* HSI flat, H-shares -0.4 pct, CSI300 -1.2 pct
* Profit-taking hits Chinese banks ahead of econ data
* Macau casinos sink after MGM China stake sale
* Kweichow Moutai at highest in nearly 2 weeks
By Clement Tan
HONG KONG, March 7 Weakness in Chinese banks
halted a two-day rebound in Hong Kong shares on Thursday, as
investors took profit on the sector which had led previous
gains, and rotated into laggards ahead of key U.S. and China
data on Friday.
Losses in mainland Chinese markets accelerated in the
afternoon after comments from the Shanghai Stock Exchange
chairman stoked fears that initial public offerings could resume
and pump more supply into the A-share market.
The CSI300 of the leading Shanghai and Shenzhen
listings shed 1.2 percent, while the Shanghai Composite Index
fell 1 percent. They are down 1.8 and 1.5 percent,
respectively, this week.
The Hang Seng Index, flat on the day, is down 0.5
percent on the week. The China Enterprises Index of the
top Chinese listings in Hong Kong was down 0.4 off on Thursday
and 0.3 percent this week.
Shanghai volume stayed robust and above average, but Hong
Kong turnover sank below its average over the last 20 days for
the first time in more than a week.
"There's some profit-taking today after the rebound in the
last two days," said Jackson Wong, Tanrich Securities'
vice-president for equity sales. "We have been in this
consolidation phase for more than two weeks now, so we are due a
break up or down soon."
Investors rotated out of Chinese banks on Thursday ahead of
a slew of February Chinese data starting with trade on Friday.
Data for inflation, urban investment, industrial output and
retail sales is due on Saturday, with monthly money supply and
loan growth data expected from Sunday.
Mid-sized lender China Merchants Bank
lost 2.5 percent in Shanghai and 0.9 percent in Hong Kong.
Shenzhen-listed Ping An Bank, which on Wednesday had
its highest close in nearly three years, fell 2 percent.
The Macau gambling sector came under pressure after a term
sheet showed an unidentified investor is selling 25.36 million
shares in MGM China that were marketed at between
HK$16.99 and HK$17.20, up to a 3.8 percent discount from its
MGM China slid 3.4 percent to HK$17.06, while peers SJM
Holdings dived 3.6 percent and Galaxy Entertainment
fell 3 percent.
Shares of global supply chain manager Li & Fung
jumped 3.6 percent after a private survey showed U.S.
private-sector hiring was surprisingly strong in February. That
came ahead of the U.S. government's closely watched non-farm
payrolls report, due on Friday.
Chinese shippers were also broadly stronger. China Shipping
Development rose 1.4 percent in Hong Kong, while China
Cosco climbed 2.1 percent in Hong Kong and
1.2 percent in Shanghai.
China's annual parliamentary meetings continued to move
markets. Chinese premium alcohol producers bucked broader
weakness after a delegate from Guizhou province was reported to
have said a cut in public spending won't impact growth in the
industry. Liquor is often offered as gifts in China.
Kweichow Moutai, based in Guizhou, surged 3.8
percent to its highest in almost two weeks. Wuliangye
gained 1.5 percent in Shenzhen. The sector has been
hurt by calls by China's incoming leaders for combating
On Thursday, losses in the mainland accelerated after Gui
Minjie, chairman of China's larger stock exchange, said that the
recent dearth of initial public offerings did not amount to a
deliberate halt in the approval process, but was part of an
attempt to slow the supply of stock.
The official Shanghai Securities News reported on its
website that Gui also said the country's securities regulator
was currently reviewing some applications.
The exchange chief also said that the Shanghai Stock
Exchange is planning to launch equity options for blue-chip
stocks this year, in a bid to provide more hedging tools for
Separately, securities regulators had said late on Wednesday
that China will loosen restrictions on investment by foreigners
of offshore yuan into onshore capital markets. Investors will be
permitted to buy individual stocks and bonds, rather than just
Despite Thursday's losses, signs are emerging that domestic
Chinese retail investors are returning to onshore markets. New
Chinese stock market accounts are at their highest in a year, a
sharp rebound from December, local media reported.
A revival in the A-share market, which now has 78 million
retail investors, could boost interest in Chinese brokerage
stocks, which have struggled recently.