* HSI -0.4 pct, H-shares -0.3 pct, CSI300 -0.5 pct
* China on track for best week in 5 months, HSI sees 3rd
* Belle climbs, Daphne plunges after contrasting Q2 signals
* China railway counters surge, investment to top $85 bln
* Asia Cement jumps on positive profit alert
By Clement Tan
HONG KONG, July 12 China shares looked to end
their best week in five months on a whimper, with Hong Kong also
weaker, as investors on Friday trimmed gains in recent
outperformers ahead of more China economic data that could
Encouraging statements from Chinese Premier Li Keqiang
triggered a broad rally in both markets this week on hopes for
economic stimulus following anemic data. Tentative signs of
support for sectors plagued by overcapacity emerged on Friday.
At midday, the Shanghai Composite Index and the
CSI300 of the leading Shanghai and Shenzhen A-share
listings were both down 0.5 percent. But for the week, they were
up 2.7 and 3.9 percent, respectively, and on track for their
best week since the one ended Feb. 1.
The Hang Seng Index edged down 0.4 percent to
21,353.7 points, but was poised for a third-straight weekly
gain, up 2.4 percent. The China Enterprises Index of the
top Chinese listings in Hong Kong shed 0.3 percent, but was
still up 3.5 percent this week.
Some people missed the rally over the past two days, "but we
have had quite a violent selloff in the weeks before that and
some of the buying interest was bound to return," said Linus
Yip, a strategist at First Shanghai Securities.
"Confidence is returning after Li Keqiang's comments, but
things are stablising, not turning bullish. Much will now depend
on what Beijing rolls out. Earnings visibility will continue to
be rewarded, investors won't mind paying a premium for that,"
Beijing is due to release second-quarter GDP growth data on
Monday, along with monthly urban investment, industrial output
and retail sales figures. June money supply and loan growth data
is also due by July 15.
China's finance minister signalled that Beijing may be
willing to tolerate second half economic growth significantly
below 7 percent, the most sobering comment to date on the
country's slowdown from a senior policymaker.
In a sign that big divergence may surface within sectors at
the upcoming interim results reporting season, shoe retailer
Belle International climbed 4.3 percent after its same
store sales growth for the second quarter slowed to 0.5 percent,
Rival Daphne International plunged 13.2 percent in
heavy volumes to its lowest since August 2009 after warning of a
"meaningful decline" in first half profit as second quarter
same-store sales dived 13.7 percent from a year earlier.
The Chinese banking sector was hurt by a report in the
official China Securities Journal that Beijing may scrap the
official floor under banks lending rates as the first major step
to liberalise its interest rate regime, a move that could hurt
short-term net interest margins.
In Hong Kong, Industrial and Commercial Bank of China
, the country's biggest lender, shed 0.4 percent, while
mid-sized lender China Minsheng Bank fell 2 percent.
OVERCAPACITY, POLICY, STIMULUS?
On Friday, Asia Cement climbed 7.6 percent after
becoming the second Chinese cement producer in two days to put
out a positive profit alert.
China Resources Cement, the first with a positive
alert, followed Thursday's 10.6 percent surge with a 1.6 percent
rise on Friday. China National Building Material
jumped 3.4 percent.
Cement also swayed by a report in the 21st Century Business
Herald, citing unidentified officials, that China could invest
in railway construction to absorb some overcapacity in the steel
and cement sectors.
China Railway surged 8.5 percent in
Hong Kong and 3.2 percent in Shanghai after that report
suggested mainland rail investment this year will be about 520
billion yuan ($84.76 billion).
CSR Corp spiked nearly 10 percent in
Hong Kong and 4.1 percent in Shanghai after the official
Shanghai Securities News reported the company won subway
The shipping sector failed to take any cheer from a China
Daily report that Beijing is considering a package of regulatory
measures to protect the struggling domestic shipping industry
against foreign competitors suspected of malicious price
China Rongsheng, the largest private shipbuilder,
which asked Beijing and major shareholders for financial help
last week, slid 2.4 percent in Hong Kong.