* HSI -0.3 pct, H-shares -0.1 pct, CSI300 +0.1 pct
* Beijing's "mini stimulus" buoys railway, cement, steel
* A-share market weighed by planned $7.5 bln share placement
By Clement Tan
July 25 Railway-related stocks outperformed in
Hong Kong and China on Thursday after Beijing pledged more
funding to support rail construction in a series of measured
moves to stem the slowdown in the world's second-largest
Their gains stood out in a tepid market. The A-share market
was further weighed by a planned $7.5 billion private share
placement, raising concerns the largest equity offering in a
year could put pressure on tight liquidity conditions.
At midday, the Hang Seng Index was off 0.3 percent
and the China Enterprises Index edged down 0.1 percent,
both slipping after closing on Wednesday at their highest since
The CSI300 of the leading Shanghai and Shenzhen
A-share listings was up 0.1 percent, while the Shanghai
Composite Index slipped 0.1 percent in fairly weak
Index losses had briefly accelerated after the Chinese
labour ministry warned the economy faces mounting employment
pressures in the future.
Beijing's war against industrial overcapacity was cited as a
reason. These comments came a day after a private preliminary
survey of manufacturing activity in the mainland showed
employment at its weakest since March 2009.
"I think you can expect more of these types of policy
support from Beijing. They are making it clear they are serious
about restructuring the economy, but I don't think we have
tested their bottom limit for growth yet," said Cao Xuefeng, a
Chengdu-based head of research for Huaxi Securities.
On Thursday, Chinese railway counters rose for a
third-straight day. China Railway Construction
jumped 3.6 percent in Hong Kong to its
highest since May 9, while its Shanghai listing jumped 5.1
percent and has now soared more than 13 percent this week.
Building material counters were also stronger on hopes that
railway construction will buoy physical demand. Anhui Conch
Cement jumped nearly 4 percent each in
Shanghai and Hong Kong. Angang Steel spiked
4.3 percent in Hong Kong and 3.3 percent in Shenzhen.
China's support for the railway industry was part of series
of targeted policy measures the country's cabinet announced late
on Wednesday, which also included an elimination of taxes for
small firms and more help from banks for exporters.
Shares of China Rongsheng, the country's largest
private shipbuilder which asked for financial help from Beijing
last month, surged 6.3 percent in Hong Kong as investors rushed
to cover short bets.
The Chinese coal and banking sectors, which have broadly
risen in the last month, were on the defensive and were key
index drags in Hong Kong.
Bank of China slipped 0.6 percent, while China
Shenhua Energy shed 2.1 percent after both had closed
on Tuesday at their highest since mid-June.
Sino Pharmaceutical tumbled 4.2 percent to HK$5.54
after a major shareholder sold 100 million shares priced at
HK$5.43 each, suggesting demand for the placement was relatively
BOE Technology dived 6.3 percent in Shenzhen.
IFR reported that the company plans to raise up to 46 billion
yuan ($7.50 billion) from a private placement to not more than
10 institutional investors in what could become the largest
equity offering in the A-share market in a year.