* HSI flat, H-shares -0.1 pct, CSI300 -1.0 pct
* HSI set for 5th weekly gain, longest such streak since
* Anhui Conch buoyed by state deadline for cutting
* AIA down nearly 2 pct despite strong growth in new
By Clement Tan
July 26 China shares trimmed weekly gains in
lacklustre Friday trade, with financials put on the defensive as
cash rates crept higher and the Chinese central bank chief
reiterated that monetary policy would stay prudent, despite the
Shanghai shares of Anhui Conch Cement, the
largest cement producer, were lifted by an order from China's
Ministry of Industry and Information Technology to companies
across 19 industries to close outdated capacity by the end of
The CSI300 of the leading Shanghai and Shenzhen
A-share listings went into the lunch break down 1 percent, while
the Shanghai Composite Index shed 0.8 percent in the
weakest midday volumes in more than two weeks.
For the week, the indexes were still up 1.1 and 0.6 percent
respectively, underperforming Hong Kong. The Hang Seng Index
, flat on the day, was up 2.6 percent this week and on
track for a fifth-straight weekly gain, which would be the
longest such streak since October.
The China Enterprises Index of the top Chinese
listings in Hong Kong is down 0.1 percent on the day, but up 3.2
percent this week - its best weekly showing in almost three
Turnover in Hong Kong at midday was weak, coming off highs
earlier this week after Chinese media reports spurred hopes for
support from Beijing to stem the slowdown in the world's
"The quantitative folks are probably trading off technical
levels on the benchmark indexes (in the mainland) today, which
is why you see such choppy price movements," said Zhang Qi, a
Shanghai-based analyst with Haitong Securities.
"Volumes were particularly low this morning, it will be
interesting to see if the money that has been trickling out of
the outperforming smaller cap names will start to rotate back
into the large caps ahead of the earnings season," Zhang added.
The ChiNext Composite Index, which tumbled 4.7
percent on Thursday, fell another 1.5 percent as technology
counters were hit by plans by liquid crystal display maker BOE
Technology to raise 46 billion yuan ($7.5 billion).
That could exert more pressure on already-tight liquidity in
Shenzhen-listed BOE Technology dived 3.7 percent to its
lowest in a month and was down nearly 12 percent for the week.
Chinese banks A-shares were also weaker, with mid-sized
lenders Industrial Bank down 0.8 percent and China
Merchants Bank shedding 1 percent as China's
weighted seven-day repo rate crept higher at
Shares of AIA Group were down 1.8 percent at
midday. Earlier, they were up as much as 2 percent after the
Asian insurance giant reported on Friday a solid increase in the
value of new business in the first half, buoyed by growth across
its markets in Asia.
CHINA'S TARGETTED MEASURES
In comments in the official People's Daily on Friday,
People's Bank of China Governor Zhou Xiaochuan, while affirming
that monetary policy will remain prudent, pledged to improve
financing channels for small firms.
His comments were the latest in a slew from top Chinese top
officials suggesting Beijing's response to slowing growth will
not be a large-scale stimulus, but targetted measures aimed at
restructuring the economy and improving capital allocation.
Beijing's fight against industrial overcapacity gathered
speed when the industry ministry set an end-September deadline
for companies to comply with orders to shut down 654,400 tonnes
of copper capacity and 260,000 tonnes of aluminum capacity,
Anhui Conch Cement shares jumped 3.4 percent in Shanghai,
but inched up only 0.2 percent in Hong Kong.