* HSI -1.3 pct, H-shares -2 pct, CSI300 -1.1 pct
* Plenum disappoints on lack of details, SOEs seen staying
* China growth plays hit, investors trim long positions
* Tencent extends slide ahead of quarterly earnings
By Clement Tan
HONG KONG, Nov 13 Hong Kong shares hit a
two-month low early on Wednesday, underperforming mainland
markets as disappointed investors cut risk exposure after a
perceived lack of details on highly-awaited reforms from a key
Communist Party policy meeting.
China's banks were among the leading drags on benchmark
indexes. Losses in Hong Kong were accompanied by a spike in
turnover in the first hour of trade as investors trimmed long
positions in Chinese state-owned enterprises.
"People should just take off bets on growth and be careful
not to read too much into the change of wording from 'basic' to
'decisive' on the role of markets," said Hong Hao, chief
strategist at Bank of Communications International Securities.
Without details guiding the scale and nature of much-touted
reforms, Hao said investors should brace themselves for a global
sell-off in the short term with data signals seeming to point to
a slowing of growth in the mainland and a possible
earlier-than-expected tapering of U.S. monetary stimulus.
By 0339 GMT, the Hang Seng Index was down 1.3 percent
at 22,591.1 points after earlier touching its lowest intra-day
level since Sept. 5. The China Enterprises Index of the
top Chinese listings in Hong Kong sank 2 percent.
At midday, the CSI300 of the leading Shanghai and
Shenzhen A-share listings was down 1.1 percent, while the
Shanghai Composite Index slid 0.8 percent. Both onshore
indexes pared gains made in the first two days of the week.
H-shares have been trading at a slight premium over A-shares
for more than two weeks, but on Wednesday, the outperformance of
onshore markets over offshore ones further narrowed that premium
Industrial and Commercial Bank of China (ICBC)
, the world's largest bank by market
capitalisation, was among the biggest index losers in Hong Kong,
down nearly 3 percent. Its Shanghai listing shed 0.5 percent.
Chinese banks' non-performing loan ratio ticked up to 0.97
percent at the end of September from 0.96 percent from the end
of June, the China Banking Regulatory Commission said on
Wednesday. [ID: nB9N0I602F]
While more details on other reforms may be released in the
coming days, the initial communique made clear that the
Communist Party had no plans to radically reduce the role of the
state in the economy.
"Some people were just positioned too long going into this
plenum meeting and were always bound to be disappointed," said a
trader at an agency broker.
China Petroleum and Chemical (Sinopec) Corp
sank 1.6 percent in Hong Kong and 1.7
percent in Shanghai. China Resources Power slid 3.2
percent to its lowest in more than a month in Hong Kong.
Ping An Insurance , China's
second-largest insurer, tumbled more than 2 percent each in Hong
Kong and Shanghai on uncertainty whether its largest shareholder
will cut its stake.
Thailand's Charoen Pokphand Group, Ping An's single-largest
investor, pledged late on Tuesday the majority of the shares it
owned to the London branch of UBS as part of a financing scheme.
Tencent Holdings dived 2.6 percent ahead of its
quarterly earnings later in the day and is now down about 11
percent from an Oct. 21 peak.
Still up nearly 60 percent on the year, Tencent is trading
at a 9 percent premium to its forward 12-month earnings
multiple, according to Thomson Reuters StarMine. Six out of 26
analysts have upgraded their full year earnings-per-share
estimates for Tencent by 7 percent in the last 30 days.