* HSI +0.5 pct, H-shares +1.4 pct, CSI300 +1.4 pct
* China banks boosted by reports on preferred share pilot
* Country Garden falls 6.5 percent on broker downgrade
By Alice Woodhouse and Chen Yixin
HONG KONG/SHANGHAI, March 13 Chinese stocks rose
on Thursday, pulling up Hong Kong's market, led by banking
counters that could be the first ones joining an anticipated
preferred shares pilot programme in the mainland.
Three sources with knowledge of the plans told Reuters that
the China Securities Regulatory Commission is ready to launch
the long-awaited pilot programme allowing listed companies to
issue preferred shares, and could announce it as policy as soon
as this weekend.
At midday, the Hang Seng Index was up 0.5 percent at
21,999.79 points. The China Enterprises Index of the top
Chinese listings in Hong Kong rose 1.4 percent.
The CSI300 of the largest Shanghai and Shenzhen
A-share listings also climbed 1.4 percent, while the Shanghai
Composite Index moved above 2,000 points by rising 1.3
percent to 2,022.96 points.
In Hong Kong, shares saw "just a slight recovery from their
low," said Alex Wong, a director at Ample Finance Group.
"Preferred shares can only solve a little bit of capital worry
but it cannot solve the worries such as debt quality and
interest margin (among Chinese banks) in the long run."
Wong said that as the overall outlook is still bearish,
market sentiment improved a little on improved liquidity. He
said resource, energy and bank stocks should rise if Chinese
data due this afternoon is solid.
Data due at 0530 GMT includes industrial output, urban
investment and retail sales.
Index compiler MSCI said on Wednesday it plans to include
China's mainland-based A shares in its benchmark emerging market
index from May 2015, as the country gradually opens up its
domestic yuan markets to foreign investors.
Almost all banking shares rose. Shanghai Pudong Development
Bank Co Ltd jumped 4.1 percent and Agriculture Bank
of China Co Ltd added 3.5 percent in
Shanghai and 1.9 percent in Hong Kong on the preferred shares
On Thursday, China Construction Bank Corp's
Hong Kong-listed shares gained 1.8 percent after
hitting a 9-month low the previous trading session. Its
Shanghai-listed shares rose 2.1 percent.
Property developer Country Garden Holdings Co Ltd
fell 6.5 percent after UBS downgraded it to neutral from buy
because of lower gross margins and higher operating expenses.