* China Resource Power tumbles on parent company chair
* Mainland investors cautious after more companies cleared
* H shares down on weak earnings
By Natalie Thomas
BEIJING, April 22 Hong Kong shares eased on
Tuesday, with a sell-off in China Resource Power Holdings Co Ltd
and its subsidiaries weighing on index performance after the
parent company's chairman was snared in a graft investigation.
Mainland China shares were also down as investors remained
on edge after 18 additional companies gained listing approval
last night, further stoking fears of funds being diverted from
By midday, the Hang Seng Index was down 0.2 percent
at 22,707.24 points. The China Enterprises Index of the
top Chinese listings in Hong Kong dropped 0.8 percent.
The CSI300 index of the largest Shanghai and
Shenzhen A-share listings was down 0.1 percent, while the
Shanghai Composite Index was down 0.1 percent at
In Hong Kong, shares in state owned energy giant China
Resources Power tumbled 10 percent after Chinese
authorities said they were probing the head of its parent group
The sell-off spread to the firm's subsidiaries, with China
Resources Enterprise Ltd down 4.4 percent and China
Resources Land Ltd losing 3.6 percent.
"There are worries that some of the previous acquisitions
were not made with a very fair valuation of the assets," said
Ben Kwong, chief operating officer of stockbroker KGI Asia in
"Of course we have no way to verify if this is true or not,
but the market is reacting negatively."
Weak earnings were the main drag on H-shares, with Great
Wall Motor Co Ltd shedding 8.7 percent after the
country's top maker of sport utility vehicles and pick-up trucks
posted a steep decline in first-quarter earnings growth.
The firm's mainland listed shares were down 1.4
percent, having already lost 8.6 percent during Friday and
Air China Ltd shares lost 6.1 percent as the
company braced itself for a decrease of between 55-65 percent in
On the mainland, investors were still wary after the SSEC
index shed 1 one percent in the final hour before trade on
Wednesday as investors took fright following news that 28
companies had been cleared to list.
"Technically there was a great deal of pressure for a
downward adjustment" said Du Changchun, an analyst at Northeast
Securities in Shanghai.
"I think overall today is going to be a bit weak, I'm not so
optimistic, I don't think there's much space for any increases
as we're still in a period of adjustment."
But shares in Shanghai free trade zone related companies
performed well after the Shanghai municipal government published
new regulations aimed at facilitating commodities trading in the
Shanghai Waigaoqiao Free Trade Zone Development Co Ltd
jumped 6.3 percent and Shanghai Lujiazui Finance and
Trade Zone Development Co Ltd gained 3.8 percent.
The Hong Kong stock exchange was closed on Friday and Monday
for the Easter holiday.
(Editing by Kim Coghill)