* HSI +0.9 pct, H-shares +1.8 pct, CSI300 +1.5 pct
* BYD down 8 pct in Hong Kong on profit-taking
* Investors lukewarm on China Merchants Bank's issuance
* Stocks seen benefiting from Shanghai FTZ draw funds
By Pete Sweeney
SHANGHAI, Aug 23 China shares were buoyant
Monday morning, with all major indexes in Hong Kong and the
mainland rising about percent or more as investors bet on
banks, infrastructure and the planned Shanghai Free Trade Zone.
"Markets are pretty optimistic today," said a trader at a
Shanghai brokerage, saying that mainland companies expected to
benefit from construction of the recently-approved free trade
zone were seeing inflows from investment funds, as were banks.
In the morning, the state statistics bureau said China's
economy is showing clear signs of stabilisation, helped by
policy support and some improvement in global demand, and is on
track to meet the government's 2013 growth target of 7.5
China stocks outperformed other Asian markets on Monday as
they extended gains after disappointing U.S. new home sales
figures eased fears that the Fed might cut qualitative easing
At midday, the Hang Seng Index was up 0.9 percent at
22,069.29 points. The China Enterprises Index of the top
Chinese listings in Hong Kong rose 1.8 percent.
The CSI300, which tracks the largest listed
companies in China, was up 1.5 percent, while the Shanghai
Composite Index was up 1.4 percent at 2,086.5 points.
Earnings had a positive impact on some index heavyweights,
including shares in China Construction Bank Corp, the
country's No. 2 lender, which rose 0.9 percent after
second-quarter net profit slightly beat expectations.
Asia's largest refiner Sinopec Corp moved up 1.6
percent after the company posted a 22 percent rise in
second-quarter net profit, helped by better refining margins
after China introduced measures to let domestic fuel prices
track the international market more closely.
Sinopharm Group Co Ltd, China's largest
pharmaceutical products distributor, rose 4 percent after the
company said its first half net profit rose to 1.15 billion yuan
($187.9 million) from 958.9 million yuan a year ago.
The Shanghai trader noted that two companies expected to
benefit from the development of the Shanghai FTZ were
outperforming on Monday. Shanghai International Port Group Co.
Ltd. and Shanghai International Airport Co. Ltd.
both rose more than 9 percent, close to the intraday
HONG KONG-SHANGHAI DISCONNECT
There were a few notable losses. Shares in Warren
Buffett-backed BYD Co Ltd plunged more 8
percent in Hong Kong and 3 percent in Shenzhen even though the
company said first half net profit rose 26 fold to 427 million
Some analysts said BYD shares ad become quite expensive and
attributed the decline to profit-taking given uncertain
Shares in China Merchants Bank , China's
sixth-largest lender, were mixed as the company launched its
online road show sell a maximum 35 billion yuan ($5.7 billion)
rights issue on Monday after a two-year delay caused by the weak
domestic stock market.
The bulk of the proceeds will supplement the bank's capital.
The bank will issue 1.74-for-10 yuan-denominated A-shares listed
in Shanghai, with the rest via Hong Kong-listed H-shares, the
company has announced.
Shares in China Merchants Bank were down 0.6 percent in
Shanghai but up 1 percent in Hong Kong.
Many retail investors in the mainland remain resistant to of
new listings or share reissuances given the lacklustre
historical performance of Chinese equities relative to other
asset classes and China's economic growth. Initial public
offerings have been frozen since late 2012 and regulators have
yet to clarify when they will formally resume.