December 28, 2018 / 4:28 AM / a year ago

China, HK stocks up as investors look to more upbeat 2019

* .SSEC +0.2 pct, .CSI300 +0.3; .HSI +0.1 pct

* Regulator gives go-ahead for new wealth management companies

* Investors hope for looser liquidity, policy support in 2019

HONG KONG, Dec 28 (Reuters) - The Chinese and Hong Kong stock markets moved up on Friday, the last trading day of the year, after authorities allowed banks to set up new wealth management companies and as investors expected more government support after New Year’s Day. ** The Shanghai Composite Index edged up 0.2 percent to 2,486.90 points, while the blue-chip CSI300 index rose 0.3 percent. ** As of midday, the Shanghai stock index is down 24.8 percent year-to-date, and sits below its 50-day moving average and below its 200-day moving average. ** CSI 300’s financial sector sub-index was higher by 0.9 percent, the consumer staples sector was up 1.1 percent, while the smaller Shenzhen index stayed flat and the start-up board ChiNext Composite index was slightly softer by about 0.5 percent. ** In Hong Kong, the main Hang Seng Index rose close to 0.1 percent at 25,502.87 points, while the index for Chinese H-shares listed in Hong Kong rose 0.8 percent. As of midday, the Hang Seng is down 14.8 percent year-to-date. ** China’s banking and insurance regulator gave the green light for two major state-owned banks to set up their wealth management units on Thursday. ** The introduction of these wealth management companies, in conjunction with a looser monetary policy next year, implies that Chinese stock investors “will no longer have to worry about liquidity” in 2019, Wei Yi, an analyst at Kaiyuan Securities, wrote in a memo on Friday. ** Although most analysts expect Chinese authorities to do more to support the economy next year, the scale of the stimulus remains in doubt, analysts at Minsheng Securities said in a note on Friday. ** “Hopefully there will be a tax cut on a larger scale, infrastructure (spending) will rebound but there is limited room for that,” said the analysts. “Real-estate policies will be implemented on a city-by-city basis.” ** One city in central China backtracked on lifting curbs on property prices after just one day on Thursday. ** While activity was likely to be subdued on the last trading day of 2018, investors should remain vigilant after the shock suspensions of two Sinopec executives spooked the market on Thursday. “We recommend that (investors should) mostly observe, and wait until next year to battle again,” Zhao Wei, an analyst at Founder Securities, wrote in a memo on Friday. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.5 percent while Japan’s Nikkei index was down 0.5 percent. ** The yuan was quoted at 6.8545 per U.S. dollar, 0.19 percent firmer than the previous close of 6.8675. ** The largest percentage gainers in the main Shanghai Composite index were Pengqi Technology Development Co Ltd, up 10.12 percent, followed by Changshu Fengfan Power Equipment Co Ltd, gaining 10.09 percent and Ribo Fashion Group Co Ltd, up by 9.99 percent. ** The top gainer on the Hang Seng was CSPC Pharmaceutical Group Ltd, up 3.4 percent, while the biggest loser was Sinopec, down 5.1 percent. ** The top gainers among H-shares were GF Securities Co Ltd , up 3.5 percent, followed by CSPC Pharmaceutical Group Ltd, gaining 3.4 percent and Shenzhou International Group Holdings Ltd, up by 2.4 percent. ** About 6.68 billion shares have traded so far on Friday on the Shanghai exchange, roughly 45.9 percent of the market’s 30-day moving average of 14.56 billion shares a day. The volume traded was 13.54 billion as of the last full trading day. ** At midday, China’s A-shares were trading at a premium of 18.88 percent over the Hong Kong-listed H-shares.

Reporting by Noah Sin; Editing by Sunil Nair

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