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China shares touch 8-month high despite weak property data
August 18, 2014 / 4:56 AM / in 3 years

China shares touch 8-month high despite weak property data

* HSI -0.5 pct, H-share -1.0 pct, CSI300 +0.4 pct

* Media-related shares up on Shanghai-Hong Kong stock pilot

* FDI slips 0.4 pct yr/yr, sparking worries about economy

* New home prices fall mth/mth for third straight month

By Chen Yixin and Pete Sweeney

SHANGHAI, Aug 18 (Reuters) - China’s stock indexes rose moderately on Monday, with the Shanghai Composite Index touching its highest since December 2013 even amid weak investment and housing data, but home price slides on the mainland dampened shares in Hong Kong.

By midday, the CSI300 index of leading Shanghai and Shenzhen A-share listings was up 0.4 percent and the Shanghai Composite rose 0.4 percent to 2,235.44 points, easing off its highest level since Dec 2013.

In Hong Kong, however, the HSI index was down 0.5 percent at 24,838.4 points, with the China share sub-component underperforming to lose nearly 1 percent.

China’s property prices slid for a third straight month in July, but shares in property developers -- many of which are index heavyweights -- evinced no particular reaction, rising in line with their broader indexes.

However, China Baoan Group managed to be the lead supporter of the CSI300 index’s rise, based on ongoing speculation in the stock following June reports that it would reallocate its investments out of real estate toward new energy, analysts said.

Media-related companies posted big rises in Shanghai and Shenzhen on Monday, a sector mainly dominated by small- and medium-sized enterprises (SMEs) in China, with Shanghai Ganglian E-Commerce Holdings jumping 7.7 percent and Guangdong Guangzhou Daily Meida up 8.7 percent.

“The media sector was boosted by the upcoming Shanghai-Hong Kong Stock Connect pilot programme,” said Xiao Shijun, an analyst from Guodu Securities in Beijing, with investors betting that foreign capital allowed to flow into mainland exchanges will favour the sector when the pilot programme officially launches.

Analysts said that investors were still wary about economic stability and have held back from aggressive moves given mixed macroeconomic data in July.

China drew $71.1 billion in foreign direct investment (FDI) in the first seven months of 2014, down 0.4 percent from a year earlier and 17 percent lower month-on-month.


“The set of weak (China property) data worried investors and that helped trigger selling on property stocks such as Sun Hung Kai Properties and Cheung Kong, which have big scale property projects on the mainland,” said Alfred Chan, chief dealer at Hong Kong-based Cheer Pearl Investment.

“Banks which provide financing to developers are under selling pressure as investors are concerned over potential risks of escalating bad debt.”

Sun Hung Properties fell 1.5 percent in its biggest drop in more than two weeks, and Bank of China was also down 1.1 percent in its biggest slide since August 1. (Additional reporting by Donny Kwok in HONG KONG and the Shanghai Newsroom; Editing by Jacqueline Wong)

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