Hong Kong shares close up 0.5 pct, bouncing off week lows

HONG KONG Wed Jan 9, 2013 8:09am GMT

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HONG KONG Jan 9 (Reuters) - Hong Kong shares rebounded from its lowest in a week on Wednesday, resuming a start-of-the year rally that has the main indexes headed towards multi-month highs, with Chinese banks stronger following a brokerage's upgrade for the sector.

The Hang Seng Index ended up 0.5 percent at 23,218.5, recovering from its lowest close since Dec. 31 set on Tuesday. The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.9 percent.

In the mainland, both the Shanghai Composite Index and the CSI300 of the top Shanghai and Shenzhen A-shares closed flat, paring losses after Reuters reported that the mainland IPO market could be frozen until the end of March, a move that would reduce competition in the A-share market.

HIGHLIGHTS:

* Bank of China (BOC) climbed 1.1 percent to HK$3.59 after UBS raised its price target by 31 percent from HK$3.05 to HK$4, citing its attractive valuation that make BOC the least expensive among the larger H-share banks.

* China Railway Group jumped 5.1 percent and China Railway Construction rose 3 percent after JP Morgan analysts raised their price target for both these stocks by about 40 percent.

* MGM China shares jumped 7 percent after the company received government approval for a $2.5 billion Macau casino.

* China's securities regulator is requiring underwriters and auditors of all applicants for domestic initial public offerings to re-examine their financial statements as part of efforts to boost the quality of listed companies, four sources with knowledge of the plan told Reuters on Wednesday.

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