China shares outperform Asia on hope of greater foreign investment
* HSI +0.7 pct, H-shares +0.9 pct, CSI300 +2.4 pct
* Brokers, mid-sized banks lead A-share index gains
* Hotel IPO spin-off lifts New World Development
* BYD up on reported renewable-energy car subsidies
By Clement Tan and Yimou Lee
HONG KONG, May 3 (Reuters) - China shares were headed for their best day in more than a week on Friday, lifting the Hong Kong market, as investors were cheered by prospects of greater foreign investment in mainland markets.
At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was up 2.4 percent, while the Shanghai Composite Index rose 1.8 percent. Both are set for their best day since April 19 and are up 2.5 and 1.6 percent this week, respectively.
The Hang Seng Index rose 0.7 percent after testing its highest since March 13 earlier in the session. The China Enterprises Index of the top Chinese listings in Hong Kong gained 0.9 percent. On the week, they are up 1.2 and 0.8 percent respectively.
Turnover in Hong Kong at midday was the strongest since April 5, while Shanghai midday volume was at its highest since April 22.
The official Shanghai Securities News reported on Friday that new technical regulations rolled out by the Chinese central bank late on Thursday suggest that renminbi qualified foreign institutional investors (RQFII) quota approvals may be resumed after a two-month suspension.
"I think people are anticipating about 200 billion yuan of unused RQFII quota could be deployed," said Jackson Wong, Tanrich Securities' vice-president for equity sales.
CITIC Securities , China's largest listed brokerage, climbed 3.9 percent to its highest since March 25 in Shanghai and 2.4 percent in Hong Kong. Its biggest rival, Haitong Securities jumped 4.5 percent in Shanghai and 2.2 percent in Hong Kong.
The People's Bank of China said that custodial institutions have five working days, up from the current one-day arrangment, to report transactional information relating to RQFII investments. The central bank also said that the RQFIIs should open offshore RMB deposit accounts, the Securities Daily reported.
Mid-sized Chinese bank were the biggest boosts to onshore indexes. China Minsheng Bank soared 4.1 percent in Shanghai and 3.2 percent in Hong Kong.
Hong Kong developer New World Development jumped 4.9 percent after announcing plans to spin off its hotel properties in an initial public offering.
Warren Buffett-backed Chinese automaker BYD Co Ltd climbed 4.4 percent in Hong Kong and 5.2 percent in Shanghai after the official Shanghai Securities News reported that Beijing might issue subsidies for renewable-energy cars in the first half of this year.
Power equipment makers Dongfang Electric Corp rose 6.6 percent to a one-month high, while Shanghai Electric Group Co jumpped 3.7 percent.
The National Development and Reform Commission and several ministries will release their urbanization development plan for 2012-2020 before the end of June, with implementation guidance expected in the second half this year, the Shanghai Securities News reported on Friday.
China State Construction gained 3.2 percent in Shanghai and 2.1 percent in Hong Kong. Property developer China Vanke gained 2.3 percent in Shenzhen.
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