Hong Kong, China shares tepid in weak volumes

Tue Jul 9, 2013 4:51am BST

Related Topics

* HSI +0.2 pct, H-shares -0.3 pct, CSI300 flat

* China property A-shares sink, some developers suspends trading

* Yanzhou Coal slips in Hong Kong after Aussie offer

By Clement Tan

HONG KONG, July 9 (Reuters) - Hong Kong and China shares were weak on low volumes on Tuesday, with mainland-listed property developers mostly down after China reported a higher-than-expected inflation rate for June.

Annual consumer inflation quickened to 2.7 percent in June from May's 2.1 percent, overshooting market expectations for 2.5 percent on soaring food prices. Producer prices fell 2.7 percent in June from a year earlier, a 16th straight monthly deflation.

At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was flat, while the Shanghai Composite Index inched up 0.3 percent. Both had earlier bounced off their lowest since June 27.

The Hang Seng Index was up 0.2 percent at 0345 GMT, while the China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.3 percent.

"I don't think anybody's expecting Beijing to loosen (policy), the key here is more efficient credit allocation and for that reason, people will be watching out for the money supply and loan growth data this time round," said Kelvin Wong, Julius Baer's China-Hong Kong equity analyst.

That data is expected by July 15. Beijing is due to release June trade numbers on Wednesday, and second-quarter GDP growth figures is due on Monday, as are monthly urban investment, industrial output and retail sales figures.

The Economic Information Daily newspaper reported on Tuesday that Beijing's strategy for cutting industrial overcapacity may involve heightened scrutiny on bank lending, differentiated power prices and limiting energy consumption.

On Tuesday, China property counters were among the biggest index drags in the mainland. China Vanke dived 3.3 percent in Shenzhen, while Poly Real Estate slid 2.3 percent in Shanghai.

The official Shanghai Securities News reported on Tuesday that more than six real estate A-share listed firms have suspended trading while they seek refinancing or complete major asset restructuring.

In Hong Kong, the smaller Chinese developers saw some of the bigger percentage losses as a two-day rally stalled. Hopson Development tumbled 6.6 percent, while Kaisa Group dived 3.6 percent.

But the larger Chinese developers saw gains. China Resources Land climbed 2.2 percent, while China Overseas Land rose 0.6 percent.

Yanzhou Coal dived 3 percent in Hong Kong after offering on Tuesday to purchase the 22 percent of Yancoal Australia Ltd it does not already own in a deal valued at A$905 million ($825.95 million).

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