* HSI +0.6 pct, H-shares +0.8 pct, CSI300 -0.2 pct
* Turnover in both markets stays at weak levels
* CNBM dives after core net profit disappoints
* CCB climbs, first of "Big Four" China banks to report
By Clement Tan
HONG KONG, March 25 Hong Kong shares recovered
some of last week's losses in thin Monday trade, as investors
welcomed a Cyprus bailout deal Chinese oil majors posted
relatively positive 2012 results.
Mainland Chinese markets made a subdued start to the week,
slipping for the first time in five days, pulling back after a
strong performance last week, with brokerages and mid-sized
banks among the biggest index drags.
The CSI300 of the leading Shanghai and Shenzhen
listings inched down 0.2 percent, while the Shanghai Composite
Index slipped 0.1 percent in volume that was 13 percent
below its average in the last month.
The Hang Seng Index, which fell 1.9 percent last
week, closed up 0.6 percent at 22,251.2 and off the day's highs.
The China Enterprises Index of the top Chinese listings
in Hong Kong climbed 0.8 percent.
Hong Kong turnover was only slightly higher than Friday's,
which was the lowest in two weeks. Monday's volume was almost 20
percent below the average over the past 20 days.
"There's quite a bit of short covering in today's rebound
after the Cyprus deal, but we have barely cut last week's
losses, so there's nothing to be too excited about," said
Jackson Wong, vice-president for equity sales at Tanrich
CNOOC jumped 3.9 percent, while China Petroleum
and Chemical Corp (Sinopec) rose 3.3
percent in Hong Kong after both posted 2012 net profit broadly
in line with market expectations. Monday's higher oil prices
Sinopec also announced a venture with its parent company to
buy $3 billion worth of oil and gas assets held by the latter in
a bid to improve its profitability.
China Construction Bank , which reported
results on Sunday, rose 2.3 percent in Hong Kong and 1.7 percent
in Shanghai. In 2012, the country's second-largest lender had
its slowest annual profit growth as a public listed company, a
result broadly in line with market expectations.
CCB was the first of the "Big Four" Chinese banks to report
2012 results, with the rest due to release theirs this week as
the earnings seasons for the Hong Kong and China markets peak.
PATCHY EARNINGS RECOVERY
Of the 48 percent of Hong Kong-listed companies that have
reported 2012 earnings so far, half of them have missed
expectations with the materials sector accounting for the bulk
of disappointments, according to Thomson Reuters StarMine.
China's highest ranking vice premier, Zhang Gaoli, said on
Sunday that China's economy was struggling with surplus
production capacity and risks to the financial system, warning
that failure to extend reforms would consign the country to
years of low-quality growth.
Part of that strategy involves mergers and acquisitions in
sectors such as cement. But 2012 corporate earnings results from
sector bellwethers China National Building Material Co Ltd
and Anhui Conch Cement Co Ltd
over the weekend pointed to a patchy consolidation process.
CNBM shares tumbled 5.5 percent after the company's 2012 net
core profit revealed the extent of its reliance on subsidies,
raising fears that its aggressive acquisition strategy could
Three CNMB subsidiaries acquired 24 cement companies last
year, according to the company's 2012 earnings statement. But
that was seen partly accounting for a spike in CNMB's net
gearing levels to 300 percent last year from 201 percent in
In contrast to CNBM shares, those of Anhui Conch rose 0.4
percent in Hong Kong. The company posted a 45 percent decline in
2012 net profit but its core net profit - which excludes
subsidies - was 14 times larger than CNBM's, according to
Anhui Conch reported receiving 1.0 billion yuan ($160.97
million) in subsidies last year, against 4.3 billion yuan for
Several Chinese retail bellwether companies, including Belle
, GOME and Li Ning, were posting
results after Monday's market close.
Shares of GOME Electrical Appliances sank 2.3 percent in
Hong Kong, while Chinese sportswear brand Li Ning rose 2.2
GOME, backed by private equity firm Bain Capital, posted a
596.6 million yuan loss in 2012, its first yearly loss since
listing in 2004, as slower economic growth, rising costs and
problems in its e-commerce business took a toll.
Belle International shed 1.2 percent ahead on Monday. Down
more than 20 percent this year, Belle is trading at a 19 percent
discount to its historical median 12-month forward earnings,
according to StarMine.
In the last 30 days, 19 of 32 analysts have downgraded their
2012 earnings-per-share estimates for Belle by an average of 8.2
percent, according to StarMine.