* HSI -0.1 pct, H-shares -0.4 pct, CSI300 -1.2 pct
* Shanghai Composite closes below 2,000 pts, 1st time since
* Sany at lowest since Oct 2010, shrugs off industrial
* CRE at 6-mth high on reported interest in Carrefour
By Clement Tan and Vikram Subhedar
HONG KONG, Nov 27 Onshore Chinese shares fell
for a third-straight day, reversing midday gains in Hong Kong
after the Shanghai share index closed below 2,000 points for the
first time in nearly four years on concern that stricter capital
rules for banks may hurt lending.
The state-run China Securities Journal newspaper reported
that Basel III requirements could raise the capital adequacy
ratio at the country's six biggest banks by up to 50 basis
points, potentially limiting their capacity to lend and support
growth in the world's No.2 economy.
The Hang Seng Index ended down 0.1 percent, while the
China Enterprises Index of the top Chinese listings in
Hong Kong shed 0.4 percent, both reversing midday gains.
In the mainland, the CSI300 Index of the top
Shanghai and Shenzhen listings shed 1.2 percent. The Shanghai
Composite Index ended down 1.3 percent at 1,991.2, the
first time it closed below 2,000 points since January 2009.
Over the month, the Shanghai Composite has lost 3.8 percent,
while the CSI300 is down 4.6 percent, compared with the China
Enterprises Index's 0.5 percent loss.
"This divergence between A and H share performance will
continue at least until the year's end. There is a long list of
A-share IPOs waiting for approval and that's not going to
impress investors," said Larry Jiang, chief strategist at Guotai
Junan International Securities.
The Hang Seng Index A/H premium index opened at
95.8, its lowest intra-day level since June last year, but ended
at 96.5. It has closed below 100 on all but two sessions since
mid-October, suggesting the premium that onshore shares once
traded over their offshore peers has been wiped out.
Turnover in Shanghai jumped 24 percent from Monday, while
Hong Kong improved only slightly, still some 7 percent below its
average in the past month.
Speculation in the market that the amount of lockups
expiring in December could double from November weighed on the
A-share market, according to Hong Kong-based traders at a major
They added that steep losses in small-cap names listed in
the mainland worsened on fears that prospective listings could
suffer from profit declines after failing to impress in
pre-listing marketing. The CSI500 Index dived 3.6
On Tuesday, industrial counters were weak in the mainland
despite official data from the National Bureau of Statistics
showing Chinese industrials returning to profit growth in
Shanghai-listed Sany Heavy Industry slid 3.1
percent to its lowest in more than two years. It is set for a
second-straight annual loss, down 33.6 percent, compared to the
9.5 percent loss on the Shanghai Composite and 8.3 percent loss
on the CSI300.
China Rongsheng tumbled 6.7 percent to its lowest
close in a month after the company said that its chairman had
stepped down just three months after the company posted its
sharpest fall in half-year net profit.
Over the past month, analysts have cut forward 12-month
earnings forecasts for MSCI China industrials by 2.7 percent,
the sixth straight month of cuts, according to Thomson Reuters
Investors will be looking at China's annual Central Economic
Work Conference, which is typically held in mid-December, for
clues on the tone of economic policies in 2013.
The China Securities Journal also reported on Tuesday that
China is likely to target growth of 7 to 7.5 percent and will
remain prudent on monetary policy -- denting hopes for more
aggressive policy easing.
The Chinese banking sector ended broadly weaker in Hong
Kong, but reversed early losses in the mainland. Bank of China
slipped 0.3 percent in Hong Kong but edged
up 0.4 percent in Shanghai.
China Resources Enterprises (CRE) led percentage
gains among Hang Seng Index components, rising 2.8 percent to a
six-month high on media reports that it plans to purchase a
stake in French retailer Carrefour SA.
The Macau casino sector was broadly stronger on hopes of a
similar special dividend payout after Las Vegas Sands,
parent of Sands China, approved a $2.75 per share
Sands China was up 1.8 percent, while MGM China
jumped 3.4 percent.