* CSI300 +0.4 pct, Shanghai Comp +0.3 pct
* Hong Kong to resume trading on Thursday
* Poly Real Estate at 3-year closing high
* Vanke suspended, B-shares to reportedly relist in HK
By Clement Tan
HONG KONG, Dec 26 Mainland China shares reversed
midday losses to edge higher for a third straight day, with the
property sector strong as investors found cheer in a media
report outlining Beijing's plan to further urbanise China.
Investors took profit on the Chinese banking sector on
Wednesday after the country's vice finance minister warned of
rising risks in the banking sector and pressure on government
revenue in 2013.
Hong Kong markets have been closed since midday on Monday
for the Christmas holiday and will resume trading on Thursday.
The CSI300 of the top Shanghai and Shenzhen
listings closed up 0.4 percent at 2,457.6. The Shanghai
Composite Index crawled up 0.3 percent. Both indexes
closed at their highest levels since July 6.
Gains on Wednesday came in good volume as both indexes
stayed above their 200-day moving average, a level they closed
decisively above on Tuesday after strong gains that pushed the
Shanghai Composite Index into positive territory for 2012.
After languishing in negative territory for almost six
months, both onshore Chinese indexes are now set for their first
annual gain in three years. Their 14-day relative strength index
(RSI) readings also suggest they are at their most overbought
level in more than two years.
"Investors are consolidating strong gains yesterday, but
sentiment has clearly changed for the better," said Zhong Hua, a
Shanghai-based equity strategist with Guotai Junan Securities.
"Not too long ago, property stocks would have suffered if
there were headlines like today, reiterating purchasing curbs
for next year. Instead, they are extending strong gains on hopes
of better demand from urbanisation policies," Zhong added.
Poly Real Estate rose 2 percent to close at its
highest since November 2009 in Shanghai.
Shares in China's second-largest property developer by sales
are now up 57.2 percent in 2012, compared with rises of 4.8
percent for the CSI300 and 0.9 percent for the Shanghai
The official Shanghai Securities News on Wednesday reported
Beijing's policy focus on urbanisation will likely involve
reforms in the so-called hukou, or household registration,
system to help smaller, rural cities catch up with their biggest
cousins in development.
Investors in property shares were unfazed by a report by the
official Xinhua news agency on Tuesday saying China will extend
its property tightening policies into 2013 to choke speculative
buying while expanding its trial property tax.
Trading in shares of China Vanke Co Ltd, Poly
Real Estate's larger sector rival, was suspended in Shenzhen on
Wednesday pending an announcement, the firm said late on
Local media reported that the company plans to convert its
Shenzhen-listed B shares, denominated in Hong Kong dollars, into
a Hong Kong listing.
In May, the official China Daily newspaper reported that
Vanke had bought a 73.9 percent stake in Hong Kong-listed Winsor
Properties Holdings in its first step in its
"long-term overseas expansion plans."
CHINA BANKS TRIM DECEMBER GAINS
Limiting index gains on Wednesday, Chinese banking shares
slid, trimming their recent outperformance, after the vice
finance minister said the country's banking assets have been
growing rapidly in recent years, with bank loans climbing to new
Among the country's "Big Four" banks, Industrial and
Commercial Bank of China (ICBC) declined 1.5 percent
in Shanghai after closing at a six-month high on Tuesday. ICBC
is on track for a third-straight monthly gain and its decline
for the year has been cut to about 4 percent.
Smaller rival Bank of Beijing dropped 1.4
percent after closing on Tuesday at its highest since May 2011.
It is still up 27 percent in December, which should be its best
month in 3-1/2 years.
Much of the rally in the banking sector this month has come
after China's insurance regulator abolished limits for insurance
firms' investments in the country's banks. Previously, firms
were unable to invest in more than two banks if they owned more
than 5 percent of any single bank.