* HSI -0.9 pct, H-shares -2.2 pct, CSI -0.4 pct
* Profit taking hits outperformers in recent weeks
* Ping An sinks, CP Grp's potential purchase in jeopardy
* China property hurt by report touting stricter curbs
By Clement Tan
HONG KONG, Jan 8 Hong Kong and China shares
retreated on Tuesday, as investors took profit on mainland
property and insurance counters, whose outperformance in recent
weeks have helped benchmark indexes on both markets swell to
Chinese property stocks sank after the official China
Securities Journal said in a front page editorial that stricter
implementation of curbs on the property sector is necessary to
control home prices.
Weakness in the sector came after a strong rally as several
smaller Chinese developers had successfully tapped the credit
market in Hong Kong since the start of the year, improving their
balance sheets without diluting equity stakes.
The Hang Seng Index fell 0.9 percent to 23,111.2, its
lowest this year after a strong start to 2013. The China
Enterprises Index of the top Chinese listings in Hong
Kong slumped 2.2 percent.
In the mainland, the Shanghai Composite Index and
the CSI300 of top Shanghai and Shenzhen listings each
slipped 0.4 percent from near seven-month closing highs. Both
had closed at their highest since mid-June on Monday.
Losses in both markets came in relatively robust bourse
volumes, but their relative strength index (RSI) values suggest
mainland markets still remained in technically overbought
"There's a lot of liquidity floating around in Hong Kong, so
investors have to park their money somewhere in this risk-on
environment," said Lee Wee Liat, BNP Paribas' head of Asia
property research, referring to the rally in Chinese property
"There won't be anything too draconian from Beijing, but if
prices rise any more from here, I'd expect them to pre-emptively
intervene by threatening to take away pre-sales rights and other
measures that will hurt developers," Lee added.
On Tuesday, Longfor Properties and Evergrande
fell 2.3 percent and 1.5 percent, respectively, in
Hong Kong despite posting December sales that helped both
companies exceed their stated 2012 targets.
Agile Property, whose Hong Kong shares surged 56
percent in 2012, slumped 6.5 percent in its worst day in 11
months after the company said that Hong Kong police has formally
charged its chairman for indecent assault.
In the mainland, Poly Real Estate fell 1.2
percent in Shanghai. A sub-index of property listings in
Shanghai was an underperformer among sectors, down 1.2
TRIPLE WHAMMY FOR CHINA INSURERS
Ping An Insurance suffered its worst daily loss in
about 5-1/2 months in Hong Kong on Monday after sources told
Reuters that state-run China Development Bank (CDB) has
expressed concern over the funding behind Thailand's CP Group's
attempt to buy HSBC's stake in China's second-largest insurer.
Ping An shares dived 4 percent in Hong Kong in its worst
loss since a 4.4 percent tumble on July 23. Its Shanghai listing
sank 3.7 percent in its worst loss since Oct. 29.
Ping An was among the biggest drags on benchmark indexes in
China and Hong Kong.
Carlyle Group's unloading of its remaining stake in
China Pacific Insurance (CPIC) sent shares
of the mainland's third-largest insurer down 2.6 percent in Hong
Kong and 2.9 percent in Shanghai.
Compounding a miserable day for Chinese insurers, shares of
the sector's largest player China Life Insurance
was hit by a CICC downgrade after its Hong
Kong listing closed at its highest since May 2011.
China Life shed 3.3 percent in Hong Kong and 3.2 percent in
Shanghai. A rebounding A-share market has helped the sector
outperform in recent weeks. The sector was also helped by
mainland regulators' move to allow eligible insurers to offer
mutual fund products through their asset management arms.