* HSI -0.1 pct, H-shares -0.2 pct, CSI300 +0.9 pct
* ICBC down after Goldman Sach unloads $1 bln stake
* Smaller China banks up, hopes of possible loan-to-deposit
* China brokers lead A-share index gains
By Clement Tan
HONG KONG, Jan 29 Hong Kong shares came off the
previous day's 20-month high on Tuesday, as weakness in
heavyweight Industrial and Commercial Bank of China (ICBC),
following a $1 billion stake sale by Goldman Sachs, offset
strength in its smaller rivals.
The Hang Seng Index inched down 0.1 percent to
23,655.2 on Tuesday, slipping from its highest closing levels
since May 31, 2011. The China Enterprises Index of the
top Chinese listings in Hong Kong fell 0.2 percent.
In the mainland though, benchmark indexes rose to their
highest since mid-2012. The CSI300 of the top Shanghai
and Shenzhen listings climbed 0.9 percent. The Shanghai
Composite Index gained 0.5 percent.
Volume in Shanghai was above its 20-day moving average for
the first time in three sessions, but Hong Kong turnover was
still about 3 percent below average.
"The Chinese banking sector is actually holding up quite
well, but the Goldman sale is triggering some profit taking and
rotation from the larger banks into some laggard energy names
today," said Jackson Wong, Tanrich Securities' vice-president
for equity sales.
After the market closed on Monday, Goldman Sachs offered
shares of ICBC in Hong Kong at HK$5.77, a 3 percent
discount to the day's near 2-year close at HK$5.95.
On Tuesday, the shares slid 2.2 percent to HK$5.82 which
pointed to a healthy demand for the stake sale, given that the
stock dropped less than 3 percent.
Most of the Chinese banking sector reversed early losses as
investors chased gains particularly in mid-sized banks in the
mainland on hopes that regulators may relax loan-to-deposit
ratio limits as interest rates are gradually liberalised.
China Minsheng Bank added another 2
percent to a record closing high in Hong Kong and 2.6 percent to
a successive five-year closing high in Shanghai on Tuesday,
following its market leading gains on Monday.
Minsheng Bank's Shanghai shares have surged 88 percent from
a Sept. 5 nadir, while its Hong Kong listing have bounced 98
percent over the same time period.
A China Business News report said the China Banking
Regulatory Commission Chairman Shang Fulin told a recent
internal meeting that extensive research would be carried out on
current rules on loan-to-deposit ratios and the methodology
would be enhanced.
The report did not specify how the regulator would reform
the ratio, which many bankers say should be raised, or if it
would simply be replaced with a new measurement tool.
"In the current mood, the market will probably take a
relaxation as positive because this will allow banks to keep
injecting credit into the economy," Credit Suisse analysts said
in a note on Tuesday.
The note, which identified Minsheng as a likely beneficiary
of any relaxation of the current 75 percent loan-to-deposit
limit, however said credit quality will re-emerge as a concern
if growth starts to slow in the mainland in a few months.
CHINESE BROKERS A-SHARES JUMP
Investors chased gains for Chinese brokerages in afternoon
trade, anticipating more foreign interest in the A-share market
as the country's top securities regulator visited Taiwan.
Reports in official newspapers on Tuesday said foreign investors
have accounted for most of the surge from December lows.
After markets closed, Guo Shuqing, the chairman of the China
Securities Regulatory Commission said the country will give
investment quotas for Taiwanese seeking to put money into its
financial markets under the Renminbi Qualified Foreign
Institutional Investor (RQFII) programme.
In Shanghai, shares of China's second-largest listed
brokerage Haitong Securities surged 7.3 percent to
its highest close since November 2010, while its larger rival
Citic Securities jumped 4.3 percent.
Energy counters were also strong after China's National
Energy Administration said investment in the country's energy
sector is expected to total 13.5 trillion yuan during the 12th
five-year development plan (2011-2015) period.
The agency also added that the government will encourage
direct financing of energy companies and also loosen the
threshold for investment.
Chinese shale gas producer Kunlun Energy climbed
2.3 percent, while the country's oil giants also saw gains.
CNOOC Ltd gained 1.3 percent, also helped by rising