* HSI -0.4 pct, H-shares -0.9 pct, CSI300 -1.4 pct
* A-shares hit by pre-holiday profit-taking
* Shanghai free trade zone stocks lead A-share tumble
* New World Development sinks ahead of earnings
By Clement Tan
HONG KONG, Sept 26 China shares sank to two-week
lows early Thursday, weighing on Hong Kong, as investors started
taking profit on recent outperformers ahead of the quarter's end
and a week-long holiday that begins on Tuesday.
Shares of global supply chain manager Li & Fung
tumbled 4.1 percent, tracking losses for Wal-Mart Stores Inc
after Bloomberg reported the U.S. retailer is cutting
orders this and next quarter. Wal-Mart denied the report and Li
& Fung said there have been no cancellation of Wal-Mart orders.
At midday, the Hang Seng Index was down 0.4 percent
at 23,108.3 points. It has now surrendered all the gains it made
last Thursday after the U.S. Federal Reserve stunned markets by
not cutting its asset-purchasing programme.
The China Enterprises Index of the top Chinese
listings in Hong Kong fell 0.9 percent. The CSI300 of
the leading Shanghai and Shenzhen listings dropped 1.4 percent,
while the Shanghai Composite Index sank 1.5 percent.
All four indexes are now at their lowest since
"Shanghai free-trade zone 'concept' stocks are the biggest
losers today, they have rallied strongly over the last few weeks
and most are now technically overbought," said Cao Xuefeng,
Huaxi Securities' Chengdu-based head of research.
"Some quarter-end profit-taking is starting to happen, and
perhaps aggravated by the week-long National Day holiday at the
start of October. The free trade zone is also launching this
Sunday," Cao added.
Shanghai International Port dived 9.4 percent
after closing on Wednesday at its highest since August 2009. Its
Shanghai shares are still up almost 150 percent from an Aug. 22
Key drivers have been rising global freight rates and
official approval, announced on Aug. 23, for a Shanghai
free-trade zone expected to be a testbed for financial
liberalisation in the mainland.
Shanghai Oriental Pearl Group shed 8.9 percent.
On Wednesday, it had closed at its highest in nearly three years
and its highest relative strength index (RSI) value since May
China Merchants Bank fell 0.8 percent to HK$14.64
after the country's sixth-largest lender raised HK$7.95 billion
($1.03 billion) from the sale of 680.4 million H-shares, priced
at $11.68, a 19 percent discount to the pre-deal spot price.
The bank earlier this month raised 27.52 billion yuan
($4.49bn) from the sale of 2.96 billion A-shares on the same
basis. Its Shanghai listing was down 1.6 percent on the day.
Hong Kong property conglomerate New World Development
sank 1.7 percent ahead of its full-year earnings due
at the midday trading break. Three of 12 analysts have upgraded
their earnings estimates by an average of 30.1 percent in the
past month, according to Thomson Reuters StarMine.
Now down 1.7 percent on the year, New World Development is
trading at 10 times 12-month forward earnings, a 21 percent
discount to its historical median, according to StarMine.
There were gains, however, for Shanghai-listed Yunnan
Yutianhua, surging 10 percent.
The official Shanghai Securities News reported on Thursday
the company will swap 4.76 billion yuan ($777.78 million) worth
of loss-making assets with 540 million shares in itself owned by
its parent, and then cancel them, in the first such move by a
Markets in the mainland will shut Oct. 1 to 7 for the
National Day holiday, Hong Kong will be shut on Tuesday.