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(AFX UK Focus)
2009-11-26 09:50
HK, China stocks down; weak Minsheng debut weighs |
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By Donny Kwok and Claire Zhang HONG KONG/SHANGHAI, Nov 26 (Reuters) - Stocks in Hong Kong and China ended down on Thursday as China Minsheng Banking made a disappointing debut, weighing on recently battered banking stocks, while concerns over asset prices put pressure on the Shanghai market. Minsheng Banking Corp, which raised $3.9 billion in the world's fifth-largest initial public offering of 2009, fell as low as HK$8.78 during its Hong Kong debut, underscoring soured investor sentiment toward mainland banks. Minsheng, topped the most actively traded list, ending the session at HK$8.80, down 3.1 percent from its IPO price of HK$9.08. "It was disappointing and the drop was much steeper than we expected," said Alex Wong, a director at Ample Finance Group. "There was no rush for fund managers to buy the stock even if they want to increase their exposure to Chinese banks. There are many to choose from in the market." The benchmark Hang Seng Index fell 1.78 percent, or 401.39 points to 22,210.41, its lowest close in three-weeks. "Sentiment turned a little bit, triggering profit-taking," said Patrick Yiu, a director at CASH Asset Management. He added that the underlying tone remained positive with ample liquidity continuing to flood the market. Turnover was HK$77.35 billion ($9.98 billion), slightly lower than Wednesday's HK$79.4 billion. Chinese banking stocks have come under pressure from concerns over potential cash calls by the sector on expectations the government may lift capital-adequacy ratios for larger state lenders next year follwoing a lending boom. Bank of China lost 2.9 percent to about a five-week closing low of HK$4.35. China Construction Bank sank 3.64 percent to a three-week closing low of HK$6.89. Industrial & Commercial Bank of China (ICBC) fell 2.79 percent to HK$6.61. The China Enterprises Index of top locally listed mainland Chinese stocks fell 2.23 percent to 13,146.28. Bank of East Asia (BEA) bucked the overall weakness, rising 4.01 percent to HK$35, its highest close since July 24, 2008. Citigroup raised its price target for Hong Kong's No.5 bank to HK$44 from HK$28 and upgraded it to "buy" from "sell". China Resources Gas surged as much as 16 percent to its highest level in 18 months after the gas fuel distributor said its subsidiary would buy Zhengzhou Gas Co in a deal valued at HK$682.7 million ($88.1 million). The stock closed at HK$8.26, up 10.13 percent.
SHANGHAI FALLS ON ASSET PRICE CONCENR China's key stock index sank 3.62 percent in heavy trade on Thursday, with banks weak as investors fled the market amid mounting worries that the government may take steps to clamp down on surging asset prices. The Shanghai Composite Index ended at 3,170.979 points, its lowest close in three weeks and posting its biggest one-day fall in nearly three months. Losing Shanghai A shares overwhelmed gainers by 803 to 83, while turnover picked up to 253 billion yuan ($37.06 billion) from Wednesday's 217 billion yuan. "Concerns over a clampdown on asset prices, including stocks and property, have altered the trend of uninterrupted rises seen from early September until early this week, which was spurred by the strong economic recovery and corporate earnings," said a senior trader at a major Chinese brokerage. "Many think the clampdown might come in the first quarter of next year, with the government probably adding share supplies and cancelling preferential property policies." An increasing number of officials and researchers have been warning about possible asset price bubbles, amid signs that speculative hot money is again flowing into China on a large scale, in line with a global trend of funds flowing into emerging markets. Banks fell on concerns about shrinking lending and a possible need to raise funds next year to shore up their capital, with Industrial & Commercial Bank of China down 2.81 percent at 5.18 yuan and one of the most active stocks. Minsheng Banking sagged 5.74 percent to 7.88 yuan after a dull Hong Kong debut. Chinese banks were likely to lend 5 trillion to 8 trillion yuan ($732.5 billion to $1.17 trillion) next year, a senior lawmaker said on Thursday, suggesting that credit growth could fall well below both the 2009 total and market expectations. "The banking sector is under pressure from possible fundraising, while lending by big banks is expected to shrink sharply at the end of this year," said Wen Lijun, analyst at Nanjing Securities. She said investors were wary that a central economic meeting due later this month or early next month may discuss asset price bubbles, which would weigh on the stock and property markets. She forecast the index would drift lower in the near term. The index is expected to probe lower on Friday to test support at the 30-day moving average, now at 3,150 points, analysts said. Shanghai Pudong Development Bank sagged 5.13 percent to 21.99 yuan after the official Securities Times quoted Citi China's top executive as saying Citigroup had no plan to increase its stake in Pudong Bank in the near future.
The Shanghai dollar-denominated B-share index dropped
3.92 percent to 244.442 points after jumping 5.12 percent on
Wednesday, continuing the volatile swings of recent weeks after
rallying on speculation that the index may be merged with a
planned international board for foreign companies' shares.
(Reporting by Donny Kwok; Editing by Chris Lewis)
((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters
Messaging: donny.kwok.reuters.com@reuters.net))
(If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)
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