Hong Kong shares steady as ICBC drags, property gains lift China

Last Updated: Tue, Jan 29, 2013 05:10 hrs

* HSI flat, H-shares -0.3 pct, CSI300 +0.4 pct

* ICBC shares down after Goldman sells $1 bln stake

* GOME drops after warning of 2012 net loss

* Chinese property up on more reports of warming market

By Clement Tan

HONG KONG, Jan 29 (Reuters) - Hong Kong shares held steady at Monday's 20-month closing high, underperforming Asian peers largely due to a weak Chinese banking sector after Goldman Sachs sold a $1 billion stake in Industrial and Commercial Bank of China (ICBC).

The Hang Seng Index went into Tuesday's midday trading break flat. The China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.3 percent. In spite of Goldman's ICBC stake sale, turnover at midday was rather lackluster.

In the mainland, the CSI300 of the largest Shanghai and Shenzhen A-share listings climbed 0.4 percent, while the Shanghai Composite Index was flat as volumes picked up in late morning trade.

"The Chinese banking sector is actually holding up quite well, but the Goldman sale is triggering some profit taking and rotation 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 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 2.4 percent to HK$5.81 - which pointed to healthy demand for the bank, given that the stock dropped less than 3 percent.

Still, there were losses on Tuesday for most Chinese banking shares in both onshore and offshore markets. ICBC's shares in Shanghai fell 0.9 percent, while Bank of Communication shed 0.9 percent in Hong Kong and 1 percent in Shanghai.

China Business News reported that the country's banking regulator is examining ways to improve the current system used to monitor the loan-to-deposit ratios of mainland commercial banks.

Shares of Bain Capital-backed GOME Electrical Appliance dropped 1.1 percent after China's second-largest home appliance retailer said late on Monday that it expects to have suffered a loss last year partly due to its unprofitable e-commerce business.

Tuesday's fall cut GOME gains in January to 2.2 percent. The stock tumbled 49 percent in 2012, its third straight year of decline.

GOME's larger rival Suning Appliance Co Ltd shed 1.4 percent in Shenzhen on Tuesday.


Strength in the Chinese property sector helped limit losses in Hong Kong and propel mainland markets to new highs since mid-2012 as investors welcomed more news reports of a warming property sector in the world's second-largest economy.

The official China Securities Journal reported that January land sales in Beijing hit a 11-year high, while the Shanghai Daily said that average homes prices in Shanghai rose to a 30-week high, though mainly due to demand at a high-end project in the city's Hongkou district.

China Vanke rose 2.8 percent to its highest since August 2009 in Shenzhen, while Poly Real Estate gained 1.9 percent in Shanghai. China Resources Land edged up 0.6 percent in Hong Kong.

Rising oil prices helped Chinese oil giants CNOOC rise 0.9 percent and China Petroleum and Chemical Corp (Sinopec) gain 1.3 percent in Hong Kong.

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