Hong Kong, China shares trim weekly gains after weaker data

Last Updated: Fri, Mar 01, 2013 05:30 hrs

* HSI, H-shares both -0.3 pct; CSI300 -0.6 pct

* Citic Pacific hit by broker price target reductions

* Macau gambling up ahead of February revenue data

* Chinese insurers sink after China Life's profit warning

By Clement Tan

HONG KONG, March 1 (Reuters) - Hong Kong and China shares trimmed this week's gains after official data on Chinese manufacturing activity was slightly below expectation and at its weakest since September.

Friday's losses came after stocks had their biggest daily gains in weeks the previous day. Sun Hung Kai Properties sank almost 2 percent after the world's second-largest property developer by market cap gave weaker-than-anticipated sales guidance despite trumping first half earnings expectations.

The Hang Seng Index and the China Enterprises Index of the top Chinese listings in Hong Kong each went into the midday trading break down 0.3 percent. Both were still up 0.7 percent on the week.

In the mainland, the CSI300 of the top Shanghai and Shenzhen A-share listings dropped 0.6 percent, while the Shanghai Composite Index shed 0.5 percent. On the week, they are up 2.4 and 1.7 percent, respectively.

Losses came in the strongest Shanghai midday volume in two weeks as China's key money rate stormed to its highest level this year on Friday, inflaming worries about policy tightening as the central bank looks to restrain bank lending.

Hong Kong turnover at midday almost equalled Thursday's week-high as China's official Purchasing Managers' Index (PMI) eased to 50.1 after seasonal adjustments. The five-month low was weaker than a 50.2 Reuters poll consensus and down from January's 50.4 level.

"The China PMI today wasn't much of a deal, but coming after Thursday's strong gains, it was a catalyst for some profit taking," said Jackson Wong, Tanrich Securities' vice-president for equity sales.

The Macau gambling sector was broadly stronger ahead of February revenue data at midday, which came in at the top end of analysts' forecasts for growth of between 9 and 11 percent. Sands China rose 1 percent and Wynn Macau gained 0.7 percent.


The ongoing corporate reporting season remained in focus, with results showing the uneven recovery in China-exposed companies.

Shares of Citic Pacific sank 3.7 percent in Hong Kong, hit by target price reductions from brokerages including Bank of America-Merrill Lynch, Citi and UBS. Targets were cut after the steel-to-property conglomerate posted disappointing full year 2012 results on Thursday.

Citic Pacific, whose stock has fallen each of the past three years, is now down 0.7 percent in 2013. Citi analysts said the company remains highly geared and will need to borrow more given its current capital expenditure and annual dividend commitments.

Chinese insurers were broadly weaker after China Life Insurance , the world's biggest insurer by market value, said on Thursday full-year 2012 profit could be down 40 percent from 2011.

China Life Insurance fell 2.7 percent in Shanghai and 0.2 percent in Hong Kong. Ping An Insurance shed 0.3 percent in Hong Kong and 1.9 percent in Shanghai.

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