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Hong Kong shares extend losses to 4-week low, China flat

Source : REUTERS
Last Updated: Fri, May 24, 2013 05:30 hrs

* HSI -0.2 pct, H-shares -0.3 pct, CSI300 flat

* Hong Kong turnover lowest in about a month as investors remain cautious on China recovery

* Lenovo extends gains after a slew of price target upgrades

By Yimou Lee

HONG KONG, May 24 (Reuters) - Hong Kong shares extended losses to fall to their lowest in a month on Friday with the property sector hurt by worries of a slowdown in the Chinese economy.

At midday, the Hang Seng Index slipped 0.2 percent to 22,624.2 points, the lowest level since April 25. The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.3 percent. On the week, they were down 2 and 2.8 percent, respectively.

The CSI300 was flat, while the Shanghai Composite Index rose 0.1 percent at 2,277.8 points, up from its biggest slump in a month on Thursday. They are down 0.3 and 0.2 percent on the week.

"The market stabilized today, but investors remained quite cautious," said Ben Kwong, chief operating officer at securities house KGI Asia. "They don't have any motivation to buy at this moment," he said.

Midday turnover in Hong Kong was at its lowest in about a month.

China's flash HSBC Purchasing Managers' Index (PMI) shrank for the first time in seven months in May as new orders fell, slipping under the 50-point level demarcating expansion from contraction.

The survey prompted speculation that Beijing may launch more stimulus to put economic recovery on a firmer scale.

But sources close to the government said China's plan to spend $6.5 trillion on urbanisation to bolster the economy is running into snags, as top leaders fear another spending binge could push up local debt levels and inflate a property bubble.

Chinese property developers listed in the mainland were broadly weak. China Vanke fell 1.3 percent in Shenzhen after testing its highest since Feb. 5 on Thursday.

In Hong Kong, China Overseas Land dropped 1.9 percent, while China Resources Land fell 1.5 percent.

Lenovo Group Ltd rose as much as 5.3 percent to HK$7.69, the highest since April 2, helped by a slew of price target upgrades by brokerages after the Chinese PC marker reported a forecast-beating quarterly profit.

Analysts said the company was on the right track diversifying into mobile gadgets though it faced stiff competition from existing players such as Samsung Electronics Co Ltd and Apple Inc. Lenovo's Chairman and CEO said on Thursday it planned to ship 50 million smartphones and 10 million tablet PCs, up from 30 million and two million respectively during the previous fiscal year.

Shares in China Huiyuan Juice Group Ltd fell 5.2 percent after the company said it would buy a fruit juice concentrates supplier from controlling shareholder China Hui Yuan Juice Holdings Co Ltd for HK$4.9 billion ($631.17 million) to secure key raw materials and generate new revenues.



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