Hong Kong shares headed for 3rd daily rise, China pares early gains

Last Updated: Thu, Apr 11, 2013 05:10 hrs

* HSI +0.8 pct, H-shares +0.9 pct, CSI300 +0.2 pct

* Gains still accompanied by anemic turnover in both markets

* Beta plays lifted by positive China lending data

* Agile Property climbs after encouraging March sales

By Clement Tan

HONG KONG, April 11 (Reuters) - Hong Kong shares were headed for a third-straight daily gain on Thursday, but in weak turnover, after official data showed Chinese lending and money supply exceeded expectations in March, dissipating credit tightening fears.

Mainland markets were comparatively weaker, paring early gains. At midday, the CSI300 of the leading Shanghai and Shenzhen listings was up 0.2 percent, while the Shanghai Composite Index crawled up 0.1 percent.

The Hang Seng Index climbed 0.8 percent to 22,220.5 points, set for a third day of gains that helped it retrace about 80 percent of last Friday's bird flu-triggered tumble. The China Enterprises Index of the top Chinese listings in Hong Kong was up 0.9 percent.

"The most important thing about this current batch of data is that the Chinese economy is more stable than previously feared," said Larry Jiang, chief investment strategist at Guotai Junan International Securities.

"But I still won't aggressively add to positions now, only selectively buying into companies with good fundamentals. We need to be more patient to see how the bird flu and North Korea situation pan out," Jiang added.

Central bank data showed on Thursday that Chinese banks made 1.06 trillion yuan ($171.2 billion) of new local currency loans in March, well above market expectations for 850 billion yuan, buoying the Chinese banking sector and other cyclical counters.

China Construction Bank (CCB) , the country's No. 2 lender, rose 0.8 percent in Hong Kong and 0.2 percent in Shanghai. CCB has shaved a quarter of its bounce from a September low to Jan. 30 high, slipping about 7 percent from that peak.

Mid-sized lender China Minsheng Bank climbed 1.7 percent in Hong Kong and 0.8 percent in Shanghai. Minsheng has now tumbled more than 17 percent from its Feb. 4 peak, cutting about 40 percent from its bounce from September lows.

Total social financing, the central bank's broad measure of liquidity in the economy, surged to 2.54 trillion yuan in March, more than double the 1.07 trillion yuan in February, the same set of data showed.

More data is expected next week. First quarter GDP growth data is due April 15, along with industrial output, retail sales and urban investment data for March.

FAW Car surged by the maximum 10 percent limit in Shenzhen after the Chinese automaker said it expects to record a profit for the first quarter.


Agile Property gained 2 percent in Hong Kong after the Chinese developer said new contract sales increased 17 percent in March from a year earlier. Gains on Thursday lifted Agile to its highest since early March.

Other Chinese property developers listed in Hong Kong were mostly higher, but those listed in the mainland were mixed. China Vanke inched up 0.7 percent in Shenzhen, but Poly Real Estate slipped 0.4 percent in Shanghai.

The official China Securities Journal reported on Thursday that Guangzhou will raise the down-payment ratio for buying a second home to 70 percent if housing prices rise by more than 2 percent this month from March, citing an unnamed local official.

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