* SSEC 0.4 pct, CSI300 0.3 pct, HSI -1.2 pct
* Gov's debt-reduction plan needs a vibrant equity
* China property shares rebound sharply on signs of strong
SHANGHAI, Oct 11 China stocks rose to a
one-month high on Tuesday after Beijing unveiled guideliness to
cut massive corporate debt, potentially leading to consolidation
among some state-owned companies and drawing more investor
interest into equities.
But Hong Kong shares fell over 1 percent, after trading
resumed following Monday's holiday, as some investors took
profit from the market's recent rally.
China's blue-chip CSI300 index rose 0.3 percent,
to 3,304.22 points by lunch break, while the Shanghai Composite
Index gained 0.4 percent, to 3,059.55 points.
Investors welcomed newly-released plans to reduce rising
corporate debt by the Chinese government, which will take a
multi-pronged approach including encouraging mergers and
acquisitions, bankruptcies, debt-to-equity swaps and debt
"For such a plan to be successful, you need a vibrant equity
market," said Yang Hai, analyst at Kaiyuan Securities.
"The government apparently wants to channel money from the
property market to the equity market, which can serve the
economy in a better way," he said, referring to fresh curbs by
many city governments over the past week to discourage property
Investors are now betting that consolidation among
debt-laden state-owned companies will accelerate.
China's major listed shipbuilders, including CSSC Offshore &
Marine Engineering Group Co, China Shipbuilding
and China CSSC Holdings surged on
expectation that their state-owned parents will merge.
Also reflecting growing interest in state assets
restructuring, shares of China United Network Communications
jumped for the second day on Tuesday, after saying
over the weekend that its parent company is studying plans for
"mixed ownership" reforms.
The real estate sector rebounded sharply
following the previous session's slump, after major developers
including China Vanke, Poly Real Estate
and Beijing Capital Development reported strong
sales in September.
In Hong Kong, the Hang Seng index dropped 1.2
percent, to 23,578.23 points, while the Hong Kong China
Enterprises Index lost 1.1 percent, to 9,813.84.
During the July-September period, the Hong Kong market
posted its biggest quarterly gain in seven years with a 12
percent jump, so many investors expect trading to be volatile
this quarter due to rising pressure from profit-taking.
(Reporting by Samuel Shen and John Ruwitch; Editing by Shri