* HSI -0.3 pct, H-shares -0.3 pct, CSI300 -0.4 pct
* Turnover stay subdued ahead of U.S. presidential election
* HSBC slides after saying U.S. fine may exceed $1.5 bln
* Steady demand for China Merchant Holdings block deal
By Clement Tan
HONG KONG, Nov 6 Hong Kong shares slipped
further from 2012 highs as investors took profits in some recent
outperformers, with turnover subdued ahead of the U.S.
presidential election later on Tuesday.
The Hang Seng Index slipped 0.3 percent to close at
21,944.4 points, slipping for a second day after closing at its
highest level of the year on Friday. The China Enterprises Index
of the top Chinese listings in Hong Kong also shed 0.3
The Shanghai Composite Index and CSI300 of
the top Shanghai and Shenzhen listings each lost 0.4 percent.
"Funds are still flowing into Hong Kong, but everybody is
holding off until the uncertainty from the U.S. election is
resolved," said Jackson Wong, Tanrich Securities' vice-president
for equity sales.
Bourse operator Hong Kong Exchange (HKEx) fell 2.1
percent from a 6-month high recorded on Monday.
After lagging the market for much of the year, it jumped 24
percent in two months prior to November on expectations that
interest in Chinese equities would revive as the world's
second-largest economy shows signs of perking up.
HSBC Holdings Plc lost 1.4 percent after
Europe's largest bank said a U.S. fine for violating federal
anti-money laundering laws could cost significantly more than
$1.5 billion and is likely to lead to criminal charges as well.
China Merchants Holdings slumped 5.2 percent to
HK$24.55, its lowest close since Oct 16, after an undisclosed
investor raised $84 million selling 27 million shares in a deal
priced between HK$24.20 and $25.10, representing a discount of
6.6 percent to Monday's HK$25.90 close.
Traders said institutional investors made up 80 percent of
the orders for the deal and demand was double that of available
sales, suggesting that demand for secondary offerings still
exists if the discount is sufficient.
This contrasted with a failed Tingyi Holdings
share placement on Oct. 16, when an undisclosed shareholder
tried to price a $120 million share sale at a 1 to 2.1 percent
discount to the previous day's close.
MAINLAND RETAIL INVESTORS JITTERY AHEAD OF PARTY CONGRESS
Mainland Chinese markets suffered their worst day in more
than a week after a news report suggested that institutional
investors sold into the rally last week ahead of a
once-in-a-decade political transition that formally starts this
Thursday with the 18th Communist Party Congress.
The state-run China Securities Journal reported on Tuesday
that redemptions last week in exchange-traded funds tracking
mainland markets topped 2 billion units for only the fifth time
This was despite the fact that last week was the best one in
a month for the Shanghai Composite and CSI300 indices. They rose
2.5 percent and 2.6 percent respectively.
"If redemptions were so high last week when the market had a
good week, it shows that institutional investors still lack
confidence and retail investors have reacted accordingly," said
Cao Xuefeng, head of research at Huaxi Securities in Chengdu.
China Railway Construction slipped 1.7
percent from a 14-month high in Shanghai, while shedding 2.8
percent in Hong Kong. But it is still up 37 percent in Shanghai
and 88 percent in Hong Kong for the year.
Kweichow Moutai lost 2.9 percent in Shanghai
despite mainland media reports that the bigger producer of
Chinese premium liquor had denied rumours that it had
inventories almost equal to two years' supply and could face a
collapse in its product prices.