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4 years ago
China shares rebound despite IPO resumption, Hong Kong shares up 2.9 pct in 2013
December 31, 2013 / 4:32 AM / 4 years ago

China shares rebound despite IPO resumption, Hong Kong shares up 2.9 pct in 2013

* HSI +0.3 pct on the day, rises 2.9 pct in 2013

* H-shares +0.4 pct on Tuesday, down 5.4 pct in 2013

* CSI300 +1.3 pct by midday

* Chinese brokerage rises on IPO resumption

By Yimou Lee

HONG KONG, Dec 31 (Reuters) - China shares rose in a choppy trade on Tuesday, with strength in securities and steel firms overshadowing concerns that the resumption of new share listings will drain liquidity from the market after a more than one-year freeze.

China has approved five firms to list on mainland exchanges, ending a suspension on initial public offerings (IPO), as authorities look to reboot a reformed market in 2014.

Hong Kong shares ended the year higher during Tuesday's half-day session, with some "window dressing" buying from fund managers to improve the appearance of portfolios ahead of the year-end.

The Hang Seng Index closed up 0.3 percent at 23,306.39 points, while the China Enterprises Index of the top Chinese listings in Hong Kong rose 0.4 percent.

They were up 2.9 percent and down 5.4 percent in 2013, respectively.

The CSI300 rose 1.3 percent by midday, while the Shanghai Composite Index was up 0.9 percent at 2,115.79 points. Both swung between negative and positive territory in morning trade.

So far this year, they have lost 7.7 percent and 6.8 percent, respectively.

Hong Kong markets will reopen on Thursday. Mainland markets, open for a full day on Tuesday, will close on Wednesday.

"By doing the IPOs gradually, it may not have too much impact on the Chinese markets," said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities. "The market already has some expectations."

"The liquidity is a short-term problem and it won't have a long-lasting effect," Yip said.

China said last month it would start lifting a ban on new stock listings in early 2014 with around 50 firms set to complete the streamlined registration process by January, sparking concerns that a wave of new stocks could direct money away from where it is needed.

China's central bank said on Tuesday it will achieve reasonable growth in credit and social financing while keeping appropriate liquidity and continuing a prudent monetary policy.

GAINS ON IPO

Leading gains were Chinese brokerage and steel companies. Citic Securities , China's largest listed brokerage, rose 1.9 percent in Hong Kong and 1.7 percent in Shanghai. China Merchants Securities jumped 3.4 percent in Shanghai.

Inner Mongolian Baotou Steel Union Company surged the daily 10 percent limit after the company said it will raise up to 29.8 billion yuan ($4.92 billion) for asset acquisitions from its parent company.

A strong performance from index heavyweight stocks helped boost the Hong Kong market, with Hutchison Whampoa Ltd rising 0.4 percent to a record high and Galaxy Entertainment up 0.9 percent.

Shares in China Vanke, the country's largest developer by sales, rose 1.5 percent after the official China Central Television reported on Tuesday the company owed unpaid land taxes for more than 4 billion yuan.

The state broadcaster was under harsh criticism for being "inaccurate" after it reported last month that billions were owed in unpaid taxes from major developers.

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