* HSI -0.9 pct, H-share -1.1 pct, CSI300 flat
* Time to take profit, growth plays vulnerable: BoComm
* China property sinks after Beijing city control measures
* Key earnings Thurs: Unicom, Zijing Mining, Great Wall
By Clement Tan
HONG KONG, Oct 24 China shares rebounded from
two-week lows early on Thursday, trimming losses after a
stronger than expected preliminary private survey of factory
activity in the country eased concerns about tightening
But worries lingered as short-term money rates again spiked
after the Chinese central bank refrained from injecting funds
through open market operations for a third session. Beijing also
strengthened regulations on the city's property market.
At midday, the CSI300 of the leading Shanghai and
Shenzhen A-share listings was flat, while the Shanghai Composite
Index shed 0.2 percent. Both had earlier tested their
lowest since Oct. 8.
But Hong Kong markets were barely moved by the HSBC China
flash purchasing managers' index (PMI), which came in at a
seven-month high of 50.9 in October, compared with September's
At 0405 GMT, the Hang Seng Index sank 0.9 percent to
22,795 points, while the China Enterprises Index of the
top Chinese listings in Hong Kong shed 1.1 percent to its lowest
Still, losses in both markets were not accompanied by
unusual spikes in turnover in both markets, suggesting there was
not yet any panic in a repeat of the end-June cash crunch.
"I still wouldn't add on any new positions from here, growth
plays are looking especially precarious," said Hong Hao, chief
strategist at Bank of Communications International Securities.
"Cash demand is going to be high in October because people
have to pay taxes and banks have to park reserves with the
central bank, but I think people ought to see that the People's
Bank of China has already tightened in a way because they have
not sold any yuan, allowing the yuan to spike," he added.
"Property restrictions usually doesn't bode well for the
stock market and we are starting to see them appear," Hong said.
He recommended investors start to take profit in the market.
Chinese property stocks mostly slid after the official
Xinhua news agency said that authorities would also increase
scrutiny of mortgage applications and strengthen oversight of
pre-sales of property.
The Beijing Housing Authority said separately that it would
speed up construction of lower-priced apartments and ensure an
adequate supply of land to build 20,000 new homes,
In Hong Kong, Country Garden tumbled 4.3 percent,
while China Resources Land tanked 3.4 percent. Vanke
slipped 0.2 percent in Shenzhen, while Poly Real
Estate shed 0.8 percent.
The Chinese banking sector was broadly weaker in Hong Kong
but patchy in the mainland. The "Big Four" players each lost
more than 1 percent in Hong Kong, as did the more prominent
mid-sized lender China Minsheng Bank.
But Shenzhen-listed Ping An Bank jumped 4.2
percent, headed for a second day of gains after posting robust
third quarter earnings. Mid-sized rival Industrial Bank
rose 1.8 percent.
EARNINGS, M&A FOCUS
Great Wall Motor, which closed in Hong Kong on
Wednesday at its record high, dived 4.8 percent ahead of its
quarterly earnings. Losses on the day weighed on the Chinese
auto sector listed in the offshore market.
Up 98 percent on the year, Great Wall is trading at 12.6
times forward 12-month earnings, a 41 percent premium to its
historical median, according to Thomson Reuters StarMine.
Other key earnings expected later in the day include ones
for China Unicom and Zijin Mining. They were
down 0.3 percent and flat in Hong Kong, respectively.
Wing Hang Bank climbed 1.7 percent after Reuters
reported Agricultural Bank of China is
considering a bid for the Hong Kong family-owned bank.
Trading in the shares of another family-owned bank, Chong
Hing and its holding company Liu Chong Hing
were suspended on Thursday. Reuters reported that Yue Xiu Group,
the trading arm of China's Guangzhou city government, is close
to an agreement to buy Chong Hing Bank.