April 28, 2020 / 5:18 AM / a month ago

China stocks waver as earnings loom; start-ups surge on IPO reform

* SSEC +0.1%, CSI300 +0.8%, HSI +0.8%, HSCE +0.8%

* Start-up board rise most among indexes amid IPO reform

* Banks to report earnings; regulator warns on wealth products

HONG KONG, April 28 (Reuters) - China stocks on Tuesday flitted in and out of negative territory but turned positive as the start-up index gained on fresh regulatory reform, while investors awaited big banks to release their earnings after a tumultuous first quarter.

** At the midday break, the Shanghai Composite index was up 0.1% at 2,818.48 points, after dropping 2% to its lowest level in more than three weeks in morning trade. ** China’s blue-chip CSI300 index was up 0.8%, with its financial sector sub-index rising 1.2%, the consumer staples sector up 1.6%, the real estate index up 1.7% and the healthcare sub-index climbed 0.1%.

** China’s banking regulator has asked commercial banks to halt new sales of a wide range of wealth management products that might lead to unlimited losses for investors, a week after heavy losses were recorded in a crude oil futures trading product sold by the country’s fourth-largest lender.

** Investors worry a broad tightening on such products could hurt bank profits, said Anthony Chan, chief Asia investment strategist at Union Bancaire Privée. Bank of Communications and ICBC are among banks reporting earnings in the coming days.

** China kicked off a reform this week to fast-track initial public offerings (IPOs) on Shenzhen’s start-up board ChiNext, as Beijing accelerates capital market restructuring to reinvigorate an economy ravaged by coronavirus.

** “We consider ChiNext’s IPO registration reform as long-term positive for the Ashare market,” Morgan Stanley’s analysts said in a note on Tuesday. They said extending eligibility of IPO companies and creating more comprehensive de-listing rules would “continue to make the A-share market more attractive as an IPO destination and discourage speculative activities.”

** The Shenzhen index was up 0.1% and the start-up board ChiNext Composite index climbed 1.3%. ** Hong Kong leader Carrie Lam said on Tuesday most civil servants will gradually return to work from May 4.

** Chinese H-shares listed in the city rose 0.8%, while the Hang Seng Index also gained 0.8% to 24,466.42. ** Around the region, MSCI’s Asia ex-Japan stock index was flat, while Japan’s Nikkei index was down 0.4%. ** The onshore yuan was 0.01% firmer at 7.0863 per U.S. dollar. ** The sub-index of the Hang Seng index tracking energy shares gained 0.3%, while the IT sector rose 0.4%. (Reporting by Noah Sin, Editing by Sherry Jacob-Phillips)

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