Hong Kong shares closed at their highest in about a month on Thursday, spurred by recovering commodity prices and positive quarterly earnings from China Minsheng Bank, the country’s seventh-largest lender.
But a weak property sector dragged mainland Chinese markets to a third loss in four sessions. The CSI300 of the leading Shanghai and Shenzhen A-share listings slid 1.1 per cent. The Shanghai Composite Index shed 0.9 per cent.
Minsheng’s first quarter earnings were pretty solid, but much of its gains ... today were down to short coveringJackson Wong, Tanrich SecuritiesShort selling interest in Minsheng Bank’s H-share listing averaged 26 per cent in the first three days of the week, way above the 9.8 per cent average for the broader Hong Kong market.
On Thursday, Minsheng’s Hong Kong shares jumped 4.8 per cent to its highest since March 28 after China’s seventh-largest listed bank posted a 20 per cent rise in first quarter net profit from a year earlier.
But its Shanghai listing fell 2 per cent, tracking losses in the Chinese banking sector on the mainland after regulators ordered banks to report suspicious or irregular fixed-income transactions as part of a clampdown on the country’s vast interbank market.
The People’s Bank of China, which regulates the 24.4 trillion yuan (HK$30.38 trillion) interbank bond market, told commercial banks at a closed-door meeting on Wednesday that it was preparing tougher regulation to deal with substitute holdings.
Chinese property developers listed in the mainland were among the biggest index drags after the China Business News reported that the banking regulator has instructed lenders to stop extending loans to developers guilty of “malpractices”.
This came after data from the central bank showed China’s outstanding real estate loans in the first quarter rose 16.4 percent from the same period a year ago, even as overall industrial lending slowed.
Poly Real Estate tumbled 3.3 per cent in Shanghai, while China Vanke skidded 2.8 per cent in Shenzhen.
Commodities-related stocks were broadly higher as gold and copper prices rose to their highest in a week following a recent plunge in the physical markets. Zijin Mining, China’s biggest gold miner, jumped 4.9 per cent in Hong Kong in its best day since November.
Jiangxi Copper spiked 4.4 per cent in Hong Kong and a more modest 0.6 per cent in Shanghai, also helped by an upgrade by UBS from “hold” to “buy” with analysts believing its share price after the recent selloff, now represents an attractive risk-reward profile.
First quarter earnings were in also in focus, as Haitong Securities climbed 1.9 per cent in Hong Kong and 0.5 per cent in Shanghai after posting favourable results.
Bank of China, the first of the “Big Four” Chinese banks to post quarterly earnings later in the day along with a clutch of bellwether Chinese companies, inched up 0.6 per cent in Hong Kong.
China Unicom, the country’s second-largest mobile provider, slipped 0.2 per cent ahead of its first quarter earnings. After markets closed, Unicom said quarterly net profit jumped 90 per cent from a year earlier.
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