China shares touch 8-month high despite weak property data

China shares touch 8-month high despite weak property data

SHANGHAI - China's stock indexes rose moderately on Monday, with the Shanghai Composite Index touching its highest since December 2013 even amid weak investment and housing data, but home price slides on the mainland dampened shares in Hong Kong.

By midday, the CSI300 index of leading Shanghai and Shenzhen A-share listings was up 0.4 per cent and the Shanghai Composite rose 0.4 per cent to 2,235.44 points, easing off its highest level since Dec 2013.

In Hong Kong, however, the HSI index was down 0.5 per cent at 24,838.4 points, with the China share sub-component underperforming to lose nearly 1 per cent.

China's property prices slid for a third straight month in July, but shares in property developers -- many of which are index heavyweights -- evinced no particular reaction, rising in line with their broader indexes.

However, China Baoan Group managed to be the lead supporter of the CSI300 index's rise, based on ongoing speculation in the stock following June reports that it would reallocate its investments out of real estate toward new energy, analysts said.

Media-related companies posted big rises in Shanghai and Shenzhen on Monday, a sector mainly dominated by small- and medium-sized enterprises (SMEs) in China, with Shanghai Ganglian E-Commerce Holdings jumping 7.7 per cent and Guangdong Guangzhou Daily Meida up 8.7 per cent.

"The media sector was boosted by the upcoming Shanghai-Hong Kong Stock Connect pilot programme," said Xiao Shijun, an analyst from Guodu Securities in Beijing, with investors betting that foreign capital allowed to flow into mainland exchanges will favour the sector when the pilot programme officially launches.

Analysts said that investors were still wary about economic stability and have held back from aggressive moves given mixed macroeconomic data in July.

China drew $71.1 billion in foreign direct investment (FDI) in the first seven months of 2014, down 0.4 per cent from a year earlier and 17 per cent lower month-on-month.

ROCKY PROPERTY

"The set of weak (China property) data worried investors and that helped trigger selling on property stocks such as Sun Hung Kai Properties and Cheung Kong, which have big scale property projects on the mainland," said Alfred Chan, chief dealer at Hong Kong-based Cheer Pearl Investment.

"Banks which provide financing to developers are under selling pressure as investors are concerned over potential risks of escalating bad debt."

Sun Hung Properties fell 1.5 per cent in its biggest drop in more than two weeks, and Bank of China was also down 1.1 per cent in its biggest slide since August 1.

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