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H-SHARES and A-shares had a week to forget.
The Hang Seng Index lost 0.98% on Friday to 21,244.49 while the benchmark Shanghai Composite Index shed 0.5% to 2,983.54, falling 5% for the week.
The Hang Seng China Enterprises Index, which tracks mainland-based companies (H-shares) listed in the SAR, lost 1.32% on Friday.
However, property counters in China did end the week on an upbeat note and should help shares in both Hong Kong and on the mainland make up this week for recently ceded ground.
Chinese property developers listed in Hong Kong did not fare as well as their A-share counterparts.
China Resources Land (HK: 1109) fell 3.01%, while R&F Properties (HK: 2777) and China Overseas Land & Investment (HK: 0688) shed 2.85% and 2.78%, respectively.
Hong Kong-listed financial counters also stayed in negative territory with China Construction Bank (HK: 0939; SHA: 601939) losing 1.71%, and ICBC (HK: 1398; SHA: 601398) and China Merchants Bank (HK: 3968; SHA: 600036) falling 1.02% and 0.94%, respectively.
Container and cargo shippers also softened on Friday led by China Shipping Development (HK: 1138) losing 2.59% and China COSCO Holdings (HK: 1919) down 2.34% following news that it lost 7.47 bln yuan last year compared to a net profit of 11.61 bln yuan in 2008.
China Shipping Container Lines (HK: 2866) fell 1.24% on Friday.
Steelmakers also took a hit on Friday, but mainly due to profit-taking and through no fault of their own.
Angang Steel (HK: 0347) and Chongqing Iron & Steel (HK: 1053) fell 4.68% and 3.57%, respectively.
Southwestern China-based Chongqing Iron & Steel reported a first quarter net profit 52.10% higher than a year earlier.
Meanwhile, across the de facto border on the mainland, A-shares also finished lower last week.
But some developers displayed a few points of light in an otherwise dour two weeks.
China’s largest real estate firm Vanke (SZA: 000002) gained 0.38% while Poly Real Estate Group (SHA: 600048) rose 0.6% and Gemdale (SHA: 600383) was up 3.09%.
However, lenders continued their losing ways in China.
Bank of Communications (BoCom) (HK: 3328; SHA: 601328) had the biggest drop at 1.91%, with tighter property sector regulations hitting the lender’s mortgage business severely over the past two months, BoCom’s executive vice president said in a media interview last week.
Some resource firms fared much better than the Index on strong annual results.
Shanghai Datun Energy Resources (SHA: 600508), a coal firm, rose 10.02% Friday after announcing its 2009 net profit rose 87%.
Peer firm Shan Xi Guo Yang New Energy (SHA: 600348) climbed 6.88% on net profit improvement of 168.33%.
Back in Black?
This week, analysts are expecting Chinese shares to climb back into positive territory and avoid the sharp swings seen over the past two trading weeks.
Last week, the Shanghai Composite fell by 4.8% in one single trading day, the largest such selloff witnessed in eight months.
But at least one market expert says that the relatively lukewarm reception to the recent launch of margin trading and stock futures trading is resulting in a lot of passive spectator activity.
“I think the wait-and-see attitude toward the inauguration of the two new products is reaching its expiration date, and we will soon see a lot more trading activity. However, I would urge investors to keep a close eye on whether or not CNPC (SHA: 601857) issues stock futures. This will be indicative of how much room there is for the product at this time,” SinaFinance cited the expert as saying.
The expert added that investors should be wary of regulatory adjustments to the property sector at any time.
“As we saw recently, drastic changes can take place on the policy front even over the weekend.”
This is a reference to recent measures meant to make it more difficult to buy second homes in hopes of cooling speculation in the real estate sector.
See also: CHINA PROPERTY: Mortgage bonanza a worry
