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Hong Kong shares slip ahead of China data, Qingdao Haier soars

Clement Tan
Monday, 9 Dec 2013 | 11:56 PM ET

* HSI -0.1 pct, H-shares -0.2 pct, CSI300 +0.3 pct

* China industrial output, retail sales, urban investment awaited

* China shippers rally on "special funds" for buying, scrapping vessels

* Coal sinks, environmental companies rise on China pollution

HONG KONG, Dec 10 (Reuters) - Hong Kong shares fell early on Tuesday as investors marked time ahead of more Chinese data and Beijing kicked off an annual economic work conference where targets will be set for 2014.

The Chinese shipping sector rose in Hong Kong after the government announced new subsidies for buying and scrapping ships that will run until end 2015, confounding an earlier pledge to reduce support for sectors plagued by overcapacity.

China data for November urban investment, industrial output and retail sales are due at 0530 GMT, while money supply, loan growth and total social financing data are due by Dec. 15.

At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was up 0.3 percent, while the Shanghai Composite Index inched up 0.2 percent. The Nasdaq-style ChiNext Composite Index of mainly technology start-ups listed in Shenzhen slipped 0.4 percent.

The Hang Seng Index was down 0.1 percent at 23,790.2 points. The China Enterprises Index of the top offshore Chinese listings in Hong Kong slipped 0.2 percent. Both have been traded in the same ranges for more than three weeks, since Beijing unveiled reform details late on Nov. 15.

"The optimism on China is still intact, data will still drive the market in the short term, but reform details and execution will bolster the longer term view," said Linus Yip, an analyst at First Shanghai Securities.

"The optimism on China is still intact and investors want to position themselves for the next stage of the rally, but it's the year-end and investors are starting to be looking to lock in gains," Yip added.

Chinese cities and provinces including Shanghai, Shenzhen, Chongqing and Wuxi are accelerating the introduction of state-owned enterprise reforms, aimed at giving the markets a "decisive" role in resource allocation, the official Shanghai Securities News reported on Tuesday.

The official Xinhua news agency reported that China's leaders have started a closed-door meeting to map out their economic and reform plans for 2014. Another conference for urbanisation is reported to be in the works.

On Tuesday, shares of China Rongsheng Heavy Industries , the country's largest private shipbuilder, spiked 6.3 percent in Hong Kong to near its highest since June.

The sector was broadly mixed in the mainland though with China Shipbuilding Industry Co sinking 1.8 percent in Shanghai, while China Shipping Development climbed 1.2 percent.

China Shipping Development was further buoyed by a 32 percent target price upgrade by Deutsche Bank analysts for its H-share listing on expectations that its re-rating will continue on a strong earnings recovery. Its shares rose 1.1 percent in Hong Kong.

Qingdao Haier jumped the maximum 10 percent limit in Shanghai at the resumption of trade, while Haier Electronics soared another 8.8 percent after surging 13.1 percent on Monday after the company said Alibaba would buy stakes in Qingdao Haier and Haier Electronics as part of a joint venture.

Chinese coal counters fell on fears physical demand will be hit after record high pollution levels in the mainland. China Coal fell 1.6 percent to its lowest in almost three weeks in Hong Kong, while slipping 0.4 percent in Shanghai.

Environmental protection-related counters were strong. Beijing Enterprises Water jumped 4.5 percent, while China Everbright International climbed 2.8 percent.

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