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Mainland banks slip on HK market

CHINESE mainland bank stocks slipped in the Hong Kong market yesterday as investors worried about the mainland reversing its easy monetary policies following a surge in new lending in the first half.

On Tuesday, senior regulators warned that the mainland's massive lending was posing increasing risks for the banking system.

Bill and bond yields had been rising recently on signs that the central bank was starting to tighten its liquidity policy, with worries over a possible policy shift also weighing on the stock market, analysts in Shanghai said.

China Merchants Bank dropped 3.7 percent in Hong Kong. The mainland's sixth-largest lender was planning a rights share offer to raise about US$3 billion before year-end, according to investment banking sources yesterday.

The benchmark Hang Seng Index finished down 0.8 percent or 141.2 points at a two-week closing low of 17,721.07, falling for a third straight day as talk circulated about the need for a second round of stimulus spending in the United States.

Turnover rose to HK$57.1 billion (US$7.3 billion) from Tuesday's HK$50.7 billion.

Mainland property stocks fell on worries a clampdown on lending for second-home buyers in Hangzhou may spread to other cities. Banks there are required to apply a 40-percent down-payment rule for second home purchases after property prices rose 20 percent over the past three months, Chinese newspapers reported.

The China Enterprises Index, which represents top locally listed mainland stocks, fell 1 percent to 10,573.71.


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