China H Shares Slide to One-Month Low Amid Regulation Worries

  • Investors also seen concerned about U.S.-North Korean tensions
  • Shanghai Composite reverses losses in afternoon trading

Chinese shares traded in Hong Kong slumped to their lowest in more than a month amid concern China may ramp up oversight of financial markets and as geopolitical risks linger.

The Hang Seng China Enterprises Index fell 0.9 percent at the close. China Galaxy Securities Co. was among the biggest decliners, while China Life Insurance Co. retreated to its lowest price since Feb. 6. The Hang Seng Index slipped 0.7 percent to 24,088.46, and the Shanghai Composite Index reversed losses in the afternoon to advance 0.6 percent.

China’s anti-graft agency said on Sunday it is probing the nation’s top insurance official Xiang Junbo as the government steps up a bid to rein in financial risks. That’s spurred concern that regulators may consider new ways to reduce insurers’ stock holdings as a crackdown on the industry intensifies. Separately, investors are watching as the U.S. sends warships to waters near North Korea days after U.S. President Donald Trump attacked Syria with cruise missiles.

"The market is very concerned that China may step up regulation in the financial market," said Banny Lam, head of research at CEB International Investment Corp. in Hong Kong. "After Xiang Junbo’s arrest, investors are concerned that there could be more regulations on insurers’ investments in the stock market."

Lam added that the situation in North Korea had also hurt sentiment.

  • China Galaxy Securities slid 1.5%, while GF Securities Co. lost 1.1%.
  • China Life Insurance retreated 1.1%, paring its gain for the year to 14%. People’s Insurance Co. (Group) of China Ltd. dropped 0.6% to its lowest since March 13.
  • Guotai Junan Securities Co., China’s third-largest brokerage by market value, was unchanged on its trading debut in Hong Kong.
  • Pou Sheng International Holdings Ltd. jumped as much as 11% after its March revenue rose.
  • Jihua Group Corp. and Avic Aviation Engine Corp. rose by the daily limit as defense-related shares rose on the mainland amid heightened tensions on the Korean peninsula.
  • Chongqing Department Store Co. dropped 4.9%, and Wuliangye Yibin Co. slipped 1.7%. Some Chinese insurers may rush to sell their holdings amid concern over investment curbs, according to Zhang Gang, a strategist at Central China Securities Holdings.
  • Beijing Capital Co., Hesteel Co. and BBMG Corp. climbed by the daily limit for the fifth session since China said it plans to develop an area called Xiongan near the capital. The plans for the new city will result in total investment of 1.2 trillion yuan ($174 billion) to 2.4 trillion yuan in the next 10 to 20 years, Morgan Stanley economists have said.
  • A gauge of property companies led gains on the mainland. China State Construction Engineering Co. climbed 3.9%, bringing its advance this month to more than 13%.
  • China is scheduled to release key economic reports this week, including money supply, inflation and trade data.
  • Ningbo Construction Co. slumped 9.3% as trading resumed following a more than three-week halt during which it said it was terminating an asset restructuring plan.
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