SHANGHAI, Jan 28 (Reuters) - China stocks rose on Monday morning, amid hopes that leadership changes at the country’s securities watchdog could breathe life into a struggling market, but gains were capped by downbeat industrial profit data.
** There are signs money continues to shun risky assets, while chasing high-quality bonds, amid lingering worries about the Sino-U.S. trade relationship.
** China’s bluechip CSI300 index rose 0.5 percent, to 3,201.07 points, by the end of the morning session, while the Shanghai Composite Index gained 0.3 percent, to 2,610.14 points.
** Hong Kong shares followed Wall Street higher. The Hang Seng index added 0.4 percent, to 27,684.23 points, while the Hong Kong China Enterprises Index gained 0.6 percent, to 10,934.91.
** China has appointed banking veteran Yi Huiman to head the China Securities Regulatory Commission (CSRC), putting governance of the nation’s stock markets in his hands at a time when investor confidence has been hit by a slowing economy and U.S. tariffs.
** Shen Weizheng, a fund manager with LC Securities, said except for a knee-jerk reaction, the leadership change won’t likely have a lasting impact on the market.
** “Stock performance is closely related to the macro economy and structural reforms, which is not controlled by the CSRC chairman,” he said. “It’s like the Chinese national soccer team. Who is the coach doesn’t really matter a lot.”
** Curbing market sentiment, earnings at China’s industrial firms shrank for a second straight month in December on slowing prices and sluggish factory activity.
** Despite looser monetary conditions, risk appetite remains weak. Local government Chinese bonds issued last Friday by the northern Hebei province were 52.74 times oversubscribed, underscoring huge demand for high-quality debt instruments, as well as continuous aversion toward risky assets, Shanghai Securities News reported.
** Also reflecting investor preference, convertible bonds issued recently by Ping An Bank were 1,400 times oversubscribed, with 10.75 trillion yuan worth of institutional money bidding for about 8 billion yuan of the securities on sale, local media reported.
** China’s CSI300 financial sub-index was higher by 0.38 percent but the healthcare sub-index fell 1.46 percent. ** The smaller Shenzhen index was up 0.26 percent and the start-up board ChiNext Composite index was higher by 0.21 percent. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.37 percent, while Japan’s Nikkei index was down 0.38 percent. ** The yuan was quoted at 6.731 per U.S. dollar, 0.26 percent firmer than the previous close of 6.7485. ** The largest percentage gainers on the main Shanghai Composite index were Chongqing Dima Industry Co Ltd, up 10.14 percent, followed by Beijing Bashi Media Co Ltd, gaining 10.13 percent, and Beijing Hualian Hypermarket Co Ltd , up by 10 percent. ** The largest percentage losers on the Shanghai index were ARTS Group Co Ltd, down 9.99 percent, followed by Xinhua Winshare Publishing and Media Co Ltd, losing 9.99 percent, and Yiwu Huading Nylon Co Ltd, down by 9.98 percent.
Reporting by Samuel Shen and John Ruwitch; Editing by Subhranshu Sahu