appConfigEntityId

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

hooksArticlePageAdvertisementConfigArticle

liveArticle

appConfig

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

sectionsV2

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

json

SCMP Reporter

Shares in Citic Pacific took a beating for the second consecutive trading day yesterday as investors continued to reassess the impact of its recent shareholding changes.

  Citic fell $2.40, or 5.63 per cent, to $40.20, the only Hang Seng Index constituent to lose ground.

  The conglomerate lost a hefty $2.50 on Friday.

  The fall comes amid concerns Citic's influence in Beijing may have been dealt a mortal blow by the management's move last week to purchase 330 million Citic shares from the company's mainland-owned parent.

  The share transaction saw the stake held by parent Citic Hong Kong weakened from 41.9 per cent to 26.45 per cent.

  Thornton Management (Asia) fund manager John Lai said: 'Now that Beijing has cut down its holding in Citic, people wonder what state will the company be in terms of future asset injections.'   Citic, the first major mainland enterprise set up in Hong Kong, has derived much of its impressive growth through its links with China's State Council.

  Since listing in 1986, the company has built up an impressive portfolio, including stakes in Hongkong Telecom, Cathay Pacific, Hongkong Dragon Airlines, Discovery Bay, and motor-trader Dah Chong Hong.

  The deal has created another cloud over Citic. Its management might have to raise money to pay for the share purchase.

  Mark Simpson, research director at ING Barings, said: 'There is some negative sentiment about whether the management have adequate funds to pay for the $10.9 billion deal.

  'They might be tempted to pass some of that on some time in the future.'   He said this could mean the sale of some recently purchased shares to third parties, an act which may put further downward pressure on Citic shares.

  Most brokers are looking for Citic to recover its momentum soon.

  They argue the shares are due for a pause as the counter was the best performing Hang Seng Index stock last year, posting a price rise of 66.6 per cent.

  Reports that Citic's influence in China could be waning might be premature as the parent company retains a sizeable stake.

  Mr Simpson said: 'Twenty-five per cent is still a significant holding. You would still be looking to protect that investment.' 



Citic Pacific takes beating for second day