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Benjamin Robertson

Stocks ended the week on a mixed note as mainland Chinese capital outflows hit a new monthly high and US Federal Reserve chief Janet Yellen signalled interest rates would increase before the end of the year.
Leading mainland Chinese stock indices ended lower on Friday, weighed down by state-run industrial stocks, with the Shanghai Composite Index falling 1.6 per cent and the Shenzhen Composite Index sliding 3.44 per cent.
Shanghai finished down 0.18 per cent for the week and Shenzhen up 1.07 per cent.
Turnover contracted to six-month lows as investors closed positions ahead of an extended public holiday.
Despite the risks higher interest rates pose to mortgage costs, property stocks led the gainers in Hong Kong, with the benchmark Hang Seng Index closing up 0.43 per cent and the H-share index 0.45 per cent stronger.
The Hang Seng Index lost 3.35 per cent on the week, while the H-share index shed 5.15 per cent.
Yellen said on Thursday the policy-setting Federal Open Market Committee believed American economic growth was on target for a rate rise.
"Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter," she said.
The FOMC decided last week to keep rates on hold and at the same time made dovish statements about the uncertain economic outlook in emerging markets, including China.
"I have been in the industry 15 years and have not seen such a confusing outlook on rates," said Ivan Li, an equities analyst at Tung Shing Securities.
Investors were waiting for clearer signals and were at the same time worried the mainland's economy was slowing, Li said.
One sign that investors are voting with their wallets was a record US$141.66 billion in capital outflows from the mainland last month, exceeding the previous record of US$124.62 billion in July, according to Bloomberg data.
Outflows picked up following a sudden devaluation in the yuan exchange rate against the US dollar in the middle of last month after the People's Bank of China adjusted the way it sets the daily trading range, threatening further falls.
Shares in mainland internet giant Tencent Holdings closed the week 3.18 per cent lower after Hong Kong exchange filings showed founder Pony Ma Huateng sold 23.85 million shares, reducing his stake to 9.37 per cent from 9.62 per cent.
A coterie of small and mid-cap stocks reverberated to a critical internet posting on Thursday night by shareholder activist David Webb warning investors to avoid more than a dozen thinly traded stocks, saying some were bubbles.
Among those on Webb's list, software developer Finsoft Financial Investment Holdings fell 6.45 per cent to close at 11.6 HK cents, insurance broker Convoy Financial Holdings dropped 2.3 per cent to 42.5 HK cents, and investment holdings group Capital VC tumbled 4.62 per cent to 31 HK cents.


Capital outflows and rates signal mark close in China markets

An investor takes a nap as China's stock markets finish lower ahead of an extended holiday weekend. Photo: Reuters

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