* Hong Kong bourse steady after last week's 13-mth high
* New IPO approvals stir supply concerns on mainland markets
* Bigger correction seen after China national holiday
* Metallurgical Corp of China posts firm debut. (Updates to midday)
By Nerilyn Tenorio and Claire Zhang
HONG KONG/SHANGHAI, Sept 21 (Reuters) - Hong Kong shares held steady on Monday after setting new highs for the year last week, while Shanghai stocks slipped 1.47 percent on concerns over heavy share supply following new IPO approvals.
Ten companies approved to list on Shenzhen's second board said they would begin investor roadshows and take subscriptions on Friday.
"Hong Kong actually did quite well; you can see it did not really follow the mainland market's lead. That's because hot money continues to support trading, so we're still positive in terms of liquidity," said Steve Cheng, associate director at Shenyin Wanguo Securities in Hong Kong.
General sentiment had cooled but analysts said the mainland government would not allow it to deteriorate further ahead of China's long national day celebrations from Oct 1 until the following week. "The mainland government wouldn't want to spoil the fun ahead of National Day," Cheng said. "After the national holiday, we might see a correction, depending on the changes that we see in mainland monetary policy. But I think the PBoC (central bank) is likely to maintain a loose monetary policy."
After hitting a 13-month high above the 21,700-point level last Thursday and easing slightly on Friday and Monday morning, Hong Kong's benchmark Hang Seng Index drifted back into positive territory in late morning trade, ending the morning session up 0.21 percent at 21,668.30. Turnover remained high at HK$33.24 billion from midday Friday's HK$35.76 billion.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was down 0.57 percent at 12,543.26.
Banks and financial shares in Hong Kong were mixed following last week's rally on ample liquidity. Index heavyweight HSBC rose 1.32 percent to HK$92.40, while China's leading bank ICBC lost 1.62 percent to HK$6.06. The finance sector sub-index eased 0.12 percent.
Skyfame Realty, which is engaged in property development, investment and operation, jumped as high as 23 percent before scaling back gains to 3.57 percent at HK$0.58 by the end of the session.
The company said late on Friday that it would sell hotel and office property assets in Guangzhou to HNA Hotel for 1.1 billion yuan ($161.1 million), raising capital to fund an early note redemption and for working capital.
Melco International Development, parent of casino operator Melco Crown Entertainment Ltd, rose 1.1 percent to HK$5.51 after the company said on Sunday that it would sell its remaining 160.9 million shares, or 43.24 percent of the issued share capital of securities broker Value Convergence at a discounted HK$1.92 each to third party investors.
WEIGHED DOWN BY SUPPLY
China's key stock index slipped 1.47 percent on Monday, led by metal counters, weighed down by fresh signs that the stock regulator was pushing more shares, including those from a new board to be launched, into the market.
Dealers said market sentiment was weighed down after 10 companies approved to list on the second board said they would begin investor roadshows and take subscriptions on Friday.
But Metallurgical Corp of China (MCC) posted a firm debut.
The Shanghai Composite Index ended the morning at 2,919.196 points, after sinking 3.2 percent and falling below the psychologically important 3,000-point level on Friday.
Losing Shanghai A shares outnumbered gainers by 688 to 234, while turnover was active at 81 billion yuan ($12 billion).
Analysts said subscriptions for the 10 companies to be listed on China's Nasdaq-style market to fund high-growth start-ups had come faster than expected and could lead to a mild consolidation for the index.
"The subscriptions came much faster than investor expectations of at least after the National Day holiday, while MCC opened higher but drifted lower, weakening sentiment," said Wen Lijun, an analyst from Nanjing Securities.
She mentioned bearish factors such as more fundraising and looming share supplies, which were encouraging profit-taking, but also noted the index could consolidate around technical support.
Analysts said the index may find initial support at its 125-day moving average now at 2,840 points.
Investors were looking to lock in profits ahead of the National Day celebrations starting on Oct. 1, they said, anticipating volatility when the effect of government support bolstering the market fades after the event.
Shares of firms that had announced capital-raising plans softened. Shanghai Pudong Development Bank <600000.SS> lost 4.84 percent to 19.47 yuan, while property industry leader China Vanke sank 2.99 percent to 11.02 yuan.
MCC, the Chinese construction and engineering company that completed the world's second-biggest initial public offering (IPO) this year, gained 27 percent to 6.91 yuan, on its first day of trade in Shanghai, near the top end of analysts' expectations of between 6 and 7 yuan.
Metal shares were weak with Jiangxi Copper dropping 2.86 percent to 38.01 yuan. Shanghai copper futures fell sharply on Monday after a slide on the London Metal Exchange last Friday.
The average premium of Shanghai A shares over Hong Kong-listed H shares of the same companies fell as low as 12.2 percent on Monday, near the lowest level of 11.9 percent for the year hit in January. (Editing by Chris Lewis)