** Hong Kong shares of Haitong Securities rise 2.9% to HK$6.44, highest since Jan. 4

** Haitong's Shanghai-listed stock climbs 2.3% to 10.80 yuan, highest since Jan. 2, and set for a second straight session of gains

** China's securities regulator on Friday approved merger of Haitong Securities and Guotai Junan Securities , giving the final nod to a deal that would create a $230 bln brokerage powerhouse

** Under the merger plan, Guotai Junan would absorb Haitong by issuing new shares to the latter's investors in the mainland China and Hong Kong markets

** Guotai Junan's Hong Kong stock rises as much as 2.9% to HK$10.76, highest since Jan. 3, while Shangahi shares

climb 2.7% to 18.08 yuan, highest since Jan. 2

** In Hong Kong, the Hang Seng Index rises 2.4% and the Hang Seng Mainland Banks Index adds 0.7%

** In China, the blue-chip CSI 300 Index gains 1.1% and the Shanghai Composite Index adds 0.7%

(Reporting by Donny Kwok)

((donny.kwok@thomsonreuters.com))