Hong Kong's Stocks Fall as Chinese Growth Slows; Henderson Land Declines
Hong Kong stocks declined, dragging the benchmark index to a one-week low, as slowing economic growth in China raised earnings concerns.
Cnooc Ltd., China’s biggest offshore oil explorer, declined 2.7 percent as China said its economic growth slowed in the second quarter and as crude oil prices fell. Industrial & Commercial Bank of China, the world’s largest bank by market value, fell 2.4 percent. TCL Multimedia Technology Holdings Ltd., a Chinese maker of television sets, slumped 16 percent after Credit Suisse Group AG cut its rating on the stock to “neutral.”
The Hang Seng Index fell 1.5 percent to 20,255.62, its lowest close since July 8. All but five stocks declined among the gauge’s 43 constituents.
China’s data “could be a signal for a slowdown in economic growth and corporate earnings for the second half of the year,” said Peter So, head of research at CCB International Securities Ltd. Still, “this data is lower than market expectation and forms a case for credit easing and for holding interest rates.”
The Hang Seng China Enterprises Index of so-called H shares of Chinese companies lost 2 percent to 11,427.94.
The Hang Seng Index has slid 7.4 percent this year as China’s efforts to cool its property market and Europe’s debt crises dented confidence in a global economic recovery. Stocks on the gauge trade at 13.4 times estimated earnings, Bloomberg data show. Futures on the index slipped 1.8 percent to 20,181.
China Growth Slows
Cnooc lost 2.7 percent to HK$12.40. China Unicom (Hong Kong) Ltd., the nation’s second-biggest wireless carrier, declined 3.1 percent to HK$10.08.
China’s economic growth eased to 11.1 percent in the first half after the government succeeded in tempering credit expansion, investment spending and property speculation. The pace compares with an 11.9 percent gain in January-March from a year earlier.
ICBC, the world’s largest bank by market value, fell 2.4 percent to HK$5.74. China Construction Bank Corp., the nation’s second-largest lender, lost 2.3 percent to HK$6.36. Bank of China Ltd., the nation’s third-largest lender, slipped 2.4 percent to HK$4.04.
Chinese banks also declined today ahead of the Agricultural Bank of China Ltd.’s listing in Hong Kong tomorrow.
Agricultural Bank of China, China’s largest bank by customers, began trading in Shanghai today, and will list H- shares in Hong Kong tomorrow.
“I have already reduced holdings of ICBC and China Construction Bank because of this IPO,” Alex Au, managing director of Richland Capital Management Ltd. which oversees $300 million of assets said yesterday.
TCL Multimedia slumped 16 percent to HK$3.48. Credit Suisse, which previously rated the stock “outperform,” lowered its recommendation on the stock after the company warned of a loss in the first half.
China ITS Holdings Co., part-owned by Singapore’s Temasek Holdings Pte, rallied as much as 9.7 percent in its Hong Kong debut today. The shares were unchanged to close at HK$3.49.
China ITS, which provides information technology for transportation infrastructure projects, intends to use the IPO proceeds for acquisitions, to replenish its working capital and for research and development, according to the term sheet for the sale obtained by Bloomberg News.
Henderson, Zijin Mining
Henderson Land Development Co., the Hong Kong builder controlled by billionaire Lee Shau-kee, declined 2.1 percent to HK$46.70 after local police said they seized documents from the developer as part of an investigation into collapsed apartment sales at a luxury residential project. Henderson is at the center of a government probe after 20 luxury apartment sales worth HK$2.67 billion ($343 million) fell through.
Zijin Mining Group Co., China’s largest gold producer, dropped 3.4 percent to HK$4.82 after the company said the China Securities Regulatory Commission will investigate its release of information about a leak of waste water from a mine in Fujian province that polluted a local river, according to a statement to Shanghai’s stock exchange.