Hong Kong Stocks Fall, Halting Six-Day Gain, on Slowing China Home Market
Hong Kong stocks fell for the first time in seven days after property prices rose at the slowest pace in six months and growth of imports to China slowed.
China Overseas Land & Investment Ltd., controlled by the nation’s construction ministry, slid 2 percent. Daphne International Holdings Ltd., a shoe retailer, dropped 3.8 percent after data showed China’s import growth slowed, indicating government policies to contain economic expansion were working, the customs bureau said. China Oriental Group Co. soared 15 percent after the steel-product producer reported higher profit.
The Hang Seng Index slipped 1.3 percent to 21,513.20 as of 3:08 p.m. local time, halting a six-day, 3.7 percent gain.
“The market needs a bit of consolidation and to give up some of its recent gains,” said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. “Mainland developers are still encountering lots of uncertainty.”
The Hang Seng China Enterprises Index of so-called H shares of Chinese companies declined 2 percent to 11,978.88.
The Hang Seng Index has fallen 4.1 percent from its highest close this year on Jan. 6 as China’s efforts to cool its property market and Europe’s debt crisis dented confidence in a global economic recovery. Stocks on the gauge trade at an average 14.2 times estimated earnings, Bloomberg data show, down from 17.2 times at the beginning of the year.
China Overseas Land slid 2 percent to HK$16.38. Guangzhou R&F Properties Co., the biggest real-estate company in the southern Chinese city, dropped 3.9 percent to HK$12.18. KWG Property Holding Ltd., a builder, slumped 4.8 percent to HK$5.20. China Resources Land Ltd., a state-controlled developer, fell 0.8 percent to HK$15.84.
China Property Prices
House prices in 70 major Chinese cities climbed 10.3 percent in July from a year earlier, the statistic bureau’s newspaper, China Information News, reported. That was less than an 11.4 percent increase in June and the median estimate of 10.5 percent in a Bloomberg News survey of economists.
Daphne dropped 3.8 percent to HK$7.57. Li Ning Co., the Chinese sportswear maker endorsed by basketball star Shaquille O’Neal, fell 3.3 percent to HK$25.15.
Imports climbed 22.7 percent to $116.8 billion in July, the customs bureau said. That was slower than the 34.1 percent expansion in June and was the smallest gain since growth resumed in November.
The slowdown in imports reflects government policies to cool the economy, said Huang Guohua, head of the statistics department of the customs bureau.
“Today’s trade data underline how little progress China has made in rebalancing its economy,” Mark Williams, an economist at Capital Economics Ltd. in London, wrote in an e- mailed report. “The import data underline the downside risks to growth in second half of the year.”
China Oriental soared 15 percent to HK$2.68 after the steel-product manufacturer reported first-half profit more than doubled to 796 million yuan ($117.5 million). The company also plans to sell between $300 million and $500 million of five-year bonds denominated in U.S. dollars, according to a person familiar with the matter.
Trading in Li & Fung Ltd., the biggest supplier to retailers including Wal-Mart Stores Inc., was suspended, pending an announcement of the privatization of affiliate Integrated Distribution Services Group Ltd. IDS, which also halted trading in its shares, provides logistics and distribution services for Li & Fung Group, parent of Li & Fung.
Sinotrans Shipping Ltd. fell 3.1 percent to HK$3.31 after the dry-bulk arm of China’s third-largest shipping group said first-half profit fell 8.7 percent to $58.5 million, mainly on reduced interest income.
Futures on the Hang Seng Index slid 1.3 percent to 21,513. Thirty-eight stocks declined while three gained on the 43- company gauge.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.