Hong Kong Stocks Fall in Longest Losing Streak in Three Months

Hong Kong stocks fell for a fourth day, the longest losing streak in almost three months, after Chinese Premier Wen Jiabao said his cabinet is drafting further measures to curb inflation.

China Shenhua Energy Co., the nation’s biggest coal producer, slid 3.8 percent. Aluminum Corp. of China Ltd., the nation’s largest maker of the lightweight metal, dropped 3.2 percent. Skyworth Digital Holdings Ltd. slumped 7.3 percent after the Chinese manufacturer of televisions said it expects a “significant” decrease in first-half net income.

“It’s very clear that inflation expectation in China is rising very fast, so it’s time for the government to act very decisively,” Sun Mingchun, head of China research at Daiwa Securities Capital Markets, said in a Bloomberg Television interview.

The Hang Seng Index declined 2 percent to close at 23,214.46, extending its losses in the past four days to 6 percent. That’s the longest losing streak since the six days ended Aug. 27.

The Hang Seng China Enterprises Index of so-called H shares of Chinese companies lost 2.4 percent to 12,876.34, its lowest close since Oct. 8.

The Hang Seng Index gained 11 percent this year through the end of last week on expectations that growth in corporate earnings would overcome concerns about the pace of the U.S. economic recovery and China’s steps to curb rising property prices. Shares in the gauge trade at an average 14.6 times estimated earnings, compared with about 17.2 times at the start of the year.

TV Broadcast

Wen’s comments at a supermarket in Guangzhou, Guangdong, were broadcast last night on state television. He didn’t elaborate, beyond urging local governments to ensure market supply and order.

China may raise interest rates for a second time this year as soon as Nov. 19, the China Securities Journal reported, citing an unidentified analyst. Earlier announcements also indicate that rate decisions are often released on Fridays or around the 20th of the month, the newspaper said.

Shenhua Energy slid 3.8 percent to HK$33.15. Aluminum Corp. fell 3.2 percent to HK$7.01. Jiangxi Copper Co., China’s biggest producer of the metal, plunged 8.2 percent to HK$21.90. Cnooc Ltd., China’s biggest offshore oil explorer, dropped 2.7 percent to HK$16.48.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum plunged 6.3 percent yesterday. Crude oil futures dropped 3 percent yesterday to $82.34 a barrel, the lowest settlement since Oct. 29.

Record Volume

The People’s Bank of China in October raised its benchmark interest rates for the first time since 2007 and last week boosted lenders’ reserve-requirement ratios by as much as one percentage point, seeking to tame the fastest inflation in two years. Consumer prices jumped 4.4 percent in October from a year earlier, exceeding all 28 estimates in a Bloomberg survey.

The volume of securities traded on the Hong Kong stock exchange surged to an all-time high of 254.9 billion on Nov. 12, according to data from the stock exchange. That was followed by 226.7 billion on Nov. 15, and yesterday’s 215.9 billion, the second and third highest volumes on record, exchange data shows. Today’s volume was 208.6 billion shares, the seventh-highest.

Skyworth sank 7.3 percent to HK$4.04. The company has lowered the full-year sales target of its flat-panel TV sales in China to 7 million units from 7.5 million, according to a statement.

Weichai Power

Weichai Power Co., the Chinese maker of diesel engines, slumped 9.7 percent to HK$45.80 after JPMorgan Chase & Co. cut its recommendation on the stock to “neutral” from “overweight.”

Among shares that fell amid concern Ireland’s debt crisis is worsening, HSBC Holdings Plc, Europe’s biggest bank, declined 2 percent to HK$81.30. Esprit Holdings Ltd., a fashion retailer that gets most of its sales in Europe, lost 2.7 percent to HK$40.30.

Ireland is in talks with European and International Monetary Fund officials about a bailout that would enable the country to inject capital into its banks, said a European official with direct knowledge of the talks.

Futures on the Hang Seng Index dropped 1.8 percent to 23,175. All but three stocks declined among the measure’s 45 constituents.

Shirble Plunges

Shirble Department Store Holdings (China) Ltd. plunged 18 percent to HK$1.81 on its debut.

Macau gaming stocks fell after Xinhua News Agency said the city will tighten control of its casino industry.

Sands China Ltd., Asia’s second-biggest casino operator by market value, plunged 7.1 percent to HK$15.86. Galaxy Entertainment Group Ltd., the casino operator part-owned by Permira Advisers LLP, slumped 5.6 percent to HK$7.15.

Dah Sing Financial Group Ltd. slid 2.4 percent to HK$60, and its Hong Kong unit Dah Sing Banking Group Ltd. lost 1.6 percent to HK$15 after announcing plans to raise at least HK$2.2 billion ($284 million) in two rights offers to help boost the lender’s capital base.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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