Hong Kong Stocks Swing Between Gain, Loss on Profit Drops
Hong Kong stocks swung between gains and losses as companies warned of lower profit and the International Monetary Fund’s China representative said the country may have already done enough to put a recovery in place.
China Resources Land Ltd. (1109), a state-controlled mainland developer, rose 2 percent after Daiwa Capital Markets H.K. Ltd. said it doesn’t foresee any further curbs on the property market. Sands China Ltd. (1928), the Asian unit of Sheldon Adelson’s Las Vegas company, lost 6.3 percent after saying its second- quarter net income fell 40 percent from last year. Xingye Copper International Group, a Chinese producer of copper products, fell 3.7 percent after saying it expected a “significant” decline in first half profit.
The Hang Seng Index was little changed 18,882.19 as of 11:24 a.m. Hong Kong time, with the measure swinging between a gain of 0.3 percent and a loss of 0.5 percent. About eight companies climbed for every seven that fell on the 49-member gauge. The Hang Seng China Enterprises Index (HSCEI) of mainland companies was little changed at 9,212.
“Investors generally want to be optimistic,” said Marco Li, Hong Kong-based portfolio manager at Manulife Asset Management, which oversees $208 billion globally. “The major focus is earnings, if you can get some large weights saying the outlook is improving, that will turn the market higher.”
The benchmark Hang Seng Index fell 13 percent from this year’s high in February through yesterday on signs Europe’s debt crisis is worsening while growth slows in China and the U.S. The drop cut the value of shares on the gauge to 9.9 times estimated earnings on average, compared with 13 for the Standard & Poor’s 500 Index and 10.6 for Stoxx Europe 600 Index.
Futures on the Hang Seng Index (HSI) were little changed at 18,857. The HSI Volatility Index (VHSI) lost 3 percent to 22.06, indicating traders expect a swing of about 6.3 percent in the benchmark index during the next 30 days.
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