Chinese Stocks in Hong Kong Drop on Disappointing Data

Chinese companies listed in Hong Kong (HSCEI) posted their longest losing streak in more than a year as economic data released over the weekend added to signs growth in the world’s second-largest economy is slowing. Exporters rose as U.S. employers hired more workers than expected.

China Resources Land Ltd. (1109) decreased 2.8 percent, pacing declines among mainland property developers. BYD Co., the Chinese automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., sank 3.4 percent after a report showed the nation’s passenger-vehicle sales rose at a slower pace in May. Li & Fung Ltd. (494), a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., added 1.3 percent.

The Hang Seng China Enterprises Index decreased 0.6 percent to 10,126.97 at the close, extending losses for a ninth day, the longest such streak since March 26, 2012. Financial markets in the mainland were closed for a holiday. The Hang Seng Index, the developed world’s worst-performing major equity benchmark this year, rose 0.2 percent to 21,615.09, erasing losses of 0.4 percent.

“China’s economic indicators haven’t been good,” said Mari Oshidari, a Hong Kong-based market strategist at Okasan Securities Group Inc. “That together with concerns that the Federal Reserve may soon pare back quantitative easing as the U.S. economy improves are negative for the Hong Kong market.”

The benchmark Hang Seng Index (HSI) dropped 4.6 percent this year, making Hong Kong the worst performer among the world’s developed equity markets, according to data compiled by Bloomberg. Shares on the gauge traded at 10.3 times estimated earnings, compared with 14.9 times for the Standard & Poor’s 500 Index. Trading volume was 9.8 percent below the 30-day average.

Slowdown Signs

Chinese government data over the weekend showed industrial production rose a less-than-forecast 9.2 percent from a year earlier. Export gains were at a 10-month low and imports dropped after a crackdown on fake trade invoices while fixed-asset investment growth slowed and new yuan loans declined.

Mainland developers declined. China Resources Land slipped 2.8 percent to HK$22.35. China Overseas Land & Investment Ltd. (688), the biggest Chinese real estate company traded in Hong Kong, lost 1.1 percent to HK$21.75. Guangzhou R&F Properties Co. fell 0.8 percent to HK$12.74.

Chinese carmakers fell as a report showed sales of passenger vehicles in the country increased 9 percent in May after climbing 13 percent in April. BYD declined 3.4 percent to HK$31.55. Brilliance China Automotive Holdings Ltd. (1114), Bayerische Motoren Werke AG’s Chinese partner, slid 1.9 percent to HK$8.63.

U.S. Jobs

Futures on S&P 500 Index added 0.4 percent today. The gauge rose 1.3 percent on June 7, the biggest advance since April. U.S. employers took on 175,000 workers in May, the Labor Department reported on June 7. That’s more than the 163,000 estimate in a Bloomberg survey.

Exporters gained amid signs the U.S. economic recovery is strengthening. Li & Fung rose 1.3 percent to HK$11.24. Yue Yuen Industrial (Holdings) Ltd. (669), a supplier of shoes to Nike Inc., climbed 2.7 percent to HK$20.65. Man Wah Holdings Ltd., a sofa maker that gets about 51 percent of sales from the U.S., added 0.5 percent to HK$9.31.

Futures on the Hang Seng Index gained 0.3 percent to 21,411. The HSI Volatility Index dropped 3.3 percent to 18.75, indicating traders expect a swing of 5.4 percent for the city’s benchmark equity measure in the next 30 days.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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