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Hong Kong Stocks Fall as Developers Drop; China Overseas Gains

June 10 (Bloomberg) -- Hong Kong’s stocks fell, sending the Hang Seng Index to its fourth-straight weekly decline, its longest losing streak in almost a year, as developers slid on speculation the property market will slow.

Sino Land Co., a Hong Kong developer controlled by billionaire Robert Ng, fell 2.7 percent. Henderson Land Development Co., the builder controlled by billionaire Lee Shau-kee, dropped 2.8 percent. Huaneng Renewables Corp., a developer of wind-power projects in China, tumbled as much as 11 percent and Dragon Crown Co Holdings Ltd., a terminal service provider, climbed 3.6 percent on their trading debuts. China Overseas Land & Investment Ltd., a developer controlled by the nation’s construction ministry, rose 3.9 percent after sales increased.

The Hang Seng Index fell 0.8 percent to 22,420.37 at the close after earlier rising as much as 0.3 percent. The gauge slid 2.3 percent for the week, the longest streak of declines since May, 2010.

“The property industry is a little bit weaker today after yesterday’s auction failed to hit a new high,” said Andrew Sullivan, director of institutional sales trading at OSK Securities Hong Kong Ltd. “There’s going to be the release of China’s data next week, and that’s making people a little cautious going forward.”

China Inflation

The Hang Seng China Enterprises Index of Chinese companies’ H shares lost 0.7 percent to 12,380.81 ahead of consumer price, industrial production and retail sales figures due June 14.

China’s consumer prices increased 5.5 percent in May from a year earlier, next week’s report by the statistics bureau will show, according to the median estimate of economists surveyed by Bloomberg. Price gains have outpaced a government target of 4 percent every month this year.

A measure of property stocks had the biggest decline among the Hang Seng Index’s four industry groups. Sino Land slid 2.7 percent to HK$12.80. Henderson Land retreated 2.8 percent to HK$48.85.

Cheung Kong (Holdings) Ltd., Hong Kong’s No. 2 developer by market value, dropped 1.5 percent to HK$115.20. The company controlled by billionaire Li Ka-shing paid HK$11.65 billion ($1.5 billion), 10 percent less than the HK$13 billion median of five estimates in a Bloomberg News survey, for a site on Borrett Road yesterday.

Contract Breach

Sands China Ltd., a casino operator in Macau, declined 3.6 percent to HK$18.60 after the Las Vegas Sun reported a judge in Nevada refused to dismiss a breach of contract claim filed by the company’s former chief executive officer.

Huaneng Renewables fell 2.8 percent to HK$2.43 after tumbling as much as 11 percent. Dragon Crown rose 3.6 percent to HK$1.14.

The Hang Seng Index has fallen 2.7 percent this year on concern that Japan’s earthquake and nuclear crisis and monetary-policy tightening measures by China will damp economic growth. Shares in the gauge traded at an average 12.1 times forecast earnings, compared with 14.4 times at the end of last year, according to data compiled by Bloomberg.

Among stocks that rose, China Overseas Land gained 3.9 percent to HK$15.64, the steepest gain in the Hang Seng Index, after saying its sales of property in May rose 252 percent to HK$12.1 billion from a year earlier.

Greenheart Group Ltd., a lumber company controlled by Sino-Forest Corp., surged as much as 33 percent to HK$1.95, extending yesterday’s gains, after its parent asked Canadian regulators to investigate short selling of the company. Shares of Greenheart tumbled this week after Muddy Waters Research, founded by short-seller Carson Block, released a report saying the company’s parent may have exaggerated its land holdings.

“There’s some concern THE report form Muddy Waters had a lot of self interest in it, and overplayed some of the negative points,” said OSK Securities’ Sullivan.

Futures on the Hang Seng Index fell 0.9 percent to 22,275. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, rose 0.5 percent to 19.41, indicating options traders expect a swing of 5.6 percent in the Hang Seng Index in the next 30 days.

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

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