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Hong Kong Stocks Decline as Energy, Property Shares Drop

Nov. 13 (Bloomberg) -- Hong Kong stocks fell, with the benchmark index closing at the lowest level in four weeks, as property companies and energy shares declined.

Shimao Property Holdings Ltd., which develops real estate projects in China, dropped 2.6 percent on concern the mainland may continue to apply property curbs. China Petroleum & Chemical Corp., the state-backed refiner, fell 3 percent as oil declined for a second day. Industrial & Commercial Bank of China Ltd. led banks lower.

The Hang Seng Index fell 1.1 percent to close at 21,188.65, the lowest since Oct. 15, in Hong Kong. All but four stocks dropped on the 49-member index, with trading volume 13 percent below the 30-day average. The benchmark gauge has advanced 17 percent from this year’s low on June 4 as economic data showed China’s slowdown may be bottoming and central banks around the globe added stimulus to spur growth.

“Hong Kong has shot up too much and it has a chance to have a significant correction,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “Data are in line with market forecasts, but I don’t think just one month’s worth is strong enough to convince the market that China has resumed growth.”

The Hang Seng China Enterprises Index of mainland companies slipped 2 percent to 10,230.07, retreating for a fourth day. The index entered a so-called bull market on Nov. 2 after advancing 20 percent since Sept. 5.

The Hang Seng Index traded at 11.1 times estimated earnings, compared with 13.3 for the Standard & Poor’s 500 Index and 12.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Property Curbs

Chinese developers slid after the housing ministry said property controls will be enforced “steadfastly.” Shimao, which had risen 121 percent this year through yesterday, fell 2.6 percent to HK$14.26, and Agile Property Holdings Ltd. lost 2.7 percent to HK$9.26.

Energy shares dropped as crude for December delivery slid as much as 58 cents to $84.99 a barrel in electronic trading on the New York Mercantile Exchange. China Petroleum & Chemical, known as Sinopec, dropped 3 percent to HK$7.86. PetroChina Co., the nation’s biggest oil and natural gas producer, fell 1.9 percent to HK$10.14.

Chinese banks declined. Industrial & Commercial Bank of China slid 1.8 percent to HK$4.96. China Construction Bank Corp. dropped 1.7 percent to HK$5.66.

Money Supply

China’s money supply gained 14.1 percent in October, less than a median forecast of 14.5 percent by economists, the Beijing-based People’s Bank of China reported yesterday. Local currency loans unexpectedly dropped last month from a year earlier.

Futures on the S&P 500 Index lost 0.7 percent today. The benchmark was little changed yesterday as investors awaited U.S. budget talks. Euro-area finance ministers gave Greece two extra years to cut its budget deficit, pledging to prevent the region’s debt crisis from escalating.

The HSI Volatility Index dropped 0.1 percent to 17.26, indicating traders expect a 4.9 percent swing in the equity benchmark in the next 30 days. Futures on the Hang Seng Index fell 1.1 percent to 21,176.

Of the 49 companies on the Hang Seng Composite Index that have reported quarterly earnings since Oct. 1 and for which estimates are available, 57 percent missed expectations, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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