Most Hong Kong stocks rose as companies from Geely Automobile Holdings Ltd. to Samsonite International SA reported higher profits. Chinese developers fell amid mounting concern about defaults in the sector.
Geely, a unit of the owner of Volvo Cars Corp., jumped 15 percent, while luggage-maker Samsonite surged 9.4 percent. China Resources Land Ltd., the second-biggest mainland developer by market value listed in Hong Kong, slid as much as 3.1 percent before paring losses. Country Garden Holdings Co. slid to its lowest since September 2012 after the Chinese property company said its chief financial officer will resign.
About three stocks gained for every two that dropped on the Hang Seng Index, which fell 0.1 percent to 21,568.69 at the close in Hong Kong after rising as much as 0.1 percent. Trading volume was 22 percent lower than the 30-day average. The Hang Seng China Enterprises Index, also known as the H-share index, gained 0.2 percent to 9,360.70 after dropping 0.7 percent. The Federal Reserve is due to deliver a policy decision today.
“Investors are particularly paying attention to company-specific earnings rather than the overall market,” said Jackson Wong, vice president of Tanrich Securities in Hong Kong. “The ongoing problems for China developers are still there. The market is very cautious.”
The H-share measure is down 13 percent this year as Chinese data from industrial production and slumping exports signaled a slowdown in the world’s second-largest economy. The measure traded at 6.35 times estimated earnings, compared with 9.79 for the Hang Seng Index and 15.9 for the Standard & Poor’s 500 Index yesterday.
Geely surged 15 percent to HK$3.09 after fiscal-year net income jumped 31 percent from a year earlier. Kingsoft Corp. rose 8.7 percent to a record HK$30.70 after the software company’s full-year profit beat estimates. Samsonite increased 9.4 percent on higher full-year adjusted net income and after it said it expects stronger Asian sales this year.
Developers slid. China Overseas Land & Investment Ltd., the largest mainland property company listed in Hong Kong by market value, fell 2 percent before rising 0.4 percent to HK$18.36 at the close. China Resources Land retreated 0.5 percent to HK$15.40. Smaller peers had sharper declines, with Greentown China Holdings Ltd. sliding 3 percent to HK$8.35.
Data yesterday showed growth in new home prices slowed last month, amid property curbs and tighter credit to rein in excessive borrowing. Closely held developer Zhejiang Xingrun Real Estate Co. was this week said to have collapsed with $567 million of debt, adding to concern of strains in the nation’s real estate sector and financial system. This comes after Shanghai Chaori Solar Energy Science & Technology Co. failed to repay its debt, the first onshore corporate-bond default.
The People’s Bank of China said in a statement it didn’t participate in an “emergency meeting” yesterday on Zhejiang Xingrun. Three government officials with knowledge of the matter said officials from PBOC and China Banking Regulatory Commission branches in the eastern city of Ningbo joined meetings yesterday on how to contain risks from the collapse.
“Investors are moving into bigger names such as China Resources Land as these are supposed to be safer,” said Wong of Tanrich Securities. “It’s probably some short covering or rotational buying, but I don’t think it’s time for developers’ turnaround yet.”
Galaxy Entertainment Group Ltd., controlled by billionaire Lui Che-woo, declined 2.8 percent to HK$72 after the casino operator’s fourth-quarter profit missed estimates.
Tencent Holdings Ltd., Asia’s largest Internet company, fell 1.8 percent to HK$567.50 after jumping 5.8 percent yesterday. The company is scheduled to report its earnings after the close today.
Futures on the S&P 500 were little changed today. The gauge advanced 0.7 percent yesterday. A Commerce Department report showed housing starts were little changed in February after declining less than previously estimated a month earlier, indicating the industry is stabilizing after bad winter weather curbed construction.
The Fed Open Market Committee will further scale back its bond-buying program at its two-day meeting that ends today, reducing purchases for the third time by $10 billion to a $55 billion monthly rate, according to the median estimate of 54 economists surveyed by Bloomberg from March 14-17.
Fed officials have said they will probably hold the central bank’s target interest rate near zero “well past the time” that unemployment falls below 6.5 percent, “especially if projected inflation” remains below its longer-run goal of 2 percent.
Russian President Vladimir Putin yesterday ordered the approval of Crimea’s accession to Russia a day after the U.S. and European Union imposed limited sanctions on some political figures linked to the annexation of the Ukrainian territory.