Hong Kong Stocks Fall for Week as Developers, BYD Drop
Hong Kong stocks declined, with the benchmark index dropping for the first week in three, as BYD (1211) Co. fell on a report the carmaker plans to sell shares and a gauge of developers slid for a fourth day.
China Resources Land Ltd., the second-biggest mainland property company traded in Hong Kong, retreated 5.4 percent. BYD, the Chinese automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., slumped 7.8 percent. Techtronic Industries Co. (669), a power-tool maker that counts North America as its biggest market, rose 2.8 percent after fewer Americans than expected filed for unemployment benefits.
The Hang Seng Index declined 0.4 percent to close at 22,533.11, with about four stocks falling for each that gained. The measure retreated 2.4 percent for the week as the city’s mortgage rates rose and on reports some of China’s biggest cities are doing more to curb property price increases. The Hang Seng Property Index fell this week the most since May.
“In the near-term, we have a lot of negative news in China and in Hong Kong’s property market so I think many investors will wait and see what will happen,” said Benjamin Tam, a fund manager who helps oversee about $1.5 billion at IG Investment in Hong Kong. “In the mid- to longer-term we are still seeing whether the U.S. recovery will help to improve China’s exports and whether the Chinese government will launch any further stimulus.”
The Hang Seng China Enterprises Index (HSCEI) of mainland companies, which slid 0.7 percent to 11,020.89 today, is 0.2 percent away from entering a so-called correction after dropping 9.8 percent from this year’s high on Feb. 1. Shares fell this week after inflation rose at the fastest pace in 10 months and People’s Bank of China Governor Zhou Xiaochuan said monetary policy is “no longer relaxed.”
Near A Record
The Hang Seng Index has retreat more than 4 percent from a 21-month high at the end of January. The benchmark equity measure traded at 11 times estimated earnings yesterday, compared with 14.1 for the Standard & Poor’s 500 Index and 12.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
China Resources Land slumped 5.4 percent to HK$19.40, the biggest drop in the Hang Seng Index. (HSI) Wharf (Holdings) Ltd., a Hong Kong mall developer, slid 3.9 percent to HK$62.45. Cheung Kong (Holdings) Ltd., the city’s second-biggest developer by market value, fell 2.3 percent to HK$113.
Beijing will strengthen a review of homebuyers’ qualifications to purchase property in the city, the China Securities Journal reported yesterday, citing an unidentified person.
The southern Chinese city of Shenzhen this week banned developers from raising prices on new residential properties, news site Sina.com reported, citing unidentified officials at builders.
BYD tumbled 7.8 percent to HK$24.25 on plans to sell new shares equivalent to as much as 20 percent of its Hong Kong- traded stock, according to two people with knowledge of the matter.
GCL-Poly Energy Holdings Ltd. (3800), the world’s biggest producer of polysilicon, slumped 3.8 percent to HK$1.79 after reporting its first full-year loss since 2009.
Futures on the S&P 500 (SPX) retreated 0.1 percent. The U.S. equity gauge rose yesterday to within two points of its record high as government data showed jobless claims unexpectedly dropped last week to the lowest level in almost two months.
Stocks linked to the U.S. advanced. Techtronic Industries climbed 2.8 percent to HK$18.10, while HSBC Holdings Plc (HSBA), which received about a fifth of its revenue from North America last year, rose 1.6 percent to HK$86.10. Semiconductor Manufacturing International Corp. (981), a chip-services provider that gets more than half of its revenue from North America, rose 1.1 percent to 45.5 Hong Kong cents.
Want Want China Holdings Ltd. (151) added 3.2 percent to HK$11.60, the biggest gain on the Hang Seng Index. The snack maker will invest 2 billion yuan ($322 million) to expand, Xinhua news reported, citing people it didn’t identify from the Hunan government.
Hang Seng Index futures fell 0.8 percent to 22,337. The HSI Volatility Index (VHSI) rose 2.1 percent to 15.28, indicating traders expect a swing of 4.4 percent for the equity benchmark in the next 30 days.
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