Hong Kong Stocks Decline as China Manufacturing ContractsKana Nishizawa and Jasmine Ng
Hong Kong stocks declined, with the benchmark index dropping the most in three weeks, after a private report showed China’s manufacturing industry unexpectedly contracted.
Hang Lung Properties Ltd., a Hong Kong-based developer that invests in mainland shopping malls, slumped 5.1 percent after saying 2013 underlying profit dropped 18 percent. Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas gaming company, retreated 2.9 percent as casino operators extended yesterday’s declines. Gas-supplier Kunlun Energy Co. slid 3.3 percent after UBS AG cut its rating on the stock.
The Hang Seng Index fell 1.5 percent to 22,733.90 at the close in Hong Kong, its biggest drop since Jan. 3. All but four stocks fell on the 50-member gauge, with volume 33 percent more than the 30-day average. The Hang Seng China Enterprises Index of mainland companies, known as the H-share index, lost 2.1 percent to 10,109.49.
“People are worrying about China’s credit crunch and slowdown, they will take any slice of negative news on slow growth as a reason to sell,” said Benjamin Tam, a Hong Kong-based portfolio manager at IG Investment Ltd., which oversees about $1.5 billion. “Slower growth is now the market consensus. People are watching whether the government can restore market confidence on sustainable growth.”
A gauge of China’s manufacturing dropped to 49.6 in January from 50.5 the previous month, HSBC Holdings Plc and Markit Economics said today. Strategists had estimated a reading of 50.3, according to the median estimate in a Bloomberg survey. A figure under 50 indicates contraction.
The Hang Seng Index fell 2.5 percent this year, the worst performer behind Japan’s Nikkei 225 Stock Average among major developed-market gauges tracked by Bloomberg. The H-share index declined 6.5 percent in 2014 as data from China fueled concern growth is slowing.
China’s central bank added more than $42 billion to the financial system on Jan. 21 to meet Lunar New Year demand after money-market rates surged.
Futures on the Standard & Poor’s 500 Index dropped 0.2 percent today after the gauge gained 0.1 percent yesterday. Most U.S. stocks rose as investors assessed earnings from companies including Norfolk Southern Corp., Coach Inc. and International Business Machines Corp.
Magnum Entertainment Group Holdings Ltd., the first nightclub operator to go public in Hong Kong, surged 89 percent to HK$2.84 on its first day of trading. The company raised $16.3 million in an initial public offering, selling shares at the top end of a marketed range, according to data compiled by Bloomberg.
Esprit Holdings Ltd., a clothing retailer, added 1.8 percent to HK$15.98 after the company said it expects to return to profit in the six months ended December after cutting costs.
Property developers dropped. Hang Lung sank 5.1 percent to HK$23.10, as the company announced that underlying profit fell to HK$5.05 billion ($651 million) from HK$6.18 billion a year earlier. Sino Land Co., controlled by billionaire Robert Ng, fell 2.7 percent to HK$10.64.
Industrial & Commercial Bank of China Ltd., the nation’s largest lender, slipped 3.4 percent to HK$4.81 to lead financial stocks lower. China Construction Bank Corp., the second-biggest, dropped 3 percent to HK$5.45, while Agricultural Bank of China Ltd. retreated 2.6 percent to HK$3.40.
Kunlun, the gas distribution arm of China National Petroleum Corp., fell 3.3 percent to HK$13.60, the biggest drop in almost five months. UBS cut the shares to sell from neutral.
Sands China dropped 2.9 percent to HK$60.05, the lowest since December, while Wynn Macau Ltd. slid 2.6 percent to HK$34. JPMorgan Chase & Co. said yesterday that investors should trim Macau gaming companies.