China H Shares Drop to Four-Week Low as Builders, Insurers Fall

  • Pace of new property-price increases slows in November
  • Chinese leaders vowed on Friday to deflate asset bubbles

Chinese stocks in Hong Kong fell to a one-month low, led by construction firms and insurers, amid concern government efforts to contain property bubbles and curb capital outflows will hurt earnings growth.

The Hang Seng China Enterprises Index dropped 1 percent to 9,377.43 at the close. China Vanke Co. tumbled 3.2 percent in Hong Kong after the company scrapped a plan to buy assets from Shenzhen’s metro operator and the pace of new home-price increases slowed. China Taiping Insurance Holdings Co. sank 4.2 percent, while Ping An Insurance Group Co. dropped 1.7 percent. Chinese residents buying insurance in Hong Kong will no longer be able to swipe their credit cards multiple times to get around curbs, according to people with knowledge of the matter. The Shanghai Composite Index lost 0.2 percent.

China’s leaders vowed on Friday to safeguard the financial system and deflate asset bubbles, with one Communist Party official saying the government will "strictly" control speculation and rein in excessive corporate borrowing. The nation’s financial markets have taken a battering as surging money-market rates reduced investor demand, with the Shanghai Composite sinking the most in eight months last week and bonds tumbling the most in two years.

“Policy makers are making clear that they’re determined to clamp down on speculation and will keep doing so next year,” said Wen Bin, chief research analyst at China Minsheng Banking Corp. in Beijing.

The Hang Seng Index dropped 0.9 percent, while the Shenzhen Composite Index slipped 0.4 percent. Mainland China and Hong Kong equity markets recorded net selling of $211 million for the week ended Dec. 14, the sixth week of outflows in a row, according to a China International Capital Corp. note. The CSI 300 Index lost 0.5 percent, while the small-cap ChiNext index retreated 0.9 percent.

For the first time in four months, Hong Kong’s benchmark equities gauge has fallen into the red for the year. The Hang Seng Index’s losses since its Sept. 9 high are approaching 10 percent. The retreat is also a blow to bulls who saw the previous quarter’s jump by the measure -- its biggest in seven years -- as the start of an extended rally after months of global underperformance.

New-home prices, excluding government-subsidized housing, gained in November from the previous month in 55 of the 70 mainland cities tracked by the government, compared with 62 in October, the National Bureau of Statistics said Monday. Local authorities from Shanghai to Tianjin stepped up property curbs last month, following a raft of restrictions rolled out in almost two dozen cities since late September.

China Overseas Land & Investment Ltd. lost 1.4 percent in Hong Kong to fall to its lowest since January. China Resources Land Ltd. dropped 1.8 percent to its lowest level since June. China Vanke shares traded in Shenzhen slid 6.1 percent.

  • China Huishan Dairy rose 1.8% as trading resumed after the company said Muddy Waters allegations are groundless and controlling holder Yang Kai bought shares
  • Chengdu Hongqi Chain Co. jumped by the 10% daily limit in Shenzhen to a 16-month high after a CMIG Property unit bought a 4.99% stake
  • China Shenhua Energy Co. fell 2.6% after Qinghuangdao coal prices declined for a sixth week

— With assistance by Amanda Wang

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