Stocks fall as developers decline
Updated: 2011-02-23 06:48
(HK Edition)
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Hong Kong stocks fell Tuesday, sending the Hang Seng Index (HSI) to its biggest drop in almost three months, as developers slid on concern the city may try to curb property prices and as tension escalated in the Middle East.
Hang Lung Properties Ltd, which gets about 84 percent of its revenue from Hong Kong, declined 2.4 percent on speculation the city's government may increase land supply in today's budget announcement.
The HSI fell 2.1 percent to 22990.81 at the close. All but three stocks dropped among the measure's 45 constituents. The Hang Seng China Enterprises Index slid 2.4 percent to 12351.66. The declines mirror a global rout in equities as all benchmarks in Asia fell, following retreats in Europe.
A measure of property stocks had the steepest decline among the HSI's four industry groups. Hang Lung Properties dropped 2.4 percent to HK$31.95, while Sino Land Co slid 2.6 percent to HK$13.78. Sun Hung Kai Properties Ltd retreated 2.4 percent to HK$121.80.
Radio Television Hong Kong on Feb 21 reported that the city will increase land supply by auctioning at least 10 sites, and the Hong Kong Economic Times said Feb 18 the government plans to hold land auctions almost once a month. Financial Secretary John Tsang is scheduled to announce today the city's budget, which may include land-supply plans.
Cathay Pacific Airways Ltd fell 5.1 percent to HK$18.08 after oil surged Monday to the highest price in more than two years in London on concern turmoil in the region will disrupt supplies. China Southern Airlines Co tumbled 6.5 percent to HK$3.61, and Air China Ltd dropped 7 percent to HK$7.46.
Both airlines and China Eastern Airlines Corp raised fuel surcharges starting Tuesday to offset higher oil prices.
Even as oil prices rose, China Petroleum & Chemical Corp retreated 3.8 percent to HK$8.02 and PetroChina Co slid 1.7 percent to HK$10.56. China's oil processing volume fell from an all-time high in January after domestic fuel shortages eased, according to the National Development and Reform Commission.
Futures on the HSI slid 2.2 percent to 22942. The HSI Volatility Index jumped 10 percent to 19.55 for the biggest gain in nine months.
Bloomberg
(HK Edition 02/23/2011 page3)