Market Wrap: Hong Kong stocks flat on growth concern; Standard Chartered drops
Hong Kong stocks fell for a second day on concerns that the People’s Bank of China may not cut the reserve ratio requirement (RRR) after it instead tweaked liquidity by making a record cash injection into the banking system in reverse repos ahead of a seven-day national holiday.
“There is limited hope that China will lower the RRR till the end of this year, given the frequency and volume of repurchase agreements that the central bank is using,” said Wang Shuo, a fixed-income trader at BOC International (China) Ltd. in Beijing.
Standard Chartered (2888.HK) fell the most in almost seven weeks in Hong Kong trading after a report that the bank’s largest shareholder had talked to potential buyers for its stake. Temasek Holdings, which holds 18 per cent of Stanchart, had been gauging potential interest in the stake in recent months, the Financial Times reported on Tuesday, citing people it didn’t identify.
“I don’t think there will be a spill-over effect. It is a big stock and the news will only have a short-term impact on its share price,” said Chad Kwok, portfolio manager at Guosen Securities HK Financial Holdings.
The stock fell 2.93 per cent to finish at HK$182.00, the biggest intraday drop since August 7, and bucking the trend of the benchmark Hang Seng Index (HSI).
The HSI added 3.98 points, or 0.02 per cent, to end flat at 20,698.68. The Hang Seng China Enterprises Index dropped 22.09 points, or 0.23 per cent, to close at 9,745.40.
Hong Kong Exchanges and Clearing (0388.HK) lost 2.61 per cent to HK$115.80. The world's No.2 exchange operator by market value said late Monday that it will issue convertible bonds worth US$400 million to help fund its purchase of the London Metal Exchange.
Prada (1913.HK) lost 3.50 per cent to HK$57.85. The Milan-based company said net interim profit was 286.4 million euros, up 59.5 per cent from a year earlier, bolstered by the booming luxury market in China.
Railway equipment stocks fell on Tuesday after brokerage Credit Suisse rated the sector as “underweight” as it expects delayed orders and funding constraints to lead to more cuts in earnings forecasts. CSR Corporation (1766.HK) lost 1.78 per cent to HK$4.97 after Credit Suisse forecast a 14 per cent decline in CSR’s 2012 net profit.