Stock Talk

Market Open: H-shares may fall on property developers retreat, earnings fears

PUBLISHED : Thursday, 17 January, 2013, 8:42am
UPDATED : Thursday, 17 January, 2013, 9:06am

The Hang Seng Index could fall on worries over corporate earnings growth after a number of firms announced profit warnings and the latest policies by local government to boost home supply may cool the upside momentum for on property equities.

Property stocks will be in the spotlight after Evergrande (3333.HK), China's biggest property developer by area sold last year, plans to sell 1 billion shares to raise up to US$580 million. And Cheung Kong (0001.HK) is the latest  property developer to issue perpetual bonds, with a US$50 million issue.

Li & Fung(0494.HK) is also worth to watch after the exporter announced to acquire the health-care brand Lornamead for US$190 milllion in a bid to boost the firm's presence in the health-care and cosmetics market. 

A number of companies have issued profit earnings for 2012 which could worry the market as investors are expecting a double-digit earnings growth and a likely re-rating wave for some Chinese firms in banking, property and consumer discretionary sector. Brightoil Petroleum (0933.HK), Perception Digital (1822.HK), BBMG (2009.HK) on Wednesday issued profit earnings for 2012.