Hong Kong stocks dragged by slide in property developers, HSBC

Property companies had expected Hong Kong’s Chief Executive to announce new policies on land supply

PUBLISHED : Wednesday, 11 October, 2017, 9:23am
UPDATED : Wednesday, 11 October, 2017, 6:30pm

Hong Kong’s stock market ended lower on Wednesday, as Chief Executive Carrie Lam Cheng Yuet-ngor’s failure to detail land supply measures in her policy speech sent property stocks tumbling.

The Hang Seng Index concluded the day at 28,389.57, down 101 points or 0.36 per cent. The Hang Seng China Enterprises index fell 0.06 per cent to 11,411.41.

Hong Kong developers swung from gains to losses after Lam offered few details on new land supply measures or arrangements regarding farmland conversion during her maiden policy address on Wednesday.

Kingston Lin King-ham, a director at AMTD securities brokerage, said the market had anticipated some favourable policy announcements as the city grapples with housing affordability.

“There were speculation before Lam’s speech. Now it seems like the current high prices have already sufficiently accounted for all the possible upbeat factors,” Lin said, adding that losses in HSBC were also a drag on the market.

New World Development slid 1 per cent to HK$11.92 after touching its highest level since May 2013 earlier in the session. Sun Hung Kai Properties slipped 1.75 per cent to HK$129.50, Henderson Land eased 4.89 per cent to HK$52.55 and Sino Land dropped 0.71 per cent to HK$13.92.

Chinese financials continued higher, however, with China Construction Bank rising 0.3 per cent to HK$6.9, and Industrial & Commercial Bank of China adding 0.2 per cent to HK$6.4.

HSBC shares slid 0.6 per cent to HK$78.10.

“Chinese insurers are buying Chinese bank H-shares,” said Castor Pang Wai-sun, Core Pacific-Yamaichi’s head of research. “At least there’s unlikely to be negative news from China before the 19th Party Congress.”

Manulife rose 1.8 per cent to HK$160.8 after the Insurance Authority said it plans to introduce a licensing fast-track for online-only insurance companies, accelerating an approval process which currently takes about 12 to 18 months.

Lin said there is no clear investment direction for the remainder of the week as the markets await third quarter results from US companies and policy guidance from China’s 19th Party Congress which gets underway on October 18.

“I think the Hang Seng Index will be ranging between 28,200 and 28,600,” he said.

In the mainland, the Shanghai Composite Index was 0.2 per cent higher to 3,388.28 while the CSI 300 – which tracks the large companies listed in Shanghai and Shenzhen – rose 0.3 per cent to 3,902.69.

The Shenzhen Composite Index gained 0.18 per cent to 2,026.47 but the Nasdaq-style ChiNext eased 0.8 per cent to 1,901.55.

All three major US indices closed higher on Tuesday, as Wal-Mart Stores led a rally in consumer shares.

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The Dow Jones Industrial Average finished Tuesday 0.3 per cent higher at 22,830.68, the S&P 500 tacked on 0.2 per cent to 2,550.64 and the Nasdaq Composite edged up 0.1 per cent at 6,587.25.