HONG KONG - Hong Kong stocks fell 0.13 percent on Monday morning, tracking
mostly lower Asian markets, as weak crude and commodity prices led a broad-based
fall in resource shares including Jiangxi Copper Co. Ltd.
But mainland property developers defied the downtrend on signs that China's
efforts to rein in credit were bearing fruit.
"Renminbi-denominated assets will be attractive as speculation in the
renminbi continues," said Y.K. Chan, strategist at Phillip Securities, referring
to Chinese property stocks.
The benchmark Hang Seng index was down 22.88 points at 17,122.88 by the
midsession on turnover of HK$16.6 billion (US$2.1 billion), up from HK$13.7
billion on Friday morning.
The market should maintain its trade in a narrow range in the afternoon,
clinging near the 17,100 level, Chan said.
As crude prices fell below $66, China's top oil producer PetroChina Co. Ltd.
dropped 1.3 percent to HK$8.31. Rival CNOOC Co. Ltd. slumped 1.7 percent to
HK$6.39.
Oil prices also weighed on oil explorer CNPC (Hong Kong), which was not
helped by what traders said was a disappointing 59 percent year-on-year growth
in its first-half net profit. CNPC ended the morning down 9 percent at HK$4.17.
Falling oil prices also dented gold stocks as investors weighed the metal's
prospects amid declining crude prices.
Lingbao Gold sank 1.5 percent to HK$6.75 and Zijin Mining Co. Ltd. tanked 4.6
percent to HK$3.72.
Jiangxi Copper slid 4 percent to HK$7.57 after Shanghai copper futures
plunged by the daily 4 percent limit on Monday, tracking losses of more than 2
percent in London, as sentiment was hurt by general weakness in commodities.
Mainland properties continued their climb in heavy volume after the
semi-official China Buiness News on Friday said the country's four dominant
state banks had lent less in August than in any other month this year. (For
details, see [ID:nPEK149631]).
ING said in a note on Monday it expected the slowing loan growth to be enough
to keep China's central bank from raising either the benchmark lending or
deposit rate again this year.
China Overseas Land and Investment Ltd., the country's top property
developer, leapt 3.6 percent to HK$6.08, earlier hitting nine-year highs. China
Resources Land Ltd. shot up 6.6 percent to HK$5.33 in active trade.
Bank of East Asia advanced 1.6 percent to HK$34.45 following a positive
report by Goldman Sachs calling Hong Kong's fifth-largest lender by assets the
"first in a brave, new, increasingly profitable world in China" in which it
leads its peers by more than seven years.
COSCO Pacific slid 1.5 percent to HK$16.16 as the container leasing and
terminal operating company saw its stock rating downgraded by UBS to "neutral 2"
from "buy 2" to reflect declining prospects in its core business. This comes on
the heels of COSCO's disappointing earnings report last week.
