Hong Kong Stocks Fall, Led by China Everbright, Swire Pacific
By Yeong Choy Leng
Hong Kong, Jan. 17 (Bloomberg) -- Hong Kong stocks fell, led by China-related companies such as China Everbright Ltd. as the government steps up its probes on stock manipulations in China's equity markets.
Swire Pacific Ltd. added to losses after the company lost an arbitration case with the government over a land-use fee and could end up paying as much as HK$4.5 billion ($577 million).
``It comes as a surprise to the market in terms of the amount they may have to pay,'' said Franklin Lam, head of Hong Kong research at UBS Warburg LLC. ``The stock may fall 1 percent to 2 percent today but losses will be limited as the company has a strong balance sheet and this is a one-off item in the overall appraisal of the company.'' Lam reaffirms his ``buy'' recommendation on the stock.
The Hang Seng Index fell 136.58, or 0.9 percent, to 15,226.57. In the broader market, 190 stocks fell, 53 rose and 470 were unchanged.
China B shares, which foreigners can own, rose. The Shanghai B-share index gained 0.9 percent to 84.53. In Shenzhen, the B- share index rose 0.6 percent to 131.64. The indexes fell to a three-week low yesterday.
The following is a list of companies whose shares are active.
Hong Kong stocks:
China-related stocks fell after Premier Zhu Rongji and the chairman of China's securities regulatory body both reiterated the government's pledge to step up stock market supervision against manipulation. They also fell on concern of a possible delay in China's entry into the World Trade Organization. China said it won't sacrifice income support for farmers in talks this week to join the WTO.
China Everbright Ltd. (165 HK ), which is controlled by China's Cabinet, fell 55 cents, or 6.4 percent, to HK$8. China Resources Enterprise Ltd. (291 HK ), the Hong Kong-listed investment arm of China's foreign trade ministry, fell 50 cents, or 4.4 percent, to HK$10.85. Cosco Pacific Ltd. (1199 HK ), the Hong Kong arm of China's biggest shipping company, fell 30 cents, or 5 percent, to HK$5.65. China Merchants Holdings International Co. (144 HK ), an investment company controlled by China's Ministry of Communications, fell 30 cents, or 5.5 percent, to HK$5.20.
Swire Pacific Ltd. (19 HK ), one of Hong Kong's biggest landlords, extended yesterday's 2.3 percent loss, falling HK$1, or 1.9 percent, to HK$51.50. The company said it lost an arbitration case with the government over a land-use fee and could end up paying as much as HK$4.5 billion ($577 million).
China Unicom Ltd. (762 HK ), a unit of China United Telecommunications Corp., rose 15 cents, or 1.3 percent, to HK$11.50. The company may sell some shares to a foreign rival, possibly NTT DoCoMo Inc., Deutsche Telekom AG, AT&T Wireless Group or France Telecom SA, the Asian Wall Street Journal reported, citing China Unicom Vice President Tan Xinghui.
Hikari Tsushin International Ltd. (603 HK ), the Asian investment vehicle for Japan's Hikari Tsushin Inc., fell 0.7 cents, or 3.4 percent, to 20.1 HK cents after being suspended yesterday afternoon. Its parent said it will sell its stakes in the six Internet-related companies for as much as $30 million, to Hikari Tsushin International.
Hanny Holdings Ltd. (275 HK ), which distributes Memorex brand computer discs and computer accessories, fell 7.4 cents, or 29 percent, to 18.1 HK cents. The company plans to raise at least HK$343 million by offering shareholders one new share for every share they hold, said an official at BNP Paribas Peregrine Securities Ltd. The new shares would be offered at a 37 percent discount to the last trading price of 25.5 HK cents on Monday.
Hutchison Whampoa Ltd. (13 HK ), which has global telecommunications businesses, fell 50 cents, or 0.5 percent, to HK$97.25. The company is in talks with Vodafone Group Plc about joining its bid for the mobile assets of Cable & Wireless Optus Ltd., the Australian Financial Review reported. Hutchison declined to comment.
Pacific Century CyberWorks Ltd. (8 HK ), Hong Kong's largest telecommunications company, extended its 17 percent loss in the past five days, falling 15 cents, or 3.7 percent, to HK$3.95. Investors tried to sell the stock before CyberWorks' shareholder Cable & Wireless Plc is allowed to sell half of its 14.9 percent stake next month as part of its sale of Cable & Wireless HKT Ltd. to CyberWorks.
Yue Yuen Industrial (Holdings) Ltd. (551 HK ), which makes for Nike Inc., Reebok International Ltd. and New Balance Athletic Shoe Inc., extended yesterday's 3.5 percent loss, falling 10 cents, or 0.7 percent, to HK$13.90. The company yesterday reported a worse-than-expected net income of $210.2 million last year.
China B Shares:
Konka Group Co. (2016 CH ), China's second-biggest television maker, rose 5 cents, or 1.1 percent, to HK$4.60. The government plans to spend 300 million yuan ($36.2 million) this year supporting the nation's television makers, according to yesterday's Shanghai Daily.
Inner Mongolia Eerduosi Cashmere Products Co. (900936 CH ), the world's biggest cashmere producer, fell 0.5 cent, or 1 percent, to 49.5 U.S. cents. A snowstorm has hit Inner Mongolia, destroying grass and killing goats, according to the Guangzhou Daily. Any reduced supply in raw wool may increase purchase costs.
Shanghai Tyre & Rubber Co. (900909 CH ), China's largest maker of radial tires, rose 0.3 cent, or 0.8 percent, to 37 U.S. cents, after saying it has reached agreement with Michelin & Cie. SCA on major terms for a $150 million joint venture.
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