Hong Kong Stocks Fall, Led by Banks on Credit-Loss Concerns

By Chua Kong Ho
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Sept. 11 (Bloomberg) -- Hong Kong stocks fell on concern credit-market losses will widen and after Europe cut its economic growth forecast.

Bank of China Ltd. slumped 2.9 percent after Lehman Brothers Holdings Inc. lost more than analysts estimated. TPV Technology Ltd., the world's biggest contract maker of computer monitors, tumbled 13 percent on a reduced shipment forecast. China Mobile Ltd. slid 5.7 percent after Nanfang Daily reported subscribers will be allowed to keep their numbers when switching carriers.

``All looks grim as there's a complete absence of any buyers,'' said James Johnstone, chief investment officer at Alcor Investment Management in Singapore, which manages about $100 million. ``We're halfway through the developed world problems and Asia will find it hard to go up from here.''

The Hang Seng Index lost 682.84, or 3.4 percent, to 19,316.94 at 2:48 p.m. local time, headed for the lowest since March 19, 2007. Futures fell 3 percent to 19,325.

All 10 industry groups on the broader Hang Seng Composite Index declined, with only 13 of the 201 stocks on the index advancing. The Hang Seng Index has tumbled 30 percent this year, as a global slowdown and more than $500 billion in writedowns and credit losses at financial institutions hurt profits.

Bank of China, the country's largest foreign exchange bank, fell 2.9 percent to HK$3.33. HSBC Holdings Plc, Europe's largest bank by market value, declined 1.1 percent to HK$122.70. It also dropped after South Korea's Financial Services Commission said the bank was unlikely to get a ruling on its purchase of Korea Exchange Bank this month.

TPV Tumbles

Lehman said yesterday it posted a $3.9 billion third- quarter loss on $5.6 billion of writedowns, worse than the $2.2 billion analysts had predicted.

The European Commission cut its growth outlook for the euro area for the rest of this year and predicted a recession for Germany, the region's largest economy. The commission lowered its full-year growth forecast to 1.3 percent, from 1.7 percent earlier, and signaled the 2009 outlook may also be cut.

TPV tumbled 13 percent to HK$2.73, the most since at least October 1999. The maker of monitors and flat-panel televisions, which derives about a quarter of its sales from Europe, reduced its forecast for full-year shipments of liquid-crystal display TVs to 6 million from 7 million, citing slowing demand.

Li & Fung Ltd., a supplier of clothes, toys and home furniture that counts Europe as its second-largest market, lost 1.6 percent to HK$24.30.

China Cosco

China Mobile dropped 5.7 percent to HK$76.70, the biggest drag on the Hang Seng Index. The Nanfang Daily reported today that Chinese regulators plan to allow China Mobile subscribers in the cities of Tianjin and Shenzhen to retain their phone numbers if they switch to other carriers. Users moving to China Mobile would have to change numbers, according to the report.

Shipping stocks retreated, led by China Cosco Holdings Co. as transport rates slumped for a 16th day. The Baltic Dry Index tracking cargo costs fell 4.4 percent to 5,026 points, the lowest since March 9, 2007, according to the Baltic Exchange in London. China's exports rose 21.1 percent in August from a year earlier, down from July's 26.9 percent, the official Xinhua News Agency reported yesterday.

China Cosco, the world's biggest dry-bulk ship operator, dropped 8.9 percent to HK$9.27, the lowest since May 31, 2007. China Shipping Development Co., a crude oil and dry-bulk carrier, declined 2.3 percent to HK$12.94.

The Hang Seng China Enterprises Index, which tracks so- called H shares, fell 5.5 percent to 9,918.38.

The following shares also rose or fell in Hong Kong. Stock symbols are in parentheses after company names:

Belle International Holdings Ltd. (1880 HK), China's largest retailer of women's shoes, dropped HK$0.70, or 11 percent, to HK$5.53, after UBS AG, Goldman, Sachs & Co., Citigroup Inc. and JPMorgan Chase & Co. cut their share price estimates.

China Overseas Land & Investment Ltd. (688 HK), a real- estate developer, tumbled HK$1.09, or 11 percent, to H$9.11. August property sales declined 41 percent from July to HK$1.13 billion, the company said yesterday.

China Southern Airlines Co. (1055 HK), China's largest carrier by passenger numbers, declined HK$0.07, or 4 percent, to HK$1.67. Traffic fell 16 percent to 4.9 million in August, the biggest monthly decline since June 2003, due to government restrictions on air travel during the Beijing Olympic Games.

Hopewell Holdings Ltd. (54 HK), a real-estate developer controlled by billionaire Gordon Wu, rose HK$0.80, or 2.9 percent, to HK$28, after full-year profit more than doubled on one-time gains to HK$5.97 billion. The South China Morning Post reported Co-Managing Director Thomas Wu as saying the company remains a possible investor in a proposed 37.45 billion yuan bridge linking Hong Kong, Zhuhai and Macau.

K Wah International Holdings Ltd. (173 HK), a real-estate developer, slid HK$0.12, or 5.7 percent, to HK$1.97. The company will put land purchases in Hong Kong and China on hold because of weakening demand and the slowing global economy, the South China Morning Post reported, citing Chairman Lui Che-woo.

Yanzhou Coal Mining Co. (1171 HK), a unit of China's fourth-largest producer of the fuel, fell HK$0.85, or 7.9 percent, to $9.85, a third-straight decline. Coal prices at Australia's Newcastle port, the world's largest coal-export harbor, have fallen from a record $194.79 a metric ton reached on July 4, according to globalCOAL NEWC Index.

To contact the reporter responsible for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net