Hong Kong Stocks Retreat for 3rd Day; Developers Lead Declines

By Hanny Wan and Catherine Yang

Sept. 29 (Bloomberg) -- Hong Kong stocks fell for a third day, led by developers, after a media report said HSBC Holdings Plc raised interest rates for new homebuyers, and on concern the U.S. bank-rescue deal isn't enough to avert an economic slowdown.

New World Development Co., a Hong Kong developer, tumbled 9.4 percent. Ping An Insurance (Group) Co., China's second- largest insurer, slumped 9.5 percent after saying it may make further provisions for losses from its stake in Fortis.

The Hang Seng Index lost 395.19, or 2.1 percent, to 18,286.90 at the 12:30 p.m. break, extending the 1.5 percent decline in the past two sessions. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese companies, fell 4.1 percent to 9,192.30.

``Earnings have yet to see the full force of this economic slowdown,'' Anthony Muh, chief executive officer of Asia Pacific at Alliance Trust Asset Management in Hong Kong, which manages $1 billion, said in an interview with Bloomberg TV.

The Hang Seng Index has plunged 34 percent this year as the U.S. subprime mortgage crisis damped global growth. President George W. Bush and congressional leaders said yesterday they reached an agreement on a $700 billion bank-rescue package.

HSBC Holdings Plc, Hong Kong's largest mortgage lender, was unchanged at HK$124.50, after falling as much as 0.9 percent. It will raise interest rates for new homebuyers in the city as global credit tightening pushes up its funding costs, the South China Morning Post newspaper reported Sept. 27. From today, the bank will increase rates for new home loans by 50 basis points, the paper said, without identifying the source of its information.

Largest Percentage Loser

New World retreated 9.4 percent to HK$8.59, making it the Hang Seng Index's second-largest percentage loser. Hang Lung Properties Ltd., a Hong Kong-based developer, slipped 6.2 percent to HK$17.70. Sun Hung Kai Properties Ltd., the city's No. 1 developer by market value, slipped 3.9 percent to HK$82.10.

The Hang Seng Property Index's 4.7 percent drop made it the biggest group loser in percentage terms on the broader Hang Seng Index.

Ping An slumped 9.5 percent to HK$43, making it the largest percentage loser on the Hang Seng Index. The company said on Sept. 26 that it may set money aside in its third-quarter results to cover losses from its stake in Fortis after shares of the largest Belgian financial-services company fell to the lowest in 13 years last week. Still, the Shenzhen-based company said it has adequate capital.

Fortis, the largest Belgian financial-services firm, received an 11.2 billion-euro ($16.3 billion) rescue from Belgium, the Netherlands and Luxembourg.

All but four stocks on the 43-member Hang Seng Index declined. September futures slipped 1.7 percent to 18,340.

The following stocks rose, fell or were suspended. Stock symbols are in brackets after company names.

BYD Electronic (International) Co. (285 HK) was suspended after jumping HK$1.22, or 70 percent, to HK$2.96. Billionaire Warren Buffett's Berkshire Hathaway Inc. agreed to pay HK$1.8 billion ($231 million) for a minority stake in BYD Co. (1211 HK), China's largest maker of rechargeable batteries. Berkshire Hathaway unit MidAmerican Energy Holdings Co. will buy 225 million BYD shares, equivalent to a stake of about 10 percent, in the manufacturer, according to a Sept. 27 statement. BYD, parent of BYD Electronic, was also suspended. BYD advanced 6 cents, or 0.7 percent, to HK$8.40 on Sept. 26.

Lifestyle International Holdings Ltd. (1212 HK) climbed 24 cents, or 2.9 percent, to HK$8.45. The operator of Hong Kong's Sogo stores axed a plan to buy luxury-goods maker EganaGoldpfeil (Holdings) Ltd. (48 HK) and said there was a ``remote'' chance it would recover money it was owed. The HK$1.2 billion deal collapsed after the two companies and Egana's creditors failed to agree on a debt restructuring plan, Lifestyle said Sept. 26. EganaGoldpfeil remains suspended.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net