Hong Kong Stocks Fall to Month Low as Utilities, Developers Drop - 30 May (15:33)
Bloomberg, (30/5) -- Hong Kong stocks fell, with the benchmark index
capping its lowest close in more than a month, as the city�s
developers and utilities retreated amid concern the Federal Reserve will
reduce its bond buying.
The benchmark Hang Seng Index slid 0.3 percent to 22,484.31, its lowest close since April 25. About two stocks fell for each that gained, with trading volume 8.7 percent more than its 30-day intraday average. The Hang Seng China Enterprises Index of mainland companies slid 0.6 percent to 10,689.99.
�There�s concern about when the Federal Reserve will stop quantitative easing, and there are downside risks for China�s economy,� said Ben Kwong, chief operating officer at brokerage KGI Asia Ltd. in Hong Kong. �I don�t think there�s fresh incentive for the Hong Kong market to move up, but the downside is relatively small.�
Sun Hung Kai fell 2.5 percent to HK$103.20. Cheung Kong (Holdings) Ltd., the city�s second-biggest developer by market value, sank 1.4 percent to HK$110. Interest rates are expected to rise in Asia as savings drop and the Fed reins in quantitative easing, Morgan Stanley said in a note yesterday.
The yield on U.S. benchmark 10-year debt extended gains today after surging yesterday to a 13-month high. Hong Kong�s interest rates follow the U.S as the city�s currency is pegged to the greenback.
Rising yields also weighed on utility shares, which fell the most among the Hang Seng Composite Index�s 11 industry groups. CLP fell 3.3 percent to HK$66.95. Power Assets Holdings Ltd. retreated 3.7 percent to HK$70.50.
�People are worried the interest rates may rise,� said Kenny Tang, general manager of AMTD Financial Planning Ltd. in Hong Kong. �That undermines the attractiveness of utility stocks because last year, the market thought their dividend yields were attractive compared to low interest rates.�
The benchmark Hang Seng Index slid 0.3 percent to 22,484.31, its lowest close since April 25. About two stocks fell for each that gained, with trading volume 8.7 percent more than its 30-day intraday average. The Hang Seng China Enterprises Index of mainland companies slid 0.6 percent to 10,689.99.
�There�s concern about when the Federal Reserve will stop quantitative easing, and there are downside risks for China�s economy,� said Ben Kwong, chief operating officer at brokerage KGI Asia Ltd. in Hong Kong. �I don�t think there�s fresh incentive for the Hong Kong market to move up, but the downside is relatively small.�
Sun Hung Kai fell 2.5 percent to HK$103.20. Cheung Kong (Holdings) Ltd., the city�s second-biggest developer by market value, sank 1.4 percent to HK$110. Interest rates are expected to rise in Asia as savings drop and the Fed reins in quantitative easing, Morgan Stanley said in a note yesterday.
The yield on U.S. benchmark 10-year debt extended gains today after surging yesterday to a 13-month high. Hong Kong�s interest rates follow the U.S as the city�s currency is pegged to the greenback.
Rising yields also weighed on utility shares, which fell the most among the Hang Seng Composite Index�s 11 industry groups. CLP fell 3.3 percent to HK$66.95. Power Assets Holdings Ltd. retreated 3.7 percent to HK$70.50.
�People are worried the interest rates may rise,� said Kenny Tang, general manager of AMTD Financial Planning Ltd. in Hong Kong. �That undermines the attractiveness of utility stocks because last year, the market thought their dividend yields were attractive compared to low interest rates.�
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