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Hong Kong Stocks Decline as Wen Warns of ’Difficult’ Conditions for China

Nick Gentle Bloomberg.com 01/05/2012 02:09
Hong Kong Stocks Decline as Wen Warns of ’Difficult’ Conditions for China - economy - China - Business - Hong Kong


Hong Kong stocks (HSI) fell as Premier Wen Jiabao said China faces “relatively difficult” business conditions, tempering gains by exporters on better-than- estimated economic data from the U.S. and Germany.



Swire Pacific Ltd. (19), the Hong Kong developer, retailer and airline operator, led declines, dropping 16 percent as it spins off its property unit. Agile Property Holdings Ltd., a developer of properties in mainland China, fell 3.4 percent. Li & Fung Ltd., the biggest supplier to Wal-Mart Stores Inc., climbed 1.3 percent as U.S. manufacturing increased and German unemployment unexpectedly fell.

The Hang Seng Index fell 0.3 percent to 18,822.68 at the midday break. Seven stocks fell for every five that rose in the 48-member gauge. The Hang Seng China Enterprises Index (HSCEI) of mainland companies’ H shares fell 0.2 percent to 10,174.95.

The Hang Seng Index fell 20 percent in 2011 as China raised interest rates and lenders’ reserve requirements to curb inflation and slow the advance of property prices.

“Investors are concerned about liquidity in the market and this adds to worries about the economic slowdown after Wen’s comments,” said Chen Liqiu, a strategist at Jianghai Securities Co. in Shanghai. “We need reserve-ratio cuts for the liquidity issue to be eased.”


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