Hong Kong shares slide

28 Oct, 2008

Hong Kong shares were down 4.2 percent on Monday, after briefly slipping below 12,000 points, as energy stocks plunged after an Opec move to cut output failed to arrest falling oil prices, while banks fell on signs of cooling growth. Mainland property developer Guangzhou R&F Properties tested a life low of HK$2.30 after a slew of support measures from the government to prop up the ailing sector failed to revive investor confidence.
The stock had shed more than a fourth of its market value by midday to stand at HK$3.52. "Investors might just be throwing in the towel," said UBS analyst Eric Wong. ICBC, the world's largest bank by market value, slid 6.7 percent after on Friday reporting a slower pace of growth in third-quarter earnings and posting bigger-than-expected impairment losses on subprime mortgage-linked assets.
HSBC Holdings, Europe's largest bank, gave up 4 percent, adding to the 12.5 percent plunge on Friday triggered by Morgan Stanley slashing its target price to HK$75 on growing signs of trouble in emerging markets. The shares were trading at HK84.5 on Monday.
The benchmark Hang Seng Index ended the morning session down 532.11 points at 12,086.27 after dropping to 11,891.45 earlier. The index briefly recovered to 12,736.85 in early trade amid bargain buying in select blue chips. "Nobody can tell for sure where the support levels are or where the bottom is," said Castor Pang, strategist with Sun Hung Kai Financial
"The current bear market trends point to continuous declines in the market as fund managers unload their positions in the face of increased redemptions." Bourse operator Hong Kong Exchanges & Clearing shrank 8.8 percent as dwindling turnover weighed on the company's earnings outlook. Asia's largest oil and gas producer Petrochina fell 6.8 percent while the region's biggest refiner Sinopec Corp gave up 8.9 percent. Offshore oil specialist CNOOC shed 10.5 percent while top coal miner China Shenhua Energy dropped 11 percent.
The China Enterprises Index of top locally listed mainland Chinese companies had fallen 6.9 percent to 5,402.73. Aluminium Corp of China Ltd, fell 7.7 percent after the world's No 3 alumina producer said on Sunday its quarterly earnings plunged 92 percent, lagging forecasts, while its outlook was clouded by high costs and sliding aluminium prices.
Datang International Power slumped 11.5 percent after it said on Sunday it expected its earnings to fall about 85 percent in 2008 on soaring coal costs. The country's second-largest power producer reported a net loss of 432.9 million yuan ($63.2 million) for the third quarter ended September, according to Chinese accounting standards. Rival Huaneng Power dropped 13.7 percent.

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