Hong Kong shuffled sideways on Friday, underperforming most regional markets, which gained on news of a US government rescue for Bank of America, as HSBC tanked for a third straight session on its second broker downgrade this week. The blue chip index ended the week 7.8 percent lower, its worst since end-October, led by a 14 percent drop in HSBC as investors fretted about dividend cuts and recapitalisation at the London-based bank.
The Hang Seng Index ended 12.55 points higher at 13,255.51. Goldman Sachs slashed the UK's top bank to a sell rating from neutral and slashed its target price to HK$49, lower than Morgan Stanley's cut to HK$52, which sparked a two-day sell-off in the stock.
HSBC fell 2.7 percent to close at a 10-year low of HK$64.20. Mainboard turnover fell to HK$47.1 billion ($6 billion) from HK$49.4 billion on Thursday. Local property stocks also slipped amid concerns over slowing transaction growth and falling prices.
Property conglomerate Wharf Holdings gave up 2.5 percent after CLSA downgraded the stock to underperform from buy following a sharp run-up in its share price in the past month. New World Development fell 3.6 percent while Swire Pacific gave up 1.5 percent.
But shares in Hang Lung Properties bucked the trend to rise 3.3 percent after J.P. Morgan raised its stake in the developer slightly to 4.98 percent by acquiring 1.89 million shares. The China Enterprises Index of top locally listed mainland firms climbed 1.5 percent to 7,147.34 helped by a strong rally in banking counters.
China Communications Construction dropped 4 percent after the World Bank barred its unit for eight years on uncovering its involvement in a major cartel involving local and international firms bidding on a Philippine road project. The stock dropped 5.5 percent after the announcement on Thursday.
In 2007, overseas contracts accounted for 28 percent of CCC's total construction contracts, Citigroup said. China's top builder of highways and ports on Friday denied alleged engagement in collusive activities and said it believed the World Bank allegation against its unit had no factual or legal merit.
Chinese lenders continued Wednesday's rally, recovering from Thursday's broad-based losses, after three equity selldowns in major banks this year eased some of the uncertainties hanging over the stocks and recent data showed an increase in bank lending and money supply on the mainland. Top bank ICBC gained 3.6 percent while No 2 lender Bank of China added 4.6 percent. China's third largest lender, Construction Bank, climbed 3.7 percent.
Property investment and heat energy supplying concern Kai Yuan Holdings Ltd jumped 14.22 percent after it said it would buy a steel manufacturing and trading venture for HK$5.2 billion ($666.7 million), a move to further diversify its business scope and expand its income stream. The deal will be settled by the issue of 2 billion new shares at HK$2.6 each.