Hong Kong Stocks Cap Biggest Weekly Decline Since March

By Kana Nishizawa and Anna Kitanaka

Hong Kong stocks fell, with the benchmark index capping its steepest weekly slide in six months, as oil producers declined and as Citic Ltd. led declines after being sued by the city’s securities regulator.
Cnooc Ltd., China’s largest offshore energy explorer, lost 2.3 percent. Belle International Holdings Ltd. dropped 2.7 percent after the women’s footwear retailer said sales slid. Citic tumbled 4.1 percent. Lenovo Group Ltd. (992), the world’s largest maker of personal computers, gained 3 percent as it rebounded from yesterday’s loss.
The Hang Seng Index slid 0.3 percent to 24,595.32 at the close in Hong Kong, sliding 2.6 percent for the week. The Hang Seng China Enterprises Index, also known as the H-share index, today lost 0.2 percent to 11,014.69.
“There are mixed views on whether we see more stimulus from China in the light of the weaker-than-expected data recently,” said Andrew Sullivan, head of sales trading at Espirito Santo Securities Inc.
The H-share measure pared gains this
quarter to 6.6 percent amid signs the mainland economy is losing momentum as reports this week showed falling imports and housing prices slumped in July. The index traded at 7.5 times estimated earnings, compared with 11.3 for the Hang Seng Index (HSI) and 16.7 for the Standard & Poor’s 500 Index yesterday.

China Economy

Data today showed China’s broadest measure of new credit rose to 957.4 billion yuan ($156 billion) in August, missing analysts estimates for 1.14 trillion yuan after a 273.1 billion-yuan rise the month before. New yuan loans increased 702.5 billion yuan, about in line with estimates. Money-supply expansion slowed.
China’s consumer inflation eased to a four-month low in August while factory-gate prices extended declines to 30 months, a report yesterday showed. Still, conditions for a broad interest-rate cut are not ripe, according to a China Securities Journal commentary citing unidentified analysts.
Citic lost 4.1 percent to HK$14.18. Hong Kong’s Securities and Futures Commission filed a suit against the company formerly known as Citic Pacific Ltd. and five ex-directors yesterday, saying they disclosed false information about losses in 2008 stemming from currency bets to hedge a mining project in Australia. The regulator also said it’s seeking compensation for as many as 4,500 investors. Citic said today it’s considering the allegations and seeking legal advice.

Energy Stocks

Cnooc fell 2.3 percent to HK$14.30 and PetroChina Co. (857) retreated 1.3 percent to HK$10.54. Both stocks plunged at least 7.5 percent this week as the International Oil Agency cut its global demand forecasts.
Belle dropped 2.7 percent to HK$9.40 after same-store sales for the June to August period dropped 2.8 percent from a year earlier.
Lenovo rose 3 percent to HK$12.24 to lead gains on the Hang Seng Index. The stock yesterday slid 4.2 percent after a filing showed the computer maker’s chairman further cut his holdings in the company.

U.S. Shares

Futures on the S&P 500 (SPX) were little changed. The equity benchmark advanced 0.1 percent yesterday as a rebound in oil offset concerns over escalating geopolitical tension and the timing of possible interest-rate increases.
The U.S. will join the European Union in stiffening sanctions on Russia over Ukraine, prompting the government in Moscow to threaten retaliation. European companies and taxpayers “will have to pick up the costs” for the penalties, Dmitry Peskov, a spokesman for Russian President Vladimir Putin, told Interfax.