Hong Kong shares fall as China war on speculators drags mainland stocks
HONG KONG (Nikkei Markets) -- Hong Kong shares headed for a third day of losses, as mainland equities set course for their worst single-session decline this year amid lingering concern about increased regulatory supervision.
The Hang Seng Index fell 0.6% to 23,779.90 by midday, adding to Tuesday's 1.4% slump. PetroChina fell 1.8% and China Petroleum & Chemical Corp (Sinopec) dropped 1.6% as U.S. crude oil prices were poised for a third consecutive day of losses. The two oil majors were among the biggest contributors to the 0.9% fall on the Hang Seng China Enterprises index, which tracks mainland companies listed in Hong Kong. CNOOC shed 2.2% after the offshore oil producer said CEO Yang Hua resigned, but will continue as chairman and a non-executive director.
The Shanghai Composite sank 1% to fresh two-month lows in its fourth consecutive decline, while the ChiNext index of small-company shares in Shenzhen retreated 1%. The threat of continued regulatory crackdown remained a drag on investor sentiment after China Securities Regulatory Commission Chairman Liu Shiyu over the weekend vowed to boost "real-time" supervision to restrict abnormal trading. The comments rekindled fears of further steps to prevent asset bubbles in China.
"Sentiment for China markets has dipped considerably as authorities seem determined to crack down on speculation. This could lead to speculative liquidity drying up," said Francis Lun, chief executive officer at Geo Securities. "With global cues also not too helpful, investors are a bit too scared to look at this fall as a buying opportunity, and I think we are in for further declines in Hong Kong as well as China markets."
Indexes on Wall Street dipped overnight and most other regional benchmarks also traded lower as ongoing tensions between the U.S. and North Korea, and caution ahead of French elections damped risk appetite. The Nikkei Asia300 index was down 0.7%, on course for a third day lower.
Trading in Belle International Holdings remained halted for a second day. CDH Investments Fund Management is working with the shoe retailer's management for a potential buyout, with an announcement possibly due as early as this week, Bloomberg reported, citing people familiar with knowledge of the matter.
i-Cable Communications shares also remained halted for a second day. The company has taken an "important step" towards carrying on its business, the pay TV and broadband service providers Chairman Stephen Ng Tin-hoi said, South China Morning Post reported, citing an internal circular to staff. i-Cable lost one-third of its value last month after its parent Wharf Holdings said it will cut off funding.
CSPC Pharmaceutical rose for the fifth day, adding 1% after saying it is considering a spin-off and separate listing of CSPC XNW Pharmaceutical Joint Stock Co in China.
Gold miner Zijin Mining fell 2.1%, in line with broad market losses. It rose as much as 2.7% earlier after saying that it expects a profit of 1 billion yuan ($145.3 million) for the first quarter, more than 15 times higher as compared with a year ago.
China Eastern Airlines declined 4.6% to HK$4.20 after Morgan Stanley reportedly downgraded the stock to "underweight" and cut its target price to HK$3.62 from HK$3.83. The airline late Tuesday reported a 9.6% increase in passenger traffic for March.
China Huishan Dairy Holdings, whose shares have been suspended since an 85% plunge on Mar. 23, said its board is unable to operate after two more directors resigned this week, leaving the dairy farm operator with too few board members. On Thursday, the company said it engaged Deloitte Advisory (Hong Kong) as an independent financial advisor.
-- Nimesh Vora
--Nikkei Markets is a real-time financial news service for South East Asia's markets published by Nikkei NewsRise Asia Pte Ltd, a Nikkei and NewsRise joint venture company. Nikkei Markets provides wide companies coverage in the region, including the Nikkei's Asia300 companies.