April 21, 2017 7:22 pm JST

Hong Kong shares post weekly losses as regulatory woes hurt mainland markets

HONG KONG (Nikkei Markets) -- Hong Kong shares ended lower this week, after concerns over increased regulatory scrutiny dragged mainland markets to an over two-month low.

The Hang Seng Index edged 0.06% lower to 24,042.02 on Friday, extending losses for the week to 0.9%. A measure of mainland companies listed in Hong Kong was down 1.5% this week after the Shanghai Composite suffered its worst weekly loss this year amid concerns that authorities will step up efforts to rein in speculation. China's securities regulator last weekend urged stock exchanges to increase supervision and emphasized the need to maintain market order. The Shanghai Composite ended little changed on Friday, but fell 2.2% this week.

Most other Asian markets also fell this week as risk sentiment was tepid, with investors fretting over the possibility of increased tensions between the U.S. and North Korea. Caution ahead of the first round of French presidential elections on Sunday also kept investors on edge. The Nikkei Asia300 Index, which tracks 316 of the region's most influential companies, has fallen 0.4% since last Friday.

"Most of the weak sentiment in Hong Kong was on account of the concerns over China markets," said Sam Chi-yung, a senior strategist at South China Financial Holdings. "Geopolitical concerns were also a factor."

A slump in global crude prices weighed on energy producers. PetroChina fell 0.7% Friday to end the week 3% lower. CNOOC lost 4% this week after the offshore oil producer on Tuesday said Yang Hua resigned as chief executive officer.

The city's property developers were also among the major losers this week, with Hang Lung Properties and Sino Land shedding at least 4% over the last four trading days.

"While housing demand has remained quite strong and prices remain high, there is strong possibility that we could see more measures from authorities to cool the property market," said Linus Yip, chief strategist at First Shanghai Securities.

Last week, Hong Kong said first-time local homebuyers acquiring more than one property at the same time will be subject to a higher stamp duty of 15%.

Among H-shares, China Overseas Land & Investment fell 2.1% this week. Shortly after markets closed Friday, the company reported a near 10% increase in first-quarter operating profit to HK$7.80 billion ($1 billion). China Resources Land lost 5.5% during the period.

China Unicom (Hong Kong) fell 1.7% Friday ahead of its quarterly earnings. After the market closed, the telecom operator reported a 79% increase in March quarter profit.

Air China and China Eastern Airlines fell at least 3.8% each this week after Morgan Stanley reportedly downgraded the stocks.

Unprofitable i-Cable Communications surged 16.4% Friday in its only trading session this week after announcing plans to raise HK$704 million through a sale of new shares being underwritten by Forever Top (Asia). The offering represents a 65% discount to its last closing price. i-Cable shares fell as much as 24% intraday.

Its parent, billionaire Peter Woo's Wharf Holdings, a unit of Wheelock, which last month said it will cut off funding to the troubled pay-television operator, will not subscribe to the offering. Wharf shares fell 1.1% Friday to end the week 1.8% lower.

Tencent Holdings slipped 0.1% Friday after climbing to a record in the previous session. The Internet giant expects its mobile messaging app WeChat to provide electronic payment services in every Chinese shop within two years, Reuters reported shortly after markets closed. The stock rose 2.5% this week.

Geely Automobile Holdings jumped 8.9% this week, its first weekly advance in four, after Daiwa Capital Markets upgraded the stock to "buy," citing attractive valuations. Geely was down 0.7% on Friday.

-- 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.

Asia300

PetroChina Co., Ltd.

China

Market(Ticker): HKG(857)
Sector:
Industry:
Energy Minerals
Integrated Oil
Market cap(USD): 196,382.84M
Shares: 183,020.97M
Asia300

CNOOC Ltd.

Hong Kong

Market(Ticker): HKG(883)
Sector:
Industry:
Energy Minerals
Oil & Gas Production
Market cap(USD): 48,772.30M
Shares: 44,647.45M
Asia300

Hang Lung Properties Ltd.

Hong Kong

Market(Ticker): HKG(101)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 11,094.82M
Shares: 4,497.57M
Asia300

China Overseas Land & Investment Ltd.

Hong Kong

Market(Ticker): HKG(688)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 31,957.91M
Shares: 10,956.20M
Asia300

China Unicom (Hong Kong) Ltd.

Hong Kong

Market(Ticker): HKG(762)
Sector:
Industry:
Communications
Major Telecommunications
Market cap(USD): 35,923.23M
Shares: 23,947.08M
Asia300

Wheelock & Co. Ltd.

Hong Kong

Market(Ticker): HKG(20)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 15,714.58M
Shares: 2,039.34M
Asia300

China Eastern Airlines Corp. Ltd.

China

Market(Ticker): HKG(670)
Sector:
Industry:
Transportation
Airlines
Market cap(USD): 12,565.42M
Shares: 14,467.58M
Asia300

Air China Ltd.

China

Market(Ticker): HKG(753)
Sector:
Industry:
Transportation
Airlines
Market cap(USD): 18,855.94M
Shares: 14,524.81M
Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 340,504.81M
Shares: 9,478.03M

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