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Stocks

Hong Kong stocks slip as Chinese companies extend fall

Property developers higher despite rising interest rates

HONG KONG (Nikkei Markets) -- Hong Kong shares edged lower on Wednesday as Chinese companies listed in the city fell for the fourth time in five days, led by insurers and banks.

The Hang Seng Index gave up 0.2% at 29,623.83, with heavyweight Tencent Holdings losing 1.8% and life insurer AIA Group slipping 0.5%. The 40-member Hang Seng China Enterprises Index of large mainland companies retreated 0.5% to a one-week low. Ping An Insurance Group dropped 1.9%, China Life Insurance shed 0.6% and China Pacific Insurance Group declined 1.1%.

Nearly 110 billion Hong Kong dollars ($14.1 billion) worth of local stocks changed hands on the stock exchange's main board on Wednesday.

The day's losses came amid a cautious tone in regional markets after North Korea tested an intercontinental ballistic missile that it claimed would put the entire U.S. mainland within reach. The Nikkei Asia300 Index of regional stocks outside Japan fell 0.2%.

The Hang Seng Property Index of large real estate companies climbed 0.3%, trimming this week's losses to 0.7%, even as the Hong Kong Interbank Offered Rates -- on which most local mortgage rates are based -- stayed at elevated levels. The rate with a one-month tenor climbed to breach 1% on Wednesday, while that with a three-month tenor reached 1.19%. Both are at their highest levels since late 2008.

CK Asset Holdings gained 0.2%, while Hang Lung Properties advanced 3.5%. Ronnie Chan, chairman of Hang Lung Properties, told reporters at a real estate summit in Hong Kong on Wednesday that the company expected "good" rental income growth in China this year that would improve its total income from rents.

"Although Hibor has risen, the Hibor-based mortgage rate is still at a low level. Thus it won't have much impact on property sales of developers," said Andrew Wong, chairman of financial services company Anli Holdings. "I can't see any serious capital outflow risk at the moment."

Several Chinese developers listed in Hong Kong also climbed following recent weakness amid worries about high credit costs on the mainland. KWG Property Holding surged 10.1%, China Vanke rose 5.1%, while China Evergrande Group added 1.1%. Wanda Hotel Development, a listed affiliate of developer Dalian Wanda Group, rose 8.3%

In mainland trading, the Shanghai Composite Index rose 0.1% while the CSI 300 Index of large companies in Shanghai and Shenzhen ended the day little changed. The yuan traded onshore strengthened 0.1% to 6.5978 to the dollar.

Foundation works company Sheung Yue Group Holdings slid 5.6% after reporting a 21.3% drop in net profit for the six months ended Sept. 30 even as revenue rose 6.4% from a year ago.

Microware Group surged 13.2%, trimming losses this month to 6.5%. On Tuesday, the information technology company reported a 21.1% drop in six-month net profit and a 12.8% decrease in revenue.

Qinqin Foodstuffs Group tumbled 5.3% in Hong Kong after it said it expected to report a loss of at least 10 million yuan ($1.5 million) for 2017.

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