Hang Seng Index Dragged Down by Lenders, Developers

• Apr 16, 2010
• Sectors:   China Report
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The Hang Seng Index declined 1.32% to close at 21,865.26 on Friday, April 16, in main board trading volume of HK$ 76.49 billion. The Hang Seng China Enterprises Index, which tracks mainland-based companies listed in Hong Kong, fell 2% on Friday.

The major mainland banks weighed heavily on the index, China Merchants Banks (3968.HK, 600036.SH) backed 4.29%, Bank of China (3988.HK, 601988.SH) slumped 4.03%, Bank of Communications (3328.HK, 601328.SH) declined 3.83% China Construction Bank (0939.HK, 601939.SH) fell 2.66%, Industrial and Commercial Bank of China (ICBC) (1398.HK, 601398.SH) dropped 2.11%. HSBC (NYSE:HBC, LON:HSBA, 0005.HK) remained positive, strengthening 0.3%.

Coal-related companies broadly retreated. Yanzhou Coal Mining (NYSE:YZC, 1171.HK, 600188.SH) fell 2.65% and China Coal Energy (1898.HK, 601898.SH) lowered 3.37%. China Shenhua (1088.HK) produced 19 million tons of coal in March, down 1% year-on-year, bringing the company's production for the first quarter of 2010 to 56.1 million tons, up 8.3% year-on-year. Shenhua sold 21.3 million tons in March, down 6.2% compared to March 2008, while first quarter sales reached 65.1 million tons, up 14.2% year-on-year. The company's stock reduced 0.69% Friday. Coking company Fushan Energy's (0639.HK) full year results announcement, including 136% year-on-year growth in revenues and 98% expansion in net income, was followed by a 1.72% drop in the company's stock.

Aluminum Corporation of China (Chalco) (NYSE:ACH, 2600.HK, 601600.SH) capped the week with a 4.54% slide, after announcing it has received approval to issue 1 billion new shares, China Business News reports.

Property companies fell heavily Friday after the government announced new down payment requirements for second-home mortgages yesterday. China Overseas Land (COLI) (0688.HK) slid 4.79%, R&F Properties (2777.HK) tumbled 4.63%, KWG Property (1813.HK) lost 4.61%, Shimao Property (0813.HK) declined 4.65% and China Resources Land (1109.HK) fell 4.15%.

The telecom big-caps China Telecom (NYSE:CHA, 0728.HK) and China Mobile (NYSE:CHL, 0941.HK) fell 5.72% and 2.17%, respectively, while China Unicom (NYSE:CHU, 0762.HK, 600050.SH) was positive, gaining 4.37%. Other tech-sector heavyweights Foxconn International (2038.HK) and ZTE (0763.HK, 000063.SZ) fell 4.65% and 1.81%, respectively.

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