Hong Kong stocks decline to three-month low amid global selloff

Traders work on the trading floor of the Hong Kong Stock Exchange in Hong Kong

Hong Kong stocks fell, with the benchmark index closing at its lowest in more than three months, as a rout in global shares continued.
Agile Property Holdings Ltd., a Chinese developer whose chairman was confined by prosecutors, slid 4.8 percent after saying its executive director is missing amid a corruption probe. Anta Sports Products Ltd. tumbled 11 percent as the Chinese maker of athletic apparel said controlling shareholders are selling stakes. Esprit Holdings Ltd., a clothier that gets most of its sales from Europe, slid 3.5 percent after the region’s equities plunged.
The Hang Seng Index yesterday declined 1 percent to 22,900.94, its lowest close since June 25, while a measure of the gauge’s volatility jumped 8.7 percent to its highest in more than a year. The Hang Seng China Enterprises Index, also known as the H-share gauge, slid 1 percent to 10,185.55. Shares maintained losses even after the city’s leader said his government is ready to resume talks with student leaders amid an outcry over alleged police brutality.
“Investors are very cautious,” said Louis Tse, a Hong Kong-
based director at VC Brokerage Ltd. “Global data is weak, which is a bad omen for the economy. The market may trend lower if the Hong Kong-Shanghai connect isn’t announced tomorrow [today].”
Futures on the Standard & Poor’s 500 Index added 0.2 percent yesterday. The measure fell as much as 3 percent Wednesday, the biggest intraday plunge since 2011, after a second Texas health-care worker was diagnosed with Ebola and retail sales dropped more than expected in September, while a gauge of commodities sank to a five-year low.
The Chicago Board Options Exchange Volatility Index, the benchmark gauge of options prices known as the VIX, jumped 15 percent to 26.25 Wednesday, the highest level since 2012, amid demand for protection against losses in equities. Almost 12 billion shares changed hands in the U.S., the most since October 2011.
Political unrest in Hong Kong and uncertainty about economic growth in China and Europe as well as U.S. interest-rate policy helped drag Hong Kong’s benchmark equity gauge down 9.6 percent from this year’s high. The Hang Seng Index traded at 10.5 times estimated earnings, compared with 15.5 for the Standard & Poor’s 500 Index Wednesday.
Hong Kong shares held declines after China data on money supply and aggregate financing for September missed analyst estimates. Foreign direct investment unexpectedly increased from a year earlier, while new yuan loans rose to 857.2 billion yuan ($910 million) from 702.5 billion yuan in October.
The Stoxx Europe 600 Index retreated the most in almost three years Wednesday, closing down 11 percent from its June high to meet the definition of a correction.
Esprit dropped 3.5 percent to HK$9.98. Cosco Pacific Ltd., a container-terminal operator that gets about a third of its revenue from Europe, slid 1.7 percent to HK$10.22.
The cross-border equity trading plan is waiting for Chinese regulators’ approval, Hong Kong Economic Times reported, citing unidentified people. The plan will allow foreign investors unprecedented access to mainland stocks and give Chinese investors access to Hong Kong-listed equities. The China Securities Regulatory Commission may announce the start date at its weekly news conference today, according to the report. The link is scheduled to start this month.
Agile slid 4.8 percent to HK$3.96. The company said it can’t contact an executive director following a corruption probe by the Chinese Communist Party’s discipline commission. Agile also said it plans to raise HK$1.65 billion ($213 million) from a rights issue to refinance a loan due in December. An earlier share sale that would have raised HK$2.8 billion was scrapped last week before the developer announced its chairman had been taken into custody by prosecutors.
Anta Sports tumbled 11 percent to HK$15.84. The company’s controlling shareholders are selling 70 million shares at HK$16.32 each, according to a statement to the Hong Kong stock exchange.
Chinese railway shares advanced. CSR Corp. jumped 5.9 percent to HK$7.51, and China Railway Group Ltd. increased 4.4 percent to HK$4.29. The National Development and Reform Commission said it approved a 44.5 billion-yuan ($7.23 billion) rail project in Yunnan province and a 25.6 billion-yuan plan to expand rail capacity in Northern China, according to statements posted on the regulator’s website yesterday. Kana Nishizawa ,Bloomberg