Hong Kong stocks closed sharply lower on Monday with the key
Hang Seng index posting its biggest one-day drop ever.
The benchmark Hang Seng Index slid 1,526.02 points, or 5.01
percent, to 28,942.32 after trading between 30,356.79 and 28,920.30
during the session.
H-share index, which reflected the performance of state-owned
companies registered in the Chinese mainland, plummeted 1,395.58
points, or 6.16 percent, to 21,244.29.
Turnover rose to 158.76 billion HK dollars (US$20.46 billion)
from last Friday's 152.35 billion HK dollars (US$19.68
billion).
Analysts considered Monday's slid for several reasons, among
which Chinese Premier Wen Jiabao's words over the weekend is the
biggest one. Wen said on Saturday during his visit to Uzbekistan
that the individual investor scheme, dubbed the "through train" to
Hong Kong, should be implemented only after ensuring that
conditions are in place to minimize its impact on China's domestic
bourses and fund flows. He also said that investors' risk awareness
must be improved before they are allowed to buy overseas
stocks.
The Hang Seng Index went from 20,300 in mid-August to almost 32,
000 last week after Beijing said it would allow individuals there
to invest in Hong Kong directly, on hopes of greater capital
inflows from the Chinese mainland.
Experts also thought the shares fell on fresh worries about the
US supreme mortgage problem. The world famous bank, Citigroup Inc.,
said it will make further write-downs to reflect the declining
value of its US supreme-related securities.
China Mobile, the biggest constituent of the benchmark index by
market capitalization, fell 7 percent to 141.60 Hong Kong dollars
and accounted for 527 of the Hang Seng Index's points drop.
China Life Insurance dropped 4.8 percent to 47.80 Hong Kong
dollars and Ping An Insurance slipped 4.4 percent to 100.30 Hong
Kong dollars.
Oil refiner Sinopec dropped 10 percent to 11.04 Hong Kong
dollars on profit-taking after its recent rally on strong oil
prices.
Chinese oil and gas producer PetroChina followed the broad
market decline. It slumped 8.2 percent to 18.00 Hong Kong dollars.
That was in contrast to its A shares, which more than doubled on
Shanghai debut Monday, closing at 43.96 yuan, compared with their
initial public offering price of 16.70 yuan. The huge gains secured
PetroChina's position as the world's biggest company by market
capitalization.
(Xinhua News Agency November 6, 2007)
