Hong Kong Stocks Close Sharply Lower

Hong Kong stocks were sharply lower in early Friday trading on the weakness of property stocks, with the blue chip Hang Seng Index dropping 141.90 points, or 1.34 percent, to 10,441.20 at the open.

Shares of property developers were marked down at the opening following news that Cheung Kong cut flat sale prices, but bargain hunters came in and lifted the sector from low levels, said Percy Au-Young, sales director at DBS Securities.

The Hang Seng recovered to 10,463, down 119 points, before extending losses to hit a low of 10,397, down 185 points. Turnover was HK$965.58 million in the first 25 minutes of trade.

Cheung Kong slashed sale prices for apartments in its DeerHill Bay development in Tai Po in the New Territories by 20 percent after offering the units at surprisingly high prices earlier this month.

Cheung Kong was down HK$1.50 to HK$53.75.

Au-young said Cheung Kong had come back to more realistic price levels after it mispriced the flats.

I believe the (prices) cut is a non-issue and the projects sales will substantially pick up and the news impact on the market will be short-lived, he added.

The market was directionless and the Hang Seng was likely to move within a range between 10,500 to 10,300 level, said Edwin Cheung, dealing director at Taiwan Securities.

December Hang Seng Index futures fell 205 points to 10,435.

Trading in shares of Lai Fung, the property arm of Lai Sun Development, debuted at HK$3.00 and the stock swiftly fell to HK$2.50, below an issue price of HK$2.80.

This is pretty much expected as the stock is expensive compared to other Chinese property counters which have fallen sharply lately, Cheung said.

China plays red chips and H shares were weak with the red chip Hang Seng China-Affiliated Corporation Index dropping 39 points, or 2.20 percent, to 1,744. The Hang Seng Chinese

Enterprises Index was down nine points, or 1.21 percent to 775.