HK Property Sales Fall, HBSC Plunges 19%

123jump.com Staff
03 Mar, 2009
New York City

Hong Kong property sales fall 12.4% to February. HSBC fell 18.8% or $17 billion in market capitalization after it reported a sharp drop in earnings and offered to raise nearly $18 billion at 51% discount from the stock price.

[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong property sales fall 12.4% to February. HSBC pre-tax falls 62% to $9.3 billion.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index declined 2.3% or 283.58 to 12,033.88, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, increased 0.5% or 35.34 to 6,617.57. In Shanghai trading CSI 300 Index fell 1% or 22.51 to 2,142.15.

Daily turnover on main-board increased to HK$43 billion from HK$36.4 billion yesterday.

Hong Kong Property Sales Falls

Information service department of the Hong Kong said today that sales and purchase agreement dropped fell 12.4% from a month earlier and 64.9% from a year ago to 5,043 in February.

Of the 5,043 sales, 4,487 were residential units.

Sales and purchase agreements however fell 9.1% on the month and 41.7% from a year ago using the 12-month moving average.

According to the report, the total value of the agreements fell 15% from a month earlier and 69.5% from a year ago to HK$15.98 billion in the review period.

HSBC Pretax Profit Falls 62% to $9.3 billion

HSBC reported yesterday that its pre-tax profit in the fiscal year ending December 31 dropped 62% to $9.3 billion from a year ago.

Excluding goodwill impairments pre-tax profit increased to $19.9 billion.

Loan impairment charges and other credit risk provisions rose $7.7 billion from 2007 to $24.9 billion. In North America a loss of $15.5 billion was reported including goodwill impairment charge of $10.6 billion in Personal Financial Services.

The lender declared an interim dividend of 10 cents in the fourth quarter, resulting in an annual dividend of 64 cents per ordinary share.

HSBC will write no further consumer finance business in the U.S. through the HFC and Beneficial brands and closing the majority of the network.

The bank plans to launch rights issue at 254 pence to £12.5 billion, 51% discount from the prevailing closing a day before.

The bank forecasts that the rights issue will add 150 basis points to HSBC’s capital ratios, strengthening the core equity tier 1 ratio to 8.5% and the tier 1 ratio to 9.8%.

Gainers & Losers

Hong Kong stock indexes fell 2% as market jitters heightened after HSBC announced a record rights offer of £12.5 billion in order to boost its balance sheet that has been dented by the unprecedented global financial crisis.

HSBC fell 18.8% to HK$46.25, an estimated $17 billion in market capitalization induced by today’s sell off.

HSB Hong Kong unit Hang Seng Bank declined 3.5% to HK$81.30 after a 46% fall in its second half profits.

BOC Hong Kong declined 5.7% to HK$7.17.

However losses were trimmed by market rumors that China will expand its stimulus plan to other industries that previously were not covered by the plan.

China Overseas Land increased 5.2% to HK$10.36.

Hong Kong Exchanges & Clearing dropped 2.8% to HK$55.90. The stock is due to announce its results tomorrow.

China Mobile rose 0.4% and China Life advanced 1.5%. Angang Steel edged up 7.8% and Anhui Conch soared 7.5%.

Shipping lines increased as the measure of freight charges gained. China Cosco rallied 4.4% to HK$4.25 and China Shipping Development increased 6.6%.