Hong Kong Stocks Fluctuate; China Coal, Belle Climb on Hang Seng Inclusion

Hong Kong stocks fluctuated as developers slumped after the city tightened mortgage-lending rules and said it will boost land supply in a bid to cool home prices, while shipping stocks rose along with freight rates.

Sino Land Co., the worst performer on the Hang Seng Property Index this month, tumbled 5.3 percent. Belle International Holdings Ltd., a retailer of women’s shoes, and China Coal Energy Co. gained more than 2 percent after being picked as the latest additions to the Hang Seng Index. China Cosco Holdings Co., the nation’s largest operator of dry-bulk ships, surged 4.6 percent after shipping rates gained.

“Our house view on property developers is ‘cautious’ because the government is determined to curb the overheating real-estate market,” said Steve Tse, a research manager at BEA Union Investment Management. “We like stocks that are domestic- consumption related, such as Belle, which has made its way into the Hang Seng Index as its membership expands.”

The Hang Seng Index advanced 0.2 percent to 21,117.97 at the 12:30 p.m. break, after falling as much as 0.9 percent.

The Hang Seng China Enterprises Index of so-called H shares of Chinese companies gained 0.7 percent to 11,721.93.

Government Loan Curbs

The Hang Seng Index has fallen 5.8 percent from its highest close this year on Jan. 6 as China’s efforts to cool its property market and Europe’s debt crisis dented confidence in a global economic recovery. Stocks on the gauge trade at an average 13.7 times estimated earnings, Bloomberg data show, down from 17.2 times at the beginning of the year.

Sino Land tumbled 5.3 percent to HK$13.34. Sun Hung Kai Properties Ltd., Hong Kong’s biggest developer, plunged 4 percent to HK$110.10. Henderson Land Development Co., the worst performer on the Hang Seng Property Index this year, sank 3.2 percent to HK$48.45.

The Hang Seng Property Index’s 2.8 percent slump was the biggest among the four industry groups tracked by the Hang Seng Index.

Down payments for apartments costing HK$12 million ($1.54 million) or more will rise to 40 percent from 30 percent, with immediate effect, Hong Kong Monetary Authority Chief Executive Norman Chan said Aug. 13. The government will increase land sales next year, Financial Secretary John Tsang said earlier.

Belle climbed 2 percent to HK$13.22. China Coal, a unit of the country’s second-biggest producer of the fuel, rose 3.8 percent to HK$10.90. The shares will join the Hang Seng Index effective Sept. 6, the gauge’s compiler said Aug. 13.

Shippers Advance

China Coal posted a 25 percent increase in first-half profit to 5.45 billion yuan ($802 million) after a rebounding economy drove up prices. That’s higher than a median estimate of 4.9 billion yuan in a Bloomberg survey of three analysts.

China Cosco surged 4.6 percent to HK$9.10. Pacific Basin Shipping Ltd., Hong Kong’s largest operator of commodity vessels, rose 2.6 percent to HK$5.59.

The Baltic Dry Index, a measure of the cost of shipping commodities from iron ore to grain, increased 1.3 percent on Aug. 13, extending its rally in the last seven days to 26 percent.

GOME Electrical Appliances Holding Ltd., China’s second- biggest electronics retailer by value, fell 3.9 percent to HK$2.25. The company plans to sell 3 billion shares in a private placement, diluting the stake held by its jailed founder Huang Guangyu, the China Business News reported, citing an unidentified person familiar with the situation.

Futures on the Hang Seng Index advanced 0.3 percent to 21,100. Two stocks rose for each that dropped among the 43 constituents on the gauge.