Biggest emerging stock slump in seven months wipes out 2013 gain

China Stocks

The Hang Seng China Enterprises Index declined 2.2% today, erasing this year’s gains. The Shanghai Composite Index fell 3%, the most since Nov. 30, 2011. Vietnam’s VN Index sank 3.7%, the sharpest loss in Asia.

Belle slumped 17%. The company expects its 2012 net profit will be “marginally higher” than the previous year’s and “will fall within the lower end” of analysts’ estimates, it said in a filing last night. Daphne International Holding Ltd., a rival of Belle, lost 6.4%.

Evergrande Real Estate Group Ltd., China’s biggest developer by sales volume, slid 1.6%, the lowest level in more than two months. Soho China Ltd., the biggest developer in Beijing’s central business district, dropped 1.8%.

Property Curbs

China’s government told local authorities to curb real estate speculation, according to a statement yesterday. Chinese cities that have had “excessively fast” price gains should promptly impose home-purchase restrictions if they’ve not done so already, according to the statement released yesterday after a State Council meeting headed by Premier Wen Jiabao.

“We are in a tricky period of policy risk for China,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP in London, said by e-mail. “There may be some more tightening related to the property sector and a slowdown in credit.”

China Minsheng Banking Corp. fell 5.3% in Hong Kong on speculation more restrictions on the property industry will hurt demand for bank loans and construction materials.

China’s central bank drained 910 billion yuan ($146 billion) from the financial system this week, according to Dariusz Kowalczyk, a Credit Agricole CIB strategist in Hong Kong. That was the biggest withdrawal since Bloomberg started compiling the data in 2008.

Jollibee Foods Corp., the largest Philippine fast-food company, surged 5.9% to a record in Manila, the biggest gain in the MSCI Emerging Markets Index. The stock rallied a fifth day since it reported on Feb. 14 that profit gained 15% in 2012.

Bloomberg News

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