Approved loans fall 16% in June

Hong Kong's new mortgage loans approved fell 16 percent to HK$26.6 billion in June from May, the Hong Kong Monetary Authority said in a statement on its website on Monday. Newly-drawn down mortgage loans dropped 9.4 percent to HK$24 billion in May, the statement said.

CLP to buy 17% of nuclear project

CLP Holdings, Hong Kong's largest power producer and owner of 25 percent of the Daya Bay nuclear power plant, announced on Monday that it will invest in a 70 billion yuan nuclear power project in Yangjiang, Guangdong province.

CLP will own 17 percent of the project, which started construction in 2008 and is expected to be commissioned in phases between 2013 and 2017. The power station is located on the west of Guangdong, about 220 kilometers away from Hong Kong. The company signed an agreement of cooperation intent with China Guangdong Nuclear Power Company for the project a year ago.

Secondary home prices may drop

Prices in Hong Kong's secondary-home market may continue to drop, with conditions favoring the buyer, Cheung Kong (Holdings) Ltd. Executive Director Justin Chiu said at a press conference in the city on Monday.

"Both sellers and buyers are becoming more practical in terms of reaching a deal," said Chiu "Some owners, especially, would rather make less profit to ensure they close the sale."

More home owners are willing to cut prices by 5 percent to 10 percent, triggering a rebound in secondary-home transactions, Samsung Securities analyst Lee Wee Liat wrote in a report on Monday. The reductions in prices are mainly in the New Territories and haven't yet spread to Kowloon and Hong Kong Island, according to Centaline Property Agency Ltd Research Director Wong Leung-sing.

"New Territory owners have no choice but to cut by 5 percent to lure the buyers, while urban owners insist on holding out," said Centaline's Wong said.

Stocks decline on US debt impasse

Hong Kong stocks fell on Monday, eroding last week's advance, as US lawmakers failed to agree on raising the federal debt ceiling, risking a default that would threaten a global economic recovery and hurt Asian exporters' earnings.

The Hang Seng Index (HSI) slid 0.69 percent to 22293.29 at the close of trading in Hong Kong. That pared last week's 2.6 percent advance, the steepest among Asian benchmark indexes, as steps by European leaders toward easing the region's sovereign debt crisis, including fresh aid for Greece, eased doubts about the global recovery.

The Hang Seng China Enterprises Index dropped 1.26 percent to 12440.64 on Monday.

Exporters slumped as a failure to raise the US federal debt limit intensified concern of a default that may derail a global economic recovery. House Speaker John Boehner told Republicans there's no agreement on a plan for raising the ceiling before a default threatened for August 2.

Esprit fell 3.5 percent to HK$23.30. PetroChina dropped 2.9 percent to HK$11.34 and rival Cnooc Ltd slipped 1.2 percent to HK$17.12 as New York-traded crude oil fell as much as 1.1 percent on Monday.

China Shenhua Energy Co fell 0.9 percent to HK$39.65. Jiangxi Copper Co lost 0.2 percent to HK$27.35 after copper futures declined as much as 0.9 percent in New York.

Futures on the HSI dropped 0.7 percent to 22320. The HSI Volatility Index climbed 7.5 percent to 18.60.

Bloomberg - Reuters

(HK Edition 07/26/2011 page2)