Stocks drop to 11-week low

Hong Kong stocks fell, dragging the benchmark index to close at an 11-week low, on mounting concern Europe's debt crisis will worsen and derail the global economic recovery.

The Hang Seng Index declined 2.1 percent to 20,327.54, its lowest close since Feb. 19. All but two of the gauge's 43 constituents fell. The Hang Seng China Enterprises Index, which tracks the so-called H-shares of Hong Kong-listed mainland companies, slid 2.7 percent to 11,539.88, its sharpest drop since February 19.

Esprit Holdings Ltd, which received 85 percent of its fiscal 2009 revenue from Europe, plunged 5.2 percent. Cosco Pacific Ltd, which took over some operations in Greece's Piraeus port last year, sank 5 percent. Jiangxi Copper Co, China's biggest producer of the metal, tumbled 4.6 percent after metal prices slumped.

Shares declined the day after the US Federal Reserve raised the discount rate it charges on loans to banks, signaling a retreat from its unprecedented actions to halt the deepest financial crisis since the Great Depression.

Fantasia sets guidance on US$ bonds at 14.5%

Hong Kong-listed mainland property developer Fantasia Holdings Group has set a guidance of 14.5 percent for its planned five-year dollar bonds worth $120 million, a source close to the deal said Wednesday. The size, though, was less than the earlier planned $200 million, the source said. Market talk swirled earlier Wednesday that the deal had been postponed due to the skittish market. The issuer met investors in Asia, Europe and the United States from last week, ahead of the proposed debt issue. Bank of America Merrill Lynch, Citigroup and UBS were hired to arrange the deal. Proceeds from the sale will be used to fund existing and new projects, including construction costs and land premiums, as well as for general purposes.

Little Sheep says shareholders to sell 4.3% stake

Hong Kong-listed mainland restaurant chain operator Little Sheep Group said Wednesday its directors and some shareholders are selling 4.34 percent of the company's shares for HK$187.8 million ($24.2 million). The company said its shareholders, including four executive directors and 16 other individuals, are selling a total of 44.6 million shares at HK$4.21 each. The shareholding of executive chairman Zhang Gang will be reduced to 2.42 percent after the share sale from 3.06 percent, while that of its controlling shareholder Possible Way will be unchanged at 29.97 percent. Yum! Brand Inc will also remain unchanged at 27.28 percent, it said in the statement.

New World, Wheelock to seek HK$9b loan

A joint venture of New World Development Ltd and Wheelock Properties Ltd has hired three banks to help it borrow as much as HK$9 billion ($1.2 billion) for five years, three people familiar with the matter said.

Proceeds will be used to buy and develop land above MTR Corp's subway station on Austin Road in Hong Kong's Kowloon district, the people said. Bank of China Ltd (Hong Kong), BNP Paribas SA and HSBC Holdings Plc will help arrange the loan. The so-called club deal is at an early stage and is unlikely to be marketed to other banks for participation, two of the people said, asking not to be identified, as details are private. Officials from both companies weren't immediately available for comment.

Agencies - China Daily

(HK Edition 05/06/2010 page2)