Bank of Communications Co., part owned by HSBC Holdings Plc, dropped the most in two weeks, after the Sonntag newspaper said UBS AG will need more capital. China Construction Bank Corp., which held $1.06 billion of securities linked to U.S. subprime loans at the end of June, fell for the first time in five days.

Esprit Holdings Ltd., a Hong Kong-based global clothing retailer, declined the most in more than a week on concern global consumption will drop after J.C. Penney Co., the third-largest U.S. department store chain, cut its earnings forecast.

The Hang Seng Index lost 436.75, or 1.9 percent, to close at 22,849.20, extending its drop this quarter to 18 percent. That's the gauge's largest quarterly decline since the three months to September 2001.

The Hang Seng China Enterprises Index, a measure of so- called H shares of mainland Chinese companies, fell 2.8 percent to 12,083.30, its biggest loss since March 20.

Bank of Communications lost 29 cents, or 3.1 percent, to HK$9.09, its largest decline since March 17. China Construction Bank retreated 16 cents, or 2.7 percent, to HK$5.81, its steepest drop since March 20. Bank of East Asia Ltd., Hong Kong's third biggest by assets, fell HK$1.05, or 2.6 percent, to HK$38.95, its largest drop since March 17.

UBS, the European bank with the highest losses from the U.S. subprime crisis, may ask shareholders to approve a capital increase of as much as 16 billion Swiss francs ($16.1 billion), Sonntag said yesterday, citing people it didn't identify.

Esprit dropped HK$2.25, or 2.4 percent, to HK$93.40, its largest decline since March 18. Yue Yuen Industrial (Holdings) Ltd., the world's largest maker of sports shoes for brands such as Nike Inc., lost 55 cents, or 2.2 percent, to HK$24.40.

J.C. Penney said March 28 that first-quarter same-store sales will post a "high single-digit" decline on a percentage basis. Profit will be about 50 cents a share, less than the 75 cents to 80 cents J.C. Penney previously predicted.

All but seven stocks on the 43-member Hang Seng Index declined. April futures dropped 2.8 percent to 22,630.

The following stocks rose or fell. Stock symbols are in brackets after company names.

Developers: Cheung Kong (Holdings) Ltd. (1 HK), Hong Kong's second-biggest developer by market value, lost HK$1.40, or 1.3 percent, to HK$110.50. Henderson Land Development Co. (12 HK), the third largest, fell HK$1.95, or 3.4 percent, to HK$55.30. Both stocks dropped the most since March 20.

Source: By Pravda.ru