BloombergHong Kong’s Hang Seng Index fell on concern China Mobile Ltd. will deviate from its main business and invest in a lender while Industrial Bank Co. forecast growth in loans will almost halve this year.
China Mobile Ltd., the world’s biggest phone company by market value, dropped 2.3 percent after saying it may invest in Shanghai Pudong Development Bank Co. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market capitalization, lost 1.5 percent. China Construction Bank Corp. slumped 1.3 percent. Li & Fung Ltd., which gets 61 percent of its sales from the Americas, increased 1.6 percent after the U.S. reported an improvement in the job market and service industry.
“It’s a normal reaction from the market, there’s a limit on how much the banks in China can lend this year,” said Castor Pang, research director at Cinda International Holidings Ltd. in Hong Kong. “Investors are getting more confident toward a global recovery but there could still be uncertainties.”
The Hang Seng Index fell 0.6 percent to 20,755.76 as of 12:16 p.m. local time. The Hang Seng China Enterprises Index, which tracks so-called H shares of Hong Kong-listed Chinese companies, dropped 1.1 percent to 11,913.91.
Shares on the Hang Seng Index were priced at an average 13.5 times estimated earnings, down from 18.1 times on Nov. 16 when the index closed at its highest level for 2009, according to Bloomberg data. Concerns over monetary tightening in China have contributed to a 9.6 percent drop in the stock benchmark from its November high.
China Mobile dropped 2.3 percent to HK$72.90, the biggest drag on the Hang Seng Index, after Chairman Wang Jianzhou said yesterday the company may invest in Shanghai Pudong Development Bank Co. to build its electronic commerce business and lift earnings as mounting competition slows profit growth.
ICBC lost 1.5 percent to HK$5.81. China Construction Bank fell 1.3 percent to HK$6.06.
Industrial Bank Co., a Fuzhou-based lender, forecast growth in loans will almost halve this year as the government orders a retreat from 2009’s record expansion. HSBC Plc unit Hang Seng Bank Ltd. owns 12.8 percent of Industrial Bank.
Li & Fung, the biggest supplier for retailers including Wal-Mart Stores Inc. and Inditex SA’s Zara, increased 1.6 percent to HK$38.55, set for its highest close since November 2007. Foxconn International Holdings Ltd., which receives 35 percent of its revenue from the U.S., gained 0.4 percent to HK$8.01.
In the U.S., ADP Employer Services said companies cut 20,000 jobs last month, the fewest in two years while job placement firm Challenger, Gray & Christmas Inc. said planned firings fell 77 percent in February.
Seven stocks rose for every six that fell on the 42-company Hang Seng Index. Futures on the gauge declined 0.6 percent to 20,765.
--Editors: Nick Gentle, Sam Waite.
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