Hong Kong stocks fell, dragging the Hang Seng Index to its first quarterly decline in four, as China Oilfield Services Ltd. and Henderson Land Development Co. reported profit that missed analyst estimates.
China Oilfield Services, a unit of the nation’s largest offshore oil producer, and Henderson Land Development, the Hong Kong-based builder controlled by billionaire Lee Shau-kee, both declined more than 4 percent. Bank of Communications Co., China’s fourth-largest publicly traded bank, jumped 4.4 percent after reporting full-year profit increased. Fook Woo Group Holdings Ltd., the paper recycling company, which began trading today, surged 17 percent.
The Hang Seng Index dropped 0.6 percent to 21,239.35 as of the close of trading after rising as much as 0.3 percent earlier. The measure has fallen 2.9 percent this quarter, halting three straight quarters of gains. The Hang Seng China Enterprises Index, which tracks the so-called H shares of Hong Kong-listed Chinese companies, lost 0.1 percent to 12,397.59.
“The market is drying up in terms of buying demand,” Derek Cheung, head of research at DBS Vickers Hong Kong Ltd., said in a Bloomberg Television interview. “Everyone is nervous and there’s a lack of news for trading.”
Shares on the Hang Seng are priced at an average 14 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. Concern budget deficits in Europe, including in Greece, may derail the global recovery and speculation China’s government will tighten money supply have contributed to a 7.4 percent drop in the Hang Seng Index from its November high.
China Oilfield Services
China Oilfield Services fell 6.9 percent to HK$11.40, the most since Jan. 13. The company said net income rose to 3.14 billion yuan from 3.1 billion yuan, the previous year. That compares with a 3.2 billion yuan median estimate in a Bloomberg survey of 10 analysts. The company said the outlook for “the oilfield services sector is still very harsh.”
Henderson Land Development fell 4.2 percent to HK$54.70 after posting an underlying 18-month profit that was below analysts’ estimates after it changed its financial reporting year.
Zijin Mining Group Co., China’s largest gold producer, sank 2.2 percent to HK$6.12. The company reported net income rose 3.5 billion yuan, missing the 4 billion yuan average compiled by Bloomberg from 16 analysts’ estimates.
China Merchants Holdings (International) Co., the investor in ports moving about a third of the country’s containers, declined 2.1 percent to HK$28.60 after reporting a 10 percent drop in second-half profit to HK$1.51 billion from HK$1.69 billion a year earlier, following a slump in exports.
“What we need to think about is whether earnings and growth forecasts for this year are going to crystallize or not,” Cheung said. “If they are not going to crystallize, we are going to see disappointment in the stock market.”
Bank of Communications, partly owned by HSBC Holdings Plc, jumped 4.4 percent to HK$9.25 and was the biggest gainer on the Hang Seng index. The lender posted a 5.6 percent increase in full-year profit to 30.1 billion yuan last year from an adjusted 28.5 billion yuan in 2008, the Shanghai-based company said. That beat the 28.5 billion yuan average estimate of 15 analysts surveyed by Bloomberg.
Fook Woo Group surged 17 percent to HK$2.70 on its debut from the initial public offering price of HK$2.30 a share. The shares earlier rose as much as 29 percent.
Futures on the Hang Seng Index declined 0.9 percent to 21,230. About two stocks fell for each that rose among the 43 companies on the stock benchmark.
--Editor: Sam Waite, Darren Boey