H.K. Stocks Fall, Led by China Mobile; Sinopec, H-Shares Gain
By Christina Soon
Hong Kong, April 17 (Bloomberg) -- Hong Kong stocks fell, led by China Mobile (Hong Kong) Ltd. after Cisco Systems Inc. said sales will miss already lowered forecasts, dimming the computer-related industry's profit outlook.
``Cisco's warning is certainly worse-than-expected,'' said Billy Chan, who helps manage over $4 billion in Asia, excluding Japan, for Invesco Asia Ltd. ``There may be some short-term pressures and knee-jerk reaction on stocks like China Mobile. It's an indirect implication of (slower) demand in the U.S.''
The Hang Seng Index fell 233.44, or 1.8 percent, to 12,756.03. In the broader market, 195 stocks fell, 186 rose and 344 were unchanged. Trade at HK$4.4 billion ($564 million) was almost half the full-day average for the past three months.
Elsewhere, China Petroleum & Chemical Corp. led gains among Chinese state-owned enterprises, known as H-shares, after the company said profit quadrupled last year and the government said first-quarter gross domestic product rose more than expected.
``We expect Chinese companies to report pretty decent numbers for the coming quarter,'' said Aaron Pong, who helps manage $200 million at RBC Investment Management (Asia) Ltd. ``We do have a decent exposure in China. We still think the basic consumer staples will benefit from the continuous strength of GDP.''
The following is a list of companies whose shares were active.
Telecommunications and computer-related stocks tracked declines in their U.S. peers. ``We still need to be cautious about the results announcements,'' said Lawrence Wu, who helps manage $300 million at OSK Asia Asset Management Ltd. He is slightly underweight in telecom and computer-related stocks.
China Mobile (Hong Kong) Ltd. (941 HK ), China's largest publicly traded mobile phone company, fell HK$1.80, or 4.9 percent, to HK$34.70. China Unicom Ltd. (762 HK ), another Chinese phone company, fell 20 cents, or 2 percent, to HK$9.75. Legend Holdings Ltd. (992 HK ), China's biggest computer maker, lost 15 cents, or 2.8 percent, to HK$5.25. Pacific Century CyberWorks Ltd. (8 HK ), Hong Kong's largest phone company, shed 10 cents, or 3.6 percent, to HK$2.65. Hutchison Whampoa Ltd. (13 HK ), which has global telecommunications businesses, fell 50 cents, or 0.6 percent, to HK$81.75.
China Petroleum & Chemical Corp. (386 HK ), Asia's top refiner, rose 6 cents, or 5.2 percent, to HK$1.21 after it said profit quadrupled last year, thanks to higher sales of oil products. The company, known as Sinopec, earned 19 billion yuan ($2.3 billion), or 0.26 yuan a share. ``It's in line with the market's expectation,'' said Marco Mak, head of research at Tai Fook Securities Group Ltd. ``It's a long-term good buy.''
H-shares rose 2.1 percent as a group after the government said gross domestic product gained 8.1 percent in the first quarter from a year earlier. Domestic consumption and strong export growth helped the economy grow faster than expected. Jiangxi Copper Co. (358 HK ), the Hong Kong-traded unit of China's largest copper producer, rose 7 cents, or 8.1 percent, to 93 HK cents. Yanzhou Coal Mining Co. (1171 HK ), China's largest coal exporter, rose 12.5 cents, or 4.3 percent, to HK$3.025.
Developers fell on concern home sales will lag as the economy slows. ``People are not confident of the near-term outlook of the property market because property sales have been quite slow,'' Mak said. Cheung Kong (Holdings) Ltd. (1 HK ), Hong Kong's biggest property developer, was unchanged at HK$81.50 after earlier falling as much as 1.5 percent. Sun Hung Kai Properties Ltd. (16 HK ), Hong Kong's second- largest real estate developer, fell HK$2.00, or 2.8 percent, to HK$69.50. Henderson Land Development Co. (12 HK ), the No. 3 developer, lost 60 cents, or 1.7 percent, to HK$35.10.
Citic Pacific Ltd. (267 HK ), a China-backed investment company, rose 40 cents, or 1.8 percent, to HK$22.25. CITIC Guoan Information Industry Co., a Chinese cable and satellite network operator, said it plans to raise 1.8 billion yuan ($217 million) by selling new shares to domestic investors to build a new broadband network and a data-processing center. Citic Guoan Information is 75 percent owned by Citic Guoan Group, which in turn is 50 percent owned by Citic Pacific Ltd.
Guoco Group Ltd. (53 HK ), which last week sold its 71.3 percent stake of Dao Heng Bank Group Ltd. to Singapore's DBS Group Holdings Ltd., rose HK$3.00, or 7.8 percent, to HK$41.60. Guoco is ``trading at a discount to the cash that they're receiving from DBS,'' said Anil Daswani, an analyst at Salomon Smith Barney Inc. ``At this point, it's still at a 40 percent discount to its net asset value that's mainly made up of cash.''
HKCB Bank Holding Co. (655 HK ), a small Hong Kong lender, surged 57.5 cents, or 22 percent, to HK$3.20 on speculation CITIC Ka Wah Bank Ltd. (183 HK ) may acquire it after DBS last week bought Dao Heng Bank Group at a 60 percent premium. HKCB was unavailable for comment.
``People are thinking since Dao Heng can be sold at such a premium, why not HKCB?'' said Ian Lui, regional chief investment officer at Allianz Asset Management Asia Pacific Ltd., which manages $500 million in Asia. Citic Ka Wah added 12.5 cents, or 5.3 percent, to HK$2.475. Earlier this month, HKCB denied a report Singapore's United Overseas Bank Ltd. and Oversea-Chinese Banking Corp. were bidding to buy a stake in it.
Kowloon Motor Bus Holdings (62 HK ), the world's largest non-government city bus operator, gained 40 cents, or 1.8 percent, to HK$22.50. It will form a third joint venture to operate bus services in mainland China, the Hong Kong iMail reported, citing managing director John Chan.
Television Broadcasts Ltd. (511 HK ) rose 10 cents, or 0.3 percent, to HK$38.70. Hong Kong's dominant free-to-air broadcaster said it expects to strike a pact with China Central Television, making it the first foreign media company to have channels distributed by the state-owned broadcaster. Talks have reached a ``critical stage,'' said TVB assistant general manager Raymond Wong.
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