China Minsheng Banking Corp., the nation’s first privately owned lender, dropped 2.2 percent after closing at a record high yesterday. Li Ning Co. slumped 14 percent after the Chinese sportswear company said it plans to raise as much as HK$1.87 billion ($241 million) offering convertible securities. China Rongsheng Heavy Industries Group Holdings Ltd. dropped 5 percent after billionaire co-founder Zhang Zhirong gave up his controlling stake in the shipbuilder.
The Hang Seng Index (HSI) slipped 0.4 percent to 23,506.29 as of the midday break in Hong Kong, with about two shares falling for each that rose. The gauge is heading for a fifth month of advance, the longest streak of monthly gains since July 2009, amid optimism China’s economy will continue to recover.
“The market has accumulated very strong gains in the past few months so now its due for consolidation,” said Ben Kwong, chief operating officer at KGI Asia Ltd. in Hong Kong. “Investors will probably buy shares on weakness. With the steady improvement in the economy, the earnings will also improve accordingly.”
The city’s benchmark index is poised for a 0.4 percent decline this week. The Hang Seng China Enterprises Index of mainland companies dropped 1.3 percent to 11,938.27.
The Hang Seng Volatility Index (VHSI) fell 3.5 percent this week to 12.64, indicating options traders expect a swing of 3.6 percent in the next 30 days. That’s the lowest since August 2005. Futures on the Hang Seng Index fell 0.3 percent to 23,540.
To contact the reporter on this story: Jonathan Burgos in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Gentle at email@example.com