Hong Kong Kong Stocks Fall as ICBC Slips on Goldman Sale

Hong Kong stocks dropped, with the city’s benchmark index falling for the fourth time in five days, as Industrial & Commercial Bank of China (601398) Ltd. slid after Goldman Sachs Group Inc. sold a stake in the lender.

Hong Kong-traded shares of ICBC, as the world’s biggest lender in known, slid 2.2 percent. Beiren Printing Machinery Holdings Ltd. lost 3.5 percent after projecting as much as 180 million yuan ($29 million) in losses for 2012. Kunlun Energy Co., a Chinese gas supplier controlled by PetroChina Co., added 2.3 percent after the stock was rated outperform at Sanford Bernstein & Co.

The Hang Seng Index slipped 0.1 percent to 23,655.17 as of the close in Hong Kong after trading of ICBC pushed volume to about 59 percent more than the 12-month average, according to Bloomberg data. The benchmark index is heading for a fifth monthly advance, the longest such streak since July 2009, amid optimism China’s economy will continue its recovery. The Hang Seng Composite Index (HSCI) added 0.1 percent today.

“Expectations may have moved ahead of fundamentals,” Marco Li, Hong Kong-based portfolio manager at Manulife Asset Management, which oversees $218 billion globally. “The upcoming earnings season is pretty important. Investors are waiting for confirmation that fundamentals have improved. It all depends on whether companies can actually deliver.”

The Hang Seng China Enterprises Index (HSCEI) of mainland companies slipped 0.2 percent to 12,077.87. The Shanghai Composite Index climbed 0.5 percent, extending its advance since Dec. 3 to 20 percent, a threshold signaling a bull market to some investors.

‘Year of Expectations’

“This rally should continue,” Deng Wenyuan, an analyst at Soochow Securities Co., said by phone from Suzhou, near Shanghai. “The economy is recovering and this is the year of reforms by new leaders, so there are a lot of expectations.”

Shares on the Hang Seng Index traded at 11.5 times estimated earnings, compared with 13.6 times for the Standard & Poor’s 500 Index.

ICBC slipped 2.2 percent to HK$5.82, the biggest drag on the Hang Seng Index. About 2 billion ICBC shares changed hands, about four times more than the average daily volume in the past five years and about nine times the five-day average, according to data compiled by Bloomberg.

Goldman Sachs raised $1 billion selling 1.35 billion shares at HK$5.77 per share, according to a term sheet obtained by Bloomberg News. The investment bank has no immediate plans to sell more shares following this transaction, Edward Naylor, a Hong Kong-based spokesman, said today.

China Construction Bank Corp., the world’s No. 2 lender by value, slipped 0.9 percent to HK$6.65. Agricultural Bank of China Ltd. dropped 1.2 percent to HK$4.16.

Kunlun, Sands

Beiren Printing sank 3.5 percent to HK$2.18 after projecting as much as 180 million yuan ($29 million) in losses for 2012. The stock dropped 17 percent yesterday after the company said the China Securities Regulatory Commission halted a review of its application for reorganization because the parties involved are suspected of violating laws.

Among stocks that rose, Kunlun Energy climbed 2.3 percent to HK$16.80. Sanford Bernstein rated the stock outperform with a share-price forecast of HK$20, citing positive earnings momentum.

Sands China Ltd. rose 1.6 percent to HK$38.15 on speculation the Macau casino operator’s earnings will increase after receiving approval this month to add gaming tables.

The Hang Seng Volatility Index rose 1.8 percent to 12.81, indicating options traders expect a swing of 3.7 percent in the next 30 days. Futures on the Hang Seng Index (HSI) were little changed at 23,668.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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