Chinese shares trading in Hong Kong rose for the first time in three days after dropping to a one-month low yesterday. Mobile carriers rose while Power Assets Holdings Ltd. led declines.
China Telecom Corp. gained 4 percent, the most on the Hang Seng China Enterprises Index, amid speculation the company will release 4G handsets in May. Gome Electrical Appliances Holding Ltd. jumped to a two-year high after saying it expects quarterly profit to more than triple. Power Assets dropped 3.1 percent, with the utility posting the steepest decline on the benchmark Hang Seng Index.
The Hang Seng China Enterprises Index, also known as the H-share index, rose 0.4 percent to 9,940.63 at the close in Hong Kong after falling as much as 0.2 percent. The benchmark Hang Seng Index advanced 0.2 percent to 22,562.80, with trading volume on the gauge 28 percent below the 30-day average.
“The Chinese economy is going to see slower growth but not a hard landing,” said Raymond Chan, Hong Kong-based Asia-Pacific chief investment officer at Allianz Global Investors, which has $477 billion in assets under management. “The downside for the market should be quite limited. The market has already discounted quite a lot of bad news.”
Shares dropped yesterday after the preliminary reading for HSBC Holdings Plc and Markit Economics’ Purchasing Managers’ Index for April met analysts’ estimates with a reading of 48.3 from 48 in March, signaling a fourth month of contraction.
The benchmark Hang Seng Index fell 3.2 percent this year while the H-share gauge lost 8.1 percent as mounting signs of a slowdown fueled speculation China won’t meet its official target for economic expansion. The Hang Seng Index traded at 10.4 times estimated earnings compared with 16 for the Standard & Poor’s 500 Index yesterday.
The National Bureau of Statistics and China Federation of Logistics & Purchasing will next week publish their survey of purchasing managers at about 3,000 manufacturing companies. The official gauge’s March reading was 50.3 after falling to an eight-month low of 50.2 in February.
The HSI Volatility Index, which measures the cost of options on the Hong Kong gauge, slid 5 percent to 14.14, its lowest level since Jan. 22.
China Telecom jumped 4 percent to HK$3.60. The carrier will release eight 4G smartphones on May 1, Marbridge Consulting said, without saying where it got the information. China Unicom (Hong Kong) Ltd., the nation’s No. 2 carrier, advanced 3.8 percent to HK$10.38.
Gome gained 4.9 percent to HK$1.50. The appliance maker said it expects first-quarter net income to surge more than 240 percent from a year earlier.
China will offer 80 projects in industries dominated by state-owned entities for private investment as the nation seeks to let markets play a bigger role in the economy, according to a statement posted on the central government’s website yesterday.
Futures on the S&P 500 gained 0.4 percent today. The U.S. equities benchmark yesterday halted its longest winning streak since September after disappointing earnings reports from AT&T Inc. and Amgen Inc. and an unexpected drop in home sales.
Power Assets slid 3.1 percent to HK$67.75. The electricity generator may see lower 2014 recurring earnings, Deutsche Bank AG said in a note.
China Mobile Ltd. fell an eighth day, its longest losing streak since June. Net income at the world’s largest phone company by users fell 9.4 percent to about 25.2 billion yuan ($4 billion) in the first quarter, according to earnings posted April 22. The results missed the 27 billion-yuan median estimate of five analysts compiled by Bloomberg News. The stock today lost 0.4 percent to HK$69.75.