Most Hong Kong stocks declined as Macau casino operators led declines. Kunlun Energy Co. surged on speculation it will acquire a natural-gas supplier.
Sands China Ltd. slid 1.2 percent after the Macau gaming company’s profit missed estimates. Sinotrans Ltd., a provider of logistics services, dropped 9.4 percent after saying it plans to raise HK$1.68 billion ($217 million) selling shares. Kunlun Energy jumped 7.4 percent, the biggest advance on Hong Kong’s equity benchmark.
The Hang Seng Index was little changed at 23,520.87 at the close in Hong Kong after erasing a 0.3 percent gain. About three shares fell for every two that rose on volume 16 percent lower than the 30-day intraday average. The Hang Seng China Enterprises Index, also known as the H-share index, lost 0.1 percent to 10,467.06. Data yesterday showed China’s gross domestic product growth accelerated for the first time in three quarters.
“We are lacking major catalysts,” said Jackson Wong, vice-president at Tanrich Securities Co. in Hong Kong. “China’s economic data have been slightly better, but that doesn’t warrant rolling out policies to support growth.”
The Hang Seng Index advanced 0.9 percent this year, reversing losses as reports showed China’s economy is stabilizing after the government deployed targeted stimulus to prop up growth. The gauge traded at 11 times estimated earnings, compared with 7.3 for the H-share index and 16.7 for the Standard & Poor’s 500 Index yesterday.
Kunlun Energy soared 7.4 percent to HK$13.12. The Hong Kong unit of China National Petroleum Corp. will acquire unlisted PetroChina Kunlun Gas Co., according to officials familiar with the project. CNPC, the nation’s largest energy producer, aims to form a single natural-gas company to compete with private rivals before an inflow of Russian fuel at the end of the decade.
Sands China, controlled by billionaire Sheldon Adelson, slid 1.2 percent to HK$55.75. The company posted second-quarter net income that missed analysts’ estimates on lower spending by high-stakes players. Wynn Macau Ltd., a unit of billionaire Steve Wynn’s gaming company, dropped 2.5 percent to HK$29.05, while MGM China Holdings Ltd. fell 2 percent to HK$26.50.
Bank of America Corp. analyst David Cui says state spending and monetary stimulus that drove a 14 percent rally in the H-share gauge from this year’s low in March are only making equities less appealing. He says unwillingness to endure slower growth needed to cut debt and shift the economy from exports will prevent a sustainable rally. The gauge will drop to 9,600 by year-end, or 8.4 percent below yesterday’s close, he predicted.
China’s banks may sell an estimated 350 billion yuan to 400 billion yuan ($64 billion) in shares over the next few years to meet capital requirements, with the fundraising likely to weigh on existing equities, UBS AG strategist Chen Li said in Shanghai today.
Futures on the S&P 500 fell 0.2 percent today. The underlying gauge gained 0.4 percent yesterday and the Dow Jones Industrial Average reached an all-time high as Intel Corp. rallied after its sales forecast topped analysts’ projections and Time Warner Inc. surged after rejecting a takeover bid. U.S. industrial production capped its strongest quarter in almost four years.
Federal Reserve Chair Janet Yellen said in testimony to lawmakers yesterday that asset valuations in general aren’t out of line with historical norms. A central bank report the day before indicated prices for smaller social-media and biotechnology companies are substantially stretched.
Sinotrans tumbled 9.4 percent to HK$4.92. The company said it will sell up to 357.5 million Hong Kong-traded shares at placement price of HK$4.8 per share, a 12 percent discount to yesterday’s closing price.
Anton Oilfield Services Group retreated 4.5 percent to HK$4.92 after UBS cut its rating on the stock to sell from neutral.