Stocks drop on weaker earnings
Updated: 2010-10-30 07:16
(HK Edition)
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Hong Kong stocks fell, paring the Hang Seng Index's (HSI) monthly gain, after Bank of Communications Co and China Life Insurance Co reported earnings that missed analysts' estimates. AIA Group Ltd rose on its first day of trading.
The Hang Seng Index declined 0.5 percent to 23,096.32 at the close. That pared the measure's gain this month to 3.3 percent.
"There's a lot of noise about more quantitative easing in the US," said Steven Leung, director of institutional sales at UOB-Kay Hian Ltd in Hong Kong. "So many people are locking in profit. There'll be a few more banks reporting earnings later Friday, and we'll need to see what they have to say about provisions."
The Hang Seng China Enterprises Index dropped 1.2 percent to 13,168.68.
Bank of Communications plunged 7.8 percent to HK$8.47, the biggest drop on the HSI. The lender said net income climbed to 9.18 billion yuan ($1.37 billion) from a restated 7.39 billion yuan. That fell short of the 9.5 billion yuan median estimate of seven analysts surveyed by Bloomberg.
China Life Insurance Co said third-quarter profit rose 3.4 percent to 6.91 billion yuan from a restated 6.68 billion yuan, a year earlier. The stock declined 3 percent to HK$33.95.
"The results came in slightly below expectations," Guosen Securities Co analysts Shao Ziqin and Tong Chengdun said in an emailed note Friday.
China Life's smaller rival Ping An Insurance (Group) Co slid 2.5 percent to HK$83.45 after reporting on October 27 a drop in third-quarter profit.
AIA Group Ltd rose 17 percent to HK$23.05. AIG Chief Executive Officer Robert Benmosche sold a 58 percent stake in a unit that spans 15 Asian markets and was described by one of his predecessors as a "crown jewel" to help repay a $182.3 billion US government bailout.
Futures on the index slipped 0.6 percent to 22,973.
Bloomberg
(HK Edition 10/30/2010 page3)