Hong Kong stocks fell on Wednesday, weighed down by financial shares after two major Chinese banks reported weak first-quarter earnings, highlighting the drag from the slowing mainland economy. The Hang Seng index fell 0.2 percent to 28,400.34 points, while the China Enterprises Index lost 0.8 percent to 14,603.04 points.
Bank of Communications Co, the fifth-biggest lender, reported a sharp fall in its first-quarter net interest margin, while Agricultural Bank of China Ltd (AgBank), the third-largest, posted its slowest quarterly profit growth in six years and higher bad loans BoCom fell 0.4 percent, while AgBank shed 2 percent. The results foreshadowed soft earnings announcements by other major lenders later on Wednesday. But in the long term, the Hong Kong market may benefit from further opening in China's capital markets.
China may launch a trial scheme soon that would allow Chinese individuals in the Shanghai Free Trade Zone to invest in overseas markets directly for the first time, two sources with direct knowledge of the matter said on Wednesday. One other notable mover on Wednesday was Hong Kong-based securities firm Quam Ltd, whose shares surged 69 percent after China Minsheng Banking Corp said late on Tuesday it was in talks to invest as much as $970 million for a controlling stake in the company.
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