October 4, 2013 / 4:55 AM / in 4 years

Hong Kong shares slip as profit-taking hits Macau casino sector

* HSI -0.5 pct, H-shares -0.2 pct, China shut for holiday

* Turnover hurt by worrying U.S. fiscal standoff

* Hong Kong indexes could be flat for the week

* China telcos sink on pricing policy uncertainty

By Clement Tan

HONG KONG, Oct 4 (Reuters) - Hong Kong shares slipped early Friday as investors took profit on the outperforming Macau casino sector and uncertainty about Chinese policy on pricing hit telecom counters.

Turnover was relatively subdued with the U.S. government still shut. Fears that the world’s largest economy could default on its debt are rising, with an Oct. 17 deadline lurking.

At midday, the Hang Seng Index was down 0.5 percent at 23,100.4 points, and was also off 0.5 percent for the week. The China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.2 percent for the day and was flat for the week.

Both indexes have corrected after rallying about 20 percent from June lows to mid-September peaks. The Macau casino sector led the rally and was again strong this week on better-than-expected holiday visitor numbers from the mainland.

“There’s some profit-taking on the Macau casinos today, but with so much going on in U.S. at the moment, people will be looking to playing the China game, which looks a safer bet for now,” said Alex Wong, Ample Finance’s director of asset management.

Markets in mainland China reopen Oct. 8 after a week-long National Day holiday. September money supply and loan growth, due by Oct. 15, will kickstart a new batch of macroeconomic data that could cement expectations for a modest stablization of growth in the world’s second-largest economy.

On Friday, Citic Pacific jumped 7.3 percent in heavy volumes, which traders said reflected how long-only funds were moving to increase stakes growth-sensitive counters.

Galaxy Entertainment tumbled 4.7 percent, while Sands China sank 2.5 percent after both closed on Thursday at record highs. Other Macau counters also suffered, with SJM Holdings down 3.8 percent.

Shares of China Mobile, the country’s largest mobile operator, fell 2.4 percent to its lowest in a month after local media reported the mainland’s telecom regulator may reduce interconnection fees, which would help its two smaller competitors.

While this could ensure fairer competition, the move is seen hurting China Mobile’s margins. Both China Unicom and China Telecom said they have not received any notification of a policy shift by regulators.

In a note to clients, Jefferies analysts said such a move could lift profit for China Unicom by 27 percent and for China Telecom by 29 percent, while causing a 5 percent decline for China Mobile.

Shares of Unicom and Telecom shed 1.1 and 2.2 percent respectively. On Thursday, both surged about 8 percent as investors chased afternoon gains after the reports of the apparent fee change broke.

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