China Mobile Ltd shares may fall in Hong Kong trading on concern the world's biggest phone company by value is deviating from its main business by considering an investment in Shanghai Pudong Development Bank Co.

"Shareholders will take this negatively," said Bertram Lai, who rates China Mobile shares "neutral" at CIMB-GK Securities in Hong Kong. "It doesn't make sense for the management to be using funds this way. They should be returning it to shareholders."

China Mobile Chairman Wang Jianzhou said Wednesday the possible investment in Pudong Bank will help the carrier build its electronic commerce business and lift earnings as mounting competition slows profit growth. The transaction would help replenish capital at the Shanghai-based lender after Chinese banks extended a record 9.59 trillion yuan ($1.4 trillion) of credit last year.

"You don't need to buy a bank to get into mobile banking. They should just stick to what they do," said Christopher Wong, a fund manager at Aberdeen Asset Management, which manages $45 billion of assets, including China Mobile shares, in the Asia excluding Japan region. "We'll be disappointed if this goes through. This is not what they do."

Pudong Bank, part-owned by Citigroup Inc, said Wednesday in a Shanghai stock exchange filing that talks on a possible investment by China Mobile are under way. Wang said a deal will lift China Mobile's earnings per share as support from a financial firm helps it expand in e-commerce, a market dominated domestically by Alibaba Group Holding Ltd.

Trading Halted

China Mobile, which had 256 billion yuan ($37.5 billion) of cash at the end of June according to its interim earnings report, may buy 2.2 billion Pudong Bank shares for 17.82 yuan apiece, Guotai Junan Securities Co. analyst Wu Yonggang wrote in a note last week, without citing anyone. That's 14 percent lower than the stock's closing price before trading was halted on Feb. 26 pending an announcement about a strategic investment.

China Mobile fell 2.4 percent to HK$74.65 ($9.60) Wednesday in Hong Kong before the company's official announcement of the talks, underperforming the benchmark Hang Seng Index for a fourth consecutive session.

The phone carrier, with a market capitalization of HK$1.5 trillion as of Wednesday, hired China International Capital Corp. as its financial adviser, two people involved in the talks said, asking not to be identified because of confidentiality agreements.