AXA Asia Pacific , target of an $11.5 billion takeover battle, flagged a 5.7 percent rise in first-half operating earnings, shy of market expectations, as its Hong Kong operations were hurt by currency movements.

The company, a unit of France's AXA SA , also said it planned to pay an interim dividend of 9.25 cents a share on expected first half operating profit of A$270 million ($238.5 million).

AXA Asia Pacific shares fell as much as 1.9 percent in early trade on Wednesday, but recovered to trade 1.3 percent lower at A$5.19 by 0027 GMT.

The market clearly expected a much higher number, and with the miss, investors are unhappy, Chris Kimber, a client advisor at Bell Potter Securities said.

Investors said the consensus was for an operation earnings of around A$295 million.

Under an agreed deal, National Australia Bank plans to buy AXA Asia Pacific and sell its Asian operations back to its parent AXA SA, in a bid to cement its domination of the $1 trillion Australian wealth management market.

But the deal has run into regulatory hurdles and the three firms have agreed to extend their agreement until August 31 while NAB seeks to ease the regulator's concerns.

AXA Asia said Australia and New Zealand operating earnings are seen at about A$110 million up from A$88.1 million, reflecting growth across business and higher average funds.

But its Hong Kong operating earnings are seen slipping to A$140 million from A$175.8 million, hurt by the appreciation of the Australian dollar in 2010.

AXA Asia Pacific also said it saw its profit after tax and non-recurring items of approximately A$220 million compared with A$270.4 million, a year-ago.

AXA Asia will announce its results first half-results on August 4.

(Reporting by Narayanan Somasundaram; Editing by Balazs Koranyi)