Meituan, Alibaba drag HK stocks lower on tech clampdown concerns as manufacturing in China cools

01-May-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

Hong Kong stocks dropped by the most in a month on concerns China is escalating a crackdown on the nation’s technology giants to rein in financial risks. A government report today also showed Chinese manufacturing slowed more than expected this month.

The Hang Seng Index tumbled 2 per cent from a six-week high to 28,724.88 at the close, capping a weekly 1.2 per cent decline and limiting this month’s advance to 1.2 per cent. The Shanghai Composite Index snapped a three-day winning streak, losing 0.8 per cent. It also dropped 0.8 per cent this week, almost erasing this month’s gain.

Meituan fell by 3.6 per cent to HK$298, while Alibaba Group Holding retreated 2.8 per cent to HK$225, among the worst performers of Hang Seng constituents. Tencent Holdings slipped 1.4 per cent to HK$623. The Hang Seng Tech Index slumped 2.2 per cent.

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“The increased scrutiny of tech companies will be a global and long-running issue now,” said Jin Xiangyi, an analyst at Huachuang Securities. “Against this backdrop, the leading market players will boost investments for structural growth opportunities, which will further intensify competition among them.”

China’s financial-market regulators summoned 13 tech firms with online financial business for a meeting late Thursday evening, asking them to tighten anticompetitive measures in yet another signal to investors that an industry clampdown is ongoing and widening.

The news came days after Beijing initiated an antitrust probe into food-delivery platform operator Meituan, and after it slapped a record $2.8 billion fine on Alibaba, the owner of this newspaper, earlier this month for antitrust violations.

The Hang Seng Tech Index has lost more than HK$2.2 trillion (US$283 billion) in market value from its February 17 peak.

Those concerns were a blemish to an otherwise big recovery for Hong Kong stocks this month, when the benchmark reached the highest level since March 18. They conspired to trim the Hang Seng Index’s advance in April fuelled by recovering sentiment, after a 2.1 per cent loss in March.

Stocks also weakened today after China’s statistics bureau said the Purchasing managers’ Index (PMI) on manufacturing fell to 51.1 this month from 51.9 in March. The decline was larger than the median estimate of 51.8 in a survey of economists by Bloomberg.

Three companies started trading for the first time on mainland bourses. Jiangxi GETO New Materials Corp surged 225 per cent from its initial public offering price to 48.10 yuan in Shenzhen as the best performer. Zhejiang Huasheng Technology and Jiahe Foods Industry both advanced by 44 per cent in Shanghai.

Markets in mainland China will close from Monday to Wednesday next week for public holidays.


Category: Hong Kong

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