Tech stocks from Meituan to Alibaba lead losses in HK as Chinese ride-hailing giant Didi prepares for US delisting

04-Dec-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

Hong Kong stocks fell on Friday as concerns about Chinese companies being kicked off American stock exchanges delivered a punch to technology giants, compounded by Didi Global’s move to delist from New York.

The Hang Seng Index retreated 0.1 per cent to 23,766.69 at the close of Friday trading, reversing a two-day gain to finish the week down 1.3 per per cent. That was its third straight weekly loss. The Hang Seng Tech Index slid 1.5 per cent on Friday, while China’s Shanghai Composite Index rose 0.9 per cent.

Alibaba, the owner of this newspaper, sank 2.6 per cent to HK$119.40, deepening a rout as it continues to trade at a record low. Food delivery platform operator Meituan declined 2.7 per cent, while online gaming giant Tencent lost 2.3 per cent.

“Declines in the Hang Seng Index have been led by Chinese tech stocks following weak overnight returns. More broadly, US markets have been weak on Omicron concerns and the Fed chair’s hawkish comments,” said Stephanie Leung, head and deputy chief investment officer at wealth management firm StashAway HK.

Blighted by poor third-quarterly earnings reports last month, tech giants are now suffering losses sparked by concerns that Chinese companies could soon be booted off American bourses. The Securities and Exchange Commission (SEC) moved closer to passing a new law on Thursday that would aim to ensure foreign firms, in particular Chinese companies, comply with audit requirements.

Since its peak on February 17, successive sell-offs in the Chinese tech sector have wiped out about $1 trillion of market value in the Hang Seng Tech Index. The Nasdaq Golden Dragon China Index, which tracks US-listed Chinese stocks, sank to its lowest in almost 19 months on Thursday.

Soon after the SEC’s move, Didi Global announced that it had begun preparations to delist in the US. The ride-hailing giant said on Friday it would prepare for a Hong Kong initial public offering. Its shares declined 0.1 per cent to $7.80 on Thursday in New York.

Separately, the overstretched Chinese property sector continued to reel as another developer edged towards the brink of disaster. China Aoyuan Group said it had been unable to meet debt repayments of $651 million following recent credit rating downgrades. Its shares slumped 11.9 per cent to HK$1.78.

In mainland China, Tongling Jieya Biologic Technology, a cleaning wipes producer, jumped 44.4 per cent to 82.68 yuan on its debut.

Major markets in Asia gained, inching up 0.2 per cent in Australia, while climbing 0.8 per cent in South Korea and 0.1 per cent in Japan.


Category: Hong Kong

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