Tech stocks slip in Hong Kong while slump in Chinese property stocks pegs back market bulls

·3-min read

Chinese technology stocks slipped in Hong Kong as traders locked up sizeable gains over the past week. An index tracking Chinese property developers fell by the most in a month amid growing signs of credit distress.

The Hang Seng Tech Index lost 1.8 per cent at the close of Thursday trading, after logging its best gain in three months on Wednesday. The benchmark Hang Seng Index ended a choppy day with a 0.1 per cent gain as oil producers advanced. China’s Shanghai Composite Index lost 1.2 per cent.

Alibaba Group Holding, the owner of this newspaper, declined 0.6 per cent, while its health unit tumbled 7 per cent. slid 3.9 per cent after logging its best rally in five months on Wednesday. NetEase dropped 3.3 per cent, while Tencent and Meituan lost at least 0.4 per cent.

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Tech stocks rallied this week on cheap valuations and policy easing bets, helping the 30-member Tech Index recoup US$239 billion of market value along the way.

“Concerns of policy regulations still prevail so we cannot bank too much for a strong rebound,” said Louis Tse Ming-kwong, managing director of Wealthy Securities. Plus, the reporting season is coming, so some traders are now locking up their huge winnings, he added.

Chinese developers added to market weakness. Sunac China crashed 19 per cent after announcing a HK$4.52 billion (US$580 million) share sale plan to ease its liquidity crunch. Yuzhou Group slipped 6.9 per cent as it sought leniency from bondholders.

Country Garden retreated 7.8 per cent and its management service subsidiary declined 4.9 per cent. China Overseas Land lost 2 per cent. A gauge tracking mainland property developers tumbled 5.4 per cent, the most in a month.

Gains in oil-related stocks softened the blow. PetroChina and CNOOC rose at least 1 per cent, while Sinopec gained 2.5 per cent. Natural gas distributor ENN Energy climbed 3.4 per cent. Oil traded near US$82.64 a barrel, the highest level since November 9, according to Bloomberg data.

Genting faces demand on US$2.78 billion debt as unit bankruptcy triggers cross default

PetroChina’s gain was also aided by a report it made an almost five-fold increase in earnings last year, according to an advance estimate in a stock exchange filing. CNOOC extended a surge after unveiling a surprise dividend plan under its 2022-2024 business strategy.

Separately, Genting Hong Kong plunged by a record 56 per cent as trading resumed on Thursday. The cruise operator faces debt payment of US$2.78 billion after its German shipyard unit filed for bankruptcy, potentially triggering cross default of debt.

Rastar Environmental Protection Materials slumped 9.1 per cent on its trading debut in mainland China on Thursday. Elsewhere, major Asian markets were mixed. Australian equities rose 0.5 per cent, while Japanese and South Korean shares fell 1 per cent and 0.4 per cent, respectively.

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