Hong Kong stocks end June with a whimper on China slowdown concerns as bubble-tea chain Nayuki slumps in market debut

·3-min read

Hong Kong stocks weakened after a government report showed economic activity in China cooled this month amid resurgence in Covid-19 infections. Chinese bubble-tea chain Nayuki Holdings slumped in its trading debut.

The Hang Seng Index fell 0.6 per cent to 28,827.95 for a third day of losses. The gauge logged a 1.1 per cent decline in June, its first loss since March. The Shanghai Composite rose 0.5 per cent while the CSI 300 added 0.7 per cent, but both gauges also recorded their first monthly setback since March.

Hengan International led declines among blue chips, falling 4.4 per cent to HK$52. China Resources Land dropped 3.4 per cent to HK$31.45, while Geely Automobile declined 3.4 per cent to HK$24.45. Ping An Insurance slid 0.7 per cent to HK$76.05 after it announced plans to acquire stakes in six Raffles City properties from Singapore’s CapitaLand for up to US$5.1 billion.

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Limiting losses, AIA Group advanced 0.8 per cent to HK$96.50. The insurer agreed to pay US$1.86 billion for a stake in the life insurance arm of the China Post Group. Moody’s Investors Service said the acquisition was credit positive as “it enhances AIA’s market reach” in China.

China’s manufacturing purchasing managers’ index fell to 50.9 in June from 51.0 in May, while the non-manufacturing indicator slipped to 53.5 from 55.2, the statistics bureau reported on Wednesday. The indexes, however, remained in expansion mode.

“We expect downward pressure on growth to increase in the second half, especially in Q4 as pent-up demand fades, exports weaken as developed markets shift back to services consumption” as they reopen their economies, Nomura analysts led by Wang Lisheng said in a report on Wednesday. Property-related tightening and surging raw materials prices are also biting, they added.

Meanwhile, six companies started trading today. Bubble tea chain Nayuki fell 13.5 per cent to HK$17.12 from its issue price of HK$19.80 in one of the worst Hong Kong stock debuts this year.

Shandong Weigao Orthopaedic Device rose 193 per cent to 106.05 yuan from its IPO price in Shanghai, while both Hangzhou Cogeneration Group and information services provider Servyou Software Group added 44 per cent. In Shenzhen, Qingdao Baheal Pharmaceutical soared 635 per cent to 56.16 yuan and Nanjing Railway New Technology gained 214 per cent to 43.14 yuan.

Markets in the Asia-Pacific were mixed. Japan’s Nikkei 225 slipped 0.1 per cent, while South Korea’s Kospi gained 0.3 per cent. Australia’s S&P/ASX 200 rose 0.2 per cent.

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