Hong Kong shares drop as southbound Stock Connect inflows fall well below daily normal
Hang Seng Index edges down 0.60pc to close Wednesday at 23,407.05
Hong Kong stocks slipped on Wednesday as southbound capital inflow slowed, forcing a sell off in financial and property stocks.
The Hang Seng Index closed down 0.60 per cent or 142.47 at 23,407.05, while the Hang Seng China Enterprises Index lost 1.34 per cent to 9,673.20.
Net inflow of southbound capital to the city through the Shanghai-Hong Kong Stock Connect trading link was at 905.75 million yuan, compared with 1.54 billion yuan on Tuesday. The daily average in late September was 2 to 3 billion yuan.
Kingston Lin King-ham, AMTD Securities brokerage director, said southbound inflow slowed as investors see little chance of the Hong Kong benchmark breaking through the 24,000 threshold before the US president election and launch of Shenzhen-Hong Kong Stock Connect.
“China’s tightening measures on home buying has to some extend encouraged capital flow to the A-share market. Although we haven’t seen any sharp movement in A-shares, such expectation could prompt investors to dump holdings in Hong Kong and turn to the mainland,” Lin said.
Carson Pang Wai-san, head of research at Core Pacific-Yamaichi International (HK), said southbound flows saw profit-taking before the “golden week” holiday last week, and without many upsides, investors have continued to “try to bank the profits”.