China stock market

Hong Kong stocks end flat, Shanghai extends weekly gain fuelled by MSCI inclusion

Hang Seng Index ends little changed at 25,670.05, while the Shanghai Composite Index gains 0.3 per cent to 3,157.87

PUBLISHED : Friday, 23 June, 2017, 9:07am
UPDATED : Friday, 23 June, 2017, 10:38pm

Hong Kong shares were mixed on Friday as the positive impact from MSCI’s decision to add yuan-traded equities to its global benchmark indexes was offset by market worries triggered by China’s orders on loan checks on selected companies.

The Hang Seng Index inched down 0.02 per cent, or 4.48 points, to 25,670.05 while the Hang Seng China Enterprises Index advanced 0.3 per cent, or 27.28 points, to 10,430.04.

Worries are mounting that Beijing’s crackdown on capital outflows and asset bubbles would lead to sharply tighter liquidity conditions.

China’s banking regulator orders loan checks on Wanda, Fosun, HNA, others

“Investors are getting more nervous because of China’s crackdown while others are locking in profits before the end of the half year,” Stanley Chan, director of research at Emperor Securities, said.

Fosun Pharmaceutical rebounded 3.7 per cent to HK$30.5 in Hong Kong after sliding 5.9 per cent on Thursday. Wanda Film also rebounded 3.6 per cent to 1.87 yuan in Shenzhen after plunging 10 per cent in the prior session.

The two companies said in separate exchange statements that operations remain “normal”.

Wanda Film said that controlling shareholding Beijing Wanda Investment will start to spend as much as 1 billion yuan (US$150 million) buying shares of the company in the next three months.

Financials saw gains, with Industrial Commercial Bank of China led advancing 1.2 per cent to HK$5.21 and Bank of China gaining 0.5 per cent to HK$3.82.

Mainland Chinese stocks reversed from early losses with the Shanghai Composite Index rising 0.3 per cent, or 32.54 points, to 3,157.87 and the CSI 300 edging up 0.9 per cent, or 10.42 points, to 3,622.88. MSCI’s decision on Wednesday to add 222 yuan-traded equities to its global benchmark indices had pushed the CSI 300 up 7 per cent from a low on May 10 through Thursday.

“The momentum from MSCI’s inclusion is now fading, given the fairly decent gains on big-cap stocks,” said Zhang Haidong, chief investment officer with Shanghai Jinkuang Investment.

Shanghai Lingang Holdings tumbled 10 per cent to 23.34 yuan, erasing Thursday’s rally. The industrial park developer denied rumours that Tesla will set up a plant in the zone, saying in an exchange statement that the company has not contacted the US maker of new-energy vehicles, or signed any agreement.