Hong Kong stocks hit 2-week low as Alibaba tumbles 3% on ex-CEO’s surprise exit while China warns speculators amid yuan slide
- Alibaba Group slipped in biggest setback since August 18 after saying former chairman and CEO Zhang relinquished all his top posts in the e-commerce group
- Stocks pared losses as China’s central bank signalled it would defend the yuan in a warning shot to currency speculators
Alibaba Group dropped 3 per cent to HK$88.05 and while JD.com fell 2.3 per cent to HK$125.60 to an all-time low. Sun Hung Kai Properties sank 9.5 per cent to HK$79.95 after profit in the year to June 30 missed consensus estimates. Chinese developers Longfor Group tumbled 3.8 per cent to HK$16.76 and peer Chinese Overseas Land and Investment lost 2.7 per cent to HK$16.72.
Zhang remains a partner in Alibaba Group, the owner of the South China Morning Post.
“Investors will be focused on any further clarity from the new management team on Alibaba’s latest organisational strategies and capital market plans of its respective subsidiaries,” Goldman Sachs said in a report.
China’s financial regulators vow to not hesitate, halt bets on yuan
Stocks pared losses after the Chinese central bank signalled on Monday it was ready to defend its currency in a warning shot to currency speculators. A separate report showed both aggregate financing and new lending surged in August from July, beating market expectations.
The offshore yuan strengthened 0.8 per cent to trade at 7.3038 per dollar on Monday, the biggest gain since March. The currency slumped last week to a 16-year low in onshore trading as China’s external trade shrank in August.
“Given weak inflation, it’s still urgent and necessary to cut the interest rates going forward to boost demand and confidence,” said Bruce Pang, chief economist at Jones Lang LaSalle in Hong Kong. “Price gains in some of consumer products are not solid.”
Selling pressure in Chinese stocks ‘has passed its strongest point’, CLSA says
While valuations are appealing and selling pressure has passed its peak, Beijing needs to address real risks in the economy and investors’ “absolutely reasonable” concerns about the growth outlook, CLSA said.
Two stocks debuted today. Hangzhou Heatwell Electric Heating Technology surged 69 per cent to 39.10 yuan in Shanghai, while auto-parts maker Wuhu Foresight Technology rose 76 per cent to 64.26 yuan in Shenzhen.
Other major Asian markets were mixed. Japan’s Nikkei 225 slipped 0.4 per cent, while South Korea’s Kospi retreated 0.4 per cent and Australia’s S&P/ASX 200 added 0.5 per cent.
Additional reporting by Ann Cao.