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

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A woman walks past a screen displaying the Hang Seng Index outside the Exchange Square in Central, Hong Kong in March 2023. Photo: Reuters

Published: 10:41am, 11 Sep 2023Updated: 4:26pm, 11 Sep 2023

Hong Kong stocks fell to a two-week low, led by losses in Alibaba Group, after former chairman and CEO Daniel Zhang Yong surprisingly quit the e-commerce group amid a leadership transition. Losses narrowed after China signalled it would defend the yuan against speculators.

The Hang Seng Index slipped 0.6 per cent to 18,096.45 on Monday from Thursday’s level. Local financial markets were closed on Friday because of a bad weather warning. The Tech Index dropped 0.2 per cent while the Shanghai Composite Index added 0.8 per cent.

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 departed from Alibaba’s board and management as chairman and CEO on Sunday as planned, according to a filing on Monday. However, he surprisingly quit the top post at the cloud intelligence unit, as previously arranged in June. Eddie Wu, the new CEO, will now oversee that unit in acting capacity.

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.

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.

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