Hong Kong stocks tumble after China Evergrande scraps creditor meetings, triggering concerns about the property sector

China Evergrande lost about a quarter of its value after saying that creditor meetings scheduled for this week would be scrapped because of poorer-than-expected sales

Property stocks led the pack of decliners as the mood darkened amid worries China’s piecemeal stimulus measures would be insufficient to arrest an economic slowdown

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Residents walk past a map showing Evergrande development projects in China. Photo AP

Published: 10:36am, 25 Sep 2023Updated: 5:05pm, 25 Sep 2023

Hong Kong stocks fell by the most in three weeks on Monday, amid concerns China’s property woes will intensify after China Evergrande Group, the world’s most indebted developer, cancelled creditor meetings in a setback to its debt restructuring plans.

The Hang Seng Index slid 1.8 per cent to 17,729.29 at close, adding to last week’s 0.7 per cent fall. The Hang Seng Tech Index dropped 2.7 per cent and the Shanghai Composite Index retreated 0.5 per cent.

Property stocks led the pack of decliners after China Evergrande said that six creditor meetings scheduled for this week would be scrapped because of poorer-than-expected sales. Longfor Group slid 6.5 per cent to HK$14.16 and Country Garden Services Holdings slumped 4.3 per cent to HK$8.21. E-commerce platform JD.com dropped 4.1 per cent to HK$115.40 for a record-low close and Tencent Holdings sank 2.9 per cent to HK$304.40.

China Evergrande tumbled 22 per cent HK$0.43 after it said in another exchange filing that it was unable to meet the regulatory requirements for new bond issuances. China Aoyuan Group, a smaller property developer, plunged 72 per cent to HK$0.325 as the stock resumed trading after it was suspended on March 31 last year for a debt revamp.

“China’s property crisis is far from over and that’s going to be an overhang on stocks,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. “The property market is crucial to China’s economy, given its size and weighting. No other industry can replace it as a stabiliser of the economy any time soon.”