Hang Seng Index

Hong Kong stocks extend declines as Tencent, gaming companies drop on reports of licence freeze

  • Hang Seng Index and Shenzhen Composite Index down by 0.4 per cent and 0.3 per cent, respectively; Shanghai Composite Index up 0.3 per cent
  • Shenzhen-listed technology shares pull higher after Xi Jinping visits city’s hi-tech industrial estate
PUBLISHED : Wednesday, 24 October, 2018, 7:11pm
UPDATED : Wednesday, 24 October, 2018, 7:11pm

Stocks listed in Hong Kong dropped further on Wednesday to extend Tuesday’s retreat, with Tencent Holdings and other video game companies posting losses following reports Beijing had halted a special approval process for new video game titles.

The Hang Seng Index closed 0.4 per cent, or 96.77 points, lower at 25,249.78. The benchmark index lost 3.1 per cent on Tuesday. The Hang Seng China Enterprises Index, known as the H-shares index, inched down 0.1 per cent, or 8.49 points, to 10,226.41.

Turnover on the main board decreased by more than 6 per cent from Tuesday to HK$91.2 billion (US$11.62 billion).

Tencent Holdings, China’s biggest gaming and social media company, fell by 0.7 per cent to HK$275.80. Online game developer IGG sank by 4.7 per cent to HK$8.39. Boyaa Interactive International tumbled by 3.8 per cent to HK$2.01. Tian Ge Interactive Holdings lost 2 per cent to HK$3.96.

The retreat follows a report by Bloomberg that Chinese regulators have ended the issuance of game licences through a stopgap approval process known as the “green channel”, closing the last known official path for developers to launch new games in China. The report, published on Wednesday, cited anonymous sources.

Other technology stocks fell too, with smartphone component maker Sunny Optical Technology down by 4.6 per cent to HK$78.50. Apple supplier AAC Technologies also lost 1.2 per cent to HK$63.75.

Index heavyweight HSBC dropped 1.3 per cent to HK$61.60.

In mainland China, the Shanghai Composite Index pared gains to end 0.3 per cent, or 8.47 points, higher at 2,603.30.

On the technology heavy Shenzhen exchange, all the main indexes closed lower. The Composite Index and the Component Index were down by 0.3 per cent and 0.2 per cent, respectively.

The combined turnover for the Shanghai and Shenzhen markets dropped by 17 per cent to 297 billion yuan (US$42.78 billion) from the previous session.

Inner Mongolia Yili Industrial Group, a state-owned dairy company, plunged by 7.2 per cent to 23.80 yuan, as investors dumped the share after Yili accused its former chairman, Zheng Junhuai, of spreading rumours about its current management. Yili said in a statement it had already appealed to the central government for an investigation focusing on Zheng and some top political leaders who were protecting him, without revealing the names of the latter.

Some technology companies based in Shenzhen, however, pulled higher after Chinese President Xi Jinping paid a visit to the city’s hi-tech industrial estate on Wednesday, as part of his tour of Guangdong province.

BGI Genomics surged by 8.5 per cent to 54.20 yuan and Shenzhen Mason Technologies soared by 10 per cent to 4.39 yuan.