Tencent, Meituan, HKEX top Hong Kong stock losers as southbound connect sees first net selling since mid-December

Mainland investors were net sellers of HK$20 billion worth of Hong Kong stocks on Wednesday, a trend that may persist in the short term

Tencent, Meituan and Hong Kong Exchanges & Clearing became top losers from biggest beneficiaries, may be instructive as sentiment swings

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Tencent, Meituan and HKEX were top three losers on Wednesday as mainland funds headed for the southbound exits. Photo: Shutterstock

Published: 2:00pm, 25 Feb 2021Updated: 5:45pm, 25 Feb 2021

Mainland Chinese investors pulled their money out of the Hong Kong stock market for the first time in more than two months, after pumping in HK$1.08 trillion (US$139.8 billion) since the start of 2020, hurting some of the most popular bets.

The net selling amounted to HK$20 billion on Wednesday through the Stock Connect’s southbound links, according to Hong Kong stock exchange data, also a daily record. These were the first net outflows since HK$855.6 million of withdrawal was recorded on December 18.

Investors, however, returned with HK$1.7 billion worth of net buying on Thursday, although the purchases remained selective.

The selling may persist in the short term, after a government decision to raise the stamp duty on stock transactions for the first time since 1993 in its 2021/22 Budget plans. The increase is said to have contributed to the slump in bourse operator Hong Kong Exchanges and Clearing, and the Hang Seng Index’s steepest one-day slide since May.

“Many mainlanders have locked in profits due to the news on higher stamp duty,” said Gordon Tsui, chairman of Hong Kong Securities Association. “This will become a trend for at least a few days or a short period of time. Mainland funds or individual investors may shift to other markets [with cheaper costs] to trade the Chinese stocks.”