Hang Seng Tech Index may fall by another 8 per cent as Didi probe deepens rout, CCBI says

The 30-member gauge, which has lost more than US$600 billion in market cap since February, has a way to fall before the sell-off eases, says the investment unit of China Construction Bank

Beijing’s unexpected move to put ride-hailing giant Didi Chuxing under a cybersecurity review has deepened the rout of the Hang Seng Tech Index in the past week

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The Hang Seng Tech Index has lost more than US$600 billion in market capitalisation since a February peak. Photo: AP

Published: 3:00pm, 9 Jul 2021Updated: 3:00pm, 9 Jul 2021

The Hang Seng Tech Index, which has lost more than US$600 billion in market capitalisation since a February peak, will probably drop by another 8 per cent before a sell-off eases, according to CCB International.

The 30-member gauge may fall to as low as 6,800 in the second half, representing a 7.8 per cent decline from where it has been trading recently, analysts Cliff Zhao and Lynn Song at the firm wrote in a research note dated July 8. That represents a downward revision of a forecast they made in June for the lower range of the tech index at 7,500.

The investment unit of China Construction Bank is cautious about Hong Kong’s broader market for the rest of the year because the valuation is above the 10-year average.

Beijing’s unexpected move to put ride-hailing giant Didi Chuxing under a cybersecurity review has deepened the rout of the Hang Seng Tech Index in the past week, with the combined loss in market value since February exceeding the size of Thailand’s entire market.

Souring sentiment has spilled over to other Hang Seng gauges, with an index tracking major Chinese companies in the city briefly entering a bear market on Friday after a 20 per cent plunge from a February high.

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