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Banking and insurance stocks offer traders a shelter from the regulatory storm in Chinese tech space. Photo: EPA-EFE
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Hong Kong stocks advance as HSBC, AIA offer safety while tech firms attempt to shake off regulatory overhang

  • HSBC and AIA led gainers as traders turned to financial stocks for safety amid regulatory overhang
  • Alibaba and Tencent bid to contain the fallout from negative media publicity over sexual harassment and app-related case, respectively
Stocks
Martin Choi
Martin Choi
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Hong Kong stocks advanced as traders sought safety by loading up on financial heavyweights amid concerns about regulatory clampdown as more mainland Chinese media reports focused on poor market practices among Chinese technology companies.

The Hang Seng Index closed 0.4 per cent higher at 26,283.40 on Monday, swinging from an earlier loss of about 1 per cent. The tech benchmark slipped as much as 2 per cent before paring losses to 0.5 per cent. China’s Shanghai Composite Index climbed 1.1 per cent.

Financial stocks, seen as a safe haven, advanced as lender HSBC rose 1.4 per cent to HK$43.80, while insurer AIA gained 1.1 per cent to HK$93.15. China Construction Bank and ICBC both gained by more than 1.2 per cent. In contrast, Alibaba dropped 2.5 per cent to HK$188.70. Tencent climbed 1.7 per cent to HK$461.60, rebounding from a 2 per cent sell-off earlier.

“The fund flow in Hong Kong market seems to be a very strong signal for the market bottoming,” said Castor Pang, head of research at investment services firm Core Pacific-Yamaichi. “However, the market will not see a very strong uptrend at this moment.”

Hang Seng Index members received HK$25.9 billion (US$3.3 billion) of fund inflows in the first week of August, compared with HK$39.6 billion in July, according to data compiled by his firm.

Alibaba, the owner of this newspaper, tumbled as the company faced an internal sexual harassment case after a female employee of a unit accused a direct supervisor of rape following a business meeting last month. Some employees have been sacked, chastised or have left the group as a result, the firm added.
Meanwhile, Tencent was targeted by a Beijing procuratorate because the youth mode of its WeChat social media app allegedly failed to comply with minor protection laws. The litigation marked the first time this kind of legal threat has been made against a Chinese Big Tech giant.
Soho China gained 0.3 per cent to HK$3.23, losing almost all of a 10.5 per cent rally. China’s antitrust regulator has started its review of a general offer by US private-equity firm Blackstone Group to take control of the property developer, Soho China said in an exchange statement late on Friday.

Shares of semiconductor makers also fell. An opinion piece from state-run broadcaster CCTV Finance late on Friday said that “chip scarcity was not a reason for speculation”, urging operators to keep prices steady.

Hua Hong Semiconductor fell 5.7 per cent to HK$51.40, while SMIC dropped 5 per cent to HK$26.75.

Shares of Vitasoy International plunged 10.1 per cent to HK$19.28, its biggest drop in over a month. The beverage manufacturer issued a warning that it could incur up to HK$50 million loss for the six months ending September 30, compared to a profit of HK$671.9 million a year earlier, due to a consumer boycott.

In mainland China, liquor distiller Kweichow Moutai rose 1.4 per cent to 1,693.80 yuan, while Ping An Insurance gained 2.7 per cent to 55.12 yuan.

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