Traders count on golden week respite amid Evergrande, power crisis after US$576 billion rout in Hang Seng members

Name: Chinese manufacturing thrown into disarray as country's electricity crisis rolls on
Uploaded: 2021-10-03T23:30:20.000Z
Duration: 4 min 1 s
Description: Chinese manufacturing thrown into disarray as country's electricity crisis rolls on

Stock Connect link will be closed through Thursday during the golden week holiday, potentially easing selling pressure

Mainland investors were net sellers of HK$65.2 billion worth of Hong Kong-listed stocks last quarter, weighing on the Hang Seng Index

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Investors look at computer screens showing stock prices at a brokerage house in Shanghai. Photo: Reuters

Zhang Shidongin Shanghai

Published: 7:30am, 4 Oct 2021Updated: 7:32pm, 4 Oct 2021

China’s national holiday, known as the “golden week”, could not have come at a better time for stock investors in Hong Kong who have endured a punishing sell-off in the past four months.

A combination of factors, from regulatory crackdowns on tech companies to China Evergrande’s debt contagion worries, have turned mainland investors into a deadweight for Hong Kong stocks last quarter through the Stock Connect’s southbound trading link.

They were net sellers of HK$65.2 billion (US$8.4 billion) worth of Hong Kong-listed stocks over the past three months, according to the exchange data. Their withdrawals have contributed to US$576 billion of wipeout in the value of Hang Seng Index members since the end of May.

While Hong Kong’s financial markets will be open for the whole week, the shutdown in the southbound link through Thursday may be a respite for local traders.

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Chinese manufacturing thrown into disarray as country's electricity crisis rolls on

“Buying the dip at a slow and gradual pace will be a good strategy against the backdrop of a broader languishing market,” said Xue Wei, an analyst at Ping An Securities. Still, “there is a low chance that Hong Kong stocks will stage a reversal in the short term”.