Hong Kong stocks suffer another sell-off as Alibaba drags Chinese tech lower while Omicron, Evergrande stoke risk aversion

Alibaba slid amid a management reshuffle as Chinese tech benchmarks in the US and Hong Kong have lost US$124 billion of value since Didi’s US delisting move

The Omicron variant spread in the region while Evergrande plunged 20 per cent as its failure to meet a US$260 million debt guarantee stoked risk aversion

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A stock trader looking at the market prices at a brokerage in Central Hong Kong. Photo: SCMP

Published: 10:26am, 6 Dec 2021Updated: 6:02pm, 6 Dec 2021

Hong Kong stocks fell to more than 14-month low as Alibaba Group Holding slumped amid a management reshuffle. The spread of Omicron variant and concerns about growing default risk among Chinese developers also shook market confidence.

The Hang Seng Index retreated 1.8 per cent to 23,349.38 at the close of Monday trading, the lowest level since September last year. The Tech Index sank 3.3 per cent, the most in a week, while China’s Shanghai Composite Index declined 0.5 per cent.

Alibaba lost 5.6 per cent to trade at an all-time low of HK$112.70. The e-commerce group, the owner of this newspaper, said Xu Hong will replace Maggie Wu Wei as chief financial officer from April next year, according to an exchange filing. The stock has lost 28 per cent since November 18 when it reported a weak quarterly earnings, and 47 per cent over the past six months.

“Risks are everywhere as we get close to the end of the year,” Natixis analysts Emilie Tetard and Florent Pochon wrote in a December 3 report to clients. “The Covid-19 resurgence will make things uncertain again and US-China tensions are increasing on the regulatory front with the US delisting of Chinese tech giants.”

Since Didi Global’s decision on Friday to shift its listing to Hong Kong from New York, Chinese tech stocks on the Hang Seng Index and the Nasdaq Golden Dragon China Index have lost US$124 billion in market value, according to Bloomberg data.

Regulatory scrutiny on big tech names has soured sentiment, while increasing competition posed further headwinds, said Shawn Yang Zixiao, deputy research head and a managing director at Blue Lotus Capital Group in Hong Kong. “As for Alibaba’s management reshuffle, it could be seen as a move to better integrate their resources and focus more on overseas markets.”

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