Record plunge in JD.com, Alibaba hits Hong Kong on US delisting act, with US$577 billion eroded from market since Ukraine invasion
- Hang Seng tumbled 1.6 per cent as tech leaders like Alibaba, JD.com and Meituan crashed by more than 4 per cent
- The US SEC asked five Chinese companies to show cause why they should not be delisted in new move following an audit inspection law
The Hang Seng Index lost 1.6 per cent to near a six-year low of 20,553.79 at the close of Friday trading. The 6.2 per cent setback since Friday completed a four-week losing run, the longest since December 2020. The Hang Seng Tech Index plunged 7.6 per cent, and the Shanghai Composite Index weakened 2.2 per cent.
JD.com tumbled by a record 11 per cent after saying annual loss widened. Meituan and Tencent slumped at least 4.5 per cent. Alibaba Group Holding crashed 5.5 per cent to a new all-time low.
“Everyone is panicking and rushing to sell” under current risk-off sentiment, said Dai Ming, a fund manager at Huichen Asset in Shanghai. “There could be more selling pressure, should the Ukraine ceasefire talks break down or oil prices climb back up.”
Pharmaceutical group BeiGene plunged 4.9 per cent and Yum China lost 6 per cent in Hong Kong, while HutchMed sank 9.5 per cent and Zai Lab shed 6.3 per cent. ACM Research lost 9.2 per cent in Shanghai, all following a rout in their American depositary shares.
US securities regulator listed the five firms on a provisional list that could lead to delisting over a three-year period. The move triggered a 10 per cent slump in a gauge tracking US-listed Chinese stocks, the most since the 2008 global financial crisis.
01:53
Washington bans Russian oil and gas imports over Moscow’s invasion of Ukraine
“We expect renewed regulatory uncertainty to dampen investor sentiment and potentially remain an overhang on Chinese [offshore stock] valuations,” he said. “Investor concern centres around a potential liquidity challenge such homecoming stocks may pose to Hong Kong’s market.”
The Hang Seng Index has dropped 13 per cent since Russia invaded Ukraine on February 24, wiping out US$577 billion of value from Asia’s third-biggest market. Still, mainland Chinese investors were net buyers of HK$29 billion (US$3.7 billion) of stocks in the period.
Meanwhile, consumer prices in the US rose 7.9 per cent in February, the most in four decades, entrenching the Federal Reserve’s policy tightening bias as policymakers look to start raising interest rates from as early as this month.
