Hong Kong stocks log best month since October on China outlook while Tencent, SenseTime tumble as insiders sell

Gains in the Hang Seng and CSI 300 indexes this month have added almost US$699 billion of market value
Tencent and SenseTime slipped in Thursday trading amid concerns about selling by corporate insiders

Hong Kong stock market

Cheryl Heng

Published: 10:58am, 30 Jun, 2022

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Hong Kong stocks weakened, trimming the best monthly gain since October, as Tencent Holdings came under selling pressure from corporate insiders. SenseTime crashed after a stock lock-up expired. Signs of recovery in Chinese manufacturing tempered losses.

The Hang Seng Index slipped 0.6 per cent to 21,859.79 at the close of trading, while the Tech Index lost 1.4 per cent. The Shanghai Composite Index strengthened 1.1 per cent. Financial markets in Hong Kong will be closed on Friday for a holiday.

Tencent, the operator of WeChat, slumped 2.9 per cent to HK$354.40, taking this week’s setback to almost 8 per cent per cent. Its major shareholder Prosus announced a plan to sell down its 28.8 per cent stake in the open market to fund a stock buy-back programme.

Other major losers on Thursday included Alibaba Group Holding which retreated 2.3 per cent to HK$111.90 while both Meituan and Lenovo Group lost more than 4 per cent.

The Hang Seng Index still logged a 2.1 per cent advance in June while the CSI 300 Index of mainland stocks advanced 9.3 per cent. Gains in both indexes since May 31 have added almost US$699 billion of market value as confidence in China’s economic outlook rebounded.

China’s PMI manufacturing index rose to 50.2 in June, the statistics bureau said, reversing contraction in the three preceding months. The non-manufacturing gauge climbed to 54.7, marking the first expansion since February.

“The PMI figures show that China’s economy is on the track of stable growth,” said Stanley Chan, research director at Emperor Capital. “Entering July, the market sentiment will be reinforced by better economic figures especially from China.”

Stocks were earlier buoyed by potential market-friendly measures to mark the 25th anniversary of the return of Hong Kong to Chinese sovereignty on July 1. Authorities will add exchange-traded funds to the Stock Connect scheme from July 4, while other “gifts” may still be expected.

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Hong Kong Exchanges and Clearing gained 0.4 per cent to HK$386. Geely Auto advanced 1.9 per cent to HK$17.84 while Sands China appreciated 2.2 per cent to HK$18.72. JD.com gained 0.6 per cent to HK$252.80 after extending a business tie-up with Tencent for three more years.

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Elsewhere, China’s biggest artificial intelligence company SenseTime slumped 47 per cent to HK$3.13 on concerns corporate insiders will sell after a six-month lock-up expired after its December 30 listing.

The Chinese artificial intelligence firm raised US$6.4 billion of net proceeds from its IPO in December. A six-month lock-up on stakes purchased by cornerstone investor expired today. Several large block of shares changed hands at HK$3 each today, according to stock exchange data.

Tianqi Lithium rose 2.5 per cent in Shenzhen. The lithium producer, kicked off its US$2 billion Hong Kong secondary listing on Thursday, in what could be the city’s biggest offering so far this year.

Guangdong Yangshan United Precision Manufacturing rose 44 per cent to 27.72 yuan in Shenzhen on its trading debut, while Beijing Winsunny Pharmaceutical jumped 44 per cent to 21.05 yuan in Shanghai.

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