Hong Kong stocks slide as Alibaba, HKEX lead losses, while developers slump on policy disappointment

Tech stocks surrender some of their hefty gains, while developers give up all of early gains with policy incentives deemed underwhelming
Bourse operator HKEX logs slide after a report showing a 30 per cent decline in third-quarter earnings

Hong Kong stock market

Jiaxing Li

Published: 10:29am, 19 Oct, 2022

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Hong Kong stocks fell, halting a three-day advance as Chinese tech firms retreated while developers pared gains on concerns policy incentives did not go far enough to help revive the economy. Bourse operator Hong Kong Exchanges and Clearing (HKEX) tumbled after a poor report card.

The Hang Seng Index dropped 2.4 per cent to 16,511.28 at the close of Wednesday trading, erasing most of the gains made over the past three days. The Tech Index slumped 4.2 per cent and the Shanghai Composite Index fell 1.2 per cent.

Alibaba Group Holding tumbled 4.2 per cent to HK$72.80, Tencent Holdings slumped 4.1 per cent to HK$244 and JD.com sank 5.3 per cent to HK$168.80, with the trio surrendering some of their hefty gains this week. HSBC retreated 1.3 per cent to HK$41.65.

The Hang Seng Property index retreated 1.8 per cent with 10 out of 12 members falling. New World Development sank 7.5 per cent to HK$18.86, Sun Hung Kai Properties lost 3.7 per cent to HK$89.35 and Henderson Land Development dropped 3.4 per cent to HK$21.50. They surrendered earlier gains after Hong Kong Chief Executive John Lee Ka-chiu announced a mild easing in property-market measures.

“Some investors [are] disappointed that it is too long for non-local buyers to wait seven years to enjoy this policy” incentive, said Raymond Cheng, head of China and Hong Kong research CGS-CIMB Securities.

Hong Kong policy address: Lee’s all-out war for talent and housing ‘breakthrough’

The city is facing challenges unseen in 100 years, such as the pandemic, economic contraction, high inflation and interest rates, and geopolitical tensions, Lee said in his Policy Address. Analysts see the local economy shrinking 0.4 per cent this year, versus a 6.3 per cent expansion in 2021.

HKEX fell 1.9 per cent to HK$253.20. Earnings shrank 30 per cent to HK$2.26 billion (US$287.9 million) for the quarter to September 30, in line with market consensus, on the back of shrinking income from trading, initial stock offerings and portfolio investments.

Four stocks debuted on Wednesday. Shandong Teamgene Technology jumped 39.3 per cent to 25 yuan and Beijing Integrity Technology gained 22.5 per cent to 60.25 yuan in Shanghai. Sportsoul soared 44 per cent to 16.08 yuan while Sublime China Information surged 62.4 per cent to 48.69 yuan in Shenzhen.

Elsewhere in the Asia-Pacific region, stocks jumped in sync with overnight gains in US equities. Benchmarks in Japan, and Australia climbed by 0.3 to 0.4 per cent aided by better sentiment on corporate earnings, while the Kospi in South Korea lost 0.6 per cent.