Goldman sends ICBC, bank stocks tumbling as downgrades hit Hong Kong market while US-China tech war simmers

Name: One year with Hong Kong leader John Lee: Is he on the right track? | Talking Post with Yonden Lhatoo
Uploaded: 2023-07-05T02:17:08.000Z
Duration: 32 min 26 s
Description: One year with Hong Kong leader John Lee: Is he on the right track? | Talking Post with Yonden Lhatoo

Goldman downgraded ICBC, Agricultural Bank and Industrial Bank to sell on Wednesday; other lenders such as Construction Bank and HSBC slid in tandem

China, US and Europe are erecting more barriers to curb access to semiconductor materials and chips, with the latest spat spilling into cloud services

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A man rides a motorcycle in front of a screenshowing stock indices, in Shanghai in August 2022. Photo: EPA-EFE

Jiaxing Li

Published: 10:17am, 5 Jul 2023Updated: 5:12pm, 5 Jul 2023

Bank stocks tumbled by the most in seven weeks in Hong Kong, after Goldman Sachs downgraded several top Chinese lenders. Tech stocks slipped amid concerns the US-China rivalry will spill into the cloud-computing business.

The Hang Seng Index fell 1.6 per cent to 19,110.38 at the closing of Wednesday trading. The Tech index retreated 1.7 per cent, while the Shanghai Composite Index weakened 0.7 per cent.

Industrial and Commercial Bank of China slumped 1.9 per cent to HK$4.11, while the Agricultural Bank of China lost 2.9 per cent to HK$3.01. Industrial Bank slipped 0.5 per cent to 15.60 yuan in Shanghai. Goldman cut its rating to a sell on the three lenders on Wednesday, saying dividend payouts are at risk as banks strengthen their capital adequacy ratios.

All 11 banks in the Hang Seng financial sub-index fell, dragging the gauge down by 1.8 per cent, the most since May 17, according to Bloomberg data. Other major losers included China Construction Bank, which slumped 1.8 per cent to HK$5 and HSBC which declined 1 per cent to HK$61.65.

Elsewhere, chip maker SMIC slid 2.6 per cent to HK$20.25 and JD.com sank 2.5 per cent to HK$138.70 while Tencent dropped 1.1 per cent to HK$335.40. Sportswear maker Li Ning tumbled 4.9 per cent to HK$41.85 and peer Anta dropped 1.2 per cent to HK$83. Developer Longfor fell 2.4 per cent to HK$18.78 and Country Garden lost 4.9 per cent to HK$1.56.

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One year with Hong Kong leader John Lee: Is he on the right track? | Talking Post with Yonden Lhatoo

“The market would want to see more evidence that the fundamentals are improving and get more clarity on the geopolitical front,” Julius Baer strategist Richard Tang said at a briefing in Hong Kong on Wednesday. The Swiss private bank still expects a positive return in the second half.