Hong Kong stocks post fourth straight weekly decline as crisis at property giant China Evergrande intensifies

Hong Kong stocks posts a loss for the fourth week in a row and ended the quarter in the red as the debt crisis at China Evergrande intensified
Overseas investors sold 66 billion yuan (US$9 billion) of onshore Chinese stocks this month after a record outflow of 89.7 billion yuan in August

Hong Kong stock market

Jiaxing Li

Published: 10:33am, 29 Sep 2023

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Hong Kong stocks edged up on Friday, trimming this week’s losses but sentiment remained jittery as the debt crisis at developer China Evergrande deepened, triggering concerns among foreign investors about broader financial risks in the property sector.

The Hang Seng Index gained 2.5 per cent to 17,809.66 on Friday to recover from a 10-month low, while the Tech Index jumped 3.8 per cent. Markets in mainland China are shut, marking the start of the 10-day long Golden Week holiday closure.

Alibaba Group gained 3.1 per cent to HK$85.60, Tencent jumped 3 per cent HK$306.20 and JD.com rallied 3.6 per cent to HK$115.10. NetEase rose 5.5 per cent to HK$159.50 while Meituan strengthened 3.4 per cent to HK$114.60.

Friday’s rebound helped narrow the benchmark index’s losses this week to 1.4 per cent, after Beijing’s piecemeal stimulus policy failed to shore up investor confidence. The Hang Seng Index has tumbled 5.9 per cent over the past three months, after losing 7.3 per cent in the second quarter.

Evergrande, the world’s most indebted developer with US$327 billion of liabilities, said on Thursday its chairman Hui Ka-yan had been placed under “mandatory measures” for unspecified crimes, throwing its make-or-break US$20 billion restructuring in doubt. The measures typically include house arrest, among others.

In signs of waning foreign interest, overseas investors have sold 66 billion yuan (US$9 billion) of onshore Chinese stocks this month, adding to a record sell-off of 89.7 billion yuan in August, Stock Connect data showed.

“Markets have been bearish and – so far – the bears have been right, with data releases on domestic demand and exports coming in weaker-than-expected,” analysts at Institute of International Finance said in a note on Thursday. “We too have been concerned given the centrality of the property market for the economy.”

Meanwhile, share listings in Hong Kong raised the smallest amount of funds since 2003, and its position in the first nine months of the year has slipped to ninth in a global ranking of initial public offering (IPO) venues down from third place at the end of last year.

Elsewhere, the Hong Kong stock exchange added Saudi Exchange, or Tadawul, to its list of recognised stock bourses, creating a short cut for secondary listings by the likes of Aramco, the world’s biggest oil company.

Other key Asian markets were mixed. Australia’s S&P/ASX 200 added 0.3 per cent and South Korea’s Kospi gained 0.1 per cent. The Nikkei 225 Index in Japan dropped 0.1 per cent.