Hong Kong stocks slip to near 2-week low as banks, BYD tumble before China data underlining weak recovery, stimulus impact
- Government reports this week are expected to show more signs of China’s slowdown, inadequate stimulus power
- Chinese banks slipped on concerns about asset quality, while BYD tumbled after cutting prices on some older EV models
The Hang Seng Index lost 0.2 per cent to 17,525.06 on Monday trading to reach the lowest since November 17. The Tech Index gained 0.2 per cent to overturn a drop of as much as 1.3 per cent, while the Shanghai Composite Index declined 0.3 per cent.
New World Development slumped 5.5 per cent to HK$12.46, the lowest level since 2003, while BYD slid 3.7 per cent to a three-month low of HK$220. The EV maker slashed prices on some older models by up to 10,000 yuan in a promotion campaign.
The Hang Seng Index is looking to chart its first monthly advance since July, aided by China’s efforts to restore economic growth. The benchmark has risen 2.4 per cent this month, having lost a cumulative 15 per cent in the preceding three months. Beijing will need to do more, Goldman Sachs said, to rejuvenate activity.
Lenders came under pressure amid concerns their loan-book quality will suffer after reports saying Beijing will ask them to write more loans without collateral to help ease liquidity crunches faced by home builders, and to help stem a multi-year industry slump.
It will be difficult for developers to provide corresponding assets as collateral for now, but “offering unsecured loans also imposes significant risks for the banks involved,” according to Wang Yifeng, chief banking analyst at Everbright Securities said in a report.