Market Wrap: Hong Kong stocks fall as mainland market tumbles to 41-month low
Hong Kong stocks went into retreat on Monday, dragged down by mainland banks and insurers, as the onshore market slumped to a three year low, triggering a selloff of stocks that are dual listed onshore and offshore.ll to a three year low, triggering a selloff of stocks that are dual listed onshore and offshore.
Hong Kong stocks went into retreat on Monday, dragged down by mainland banks and insurers, as the onshore market slumped to a 41-month low, triggering a selloff of stocks that are dual listed onshore and offshore.
Investors in Hong Kong rushed to reduce their positions, or just turned their noses up at sectors like mainland banks and insurers, private-owned small and medium-sized players, as well as property developers, according to Paul Pong, Managing Director at Pegasus Fund Managers, which oversees more than HK$25 billion in assets.
“Last week we sold 50 per cent of our holdings of stocks of the Hang Seng China Enterprises Index. And we may continue to cut our position on the sectors mentioned above.” Pong told SCMP.com.
The benchmark Hang Seng Index (HSI) lost 0.41 per cent to 19,798.67 on Monday. The Hang Seng China Enterprises Index, which tracks the performance of Hong Kong-listed China enterprises, closed down 1.35 per cent to 9,544.62.
The market barely reacted to Chinese Premier Wen Jiabao’s remarks over the weekend. China's Wen said during a trip to Guangzhou on Friday that the nation should pay "close attention" to the difficulties facing the export sector and the uncertainty over whether exports would meet a full-year growth target.
“Those pro-growth speeches by Chinese leaders are a bit of a cliché and are losing their impact. The market, both in Hong Kong and the mainland, want actions not rhetoric,” Wang Aochao, a Shanghai-based equity strategist at UOB Kay Hian Holdings, told SCMP.com.
“We are waiting for key indicators to rebound, including the PMI, PPI and M2. The mainland market will only bottom out when we see at least these three indicators showing an improvement,” UOB’s Wang said.