Hong Kong stocks fall after Trump’s warning to North Korea, mainland Chinese shares flat

Wanda Hotel Development says trading suspended because of a ‘possible asset restructuring’

PUBLISHED : Wednesday, 09 August, 2017, 9:09am
UPDATED : Wednesday, 09 August, 2017, 10:06pm

Hong Kong stocks fell on Wednesday after US President Donald Trump warned North Korea that any threat to the US would be met with “fire and fury”, while mainland China’s stock index stayed flat despite investors piling into alcohol and steel shares.

The Hang Seng Index fell 0.4 per cent, or 99 points, to 27,756, while the Hang Seng China Enterprises Index lost 1.1 per cent, or 126.2 points, to 10,953.6 at the close.

Hong Kong-listed Wanda Hotel Development Company, a unit of Wanda Group, announced a trading halt at 9am, explaining later it was due to a possible asset restructuring that involved a person connected to the company. The firm on Tuesday denied media reports that it was in talks to sell two Australian projects under development and said they were “progressing well”.

[Wanda] group has to tidy up its debt problem first as it has such a high gearing ratio already
Louis Tse Ming-kwong, director, VC Brokerage

Wanda Hotel may be looking to bring in outside money to fund its projects, or be considering a disposal of some of its overseas assets amid the Chinese government’s restrictions on Wanda Group’s outbound investments, according to Louis Tse Ming-kwong, director at VC Brokerage.

“The group has to tidy up its debt problem first as it has such a high gearing ratio already,” he said.

Wharf saw its shares surge more than 13 per cent in afternoon trading to HK$79.7 after the company reported better than expected interim results for the first half of 2017.

Henderson Land jumped 2.6 per cent to HK$47.7 as the market anticipated the real estate developer would under a restructure.

Mengniu Dairy rebounded from earlier losses and added 2.2 per cent to HK$15.5 at the close.

Insurer AIA led losses on the bourse, down 2 per cent to HK$60.3, while Bank of China shed 1.8 per cent to HK$3.9.

Wharf shares jump to record as Hong Kong property spin-off plan revealed

On the mainland, the Shanghai Composite Index lost 0.2 per cent to 3,275, while the Nasdaq-style ChiNext gauge added 0.04 per cent to 1,763.

Hit by news of the Sichuan earthquake that killed at least 13 people, infrastructure companies in the province largely saw their shares move down during the session, while investors were piling into coal and alcohol companies.

Shares in the brokerage and banking sectors led the losses on Wednesday.

President Trump’s alarming comments aimed at North Korea followed a report in the Washington Post, citing a defence intelligence agency analysis, saying that Pyongyang has developed a miniaturised nuclear warhead.

In US markets, the Dow Jones Industrial Average shed 0.2 per cent to 22,085.3 on Tuesday, ending its nine-day consecutive record high winning streak.