21 March 2019

Mainland liquidity fears weigh on HSI

The Hang Seng Index was dragged down Friday by fears of a mainland cash crunch. Hong Kong’s benchmark index gave up 76 points, or 0.34 percent, to end at 22,812 for the day. The index has fallen for three weeks and shed 433 points, or 1.86 percent, in the past five trading sessions.

China’s seven-day repo rate, the gauge of funding availability in the banking system, climbed to a six-month high Friday despite central bank attempts to calm a market worried that a liquidity crunch is looming again after six months. The rate rose to 8.1277 percent on Friday morning, its highest level since June 21.

China’s A-share market dropped for a ninth day in a row, with the Shanghai Composite Index falling more than 2 percent to 2,084 points, its lowest point since April. The Hang Seng China Enterprises Index, the main gauge for H shares, slipped 1.39 percent to 10,628 points.

Some H-share players took a tumble Friday afternoon. China Longyuan Power Group (00916.HK), Ping An Insurance Group (02318.HK), Great Wall Motors (02333.HK), PICC Property & Casualty (02328.HK) and Zijin Mining Group (02899.HK) all shed in the range of 3 percent to 4.6 percent.

But the telecom sector performed much better. HKT (06823.HK), a subsidiary of PCCW Ltd. (00008.HK), announced Friday its US$2.4 billion plan to buy back CSLNW from Australia’s Telstra and New World Development (00017.HK) more than a decade after it sold the company. The acquirer jumped 12 percent for the day. Rival SmarTone (00315.HK) ended 18 percent higher and Hutchison Telecommunications (00215.HK) was up nearly 11 percent.

– Contact the writer at [email protected]



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