20 January 2019

HSI under pressure as Beijing defrosts IPO market

The Hong Kong benchmark index was dragged down for a second day by the prospect of a resumption in mainland listings this month. The Hang Seng Index fell 133 points, or 0.58 percent, Monday to 22,684 points after plunging more than 500 points in the previous trading session.

The Hang Seng China Enterprises Index, the main gauge for H shares, gave up 1.4 percent to end at 10,436; the Shanghai Composite Index ended 1.8 percent lower at 2,045 points.

Four blue chips — Hang Lung Properties (00101.HK), New World Development (00017.HK), Wharf Holdings (00004.HK) and Belle International (01880.HK) — hit 52-week lows while Galaxy Entertainment (00027.HK) continued its winning streak, gaining 1.2 percent to reach a new high.

Mainland lenders fell amid reports that Beijing will soon move to regulate the shadow banking system, a decision that would have a huge impact on the banking system. Most of the banks shed 1-2 percent during the session.

Mainland property developers also came under selling pressure, with reports that some banks will tighten up on first-home mortgages to deflate housing prices. China Resources Land (01109.HK), Country Garden Holdings (02007.HK) and Evergrande Real Estate Group (03333.HK) fell over 1 percent. Longfor Properties (00960.HK) ended 4.9 percent lower for the day.

But investors were enthusiastic about the software and mobile game sectors. Tencent (00700.HK) rose 0.3 percent and Kingsoft Corp. (03888.HK) climbed 4.4 percent. VODone (00082.HK) and NetDragon Websoft (00777.HK) both surged over 14 percent, while mobile game developers Forgame Holdings (00484.HK) added on 6 percent and Boyaa Interactive International (00434.HK) 8.1 percent.

Meanwhile, Wing Hang Bank (00302.HK) suspended its shares from trading and said it will make an announcement on a takeover. The counter dropped as much as 6.1 percent during the session but narrowed the loss to 1.4 percent before the trading halt.

– Contact the writer at [email protected]


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