23 August 2019

Tech and mobile gaming plays lead HK stocks lower

Hong Kong stocks finished mostly weaker on Thursday, with technology and mobile gaming firms coming under pressure after a disappointing debut of London-based game developer King Digital Entertainment on Wall Street overnight.

The benchmark Hang Seng Index ended 53 points or 0.24 percent lower at 21,834 after a see-saw trading session. The Hang Seng China Enterprises Index, the main gauge for H shares, managed to eke a 0.24 percent gain to close at 9,873 points.

On the mainland, the Shanghai Composite Index dropped 0.83 percent to close at 2,046 points.

Tencent Holdings (00700.HK) led the losses among tech blue chips in Hong Kong, as the internet giant slumped 5.9 percent following the King Digital debacle. 

King Digital, the developer of the popular ‘Candy Crush’ mobile game, slipped nearly 16 percent below its initial public offering price on its first trading day on the New York Stock Exchange, souring investor sentiment and prompting concerns over the valuations in the sector.

With Thursday’s losses, Tencent has come off 19.2 percent from its peak seen earlier this month.

Among game developers, IGG Inc (08002.HK) closed 14.3 percent lower for the day, making it the worst performer in the segment. Sinosoft Technology (01297.HK) slid 13.8 percent, Boyaa Interactive International (00434.HK) lost 9.7 percent, and Forgame Holdings (00484.HK) gave up 8.1 percent.

Larger software players did not fare much better. Kingsoft (03888.HK) fell 6.4 percent and Kingdee International Software (00268.HK) closed over 10 percent lower.

Elsewhere, Bank of China (03988.HK) slid 6.2 percent after its 2013 financial report. Although the annual results were in line with estimates, investors were not happy about the lender’s decision to slash its final dividend by 32.9 percent. 

Macau casino operators also saw heavy selling pressure during the day. Galaxy Entertainment (00027.HK) plunged 5.4 percent, while Sands China (01928.HK), MGM China (02282.HK) and SJM Holdings (00880.HK) suffered losses in the 3.6-4.2 percent range.

Conglomerate CITIC Pacific (00267.HK) surged as much as 30 percent before closing 12.9 percent higher, making it the best performing blue chip. The company announced after market hours Wednesday that it will acquire all the existing shares of its parent company CITIC Group to pave way for the latter’s listing in Hong Kong.

– Contact the writer at [email protected]



EJI Weekly Newsletter

Please click here to unsubscribe