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Hong Kong stock market
BusinessMoney

Alibaba, Meituan, Tencent sink Hong Kong stocks on regulatory pressure while China sticks to zero-Covid, slow-drip stimulus

  • Alibaba suffered from speculation over its ties with Ant Group after the recent departure of key fintech executives from partnership
  • The Politburo meeting on Thursday pledged to stay the course on zero-Covid strategy, offered no big stimulus to revive faltering growth momentum

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Hong Kong’s stock benchmark enters a technical correction mode after sliding more than 10 per cent from June’s peak. Photo: Shutterstock
Cheryl Heng
Hong Kong stocks fell to its lowest in nine weeks as Alibaba Group Holding to Meituan paced losses amid renewed regulatory concerns. China’s top leaders offered a relatively limited new stimulus, while pledging to stick to its zer0-Covid strategy.
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The Hang Seng Index slumped 2.3 per cent to 20,156.51 at the close of Friday trading, bringing its losses this month to 7.8 per cent. It is the worst monthly performance in 12 months and also more than 10 per cent from the peak in June, sending the market into a technical correction. The Tech Index sank 4.9 per cent, while the Shanghai Composite Index lost 0.9 per cent.

Alibaba tumbled 6.1 per cent to HK$93.10 while Meituan weakened 6.2 per cent to HK$176.30. Tencent Holdings lost 4.4 per cent to HK$306.80 and NetEase declined 4.2 per cent to HK$144.70. Other notable losers included Budweiser and Longfor Group, each sliding more than 5 per cent.

Members of the Hang Seng Index have lost US$428 billion in market capitalisation in this round of technical correction, according to Bloomberg data. The 69 index members had recouped US$798 billion in value between the low in March and the peak in June.

Alibaba suffered following the departure of Ant Group executives from the Alibaba partnership, and amid speculation surrounding the ongoing restructuring of the fintech giant’s financial structure. Meituan and others were separately summoned by regulators in Hangzhou over practices in food-delivery platforms.
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“The peak [for regulations] has passed, but it doesn’t mean that we’re totally out of the woods,” Ramiz Chelat, portfolio manager at Zurich-based Vontobel Asset Management, said in an interview. “The market still has a fair bit of scepticism, because of weak growth we saw in the second quarter, as well as the incrementally weaker data points we’re seeing on the property market.”

04:23

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