Alibaba leads tech losses in Hong Kong on China GDP data while Macau casino stocks extend rally on concession boost

  • The benchmark index declines as a government report today shows China’s economy cooled further in the final quarter of 2021
  • Macau casino stocks add to their best day in six weeks on Friday as regulatory concerns over their concessions ease

Hong Kong stocks slipped as Alibaba Group Holding and JD.com led tech peers lower after a government report showed China’s economy cooled further last quarter. Macau casino operators extended a rally following a regulatory boost.

The Hang Seng Index fell 0.6 per cent to 24,240.11 at the local noon trading break, a second day of losses. The city’s Tech Index retreated 1 per cent while China’s Shanghai Composite Index climbed 0.6 per cent.

Alibaba, the owner of this newspaper, declined 0.6 per cent while JD.com retreated 1.1 per cent. Tencent Holdings lost 1.7 per cent as the WeChat operator looks to shrink its empire under a 2022 strategy.

China’s economy expanded 4 per cent in the fourth quarter last year, slowing from 4.9 per cent in the preceding three months, the statistics bureau said on Monday. That was stronger than the market consensus of 3.3 per cent among economists tracked by Bloomberg.

“While GDP figures were better than expected, the markets have already earlier discounted this development,” said Stanley Chan, research director at Emperor Capital. “Investors expect that China’s central bank will ease policy this quarter. With further easing, the Hang Seng Index could be strong again.”

Sands China soared 15.5 per cent and Galaxy Entertainment jumped 8.2 per cent, pacing a rally in gambling concessionaires. MGM China gained 12.1 per cent, while Melco International and SJM Holdings rose at least 5 per cent.

A China Exchanges Services index tracking casino stocks traded in Hong Kong surged 3.9 per cent on Friday, the most in six weeks. Macau proposed on Friday to allow six operators in the industry while shortening their concessions by half under the city’s biggest reform in two decades.

The amendment to the gambling law will next go to the legislature for approval. Five sessions were held to solicit public feedback on nine questions including the number of concessionaires, the duration of their licences, supervision of their businesses, criminal liability and non-gambling businesses.

Separately, home prices in China fell for the fourth consecutive month in December. Prices eased 0.28 per cent, slower than 0.33 per cent in November. Country Garden fell 7.4 per cent, while its property management services unit slumped 7.4 per cent.

Three firms started trading for the first time on the mainland. Dezhou United Petroleum Technology soared 73 per cent. Jiayuan Science and Technology jumped 71 per cent while Bank of Lanzhou surged 44 per cent.

Major Asian markets were mixed on Monday. South Korean stocks fell 1.3 per cent, while Japanese and Australian equities rose 0.8 and 0.4 per cent respectively.

Author: Cheryl Heng, SCMP

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