Alibaba, Tencent sink Chinese tech stocks in Hong Kong to record lows on renewed regulatory pressures while HSBC slips before earnings

  • Renewed concerns about regulatory tightening infect Chinese tech stocks in Hong Kong, sending the market barometer to record low
  • More than US$110 billion has been erased from the 30-member Tech Index over three days since China ordered Meituan and rivals to slash food-delivery fees

Hong Kong stocks slumped by the most in five months on mounting concerns amid speculation Chinese technology companies are facing another round of regulatory restrictions. HSBC slid before posting earnings that missed expectations.

The Hang Seng Index sank 3 per cent to 23,456.63 at the local noon trading break. The Tech Index retreated 3 per cent to an all-time low as losses snowballed to about 8 per cent over three days. The Shanghai Composite Index dropped 1.4 per cent. Contemporary Amperex lost 2.5 per cent in Shenzhen.

Alibaba Group Holding, the owner of this newspaper, tumbled by as much as 5.3 per cent in the biggest pullback in two weeks, before pausing at 3.9 per cent loss. Chinese authorities are said to have asked state-owned firms and lenders to review their exposure to its 33 per cent-owned Ant Group.

“As China sorts out [those with exposure to Ant Group], it has put a bit of fear back in the market,” said Louis Tse Ming-kwong, managing director of Wealthy Securities. “Stringent policy will continue” to be in place, he added.

Tencent slipped 2 per cent, adding to a 5.2 per cent plunge on Monday, even as the WeChat operator rejected reports it was facing a crackdown. China has not approved new online games for seven months. Meituan plunged 6 per cent and dropped 4.1 per cent.

More than US$110 billion of market value has been erased from the 30 Hang Seng Tech Index members since Friday, when the Chinese government ordered Meituan and other food-delivery platform operators to slash fees to help businesses ride out the Covid-19 crisis. About US$1.5 trillion was lost to crackdowns in the Chinese tech sector in 2021.

HSBC dropped 2.4 per cent before its earnings report at noon. The London-based lender, which derives most of its profits in emerging markets, said while earnings tripled last quarter, full-year results trailed market consensus. Alibaba will report on February 24.

Separately, geopolitical tensions escalated as Russia ordered troops into two breakaway regions in eastern Ukraine on Monday, pushing crude oil futures to a seven-year high on supply risks. PetroChina rose 0.5 per cent and CNOOC added 0.6 per cent.

Major Asian markets fell. Japanese shares dropped 2.3 per cent and Korean equities lost 1.8 per cent. The Australian benchmark slipped 1.3 per cent.

Two firms kicked off their trading debuts on Tuesday. Jinhui Mining Company soared 44 per cent, while Jiangsu New Technology surged 160 per cent.

Author: Cheryl Heng, SCMP

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