Press Releases in Hong Kong

HK stocks slump on property sector concerns

A woman walks past a bank's electronic board showing the Hong Kong share index at the Hong Kong Stock Exchange in Hong Kong on Sept 20, 2021. (VINCENT YU / AP)

Hong Kong stocks plunged on Monday to their lowest level in about a year, with several real estate giants leading the fall, but some experts still estimate a positive performance in the long term.

The situation of the Evergrande Group, which is facing debt-related difficulties, intensified concerns about the property sector, while worries about the Chinese technology sector under tightened regulations spread through the market.

The Hang Seng Index slumped 3.3 percent to 24,099 at the close after hitting an intraday low of 23,871, its lowest level since early October 2020

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The Hong Kong stock market extended its losses from the previous week, as the Hang Seng Index slumped 3.3 percent to 24,099 at the close after hitting an intraday low of 23,871, its lowest level since early October 2020. The tech index also fell around 3 percent to 6,271 at close.

The Hang Seng Property sub-index tumbled 6.69 percent as Henderson Land, Sun Hung Kai Properties, and New World Development each lost more than 10 percent, leading the fall.

Recently, Evergrande has had problems with its debt restructuring as its interest payment on several bonds and bank loans is due this week, and this uncertainty has spooked the market.

READ MORE: China Evergrande warns falling sales could worsen cash flow

“There is also speculation that the Hong Kong property policies might change and thereby lead to an increase of the supply of local properties,” said Castor Pang, head of research at Core Pacific — Yamaichi International (H.K.) Ltd.

He added that worries that the US Federal Reserve might raise interest rates, and the close of the mainland market for the Mid-Autumn Festival also adversely affected the market.

Pang said the Hong Kong stock market might not rebound in the near term if the property sector shows no sign of improvement.

However, on Sunday, a research report released by China International Capital Corp forecast a positive performance for the Hong Kong stock market in the long term as it sees the current fluctuation as being due to overly pessimistic market sentiment.

In the report, CICC said that the factors for Hong Kong market’s recent negative performance were various. Estimates for slow economy growth spur concerns, while new regulations aimed at some Chinese technology companies have also put pressure on the market.

aoyulu@chinadailyhk.com