Slump in Macau Casino Shares Adds to Hong Kong Stocks’ Many Woes
Hong Kong Stocks Slide for Third Day as Property, Casinos Lower
(Bloomberg) -- A slump in Macau casino operators dealt a fresh blow Tuesday to Hong Kong’s stocks, which are already reeling from the property sector’s debt problems and a prolonged selloff in tech giants amid Beijing’s crackdown.
The benchmark Hang Seng Index slid for a third day, ending 1.3% lower, as reopening trades in Hong Kong and on the mainland took a hit after China reported its first case of the omicron coronavirus variant. A gauge of Macau casinos plunged 6.1%, with Sands China Ltd. being the second-biggest loser on the HSI gauge.
Recent declines have widened Hong Kong underperformance to China’s onshore stocks, which in recent days have been boosted by signals Beijing’s policies may become more pro-growth next year. The benchmark CSI 300 Index fell just 0.7% on Tuesday and is up 3.3% over the past month. The HSI has lost almost 7% in this time and remains the world’s biggest loser this year among national gauges tracked by Bloomberg.
Property shares continued to be a drag on Hong Kong’s market amid troubles at Shimao Group Holdings Ltd., with a Bloomberg gauge of Chinese developers falling more than 4%. Shimao plummeted by a record 20% after a deal between its units heightened governance concerns in an industry already grappling with a liquidity squeeze. Country Garden Services Holdings Co. lost 10%, the most on the HSI.
Tech stocks also suffered. The Hang Seng Tech Index slipped 2.3%, tracking a global selloff in the sector on concern hefty valuations may be threatened by the likely tightening of monetary policy. Tech was among the worst-performing industry groups in Asia on Tuesday.
“Ahead of the FOMC meeting, markets are leaning toward paring back on some risks,” said Jun Rong Yeap, a strategist at IG Asia Pte. “For China tech stocks, it is a general confluence of risk factors, from the tech risk-off sentiments in external markets and the renewed virus uncertainty.”
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| Even Easing Can’t Save Hong Kong Stocks: What to Watch in China |
| China Reopening Stocks Drop Amid Report of First Omicron Case |
| World’s Biggest Rout Can’t Make China Titans a Buy: Tech Watch |
| World’s Money Guardians Fret Central Banks May Ruin Stocks Party |
While the HSI is down 13% in 2021, the story isn’t too different in primary markets. Hong Kong’s newly-listed companies are set to become Asia’s worst performers this year amid China’s crackdown on various sectors.
Shares of firms that listed in the financial hub after initial public offerings of at least $100 million each are down almost 20% on average from their respective issue prices, Bloomberg data show. It compares with gains of 40% in South Korea, 32% in India and 86% in mainland China, where new stocks often climb due to a system for IPO approvals that puts limits on valuations.
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