
27 Mar Hong Kong stocks retreat as Alibaba’s scrapping of logistic unit IPO weighs on sentiment
The Hang Seng Index fell 0.7 per cent to 16,5094.67 as of 11.19am local time. The Hang Seng Tech Index dropped 1.8 per cent and the Shanghai Composite Index retreated 0.7 per cent.
Trading was light in the run-up to a two-day public holiday that starts on Friday, during which the city’s market will be shut to observe the Easter. Trading volumes on the Hong Kong market were about 30 per cent below the 30-day average for this time of the day, according to Bloomberg data.
Alibaba, which has an 8.3 per cent representation on the benchmark as the second-largest constituent, dropped 1.9 per cent to HK$69 after withdrawing the listings application for Cainiao. It instead unveiled plans to buy the remaining shares from the unit’s minority shareholders “to double down on its investment in Cainiao”, given the unit’s “strategic importance”.
“The company originally wanted to separately list Cainiao in the Hong Kong market to unlock value for Baba shareholders,” said Nomura analysts in a note. “However, management conceded that the challenging capital market made this plan very difficult to implement.”
BYD’s net income rose 18.7 per cent year-on-year in the October-to-December period, the slowest pace since the last quarter of 2021, according to Bloomberg data.
“Earnings may still languish through 2024 and an acceleration in growth may not materialise until 2025,” said Fu Jingtao, a strategist at Shenwan Hongyuan Group in Shanghai. “Aggregate demand will remain muted amid China’s transition to a new growth model.”
Other major Asian markets were broadly higher. Japan’s Nikkei 225 climbed 1 per cent and Australia’s S&P/ASX 200 added 0.3 per cent, while South Korea’s Kospi retreated less than 0.1 per cent.