Hong Kong Stock Benchmark Closes Down 2.2%; Hopson Said Buying Evergrande Unit, Alibaba Drops
Hong Kong’s benchmark stock index closed at its lowest level in nearly a year after trading in financially strapped China Evergrande Group was suspended. Technology stocks fell, led by Alibaba Group, whose shares slumped to their lowest price since they began trading in Hong Kong in 2019.
The Hang Seng Index lost 534.27 points or 2.2% to 24,036.37, its lowest close since 23,980.65 on Oct. 6 last year.
China Evergrande Group, the world’s most indebted real estate developer, and Evergrande Property Services, its property management arm, halted trading in their shares this morning. China Evergrande said the halt was connected to a possible major transaction, and Evergrande Property said it was tied to a possible general offer for its shares. Reports said Chinese developer Hopson Development, whose shares were also halted, would buy a 51% for $5 billion, according to Reuters.
Hopson is controlled by billionaire Chu Mang Yee. Chu is worth $7 billion on the Forbes Real-Time Billionaires List today. His 32-year-old daughter Chu Kut Yung is the company chairman.
Alibaba Group, the day’s most actively traded share by turnover, lost 3.7% to close at HK$137, its lowest close since its secondary listing at HK$176 a share at the Hong Kong Stock Exchange in 2019; its U.S.-traded shares closed at $144 on Friday, their worst close since 2019. Alibaba Healthcare, a healthcare unit, dropped 4.6% to HK$10.68, and Alibaba Pictures, an entertainment business, fell 3.4% to HK$0.85.
Shares in Fosun Pharmaceutical, controlled by billionaire Guo Guangchang, plunged by 19% after Merck last week disclosed positive results from a tablet-form treatment for Covid-19. Fosun Pharma is a China partner of Covid-19 vaccine maker BioNTech.
All of the top five shares traded fell today. Tencent slid 0.9%, Meituan dropped 4%, Wuxi Biologics lost 8.6%, and AIA fell 1.9%.
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