Going forward, researchers see a challenging outlook for the Hong Kong retail sector as it faces the risk of being dragged down by further weakening in China’s economy and the depreciating yuan.
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Chinese developers have been taking on debt to expand as the government turned to areas such as property investment to shore up slowing economic growth. A report by Fitch last week warned that a China “hard-landing” would hit Hong Kong the hardest, alongside South Korea and Japan. Bank of China rose 2.9 percent, Industrial and Commercial Bank of China Ltd 2.4 percent, and BOC Hong Kong Holdings Ltd 2.1 percent.
China Reinsurance was jointly set up in 2007 by the State Council, Ministry of Finance, and China Insurance Regulatory Commission.
Hong Kong stocks ended lower on Tuesday with the benchmark Hang Seng index falling 0.1 percent, or 22.88 points, to 21,831.62. Evergrande spent HK$5.47 billion buying back 1.15 billion shares in July. Although most of the group’s business is based in China, a listing in Hong Kong will allow it to attract Asian investors outside the mainland, a person familiar with the deal said. If considering its perpetual notes as debt, the company’s net leverage was 291.8 per cent at the end of June. Since the opening of the Shanghai-Hong Kong Stock Connect past year, in theory, the fortunes of Hong Kong and China’s stock markets are more closely linked than ever before. But if institutional investors start using the limited powers at their disposal, big Chinese companies will no longer be able to take the support of foreign shareholders for granted.
The investor known as “Superman”, Asia’s richest man Li Ka-shing, normally lets adverse comment wash over him, but last week the 87-year-old Hong Kong tycoon responded to heavy criticism that he is abandoning mainland China.
“H shares are being driven by oil stocks as oil prices surged last night”, said Daniel So, a strategist at CMB global Securities Ltd. “Over the next week, H shares will stay strong ahead of the fifth plenary session of the Communist Party of China”.
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Developers have stepped up incentives to buyers, a September Deutsche Bank report noted, adding that secondary transactions were seeing lower average selling prices, sometimes at below-market levels.
