Hong Kong shares closed at a 14-month low on Monday, dragged by tech giants that tracked losses on Wall Street, while China Evergrande Group hit a record low after saying it could not guarantee enough funds for repaying debts.
The Hang Seng index ended 1.8 per cent lower at 23,349.38, while the China Enterprises Index lost 2.1 per cent, at 8,274.77.
The Hang Seng Tech Index plunged 3.3 per cent, extending losses on a Wall Street slide after ride-hailing giant Didi Global Inc decided to delist from the New York Stock Exchange.
The U.S. Securities and Exchange Commission said last week Chinese companies listing on US stock exchanges must disclose whether they are owned or controlled by a government entity, and provide evidence of their auditing inspections.
Nomura analysts said these amendments may reduce capital inflow into China’s tech and internet sectors.
Alibaba Group fell 5.6 per cent to a record low after it said it will reorganise its international and domestic e-commerce businesses and would appoint a new chief financial officer.
China’s Guangdong province summoned last week the chairman of Evergrande after the developer said there was “no guarantee” it would have enough funds to meet debt repayments.
Shares of Evergrande slumped nearly 20 per cent.
Chinese authorities said Evergrande’s problem was mainly caused by its own mismanagement and break-neck expansion, and its issue would not affect the industry’s normal operations.
“Evergrande’s disclosures and the ensuing government statements were well coordinated, pointing to formal beginning of Evergrande’s debt restructuring,” Nomura said in a note.
“The confident tone of regulators was aimed to calm markets, but might also deliver the message that Beijing will keep most of its property curbs in place for a longer while.” Healthcare and consumer discretionary shares tumbled 5.8 per cent and 4.1 per cent, respectively.
