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Georgina Lee

Deb Price

Good day, traders --
After a tumultuous weekend which saw protests in Hong Kong turn more violent while Washington and Beijing ramped back up the trade war, stocks came under pressure today.
The Hang Seng Index clawed back big early losses to close 1.9 per cent lower, while the Shanghai Composite Index slid 1.2 per cent.
Catch up on all the day's highlights below.
-- Georgina Lee, Anthony Richardson and Deb Price in Hong Kong 


Stocks Blog: Hang Seng tanks over protests, trade war; China stocks also fall

It's looking like a wild day for traders. Photo: Shutterstock

Business

Markets

Hang Seng finishes 1.9 per cent lower after recovering some ground
The Shanghai Composite Index sheds 1.2 per cent, its biggest decline since August 6


Water cannon used for first time against Hong Kong protesters; trade war escalates.


Stocks

China stock market

Hong Kong Stock Exchange

Live

The protests have roiled Hong Kong markets. But Aman Bimal Selarka has sensed buying opportunities.
He jumped in to buy A-Living Services (3319 HK), a China property manager.
“When stocks such as real estate corporations fell due to the protests, my family and I were able to buy it at its lowest and hold until market returned to normal,” says the 20-year-old who is studying accounting and finance at Hong Kong University.
But he pulled the trigger too fast, selling because he feared it would fall more. It did but then it rose. So he profited some, but left big gains on the table.
Overall, Selarka says he has made a 9.2 per cent profit — HK$8,000 — from when he opened an account in February.
He likes companies with strong dividends, which add to any gains and help offset losses.
“Buying stocks that pay dividends can be highly rewarding, and a safe alternative over time as long as you make intelligent buying choices,” says Selarka, who uses money from part-time jobs to invest.
Selarka’s investment hero is Warren Buffett, and he has read the renowned American’s books for tips and inspiration. 
He shares one of his favourite Buffett quotes.
 "You're making a terrible mistake if you stay out of a game that you think is going to be very good over time because you think you can pick a better time to enter it. Rather than waiting for the perfect time, invest now,” said Buffett.

— Joy Pamnani 
Young Investors is a series appearing occasionally in the Stocks Blog in which young Hong Kong traders share what they’ve learned in their rookie days — the good, the bad and the ugly.
 


Young Investors: Bargain hunt, and don’t forget dividends, advises Aman Bimal Selarka

Hong Kong is the ultimate comeback town. But ongoing protests are rattling its stock market – and its investors.
“The fundamentals of Hong Kong companies are really dampened by the social movement,” said Alex Wong, director of asset management at Ample Capital. “Investors should take this opportunity to cut their holdings of Hong Kong equities and move into overseas or Chinese companies, listed either in the mainland or in Hong Kong.”
The Hang Seng Index is down 3 per cent since the first major march on June 9. After a huge run at the start of the year – the benchmark was up nearly 17 per cent on April 9 – it has given up nearly all of its year-to-date gains and is now ahead by a mere 1.3 per cent.
Of late, protests have been the biggest weight on Hong Kong’s stock market, a number of analysts said, and they erupted into clashes between police and anti-government demonstrators again on Sunday. But the US-China trade war is likely to smack stocks again as well Monday, after US president Donald Trump “hereby ordered” American businesses to abandon China in a tweet Friday and said he is raising tariffs further following Beijing’s warning it will raise tariffs on US$75 billion in US imports.
Read full story by stocks reporter Yujing Liu here. 


Protest-battered Hong Kong stocks leaves high-stakes choices for investors

Chinese banking stocks, already the cheapest among all sectors, may see their share prices beaten down more, as a new market-based way to price loans is set to take away a shield that protected their profit margins for decades.
As of this week, commercial lenders must link the loan prime rate to their funding costs from the money market. It is a move aimed to lower borrowing costs for companies and support economic growth.
But it comes at the cost of banks’ profits, as net interest margins – or the difference between the lending and deposit rates that make up a big chunk of earnings sources – are poised to narrow.
Chinese banks’ earnings will probably fall by as much as 4.5 per cent next year, Northeast Securities says, with the whole industry moving to charge clients more based on demand and supply.
Read full story here by stocks reporter Zhang Shidong.
 


China's cheapest stocks are valuation trap as banks lose margin protection

Fosun International (656 HK) and its subsidiary, Shanghai Fosun Pharmaceutical  (2196 HK) said Shanghai Henlius -- a unit to be spun off -- has applied to list on the main board of the Hong Kong stock exchange. 
Shanghai Henlius posted information about its business and financials on the stock exchange’s website on Sunday, but the listing is subject to the approval of the stock exchange. There is no guarantee the spin-off will go ahead, which will depend on market conditions and pricing, the two companies said in a joint stock exchange filing.
Bloomberg reported last year that Shanghai Henlius, whose biosimilar HLX01 received US new drug application approval in February, and which has 20 other biologic drug candidates, would seek to raise at least US$500 million from its Hong Kong share sale. The company has yet to say how much it will raise.
Fosun International closed 1.4 per cent higher on Friday at HK$9.65, while Shanghai Fosun Pharmaceutical closed 4.9 per cent higher at HK$23.7.
-- Enoch Yiu
 


Fosun biosimilar unit a step closer to Hong Kong IPO

Shenji Group Kunming Machine Tool Company (300 HK) will delist on Monday, after failing to submit any shares resumption proposal before a July 31 deadline. It becomes the first company to be delisted under a new rule introduced last year by the stock exchange. 
Twenty companies faced expulsion under the new rule if they failed to convinced regulators by July 31 that they had improved their businesses, or that problems that had led to their suspension in the first place had been resolved.
The exchange has delisted another seven companies, but they have filed an appeal and sought a review. These include National United Resources Holdings, Shenzhou Space Park Group, Mingyuan Medicare Development, Pacific Andes International, Hsin Chong Group Holdings, Fuguiniao, as well as Yorkshire Holdings.
The other 12 companies said they have submitted resumption plans and are awaiting the regulators’ decision.
Read related story here.
-- Enoch Yiu
 


Company to delist under new stock exchange rule

China Petroleum & Chemical, or Sinopec (386 HK), one of the country’s big three state-backed oil and gas producers and the world’s largest oil refiner, said on Sunday its net profit for the first half of this year dropped 24.7 per cent year on year to 31.34 billion yuan (US$4.41 billion). 
In a stock exchange filing, it said its basic earnings per share was 0.259 yuan, down 24.7 per cent year on year. Turnover rose 15.6 per cent year on year to 1.467 trillion yuan, which was mainly due to expansion of production volume. However, operating expenses grew faster, at 17 per cent, to 1.449 trillion yuan due to the increase in procurement cost of crude oil affected by the exchange rate.
Sinopec rose 0.65 per cent on Friday to close at HK$4.68. The oil giant will have a press conference on today.
– Enoch Yiu
 


 Sinopec posts 24.7 per cent drop in first-half profit

US Friday markets/ What futures foretell
-- Overnight in US markets, S&P 500 was down 2.6 per cent,  Nasdaq dropped 3 per cent, and the Dow Jones Industrial Average was down 2.4 per cent. 
-- Hong Kong futures are down 1.96 per cent, while the China A50 futures are down 2.34 per cent.
IPO debuts:
Xiamen Solex High-Tech Industries (603992 CH)
CGN Power (003816 CH)
Economic statistics/Central Bank action:
Hong Kong July exports, July imports, July trade balance
Corporate events: earnings
360 Security Tech (601360 CH)
Anta Sports (2020 HK)
Bank of Nanjing (601009 CH)
BOE Tech (200725 CH)
Merchants Shekou (001979 CH)
China Railway Signal (3969 HK)
China Resources Pharma (3320 HK)
Great Wall Motor (2333 HK)
Greenland Holdings (600606 CH)
Guosen Securities (002736 CH)
Logan Property (3380 HK)
Longfor Group (960 HK)
Muyuan Foodstuff (002714 CH)
Fosun Pharma (600196 CH)
Xinghuacun Fen Wine (600809 CH)
Shenzhou Int’l (2313 HK)
Tingyi (322 HK)
Century Huatong (002602 CH)
Zhejiang Zheneng Electric (600023 CH)
 


Morning guidance 

The Hang Seng tanked this morning, weighed down by protests in over the weekend in Hong Kong and the escalation of the US-China trade dispute.
The benchmark Index was down 3.3 per cent within minutes of the market opening, at 25,322, with declines pretty much spread across the board. The industrial and commerce sectors led the plunge, along with property companies.
Smart phone and microphone maker AAC Technologies (2018 HK) plunged 9.9 per cent to HK$33.3, making it the biggest loser in the Hang Seng Index. Sunny Optical (2383 HK) was down 6.5 per cent at HK$98.2. Geely Auto (0175 HK) dropped 6 per cent to HK$11.22.
Property firms also dropped, with China Resources Land (1109 HK) down 5.5 per cent at HK$31. Henderson Land (12 HK) fell 2.6 per cent to HK$36.8, and Swire Pacific (19 HK) slipped 2.6 per cent to HK$75.9.
In China, most indexes were also down. The CSI, which tracks blue chips listed in Shanghai and Shenzhen, dropped 1.4 per cent to 3,768.45 while the Shanghai Composite Index lost 1.4 per cent to 2,856.65.
Over the weekend, US president Donald Trump said the US would increase tariffs on almost all Chinese imports, raising duties to 30 per cent from 25 per cent on US$250 billion worth of Chinese imports on October 1. For another US$300 billion of Chinese goods, tariffs will increase to 15 per cent from 10 per cent, starting from September 1.
Hong Kong was once again mired in riots and protests that saw the city’s police force fire a live round for the first time to ward off demonstrators. The 12th straight weekend of protests sparked by the now–scrapped anti-extradition bill descended into unprecedented levels of violence across the city. It was the first time a water cannon was used by the police to try to disperse protesters, who vandalised and smashed windows of various street-side businesses.
-- Georgina Lee 


Hang Seng Index plunges more than 3 per cent at open

The sudden escalation of the trade war is the main driver of the Hang Seng's plunge today, says Alan Li of Atta Capital. “It’s nearly all on the trade war now,” Li said. “If China and the US don’t do anything to calm the market down, the HSI is likely to break 25,000 again early this week.” The Hang Seng is down 3.5 per cent at 25,254.
-- Deb Price


'Nearly all on the trade war now,' says portfolio manager Alan Li

Today's plunge in the Hang Seng Index was triggered by a big drop in the Chinese currency, says Alvin Cheung, associate director at Prudential Brokerage.

Offshore yuan fell as much as 0.86 per cent this morning to 7.1926 per dollar, the lowest in since it started trading in 2010, before bouncing back to 7.1661.

Cheung said the weakening of the yuan has re-stoked speculation in the market that it might drop further until it is on a par with the Hong Kong dollar, which is pegged to the greenback and today is trading at 7.8431.

“The market is speculating that Beijing would continue to use a weakening yuan as a weapon to counteract the US tariffs on China goods. The fact that Beijing has announced it was planning new tariffs on US$75 billion of US imports, including pork and soyabean seems to suggest that Beijing is not fearful of a more drawn-out fight against the US in the ongoing US China trade war,” said Cheung.

He said  he sees downside support for the Hang Seng Index at the 25,000 level.

In maninland China, major financials led the benchmark index down, with Ping An Insurance (601318 CH) falling 2.3 per cent to 2.08 yuan and China Merchant Bank (600036 CH) down 3.5 per cent at 35.01 yuan.
The Shanghai Composite Index was down 1.5 per cent, at 2,854.04. Cheung expects the index to hover at the 2,800 level this week.
-- Georgina Lee


Yuan at record low weighs on Hang Seng and China indexes, says Prudential Brokerage

The Hang Seng is recovering a bit after plunging by 3.5 per cent as of 10:15am to 25,256.72.

It was last trading down 2.71 per cent at 25,468.58.

Big drops like the 3.5 per cent this morning haven't happened since last October. On October 23, the Hang Seng dropped 3.08 per cent. On October 11, it fell 3.54 per cent.
 

-- Deb Price


Hang Seng recovering a bit from big morning losses

In Hong Kong, gold mining stocks were the only gainers as the broader market plunged. Zhaojin Mining (1818 HK) shot  up 7.2 per cent to HK$10.66, Hengxing Gold (2303 HK) rose 6 per cent to HK$5.6 and SD Gold (1787 HK) soared 6.6 per cent to HK$19.82.

The same trend was seen in mainland China, as Shandong Gold Mining (600547 CH) moved up 5.5 per cent to 38.38 yuan, and Zijin Mining (601899 CH) climbed 1.9 per cent to 3.7 yuan. The two were the top gainers in today’s Shanghai Composite Index, which was down 1.3 per cent at 2,860.52.

The strong performance came as the spot gold price surged 1.9 per cent to a high of US$1,530.22 on Friday, after China announced retailatory tariffs on US$75 billion of US goods. It rose further on Monday morning, trading at US$1,543.45, up 1.1 per cent.
-- Georgina Lee
 


Gold miners surge in Hong Kong, Shanghai, as investors seek safe havens

The Hang Seng may close below 24,540, its lowest point since last October, says Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
On October 30, 2018, the Hang Seng closed at 24,585.53.
Hong Kong's benchmark has been down by as much as 3.5 per cent in early trading. It has recovered some of the steep losses, and is down 2.88 per cent at 25,424.25 points.

The moves by Beijing and Washington to escalate the trade war beginning Friday are the main source of pain for the Hang Seng this morning, he said.
"The further downside of the HSI depends on the trade war, corporate earnings in Hong Kong and the domestic political issue," Wen said, referring to the three months of protests in the city.
-- Deb Price


Hang Seng could drop to October low under trade war pressure, says strategist Kenny Wen

Shanghai-listed Xiamen Solex High-Tech Industries (603992 CH) rose by the maximum permitted 44 per cent on its first day of trading, to 19.5 yuan. The offer price of the bathroom and kitchen products provider’s initial public offering was 13.54 yuan.

Shenzhen debutante, CGN Power (003816 CH), also hit the 44 per cent ceiling, surging to 3.59 yuan. The Shenzhen-headquarterd nuclear power operator, which also deals in wind and solar energy, priced its shares at 2.49 yuan during the initial public offering.
-- Georgina Lee


Debutantes Xiamen Solex, CGN Power both hit daily trading limit

Beijiing Orient Landscape & Enviroment said at the weekend that it sank to a net loss of 894 milllion yuan in the first half, compared with a profit of 664.3 million yuan a year ago. Total revenue also plunged by two thirds to 2.2 billion yuan, from 6.5 billion yuan a year ago.

The Shenzhen-listed company, which is engaged in sewage treatment services and industrial waste management, did not offer an analysis of its performance in its announcement to the Shenzhen stock exchange. But it showed a loss from investments of 170.3 million yuan, 26 times more than a year ago.

Beijing Orient's shares (002310 CH) dropped 2.5 per cent to 5.09 yuan.
-- Georgina Lee


Beijing Orient shares find themselves in the sewer after first-half loss

WH Group (288 HK), the world’s biggest pork producer, fell 7.2 per cent to HK$6.09, making it the biggest loser in the Hang Seng Index.

Its fall came after Beijing said on Friday it would raise tariffs to as much as 10 per cent on US$75 billion worth of American products, from 5 per cent. The added duties will apply to goods including include soybeans, beef and pork.
The latest  duties are in response to Washington’s plan to slap a 10 per cent tariff on another US$300 billion worth of Chinese imports.

Outside the blue chip index, COFCO Meat (1610 HK), which produces and distributes fresh pork and processed meat products, dropped 1.6 per cent to HK$2.49.
-- Georgina Lee
 


WH Group plummets as pork finds itself next in line for tariffs

UBS has moved to underweight in equities in its portfolios to reduce its exposure to “political uncertainty” as the trade war between the United States and China further escalated during a topsy-turvy weekend.

The Swiss bank said it removed its overweight rating for global equities versus high-grade bonds. It also initiated an underweight rating for emerging market stocks versus high-grade bonds.

“We still believe the US can avoid a recession in 2020, helped by additional Federal Reserve easing and strong consumer spending,” UBS chief investment officer Mark Haefele said in a report on Sunday. “We estimate the direct impact of all the additional tariffs will represent only a marginal drag on the US economy. But downside risks are increasing for both the global economy and markets."

The UBS report came on the same day that White House officials walked back comments by US President Donald Trump at the G7 Summit in France that he had “second thoughts” about his aggressive stance on China. The White House later said he only regretted not raising tariffs higher.
My Stock Market gains must be judged from the day after the Election, November 9, 2016, where the Market went up big after the win, and because of the win. Had my opponent won, CRASH!
— Donald J. Trump (@realDonaldTrump) August 25, 2019
-- Chad Bray
 


Swiss bank UBS loses faith in equities

The sector benefited once again from news the US-China trade dispute has intensified as Beijing and Washington raised tariffs on each other’s imports. The latest salvo was triggered on Friday when China said it would impose tariffs of as much as 10 per cent on US$75 billion worth of American products, up from 5 per cent.

JL Mag Rare-Earth (300748 CH) surged to the 10 per cent daily up-limit, at 70.91 yuan. Chengdu Galaxy Magnets (300127 CH) was up 5 per cent, at 24 yuan, China Minmetals Rare Earth (00831 CH) up 1.9 per cent at 14.72 yuan.

An index tracking 41 rare-earth related stocks in Shenzhen and Shanghai rose 1.13 per cent, as the CSI 300, fell 1.2 per cent to 3,776.3.
Rare earth minerals have become something of a barometer of the trade tensions, rising and falling in line with the intensity of the conflict.

China mined 70 per cent of the world’s rare earths last year but has a bigger share of their processing into useful materials. China supplied around 80 per cent of US imports of usable forms of the group of 17 metal elements.

As the trade war dragged on this year, Chinese officials hinted it could reduce supply to the US as a counter-weapon against Trump’s escalating tariffs on Chinese products.
-- Georgina Lee


Rare earth stocks buck market downtrend as US-China trade war intensifies

The Hang Seng is being pushed down by every sector except health care.

Energy and consumer staples stocks are down more than 4 per cent each. Real estate stocks are down 3.4 per cent.

Only Sino Biopharmaceutical (1177 HK) is up, out of the 50 stocks on the Hang Seng Index. The drugmaker is up 0.55 per cent to HK$10.84.

Pork processor WH Group (288 HK) continues to lead losses, falling 7.3 per cent to HK$6.08, as China moves to impose new tariffs on beef and pork.

Macau casino stocks have also fallen, with Sands China (1928 HK) the top loser in the sector. It has fallen 3.88 per cent to HK$34.65.

Among property stocks, China Resources Land (1109 HK) is the top intra-day loser, falling 3.96 per cent to HK$31.50.

-- Deb Price


Hang Seng continues to see broad falls among sectors

"We believe the US and China are operating with very different pain tolerances. China has invoked the Korean War and the Long March while President Trump tells the US electorate that trade wars are easy to win, tariffs are paid by China, and Christmas must be merry," Jefferies analysts write in a new note.

"We also expect President Trump to jawbone the US market higher in coming weeks with spillover effects for China. We continue to believe that all the drama is textbook 'Art of the Deal' negotiation style and that some sort of deal is more likely than not."

The analysts dismissed Trump's threat to invoke a little-known law to force American companies to leave China as a "meaningless threat."

-- Deb Price


Jefferies still expects trade deal, dismisses Trump's weekend tweetstorm

Today's losses in the Shanghai Composite and Shenzhen Component Indexes, at 1.2 per cent and 1.1 per cent after lunch, were much smaller than those in Hong Kong.

The Hang Seng China Enterprises Index, which tracks the performance of major H-shares, or Chinese companies trading in Hong Kong in the local currency, dropped 2.9 per cent to 9,900.1.

Despite the worsening US-China trade dispute affecting both the Hong Kong and China stock markets,  Alvin Cheung, associate director at Prudential Brokerage, said Chinese A shares are slightly better off because of the influx of foreign cash their inclusion is expected to bring.

“The declines in the A-share benchmarks are smaller than those in Hong Kong because inflow from foreign investors as part of index inclusion, such as that of FTSE, has helped offset some negative sentiments in China to an extent,” said Cheung.

FTSE has been including A shares in its Global Equity Index series since June, as part of a three-step implementation through to 2020. The next two steps are slated for September, and March 2020, by which time the Chinese A shares will represent 5.6 per cent of the FTSE Emerging Index.

JPMorgan analyst Zhang He expects the inclusion will draw US$7.9 billion from passive funds that must mirror such changes in FTSE indexes.
-- Georgina Lee
 


Inclusion of Chinese shares in FTSE indexes limits losses from US trade war, says Prudential

Well, it's not a great day to be a Hong Kong stock, but it doesn't help if you get downgraded.

AAC Technologies (2018 HK) was downgraded to hold from buy, with its 12-month price target lowered to HK$40 from HK$56.

This was after the manufacturer of miniaturized components used in smartphones and speakers reported on Friday that its first-half net profit had dropped 57 per cent year-on-year to 770 million yuan and revenue fell 10 per cent year-on-year to 7.57 billion yuan.

The stock is trading 6.6 per cent down at HK$34.50, and is on track to close at a 52-week low.

-- Deb Price


AAC Technologies downgraded to hold by Jefferies

While major stock benchmarks from Japan to South Korea dropped at least 1.6 per cent on Monday after Donald Trump declared he would further raise the tariffs on US$550 billion of Chinese goods, the Shanghai Composite Index slid by just 1.4 per cent. 

The reaction was pretty muted in comparison with previous occasions when the Trump administration has unveiled tariff measures against China. The Shanghai Composite tumbled 5.6 per cent on May 6 after the White House more than doubled tariffs on US$200 billion of Chinese imports and threatened more duties. The gauge slumped 3.8 per cent on June 19 last year after Washington first announced duties on the Chinese goods. 

“Chinese investors are getting used to the ongoing noise on the trade front,” said Gerry Alfonso, director of the international business department of Shenwan Hongyuan Group in Shanghai. “The equity market was clearly impacted but it has been such a long process that local investors are, at least to some degree, learning to live with that uncertainty with stocks already pricing in that risk.” 
Read the full story here.
-- Zhang Shidong 


Chinese investors are 'getting used' to trade war flashpoints

Meituan Dianping (3690 HK) rose 6.7 per cent to HK$74.7, a record high since its listing in September last year.

The online food delivery-to-ticketing platform saw its profit for the three months ending in June come in at 875.8 million yuan, compared to a net loss of 7.7 billion yuan a year ago. Total revenue rose more than half to 22.7 billion yuan.
Its food delivery business achieved the first positive operating profit, as the segment’s gross transaction volume rose by 36.5 per cent to 93.1 billion yuan from a year ago.

For the six-month period ended June, the Tencent-backed e-commerce platform said its net loss had contracted to 557.5 million yuan from 28.8 billion yuan a year ago. 
-- Georgina Lee


Food delivery firm Meituan Dianping hits record high after posting tasty Q2 profit

The CSI 300 index, which tracks stocks listed in both Shanghai and Shenzhen, finished the day 1.4 per cent lower, at 3,765.91. The Shanghai Composite Index lost 1.2 per cent, its biggest decline since August 6, to close at 2,863.57.

Leading the losses were financials and consumer stocks. Liquor distiller Kweichow Moutai (600519 CH) was down 2.4 per cent at 1,102.95 yuan; Wuliangye Yibin (000858 CH), another alcoholic drinks maker, lost 2.1 per cent to 127.42 yuan.
In Shanghai, leading the index down were China Merchant Bank (60036 CH), which lost 3.5 per cent to close at 35 yuan, and Ping An Insurance (601318 CH), down 2.7 per cent at 87.5 yuan.

Linus Yip, chief strategist at First Shanghai Securities, said the worsening US-China trade dispute, with both governments increasing the tariffs on each other's imports at the weekend, was weighing on market sentiment.
The onshore yuan fell 0.6 per cent in early trade to 7.15 per dollar, the weakest since February 2008.

“Export –focused companies might get a boost from increased competitiveness relative to other countries as the yuan weakens to the US dollar,” said Yip.

Bucking today's downward trend were gold-mining firms as investors switched money into safe-haven stocks. Shandong Gold Mining (600547 CH) rose 4.7 per cent to finish the day at 38.1 yuan, and Zhongjin Gold (600489 CH) rose 2.6 per cent to 9.83 yuan.
-- Georgina Lee


China benchmarks hit by yuan weakness, worsening US-China trade war

The benchmark Hang Seng Index closed 1.9 per cent lower at 25,680.33, having  fallen by more than 3 per cent earlier in the day.

“There are a lot of uncertainties that are weighing on the Hong Kong market," said Linus Yip, chief strategist at First Shanghai Securities.

The weakening Hong Kong economy, damaged by increasingly violent protests that started in June, means listed companies whose business is primarily focused on the city will continue to face pressure, he added.

Link Reit (823 HK) , which invests in Hong Kong-based retail properties, fell 2.4 per cent to HK$89.8. New World Development (17 HK) dropped 3 per cent at HK$9.84. 

Financial Secretary Paul Chan earlier this month warned that the city could fall into recession in the current quarter.

Driving the Hang Seng  down today were index heavyweights Tencent (700 HK), which fell 2.5 per cent to  HK$326 and insurer AIA (1299 HK), which tumbled 2.9 per cent at HK$75.5.

WH Group (288 HK), the world’s biggest pork producer, was the biggest loser, shedding 6.4 per cent to HK$6.14 after Beijing said on  Friday it would impose tariffs of as much as 10 per cent on US$75 billion worth of American products, including pork.
-- Georgina Lee
