Hong Kong stocks slip ahead of key data release; Lenovo slumps on convertible bond sale
- Chinese personal-computer maker Lenovo Group tumbles amid earnings dilution concerns after sale of US$2 billion convertible bonds
- Investors are now assessing if China’s recent proposals to shore up the property market will revive home sales and stabilise growth
The Hang Seng Index slumped 1.8 per cent to 18,477.01 at close, its steepest decline since May 21. The Hang Seng Tech Index slid 2.3 per cent, while the Shanghai Composite Index added 0.1 per cent.
Investors are weighing China’s recent measures to shore up the property market and assessing their likely impact on home sales and growth. Guangzhou and Shenzhen joined Shanghai in easing curbs on home purchases on Tuesday, becoming the latest first-tier cities to join nationwide rescue efforts for the troubled industry. A Bloomberg gauge of Chinese property stocks trading in Hong Kong has surged 35 per cent over the past four months.
Sentiment was also dealt a blow after the onshore yuan fell to 7.2487 against the US dollar, its lowest since November, as China’s central allowed a weak daily fix in a bid to boost exports.
“The next catalyst would probably come from a stabilisation in fundamentals and the key is to monitor when an inflection point of home sales will come out,” said Wang Yi, an analyst at Great Wall Securities. “While earnings growth is still relatively low, the strategy of overweighting dividend assets still works.”
