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Hong Kong stocks slide on WuXi Biologics’ record 32 per cent crash after US puts 33 Chinese firms on red-flag list

  • WuXi Biologics slumped by as much as 32 per cent as firm was listed with 32 others in the so-called “unverified list” by the US
  • Alibaba extended decline amid speculation about insider selling after the e-commerce group’s plan to register new American depositary shares

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Bears are winning the day as stocks slide for a second day in Hong Kong on US red-flag list. Photo: Reuters
Cheryl Heng
Hong Kong stocks retreated for a second day, hammered by renewed US-China tensions after the Biden administration raised red flags on “unverified” Chinese technology companies, placing them under tighter export restrictions.
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The Hang Seng Index slid 1 per cent to 24,329.49 at the close of Tuesday trading. The city’s Tech Index lost 1.7 per cent, while China’s Shanghai Composite Index gained 0.7 per cent.

WuXi Biologics tanked by as much as 32 per cent in Hong Kong, before settling 23 per cent lower when trading was halted for an announcement. Wuxi Apptec, a biotech contracting firm controlled by the founders of WuXi Biologics, slumped 11.4 per cent although it was not on the red-flag list. They lost a combined US$10.6 billion in market value.

WuXi Biologics was named with 32 others in the US Department of Commerce’s so-called “unverified list.” The stock commands 2.6 per cent weight in the city’s benchmark index.

“It may not be worthwhile to hold onto WuXi Biologics as no one can be sure of further action from the US government,” said George Au, an analyst at Phillip Securities. The US move is unlikely to affect the recovery of Hang Seng Index, which has gained 4 per cent so far this year, he added.

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The Chinese firms were added on the basis that the Bureau of Industry and Security was unable to verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the US government’s control.
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