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HSBC, AIA pace Hong Kong stock sell-off as markets fear losses in Credit Suisse deal while China Huarong flags losses

  • The forced merger between UBS and Credit Suisse will impose losses on some investors in one of the latter’s riskiest capital instruments
  • China Huarong flagged a US$4 billion loss in 2022 amid erosion in value of assets and smaller income from managing distressed assets

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A forced merger between UBS and Credit Suisse stokes concerns about losses imposed on investors. Photo: Reuters
Jiaxing Li
Hong Kong stocks tumbled to more than a three-month low amid concerns about widening global financial crisis following losses imposed on investors in the forced merger between UBS and Credit Suisse. China Huarong Asset Management slumped after a profit warning.
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The Hang Seng Index lost 2.7 per cent to 19,000.71 at the closing of Monday trading, the lowest since December 7. The Tech Index slipped 2.8 per cent, while the Shanghai Composite Index dropped 0.5 per cent.

HSBC sank 6.1 per cent to HK$50.50 and Bank of China (Hong Kong) fell 2.8 per cent to HK$24.65 while AIA Group slid 4.2 per cent to HK$75.65. Alibaba Group weakened 2.8 per cent to HK$79.20 while Tencent declined 1.4 per cent to HK$334.60.

Sunny Optical dropped 3.4 per cent to HK$86.95 and WuXi Biologic crashed 5.9 per cent to HK$45.15 as both prepare to release their earnings this week.

“There remains the risk of elevated volatility, at least in the very near term” while authorities will do whatever it takes to contain the contagion in the financial sector, analyst at Nomura said on Monday.

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