Hong Kong stock losses – U.S. sanctions on Chinese firms – Stocks in Hong Kong have fallen for the fourth day in a row. Recent developments have led to the collapse amid concerns that the U.S. is extending sanctions on Chinese companies for blocklisting biotech companies. The Hang Seng Index fell 0.9 percent to 23,420.76 at the close of trading on Wednesday. This changed the previous profit to 0.5 percent. The technical index fell 1.6 percent. China’s Shanghai Composite Index fell 0.4 percent.
WuXi Biologics traded at $79.10, down 19.2 percent. It is worth noting that this is the most significant one-day drop. Sino Biopharmaceutical decreased by 5 percent. Innovent Bio lost 9.9 percent. Tencent and Meituan lost 0.9 and 1.8 percent, respectively. This, in turn, increased the speed of technical losses. After F.T. said the Treasury Department would impose sanctions on eight tech and cloud companies, the profits were swallowed up. The Commerce Department will also add more than two dozen separately, including unnamed biotech companies.
In addition to other firms believed to be complicit in human rights abuses in Xinjiang, the new moves are likely to increase geopolitical tensions. Despite recent efforts for US-China relations, no positive dynamics have been observed so far. Since Donald Trump initiated a trade war with China, the situation has become strained.
Chinese Firms Stocks
The 2022 Perspective report by Investment Officer Michael Lok says China needs to present updated challenges. In his view, the country is trying to transform the economic model. At the same time, the U.S. is focusing on restraining the world’s second-largest economy. The Hang Seng Index has risen due to speculation in earlier trading. China will further tighten its policy to support economic growth. Country Garden grew 1.2 percent. At the same time, its services division rose 1.9 percent. Longfor Group was up 1.5 percent.
After reducing the banks’ reserve ratio on December 15, Portfolio Managing Director at iFast Financial, Will Shum, noted that policy easing stakes helped. The People’s Bank of China will do something about it before the lunar new year, February 1. New home prices are falling for the third month in a row in China’s 70 largest cities. According to the Bureau of Statistics, this figure fell to 0.33 percent in November from October. It is worth noting that this was the most significant setback since February 2015. Retail sales rose 3.9 percent. This missed the consensus on the 4.7 percent increase, which economists actively monitored.
According to Finance 40 Forum researchers, the PBOC should cut interest rates; Also boost infrastructure investment to grow the economy by at least 5 percent next year. Four firms first started trading on the mainland. BeiGene fell 7.6 percent. Mengtian Home Group rose 44 percent. D.R. Corporation also grew by 41 percent, And Guangzhou Huayan Precision Machinery – jumped 210 percent.
U.S. and Chinese Firms
According to the latest information, the U.S. will add eight Chinese companies to the denylist. Among them is aircraft manufacturer DJI Technology Co Ltd.
Meanwhile, the U.S. Department of Commerce on Thursday plans to add more than two dozen Chinese companies to its list of units that restrict their exports by U.S. firms. The report hastened the sale of Chinese healthcare stocks in the afternoon trading.
U.S. investors are barred from taking part in the list of companies where about 60 firms are currently listed. SenseTime Group was also delisted; therefore, the company postponed the initial public offering of $767 million in Hong Kong. According to the firm, all allegations concerning them are baseless. Human rights groups and experts estimate that more than a million people have been arrested in recent years in a vast system of camps in China’s far western region.
Some foreign parliaments have described such treatment of the Uighurs as genocide. China denies the allegations, saying the Uighurs’ growth rate is above average. The U.S. denylist is quite long. We wonder how things will turn out for Chinese companies.
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