Hong Kong stocks dropped for a fourth day to near a four-week low on mounting concerns China’s regulatory crackdown is far from over following the latest move to tighten its oversight on Macau’s casino industry.
The Hang Seng Index slid 0.8 per cent to 24,828.22 in early Thursday trading, approaching the lowest close since August 20. The Hang Seng Tech Index retreated 0.4 per cent. China’s Shanghai Composite Index gained 0.5 per cent.
Sands China dropped 3.3 per cent to HK$16.28, adding to a record 33 per cent plunge a day earlier. Wynn Macau lost 3.6 per cent to HK$6.17 after sinking 29 per cent on Wednesday.
A gauge of six Macau casino operators trading in Hong Kong and the US slumped 23 per cent on Wednesday, erasing almost US$19 billion in market value, after the city unveiled a proposal to tighten industry oversight, including daily supervision and control on capital outflows.
“This could reduce the visibility on casino operators’ long-term business outlook, and we raise our fair value uncertainty rating for the Macau gaming companies to very high from high,” analysts at Morningstar wrote in a report. “The policy steer is fairly vague, in our view, but the reference to social responsibility is sending chills down the spines of investors, given recent developments in the technology and education sectors in China.”
China Evergrande Group sank 7.5 per cent to HK$2.60 after the troubled property developer said that it will suspend trading of all its local bonds for one day for investors to assess the impact of a credit rating cut by China Chengxin. The stock has crashed 28 per cent this week as it hired outside advisers to help tackle its debt burden.Internet Explorer Channel Network