ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Nikkei Markets

Hong Kong stocks pull back as Apple suppliers extend losses

Chinese investors sell shares through trading links with mainland exchanges

HONG KONG (Nikkei Markets) -- Hong Kong shares fell for a second consecutive trading day on Monday, weighed down by extended weakness for Apple suppliers listed in the city and lingering concerns over U.S.-China trade tensions.

The Hang Seng Index lost 0.5% to close at 30,254.40. Apple suppliers Sunny Optical Technology Group and AAC Technologies Holdings dropped 6.9% and 1.9%, respectively. The declines followed a warning last Thursday by contract chipmaker Taiwan Semiconductor Manufacturing Co. about softening demand for smartphones when it lowered its annual revenue forecast.

Ping An Insurance Group added 0.7% on Monday. On Sunday, unit Ping An Healthcare & Technology, also known as Ping An Good Doctor, said it expects to raise up to 8.77 billion Hong Kong dollars ($1.12 billion) from an initial public offering in Hong Kong. Hong Kong Exchanges & Clearing has signaled that it will announce final details of new, looser listing rules for biotech companies and other startups on Tuesday. HKEx shares fell 0.5% on Monday.

Mainland Chinese investors on Monday were net sellers of Hong Kong stocks through the trading links connecting the city with exchanges in Shanghai and Shenzhen.

The Nikkei Asia300 Index fell 0.6% on Monday following weak cues from Wall Street on Friday, when heavyweight Apple tumbled 4.1% amid worries over weakening demand for its latest iPhone model. Meanwhile, government bond yields also rose amid bets the U.S. Federal Reserve will continue to tighten interest rates. The yield on the 10-year U.S. Treasury note rose to 2.96% on Friday, the highest level since January 2014.

Mark Ng, executive director of China Demeter Financial Investment in Hong Kong, said concerns about a trade war and rising interest rates are acting as a drag on the city's stock market. "While the U.S. government continues to take further steps, like issuing an alert over the ZTE issue, Chinese authorities also need to quicken their response," he said.

Ng sees some capital flowing out of the city, although he does not expect a stock market crash.

Trading in ZTE shares remained halted. The Chinese telecommunications equipment-maker on Sunday said it is taking steps to comply with the denial order issued last week by the U.S. Department of Commerce. U.S. authorities have banned American companies from making sales to the Chinese company after it allegedly sold equipment to North Korea and Iran.

Ng said shares of other mobile-equipment makers in Hong Kong were falling amid concerns that Google may be banned from licensing the Android mobile phone operating system to ZTE. Computer and smartphone maker Lenovo Group shed 3.8% on Monday.

China Unicom (Hong Kong) climbed 3.3% after reporting that its first-quarter net profit more than tripled from a year earlier to 3.01 billion yuan ($478 million). Revenue rose 8.6%. China Mobile slipped 0.3% following its report of a 4.1% increase in net profit for the three-month period ending in March.

China Life Insurance edged 0.2% lower after the company on Friday said it expects to report that net profit for the January-March period increased between 110% and 130%.

China Resources Cement Holdings added 1.8%. On Friday, the company reported a 196.4% jump in first-quarter net profit on a 39.4% increase in revenue to HK$8.05 billion.

Maanshan Iron & Steel gained 2.5% after the Chinese steelmaker last week said its first-quarter net profit increased 57.3% from the preceding three months. JPMorgan upgraded the stock to overweight from underweight, and HSBC to buy from hold, on an improved outlook for the steel industry.

Garment exporter Eminence Enterprise rose 7.6% on Monday after saying it expects to report a net profit for the fiscal year ended in March, following a loss a year earlier.

-- Carrie Chen

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media