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Stocks

Hong Kong shares slip after US healthcare bill pulled, Kaisa surges

HONG KONG (NewsRise) -- Hong Kong shares headed for their first decline in three days after the withdrawal of U.S. President Donald Trump's healthcare bill sparked concerns about his ability to deliver on proposed economic policies.

The Hang Seng Index slipped 0.3% to 24,290.72 by midday after changing direction at least six times. AAC Technologies Holdings led losses, falling 3.2% following a near 14% rally last week on the back of upbeat earnings. The Hang Seng China Enterprises index slid 0.6%, paced by a 3.3% decline in China Vanke after the developer posted annual earnings that missed estimates. China Petroleum & Chemical (Sinopec) was 0.5% higher, after rising 2.4% earlier. The state-owned company on Sunday reported a 44% increase in earnings for last year and said it expects a jump of about 150% in first-quarter net profit.

Kaisa Group Holdings shares surged 62.8% to HK$2.54 in their first trading session in almost two years after the Shenzhen-based developer reported a 72% drop in last year's net income and said contracted sales more than tripled from 2015 to 29.8 billion yuan ($4.3 billion). Kaisa had defaulted on its offshore bonds two years ago.

U.S. index futures faltered, while safe havens gold and the Japanese yen advanced after a vote on Trump's bill that sought to repeal and replace an existing healthcare law named after former President Barack Obama was scrapped late Friday. The withdrawal of the legislation, which follows a chorus of criticism from Democrats and Republicans, raises questions about Trump's ability to follow through on other economic policies, including promised tax cuts. The S&P 500 index futures fell more than 0.8% Monday, while the Nikkei Asia300 index lost 0.3%.

"Expectations from Trump on the economic front are quite high and I think the withdrawal of the bill will dampen a bit of confidence," said Ronald Wan, chief executive at Partners Capital International. "The rally since he was elected president has been primarily built more on hopes that he will be able to deliver and now that assumption is in a bit of a doubt."

In mainland markets, the Shanghai Composite added 0.1%, while its Shenzhen counterpart slipped 0.2%. The onshore traded yuan was up 0.1% at 6.871 against the dollar. Hong Kong's currency, which is pegged to the greenback, was little changed at 7.7672 after Beijing-backed Carrie Lam Cheng Yuet-ngor, a former chief secretary in the local administration, was elected the city's chief executive in a vote by Hong Kong's elite.

"The assumption from Carrie Lam will be that she will continue with the current policies and I do not see much of an impact overall," Wan said.

China Southern Airlines, resuming trading after its suspension on Thursday, rose 2% after saying it is in talks with American Airlines for a possible "major strategic cooperation."

HNA Holding Group was flat at HK$0.28. The conglomerate bought a 25% stake in the U.S. asset management arm of Anglo-South African financial services company Old Mutual for $446 million.

Trading in China Huishan Diary shares remained halted after the stock plunged 85% on Friday without an apparent reason. The dairy-farm operator said it will issue an announcement "as soon as practicable" after completing enquiries.

Great Wall Motor fell 2.2%, paring gains this year to 22.9%. Late Friday, the carmaker reported an over 30% increase in net profit for last year.

--V. Phani Kumar and Nimesh Vora

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