Hong Kong stocks tumbled and the currency soared as interbank interest rates jumped amid protests that closed roads in the territory’s financial district.
The Hang Seng Index fell 1.7 percent at the close, with local property developers among the biggest losers, while the Hong Kong dollar strengthened as much as much as 0.26 percent, the largest gain in seven months.
The one-month interbank borrowing cost, known as the Hong Kong Interbank Borrowing Rate (HIBOR), rose 29 basis points to about 2.42 percent, the highest since 2008.
Photo: AP
While some analysts attributed the tighter liquidity to seasonal demand for cash, such as dividend payments, others said the protests — aimed at preventing the passage of a bill allowing Hong Kong to extradite its residents to mainland China — could be spurring concern about potential capital outflows.
The squeeze has driven up the cost of shorting the Hong Kong dollar, which also contributed to the one-day jump.
“Recent political events in Hong Kong are affecting investors’ confidence on the future of the city,” Springwaters Financial Securities (泓瑞源金融證券) Hong Kong-based strategist Sam Chi Yung (岑智勇) said by telephone. “A stronger local dollar may hurt exporters, while surging HIBORs mean higher funding costs for companies with more debt.”
The secretariat of Hong Kong’s Legislative Council postponed yesterday’s debate to an unspecified time after thousands converged on the legislature, blocking roads in tactics similar to the 2014 Occupy demonstrations.
Police fired tear gas in the afternoon, leading to some apparent injuries among protesters and officers.
US House of Representatives Speaker Nancy Pelosi threatened legislative action in the US Congress to “reassess” whether Hong Kong is sufficiently autonomous.
New World Development Co (新世界發展), Wharf Real Estate Investment Co (九龍倉置業) and Sun Hung Kai Properties Ltd (新鴻基地產) all fell at least 3.1 percent.
Developers are sensitive to Hong Kong’s rising borrowing costs and rallied earlier in the year on expectations the US Federal Reserve would cut interest rates.
Chinese Internet giant Tencent Holdings Ltd (騰訊) retreated 2.1 percent as the biggest drag on the Hang Seng China Enterprises Index, which lost 1.2 percent.
Sunny Optical Technology Group Co (舜宇光學) dropped 6.1 percent and AAC Technologies Holdings Inc (瑞聲科技) lost 3.4 percent.
Citigroup Inc cut its price target on Sunny, citing risks from a US ban on Huawei Technologies Co (華為).
Hong Kong’s two benchmarks were Asia’s worst performers in an otherwise quiet session in the region. The Hang Seng Index was only just recovering from a rout that had made it one of the world’s worst performing major benchmarks last month.
“Uncertainty on local policies will confuse investors and affect the flows in and out of Hong Kong stocks,” Partners Capital International Ltd (博大資本國際) CEO Ronald Wan (溫天納) said. “Investors now need to ponder whether or not to pull out of the market given the local events and global factors, including the trade war.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day