The world’s most indebted property company, China Evergrande Group plunged by more than 10% on Monday to over 11-year lows, extending losses as executives try to save their business prospects and as default fears grow over upcoming debt obligations.
The Hong Kong-listed property company triggered a sell-off in property stocks listed in the city, with the Hang Seng Mainland Properties Index falling by -5.8% and the broader Hang Seng (HK50) by -3.30%. Markets in Mainland China did not witness any action today and were closed for a holiday.
Tracker Fund of Hong Kong ETF (TF5), one of the largest Hong Kong ETFs tracking the Hang Sang index with HK$94.24 billion in assets (USD 11.85 billion) fell by -3.21%. European fund Lyxor Hong Kong (HSI) UCITS ETF is following suit with losses of -3.45% (2:05 pm, GMT +2.00)
2020 hot tech IPOs in Hong Kong and billions of investors inflows made the region one of the main financial hubs in Asia. But crackdown from Mainland China has suffocated the markets and depressed shares of several popular tech giants. It remains uncertain what lies next for Hong Kong stocks, but investors with a large risk appetite can gain exposure to Hong Kong Equities through ETFs for diversification.
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