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China stocks in worst ever post-congress rout as gloom persists

Tan KW
Publish date: Fri, 28 Oct 2022, 04:23 PM
Tan KW
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Chinese stocks traded in Hong Kong headed for their worst showing ever following a Communist Party Congress after this year’s leadership gathering dashed hopes for more market-friendly policies.
 
The Hang Seng China Enterprises Index slumped 4.3% as of 2.31pm. in Hong Kong. That took its losses for the week to over 9%, the most for any five-day period following a party meeting since the gauge’s inception in 1994. The index tumbled to the lowest since the 2008 global financial crisis in Monday’s historic rout and is on track for a fourth month of declines.
 
Traders are struggling to determine how long the rout will persist after a lack of supportive policies for the beaten-down property sector and the recommitment to the Covid Zero strategy at the congress left markets dismayed. While sentiment seemed to somewhat stabilise in the last three days, the resumption of losses Friday has dented hopes for a sustainable rebound.
 
“The market is still in a downward trend” given the disappointment from the party congress, weak consumption, lackluster industrial profits and sporadic Covid outbreaks across the country, said Yan Kaiwen, an analyst with China Fortune Securities Co. Friday’s selloff is “mainly because of weak sentiment.”
 
The expiry of monthly futures and options contracts for the Hang Seng China gauge as well as a raft of earnings announcements boosted market volatility on Friday. Automaker BYD Co. and Industrial & Commercial Bank of China Ltd. — the world’s largest bank by assets — are among those due to report results.
 
At the twice-a-decade meeting last week, President Xi Jinping stacked the leadership ranks with allies, limiting the scope for opposition to his strategies. Confidence is running low, particularly among international investors, who pulled a record US$2.5 billion from mainland stocks on Monday alone.
 
The Hang Seng Tech Index lost as much as 6% on Friday. The top US official overseeing export controls said he expects a deal with global allies to limit shipments of chip-production equipment to China in the near term. Such a move — if achieved — will expand Washington’s efforts to keep cutting-edge semiconductor technology out of China and away from the country’s military.
 
On the mainland, China’s benchmark CSI 300 Index sank as much as 2.3% on Friday, taking its losses for the week to over 5%.
 
“The drop is just the extension from Monday as the market feels uncertain and unclear of economic prospects under the new leadership,” said Ryan Chan, associate director at Eddid Securities and Futures Ltd. “The relationship between the US and China is expected to get worse.”
 
Still, with valuations at historic lows, market watchers are divided on the outlook. Morgan Stanley has slashed its targets for key Chinese equity gauges while JPMorgan Chase & Co. says the selloff is a buying opportunity.
 
“The recently concluded congress clearly” was the biggest factor weighing on the stock market in the past week, said Justin Tang, head of Asian research at United First Partners. “It will continue to be volatile unless we hear news to the contrary.”
 
 - Bloomberg
Discussions
Be the first to like this. Showing 42 of 42 comments

Tobby

Some like Grandpa Koon and QQQ, dont' understand the signficant of latest CPC! It's very significant! As CCP is now under full control of Emperor Xi fraction! Meaning, there's no longer check and balance or US friendly allies in CCP! Those days are gone!

2022-10-28 16:29

Sslee

When you only emphasis common prosperity wealth redistribution and forget about market friedly policy to create a bigger wealth for distribution the result is everyone is make poorer.

2022-10-28 17:01

brightsmart

come on....... there is nothing China can do if people want to be negative.

The CPC do not manage the country on emotions., they manage on facts and figures. ,and long term 5 years plans. 50 year plans.

2022-10-28 18:09

brightsmart

stock market is an emotional animal................CPC do not have the luxury to be emotional.

we have to live with that.

2022-10-28 18:11

brightsmart

struggles...............the great struggle for rejuvenaton and modernisation for next 10 years.

this is what it is..........Xi Jinping sees struggles ahead, No time to relax or enjoy. Its a once in a hundred years challenge for China under suppression by the USA/ outside forces.

2022-10-28 18:26

brightsmart

we will see the results in 2030, in 2050,

2022-10-28 18:28

brightsmart

Xi took the standing committee to Yanan and pay respect to Mao............. This is very important this have a deeper message.

2022-10-28 18:34

Michael Kwok

Becareful lge chant in tokong die die die.other also join him.means down down down.very powerful cursing.

2022-10-28 18:36

brightsmart

Post removed.Why?

2022-10-28 18:37

Michael Kwok

Becareful lge chant in tokong die die die.other also join him.means down down down.very powerful cursing.

2022-10-28 18:40

brightsmart

Post removed.Why?

2022-10-28 19:42

brightsmart

the result is not for 2022 or even 2023 but 2030..........................................................................

2022-10-28 19:42

Tobby

Posted by Sslee > Oct 28, 2022 5:01 PM | Report Abuse

When you only emphasis common prosperity wealth redistribution and forget about market friedly policy to create a bigger wealth for distribution the result is everyone is make poorer.

Answer : Exactly! Eventually China will revert to old bad days of Chairman Mao! There's no incentive to work hard anymore!

2022-10-28 21:36

brightsmart

China is a country of geniuses not a country of idi.ots like toby

2022-10-28 21:57

brightsmart

The key word to watch is struggle.... rejuvenation, modernise and struggle

2022-10-28 21:59

brightsmart

Western media only see one word...
Communists

2022-10-28 22:00

brightsmart

Xi jinping take the standing committee to yanan....the key message is struggle. And don't forget the roots

2022-10-28 22:01

brightsmart

China geniuses and Xi jinping modernisation Vs suppression by America.....who will win?

2022-10-28 22:23

Tobby

Anyway, better look at the positive! Now Vietnam, Malaysia, Thailand, Indonesia will get lion share of global supply chain! Let's hope there's a new unity government between Harapan and BN Umno and they will finally work as adults!

2022-10-28 22:32

Tobby

As for Vietnam, things will be like party time all the way! Vietnamese will surely deserve it given how they are indeed genuinely enterprising and hard working people!

2022-10-28 22:33

brightsmart

Will America/ Western suppression destroy China tech industry of accelerate it's development? That is the key question and key answer. Everything else is red herring

2022-10-28 22:33

brightsmart

Toby..Vietnam and even India will try to benefit... that is their rights and their opportunity.... But China will remain firm and seek self reliance

2022-10-28 22:35

brightsmart

There is nothing else for China to do except follow Xi jinping guidance to rejuvenation and modernisation

2022-10-28 22:37

brightsmart

It takes two hands to clap

2022-10-28 22:39

Tobby

Brightsmart! I am happy for you! Sucking up to the New Emperor of China 247 is definately your right!

2022-10-28 22:40

brightsmart

the emperor is a good emperor.

2022-10-28 22:51

brightsmart

toby but why u su.ck up to western decadent media and Alz.heimer's disease biden ?

2022-10-28 22:54

brightsmart

Post removed.Why?

2022-10-28 22:56

brightsmart

Will America/ Western suppression destroy China tech industry or accelerate it's development? That is the key question and key answer. Everything else is red herring

2022-10-28 22:58

Tobby

Hihihaha! Dude, dont get too emotional on geopolitics! I sense your emotional damage requires medical attention!

2022-10-28 23:06

bang_miskin

Aiyah must give thanks to Dear President Xi, Chairman of the CPC! With his help, he is bringing jobs to Malaysia (and Vietnam, Thailand, India, among others)! China bringing common prosperity to Asia, as Malaysian, what is not to like!

2022-10-28 23:14

brightsmart

i sense u are an i.diot...................................... gweilo loves a useful idi.ot like toby.

2022-10-28 23:15

brightsmart

Post removed.Why?

2022-10-28 23:17

brightsmart

China loves their new Emperor................give them some respect and some face la.

2022-10-28 23:19

brightsmart

actually, 4 years ago already told u.......nothing new here.

2022-10-28 23:20

chinaman

Bang miskin- Xi bring jobs not to locals. To bangla, indon, pinoy, Nepal, all migrant workers. many MY middle income drop to poor income level with plunging down MYR day by day. Even Nepalian puiiii on MYR, go to Dubai to work now

2022-10-29 14:35

Up_again

It wouldn’t hurt this region if China continues with their zero Covid for the next 10 years. Like tobby said, northern region this year alone many new large electronics and semicon
US should increase their sanctions and ban more tech to China

2022-10-29 15:55

Up_again

Paling kesian is the hongkies though, egg nest tied to foreign policy they can’t control

https://www.theedgemarkets.com/article/hong-kong-pension-funds-biggest-slump-2008-fuels-anger

2022-10-29 15:57

Tobby

UpAgain! Yeah, it's about time for the rest of Asean to taste the crumbs! Only hope is that we will have unity government consist of PH BN! Then at least we can take a bit of relief! And of course hopefully we will finally have adult lawmakers this round not those bunch of crybabies we have suffered for too long!

2022-10-29 16:05

Tobby

This is actually golden opportunity for Asean! Never mind if China go back to kampong era like those times during Chairman Mao! As long as the rest of Asean can finally experience superbull in growth and of course bourses!

2022-10-29 16:06

Up_again

Totally agree, we can’t be too choosy.
Though most likely Pas gets 25 parliament seats, ditch Bersatu and work with Umno-GPS

2022-10-29 16:07

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