Hong Kong Market snaps four-session winning streak

The Hong Kong share market finished softer after swinging between gains and losses on Tuesday, 20 August 2019, snapping a four-session winning streak, weighed down by financials and property developers stocks, offsetting gains in electronics stocks after temporary suspension of a ban Huawei and its suppliers. At closing bell, the Hang Seng Index advanced 0.94%, or 238.76 points, to 25,734.22. The Hang Seng China Enterprises Index rose 0.61%, or 60.89 points, to 9,964.30.

Shares of banks declined, amid concern that the central bank's reform of the loan prime rate would squeeze lenders' interest rate margins and erode their profits.The People's Bank of China (PBOC) debuted its new loan prime rates (LPR) under a new mechanism that was unveiled over the weekend. The new 1-year LPR was set at 4.25%, as compared to 4.31% previously. The 5-year LPR was at 4.85%. HSBC Holdings (5 HK), the largest bank in Europe and Hong Kong, declined 1% to HK$57.4, while insurer AIA Group (1299 HK) shed 1.1% to HK$77.4.

Property developers also suffered amid a gloomy outlook for housing prices in the city. Sun Hung Kai Properties (16 HK), Hong Kong's largest developer by capitalisation, dropped 2.1% to HK$116.7.

Suppliers of smartphone components to Huawei gained. Sunny Optical Technology (2382 HK) was up 4.9% to HK$105.6 and AAC Technologies Holdings (2018 HK) finished 3.2% higher at HK$38.5.

Pharmaceutical counters were higher. CSPC Pharmaceutical (01093) saw strong orders after it reported strong results. It ended up 11% to HK$14.4. Sino Biopharmaceutical (01177) gained 1.7% to HK$10.1. WuXi AppTec (02359) jumped 3.8% to HK$80.95. China Resources Pharmaceutical (03320) put on 1.4% to HK$8.13. WuXi Biologics (02269) added 0.7% to HK$83. 3SBio Inc. (01530) added 1.6% to HK$12.58.

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