The Hang Seng is down by about 0.20% today as investors continue to worry about the second wave of coronavirus. The index is down even after JD.com shares soared after the company cross-listed in Hong Kong. Other indices in Asia are also lagging today, with KOSPI down by 0.35% and Nikkei 225 down by 0.45%.
JD.com share price jumped by more than 6% today when it cross-listed in Hong Kong. The company, which is originally listed in New York, raised almost $4 billion from investors. The amount could hit more than $4.3 billion if bankers decide to exercise greenshoe options to increase the size.
Hong Kong could be a key beneficiary for cross listings as tensions between the United States and China continue to rise. The Trump administration is seriously considering banning Chinese firms from being listed in the US. The issue was exacerbated almost two months ago when shares in Luckin Coffee went burst.
Just this month, Netease, a technology company raised more than $2.3 billion in Hong Kong. The companies join Alibaba, which cross listed in the city a year ago.
As we wrote yesterday, the real estate sector in Hong Kong is being tested like nothing before. This has raised the potential of the bubble bursting. Indeed, real estate firms are among the worst-performing in the Hang Seng this year.
Today, 5 real estate firms are among the ten worst-performing companies in the index. For example, Wharf Real estate is down by 2.37% while China Resources Land is down by 1.50%.
The challenge is that Hong Kong real estate industry has always been expensive. As a result, only the rich companies can afford the spaces. Now, with the protests, these businesses have continued to struggle. Worse, most people expect that the city will take a longer period to recover.
The worst performer in Hong Kong was Wharf Real Estate. It was followed by HSBC, whose share price declined by more than 1.86% after the company announced that it would lay off more than 35,000 jobs. Other worse performers are CNOOC, Sino Biopharmaceutical, CK Hutchisson, and WH Group.
On the other hand, the best-performers are Geely Automobile, CSPC Pharma, China Shenhua Energy, and AAC technologies.
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The Hang Seng index is trading at $24,400, which is slightly above the 38.2% Fibonacci retracement level. The price has also moved above the 100-day exponential moving averages. This means that the price may continue rising as bulls attempt to move above the important resistance at $25,000.
On the flip side, a move below $23,500, will invalidate this prediction. This price is along the ascending trendline and also close to the lowest level on June 15.