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Shares suffer new beating as China ejects troubled developers from Stock Connect links

Changes to Stock Connect list trigger another round of sell-offs, pressuring the broader market already struggling near an 8-month low

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Property stocks suffer another bout of sell-off as they are removed from the Stock Connect scheme. Photo: Handout
Yulu AoandJiaxing Li
China’s decision to dismiss a clutch of distressed Chinese property developers from the Stock Connect scheme has fanned another round of sell-offs, erasing about HK$1.76 billion (US$225.7 million) of value and pressuring the onshore market, which is already struggling near an eight-month low.
Shimao Group Holdings, CIFI Holdings, and Sino-Ocean Group plunged by 14 to 23 per cent in Hong Kong on Tuesday, after the Shanghai and Shenzhen stock exchanges removed them from the Stock Connect scheme with immediate effect. E-commerce leader Alibaba Group Holding was among new additions to the scheme.

The developers, along with peers Agile Group, Powerlong Real Estate and China South City Holdings, were among 33 companies ejected from the southbound channel of the cross-border investment links, according to exchange statements. In total, the sell-off erased almost HK$1.76 billion of market value from the six developers.

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Under the Stock Connect rules, the exchanges can remove any stock from the programme if its average month-end market value falls below HK$4 billion for 12 consecutive months preceding the exclusion date.

Shimao sank 23 per cent to HK$0.46, leading the slump. CIFI plunged 15 per cent to HK$0.2 while Sino-Ocean Group. Agile, Powerlong and China South City declined by 14 to 17 per cent.

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