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
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.
The setback also infected other home builders. The Hang Seng Mainland Properties Index, which tracks 10 other mainland home builders, tumbled 3.5 per cent to a record low, snowballing the losses this year to 28 per cent. All of the gains made from Beijing’s rescue package in May have since evaporated.
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