Xiaomi and Tencent Drop on the Hong Kong Stock Exchange

Chinese smartphone maker Xiaomi and tech company Tencent lost ground on the Hong Kong stock exchange on Thursday despite better-than-expected earnings figures from both companies.

 

Technology companies were also under pressure on the other Asian stock exchanges after the heavy price losses among American peers. Investors traded their tech stocks for companies that are expected to benefit more from the corona crisis recovery.

The Hang Seng index in Hong Kong was 0.2 percent in the minus in the meantime. Xiaomi fell 4 percent. The world’s third-largest smartphone manufacturer posted more profit than expected in the fourth quarter of 2020. Turnover was a bit disappointing. The company also warned of higher costs due to the global chip shortage, which is now also affecting manufacturers of consumer electronics in addition to the automotive sector.

Tencent, in which the Amsterdam-listed tech investor Prosus has a large interest, lost 2.7 percent. The Chinese tech concern, known for the popular chat service WeChat, achieved significantly more turnover and profit in the last quarter of last year. However, investors are concerned that the Chinese government will restrict Tencent’s payments and lending activities. Beijing previously tackled competitor Alibaba in that area.

The US stock market watchdog SEC also announced that it would introduce rules that allow foreign companies to be removed from Wall Street if they do not comply with US accounting rules. This could affect dual-listed Chinese companies. Chinese tech group Baidu and web store Alibaba, both listed in Hong Kong and New York, lost 8.5 and 3.8 percent.

The Nikkei in Tokyo broke through a multi-day loss streak and finished 1.1 percent higher at 28,729.88 points. The Japanese banks were picked up again after the recent price losses. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group won more than 2 percent. Tech investor SoftBank and the Japanese chip companies Advantest and Tokyo Electron fell after the 2 percent loss of the US tech gauge Nasdaq.

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