Alibaba Spin Off Plan Reversal Weighs On Hang Seng & Tech

Weakness in Alibaba (-10% in HK), after the company noted that it scrapped the plan to spin off its cloud unit, garnered most of the attention on Friday and resulted in a notable shift lower for the tech heavy Hang Seng, which lost 2.1% in the final session of the week. The HSCEI was 2.3% worse off come the close. The CSI 300 lost a more modest 0.1%.

• Luxury retail names in Hong Kong also struggled, with Burberry’s post-earnings Thursday performance spilling over.
• Carmakers came under pressure on the back of RTRS sources noting that “a bipartisan group of U.S. lawmakers raised alarm about Chinese companies collecting and handling sensitive data while testing autonomous vehicles in the United States.”
• From a more top-down perspective, various source reports have flagged that some lenders were instructed to cap interest rates in interbank products earlier this month, as policymakers attempt to alleviate recent credit strains.
• We also note that SAFE has stressed that it will promote the revision of laws and regulations on overseas listings and foreign institutional investors' investment in domestic securities markets.
• On the flow side, international investors were net sellers of mainland equities via the HK-China Stock Connect schemes for the 7^th session in 8. They offloaded a net CNY2.9bn on Friday.