Wednesday’s close in Both Hong Kong and Shanghai reflected the reality of growth slowing beyond the 7% strongly held target.
All sectors were hit as all but 4 of the Hang Seng constituents crashed. Hardest hit were financials and energy-related but no sector was safe with the exception of the traditional utility haven which included CLP holdings, HK 2 and Power Assets Holdings, HK 6, with minor increases. Insurance companies moved downward in tandem on news that China would restrict overseas insurance sales to quash attempts to move money out of China beyond allowed limits. Beating them all to the bottom, however, was Lenovo, HK 992, falling over 10% thanks to a a 3 month year on year revenue drop of 8% primarily from a 12% drop in computer revenue and smartphone revenue 4% decline. Industry wide computer sales have been weak and the Motorola late 2014 purchase has done little to increase it’s smartphone market share which is hovering at around 5%.
Thanks to reportedly extraordinary efforts, the yuan held relatively steady.