Various explanations were presented for the Shanghai drop – lower liquidity, yuan fragility, a buying ban on an unlisted insurance company from buying equities and fears over upcoming data in early March but nothing specific could be blamed. Despite the drop, the Shanghai composite is still 3.9% above its recent low. For the Hang Seng, losses were widespread over all sectors with 49 of its 50 components declining.
On a lighter note, Li-Ka Shing’s CKI Holdings returns to the Hang Seng Index after an absence of 8 years. CKI – Cheung Kong Infrastructure Holdings, LTD, HK 01038, replaces China Beer Resources, HK 00291, MC 30.8b HKD; last price: 12.74 HKD, (2.75%) vs. Hang Seng’s (1.58%) decline;1 YR change: +50.9%. China Beer had been significantly reduced after selling all but its beer assets. CKI managed the return despite being thwarted in the full takeover of Power Assets Holding, PAH, HK 6, last price: 73.5 HKD, down (1.34%), MC 159 Billion hkd, another Li-Ka Shing holding and member of the Hang Seng index. Despite a Hong Kong listing, the bulk of CKI’s revenue and assets come from international investments, primarily the U.K. with others in Canada, Australia, New Zealand and the Netherlands. As such, it isn’t as heavily impacted by weakness in China and Hong Kong but has felt the pain of the decline in the British Pound, Australian Dollar and Canadian Dollar against the US dollar-linked Hong Kong Dollar.