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Hang Seng and Nikkei Drop, Alibaba Considers Listing in Hong Kong

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Hang Seng underperforms mainland indexes

Today, Hong Kong’s Hang Seng Index dropped 0.57% to end the day at 27,235.71. The index underperformed China’s mainland indexes. Yesterday, the iShares MSCI Hong Kong ETF (EWH) gained 0.44%.

In another update, Bloomberg reported that Alibaba (BABA) may be considering a second listing in Hong Kong to raise $20 billion to “diversify funding sources and boost liquidity.” On the face of it, the news doesn’t look like just a coincidence amid the ongoing trade war. Hong Kong is becoming a popular IPO destination for Chinese tech companies amid the US-China trade war.

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Nikkei 225 drops

Japan’s Nikkei 225 gave up yesterday’s gains to close 1.22% lower at 21,003.37. 2,466 stocks dropped, while only 1,012 stocks advanced on the Tokyo Stock Exchange. The broad-based Tokyo Stock Price Index (or TOPIX) closed 0.94% lower today.

Today, Japan’s Central Bank Chief, Haruhiko Kuroda, expressed a cautious outlook over the state of the global economy. He said that uncertainties persist in the global economy amid the trade war and Brexit negotiations. He also mentioned that the global trade imbalances will be on the agenda at the upcoming G20 Summit. Japan is under fire from Trump for the large trade surplus it holds against the US.

Yesterday, the iShares MSCI Japan ETF (EWJ) dropped 0.84% even as Japanese indexes gained. The JPMorgan BetaBuilders Japan ETF (BBJP) dropped 0.85% on May 28, while the WisdomTree Japan Hedged Equity ETF (DXJ) lost 0.62%.

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