Hong Kong’s Hang Seng Index tested over one-year low on Friday as tech shares slumped following Didi Global’s announcement to delist from the US stock market.
Chinese ride-hailing platform Didi Global said it will pursue a Hong Kong listing after delisting its American depositary shares (ADS) from the New York Stock Exchange.
Didi’s doomed New York-listing lasted just over five-months as Beijing authorities scrutinised the firm on data security grounds and called for the removal of its apps from smartphone app stores in China.
US SEC to boot non-compliant foreign listing
Investor sentiment furthered soured as market watchdog US Securities and Exchange Commission overnight on Thursday finalised rules forcing Chinese companies listed in the US to disclose whether they are government-controlled entities.
Chinese firms will also have to allow US authorities access to their books for auditing purposes or risk being kicked off US exchanges.
Hang Seng TECH Index down 28% in 2021
On Friday, Hong Kong’s benchmark Hang Seng Index fell 0.7% to 23,612 by Friday lunch. The index had closed at a 14-month low 23,475 on Tuesday.
The sectoral index took its year-to-date losses to over 28%, as of Friday.
Australia sees four-week losing streak
Elsewhere, Japan’s benchmark Nikkei 225 Index rose 0.4% to 27,857.63 by Friday afternoon. The index was on track to post its second weekly loss in a row, down over 3%.
Japan Airlines and ANA Holdings jumped over 4% each on Friday after the Japanese government reversed its ban on incoming international flight reservations.
In Australia, benchmark S&P/ASX 200 index snapped two days of losses to rise 0.3% by late afternoon on Friday. However, the index was on track to post its fourth straight week of losses.
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.