Yahoo News Entertainment Stocks Tumble in Hong Kong as True Cost of Wuhan Virus Emerges
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UPDATED: The Hong Kong stock market tumbled by nearly 3% as it reopened on Wednesday. This was the first opportunity for local equities to be traded since the Chinese New Year holidays and the escalation of the coronavirus outbreak that started in Wuhan, central China.
There were steep falls for some of the companies most exposed to the closure of mainland Chinese cinemas over the normally busy Chinese New Year season, and the cancelation of the release of seven Chinese tentpole movies.
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Shares in Imax China, which operates over 600 screens, dropped by 7% to HK$15.52. Huanxi Media, the company that called off the theatrical release of its “Lost in Russia” movie and opted instead for an online deal, crumpled by 8.7% to HK$1.79. But that follows a spectacular 33% jump on Friday from HK$1.34 to HK$1.95, when news of the streaming deal was first announced.
Alibaba Pictures, which includes the popular movie ticketing platform Tao Piao Piao, saw its shares fall 9.5% to HK$1.15. That contrasted with ticketing rival Maoyan, which fell in line with the market average, ending the Wednesday trading session down 2.5% at HK$12.52. The latest fall puts Maoyan shares more than 15% below their IPO price of a year ago.
Smaller film companies also wobbled. Starlight, the Chinese film financier behind “Midway,” fell 3.3% on Wednesday to HK$1.74 per share. Hong Kong’s talent, production and cinemas group Emperor Culture, fell 7.9% to HK$0.1. Its direct rival, Media Asia, listed on Hong Kong’s second tier exchange, gained 4.4% to HK$0.047.
The Hang Seng Index of leading stocks finished down 2.8% at 27,160.
Mainland Chinese tech giant Tencent is the largest component of the Hang Seng Index. With activities including online games, video streaming and social media, which could be seen as benefiting from the enforced stay at home trend, Tencent saw its share price rise in the morning trading session, but finish the day 0.7% weaker at HK$383.2.
Mainland Chinese authorities on Wednesday confirmed a total of 5,974 coronavirus cases and a death toll that has risen to 132. While the number of cases exceeds the total recorded during the 2003 SARS outbreak, the number of fatalities is currently lower.
Stock markets in mainland China were scheduled to have reopened on Friday. But authorities have ordered them to remain shut until Monday (Feb. 2) as they extend the Lunar New Year holiday season by three days in an attempt to slow down mass travel and limit the spread of the disease. The holiday season is normally the peak travel period in China. But Wuhan and many other cities have been in lockdown mode since late last week. Hubei Medical School, in the province which includes Wuhan, said that there could already be 40,000 cases in the city.
Hong Kong so far has only 10 recorded cases of the new disease and no fatalities. The two new cases, announced Wednesday afternoon, are an elderly couple who flew to Hong Kong from Wuhan on Jan. 22.
The territory has ordered schools to stay shut for two weeks, civil servants to work from home this week, and a reduction in travel between the semi-autonomous Chinese territory and the mainland. Six of Hong Kong’s 14 border crossing points will be closed from Thursday. Mainland authorities have helped by halting the issuance of new individual visit permits for travel to Hong Kong and Macau.
That move had an immediate effect on the Hong Kong-traded stocks of Macau’s casino giants.
Sands China fell 5.7% on Wednesday to HK$39 per share. Galaxy Entertainment fell 5.2% to HK$53.15. MGM China fell by 5.7% to HK$11.60. Melco International fell 5.2% to HK$17.58. Stanley Ho’s SJM Holdings fell 3.6% to HK$8.85. Some 47% of Macau gamblers enter the territory on individual visit permits.
Hong Kong’s airlines have already begun moves to halve the number of flights to and from the mainland. British Airways on Wednesday announced the halting of all flights between mainland China and the U.K.
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