SGX plummets 12pc as HKEX clinches MSCI deal

Business | Bloomberg and Avery Chen 28 May 2020

Hong Kong Exchanges and Clearing (0388) will team up with global index publisher MSCI to sell 37 futures and options contracts tracking Asian and emerging markets, the two companies announced yesterday, pushing shares in Singapore Exchange plunging the most for 17 years.

MSCI will stop licensing indexes for most derivatives products with SGX early next year after the present agreement expires, the bourse said in a separate statement. The move is a blow to SGX, whose shares fell 12 percent yesterday, the most since 2003 amid concerns over the loss of revenue.

The shift comes as a boost for the Hong Kong exchange as the city's financial hub status faces challenges, with investors spooked by a Beijing plan to impose security legislation in the city and a resurgence of pro-democracy protests.

China's offshore yuan is on the cusp of a record low, falling an additional 251 points to 7.16 per dollar as of last night on speculation the government would be willing to permit a weaker currency in response to fresh punitive measures from the US. US President Donald Trump said Hong Kong will lose its status as Asia's financial hub if Beijing proceeds with the new law.

Hong Kong and mainland stocks failed to follow gains in the US and Europe yesterday. The Hang Seng Index fell 83.3 points to 23,301.36, while Morgan Stanley lowered the target price of the benchmark to 21,300.

Shares of companies related to Stanley Ho Hung-sun's family were mixed yesterday after an overall surge on Tuesday following Ho's death.

Shun Tak (0242) fell 0.96 percent to HK$3.09, while SJM (0880) rose 0.45 percent to HK$8.88 as investment houses said the two companies' fundamentals will not significantly change after the tycoon's passing.

Separately, Li & Fung (0494) delisted from the Hong Kong stock exchange yesterday after the Fung family took the world's largest supplier of consumer goods private in a HK$7.22 billion deal.

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