Market Turmoil Intensifies as China Ousts Troubled Developers from Stock Connect, Triggering Sell-Off and $2 Billion Value Loss

Stocks take another hit as China removes struggling developers from Stock Connect ties

Alterations to the Stock Connect roster instigate a further wave of sell-offs, adding pressure to the wider market that is already battling an 8-month low.

The developers, in conjunction with colleagues Agile Group, Powerlong Real Estate, and China South City Holdings, were among the 33 firms expelled from the southbound aspect of the cross-border investment connections, per the exchange announcements. Altogether, the divestment wiped nearly HK$2 billion off the market value of the six developers.

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Why increased market fluctuations are likely for investors following the recent global stock clearance

According to the regulations of Stock Connect, the trading platforms have the authority to exclude any share from the program if its average end-of-month market worth falls under HK$4 billion for a continuous period of 12 months prior to the date of removal.

Shimao experienced a significant decrease of 25 per cent, dropping to HK$0.46 during the midday trading halt, spearheading the downturn. CIFI also took a hit, falling 20 per cent to HK$0.19, along with Sino-Ocean Group. Other companies such as Agile, Powerlong, and China South City also experienced a dip in their shares, declining by 11 to 15 per cent.