Hong Kong Stock Market Faces Sell-Off Pressure as AI and Semiconductor Shares Hit Lock-Up Expiry
Hong Kong’s stock market could face sell-off pressure as key artificial intelligence (AI) and semiconductor companies, including Zhipu AI and MiniMax, see their six-month lock-up periods expire. The lock-up periods for Zhipu AI, which is known as Z.ai internationally and trades as Knowledge Atlas Technology, and MiniMax end on Tuesday and Wednesday, respectively, unlocking 25.68 million and 150 million shares, out of total issued shares of 446 million and 314 million, respectively.
What is Driving the Sell-Off Concerns?
The market is facing dual selling pressure, according to Stevan Tam, associate director at Fulbright Financial. “These stocks have generally seen significant gains, and it is believed that investors may be looking to lock in some profits, which could limit their upwards momentum,” he said.
The situation is compounded by concerns of a drain on liquidity as many of the same companies were eyeing large secondary share placements. “At the same time, large-scale placements could intensify selling pressure,” Tam added.
How Have the Stocks Performed Recently?
Zhipu AI, known internationally as Z.ai, gained 5 per cent on Tuesday morning after sliding 14.6 per cent on Monday, while MiniMax lost 2.3 per cent on Tuesday morning after a 3.3 per cent drop on Monday. Based on Tuesday’s mid-day prices, the combined market value of the shares subject to the lock-up expiration amounts to HK$90 billion (US$11.5 billion).
Why Is Liquidity a Concern?
Analysts warned of rising fears of a drain on liquidity as many of the same companies were eyeing large secondary share placements.
What Are the Broader Implications for the Hong Kong Market?
The market was facing dual selling pressure, said Stevan Tam, associate director at Fulbright Financial.
What Should Investors Monitor Moving Forward?
Investors are advised to track the companies’
Related reading