News Maker 23

The Hang Seng Index fell 2.1%, or 533 points, to 25,473 during Monday's trading, snapping a previous upward trend. The downward pressure stemmed primarily from tech stocks, which faced profit-taking alongside concerns over high valuations and the massive investments companies are pouring into the artificial intelligence (AI) sector.

Alibaba drew significant attention after announcing plans for a US$10.2 billion share placement in Hong Kong at a 3.6% discount to its previous closing price. While the proceeds are earmarked for AI expansion, the move sparked concerns regarding potential share dilution and the substantial capital required for AI infrastructure.

Amid the pressure on the tech sector, fast-fashion company Shein officially kicked off the bookbuilding process for its Hong Kong IPO. Shein is offering 280 million shares at a price range of HK$47.60–HK$49.50 per share, aiming to raise approximately HK$13.9 billion. Trading is expected to commence on September 1.

Tech stocks bore the brunt of the selling pressure. Tencent fell 2.6%, Xiaomi weakened 3.6%, Z.AI Co. plunged 5.7%, MiniMax slumped 6.1%, and Meituan dropped 1.8%. These declines indicate that investors are beginning to trim their exposure following the sector's earlier rally.

Newsmaker Analysis: The Hang Seng is facing short-term pressure driven by profit-taking and concerns that tech stock valuations have become excessive. While massive AI investments offer long-term growth prospects, the heavy capital requirements and dilution risks could weigh on market sentiment. Future movements will hinge on the ability of key tech stocks to stabilize prices and regain investor interest.