Hong Kong’s biggest financial names got hammered on June 5 after China turned up the dial on capital controls restricting mainland residents from accessing offshore accounts. AIA Group dropped over 3%, HSBC fell nearly 2%, and Standard Chartered slid roughly 3% on the Hong Kong exchange in initial trading.
The London-listed versions fared even worse. HSBC shares dropped as much as 6%, while StanChart plunged up to 7.6% in early trading. Prudential, another major insurer exposed to mainland Chinese client flows, slid 6.5% to its lowest point in eight months.
What’s behind the selloff
The trigger traces back to May 22, when China announced a sweeping crackdown on illegal cross-border securities activity. The result: $330 million in fines levied against brokers operating without proper licenses, including Tiger Brokers and Futu, two platforms popular with mainland investors seeking access to offshore markets.
Within a week, additional rules restricted mainland residents from opening offshore accounts at major Hong Kong banks. Some banks responded by tightening or outright suspending account openings for mainland clients.
