The spat over the ports comes at a delicate time, as China grapples with escalating trade tensions with the US
[HONG KONG] CK Hutchison Holdings shares extended declines on Wednesday (Apr 9), erasing all their advances since the company agreed to sell its Panama Canal port assets to a BlackRock-led consortium last month.
The Hong Kong-listed stock fell as much as 4.3 per cent on Wednesday amid a global rout, and after Panama’s top auditor accused the conglomerate of wrongdoing. The slide helped wipe out CK Hutchison’s share gains since the transaction was announced in early March, with the stock on track for its fifth day of losses.
The sell-off underscores how the company, founded by billionaire Li Ka-shing, stands in the middle of a US-China tiff over its canal facilities in the Central American country. While the firm is set to make US$19 billion in cash proceeds from the deal, the agreement has enraged Beijing after US President Donald Trump touted it as reclaiming the Panama Canal.
The canal, used mainly by the US and China, became a geopolitical lightning rod after Trump vowed to retake it. In a news conference on Tuesday, US Defense Secretary Pete Hegseth pointed to ports operated by CK Hutchison on either end of the trade route as potential threats to US and Panamanian interests.
China’s market regulator has said it would open a review into the deal that involves selling 43 ports around the world, including two in the Panama Canal, citing the need to “protect public interests”.
The spat over the ports comes at a delicate time, as China grapples with escalating trade tensions with the US. The trade uncertainties have triggered a global equity sell-off, with Hong Kong’s benchmark stock index falling about 20 per cent from a March high.
The company’s share decline is in line with broader stock moves, “and probably does not imply a market assumption that its asset sale will fall through”, said Denise Wong, an analyst at Bloomberg Intelligence. Still, “the asset valuation could nevertheless face risk of a significant revision due to heightened business risks, especially with an escalating trade war and Panama’s potential revocation of its contract with CK Hutchison”. BLOOMBERG
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