Huawei suppliers' stocks hammered after CFO's arrest in Canada
08 December, 2018
Huawei Technologies suppliers were hammered in early Thursday trading after the arrest of the Chinese smartphone maker's chief financial officer in Canada, at the request of the United States, added fresh drama to the ongoing trade war between the world's two largest economies.
The Shanghai Composite Index fell 0.8 per cent and the Hang Seng Index dropped 2 per cent. Both gauges had been on course to rebound after top leaders from China and the US clinched a 90-day truce on the trade friction last weekend.
Huawei's Chief Financial Officer Sabrina Meng Wanzhou was detained by Canadian authorities at the request of the US, a move that sparked a protest from the Chinese government.
"Wanzhou Meng was arrested in Vancouver on December 1," Ian McLeod, a Canadian Justice Department spokesman said in an emailed reply to questions. "She is sought for extradition by the United States, and a bail hearing has been set for Friday."
She was arrested because she attempted to evade the trade embargo placed by the US on Iran, ?The Globe and Mail reported, citing a Canadian source.
Huawei's suppliers tumbled in mainland China and Hong Kong trading. Shennan Circuits slumped 7.1 per cent to 77.14 in Shenzhen and China Soft plunged 12 per cent to HK$4.05.
Meanwhile, Hong Kong property developer Hopewell Holdings announced it will go private, sending prices of its shares soaring about 30 per cent.
Also, Chinese game distributor iDreamSky belly-flopped in its Hong Kong IPO, falling 3.8 per cent to HK$6.35.