HK Stock Market Move | MTR CORPORATION (00066) falls over 3% after reaching a HK$2.25 billion settlement with the Hong Kong government over the Guangzhou-Shenzhen-Hong Kong Express Rail Link Hong Kong section and the Shatin to Central Link agreement.

MTR CORPORATION (00066) fell over 3%, temporarily leading the decline among blue chips. As of press time, it was down 3.16% at HK$30.68, with a turnover of HK$160 million. On the news front, MTR CORPORATION announced on October 2 that the company has reached a settlement arrangement with the Hong Kong government regarding matters related to early construction delays on two projects the High Speed Rail (Hong Kong Section) and the Shatin to Central Link (SCL). Under the settlement arrangement, the company will make a one-off payment of HK$2.25 billion to the government this year for the High Speed Rail (Hong Kong Section) project; as for the SCL project, both parties agreed not to pursue claims against each other over the construction delays, involving no additional payments. A CLSA research report pointed out that this amount accounts for approximately 1% of the bank's forecast 2026 net asset value and the company's current market capitalization. The payment will be recorded in the income statement for the second half of FY2026 and may cause FY2026 net profit to decline by 11%. The bank's core view remains unchanged, still believing that balance sheet pressure may lead to dividend cuts and/or equity issuance.