China tech giants lost $250 billion in market value amid potential regulations


Jack Ma, CEO of Chinese e-commerce giant Alibaba, speaks during his visit at the Vivatech startups and innovation fair, in Paris on May 16, 2019.

Philippe Lopez | AFP | Getty Images

SINGAPORE — Shares of China’s top technology giants were battered on Wednesday as regulatory concerns continue to mount.

By Wednesday afternoon in Asia, Hong Kong-listed shares of Alibaba plunged 8.86% while Tencent dropped 5.38%. Smartphone maker Xiaomi also declined 5.73% and China’s biggest on-demand delivery services firm Meituan Dianping fell 7.47%. E-commerce JD.com also saw its stock plummet 8.11%.

The broader Hang Seng Tech index saw heavy losses as well, and fell 5.6%.

The combined losses of the five tech heavyweights since their Monday’s close has contributed to more than $250 billion being wiped off in terms of market cap, based on CNBC calculations.

Chinese regulator — the State Administration for Market Regulation — on Tuesday announced a set of draft rules aimed at curbing monopolistic behavior on internet platforms. The moves were possibly further exacerbated by a global rotation out of tech stocks seen globally in recent days. A positive development on the coronavirus vaccine front has spurred hopes of a recovery in areas such as travel, and investors are selling down tech and switching to stocks in energy and industrial sectors instead.

Regulatory concerns

Andrew Collier, managing director at Orient Capital Research, told CNBC that the sudden decision to suspend Ant’s public listing was a “disaster.”

“You don’t yank a $35 billion IPO two days before it’s going to be launched internationally, it makes the regulatory system look completely arbitrary and also confused,” Collier told CNBC’s “Street Signs Asia” on Wednesday. Ant Group was looking to raise just under $34.5 billion in what would have been the world’s biggest IPO.

“It suggests deep politics within China … that’s bubbled to the surface and they couldn’t resolve (it) ahead of time,” Collier said. “Regulation can be positive but this particular move was a disaster.”

— CNBC’s Arjun Kharpal contributed to this report.



Source link

Discover

Sponsor

Latest

27 deaths associated with Covid-19 last month

Enhanced surveillance to drill down into Covid-19 spread in community settings ...

2023 Maserati MC20 Folgore technical details, specifications

Maserati's first new model of the 2020s, the MC20, strays from the path that's leading carmakers towards electrified and connected vehicles. The brand...

2021 Audi RS 5 Coupe and Sportback gain launch editions, pricing

The 2021 Audi RS 5 Coupe and RS 5 Sportback are back in the game for 2021, and the two Audi Sport models...

Amy Coney Barrett to face more questions from senators on Wednesday

https://www.youtube.com/watch?v=NSUuyzeZx_kJudge Amy Coney Barrett will face a second day of grilling from lawmakers on the Senate Judiciary Committee on Wednesday after fending off...

How the pandemic impacts America’s “working poor”

Miami resident Willie Mae Daniels, with granddaughter, Karyah Davis, 6, was laid off from her job as a food service cashier at the...