China Tech Firm Is Down By $831 Million And Is Far From Sell Off
- ByStartupStory | July 7, 2021
Chinese technology companies have wiped out a combined $823 billion since their February peaks, and Beijing’s expanding crackdown on the sector is fueling investor concern that the selloff is far from over. Authorities on Tuesday issued a sweeping warning to the nation’s biggest companies, vowing to tighten oversight of data security and overseas listings just days after Didi Global Inc.’s contentious decision to go public in the US. That has put further selling pressure on China’s biggest technology names including Tencent Holdings Ltd., Alibaba Group Holding Ltd., JD.Com IncBaidu Inc. and Meituan.“The selling will continue in the third quarter,” said Paul Pong, managing director at Pegasus Fund Managers Ltd. He says he sold two thirds of his technology stock holdings, including in Tencent and Alibaba, in May. “The measures from authorities will keep coming.”
The Hang Seng Tech Index, whose members include many of China’s biggest tech firms, fell as much as 1.9% Wednesday, poised for its sixth consecutive day of declines. Tencent and Meituan fell as much as 3.7%, among the biggest decliners on the Hang Seng Index. Alibaba dropped 2.1%. China’s sweeping warning Tuesday followed the opening of a security review by the nation’s internet regulator last week into Didi and a demand for app stores to remove it. The move stunned investors and industry executives and has hammered the Hong Kong share of peers such as Tencent—one of Didi’s largest backers.Investors worry that the latest security-based probes have opened a new front in President Xi Jinping’s broader campaign against China’s internet giants that began in November with the collapse of Ant Group Co.’s mega IPO and subsequent antitrust investigations into Alibaba and Meituan.
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