Panic selling regains Chinese tech stocks amid piles of concerns

(Bloomberg)-China’s technology stocks continued to sell in Hong Kong on Monday as the blockade in Shenzhen, a major sector hub, spurred investor anxiety over geopolitical and regulatory risks.

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The Hang Seng Index fell more than 8% in the morning trading, again putting the sector at the forefront of losses on Hong Kong and China stocks. The Golden Dragon Index, which tracks American Depositary Receipts of Chinese companies, has plummeted 10% for the second consecutive year. Last week’s days-22 years of history never before.

The fall follows a series of events that surprised investors and reminds us of regulatory uncertainty from both China and the United States. The U.S. Securities and Exchange Commission nominated the first batch of Chinese stocks last week as part of a crackdown on foreign companies refusing to open their books to US regulators, concerns about delisting risks I’m strengthening.

Separately, according to a Friday report, ridehaling company Didi Global, Inc. has suspended preparations for a planned Hong Kong listing because it was unable to ease Beijing’s regulatory demands. Beijing’s potential overture to Russia, which could bring growth and a global backlash against Chinese companies.

“We believe the technology sector is still very vulnerable at this stage,” said Junley, Chief Investment Officer of Power Pacific Investment Management, adding that the company is avoiding ADR in China. rice field. stage. “

The Hang Seng Index fell 4% on Monday, while China’s Benchmark CSI 300 Index fell 2.1%, ending last week with a loss of more than 4% at the National People’s Congress’s worst performance since 2008.

The Hang SengTech Index and Nasdaq GoldenDragon Index have each fallen by more than 60% from their peak. On Monday, Alibaba Group Holdings Ltd. sank 8% in Hong Kong and Tencent Holdings Ltd. is headquartered in Hong Kong. Shenzhen has fallen by more than 4%.

“We don’t see a big catalyst in the short term,” said Marvin Chen, a strategist at Bloomberg Intelligence. You may need to see the change in regulatory tone, but you couldn’t get it from the recently closed NPC conference. “

Despite the defeat, mainland traders aren’t enough to boost stocks, but Hong Kong stocks continue to skyrocket, buying Hong Kong stocks online through StockConnect in all sessions since February 22nd. ing.


The historic decline in tech stocks has puzzled China’s bulls this year as strategists bet on the rebound thanks to policy easing by the People’s Bank of China.

Goldman Sachs Group Inc. strategists have slightly weakened optimism about Chinese equities and have significantly reduced valuation estimates.

“We continue to overestimate China with well-fixed growth expectations / targets, mitigation policies, sluggish valuations / sentiments, and low investor positioning,” but changes in the global macro environment and higher geopolitics. Strategists, including Kinger Lau, wrote in a memo on Monday, lowering the assessment target from 14.5x to 12x due to scholarly risk.

For some strategists, now is the time to add Chinese stocks.

Ivan Sue, an analyst at Morningstar Investment Management Asia Limited, said: Probably only related to emotions. After all, there are no fundamental changes in the underlying business. “

(Estimate, updated with stock purchase data by mainland traders.)

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