Panic selling seizes Chinese stocks with the biggest plunge since 2008

(Bloomberg)-Hong Kong-listed Chinese stocks have reached their worst day since the global financial crisis, as concerns over Beijing’s close relationship with Russia and new regulatory risks have triggered panic selling.

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The Hang Seng China Enterprises Index fell 7.2% on Monday, the largest decline since November 2008. The Hang Seng China Enterprises Index has fallen 11% in the worst case since the gauge was launched in July 2020, clearing the value of $ 2.1 trillion since the year. -Early peak.

Even if China denies the report, following a report citing U.S. officials that Russia has sought military aid from China for the war in Ukraine, traders still have Beijing’s potential overture to Vladimir Putin. Is concerned that it could lead to global backlash and even sanctions against Chinese companies. Emotions were also hurt by Covid’s blockade in the major technology hubs of southern cities, Shenzhen, and northern Jillin.

Tencent Holdings Ltd. is reportedly facing a possible fine for violating the anti-money laundering rules, which pushed down stocks by nearly 10% on Monday. There is also the risk that Chinese companies will be delisted. From the United States because the US Securities and Exchange Commission has identified some names as part of a crackdown on foreign companies that refused to publish their books to US regulators.

Mark Mobius, who founded Mobius Capital Partners at Franklin Templeton Investments more than 30 years later, said: In this case, the whole story is still in the air. “

There is reason for investors to feel uneasy after some well-known funds have reported significant losses related to Russia. BlackRock’s funds exposed to Russia have plummeted $ 17 billion since the beginning of the war.

On Friday, the Golden Dragon Index, which tracks American Depositary Receipts of Chinese companies, fell 10% for the second straight day. This is unprecedented in 22 years of history. China’s benchmark CSI300 index fell 3.1% on Monday. Onshore yuan was also the weakest in a month as sentiment towards Chinese assets deteriorated.

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“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. “

Mainland traders continue to skyrocket Hong Kong stocks during the defeat, but have proven insufficient to support stock prices. Since February 22, Hong Kong stocks have been purchased online through stock connections in all sessions, accumulating $ 1 billion. Most frequent since Monday and January.


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 the valuation of the MSCI China Index.

“We continue to overestimate China with well-fixed growth expectations / targets, mitigation policies, sluggish ratings / sentiments, and low investor positioning,” but in response to changes in the global macro environment 12 Reduce the monthly evaluation target from 14.5 times to 12 times. Strategists, including the higher geopolitical risk, Kinger Lau, wrote in a memo dated Monday.

The MSCI China Index has been rated more than half since its peak in February 2021. Gauges are trading about nine times the 12-month futures earnings forecast, with a five-year average of 12.6.

Yasushi Suzuki, head of emerging market investment at Sumitomo Mitsui Banking Corporation, said, “It is true that valuations are cheap, but if you desperately close your position, valuations are irrelevant.”

(Updated to include Nasdaq Golden Dragon China Index movements in the 7th paragraph. Previous versions fixed Alibaba spelling.)

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