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Chinese tech companies have lost nearly $ 254 billion in market value over two days, as regulatory scrutiny from the country’s dominant fintech groups following the introduction of new antitrust rules for the sector sent stocks plummeting.
Shenzhen’s high-tech ChiNext Index fell 2.9 percent and Shanghai’s Star 50 Index fell 2.7 percent on Wednesday after a senior official with the China Banking and Insurance Regulatory Commission promised to examine de close the fintech monopolies.
The sell-off in Chinese tech stocks spread to Hong Kong, where the Hang Seng Tech Index fell 5.4 percent.
Alibaba’s Hong Kong-listed shares fell 8.3%, down 13% in the past two sessions, and saved $ 104 billion from the company’s market capitalization. Rivals Tencent and JD.com lost 5 percent and 8.8 percent, respectively, while food delivery group Meituan fell 6.5 percent.
Xiaomi, which has overtaken Apple as the world’s third-largest smartphone maker, was also down 11.7 percent over the two days.
The renewed antitrust attention to tech companies comes as groups wield an ever-widening influence on daily life in China, where a fifth of the country’s consumer goods are now sold on Alibaba.
Last week, Chinese regulators halted the $ 37 billion initial public offering of Ant Group, the payments and lending arm of Alibaba, after publishing a new draft of rules for online credit. Last month, Beijing published its first draft of a comprehensive law on personal data protection.
The latest comments from Liang Tao, vice president of CBIRC added to the downward pressure on stocks this week from China’s competition regulator.
$ 104 billion
The amount that Alibaba has lost due to its market capitalization in the last two sessions
“In areas where there are market monopoly problems, we must learn from international experience, strengthen our antitrust examinations and ensure that a fair market order is maintained,” Mr. Liang told attendees Wednesday at a financial summit in Beijing. .
The day before, the State Administration for Market Regulation, China’s competition watchdog, published new rules targeting behavior, including using exclusivity clauses to hinder competition, treating customers differently based on of their spending data and forcing them to buy product bundles to access the ones they want. to wish.
“Looking at the proposed guidelines, we believe that if some of them were approved and implemented, it could affect the development of the industry,” said Alicia Yap, Citi’s CEO and head of Internet Asia-wide research.
Ms Yap said the rules could limit targeted ads and product recommendations used by almost all e-commerce platforms, while the “forced exclusivity” rules could affect Meituan, which in the past required restaurants to will not be listed on the platforms of the competition.
But Shanghai merchants were skeptical that the new rules would spell the end of the world for China’s most successful companies.
“This is just one way [Beijing] saying, [to] all big companies: ‘They have to follow our rules, even if they are a giant like Ant Group, they all have to follow the instructions of the authorities,’ “said a trader from a Chinese brokerage.
Elsewhere in Asia, on Wednesday, Japan’s Topix rose 1.3 percent, while Australia’s S & P / ASX 200 rose 1.6 percent.
