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Alain Jogart / AFP via Getty Images
China was fined
Alibaba Group Holding
And two
Tencent Holdings
Supported companies on Monday are the latest indication that Chinese Internet companies may face the highest level of regulatory scrutiny as they may push their shares in the shortest possible time.
China’s state administration imposed a fine of 500,000 yuan (approximately, 500 76,500) for market regulation – but Alibaba (Tigger: Baba) and Tencent (700. Hong Kong) against Chinese literature and Shenzhen hive box technology. Regulators said the companies had not submitted proper disclosures for past acquisitions. Regulators also said they were investigating other deals.
The fine comes just weeks after Chinese regulators released draft hopeless guidelines that analysts say targeted the country’s largest Internet behemoth. Analysts expect more regulatory moves.
“The [Communist] The party realizes that Fintech has advanced in the gray area of regulation between finance and technology, ”said D.S. “At the same time, we see the negative side effects of large technology monopolies being acknowledged. The impact will be on competition, productivity and financial risks.”
Green compares and refers to regulatory research in the United States
Byte
(BIDU), Alibaba Group and Tencent account for almost the same share of Chinese venture capital expenditure
lettersS
Google (GOOGL),
Amazon.com
(AMZN), and
Facebook
(FB) refers to U.S. venture capital expenditure. Of the top five Chinese Internet companies, four are associated with Tencent, which has been a strategic investor
Redemption Dianbing
(3690. Hong Kong),
J.D.Com
(J.D.), and
Bintudovo
(PDT).
Winston Ma, former executive director and head of China’s North American office of sovereign wealth, says the measures are in line with China’s “dual-cycle” economic initiative as regulators seek to prevent competition and activity in China’s economy from blocking competition and activity. Finance, China Investment Corporation, and co-editor The hunt for unicorns: How sovereign funds are transforming investment in the digital economy.
“The current focus of the government is to make SMEs (SMEs) more active and competitive and to create more domestic jobs,” he added.
Shares of Alibaba traded down 2.5% at 7,257.96 in Monday’s trade; Shares of JDCom fell nearly 3% to 1580.15, and
iShares MSCI China
The Exchange Trading Fund (MCHI) was down 1% at $ 78.69.
Widely, the change in regulatory climate is negative for listed Chinese technology companies more and more broadly, Green says these companies are largely favored for MSCI China, but also for small and medium enterprises and the broader technological ecosystem.
As investors increasingly view China as China’s economy recovers faster than others around the world, it is better to buy a wider range of Chinese stocks than to focus on a few megacob internet stocks that are now under a regulatory cloud. .
Sean Taylor, DWS leader in emerging markets, supports finance and insurance companies as Chinese stocks take a better return view, with its ratings attractive, and climate-related sectors that China should benefit from as it progresses in its latest economic five-year plan.
Write Reshma Kapadia at [email protected]