China’s Internet Stocks Face More Pain, Global Investors Say
The Hang Seng Tech Index, where many Chinese tech giants are listed, has already lost about a quarter of its value from a rout that began mid-February.
Over the past week, more than 30 tech giants issued pledges to obey antitrust laws after Beijing gave them a month to conduct reviews and comply with government guidelines.
Food delivery platform Meituan and tech giant Tencent Holdings Ltd., which have been on analyst radars for regulatory probes, are down 36% and 18%, respectively, from their peaks earlier this year.
Looking ahead, China’s tech companies are likely to move far more cautiously on acquisitions, over-compensate on getting signoffs from Beijing, and levy lower fees on the domestic internet traffic they dominate.
“We have already applied a valuations discount to the whole Chinese internet sector to factor in higher regulation risks,” said Jian Shi Cortesi, a Zurich-based fund manager at GAM.
The landmark case against Microsoft Corp.’s alleged software monopoly took more than half a decade of back-and-forth before settling in 2004.
That has helped give investors more optimism for the long term.
Meanwhile, mainland traders have kept the faith.
While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
Automakers around the world have had to adjust assembly lines due to the shortages, caused by manufacturing delays that some semiconductor makers blame on a faster-than expected recovery from the coronavirus pandemic.
The tech and airline sectors feature prominently on the earnings calendar, offering a glimpse of industries that have enjoyed vastly different fates during the first year of the pandemic.
As of last week, both the iconic Dow Jones Industrial Average and benchmark S&P 500 were at record closing highs.
Luke Sully, CEO at digital asset treasury specialist Ledgermatic, said in an email that people “may have sold on the news of the power outage in China and not the impact it actually had on the network”.
It insisted that it would maintain pressure on trading partners to redress trade imbalances with the U.S.“There will still be pressure on Asian central banks to ease back on their intervention activity, which would lead to greater appreciation pressure,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd.
Taiwan’s tech-focused exports have soared during theCOVID-19 pandemic because of global demand for laptops, tablets and other equipment to support the work-from-home boom, driving its trade surplus with the United States and jacking up the value of the Taiwan dollar.
that have yet to prove their viability as revenue-generating, profitable entities have lost their shine over the past few months amid concern about valuations and as established carmakers like VW move faster into EV fray.Read more: The End of Tesla’s Dominance May Be Closer Than It AppearsThe industry’s multi-billion dollar surge also hasn’t escaped Beijing’s attention.