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Global investors sold about $ 1 billion in Chinese stocks on Monday as crackdowns on Beijing’s education companies raised concerns about tightening regulations across the world’s second-largest economy.
Investors offloaded RMB6.45 billion ($ 995 million) worth of Shanghai and Shenzhen listed stocks through a market linkup in Hong Kong during a morning session in Asia.
Market turmoil Leaked official memo on Friday Beijing has suggested that tuition groups can be banned from making a profit. News of potential measures has wiped out about $ 16 billion from the three values of the sector’s largest companies.
Losses continued on Monday, with the Shanghai and Shenzhen-listed Chinese benchmark CSI 300 down almost 3% and the education company subindex down almost 10%. In Hong Kong, the Chinese corporate index of mainland companies fell 3.7% as the broader Hang Seng Bank fell 2.9%. The Hang Seng Index fell 6.6%, the worst day of the year.
Investors have stated crackdowns following regulatory measures to curb financial and tech companies, including: Vehicle dispatch app Didi Chuxing E-commerce group Alibaba has expressed concern that no sector can circumvent tighter crackdowns.
Frank Benjimura, Head of Equity Strategy at Societe Generale, said:
Chinese After-school tutoring industry It has grown rapidly in recent years as middle-class parents seek benefits for their children on tests that determine admission to the country’s top universities. However, the overhaul outlined in the leaked document was aimed at “effectively” reducing student academic burdens and household spending on education within a year.
Hong Kong-listed stocks of one of the sector’s big names, New Oriental Education, plunged nearly 40% on Monday, with stock losses of about 60% in two sessions.
Beijing has launched an ongoing crackdown on the fast-growing sector over the past year. In November, regulators unplugged a record $ 37 billion initial public offering of Ant Group, a fintech company managed by. Billionaire Jack Ma, right before.
After that Wider clamp down About technology groups that include antitrust investigations into Ant-affiliated Alibaba and other large e-commerce platforms. Immediately after Diddy’s New York IPO this month New rule An overseas management list has been introduced for Chinese companies whose data collection activities cover more than 1 million users.
Dicky Wong, head of research at Kingston Securities, a Hong Kong brokerage firm, said: “This will create fear and selling pressure in the short term.”
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After cracking down on education, investors will sell $ 1 billion in Chinese stocks
Source link After cracking down on education, investors will sell $ 1 billion in Chinese stocks