Top line
Shares of Chinese heavyweights traded in the United States tumbled on Monday amid growing concerns over Beijing’s ties to Russia and potential delistings, resulting in more than $1.1 trillion in losses as regulators’ fears during the pandemic began to hit. on the former high-year Chinese stock market.
Jack Ma, co-founder and former executive chairman of e-commerce giant Alibaba, speaks in Paris in May… [+] 16, 2019.
AFP via Getty Images
Key facts
Shares of e-commerce giant Alibaba, China’s largest U.S.-listed company, were hit the hardest on Monday, dropping 10% on the New York Stock Exchange to their lowest level in nearly six years and extending losses to $613 billion since the all-time high price. in October 2020.
Other online retailers JD.com and Pinduoduo reported similar staggering declines, falling 11% and 21% respectively, amplifying the decline that has wiped out nearly $289 billion in the companies’ market value since their all-time highs last February.
Over the past year, Chinese stocks have “been going through a difficult period” amid the country’s intensifying regulatory campaign against technology companies and, more recently, concerns that firms could be delisted from US exchanges for potential ties to foreign governments, Oanda analyst Ed Moya said on Monday. Email the address.
On Tuesday, the Securities and Exchange Commission identified five Chinese companies, including fast food giant Yum China and biotech firm BeiGene, as using foreign accounting firms and warned they must hand over audit records or face delisting from US exchanges; since then, Yum and BeiGene shares have each fallen nearly 30%.
Beijing’s relationship with the Kremlin is further “complicating investor appetite” for Chinese stocks, Moya says, pointing to reports over the weekend that Russia has asked China for military assistance in the war against Ukraine and warning that any such coordination could lead to ” quick retaliatory sanctions, like those that forced the Moscow Stock Exchange to close last month.
Other biggest US-listed Chinese stocks that have been sold off include Internet giant Baidu, Tesla competitor NIO and gaming company NetEase, which fell 8%, 12% and 10% respectively on Monday.
Amazing Fact
In total, the top ten Chinese companies trading in the United States have lost more than $1.1 trillion in market value from their all-time highs during the pandemic, more than double their combined value of roughly $520 billion on Monday.
Tangent
The Nasdaq Golden Dragon China Index, which tracks the trading activity of Chinese companies in the US, fell 12% on Monday and is down 75% from its February 2021 all-time high. The index is at its lowest level in nearly nine years.
key background
Chinese stocks traded in the United States have lost much of their value after Beijing officials issued a string of sweeping private-sector regulations this summer, in one case banning for-profit educational businesses almost overnight. “Yes, there is a huge market and a lot of growth potential, but it is clear that there are regulatory risks that seem to be growing every month,” Tom Essay, author of the Sevens Report, wrote in a recent note. The sell-off also rocked markets in China, with shares trading in Beijing on Monday posting their worst day since the Great Recession.
Further Reading
Live: Russia-Ukraine talks ‘suspended’ until Tuesday, Ukraine reports (Forbes)
US-listed Chinese stocks have lost another $150 billion in market value this week as Beijing targets ‘excessive’ wealth (Forbes)