Chinese tech stocks are turning higher a year after Beijing kicked off a crackdown on the sector by blocking the record $37bn initial public offering of Jack Ma’s Ant Group.
Equity benchmarks tracking the biggest names in China’s internet sector have notched up double-digit gains since hitting lows in early October.
The Nasdaq Golden Dragon China index has climbed 18 per cent while Hong Kong’s Hang Seng Tech index has jumped more than 13 per cent.
Analysts have become more positive with HSBC this week upgrading its outlook for Chinese equities, saying investors were “too bearish” on the country’s stocks.
But the prospect of further curbs still hangs over the sector, leaving a yawning gap between China’s tech stocks and the broader market.
The benchmark CSI 300 index of large Shanghai- and Shenzhen-listed stocks is down about 5 per cent this year after recent shocks to Chinese markets and economic growth whereas big tech groups listed in Hong Kong and New York have fallen more than 20 per cent.
Yesterday, the Federal Communication Commission’s vote to force China Telecom to close its US business helped send tech shares in Hong Kong as much as 3.9 per cent lower on the day.
“The peak intensity may have already passed us . . . but regulation in the space will be ongoing because it’s not about the regulation of the internet,” said David Choa, head of Greater China equities at BNP Paribas Asset Management. “These [regulatory moves] are part of bigger actions on the overall economy.”
Analysts said the regulatory wrath that intensified in early July after ride-hailing group Didi Chuxing listed in New York means big tech groups including Alibaba and Tencent are unlikely to soar to pre-crackdown highs imminently.
Choa said some of the rally probably came from investors closing out the gains they made from bets against Chinese tech.
But he added that recent events, such as a lower than expected fine on food delivery group Meituan and the reemergence of Ma in Hong Kong and Spain, “have led the market to think that maybe the worst is behind us”.
Ma’s criticism of financial regulators was widely credited with scuppering the IPO of Ant — the fintech and a sister company of Alibaba — last November and fostering the first wave of the regulatory clampdown.
That left Alibaba shares among the hardest hit, down about 45 per cent since regulators cancelled Ant’s listing, while rival Tencent is down about 16 per cent.
The re-emergence of Ma has ‘led the market to think that maybe the worst is behind us’.
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Fonte: Financial Time del 28/10/2021