A number of factors contributed to today’s drop, including regulations intended to prevent “fake foreign fund” flows through the links, and concern over U.S. economic relations. The market is “good”, said Zhang Fushen, an analyst at Shanghai PD Fortune Asset Management. Table of contents
Full Answer
Why are China’s stocks falling?
The declines come as Chinese regulators continue to step up their oversight in sectors spanning from technology to education and food-delivery. Investors watch computer screens at a stock exchange hall on July 13, 2020 in Nanjing, Jiangsu Province of China.
How bad has Hong Kong’s stock market been since the financial crisis?
Hong Kong’s Hang Seng index also suffered heavy losses, falling 7.88% in the same period. “There hasn’t been a single two-day decline (for the Hang Seng index) since the Financial Crisis that has exceeded the magnitude of the last two days,” analysts at Bespoke Investment Group wrote in a note.
Why are American investors fearing a Chinese stock delisting?
Altogether, the environment has become significantly hostile toward Chinese stocks as American investors fear Beijing's unpredictable overreaches, and the threat of delisting also looms.
Why did China’s Evergrande Group stock fall 13%?
China’s debt-laden property giant China Evergrande Group’s plunged 13.41% on Tuesday after announcing it would cancel a proposed special dividend.
What would happen if China stock was delisted?
If these stocks were delisted, they would continue trade on other exchanges, like in Hong Kong, and a number of Chinese stocks have IPO'd in Hong Kong for that reason. While many of these stocks, like Alibaba, trade for dirt cheap valuations, with investor sentiment the way it is, these stocks could be value traps.
Why are Chinese stocks being delisted?
The Department of Defense published an "entity list" with several stocks it said would be delisted from American exchanges for acting as agents of the Chinese government and military.
Why did Morgan Stanley sell off GDS?
The threats against the education sector were the biggest reason for the sell-off, but they weren't the only one. Morgan Stanley also downgraded GDS Holdings, which operates data centers in China. The Wall Street bank lowered its rating on the stock to equal weight, saying it was concerned about unfavorable power quota allocations in Shanghai, another potential sign of the impact of government regulations.
What is A Shares?
A-shares refer to stocks of mainland China-based firms listed on the Shanghai Stock Exchange or Shenzhen Stock Exchange.
What markets traded mixed in Wednesday morning?
Hong Kong and China markets traded mixed in Wednesday morning trade, struggling to recover from the declines of the past few days.
Why did Tencent get fined?
Next, China’s antitrust regulator ordered Tencent on the weekend to give up its exclusive music licensing rights and slapped a fine on the company for anti-competitive behavior .
Is Beijing's intentions faulted on merit?
Beijing’s intentions “cannot be faulted on merit,” Mizuho Bank’s Vishnu Varathan said in a Tuesday note, arguing that authorities’ concerns over sectors such as education were aimed at social welfare, while technology is “ostensibly trained on worrying data rights/abuse issues.”
Can you take out a company listing in China?
A painfully sobering message may be: ‘You can take the company listing out of China, but you can’t take China (risks) out of the company.’
