Banks warn of new decline in shares of Chinese IT giants
China's pressure on the country's largest technology companies threatens the shares of these IT giants with a new decline, Bloomberg reports.
Experts believe that Beijing's antitrust interference will intensify in the near future. Disputes with market leaders have already exacerbated the sale of securities of the country's IT giants. The Hang Seng Tech Index, which includes shares of China's major IT giants, has lost about a quarter of its value since the crash started in mid-February. Now traders are predicting an increase in liquidity requirements for Chinese companies and a decrease in their market value.
Uncertainty due to tougher antitrust regulation in China may become a limitation for some companies in the country global markets strategist at JP Morgan Asset.
Businesses will be more cautious about company acquisitions and mergers and charge less fees on internal Internet traffic.
GAM Investments has lowered its valuation of the entire Chinese Internet sector to anticipate the increased risks from regulation, GAM wealth manager Jang Shi Cortezi reported to the agency.
China on April 10 fined Alibaba a record $ 2.8 billion as part of an antitrust investigation. Beijing gave other companies a month to test themselves for compliance with laws and government requirements, Bloomberg writes. Over the past week, more than 30 companies have declared their commitment to antitrust requirements, the agency said. Alibaba shares in Hong Kong are down 23% from their peak in October, while rival Tencent Holdings is down 18% from a peak earlier in 2021, Bloomberg added. At the same time, the American "technology" index Nasdaq has grown by 8% since the beginning of the year, despite the correction in March. Alibaba shares jumped 8% immediately after the fine.