HONG KONG (AP) – Shares of Chinese technology firms Alibaba and Tencent fell sharply yesterday, a day after Chinese regulators fined their subsidiaries for not disclosing transactions and failing to comply with anti-monopoly rules.
E-commerce giant Alibaba’s shares in Hong Kong fell 6.8 per cent, while gaming and social media company Tencent Holdings sank 3.2 per cent. The Hang Seng index declined three per cent.
On Sunday, China’s State Administration for Market Regulation published a list of 28 deals that violated anti-monopoly rules.
It included five of Alibaba’s transactions and 12 of Tencent’s. A wide-reaching crackdown on the technology sector has often hit stock prices in Hong Kong and Shanghai. For violations in each case, the maximum fine was CNY500,000 (USD74,500).
A wide-reaching crackdown on the technology sector has often hit stock prices in Hong Kong and Shanghai, though signs the authorities might be easing up spurred gains in recent months.
Alibaba’s shares had risen 70 per cent and Tencent’s were up 18 per cent since mid-March, before yesterday’s losses.
“The dip is likely to be temporary. The market was more wary about the United States raising interest rates so sharply, but it’s just been overrun by the new fines,” said investment manager and veteran market commentator in Hong Kong Francis Lun. An increase in COVID-19 cases that raised fears of more pandemic lockdowns in Shanghai also shook investor sentiment, he said.