Since 2020, the sector has been under pressure from the authorities, who have multiplied the blows against powerful internet companies, fined for competition and personal data issues.
Ant Group, Alibaba’s payment subsidiary, was the first to suffer the consequences. At the end of 2020, regulators halted its listing in Hong Kong, estimated at 34,000 million dollars.
Two years after these setbacks, the banking and insurance regulator gave Ant Group approval for a capital increase. Once the operation is completed, Ant Group will be able to own a maximum of 50% of the shares.
In this framework, ADRs rose up to 10% led by Didi Global, followed by Alibaba (7%) as well as Pinduoduo, Nio and JD.com (6%). Tencent, another tech giant that faced strong regulatory pressure last year, is up 6.5% on Wall Street.
Good start to the year for Chinese stocks
Chinese stocks overcame an initial bout of volatility to advance on the first day of the new year as optimism grew that Covid infections may have peaked in some parts of the nation.
The Hang Seng China Enterprises Index, which tracks Hong Kong-listed Chinese companies, closed up 1.9% in its best business performance of the year. first day in any year since 2018.
After initial nerves that China might have a hard time coming out of its Covid Zero policy, investors are increasingly confident that the bottom line will be positive for the economy and corporate profits. A recovery in subway use in nearly a dozen major cities and the peak of the virus outbreak in the southern manufacturing hub of Guangzhou are reinforcing these expectations.
“While seeing more surges and more widespread infection at the early opening stage is inevitable, the outlook for the Chinese economy has improved through 2023,” strategists at Saxo Capital Markets wrote in a note. “In addition to reopening, China has stepped up its efforts to support the struggling real estate sector and given property developers access to credit and equity financing that they had been denied for most of 2022.”
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
