China tech crackdown cycle nearing an end, Fidelity’s equity fund manager says

Name: China kicks off antitrust probes into Alibaba over alleged monopolistic practices
Uploaded: 2021-06-04T00:54:46.000Z
Duration: 1 min 26 s
Description: China kicks off antitrust probes into Alibaba over alleged monopolistic practices

‘I have a view that we are closer to the end of the cycle,’ equity fund manager Jie at Fidelity says

Hang Seng Tech Index has slumped 25 per cent from mid-February peak while the ‘ATM’ stock trio have lost US$400 billion combined

Reading Time:2 minutes

Why you can trust SCMP

This photo, taken on May 26, 2021, shows the Tencent headquarters in Shenzhen, in southern Guangdong province. Photo: AFP

Bloomberg

Published: 8:54am, 4 Jun 2021Updated: 8:54am, 4 Jun 2021

China’s antitrust crackdown on home-grown technology giants may be coming to an end, leaving stock valuations of some of the major firms at attractive levels.

That is the view of Hyomi Jie at Fidelity International, whose China consumer equity funds oversee US$7.3 billion in assets. One has beaten 96 per cent of peers in the past year. Hong Kong-based Jie sold some of her holdings in Alibaba Group Holding and Tencent Holdings earlier in the year, though they remain among her largest positions.

“What we can think about is whether we are in the start of this cycle, this regulatory pattern cycle, or we are closer to the end of the cycle,” said Jie. “I have a view that we are closer to the end of the cycle.”

While probes of billionaire Jack Ma’s Alibaba and Ant Group took three to four months, a second batch of investigations into firms such as Tencent and Meituan may proceed more quickly, indicating that the regulatory cycle could be wrapping up as key players in the industry have agreed on what needs to be done, she added.

01:26

China kicks off antitrust probes into Alibaba over alleged monopolistic practices

China’s rapid-fire moves to curb anticompetitive practices by more than 30 technology firms have rattled investors, leaving them uncertain about the prospects of industry favourites. Shares of internet titans such as Alibaba and Tencent have fallen about 20 per cent from their recent peaks, driven also by a global tech sell-off.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x