Battered Chinese tech stocks creep up as funds insist sell-off unjustified as regulatory danger has passed
- Chinese tech stocks clawed back some ground on Wednesday after suffering a tumble that wiped out over US$100 billion of market value the previous day
- ‘The peak of the regulatory intensity is probably behind us in this cycle,’ said Jessica Tea of BNP Paribas Asset Management
Analysts maintained that the worst of the regulatory intensity has passed.
That fanned worries that the tech sector could be facing another wave of regulations. But “the peak of the regulatory intensity is probably behind us in this cycle, as we move from policy normalisation to growth normalisation,” said Jessica Tea, Greater China investment specialist at BNP Paribas Asset Management.
“The recent correction in share prices reflects the weak sentiment of the Chinese internet sector rather than a large economic impact on the operations,” said Tea.
Meituan was first among its peers to take a hit. On Friday, China’s state planner, the National Development and Reform Commission (NDRC), told online food-delivery platform operators to slash fees to help reduce costs for catering businesses. The move was intended to foster a recovery in the services sector as it struggles through the Covid-19 pandemic.