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China EV Stocks Rise Even As Beijing Keeps

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3xBuBu   Friday, 07/30/21 04:23:45 PM
Re: 3xBuBu post# 418
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China EV Stocks Rise Even As Beijing Keeps Turning The Screws On Tech Sector

China ordered 25 technology firms, including Alibaba (BABA) and Tencent Holdings (TCEHY), to conduct internal reviews as part of a campaign to root out illegal online activity, Bloomberg reported.

Beijing also demanded the companies rectify issues ranging from data security to consumer rights protections. Alibaba, Tencent and 10 other firms were also asked Wednesday to step up data security, including the export of key information, by the Internet Society of China, which was acting on behalf of the country's Ministry of Industry Information Technology.

Meanwhile, the U.S. Securities and Exchange Commission temporarily stopped processing registrations of IPOs and other securities sales by Chinese companies, sources told Reuters and CNBC. The SEC is said to be crafting new guidance for disclosing to investors the risk of a new regulatory crackdown by Beijing.

China's new demands on its tech companies comes just a day after attempted to ease investors' fears. Top officials from the China Securities Regulatory Commission told top banks that the government will weigh any market reactions before rolling out new policies, sources told the Wall Street Journal Thursday.

The regulator also said China doesn't seek to decouple from global markets, especially the U.S., the Journal added. And Chinese companies can continue listing on U.S. exchanges as long as they meet requirements, the officials added, according to CNBC.

That comes as Didi Global (DIDI) denied a separate Journal report that said the ride-hailing giant is considering going private to appease Beijing.

In a front-page editorial Wednesday, the Securities Times said the recent slump "to some extent reflects misinterpretation of policies and a venting of emotion."

It added that "Economic fundamentals have not changed and the market will stabilize at any moment," according to Bloomberg and Reuters. Other securities dailies echoed those comments.

In recent days, Beijing regulators expanded a crackdown on technology companies to other sectors. In addition, China signaled a tougher stance on financial hub Hong Kong and gambling mecca Macau.

On Tuesday, state-run media said China's top legislative body will discuss new laws next month for the former colonial territories. While reports didn't specify what kind of laws would be imposed, it follows the enactment of new security laws in Hong Kong last year to squelch pro-democracy protest.

Over the weekend, regulators ordered Tencent Music Entertainment (TME) to end exclusive music licensing deals with record labels around the world, the BBC said.

China also tightened regulations for food delivery platforms, including minimum wages. And it signaled higher oversight of the property sector

In addition, tutoring schools are now banned from offering for-profit courses in core classes during the academic year, Beijing said. The news sent TAL Education (TAL) and New Oriental Education and Technology (EDU) to multiyear lows.

A prior crackdown targeted e-commerce giant Alibaba and Didi, as Beijing increases scrutiny on domestic companies listing overseas in the U.S.

China EV Stocks
Nio stock climbed 4.8% on the stock market today. Among other China EV stocks, Li Auto jumped 8.9%, and Xpeng rose 6.4%. Nio announced Friday that it will report for the second quarter Aug. 11. And a local unconfirmed Chinese report said Nio would release new, cheaper model from a "sub-brand" next year.

TAL Education gained 3.4% while New Oriental Education fell 1.8%, after rebounds off massive dives earlier.

Internet giant Tencent fell 1.2% but Tencent Music dipped 0.7%. Among other China tech stocks, Didi stock rose 4.6% after jumping 11% Thursday. Alibaba fell 1.2%, and JD.com (JD) lost 1.5%.

On July 26, U.S.-listed Li Auto earned the go-ahead from Hong Kong stock exchange for an initial public offering, just a year after its debut in New York, local reports said. Nio's also said to be seeking a dual Hong Kong listing, following in the footsteps of Xpeng Motors. The three EV startups are emerging rivals to Tesla (TSLA) in the world's biggest car market.

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