SINGAPORE, Nov 11, 2020, CNBC. Shares of China’s top technology giants were battered on Wednesday as regulatory concerns continue to mount, CNBC reported.
By Wednesday afternoon in Asia, Hong Kong-listed shares of Alibaba plunged 8.86% while Tencent dropped 5.38%. Smartphone maker Xiaomi also declined 5.73% and China’s biggest on-demand delivery services firm Meituan Dianping fell 7.47%. E-commerce JD.com also saw its stock plummet 8.11%.
The broader Hang Seng Tech index saw heavy losses as well, and fell 5.6%.
The combined losses of the five tech heavyweights since their Monday’s close has contributed to more than $250 billion being wiped off in terms of market cap, based on CNBC calculations.
Chinese regulator — the State Administration for Market Regulation — on Tuesday announced a set of draft rules aimed at curbing monopolistic behavior on internet platforms. The moves were possibly further exacerbated by a global rotation out of tech stocks seen globally in recent days. A positive development on the coronavirus vaccine front has spurred hopes of a recovery in areas such as travel, and investors are selling down tech and switching to stocks in energy and industrial sectors instead.
Tuesday’s announcement by Chinese regulators came about a week after financial technology giant Ant Group’s highly-anticipated initial public offering in Shanghai and Hong Kong was abruptly suspended amid regulatory concerns. Last Monday, the Chinese central bank and regulators issued new draft rules for online micro-lending, which could also affect Ant Group.
Following those developments, Alibaba — which owns a roughly 33% stake in Ant Group — saw its Hong Kong-listed shares tank more than 7%.
Andrew Collier, managing director at Orient Capital Research, told CNBC that the sudden decision to suspend Ant’s public listing was a “disaster.”
“You don’t yank a $35 billion IPO two days before it’s going to be launched internationally, it makes the regulatory system look completely arbitrary and also confused,” Collier told CNBC’s “Street Signs Asia” on Wednesday. Ant Group was looking to raise just under $34.5 billion in what would have been the world’s biggest IPO.
“It suggests deep politics within China … that’s bubbled to the surface and they couldn’t resolve (it) ahead of time,” Collier said. “Regulation can be positive but this particular move was a disaster.”
CNBC’s Arjun Kharpal contributed to this report.