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As the year comes to an end and the final trading week of 2020 begins, Asia markets were mixed on Monday as some firms pulled in gains and others declined. Alibaba stock is in the red.
Alibaba Group Holding Ltd (HKG: 9988) lost 7.98% in its stock in Monday trading as regulators in China ordered the company’s affiliate Ant Group to formulate a rectification plan for its business. As for its BABA stock on NYSE, after losing 13% in the previous trading session, at press time, BABA is down 1.85% to $217.90 in the pre-market.
Alibaba Stock Falls a Second Time amid Pressures in China
CNBC noted in a report that Alibaba shares plunged 7.71% in afternoon trading, recording an additional loss for the company. According to the report, BABA declined after the Chinese central bank, the People’s Bank of China (PBoC), ordered Alibaba-affiliate, Ant Group, to rectify and implement a timetable for its business.
On the 26th of December, PBoC said in a statement that Ant Group lacked an efficient governance mechanism. The PBOC also stated that Ant Group is affecting its rivals with its monopolistic nature.
The Chinese central bank’s meeting came after China declared an investigation into Alibaba’s monopolistic practice. Notably, Alibaba owns about 33% stake in Ant Group.
In response to The People’s Bank of China’s statement, Ant Group said the company would comply with the regulations and set up a working group to conduct the required rectifications. In a statement, the company said:
“We appreciate financial regulators’ guidance and help. The rectification is an opportunity for Ant Group to strengthen the foundation for our business to grow with full compliance, and to continue focusing on innovating for social good and serving small businesses.”
Alibaba Stock Down
Before now, the recent loss of 8% in Alibaba’s shares is the second time the company would be declining in a week. On the 24th of December, the company’s shares in Hong Kong dipped 8.13%. The loss occurred after the Chinese state’s news agency Xinhua announced that an investigation into Alibaba’s alleged monopolistic practices has started.
The CNBC report further revealed that shares of other Hong Kong-listed Chinese firms also declined. Tencent Holding Ltd (HKG: 0700) dropped by 6.65% while Meituan (HKG: 3690) fell 6.88%. In addition, China’s largest chipmaker Semiconductor Manufacturing International Corporation (SMIC), lost 4.41% in its Hong Kong shares.
Hang Seng Tech Index plunged by 3.93%.
As the year comes to an end and the final trading week of 2020 begins, Asia markets were mixed on Monday as some firms pulled in gains and others declined. Mainland Chinese stocks were mixed as the Shenzhen component gained 0.137% while the Shanghai composite fell. Hong Kong’s Hang Seng index also dipped 0.19%.
In Australia and New Zealand, markets are closed on Monday for a holiday.
Alibaba has been recording losses over the last three months. Data by MarketWatch revealed that Alibaba had lost 17.70% in the last three months and more than 20% over the past month. Also, Alibaba has plunged by 16.05% in the last five days.