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Stocks of the Chinese electric vehicle companies led by Nio and Xpeng dropped approximately 2% each on Monday.
Chinese tech stocks led by Soho China dropped on Monday following a report of incoming government regulatory calls. Alibaba Group Holdings Ltd (NYSE: BABA) stock traded around $164.73, approximately 2% down during today’s premarket. Soho China Ltd (HKG: 410) traded around HK$ 2.29, approximately 34.57% down as of September 13, 2021, 4:08 P.m HKST.
Notably, the huge drop in the Soho China stock market has largely been attributed to a takeover deal gone soar with Blackstone. According to a filing on Friday Soho China noted that the $3 billion bid by Blackstone will not go through as planned.
According to news outlet CNBC, Beijing regulators are seeking to break up Ant Group’s Alipay and force the creation of a separate loans app. Stocks of the Chinese electric vehicle companies led by Nio Inc (NYSE: NIO), Xpeng Inc (NYSE: XPEV) dropped approximately 2% each on Monday.
Reportedly, the Chinese government is not pleased by the huge proliferation of electric vehicle companies in the market. Thereby seeking the consolidation of the electric vehicle companies. Consequently, the government anticipates reducing competition and enhancing quality delivery.
Overall, most of the tech stocks closed the Asian market in the red. Further tech regulations are expected to emanate from the west that will largely favor their companies while making operations difficult for the Asian tech companies.
As a result of the tech stock drop, most of the notable Asian stock indexes closed the days at a loss. Among them is the Hang Seng index that dropped 1.5% to finish the trading day at 25,813.81. While the Shenzhen component closed the day trading at 14,705.83, 0.447% down, the Shanghai composite managed to end the day by 0.33% up, at 3,715.37.
Chinese Stocks and Future Outlook
While the world keeps fighting the Covid resurgence, the Chinese government works simultaneously to revamp its economy. Moreover, the company has been laying important policy infrastructure that encourages global investors, particularly tech-related companies.
Among them are blockchain technology and the electric vehicle industry. Notably, the Chinese government through its central bank has been testing the digital Yuan for mass adoption. Further, the country organized a group of tech companies to form the blockchain organization.
The Chinese tech companies, especially the electric vehicle companies, remain affected by the global semiconductor chip shortage. The issue that has affected other global EV makers attracted the Chinese regulator’s attention.
In a bid to save the industry from semiconductor chip shortage. The country last week fined three auto chip sales companies for driving up prices.