Aofex

Chinese Tech Stocks Register a Surge in Value as JD.Com and Tencent Prices Rise Upwards

| Updated
by Juhi Mirza · 3 min read
Chinese Tech Stocks Register a Surge in Value as JD.Com and Tencent Prices Rise Upwards
Photo: Depositphotos

Chinese tech stocks listed in Hong Kong which include stock prices of organizations such as Tencent, JD.com, and Alibaba have risen in value on Tuesday.

Chinese tech stocks of Tencent Holdings Ltd (HKG: 0700), Alibaba Group Holding Limited (NYSE: BABA), and JD.com have risen in value and have recorded a surge in prices. These organizations were badly affected due to the imposition of regulatory laws and preserves that China was practicing in the avenue of technology.

China had recently introduced a new major data protection law on Friday. Analysts have been speculating that the introduction of these new laws could slow the pace of regulatory pressure on companies for a while and allow them to grow and develop further.

Chinese Tech Stocks Record a Considerable Rise in Prices after Prolonged Regulatory Pressures

Hong Kong-listed tech stocks have risen considerably on Tuesday after experiencing prolonged regulatory pressures from the Chinese authorities. The Hang Seng Tech Index rose to a significant 7% while Tencent shares were positioned at 8.8%, which is higher than usual. Meituan which is a food delivery company in China rose to 13.5% while Alibaba, a reputed e-commerce giant surged up to 9.5%.

JD.com, commonly referred to as Jingdong is one of the leading e-commerce organizations that has surpassed market expectations and has risen to a significant 15%.

Last week was quite turbulent for Hang Seng Tech Index as the prices of the firm had fallen extensively. The drop was recorded at more than 20% which in the domain of the financial sector is referred to as bear market territory. The company at present has been able to stabilize itself and has recovered slightly with a benchmark of 18% that it still needs to acquire to gain credible momentum and pace.

The sell-off has been accelerated primarily due to China’s strict stance on tightening regulatory requirements. Several laws have been introduced by the Chinese government to establish control followed by severe punishments and investigations.

The recent fall in prices of Chinese tech giants has also induced a counter effect in investors compelling them to purchase these shares at a lower cost and viewing this sell-off as a credible opportunity to derive revenues and earnings.

Earlier this year, regulators had introduced rules related to anti-monopoly targeting platform companies. From this month onwards, regulators have brought forth a new draft that discusses unfair competition in the internet market. On Friday, the Chinese government passed another major law called Personal Information Protection Law, followed by other two laws that are scheduled to come into effect in November.

Winston Ma, a professor at NYU school of law, has opined that with the introduction of PIPL, the Chinese government has now completed the trifecta comprising data governance laws and can now take a break from drafting new laws due to which the tech sector companies have experienced a temporary price meltdown.

The recent earnings constituting the Chinese tech sector have been termed positive. Tencent’s second quarter was successfully able to beat the market expectations while Baidu also performed well and exceeded investor’s expectations in terms of share value and pricing.

With major technological laws and legislative advancements being made and secured, the investors have been looking forward to the next year in hopes to redeem the losses incurred and acquire stable earnings and revenue in future.

News, Stocks
Juhi Mirza
Author Juhi Mirza

Juhi Mirza is an archaeology major who is obsessive about blockchain/Crypto technology and deems it to be the foundational philosophy of the future. Her dogged ability to research and crystallise technical facts/multiple perspectives into rivetting stories makes her an accessible finance writer. She tends to her archaeological pursuits and loves unearthing the past over the weekends.

Related Articles