Shares of Chinese technology companies have fallen on the stock exchange for the third day in a row amid concerns over Beijing’s plans to tighten regulation of the sector, writes Bloomberg.
Market players are wary of all sorts of decisions from their regulators, from warnings about cheating in the metaverse to new restrictions on the gaming industry. The Hang Seng Tech Index fell more than 3 percent on Tuesday, Feb. 22, and reached its lowest closing level since its inception in 2020. Shares in food delivery giant Meituan fell 6 percent after Beijing ordered it to cut its commission.
Tencent’s shares fell 3 percent despite denials that its core business is under renewed scrutiny by Chinese authorities. The Hang Seng Index has more than halved from last year’s February peak as Beijing’s antitrust campaign enters its second year. Companies are bracing themselves for regulators to strike again soon.
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The question is how much the long-term revenues of large Internet companies will suffer if they are required to take on more and more social responsibility, said Jian Shi Cortesi, portfolio manager at GAM Investment Management. Participants in the Hang Seng Tech Index have lost a total of $1.6 trillion since their February peak last year, according to Bloomberg.
Earlier it was reported that the Chinese authorities cook measures that should prevent local tech start-ups from attracting foreign funding and make it harder to enter foreign exchanges