HONG KONG : Rather than spur a relief rally in China's battered tech sector, the past week's developments at Jack Ma-founded Ant Group have merely reminded global investors of the fickle nature of the country's regulatory policies and the fragility of the sector.The initial market reaction when China anno
HONG KONG : Rather than spur a relief rally in China's battered tech sector, the past week's developments at Jack Ma-founded Ant Group have merely reminded global investors of the fickle nature of the country's regulatory policies and the fragility of the sector.
"In short, tech policy tightening may have come to an end but will remain tight going forward," said Jon Withaar, head of Asia special situations at Pictet Asset Management. The KraneShares CSI China Internet ETF is up 5.4 per cent since Friday, while back home the CSI Overseas China Internet Index is up nearly 3 per cent.
Wong points to intense price competition and monopolistic behaviours as signs the business landscape had toughened. Meanwhile, there were new regulations and more could come. Derrick Irwin, portfolio manager for Allspring’s intrinsic emerging markets equity team, based in Boston, likewise believes regulatory tightening has ended but that didn't mean a return to the regime preceding Chinese President Xi Jinping's 'common prosperity' drive and to the lofty valuations then. Alibaba's ADRs were at $315 then, compared to $90 this week.
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