A brutal selloff of Chinese stocks trading in the US has erased more than US$1 trillion in value since February and shows no signs of easing, as regulators on both sides of the globe continue to put pressure on the firms.
The NASDAQ Golden Dragon China Index — which tracks China-exposed firms listed in the US — plunged 9.1 percent on Friday, the most since 2008, after Didi Global Inc (滴滴) said it is planning to delist its shares from the New York Stock Exchange.
The Didi announcement marks a stunning reversal of fortunes after the firm raised US$4.4 billion in an initial public offering (IPO) in June, and adds even more uncertainty to the prospects for other US-listed Chinese firms. Didi shares fell 23 percent at their weakest on Friday, extending the ride-hailing giant’s slump to more than 50 percent below its US$14 IPO price.
Photo: AP
“It’s sad to see what’s going on” with Didi, Race Capital general partner Edith Yeung (楊珮珊) told Bloomberg Television in an interview.
“When you consider a lot of Chinese companies are walking on egg shells to please the Chinese government, to please the US government,” she said, expecting more to join Didi in shifting toward a Hong Kong listing.
Friday’s selloff adds to what has been a historically bad stretch for Chinese stocks trading in the US. The Golden Dragon China Index has dropped 43 percent this year, putting it on pace for its worst annual performance since 2008.
An unrelenting wave of policy crackdowns by both Beijing and Washington has resulted in eight separate trading days with declines of at least 5 percent. To put that in perspective, the S&P 500 Index has only experienced five such declines over the past decade.
The dramatic plunge seen by US-listed Chinese stocks has burned investors who rode them from the depths of last year’s COVID-19 selloff to a record high in February.
In the more than nine months since its peak, the Golden Dragon China Index’s 95 members have shed more than US$1.1 trillion in value combined.
Headlining the plunge is Alibaba Group Holding Ltd (阿里巴巴), which has seen its market capitalization drop by about US$430 billion, or nearly 60 percent.
While Chinese stocks that are listed in the US have been pummeled this year, a global gauge of stocks with the highest sales exposure to the nation has delivered investors solid returns.
The MSCI World with China Exposure Index is up about 9 percent this year, outperforming the Golden Dragon China Index by more than 50 percentage points, the most since at least 2003, data compiled by Bloomberg showed.
“This represents the steady march toward the required delisting of Chinese companies from US exchanges,” Cowen & Co analyst Jaret Seiberg wrote in a note. “We do not believe Congress or the SEC [US Securities and Exchange Commission] see the value of letting Chinese firms list in the US as worth the cost of not being able to inspect the audits.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day