A trader works on the floor of the New York Stock Exchange (NYSE) after the opening bell of the trading session in New York, USA, March 13, 2020.
Lucas Jackson | Reuters
GUANGZHOU, China – Major Chinese dual-listed technology stocks in Hong Kong were hammered on Thursday over fears that some companies could be delisted in the US.
Hong Kong shares of US-listed Chinese technology stocks fell sharply. Alibaba was down more than 4% at 1:04 PM Hong Kong time, Baidu was down more than 8%, JD.com was down more than 4% and Netease was down nearly 3%.
It comes a day after the US Securities and Exchange Commission (SEC) passed a law called the Holding Foreign Companies Accountable Act, which was passed by the administration of former President Donald Trump.
Certain companies identified by the SEC must be monitored by a US watchdog. These companies will be required to provide certain documents to prove that they are not owned or controlled by a government agency in a foreign jurisdiction.
Chinese companies will have to name any board member who is a Chinese Communist Party official, the SEC said Wednesday.
The US regulator could stop trading securities that violate its rules.
Chinese tech companies are not only under pressure from the threat of deletion abroad, but are also concerned about stricter regulations at home. Beijing has sought to control the power of technology giants and enact new rules in areas from financial technology to e-commerce.
While the Chinese government’s crackdown began with billionaire Jack Ma’s empire, including the suspension of Ant Group’s mega-IPO, there are signs that Beijing’s goals could reach beyond Ant.
Reuters reported this week that Tencent founder Pony Ma met with Chinese antitrust officials this month. Tencent is listed only in Hong Kong and its shares were down more than 2% at around 1:17 PM Hong Kong time.