China — Major dual-listed Chinese technology shares trading in Hong Kong were hammered on Thursday amid fears that some companies could be de-listed in the U.S.
Hong Kong shares of U.S.-listed Chinese tech stocks fell sharply. Alibaba was down over 4% at 1:04 p.m. Hong Kong time, Baidu tanked over 8%, JD.com fell over 4% and NetEase was nearly 3% lower.
It comes one day after the U.S. Securities and Exchange Commission (SEC) adopted 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 will require auditing by a U.S. watchdog. These companies will be required to submit certain documents to establish that they are not owned or controlled by a governmental entity in a foreign jurisdiction.
Chinese companies will have to name each board member who is a Chinese Communist Party official, the SEC said Wednesday.
The U.S. regulator could stop the trading of securities that fall foul of its rules.
Chinese technology companies are not only under pressure from the delisting threat abroad, but also concerns over a stricter regulations at home. Beijing has looked to reign in the power of technology giants and establish new rules in areas from financial technology to e-commerce.
While the Chinese government’s crackdown started with billionaire Jack Ma’s empire, including the suspension of the mega initial public offering of Ant Group, there are signs that Beijing’s targets could extend beyond Ant.
Reuters reported this week that Tencent founder Pony Ma met with Chinese antitrust officials this month. Tencent is only listed in Hong Kong and its shares were more than 2% lower at around 1:17 p.m. Hong Kong time.
