Alibaba, Tencent stocks plunge amid ongoing US crusade on investment in Chinese firms
Shares of Alibaba and Tencent have dropped in Hong Kong on the news that two of China’s most valuable companies could be the next target of the outgoing Trump administration’s investment ban.
Both firms dived over four percent on Thursday, while the whole Hong Kong market faced the first decline this year amid escalating tensions between the world’s biggest economies. The benchmark Hang Seng Index fell 0.8 percent after three days of consecutive gains.Also on rt.com Trump turns up the heat on Beijing banning Alipay & seven other Chinese apps
The drop in Alibaba and Tencent shares came shortly after the Wall Street Journal and Reuters reported that they could end up on the US investment blacklist. The ban, that has already targeted more than 30 Chinese companies, prohibits American investors from funding the listed firms over their alleged military ties.
Expansion of the list is being discussed by the State Department, Department of Defense and the Treasury Department, according to the WSJ report citing people familiar with the matter. The Treasury has reportedly voiced concerns that imposing a ban on the two Chinese heavyweights, with a combined market capitalization of over $1.3 trillion, could shake capital markets.
The move could open a new chapter in the ongoing China delisting saga from the US stock market. On Wednesday, the New York Stock Exchange (NYSE) reversed course over removing three major Chinese telecom companies for the third time in just one week. On New Year’s Eve, the bourse said it will drop China Mobile, China Telecom, and China Unicom Hong Kong to comply with US President Donald Trump’s order, but then backtracked those plans just four days later. Another U-turn in less than a week came after US Treasury Secretary Steve Mnuchin reportedly called the NYSE chief to express his concerns over the decision to reverse the delisting. The NYSE is currently proceeding with its original delisting plan, and if completed, it will come into force on January 11.
The NYSE’s flip-flopping also affected the shares of the three targeted companies. China Unicom tumbled as much as ten percent in Hong Kong, while China Mobile and China Telecom lost nearly seven percent and more than eight percent respectively.
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