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Chinese stocks rebound from historic sell-off

Written by Nikkei Asia Published on   2 mins read

Beijing signals “positive progress” over US moves to audit companies.

Chinese stocks rebounded on Wednesday following days of intense selling as Beijing said it would move to stabilize markets and signaled “positive progress” in communications with Washington over its audit of US-listed Chinese companies.

The Hang Seng Tech Index, which includes several Chinese technology companies listed in Hong Kong and New York, jumped as much as 19.8%, led by a more than 40% climb in shares of Global Data Solutions Ltd. Video-sharing platform Bilibili jumped more than 30%, electric vehicle maker Nio gained more than 25%, while Tencent, Alibaba, Kuaishou, Meituan, and JD.com all climbed more than 20%.

Hong Kong’s benchmark Hang Seng Index was up more than 7%, while the SSE index in Shanghai and SZSE index in Shenzhen rose more than 3% in Wednesday trading.

A day earlier, the Hang Seng ended down 5.7%, a six-year low, and the SSE Composite Index finished 5% down.

“Any policy that has a significant impact on the capital markets should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations,” said state news agency Xinhua, citing a meeting of the Financial Stability and Development Committee under the State Council chaired by Vice-Premier Liu He.

Some policymaking departments would be held “accountable” when necessary, the Xinhua report says, adding that “Chinese and US regulators have maintained good communication and made positive progress and are working to form specific cooperation programs.”

It went on, “The Chinese government continues to support all types of enterprises to go public overseas.”

The latest bout of intense selling began last Thursday after five Chinese companies listed in New York were notified by the US Securities and Exchange Commission to expect delisting in 2024.

The five, which included restaurant operator Yum China and cancer drug developer BeiGene, are already listed in Hong Kong or Shanghai, but Pinduoduo, among other Chinese stocks, is only listed in New York.

The SEC has moved to implement a 2020 law that requires companies listed on American exchanges to allow US inspectors to review their audit records. If Chinese companies cannot meet compliance standards, most will face the risk of being delisted in the US by 2024.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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