AFP – Shares in Alibaba and Tencent tumbled in Hong Kong yesterday in response to media reports the Trump administration plans to press ahead with a ban on US citizens investing in them.
Ecommerce titan Alibaba sank almost 4 percent and internet powerhouse Tencent shed 4.7 in morning trade. Such a move would be another blow to Alibaba, which has come under pressure from Chinese officials as regulators launch an anti-monopoly probe into it, while its fintech giant Ant Group was ordered to drastically change its business model.
The moves come as Beijing puts the squeeze on the once unbridled empire of tech tycoon Jack Ma.
The Wall Street Journal report came the same day the New York Stock Exchange reversed course for a second time to say it would de-list three Chinese telecom equities from trading owing to new US government guidance.
Wednesday’s announcement capped a dizzying few days in which the stock exchange announced the removal at the weekend before making a U-turn on Monday, and then saying it would go ahead once more Wednesday.
The latest decision came after Treasury Secretary Steven Mnuchin disagreed with Monday’s reversal.
The three state-owned telecom giants plunged, with China Unicom shedding more than 11 percent while China Telecom was down more than 9 percent and China Mobile slipped more than 7 percent.
Trump issued an executive order in November banning US citizens from investing in Chinese companies deemed to be supplying or supporting the country’s military and security apparatus, earning a sharp rebuke from Beijing.
On Tuesday night he signed an executive order banning transactions involving Alipay, WeChat Pay and other apps linked to Chinese companies, drawing strong criticism from Beijing.
The Wall Street Journal reported the State Department, Department of Defense and Treasury Department had all discussed how to implement an investment ban on the e-commerce giants.
While the three Chinese telecoms firms are comparative small fry for the New York Stock Exchange, Alibaba and Tencent are China’s two largest companies.
At $1.4 trillion, the combined market value of their primary listings is twice the size of Spain’s stock market, according to Bloomberg News.
“If the bans are implemented then it’d be a huge thing for the market.”
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