Chinese tech stocks plunged on the 11th in the aftermath of the Chinese authorities imposing heaps of antitrust fines on Tencent and Alibaba.
At the Hong Kong Stock Exchange on the 11th, the Hang Seng Tech Index, which tracks the stock prices of large Chinese tech stocks such as Tencent and Alibaba, has plunged more than 4% as of 3 pm (local time).
Alibaba plunged more than 7% during the day and Tencent fell more than 3% during the session.
The National Market Supervision and Administration Administration, an anti-monopoly body, has been belatedly arguing with a total of 28 business combinations, including 12 from Tencent and 5 from Alibaba, and has imposed a fine of 500.000 yuan ($ 74.541,20 dollar), the maximum limit stipulated by the Antitrust Act, for each case. As the announcement was made the day before, concerns about the government’s regulations were raised again in the market.
In the sense that the imposition of a heap of fines targeting two big tech companies (large information technology companies) was announced ahead of the enforcement of the revised anti-monopoly law, the key to punishing illegal business combinations more severely, the authorities said that Big Tech’s mergers and acquisitions There is also an interpretation that it sent a warning message to be cautious in expanding business through
Currently, the limit of fines that can be imposed when a company engages in a business combination in violation of the law, such as not reporting to the authorities, is 500,000 yuan has risen
Accordingly, if a company with a large business scale, such as Alibaba or Tencent, is punished for violating the business combination regulations, the fine could range from hundreds of billions to several trillion won in theory, unlike in the past when fines were up to 100 million won.
“This share price decline shows just how fragile investor sentiment in the tech sector is still despite signs of deregulation,” Bloomberg said.
The Hang Seng index, the leading index for the Hong Kong stock market, also fell more than 3% in the aftermath of the plunge in large tech stocks.
The Shanghai Composite Index and Shenzhen Component Index, the two major indices of the mainland stock market, also closed down 1.27% and 1.87%, respectively, from the previous trading day.