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Beijing’s crackdown on its tech and education sectors has erased $769bn in value from US-listed Chinese stocks over the course of just five months.
![The Nasdaq Golden Dragon China Index - which tracks 98 of China’s biggest firms listed in the US - plunged 7 percent Monday after regulators in China unveiled an overhaul of its education sector [File: Brendan McDermid/Reuters]](/proxy.php?image=https%3A%2F%2Fwww.aljazeera.com%2Fwp-content%2Fuploads%2F2021%2F07%2Fstockbroker.jpg%3Fresize%3D770%252C513&hash=84153430a9bf8fac0f11840a09ad0a27 "The Nasdaq Golden Dragon China Index - which tracks 98 of China’s biggest firms listed in the US - plunged 7 percent Monday after regulators in China unveiled an overhaul of its education sector [File: Brendan McDermid/Reuters]")
The Nasdaq Golden Dragon China Index - which tracks 98 of China’s biggest firms listed in the US - plunged 7 percent Monday after regulators in China unveiled an overhaul of its education sector [File: Brendan McDermid/Reuters]
By Matt TurnerBloomberg
26 Jul 2021
Beijing’s sweeping crackdowns of its technology and education sectors has unleashed shockwaves across global markets, erasing $769 billion in value from U.S.-listed Chinese stocks over the course of just five months.
The Nasdaq Golden Dragon China Index — which tracks 98 of China’s biggest firms listed in the U.S. — plunged 7% Monday after regulators in China unveiled an overhaul of its education sector which bans firms that teach school subjects from making profits, raising capital or going public. That adds to Friday’s 8.5% drop, bringing the gauge’s two-day decline to 15%, its biggest since 2008.
“The latest events arguably highlight that the authorities are more willing to upset investors in pursuit of their broader political goals now than they were a few years ago,” wrote Oliver Jones, senior markets economist at Capital Economics in a note to clients. “It is difficult to say precisely what will happen next on this front, but on balance it seems like the downside risks to equities have increased,” he said.
Some large investors have already started to unload their shares. Cathie Wood’s flagship Ark Innovation ETF cut its holdings of China stocks to less than 0.5% this month from a high of 8% in February. The fund completely exited its position in tech-giant Baidu Inc. and has just 134 shares of Tencent Holdings Ltd. Its only other position, Chinese property site KE Holdings Inc., has dropped 60% so far this year.
TAL Education Group, New Oriental Education & Technology Group Inc. and Gaotu Techedu Inc., some of China’s largest education companies, all fell at least 26% each Monday, adding to their record declines from Friday.
www.aljazeera.com
The Nasdaq Golden Dragon China Index - which tracks 98 of China’s biggest firms listed in the US - plunged 7 percent Monday after regulators in China unveiled an overhaul of its education sector [File: Brendan McDermid/Reuters]
By Matt TurnerBloomberg
26 Jul 2021
Beijing’s sweeping crackdowns of its technology and education sectors has unleashed shockwaves across global markets, erasing $769 billion in value from U.S.-listed Chinese stocks over the course of just five months.
The Nasdaq Golden Dragon China Index — which tracks 98 of China’s biggest firms listed in the U.S. — plunged 7% Monday after regulators in China unveiled an overhaul of its education sector which bans firms that teach school subjects from making profits, raising capital or going public. That adds to Friday’s 8.5% drop, bringing the gauge’s two-day decline to 15%, its biggest since 2008.
“The latest events arguably highlight that the authorities are more willing to upset investors in pursuit of their broader political goals now than they were a few years ago,” wrote Oliver Jones, senior markets economist at Capital Economics in a note to clients. “It is difficult to say precisely what will happen next on this front, but on balance it seems like the downside risks to equities have increased,” he said.
Some large investors have already started to unload their shares. Cathie Wood’s flagship Ark Innovation ETF cut its holdings of China stocks to less than 0.5% this month from a high of 8% in February. The fund completely exited its position in tech-giant Baidu Inc. and has just 134 shares of Tencent Holdings Ltd. Its only other position, Chinese property site KE Holdings Inc., has dropped 60% so far this year.
TAL Education Group, New Oriental Education & Technology Group Inc. and Gaotu Techedu Inc., some of China’s largest education companies, all fell at least 26% each Monday, adding to their record declines from Friday.
Wipeout: China stocks in US suffer biggest 2-day loss since 2008
Beijing’s crackdown on its tech and education sectors has erased $769bn in value during the last 5 months.
