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A trader works on the floor of the New York Stock Exchange (NYSE) after the opening bell of the trading session in New York, the United States, March 13, 2020.
Lucas Jackson | Reuters
GUANGZHOU, China – Major double-listed Chinese tech stocks traded in Hong Kong were hammered on Thursday amid fears some companies could be delisted in the United States
Hong Kong shares of US-listed Chinese tech stocks fell sharply. Alibaba fell more than 4% at 1:04 p.m. Hong Kong time, Baidu fell more than 8%, JD.com fell more than 4%, and NetEase fell almost 3%.
It comes a day after the U.S. Securities and Exchange Commission (SEC) passed a law called the Holding Foreign Companies Accountable Act, which was passed by the administration of former President Donald Trump.
Some companies identified by the SEC will need to be audited by a US watchdog. These companies will need to submit certain documents to establish that they are not owned or controlled by any government entity in a foreign jurisdiction.
Chinese companies will have to nominate each board member who is an official of the Chinese Communist Party, the SEC said Wednesday.
The US regulator could stop trading in securities that do not comply with its rules.
Chinese tech companies are not only under pressure from the threat of delisting overseas, but also concerns about tighter regulations in their country. Beijing has sought to reign over tech giants and establish new rules in areas ranging from fintech to e-commerce.
As the Chinese government’s crackdown began with billionaire Jack Ma’s empire, including the suspension of Ant Group’s initial mega public offering, there are signs that Beijing’s goals could extend beyond Ant.
Reuters reported this week that Tencent founder Pony Ma met with Chinese competition officials this month. Tencent is only listed in Hong Kong, and its shares were down more than 2% around 1:17 p.m. Hong Kong time.
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