Chinese regulatory push sends Meituan, tech stocks tumbling

GENLI.ORG

SHANGHAI (Reuters) — Online food delivery group Meituan led a rout of Chinese technology company shares on Friday, as authorities announced a series of regulatory moves to boost growth while keeping financial risks under control.

Meituan fell more than 14%, while shares in video streaming sites Kuaishou and Bilibili as well as artificial intelligence firm SenseTime tumbled more than 4%.

China’s state planner, the National Development and Reform Commission (NDRC), on Friday issued rules to promote a faster recovery from the pandemic in the services sector, including guidance for online food delivery platforms to reduce service fees to help to lower operating costs for catering businesses.

Those rules were announced as the China Banking and Insurance Regulatory Commission warned against using the metaverse as a tool for illegal fund-raising, saying that some companies were engaging in illegal fund-raising, fraud, and virtual real estate speculation.

Investors, entrepreneurs, and established Chinese tech giants have in recent months piled into the trend of the metaverse, described as a virtual shared space that blurs the boundaries between the online and offline worlds.

The regulatory moves come as China’s technology sector is still smarting from a year-long regulatory crackdown, which has upended once-common industry practices and wiped millions of dollars off share prices.

In contrast, property sector shares soared on Friday after China’s finance minister pledged more fiscal support for the economy and an easing of home-purchase down payments in several Chinese cities aimed at reigniting demand.

China Orient Asset Management, one of China’s four large “bad banks” set up to dispose of non-performing loans from major state banks, also got approval to issue bonds to resolve risks in the property sector that have walloped developers’ bonds and shares..

A sub-index tracking China’s real estate developers rose 4.6% in its strongest daily performance since November, with state-owned Poly Developments and Holdings up 5.4%. In Hong Kong, the mainland properties index ended 2.9% higher, led by a 5.3% rise in Sunac China Holdings.

In another move targeted at stabilising commodity markets, the NDRC said it would ensure supply and stabilise prices of primary products and key raw materials, including iron ore and fertiliser.

The announcement, made just before the close of mainland stock markets, pushed a Hong Kong materials sub-index lower in late trade to close down 0.93%.

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