Despite years of trouble managing its financial real estate collapse, China's technology stocks are oblivious to such problems. Alibaba (BABA) closed at over $90.50 last week. JD.com (JD) and Nio (NIO) also rose.
Trouble firms like Bilibili and iQIYI (IQ) did not rebound.
Geopolitical stability hopes helped China tech stocks. Last week Yellen began a visit to China. The Treasury Secretary will discuss trade barriers, decoupling, and supply chain breakdowns between the two countries. Investors are unclear about how the career Fed banker will ease tensions.
Alibaba benefited when its bank unit, Ant Group, received a nearly $1 billion fine. The Chinese central bank imposed a RMB 7.12B fine on Ant Group. It cited violations of several laws and regulations. This included corporate governance, consumer protection, and anti-money laundering requirements. The fine is ~$15 million below the expected amount.
Ant Group’s upcoming IPO values the firm at around 30% of its original value from two years ago. Still, paying the penalty puts an end to the CCP stifling Ant’s progress.
The Chinese government also fined Tencent (TCEHY), a gaming firm around $410 million for regulatory breaches related to past regulatory payment breaches. This minuscule fine allays any further regulatory headwinds for Tencent.
Investors unafraid of geopolitical tensions should watch JD, Alibaba, and Tencent.
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