U.S.-listed Chinese shares take a hit as Didi to exit NYSE

Reuters

Published Dec 03, 2021 10:00AM ET

Updated Dec 03, 2021 05:15PM ET

By Medha Singh

(Reuters) -U.S.-listed shares of Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), JD (NASDAQ:JD).com and other Chinese firms fell on Friday as ride-hailing giant Didi Global Inc's decision to delist from the New York Stock Exchange added to worries over stricter regulatory scrutiny at home and tense Sino-U.S. relations.

Shares of Didi, which is now pursing a Hong Kong listing after succumbing to pressure from Chinese regulators concerned about data security, plunged 22.2% to end at $6.07. The company had priced its IPO at $14 apiece in June to raise $4.4 billion.

"It will now set a precedent for other U.S.-listed companies, especially those with data concerns," said Justin Tang, head of Asian Research at United First Partners, Singapore.

"The crackdown started with Ant's botched IPO. The Chinese government has already shown that it will go beyond what the market has expected. It will be a while before sentiments thaw in relation to Chinese names."

Alibaba fell 8.2%, Baidu dropped 7.8% and JD.com shed 7.7%, with investors on edge as Beijing targets sectors ranging from gaming to education.

Education companies TAL Education and New Oriental Education & Technology Group fell 8.8% and 9.2%, respectively.

KraneShares CSI China Internet ETF dropped 7%, while e-commerce platform Pinduoduo (NASDAQ:PDD) fell 8.2%, mobile game publisher Bilibili (NASDAQ:BILI) declined 7.1% and live-streaming gaming platforms operator HUYA plunged 12.9%.

"From our point of view, all Chinese-listed stocks, even Hong Kong, became uninvestable with the crackdown in HK in mid-2020, so we sold our only holding (HK-listed Tencent) in August 2020," said William de Gale, co-founder & lead portfolio manager for BlueBox Asset Management, which holds no Chinese ADRs.