China Shares Slide as Regulatory Clampdown Spooks Investors, Education Firms Dive

Sub-indexes tracking education and related sectors declined sharply. The CSI Education Index was last down 9.73% and the Hang Seng Tech index slumped 5.89%, touching its lowest level since Aug. 12, 2020.

The shakeout in China’s $120 billion private tutoring sector follows Beijing’s announcement on Friday of new rules barring for-profit tutoring in core school subjects to ease financial pressures on families. The policy change also restricts foreign investment in the sector through mergers and acquisitions, franchises, or variable interest entity (VIEs) arrangements.

Louis Tse, managing director at Wealthy Securities in Hong Kong, said the curbs were needed to prevent “chaos” in a profitable sector.

“The Chinese government…in a way it’s right, they want to put a heavy hand and try to regulate that industry to make it more acceptable,” he said. “Of course investors….I won’t say they suffer. They won’t earn that much anymore.”

The crackdown on tutoring firms follows a tightening grip on China’s internet sector that has rattled global investors. Beijing launched a data-related cybersecurity investigation into ride-hailing giant Didi Global Inc just two days after it raised $4.4 billion in a New York initial public offering.

China’s blue-chip CSI300 index hit a more than 10-week low and was last down 2.89%, the Shanghai Composite Index declined 2.18%, having earlier hit a two-month low and the Shenzhen Composite fell 2.2%.

Both the Shanghai and Shenzhen indexes were hit by heavy foreign-investor selling. Refinitiv data showed outflows of 6.2 billion yuan ($956.24 million)from A-shares as of midday on Monday.

In Hong Kong, the Hang Seng index slipped to its weakest level since Dec. 29 and was last down 2.91%. The Hang Seng China Enterprises index fell 3.66%.

Government efforts to rein in an overheated property sector also spooked investors on Monday, sending the CSI 300 Real Estate index down 4.82%, while the Hang Seng Properties index fell 2.32%.

Media reports that China’s central bank has ordered lenders in Shanghai to raise the rate of mortgage loans for first-time homebuyers followed a statement from the housing ministry on Friday that China will strive to clean up irregularities in the property market in three years.

Shares in China Evergrande Group, the heavily indebted developer whose financing difficulties have stoked broader apprehensions about the outlook for the property sector, fell 7%. Evergrande shares have fallen by a third this month, and are down more than 54% this year.

Fellow developer Country Garden Holdings Co dropped 2.18%.

“We believe China’s economy, and specifically its financial system, will face significant risks in coming months due to the unprecedented tightening measures applied to the property sector,” economists at Nomura said in a note Monday.

($1 = 6.4837 Chinese yuan)

(Reporting by Andrew Galbraith; Editing by Shri Navaratnam)

Source link

0 0 votes
Article Rating

Notifier de
0 Commentaires
Commentaires en ligne
Afficher tous les commentaires
Reset Password

Avertissement sur les risques :

Le trading peut vous exposer à des risques de pertes supérieures aux dépôts et ne convient qu’à une clientèle avisée ayant les moyens financiers de supporter un tel risque. Les CFD sont des instruments complexes et présentent un risque élevé de perte rapide en capital en raison de l’effet de levier. Entre 74 et 89% des comptes de clients de détail perdent de l’argent lors de la négociation de CFD. Vous devez vous assurer que vous comprenez comment les CFD fonctionnent et que vous pouvez vous permettre de prendre le risque élevé de perdre votre argent. Ce site n’est en aucun cas une offre de conseil en investissement ni une incitation quelconque à acheter ou vendre des instruments financiers. Trader le Forex et/ou les CFD’s implique un niveau de risque élevé, et peut ne pas être approprié car vous pouvez subir des pertes supérieures à votre dépôt. L’effet de levier peut être en votre défaveur.

Vous devez être conscient et avoir une compréhension complète de tous les risques associés au marché et au trading. Le site peut être amené à produire des commentaires d’ordre général, ce qui ne constitue pas des conseils en investissement et ne doit pas être interprété comme tel.

Veuillez recourir aux conseils d’un conseiller financier extérieur. Le site décline toute responsabilité pour les erreurs, inexactitudes ou omissions et ne garantit pas l’exactitude ou le caractère complet des informations, textes, graphiques, liens ou autres éléments contenus dans cette documentation. Toute information et toute mise à disposition sur le site ont un caractère privé.