Tuesday, January 18

Summer of Stock Market Turmoil in China: A Timeline


China’s review of mentoring firms ignited a volatile few weeks for equity markets both onshore and in Hong Kong this summer, leaving investors nervous.

Traders are on the lookout for what regulators may point to next as Beijing tightens its grip on a variety of sectors, from private education to digital games, e-cigarettes, property and insurance.

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Here’s a look at the key events from July 23:

August 17 – Technology and Entertainment

  • The Hang Seng Tech Index falls after China’s market regulator issues draft rules on unfair competition on the Internet. Baidu, NetEase Alibaba Group and Tencent Holdings are down, and tech stocks are also among the top hurdles in the benchmark index.
  • Shares of film producers and broadcasters tumble after the state-backed People’s Daily newspaper says the nation will tighten regulation of the entertainment sector and “idol culture.” Shanghai New Culture Media Group, Hunan TV & Broadcast Intermediary and Alibaba Pictures Group closed lower.

August 16 – Games

  • Tech stocks including Tencent, NetEase and Bilibilli Inc. plummet after state media say China should tighten regulations on online games to ensure they don’t misrepresent history.

August 12 – Safe Online

  • Insurance stocks tumble after China’s insurance and banking regulator ordered local companies and agencies to curb improper pricing and marketing practices, as well as step up protection of users’ privacy. The watchdog encouraged companies to tackle these problems voluntarily, saying that those who fail to comply would face “severe punishment.” ZhongAn Online P&C Insurance Co. falls as much as 9.5%, Ping An Insurance Group falls as much as 2.4%, while New China Life Insurance Co. falls 1.5% in Hong Kong.

Aug 9 – Chip Makers Slide

  • Chipmakers plummet after state media published a comment saying regulators will show no tolerance in cracking down on speculators in the chip market. China’s largest chip foundry, Semiconductor Manufacturing International Corp., falls more than 5% in Shanghai, while Hong Kong’s Hua Hong Semiconductor slides 5.7%, its worst drop in nearly three months. Will Semiconductor Co. falls 5.7%, while Hubei Tech Semiconductors Co. falls 3.3%.

August 6 – And milk

  • Manufacturers of infant formula are joining a growing list of stocks affected by regulatory risk. China Feihe falls as much as 9.3%, after Xinhua reports that some experts are concerned about the marketing that is causing mothers to choose powdered milk over breastfeeding.
  • Kuaishou’s technology plummets nearly 12% after an influential state-backed newspaper urged stricter regulation of video content on the internet.

August 5: vaping and alcohol

  • Stocks of spirits and e-cigarettes tumble as nervous investors seize on a series of state media reports that potentially herald the next targets for stricter regulation. Shares of liquor maker Kweichow Moutai Co. fell as much as 2.8%, while its peer Wuliangye Yibin Co. fell 3.8%. Smoore International Holdings tobacco vaping shares fall as much as 7.8% in Hong Kong. Several biopharmaceutical companies also fall into their daily limit after a report on the harm caused by the misuse of human growth hormone injections.

August 4 – Healthy Nation

  • Equity investors are relieved as shares in sneaker makers and other sports companies soar, spurred by Beijing’s latest political agenda for a healthy nation. Li Ning Co. rises 5.7% while Anta Sports Products rises 4.7%.

August 3: watch out for the players

  • Tencent falls as much as 11%, after Chinese state media described video games as “spiritual opium” and said the country should be alert to the harm of online games and regulate the sector as soon as possible.

July 30 – Dirt

  • The benchmark CSI 300 index closes lower, marking the worst week since late February.
  • The country’s top economic planner asks chemical fertilizer manufacturers not to over-stockpile fertilizer, raise prices, and spread misleading information. The government will also temporarily halt fertilizer exports to guarantee domestic supply.
  • The nation’s banking and insurance regulator prohibits trust firms from establishing new direct nonfinancial units.

July 28 – Spam

  • China orders Tencent and 13 other developers to rectify problems related to pop-ups within their applications, adding to a broad crackdown on the country’s tech sector. Tencent shares are down more than 5% before recovering to close higher.

July 27 – More pressure

  • Hong Kong’s Hang Seng Index posted its biggest two-day loss since 2008 as shockwaves from the intensification of Beijing’s crackdown continue to hit markets. The CSI 300 Index falls 3.5% amid a panic selloff.

July 26 – Eat and Live

  • Investors have the first chance to react to China’s confirmation of the tutoring industry reform, with the CSI 300 index falling nearly 5%. In Hong Kong, the Hang Seng index closed down 4.1%.
  • Food delivery giant Meituan falls 14%, its biggest drop on record, after China released new guidelines requiring online food platforms to ensure the well-being of delivery workers.
  • Real estate stocks, including Shimao Services Holdings, tumble after the Housing Ministry publishes a statement saying it aims to “markedly improve order” in the market and crack down on infringements.

July 24 – Non-profit

  • China introduces a radical reform of its $ 100 billion educational technology sector, banning companies that teach the school curriculum from making a profit, raising capital or going public.
  • Tencent is ordered to relinquish exclusive music streaming rights and will be fined 500,000 yuan ($ 77,295), becoming the latest Chinese internet giant to be dominated by regulators.

July 23 – Record declines

  • Bloomberg reports that China is considering asking companies offering school curriculum tutoring to become nonprofits, as part of a broad set of restrictions that threaten to decimate the $ 100,000 educational technology industry. millions. New Oriental Education & Technology Group Inc falls a record 41% in Hong Kong, while Koolearn Technology Holding closes 28% lower. Scholar Education Group falls 29%.

© 2021 Bloomberg


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