A year after China’s crackdown, battered tech stocks still struggle

A year after China’s crackdown, battered tech stocks still struggle

Bloomberg

A year after Beijing kicked off a policy clampdown that roiled stock markets from Shanghai to New York, the most beaten-down targets — China’s technology firms — are still facing a rocky outlook. The Hang Seng Tech Index, which tracks the nation’s biggest technology companies, has failed to break out of the tight trading range it has been in since July, following a 46% plunge. The cost of bearish options that profit from further losses in the index still far outstrips that of bullish ones, according to data compiled by Bloomberg. The crackdown started a year ago when Beijing on November 3 shocked global investors by suspending the mammoth listing of Ant Group Co., the finance arm of Alibaba Group Holding Ltd. That was the beginning of a regulatory onslaught on private enterprise China blamed for exacerbating inequality, increasing financial risk and challenging the government’s authority. At its most extreme, as much as $1.5 trillion was wiped off the value of Chinese shares, with the biggest victims being Alibaba, Kuaishou Technology and Tencent Holdings Ltd. “The regulatory risk is not over yet and we are not very keen on the tech names right now,” said Michael Liang, chief investment officer