Three Of China’s Richest Lose More Than $16 Billion In One Day As Stock Rout Hits Hong Kong-Listed Companies

admin

imageThe heavy selloff in Hong Kong stock markets has wiped out a combined $16.4 billion from the wealth of three Chinese billionaires in just one day, putting them alongside Amazon’s Jeff Bezos and Tesla’s Elon Musk as the five worst performing tycoons on Forbes’s Real-Time Billionaires list on Tuesday.

Tencent cofounder Ma Huateng (also known as Pony Ma) led the dive with a $6.1 billion wealth plunge, followed by Nongfu Spring Chairman Zhong Shanshan’ s $5.6 billion and Country Garden Co-chairman Yang Huiyan ’s $4.7 billion.Their net worths are plummeting amid a historic rout in Hong Kong, where the benchmark Hang Seng Index tumbled to an at least six-year low of less than 20,000 points on Tuesday.

A myriad of factors are battering their companies and others listed in the Asian financial hub.The U.S.Federal Reserve’s indication of multiple interest rate hikes this year has led to increased capital outflows, while China’s softening economic outlook amid still stringent Covid-19 curbs is exerting a heavy toll on revenue and growth.

Adding to these macro headwinds are regulatory woes and mounting worries over the situation in Ukraine.Investors are concerned that China’s closer ties with Russia may lead to economic sanctions from the West, with multiple reports pointing to the country’s possible willingness to provide military assistance – including drones and surface-to-air missiles— to Russia.

Although Beijing has disregarded them as disinformation, and Foreign Minister Wang Yi has now explicitly said China doesn’t want the Russia-related sanctions to affect itself, the country’s worsening relationship with the U.S.is still casting a deep shadow over companies caught in the middle.

MORE FROM FORBES ADVISOR Best Travel Insurance Companies By Amy Danise Editor Best Covid-19 Travel Insurance Plans By Amy Danise Editor The U.S.

Securities and Exchange Commission has notified five U.S.-listed Chinese firms that they are at risk of being delisted due to their failure to submit detailed auditing documents that support their financial statements.

As the relationship between the world’s two largest economies deteriorates, pessimism over resolving the auditing issue through bilateral negotiations has led investors to dump U.S.-listed Chinese shares.The selloff extended to Hong Kong because many of these companies – for example e-commerce giant Alibaba and games developer NetEase – are dual-listed.

The Hang Seng Tech Index, which comprises 30 technology companies including Alibaba, NetEase and Tencent, plunged 11% on Monday, and another 5.2% on Tuesday, extending this year’s loss to more than 30%.

“In the short-term, there are many negative factors,” says Kenny Ng, a Hong Kong-based securities strategist at Everbright Securities International.“And there doesn’t appear to be a single clear solution to them.”

Ke Yan, head of research at Singapore-based DZT Research, agrees.He also points to domestic headwinds such as the regulatory clampdown on the technology companies, which he says doesn’t appear to be coming to an end any time soon.

Tencent, for one, is suffering from China’s prolonged restriction on online gaming , with regulators in Beijing not handing out new games licenses since the end of last year.What’s more, a Wall Street Journal report published on Monday says the company is facing a record fine for violating the People’s Bank of China’s (China’s central bank) rules around money laundering, suggesting further regulatory woes ahead.

Yue Wang.

Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Freshly fallen meteorite found on the Nullarbor using drones and AI

Freshly fallen meteorite found on the Nullarbor using drones and AI A researcher at Curtin University has used drones and Artificial Intelligence technology to recover a meteorite on the Nullarbor Plains. Key points: – A researcher says new methods could help scientists locate more fallen meteorites – He says the […]
Freshly fallen meteorite found on the Nullarbor using drones and AI

Subscribe US Now