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US-listed Chinese language shares suffered a blow when Didi exits the NYSE

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© Reuters. FILE PHOTO: People walk past the headquarters of Chinese rideshare company Didi on December 3, 2021 in Beijing, China. REUTERS / Thomas Peter

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From Medha Singh

(Reuters) – US-listed stocks of Alibaba (NYSE :), Baidu (NASDAQ :), JD (NASDAQ :). Com and other Chinese firms were made on Friday as ride-hailing giant Didi Global Inc's decision was made for home and strained Sino-US relations.

Didi, now listed in Hong Kong, after succumbing to pressure from Chinese regulators worried about data security, fell 22.2% to $ 6.07. The company pegged its IPO at $ 14 apiece in June to raise $ 4.4 billion.

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

"The crackdown began with Ant's botched IPO. The Chinese government has already shown that it will exceed market expectations. It will be a while before the sentiment about Chinese names thaws."

Alibaba was down 8.2%, Baidu was down 7.8% and JD.com was down 7.7%, with investors nervous as Beijing targets sectors that range from gaming to education.

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

KraneShares CSI China Internet ETF fell 7% while the e-commerce platform Pinduoduo (NASDAQ 🙂 fell 8.2%, mobile game publisher Bilibili (NASDAQ 🙂 fell 7.1% and live streaming game platform operator HUYA fell 12.9%.

"In our view, all stocks listed in China, even Hong Kong, became no longer investable with the Hong Kong move in mid-2020, so we sold our only stake (HK-listed Tencent) in August 2020," said William de Gale, co-founder and senior portfolio manager of BlueBox Asset Management, which does not have any Chinese ADRs.

Trium Capital EM portfolio manager Peter Kisler said, “The concern is that all holders of ADRs could get stuck on Hong Kong stocks and I'm sure there would be some problems if some people don't hold them allowed – so it could be a forced sale. "

Meanwhile, the US Securities and Exchange Commission said Thursday that Chinese companies listed on US stock exchanges must disclose whether they are owned or controlled by a government agency and provide evidence of their audits .

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