Regulatory Noose... Stock Price Drop of 9 Chinese Companies Also 'World's Largest'

[Asia Economy Reporter Yujin Cho] China's unprecedented regulatory pressure on its domestic industries is driving away even foreign investors.

According to data analyzed by Bloomberg News on the 28th (local time) based on the MSCI stock index, among the top 10 companies worldwide with the largest stock price declines in July, 9 were Chinese companies.

The number one was Tencent, a major Chinese tech company under investigation by authorities for antitrust allegations. Tencent's stock price plunged 23% over the month, wiping out $170 billion in market capitalization.

Ranked 2nd to 5th were e-commerce company Alibaba ($103.9 billion), delivery company Meituan ($87.9 billion), e-commerce company Pinduoduo ($59.5 billion), and liquor company Guizhou Maotai ($49 billion).

6th was video platform company Kuaishou ($43 billion), 7th liquor company Wuliangye ($30.3 billion), 8th Ping An Insurance ($29.2 billion), 9th Prosus NV ($26.5 billion), and 10th online real estate brokerage KE Holdings ($27.9 billion).

Among these, only 9th-ranked Prosus NV is a Dutch company; the rest are all Chinese companies, most of which have been or are currently under regulatory investigation by Chinese authorities. In particular, recent regulatory measures on the private education market have deepened the declines.

The market is increasingly fearful that such Chinese government regulations could go beyond mere fines and potentially cripple entire industries, dampening investor sentiment.

Since the Chinese government's strong regulatory measures on the private education market announced on the 24th, the stock prices of Chinese companies listed on mainland China, Hong Kong, and U.S. stock exchanges?especially in technology, education, real estate, and biotech sectors?have been plummeting day after day.

Bloomberg News expects that despite these regulatory risks, the financial investment industry will not lower its expectations for these Chinese companies.

There are concerns that Chinese authorities may impose additional punitive measures on these companies, but current stock prices are considered excessively undervalued relative to their actual value.

This content was produced with the assistance of AI translation services.