Categories: Family Office, Financial NewsPublished On: August 2nd, 2021Comments Off on Market Update – 7/30/202120.1 min read
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China’s continued tightening of control over the technology industry has had an impact on the global financial market.
WeChat was requested by the Chinese government to temporarily suspend new user registration to ensure program compliance with relevant laws and regulations.
Chinese education stocks plummeted after news that the Chinese government would ban the listings of tutoring institutions in the future.
Meituan, which is listed in Hong Kong, fell by 18% on Tuesday after the government announced that it would ensure that delivery workers meet the minimum salary.
Nasdaq Golden Dragon China Index, which tracks 98 Chinese company stocks listed in the United States, fell 12% on Monday and Tuesday.
The technology industry has always been a bright spot in China’s financial market, and its rapid growth has been favored by domestic and foreign investors. However, a series of events have also exposed the risks of investing in a single industry and a single country, especially in an environment with uncertain laws and regulations. Without the aid of insider information, any sudden changes in laws and regulations will majorly impact the fundamentals of the industry.
The prospects of Chinese technology stocks with good health are still promising. However, asset allocation should be made from the perspective of global financial assets to avoid excessive concentration in a single industry or country.
Many noteworthy stocks announced good quarterly operating results this week, but their outlook for the future did not meet the highly optimistic expectations of investors and did not provide much incentives for stock prices. Tesla, for example, released its best operating results in its history—in which its operating profit exceeded $1 billion for the first time. However, the stock price did not rise, but fell on Tuesday due to disappointment caused by high expectations.
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