On the last day of the year, Chinese tech stocks got a strong boost in Hong Kong, but it’s not enough to make up for what has been a historically turbulent period for the sector.
Alibaba, Baidu, and Bilibili, all of which trade in New York, saw their shares rise more than 8% on Friday, placing them among the top performers during a truncated trading day in Hong Kong.
The Hang Seng TECH Index, which monitors the city’s 30 largest tech companies, surged 3.57 percent, surpassing the broader Hang Seng Index (HSI), which increased 1.2 percent.
The increase comes on the heels of excellent performances by Chinese technology companies on Wall Street on Thursday. Electric automaker Nio (NIO) and Tencent Music Entertainment Group rose nearly 15%, while Alibaba (BABA) climbed 9.7%.
However, the year has not been kind to Chinese technology in general. In 2021, Alibaba’s Hong Kong-listed stock has lost over half of its value. Tencent, which was up 3% on Friday, has lost 19% of its value. Baidu, which debuted on a secondary market in Hong Kong early this year, has lost 43% of its value since then.
Beijing’s unprecedented regulatory crackdown on private firms has wreaked havoc on Chinese businesses. The restrictions on technology, banking, education, and entertainment devastated stocks, wiping off trillions of dollars in value from Chinese enterprises on global markets at one time.
Nonetheless, there are some major issues looming on the horizon. In recent days, Beijing has taken a couple of actions that indicate it intends to tighten regulations for Chinese companies seeking to list overseas. While the government will not outright prohibit them from trading internationally, life for businesses wanting to attract additional foreign investment may become more difficult.
Regulators proposed last week that companies could be barred from holding foreign initial public offerings if authorities deem them a national security threat, and that companies could be forced to divest some assets “to eliminate or avoid the impact of overseas issuance and listing on national security.”