U.S.-listed shares of Chinese companies tumble over fears of further crackdown – .

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U.S.-listed shares of Chinese companies tumble over fears of further crackdown – .


Didi shares fell 22% early in trading after the Chinese government blocked the download of the company’s app. The move appears to be part of a broader crackdown on the country, and a Chinese cabinet official said regulators were adopting new measures to monitor cross-border data security and potential securities fraud, according to Reuters.
The action by Chinese regulators comes less than a week after Didi listed his shares in the United States. Two recent small quotes – Full Truck Alliance and Kanzhun – are also under scrutiny by regulators and saw their shares drop sharply on Tuesday morning.

Concerns about investing in Chinese stocks have grown in recent years, with former President Donald Trump trying to ban investments in companies with links to the Chinese military and US regulators pushing for further scrutiny of certain foreign inscriptions.

Investment firm Oppenheimer said in a memo that U.S. efforts for greater oversight could be a cause of these safety reviews.

“We believe these cybersecurity reviews are likely due to China’s concerns about the leakage of sensitive data to foreign countries, as the United States has passed legislation that would require Chinese companies listed on U.S. stock exchanges to allow the public US Company Accounting Oversight Board (PCAOB) to audit their auditors. work or withdraw from US stock markets, ”the note said.

Bank of America analyst Eddie Leung said in a note that reviewing government data could be an ongoing risk factor for investors.

“Geopolitical factors may play a role, and there is a material possibility that data security inspection will become standard procedure for large Chinese internet companies planning overseas listings in the future,” the note said. .

An exception to Tuesday morning’s struggles was Weibo, which climbed 12% after Reuters reported that the chairman of the company was negotiating a deal to privatize the social media company.

—Michael Bloom of CNBC contributed to this report.

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