“Investors should have confidence in the market,” it wrote. “A short-term shock does not change the nature of the long-term positive trend … China’s economy and markets are at an advantage in terms of its width and depth.”
Even so, Chinese tech stocks swung wildly Wednesday.
Each had seesawed throughout the day, at one point posting declines of between roughly 2% and 3%.
Monday and Tuesday had been Meituan’s two worst days on record. The company shed more than $62 billion in market cap after regulators issued guidelines Monday calling for improved standards for food delivery workers. Meituan runs one of China’s biggest food delivery platforms, with hundreds of millions of users making transactions on its app annually.
Tencent also recorded its worst day in about a decade on Tuesday, losing more than $100 billion in market value. The losses came after it was ordered by regulators over the weekend to scrap its plan to acquire another music streaming player, China Music Corporation. The WeChat announcement came on top of that, dealing another blow.
This week’s sell-off in Hong Kong will go down as one of the biggest in history, according to Bespoke Investment Group.
“Since the end of the financial crisis, there hasn’t been a single two-day decline in the Hang Seng that has exceeded the magnitude of the last two days,” the firm wrote in a note to clients Tuesday, referring to the city’s benchmark index.
Still, there could be “potential for a short-term bounce” as investors “look for opportunity in the weakness,” it added.
A long shadow
Now, that is spreading as China’s clampdown continues to ripple across sectors.
But it alluded to regulatory constraints in a later statement, saying: “We will continue to operate under national supervision and its regulations, as well as the requirements of a capital market environment, and pursue an IPO in a timely manner.”
— CNN’s Hong Kong bureau contributed to this report.