China tech stocks increase after Meituan struck with antitrust fine

China tech stocks rise after Meituan hit with antitrust fine

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GUANGZHOU, China– Meituan shares rose over 8% on Monday in spite of the food shipment giant being slapped with a $500 million antitrust fine, as the charge was not as big as anticipated.

“The Meituan fine was actually lower than expected,” Ken Wong, Asia equity portfolio expert at Eastspring Investments, informed CNBC’s “Street Signs Asia” on Monday.

On Friday, China’s State Administration for Market Regulation (SAMR) stated Meituan abused its dominant position in the nation’s online food shipment market. The market regulator stated Meituan pressed merchants to sign special cooperation arrangements with them and performed punitive steps for those that didn’t.

The SAMR slapped a 3.44 billion yuan ($5343 million) fine on Meituan and bought it to perform correction steps, concluding a months-long probe.

Meituan closed up more than 8% in Hong Kong trade, while other China innovation stocks noted in Hong Kong were likewise broadly greater. Tencent ended the day greater by 2.9% while Alibaba leapt almost 8%.

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“Overall the fact that Chinese equity markets are definitely … trading much more attractive relative to most other countries here in Asia,” Eastspring Investments’ Wong stated.

“Chinese markets … are trading at substantially lower valuation levels,” he stated. “We are seeing investors bottom fishing a bit.”

Wong stated that any favorable belief coming out of China towards the innovation sector ought to cause “more buying” of the associated stocks.

China has actually been increasing analysis on its domestic innovation business over the previous year, cleaning billions of dollars of worth off tech stocks.

Regulators have actually concentrated on tightening up guidelines around unreasonable competitors and information security however have actually even gone even more than other jurisdictions by turning their attention to managing algorithms.

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