Chinese shares undesirable

Published on: 30-Sep-2019
Category: Trading
Last updated: 13-Jan-2020

Chinese shares undesirable

In the trade dispute between the US and China, Trump wants to take another step against the People's Republic. Already on Friday, Trump's reflections on keeping Chinese companies from going public in the US became public. The courses of the affected companies reacted to this clearly. The shares of tech group Alibaba and also the Chinese search engine Baidu lost between five and six percent. The entire Nasdaq lost one percent on Friday, but recovered until the end of trading. More than 150 Chinese companies are listed on Wall Street, 19 of which have recently joined the Nasdaq.

The operators of the tech stock exchange Nasdaq are already going strong. Provisions for planned IPOs will be tightened and IPO approval processes slowed down and delayed. No one has officially commented on the measures against Chinese companies. The news agencies Reuters and Bloomberg refer to insiders and persons entrusted with the operations.

Most of the shares of Chinese companies are held by a few investors, which makes the turnover of the shares and their liquidity low. When these companies go public, much of the capital comes from China and not US investors. This handling of Chinese stocks keeps major institutional investors away from these stocks.



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