Chinese tech shares see a comeback after the government approves a batch of video game licenses
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All in all, this week has been a good week for Chinese tech companies. WSJ first reported on Monday that Chinese regulators were ending investigations into three firms, the most notable being Chinese ride-hailing giant Didi, and allowing the companies’ apps to return to the app store as early as this week.
And on Wednesday, the Chinese government approved 60 video game licenses, giving investors hope that the rally will continue and that the CCP’s regulatory campaign on the tech industry is coming to an end. Tech giants like Alibaba were at the forefront of the recovery, with shares increasing by 11%. But this list boosted market sentiment so much that it also increased the shares of Tencent even though that company wasn’t on the approval list.
Key comments:
“Since the middle of May, policies of the central government have pointed to less regulation. This is a second confirmation that the central government isn’t going to do anything more. It helps sentiment,” said Steven Leung, executive director of institutional sales at brokerage UOB Kay Hian in Hong Kong.
“I think the market is still excited about the potential restore of Didi on apps stores and feels a bit risk-on sentiment. The newest batch of gaming license approval, though Tencent and NetEase are not on the list, is also good news,” said Willer Chen, an analyst at Forsyth Barr Asia Ltd.
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