China tech stocks pare gains after report of new online video curbs
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The Hang Seng Tech Index was up 0.3 per cent in Hong Kong, having earlier gained as much as 2.3 per cent.
PHOTO: AFP
HONG KONG (BLOOMBERG) - Chinese tech stocks trimmed gains as a Wall Street Journal report on fresh curbs facing the online video industry stoked concerns that Beijing's regulatory crackdown is not over yet.
The Hang Seng Tech Index was up 0.3 per cent as at the midday lunch break in Hong Kong, having earlier gained as much as 2.3 per cent, following the report that said Beijing is preparing new regulations on the live-streaming industry including a daily cap on tipping - a key revenue source for such firms.
Key player Kuaishou Technology slid as much as 8.3 per cent, reversing an earlier surge buoyed by the firm's earnings beat.
The latest regulatory development sours sentiment as investors were expecting China to loosen its grip following Vice-Premier Liu He's mid-March pledge to stabilise capital markets and end crackdowns on private enterprise. The Hang Seng Tech Index has jumped more than 30 per cent from its trough two weeks ago.
"This will create pressure for live-streaming firms as they share a proportion from digital tips," said Mr Willer Chen, an analyst at Forsyth Barr Asia. "If true, this will be a big regulation on live-streaming hosts. A great number of leading hosts earn way higher than the proposed 10,000 yuan (S$2,130) daily cap."
Sentiment has also been fragile following a number of earnings misses by technology companies, including Tencent Holdings and Alibaba Group Holding. The 30-day volatility for the Hang Seng tech gauge is at a record high as traders look for more clues on the sector's earnings and regulatory outlook.
