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View all search resultsTech rout drags China shares lower after US SEC hints at delistings
The Hang Seng Tech Index dived more than 7 percent, dragging the Hang Seng Index down more than 3 percent.
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Traders wearing masks work on the first day of in-person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, United States, on May 26, 2020. (REUTERS/Brendan McDermid)
H
ong Kong-listed tech giants dragged Chinese stocks lower on Friday after the US Securities Exchange Commission (SEC) identified Chinese companies that will be delisted if they do not provide access to audit documents.
The Hang Seng Tech Index dived more than 7 percent, dragging the Hang Seng Index down more than 3 percent, while China's onshore CSI300 Index dropped more than 1 percent in early trade.
China's securities regulator said on Friday it is confident it would reach an agreement with US counterparts on securities supervision.
In the note posted on its official WeChat page, the China Securities Regulatory Commission (CSRC) said that together with the Ministry of Finance, it has continued to communicate with the US Public Company Accounting Oversight Board and has made "positive progress".
The regulator's comments came after the SEC's naming of five New York-listed Chinese stocks that could be delisted sparked a selloff in their shares.
The Nasdaq Golden Dragon China Index tumbled 10 percent on Thursday to its lowest level in nearly 6 years.
Companies on the SEC list that are also listed in Hong Kong led the slump on Friday. Yum China Holdings, Zai Lab , HUTCHMED (China) Ltd and Beigene Ltd fell between 8 percent and 15 percent.
In response to the SEC statement, Yum China, which owns KFC, Taco Bell and Pizza Hut restaurants in China, said it may have to delist from the New York stock exchange by 2024.
Some analysts downplayed the impact of the SEC's move.
"We maintain our view that the SEC update is not new news and any real risk of ADRs de-listing will likely materialize by 2024-2025 when companies fail to disclose the requirement mandated by the SEC for three consecutive years," Citi analysts said in a note.
"We suggest buying big cap ADRs that already have dual-listing in HK."
