The stocks of Chinese internet giants Alibaba, JD.com, and Tencent slipped to red territory Friday on another blow from the regulators. Now, several top apps have to stop offering other financial services, The Wall Street Journal reported.
What started in November with a probe into fintech behemoth Ant Group, a company of Alibaba (NYSE: BABA; HKEX: 9988), has spread to its competitors: 13 tech conglomerates including WeChat Pay operator Tencent Holdings Ltd. (OTC: TCEHY; HKEX: 0700), food-delivery giant Meituan (OTC: MPNGY; HKEX: 3690), e-commerce platform JD.com Inc (Nasdaq: JD; HKEX: 9618), and ride-hailing provider Didi Chuxing were ordered to separate from financial services like microlending. Earlier, Ant Group’s Alipay was ordered to do the same in a restructuring process and forced adherence to the central bank.
The regulators, including the People’s Bank of China and banking, insurance, securities, and foreign-exchange watchdogs, held a meeting with the companies on Thursday, as the WSJ reported. The crackdown is meant to minimize the risks and ensure the stability of the financial system. The medium, meanwhile, called the move as “ending an era of rapid growth” in China’s fintech industry.
Separately on Friday, Tencent, Didi, and eight other Chinese tech giants were slapped with more fines in the anti-monopoly drive, as reported by the South China Morning Post. This time, the State Administration for Market Regulation (SAMR) imposed 500,000 yuan (maximum) for failing to disclose the merger and acquisition deals of certain smaller competitors, as well as establishing new joint ventures.
OTC shares of Meituan and Tencent traded 2% lower intraday Friday, at $76.70 per share and $79.58, respectively. Stocks in Alibaba and JD.com were each down about 1%, at $232.01 per share and $77.47 per share, respectively, intraday in New York.