Alibaba jumps 12% as China approves new video games in another sign Beijing is easing its tech crackdown
Ali Baba Shares jumped alongside other Chinese tech stocks listed in the United States on Wednesday, with the approval of a new batch of video games in China, raising hopes that Beijing remains on track to further ease its crackdown. against the technology sector.
Alibaba climbed 12% to $117.28, the highest price for the e-commerce juggernaut since April 4. The increase was then reduced to 10%. Actions of competing online retailer JD.com climbed 8% to $66.94, its highest since March 4, and Baidu increased by 1.5%.
The gains helped push the S&P/BNY Mellon China ADR index to a third consecutive advance.
China’s National Press and Publication Administration, or NPAA, on Tuesday gave the green light to 60 online games, the biggest endorsement of titles for the country’s $45 billion online entertainment market since July 2021. , according to the South China Morning Post.
The endorsement suggests Beijing is continuing to loosen its regulatory grip on the broader tech sector, a crackdown that has wiped out billions of dollars of stock market valuation and weighed on the world’s second-largest economy.
The SCMP reported that the NPAA has not approved any titles of NetEase. The company’s Nasdaq-listed stock rose on Wednesday, however, rising 3% during the session.
“The noise around Chinese technology continues to grow. There is growing hope that the regulatory onslaught will end and the focus will instead be on technology as the engine of economic growth,” said Huw Roberts , head of analytics at Quant Insight, in a note on Tuesday. whether investors see a turn after the drop in tech stocks.
In Aprilthe Chinese government has reportedly said it will introduce measures to support the tech sector and promised further economic stimulus as the country faces the slowest growth in three decades, at 5.5%.
“Given the brutality of the sale since November 2020, when Beijing first suspended Ant IPObottom-up analysis suggests valuations are cheap and there is growing talk of a catch-up trade,” Roberts wrote.