Beijing s Didi Crackdown Sparks Tumultuous Week for Chinese ADRs bnnbloomberg.ca - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bnnbloomberg.ca Daily Mail and Mail on Sunday newspapers.
Provided by Dow Jones By Micah Maidenberg The S&P/BNY Mellon of American depositary receipts slipped 0.2% Thursday to 167.41. The European index closed at 142.89, up 0.4%. The Asian index fell 1% to 233.16, but the Latin American index gained 0.4% to 214.09. The index for emerging-markets ADRs recorded a 1.2% rise to close at 402.82. ADRs for ecommerce giant Alibaba Group Holding Ltd. were off 1.7% at $208 in heavy trading, the fifth straight drop for the company s shares trading in the U.S. That downward trend is occurring as investors absorb the risks tied to Chinese stocks following a move by the Chinese government to require app stores in the country to remove Didi Global Inc. s mobile app for China. In addition, regulators also recently blocked the company s China business from adding new users, citing a regulatory review of its cybersecurity practices.
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By Stephen Culp and Medha Singh (Reuters) - Didi Global Inc fell for the third consecutive session on Wednesday after China ordered the app removed from mobile app stores as part of a broader crackdown on China-based companies with overseas listings. In its fifth day of trading as a U.S.-listed company, the stock was last down 4.2%, about 28% below its $16.65 offer price. Beijing extended its actions beyond the tech sector on Tuesday, vowing to step up scrutiny of Chinese companies listed offshore in order to crack down on illegal activity. On Wednesday, China fined internet companies including Didi, Tencent Holdings Ltd and Alibaba Group Holding Ltd for failing to get approval for earlier merger and acquisition deals.
The China Securities Regulatory Commission is leading efforts to revise rules on overseas listings that have been in effect since 1994 and make no reference to companies registered in places like the Cayman Islands, said the people, asking not to be identified discussing a private matter. Once amended, the rules would require firms structured using the so-called Variable Interest Entity model to seek approval before going public in Hong Kong or the U.S., the people said.
The proposed change is the first indication of how Beijing plans to implement a crackdown on overseas listings flagged by the country’s State Council on Tuesday. Closer oversight would plug a gap that’s been used for two decades by technology giants from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. to attract foreign capital and list offshore, potentially thwarting the ambitions of firms like ByteDance Ltd. contemplating going public outside the mainland.