Chinese state media report on ‘Ma’ detention triggers Alibaba sale

Alibaba shares were sold off on Tuesday following a report by Chinese state media that an individual nicknamed “Ma” had been arrested, sending Chinese tech stocks plummeting due to rally on a pledge of support from Beijing.

Shares of the Chinese e-commerce giant fell 9.4% at the open in Hong Kong following the report. Shares then fell about 1% after China’s state broadcaster CCTV changed its one-sentence report to say the individual was not Alibaba’s billionaire founder Jack Ma.

People familiar with the situation said Jack Ma was not the person mentioned in the report. The Global Times, a state-run Chinese nationalist tabloid, said the suspect in question worked for a computer company and created an online group seeking to “divide the country and subvert the state”.

But CCTV’s initial report that authorities at Alibaba’s Hangzhou headquarters suspected an anonymous “Ma” of using the internet to endanger national security has rattled Hong Kong traders, who were ready to seize Chinese tech stocks following a pledge from top officials late last week. that Beijing’s protracted crackdown on the sector was coming to an end.

“China has imposed a lot of draconian policies on tech companies and now everyone is on high alert – if something happens they dump stocks,” said Louis Tse, managing director of Hong Kong-based Wealthy Securities.

Tse said the CCTV report quashed a planned rally for tech stocks following a statement from China’s political bureau, which pledged to end the industry’s unprecedented crackdown as policymakers seek to cushion the economic blow of a prolonged Covid-19 lockdown in Shanghai, the country’s financial capital.

Alibaba shares have fallen 54% and lost more than $340 billion in market value since late June last year, when ride-hailing platform Didi Chuxing launched an initial public offering in New York. despite warnings from officials about data security issues. .

The ensuing crackdown at one point erased around $2 billion from the market capitalization of Chinese tech groups and froze nearly all offshore tech IPOs in New York and Hong Kong.

The Politburo statement, released late Friday, gave a boost to Chinese tech stocks on Wall Street, where the Nasdaq Golden Dragon Index rose 2.4% on Monday. New York-listed shares of Alibaba closed up 4.2%.

But in Hong Kong on Tuesday, the Hang Seng Tech index of major Chinese tech stocks traded in the territory fell 0.4% as traders shunned the sector amid a lack of more concrete evidence that the crackdown was truly over. . Tse added, “After all, seeing is believing, isn’t it?”

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