(Bloomberg) — China’s overhaul of tutoring companies ignited a volatile few weeks for stock markets both onshore and in Hong Kong this summer, leaving investors on edge.
Traders are looking out for what regulators may target next as Beijing tightens its grip on a range of sectors from private education to digital gaming, e-cigarettes, property and insurance.
Here’s a look at the key events since July 23:
August 27 – IPO & Entertainment
- The Hang Seng Tech index, which tracks the biggest technology stocks in China, reverses a gain in morning session following a report by Dow Jones that China will propose new regulations to block companies with large amounts of sensitive consumer data from floating shares in the U.S. Alibaba Group Holding Ltd. drops 3.9% while Tencent Holdings Ltd. loses 1.1%.
- Chinese entertainment stocks slide after the country’s internet regulator moved to step up a crackdown on activities of fan groups and relevant online platforms. Alibaba Pictures Group Ltd. falls 9.5%, the most in six months, while Mango Excellent Media Co. drops 8.6%.
- Meanwhile, many major works of Zhao Wei, one of China’s most popular film stars, are reported to no longer play on streaming sites the previous night and her name is scrubbed from the titles’ landing pages. Zhao has built a fortune through investments including an early stake in Alibaba Pictures.
August 26 – ‘Working 996’
- The Supreme People’s Court and Ministry of Human Resources and Social Security spell out in a lengthy essay that overly long work hours are illegal. The excessive-work culture, labeled ‘996’ because of the common practice of working 9 a.m. to 9 p.m., six days a week, pervades the country’s largest corporations, particularly internet firms.
August 24 – Tech Rebound
- The Hang Seng Tech index jumps 7.1% at the close in Hong Kong, the most since July 29. The advance adds to a gain of more than 2% in the previous session following a five-week rout that took the gauge to the lowest level since inception last year. The benchmark Hang Seng Index also ends 2.5% higher, extending two-day rises to 3.5%.
August 20 – Hang Seng Index Enters Bear Market
- The Hang Seng Index slumps into a technical bear market as legislation setting out tougher rules on use of customer data and a local media commentary on online drug sales accelerate a selloff of stocks in relevant sectors. Shares of Ping An Healthcare and Technology Co. and Alibaba Health Information Technology Ltd. are among the worst hit with double-digit declines.
- Liquor shares plummet after a local media report that executive of an unnamed liquor producer will attend a symposium held by Chinese regulator over market order of the sector. Industry bellwether Kweichow Moutai Co. falls 4.4%, while Wuliangye Yibin Co. declines 7.3% and Shanxi Xinghuacun Fen Wine Factory Co. loses 9.1%.
- Shares of Chinese medical beauty firms drop after the state-run People’s Daily newspaper says in a commentary that the rising number of accidents in cosmetic surgery is alarming and the industry lacks relevant laws and regulations. Bloomage Biotechnolgy Corp., Imeik Technology Development Co. and Yunnan Botanee Bio-Technology Group Co. finish at least 4.7% lower.
August 19 – Drivers & Streaming
- Shares of technology firms plunge after China said it is studying proposals to further ensure the rights of drivers who work for online companies and to step up oversight of the live streaming industry. Alibaba Group Holding Ltd. and Kuaishou Technology slump to record lows in Hong Kong.
August 17 – Tech & Entertainment
- The Hang Seng Tech Index drops after China’s market regulator issues draft rules on unfair competition on the internet. Baidu Inc., NetEase Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd. slide, with tech shares also among leading drags on the benchmark index.
- Shares of film producers and broadcasting companies fall after the People’s Daily newspaper says that the nation will tighten regulation of the entertainment sector and “idol culture”. Shanghai New Culture Media Group Co., Hunan TV & Broadcast Intermediary Co. and Alibaba Pictures Group Ltd. all close lower.
August 16 – Gaming
- Tech shares including Tencent Holdings Ltd., NetEase Inc. and Bilibili Inc. slump after state media says China should tighten regulations of online games to ensure they don’t misrepresent history.
August 12 – Online Insurance
- Insurance shares fall after China’s banking and insurance regulator ordered firms and local agencies to curb improper marketing and pricing practices, as well as step up user privacy protection. The watchdog encouraged companies to address these issues voluntarily and said those that failed to comply would face “severe punishment.” ZhongAn Online P&C Insurance Co. slides as much as 9.5%, Ping An Insurance Group drops as much as 2.4%, while New China Life Insurance Co. slips 1.5% in Hong Kong.
August 9 – Chipmakers Slide
- Chipmakers slump after state media published a commentary saying regulators will show no tolerance in cracking down on speculators in the chip market. China’s biggest chip foundry Semiconductor Manufacturing International Corp. falls more than 5% in Shanghai, while in Hong Kong Hua Hong Semiconductor Ltd. slides 5.7%, its worst drop in nearly three months. Will Semiconductor Co. falls 5.7%, while Hubei Tech Semiconductors Co. declines 3.3%.
August 6 – And Milk
- Makers of infant formula join a growing list of stocks hurt by regulatory risk. China Feihe Ltd. falls as much as 9.3%, after Xinhua reports that some experts are concerned by marketing that is making mothers choose milk powder over breastfeeding.
- Kuaishou Technology plummets almost 12% after an influential state-backed newspaper urges tighter regulation of internet video content.
August 5 – Vaping and Alcohol
- Liquor and e-cigarette stocks dip as skittish investors seize on a series of reports from state media that are seen to potentially foreshadow the next targets for stricter regulation. Shares of liquor maker Kweichow Moutai Co. slip as much as 2.8% while its peer Wuliangye Yibin Co. loses 3.8%. Tobacco vaping stock Smoore International Holdings Ltd. drops as much as 7.8% in Hong Kong. A number of biopharmaceutical firms also fall by their daily limit after a report on the harm from misuse of human growth hormone injections.
August 4 – Healthy Nation
- Equity investors get some relief as shares of sneaker makers and other sports companies jump, driven higher by Beijing’s latest policy agenda for a healthy nation. Li Ning Co. surges 5.7% while Anta Sports Products Ltd. rises 4.7%.
August 3 – Gamers Beware
- Tencent Holdings Ltd tumbles as much as 11%, after Chinese state-owned media described video games as “spiritual opium” and said the country should stay alert to the harm of online games and regulate the sector as soon as possible.
July 30 – Dirt
- The benchmark CSI 300 Index closes lower, marking the worst week since late February.
- Chemical fertilizer makers are asked by the nation’s top economic planner not to excessively hoard fertilizer, drive up prices and spread misleading information. The government will also temporarily stop fertilizer exports to ensure domestic supply.
- Trust firms are banned by the nation’s banking and insurance regulator from setting up new direct non-financial units.
July 28 – Spam
- China orders Tencent Holdings Ltd and 13 other mobile software developers to rectify problems related to pop-ups within their apps, adding to a wide-ranging crackdown on the country’s tech sector. Tencent shares fall more than 5% before recovering to close higher.
July 27 – More Pressure
- Hong Kong’s Hang Seng Index records its biggest two-day loss since 2008 as shockwaves from Beijing’s intensifying crackdown continue to ripple through markets. The CSI 300 Index falls 3.5% amid a wave of panic selling.
July 26 – Eating and Living
- Investors get their first chance to react to China’s confirmation of the tutoring industry overhaul, with the CSI 300 Index falling nearly 5%. In Hong Kong the Hang Seng Index closes down 4.1%.
- Food delivery giant Meituan falls 14%, its biggest decline on record, after China releases new guidelines requiring online food platforms to ensure the welfare of delivery workers.
- Property stocks including Shimao Services Holdings Ltd. tumble after the housing ministry publishes a statement in which it says it aims to “notably improve order” in the market and crack down on violations.
July 24 – Non Profit
- China unveils a sweeping overhaul of its $100 billion education tech sector, banning companies that teach the school curriculum from making profits, raising capital or going public.
- Tencent Holding Ltd. is ordered to give up exclusive music streaming rights and is hit with a fine of 500,000 yuan ($77,295), becoming the latest Chinese internet giant to be brought to heel by regulators.
July 23 – Record Declines
- Bloomberg reports that China is considering asking companies that offer tutoring on the school curriculum to go non-profit, as part of a sweeping set of constraints that threaten to decimate the $100 billion education tech industry. New Oriental Education & Technology Group Inc falls by a record 41% in Hong Kong, while Koolearn Technology Holding Ltd. closes 28% lower. Scholar Education Group drops 29%.
(Updates)
More stories like this are available on bloomberg.com
©2021 Bloomberg L.P.
