Flags of China and Hong Kong flutter as screens display the Hang Seng Index outside the Exchange Square complex, home of the Hong Kong Stock Exchange, on January 21, 2021 in Hong Kong, China.
Zhang Wei | China News Service via Getty Images
Hong Kong shares of dual-listed Chinese companies, including Nio, JD.com and Alibaba, tumbled on Friday after US delisting concerns resurfaced.
Shares in tech giant Alibaba fell 6.56% by Friday evening in the city. Shares in electric car maker Nio, which debuted in Hong Kong a day earlier, fell 11.64%. Baidu lost 5.14% and NetEase lost 6.94%.
JD.com fell 15.67% after reporting quarterly losses on Thursday.
The broader Hang Seng Tech index fell 7.55%.
These losses followed the decline in the value of some Chinese stocks listed in the US overnight amid renewed concerns about a potential delisting in the US.
The US Securities and Exchange Commission recently named five U.S. registered ADRs from Chinese companies that they say do not comply with the Foreign Company Liability Act. ADRs are shares of non-US firms and are traded on US exchanges.
SEC-marked Chinese ADRs were the first to be identified as non-compliant with HFCAA standards. The law allows the SEC to ban companies from trading and even delist them from U.S. exchanges if U.S. regulators fail to review the company’s audits for three consecutive years.
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However, UBS Global Wealth Management’s Hartmut Issel is still positive about the hit Chinese stocks, though he admits it’s “not for the faint of heart.”
The fundamental value of these companies will not be affected, Issel, the company’s head of equity and credit in Asia Pacific, told CNBC’s Street Signs Asia on Friday: China.”
“Almost all of them are now listed in Hong Kong,” Issel added. “As an investor, you just have to walk away if there is an actual delisting. [in the U.S.].”
In addition, he said: “We know that the Chinese as well as the American authorities are in contact, they can save him.”
— Bob Pisani of CNBC contributed to this report.