Chinese investors are fleeing from tech giants’ stocks as the Chinese Communist Party (CCP) further tightens its grip on the technology industry, which is deeply damaging the country’s already fragile economy, Bloomberg reported on Jan. 6.

The news outlet paper noted that two tech giants, including the social media and gaming company Tencent and e-commerce company Meituan, became Chinese investors’ least-liked stocks for the first time.

Tencent used to be the star in the market in 2020. Instead, it stumbled on a net sale of $2.98 billion in the second half of 2021.

The Nasdaq 100 Index, heavily weighted in technology, has fallen around 5% from its November high.

The Hang Seng Tech Index value nosedived by more than half from last year’s February peak.

Cai Dian, a fund manager at Beijing Eastern Smart Rock asset management, said he would maximize his position in Hong Kong shares only if the market falls another 50%. 

“Because policy uncertainties are still there, it’s smartest to save ammunition and have in place strict risk control,” Dian said.

Tech companies have been riding a downward roller coaster over the past months due to the CCP’s constant new regulations. In addition, Bloomberg noted that mainland investors upended themselves from buyers to sellers in mid-2021. 

Meanwhile, Kuaishou Technology rose to top the list of tech firms that Chinese investors favored in the second half of last year. Kuaishou was freshly introduced in September and permits mainland investors to buy Hong Kong shares.

The situation was no better overseas. In the U.S., Bilibili’s American depositary receipts had fallen 64% in the past year, while Alibaba Group’s stock dropped 47%.

Some hope that more technology stocks trading in the United States may be listed in Hong Kong this year. In addition, with enterprises being allowed to join the trading linkages due to revised regulations in the city this year, there will be more Chinese buyers back.

But at present, Chinese investors remain tentative, Bloomberg noted. 

Peng Linxia, chief investment officer at Golden Glede Fund Management Zhuhai Hengxin, said, “You hear people saying it’s time to call a bottom to buy Hong Kong because it is cheap, but for me, that’s not a convincing enough reason.”

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