China Technology Shares Drop Amid Concerns Delisting from US Stocks

Zikrul
By -
0
China Technology Shares Drop Amid Concerns Delisting from US Stocks


Share prices of Chinese technology companies slumped on Friday (1/4) trading amid concerns about the risk of delisting a number of companies from the United States (US) stock exchange. This is the second day of decline. The Hang Seng Tech Index was down 3.9% in early trading Friday. Meanwhile, on the previous day, it was corrected by 1.4%.

The US stock exchange regulator has added Baidu Inc to a list of Chinese companies that may be delisted from US exchanges. Baidu shares plunged 8.5% and were the main weight on the Hang Seng Tech index on Friday. Bilibili Inc. also fell more than 8%.

The second straight day of sell-offs in tech firms shows that investors are increasingly concerned about US stock exchange regulators pushing for full access to audits of Chinese companies. However, China said talks with the US accounting watchdog would still continue to seek a deal.

As is known, the US Securities and Exchange Commission or The Securities and Exchange (SEC) has included five issuers on the New York Exchange that must comply with US audit supervision regulations. Four of them are Chinese technology companies.


Based on a SEC statement quoted by SCMP, Friday (1/4), Futu Holdings, iQiyi and Baidu are the latest names to be identified under the Holding Foreign Companies Accountable Act (HFCAA).

In addition, there are Nocera, an agricultural services company based in Atlanta, and CASI Pharmaceuticals, which develops cancer drugs in Rockville, Maryland.

The HFCAA rules, which were enacted during the twilight of the Donald Trump administration, require foreign companies registered in the US to comply with audit inspection rules under the Public Company Accounting Oversight Board (PCAOB). If it is not fulfilled for three years, it will be removed from the US stock exchange.

"The SEC's role at this stage of the process is solely to identify issuers who have used the PCAOB-identified public accounting firm to audit their financial statements," the SEC said in a statement.

Under the refutable presumption clause in US law, companies identified by the SEC can dispute their addition. Weibo Corporation, which was added to the SEC's list on March 23, has until April 13 to file an appeal, while the deadline for the remaining five is a week later on April 20.

When the SEC identified HutchMed and four other US-listed companies on March 8 as liable under the HFCAA, it caused a Hong Kong stock market crash for the shares in question. For now, China's securities regulator is calm.

“According to the SEC, it is just normal procedure for US regulators to enforce the HFCAA. Whether the companies added to the list will be delisted will depend on the outcome of negotiations between China and the US over their cooperation on audit regulations," a spokesperson for the China Securities Regulatory Commission (CSRC) said.

There are about 200 Chinese companies, including the newspaper's owner Alibaba Group Holding, listing on the New York Stock Exchange (NYSE) or Nasdaq.

China does not allow auditing and accounting data to be brought overseas, but has empowered the CSRC to find mechanisms to comply with overseas accounting regulations. A new approach is being considered, in which China's finance ministry checks audit data for state secrets and personal information before handing it over, the Post reported last week.


SEC chairman Gary Gensler and CSRC chairman Yi Huiman have held three online meetings since last August to discuss prospects for cooperation on audit regulations, and China's securities watchdog has met with the PCAOB, a CSRC spokesman said, adding that communications were ongoing.

Subscribe Daily Post or Follow Google News to update information quickly, Thank you..!!

Post a Comment

0Comments

Post a Comment (0)

#buttons=(Ok, Go it!) #days=(20)

Our website uses cookies to enhance your experience. Learn more
Ok, Go it!