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China tech stocks rise after Meituan hit with antitrust fine


GUANGZHOU, China — MeituanChina Technology stocks surged by more than 9% Monday after the antitrust investigation resulted in a large fine for China’s largest food delivery company.

Freitag, China’s State Administration for Market Regulation (SAMR) said Meituan abused its dominant positionThe country’s online food-delivery market. Meituan, the regulator of the online food delivery market in China, said that it pushed merchants into exclusive collaboration agreements and took punitive action against those who did not.

Meituan was fined 3.44 billion Yuan (or $5534.3 Million) by the SAMR. It also had to take rectification steps, which concluded a lengthy investigation that lasted months.

Jefferies, an investment bank, stated that Meituan’s fine was lifted in a Monday note.

Jefferies stated that SAMR is a market decision. Meituan, (MT), has communicated with authorities to improve its business operations and we believe it addresses market concerns.

Meituan rose more than 9 percent in Hong Kong trade.

Meituan’s 2020 revenues were 3%.

In a separate anti-monopoly probe, Alibaba was slapped with a $28 billion fine — about 4% of 2019 revenue the e-commerce giant was forced to pay as part of an anti-monopoly investigation in April.

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In early trade, other Chinese technology companies that are listed in Hong Kong also rose. TencentThe difference was 33% AlibabaThe increase was more than 9%

Ken Wong from Eastspring Investments spoke on Monday about the “Street Signs Asia”, an Asia equity portfolio specialist.

“Chinese markets … are trading at substantially lower valuation levels,” he said. Investors are bottom fishing somewhat, he said.

Wong stated that positive sentiment from China towards the tech sector should result in “more buying of” the stocks.

China’s domestic tech companies have been under increasing scrutiny over the last one year. wiping billions of dollars of value off tech stocks

Regulators are focusing on tightening rules around unfair competitionAnd data protectionBut they have also gone above and beyond other jurisdictions in focusing their attention on regulating algorithms