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Meituan Surges After $534 Million Fine in China Removes Overhang By Investing.com

by Mike Robinson

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© Reuters

By Dhirendra Tripathi

Investing.com – Meituan stock (HK:) closed 8.4% higher in Hong Kong trading Monday after the $534 million fine the Chinese markets watchdog imposed on the company last week removed an overhang for the stock.

An context in which the Communist government has launched a broad and loud attack against some of the most important young companies of the country, many people were surprised that the punishment was so mild.

China’s State Administration for Market Regulation had accused Meituan of abusing its dominant position in the country’s online food delivery market. Meituan had locked in merchants to exclusive deals and penalized those who didn’t.

While closing the probe, the body directed the giant of food delivery to corrective actions.

SAMR’s ruling buoyed other Chinese shares as well, many of which have been under pressure because of heightened regulatory action and oversight as the government pursues a campaign of ‘shared prosperity’, in an attempt to reduce inequality.

P.duo (NASDAQ:) surged 4.2% during premarket trades on Nasdaq. Xpeng (NYSE) rose 2% in premarket trading on Nasdaq.

ADRs Alibaba The stock market soared 5.6% while Didi (NYSE) and Nio(NYSE) increased around 2%.

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