© Stocksak. FILE PHOTO – Chinese President Xi Jinping votes during the closing ceremonies of the 20th National Congress of the Communist Party of China (Great Hall of the People) in Beijing, China, October 22, 2022. REUTERS/Tingshu Wang
(Stocksak). – U.S.-listed Chinese shares slumped in premarket trades after Xi Jinping’s new leadership team sparked investor concerns that ideology-driven policies would be prioritized at cost of private sector growth.
Ecommerce firms Alibaba (NYSE:) & JD (NASDAQ :).com and internet giant Baidu(NASDAQ:) dropped between 11% – 16%.
The iShares MSCI China ETF lost 8.6%. This was due to a sharp fall Hong Kong shares and losses in technology as well as the property sector.
Xi achieved a record-breaking third term of leadership on Sunday and established the new Politburo Standing Committee stacked full of loyalists.
Music streaming co Tencent Music and e-commerce platform Pinduoduo (NASDAQ) and mobile publisher Bilibili (NASDAQ) both lost between 10%- 15%
Education companies New Oriental Education & Technology Group and Gaotu Techedu dropped about 12% each, while electric vehicle firms Nio (NYSE:) Inc, Xpeng (NYSE:) and Li Auto fell between 10% and 13%.
Strategists at TD Securities wrote that the changes in leadership indicate little chance of new stimulus or changes to COVID policy in months ahead.
“While there were no new announcements regarding the policy front, the departures of perceived pro-stimulus officials, reformers from Politburo Standing Committee, and replacement with allies Xi, suggests the ‘Common Prosperity’ will be the overriding push by officials,” they stated.