$Tencent Music(TME)$$Alibaba(BABA)$$JD.com(JD)$Chinese equities have contracted a fair bit since their highs earlier this year. Should you beworried?
In my opinion, this correction is only healthy as the levels reached prior was not supported by fundamentals. There are 2 key reasons for this pull-back: (i) the possible tightening of financial conditions in China and (ii) the rising regulatory scrutiny (both domestically and externally) on the Chinese Technology sector. These it seems dampened investor sentiment considerably post-Chinese New Year. However such fears may be overblown if you consider the growth potential in the demand for Chinese goods in the re-opening world economy. The regulatory moves are also not new and Chinese tech companies have been able to emerge stronger.
So long-term, I see the Chinese economy growing strength to strength. However be prepared for some short term uncertainty. Not investment advice, dyodd. Happy to discuss! [得意]
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