Dear readers, yesterday I posted an article on the southing of a number of Chinese technology stocks listed on the US bourses. What I I forgot to mention then was an important fact that this southing of the stocks had also mainly to do also with the implementation of a law in US that will delist off Chinese companies listed on the US stock exchange if they fail to comply with the US audit regulations. And hence it is not just due to the broad-based sell-off of technology stocks on the US bourse, be they China-based or not.
In fact, it is not just Chinese tech-related stocks on the US stock exchange that bore the brunt of the sell-off. US traded Chinese stocks have already been pushed into the bear-market territory based on the S&P/BNY Mellon China Select ADR Index. This index tracks the American depositary receipts for 48 major U.S.-listed Chinese companies.
I was quite surprised of the hard stance taken by US President Joe Biden against China. I expected the US’ stance to China to be hard but I have not expected it to be as hard as what Joe Biden told the media one or two days ago.
For investors who are confident of certain Chinese stocks listed on the US stocks markets, names like Bai Du, AliBaba, Tencent (collectively called the “BAT” stocks), this recent sell-off may be an opportunity to enter into these stocks. But on the converse, could buying into these stocks be catching a “falling knife”? The answer to this is that we really do not know. These kinds of questions apply to all stocks not just the stocks we discuss in this post. The key is to invest in something you feel comfortable about. Invest with a sum that you are prepared to lose. With these, you will have a peace of mind investing.
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