This news was a welcome change as regulatory scrutiny had weighed heavily on Chinese stocks for the past few years. 19 when the Chinese government announced that it would introduce business-friendly policies to boost the struggling economy in 2023. Business-friendly government policiesĪlibaba’s stock started rising on Dec. Since we looked at why Baba stock dropped in 2022, it’s time to look at what has recently caused the share price to rise again as we enter 2023. Tryq About the Emerging Tech Kit | Q.ai - a Forbes company What’s the Story Behind BABA’s recent stock surge? When it was all said and done, Alibaba’s stock dropped by 25% in 2022 and about 49% in 2021. This caused the stock to drop until late August when reports came out that Beijing and American regulators were finalizing an audit inspection deal. This news led to foreign investors unloading their Chinese holdings in American depository receipts (ADRs), the tool that allows American-based investors to easily purchase foreign stocks. Securities and Exchange Commission had added Alibaba to a list of Chinese companies that were at risk of being delisted for issues with accounting regulations. In late July, it was revealed that the U.S. The regulatory crackdown has been an ongoing issue for the firm ever since. In April 2020, Chinese regulators fined the company $2.8 billion due to anti-monopoly laws. The political issues were also tied to the government’s probe of Alibaba. Many analysts feared that the leadership would continue the crackdown on tech giants and that the political party would not ease regulations or lockdowns. The issue with Jinping being the leader for the third consecutive term was that from 1982 to 2018, there was a constitutional limit of two consecutive terms for presidents. The Hang Seng index fell the next day since there were fears over economic policies and how the leadership would navigate the situation with COVID-related lockdowns. The downward trend for Chinese stocks accelerated in October when it was announced that President Xi Jinping would be claiming an unprecedented third term as the leader of the Chinese Communist Party, and therefore, the country. We’ve looked at Alibaba in the past when discussing why Chinese stocks fell sharply.
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