https://www.bnnbloomberg.ca/china-stocks-in-u-s-erase-740-billion-as-crackdown-deepens-1.1632983
(Bloomberg) – Beijing’s sweeping crackdowns of its technology and education sectors has unleashed shockwaves across global markets, causing U.S.-listed Chinese stocks to post their biggest back-to-back losses in over a decade.
The Nasdaq Golden Dragon China Index plunged 5.6% Monday morning after regulators in China unveiled an overhaul of its education sector that bans firms that teach school subjects from making profits, raising capital or going public. The gauge which tracks 98 of China’s biggest firms listed in the U.S. is on pace for its biggest two-day drop since 2008 and has lost more than $740 billion in value since reaching a record high in February.
“The regulatory uncertainty is significant and is something that is impossible for investors to quantify,” said Michael O’Rourke, chief market strategist at JonesTrading. “Investors should be cautious until the Chinese government affirms the legality of these structures,” he added.
Some of large investors have already started to unload their shares. Cathie Wood’s flagship Ark Innovation ETF cut its holdings of China stocks to less than 0.5% this month from a high of 8% in February. The fund completely exited its position in tech-giant Baidu Inc. and has just 134 shares of Tencent Holdings Ltd. Its only other position, Chinese property site KE Holdings Inc., has dropped 58% so far this year.