On March 22, Eastern Time, many popular Chinese concept stocks such as Alibaba, Bilibili, and Pinduoduo rose strongly. In the past week or so, Chinese concept stocks have experienced violent shocks. After the Wind China Concept Stock 100 Index fell by about 29% in the three trading days from March 10 to 14, it has risen strongly in the last six trading days, with an increase of nearly 50%.
The change in investor sentiment mainly comes from two aspects: First, leading companies have launched record repurchases, cast confidence votes with real money, and immediately eased the pessimistic atmosphere in the market On the other hand, the recent State Council Financial Committee meeting released favorable policies, which is conducive to rebuilding market confidence.
Since the second half of last year, Chinese concept stocks listed in the United States have fallen collectively, almost all companies have suffered the same pain, and the market value of technology giants has also fallen sharply. Issues of audit papers, data security, forced delisting, industry consolidation risks, geopolitical risks, etc., once shrouded China concept stocks.
Based on this, in the recent round of sharp declines, leading companies have started market value management by means of repurchase and other methods, in order to reverse the unfavorable situation, which is also within the expectations of the industry.
What exceeded market expectations was that Alibaba used a record repurchase scale of US$25 billion to further enhance market confidence and stimulate the strength of Chinese stocks.
The previous meeting of the Finance Committee of the State Council released an important signal to resolve the risks of Chinese stocks. The meeting responded to the market’s concerns about the overseas listing of Chinese concept stocks, and made it clear that the Chinese government will continue to support various companies to list overseas, and said that the regulators of China and the United States have maintained good communication and have made positive progress. specific cooperation plans.
The large-scale repurchase of Chinese concept stocks will help ease the tense and pessimistic atmosphere in the market and greatly stabilize market confidence. However, in order to get out of the predicament fundamentally, all enterprises must implement the spirit of the Financial Committee meeting and stabilize the psychological expectations of Chinese and foreign investors.
With the reduction of uncertainties such as regulatory risks, the future of China Concept Stocks is still largely in the hands of the companies themselves. Whether in a calm or turbulent market environment, the vigorous development of the company itself is the foundation of its foothold.
(Original title: Record-setting repurchase helps Chinese concept stocks stabilize, and vigorous development is the foundation of a foothold)