Solar, telecommunications and technology stocks in China have plunged for the second day as the Shanghai, Shenzen and Hong Kong exchanges were beset by low confidence Tuesday, leading a quarter of all companies on those exchanges to request a halt in trading.
While the market has been slumping for two months now (the Shanghai index has lost over 30% in the past month with $2.7 trillion vaporized on Chinese markets since mid-June), losses in the last few days have gained steam, leading the government to take emergency measures, including an IPO freeze.
500.com (
NASDAQ:WBAI,
Forum) and ecommerce platform Wowo (
NASDAQ:WOWO,
Forum) took the brunt of today’s hit, dropping 18% and 21.7% respectively. The drop for sports betting aggregator 500.com was particularly heavily felt, coming as the company has lost nearly half its value since mid-June’s $30 high.
Online beauty retailer Jumei (
NASDAQ:JMEI,
Forum) dropped 11% on the day, benefiting from a late rally that took some heat off what was a 20% plunge earlier in trading. Car retailer Autohome (
NASDAQ:ATHM,
Forum) also benefited from a late run, falling 7.4% on the day. The stock dropped from over $47 yesterday to touch $42 before climbing back over $44 in late trading.
Telecommunications firm Netqin Mobile (
NYSE:NQ,
Forum) was pounded by traders, down 16.8% and losing all gains it had made since dropping some 65% since late last year. Mobile competitor Cheetah Mobile (
NYSE:CMCM,
Forum) dropped 7.5% Tuesday, continuing a 30% slide over the past two weeks. Even the giant China Telecom (NYSE:CHA, Forum) has seen sustained drops since May, dropping from a 52-week high of $78 down to today’s near 52-week low of $54.20.
Surging social networking company Renren (
NASDAQ:RENN,
Forum) has not been immune, taking an 11% hit on the day, despite having nearly doubled its share price since April previously. Content storage and delivery provider ChinaCache International (
NASDAQ:CCIH,
Forum) also dropped 9.3%, continuing its move down from $15.50 in mid-June to $9.42 today.
But not all Chinese companies are hurting. Travel and hotel booking firm Ctrip.com (
NASDAQ:CTRP,
Forum) started the day down 10.1%, but rallied to finish slightly in the green. The company has moved down from $87 to $71.50 since June, but is still significantly up from its March levels of around $44.
Chinese solar companies posted losses across the board, including Trina, Daqo, Yingli and China Sunenergy, and companies with exposure to Chinese markets are also moving south, though at a slower pace.
Crude oil prices moved closer to $50 and continued uncertainty in Europe are contributing to a rapidly developing negativity on the markets, though many contrarians point out that Chinese markets were riding a significant bubble before the recent sell-off, and may have some way to fall before they get back to reasonable levels.
One Chinese company not feeling the hurt – at all – is Beijing Baofeng Technology (CH:300431), which halted trading on the 10
th of June, amid a meteoric rise from $7 in late March, when it debuted on the markets, to $307.56 in June - a 4200%+ increase.
--Chris Parry
https://www.twitter.com/chrisparry