China’s central bank reiterated its pledge to implement “normalized” supervision on the financial activities of inline platform companies.
The People’s Bank of China held a meeting on April 29 to discuss implementing financial support for the economy and policies to boost the healthy development of technology platform companies, it said in a statement on Wednesday.
The comments mirrored those from a statement by the Communist Party’s Politburo, the top decision-making body, which also met on April 29, suggesting authorities may ease up on a regulatory crackdown on the industry. The Politburo’s statement sparked a rally in tech stocks on the day.
The PBOC added that financial support for technology innovation companies should be strengthened and the stable operation of capital markets must be supported. It said policies that have been confirmed need to implemented faster.
The Hang Seng Tech Index inched down as much as 4.5% on Friday underscoring fourth day straight declining session.
The Nasdaq Golden Dragon China Index slipped 7.7% as investors erasing the Fed’s monetary tightening. The development highlights Chinese authorities yet to come with concrete steps to support the sector and reassuring the investor’s confidence.
“Although the valuation for Chinese tech giants have been largely beaten down over the past one year, we may have to see a clear control of China’s virus situation or more follow through in support measures in order to lift market confidence,” said Jun Rong Yeap, a strategist at IG Asia Pte as reported by Bloomberg.
“With relief catalysts such as earnings seasons and Fed meeting largely behind us now, markets are in need of a new relief catalyst.”