China-based firms such as Alibaba (BABA) got a lift Wednesday after government officials signaled a softening on regulations for financial technology companies as Covid containment policies ease. BABA stock benefited in particular as the company’s fintech unit Ant Group won the OK from regulators to raise funds.
Other China stocks climbing included Baidu (BIDU), up 7.3% to 127.85. Also, the KraneShares (KWEB) CSI China Internet ETF jumped 6.7% to 33.95%. Electric-vehicle maker Nio (NIO) moved up 6.6% to 10.30.
Chinese regulators approved a plan that allows billionaire Jack Ma’s Ant Group to raise $1.5 billion for the financial technology company’s consumer finance unit. Ant is an affiliate of e-commerce giant Alibaba, which owns 33% of the company. Ant operates one of China’s two dominant mobile pay apps.
BABA Stock: Crackdown On Ant Group
Initially revealed in a notice on Dec. 30, the approval by the China Banking and Insurance Regulatory Commission removed a key hurdle for Ant as it seeks to meet requirements from regulators following a crackdown on its business. That crackdown halted Ant’s plan for a massive initial public offering in 2020, and took a bite out of BABA stock.
The easing of Covid policies follows three years of restrictions. That included the ending of citywide lockdowns and restrictions on some of the country’s massive tech-manufacturing plants.
Alibaba, JD.com and Pinduoduo are the three largest e-commerce companies in China. In addition, Baidu is the search engine leader.
BABA stock holds a Composite Rating of 57 out of a possible 99. Its Relative Strength Rating is 41.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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