Investor sentiment toward China was undercut this week after two significant foreign investors in Chinese stocks announced they were liquidating their Chinese holdings. On Wednesday, European internet giant Prosus NV registered more than $4 billion of its stake in China’s Tencent Holdings (TCEHY) for potential sale in Hong Kong, while Japan’s SoftBank Group today said it is preparing to exit the majority of its stake in Alibaba Group Holding (BABA).
These latest moves by foreign investors to sell their Chinese stock holdings have dented investor optimism in Chinese stocks, despite recent promises by the Chinese government to loosen its regulatory crackdown on the technology sector and welcome foreign capital into the country. IG Asia said, “Reported plans to lower exposure in Alibaba by Softbank may reiterate the prevailing loss of confidence in Chinese tech firms by foreign investors, giving rise to concerns that more may do the same.”
