The sharp drop in the value of Chinese tech stocks will be seen as a major buying opportunity for some investors, but they must exercise extreme caution, warns the CEO of one of the world’s largest independent financial advisory, asset manager and fintech organizations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as fears mount over a regulatory crackdown by the Chinese government.
In the third day of plummeting values for China’s tech giants, Tencent’s shares lost 10%, Alibaba dropped 7.7%, JD.com shed 8.9% and Meituan fell 17%.
Hong Kong’s Hang Seng benchmark was down more than 5% on Tuesday. Meanwhile, in mainland China, the CSI 300 index of Shanghai and Shenzhen-listed stocks lost 3.5%.
The sharp sell-off in Chinese and Hong Kong shares spilled over into European markets and Wall Street futures are pointing to a lower open.
Mr Green notes: “Chinese tech stocks were dropping again on Tuesday for the third consecutive session as markets become increasingly jittery over concerns of a regulatory crackdown by Beijing.
“The sell-off has been focused on China’s $100 billion private education industry following a leaked government memo highlighting incoming new, tougher severe regulations which will prevent companies in the sector accepting foreign investments, raising capital through the stock market, or teaching outside school hours, amongst other rules.
“This tough new approach being taken by Beijing has spooked the tech sector which is already on high alert amid fears that the government wants more control over private enterprise.
“The effect has been wiping hundreds of billions of market value from China’s largest tech giants.”
He continues: “It can be expected that some investors will swoop in and view these events as a major buying opportunity; as a chance to top-up their portfolios within the booming Chinese economy.
“They may have a point – these shares do look like bargains.
“However, they must exercise extreme caution as the situation remains highly unpredictable and any further similar actions – or even suggestions – from Beijing will mean more, sustained volatility and sell-offs.
“It could be a long time until there is clarity.”
A good fund manager, says the deVere boss, will help investors seize the opportunities and sidestep the risks by seeking out the inevitable winners and losers from the Chinese government’s possible regulatory crackdown.
“As always, investors should be as diversified as possible in order to maximize returns relative to risk. This means geographical, sector and asset class diversification.”
Mr Green concludes: “As China rolls out another round of regulatory tightening, global stock markets will be impacted, and investors must tread carefully to avoid unnecessary risks and to capitalize on the potential opportunities.”
Nigerian Stocks Market Posts Second Decline in 2022
The Nigerian Exchange Limited (NGX) posted its second decline in 2022 on Thursday as the NGX All-Share Index shed 0.01 percent to close at 44,604.74 index points.
Activity on the Exchange floor was mixed as investors traded 321,753,226 shares worth N3.655 billion in 4,565 transactions during the trading hours of Thursday, against 266,328,204 shares valued at N3.822 billion in 4,502 deals during the trading hours of Wednesday.
Market value of listed equities dipped slightly to N24.032 trillion, down from N24.034 trillion it closed on Wednesday.
Sectorial performance showed the NGX Banking Index gained 7bps on JAIZBANK (+6.06%), STERLNBANK (+0.66%), ETI (+0.58%) and ZENITHBANK (+0.20%). UBN (-1.77%) lost points. While the NGX Consumer Goods Index gained 16bps on INTBREW (+4.04%). Losers were HONYFLOUR (-2.35%) and UNILEVER (-1.49%).
The NGX Oil and Gas and Industrial Indexes closed flat.
The year-to-date return of the Exchange stood at 4.42 percent as 14 stocks closed in the green against a total of 15 stocks that lost points. See the other details below.
|TRANSCORP||N 1.03||N 1.13||0.10||9.71 %|
|CHIPLC||N 0.63||N 0.68||0.05||7.94 %|
|REGALINS||N 0.42||N 0.45||0.03||7.14 %|
|JAIZBANK||N 0.66||N 0.70||0.04||6.06 %|
|INTBREW||N 4.95||N 5.15||0.20||4.04 %|
|NEM||N 4.40||N 3.96||-0.44||-10.00 %|
|CUSTODIAN||N 7.90||N 7.15||-0.75||-9.49 %|
|UACN||N 9.60||N 9.10||-0.50||-5.21 %|
|FTNCOCOA||N 0.39||N 0.37||-0.02||-5.13 %|
|JAPAULGOLD||N 0.45||N 0.43||-0.02||-4.44 %|
Alain Francis Nkontchou Invests Almost N1 Billion in Ecobank
Alain Francis Nkontchou, Chairman and Non-Executive Director of Ecobank Transnational Incorporated, has dumped almost N972,206,546.2 on shares of Ecobank.
The bank disclosed in a statement signed by Madibinet Cisse, Company Secretary and obtained by Investors King.
Alain Nkontchou purchased 131,379,263 shares at an aggregate price of N7.40 a unit between 1 September 2021 and 20 December 2021 from shares offered for sale in the market at the Nigerian Exchange Limited trading office in Lagos Nigeria.
The disclosure is in line with SEC’s new insider dealing declaration ACT to force transparency policy across the Nigerian capital market.
Alain Nkontchou was appointed as Chairman of Ecobank on June 30, 2021. Prior to joining the bank, Alain Nkontchou is the Managing Partner and co-founder of Enko Capital Management LLP, an asset management company based in London and Johannesburg, which focuses on African investment opportunities.
Mr Nkontchou was an advisor at Laurent Perrier champagne, having been a NonExecutive Director from 1999 to 2009. He was Managing Director of Credit Suisse’s Global Macro Trading Group in London between 1995 and 2008 and also at JP Morgan Chase & Co. in the same capacity.
Between 1989 and 1994, he was with Chemical Bank in Paris and New York, where he became Vice- President, Head of Trading and Sales.
Mr Nkontchou has a track record of business success, having generated significant dollar revenues for each of these top tier institutions. He has an MSc in Electrical Engineering from Supélec and P.M. Curie University, Paris, and an MSc in Finance and Accounting from ESCP (Ecole Supérieure de Commerce de Paris).
Jaiz Bank, Unity Bank, Others Lead Stock Gainers on Wednesday
The Nigerian Exchange Limited (NGX) extended gains on Wednesday on the back of a strong positive close in Jaiz Bank, Academy Press Plc, Unity Bank Plc and others.
Investors transacted 266,328,204 shares worth N3.822 billion in 4,502 deals during the trading hours of Wednesday to push the NGX All-Share Index to 44,608.82 index points, an increase of 1.71 percent. The market value of all listed equities crossed N24 trillion to N24.034 trillion.
The Exchange year-to-date improved to 4.43 percent as 24 stocks closed in the red against 15 stocks lost points.
Sectorial performance showed that the NGX Banking Index gained 39bps on JAIZBANK (+10.00%), UNITYBANK (+8.70%), WEMABANK (+2.30%), UBA (+1.23%), FIDELITYBK (+1.18%) and ZENITHBANK (+0.20%). STERLINGBANK (-1.95%) and ETI (-0.58%) lost points.
Similarly, the NGX Consumer Goods Index gained 14bps on CHAMPION (+3.40%), GUINNESS (+2.93%), and PZ (+2.14%). HONYFLOUR (-2.86%) lost points.
The NGX Oil and Gas Index gained 137bps on SEPLAT (+2.99%) and ETERNA (+0.72%). CONOIL (-3.18%) lost points. While the NGX Industrial index gained 306bps on DANGCEM (+6.18%).
|JAIZBANK||N 0.60||N 0.66||0.06||10.00 %|
|ACADEMY||N 0.60||N 0.66||0.06||10.00 %|
|UNITYBNK||N 0.46||N 0.50||0.04||8.70 %|
|SOVRENINS||N 0.24||N 0.26||0.02||8.33 %|
|MBENEFIT||N 0.27||N 0.29||0.02||7.41 %|
|CHIPLC||N 0.69||N 0.63||-0.06||-8.70 %|
|REGALINS||N 0.46||N 0.42||-0.04||-8.70 %|
|SUNUASSUR||N 0.37||N 0.34||-0.03||-8.11 %|
|AIICO||N 0.81||N 0.78||-0.03||-3.70 %|
|NEIMETH||N 1.86||N 1.80||-0.06||-3.23 %|
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