China’s health-care sector will probably be the next to fall under scrutiny, analysts warn, as the country’s regulators crack down on everything from tech to education to data security.
Chinese President Xi Jinping this week again reiterated the need to support moderate wealth for all — or the idea of “common prosperity” which he has been promoting for months.
China stocks could dive another 15%
China’s crackdown in the past year has been on a broad swathe of industries, from tech to education and food delivery.
That’s led to steep selloffs in Chinese stocks, wiping out billions of dollars from tech stocks in recent months.
So far this year, China’s health-care stocks have done better than the broader China indices.
MSCI’s China health-care index has declined marginally below the flatline year-to-date, compared to the MSCI China index which has tumbled more than 13%.
But some health-care stocks, especially businesses that use tech platforms, are already hurting. JD Health, for instance, has dropped almost 50% this year. Alibaba Health has tumbled more than 40% year-to-date.
Green said TS Lombard predicts the MSCI China index could dive another 10% to 15%, in a worst-case scenario.
He warned investors to be cautious, saying that political risk will remain elevated leading up to the Chinese Communist Party’s 20th National Party Congress next year.
Reference: CNBC
Thai
Eng