Chinese stocks listed on U.S. exchanges soared Wednesday, far outpacing the broader market, as investors latched onto a rare easing of business regulations from Beijing.
Shares of the 10 largest Chinese-based companies traded in New York gained a whopping $70 billion in market capitalization on Wednesday after the Chinese government greenlighted a capital increase proposal from Ant Group, the financial technology giant led by billionaire Jack Ma, whose record-setting initial public offering was axed by Beijing in 2020 as authorities cracked down on China’s growing technology sector. Shares of Alibaba, the online retailing titan and one-third owner of Ant Group which is by far the largest U.S.-listed Chinese firm, skyrocketed 13% in the U.S., adding $40 billion in market cap, while fellow e-commerce firms Pinduoduo and JD.com gained 8% and 15%.
Meanwhile, major U.S. stock indexes were flat, with the Dow Jones Industrial Average, S&P 500 and tech-heavy Nasdaq each adding less than 0.8%.
The squashing of Ant Group’s $34.5 billion IPO in 2020 set forth an increasingly unfavorable environment for the private sector in China, with the strictest pandemic restrictions among any major economy, which have recently eased, also weighing on companies.
Formerly China’s wealthiest man, Ma disappeared from the public eye in late 2020 after the billionaire railed against his home country’s strict regulatory conditions.
Ma is now living in Tokyo with his family, according to a November Financial Times report. We estimate Ma to be worth $24.5 billion, up 5% Wednesday following Alibaba’s stock surge and making him the 59th-wealthiest person in the world. Ma’s fortune is down more than 50% since late 2020.
