HomeeCommerce NewsAlibaba shares rise despite getting fined by Chinese regulators

Alibaba shares rise despite getting fined by Chinese regulators

You must have seen that the markets react in a strange way to any news but you must think that a company’s shares would go down if the company has been fined by regulators, right. Right? Well, here is one classic example of how markets reacted very differently when the ANT Group under which Alibaba falls was fined by the Chinese regulators for alleged misconducts in the industry as well as its trade policies. However, it is not too hard to understand the market sentiment because of the fact that Alibaba was under scrutiny from Chinese regulators since November 2020 which is a long time.

When the Chinese regulators announced that they are removing the shackles from ANT Group and fined them, the markets seemed to be extremely happy about the situation and also the shares of Alibaba rose after the announcement. Alibaba had also announced earlier this year that it was being split into six different units and this was also a sign that the Chinese regulators wanted them to do so. After that announcement, investors were waiting for the regulators to ease the pressure on Alibaba and they have done so with a fine of 7.12 billion yuan.

After this, investors are happy that the Chinese regulators won’t interfere with Alibaba anymore but this could be pre-mature as well. In a statement, one analyst said that there could be deeper regulations coming after this fine as well. He said “[regulators] have also emphasized the need for additional broader industry-wide regulations to effectively regulate the entire sector,” and added that “This suggests that the optimism regarding the end of regulatory scrutiny may be premature, as the new broader regulations could be equally stringent,”

Ronald Wan from Partners Financial Holdings said that “Even though we have seen the good news of the settlement of the dispute on the regulatory front, it means that, in future, Ant Group may be operating like a state-owned bank in China,” and added that he believes the growth of ANT Group and Alibaba will be “significantly restricted in future.” Another analyst said he is bullish on Alibaba after the fines.

Alf Alferez
Alf Alferez
Dedicated writer with a strong track record of developing customer loyalty and managing general office operations. Enjoy being a part of a company where my skills and creative ideas will benefit the overall productivity of the organization. I have a strong desire to work in helping make the world a better place. Please reach out to me on alf@ecommercenext.org

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