Chinese Fintech Giants Join Efforts to Calm Markets
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Chinese fintech giants Ant Group and Tencent are the latest to attempt to inspire calm in markets after they told investors not to overreact to price swings and avoid making hasty decisions.
Alipay, Ant Group’s payment arm, issued a letter earlier this week in its app to urge investors to take a longer-term view on the stock markets, which have seen turbulent swings erase $1.3 trillion from the CSI 300 index two weeks after reaching a 13-year high.
According to the letter by a think tank under Ant Fortune – a wealth management platform within Alipay that provides access to over 6,000 funds – volatility is a natural characteristic and driver of returns for equities. Short-termism could result in investors «buying high and selling low», it said, adding that full panic in the market could signal that stocks have bottomed out.
Earlier this month, Tencent’s wealth management platform also posted an article earlier this month, reminding investors that the majority of companies that generate high returns have previously seen a significant correction of share prices.
The fintech duo’s warnings to investors coincide with efforts by Beijing to also inspire calm in markets.
Chinese authorities are reportedly injecting funds to support the market via its so-called «national team» and censoring search phrases on social media.
Questions & Answers
Q.What advice did Alipay give to investors regarding the recent market volatility?
What advice did Alipay give to investors regarding the recent market volatility?
Alipay urged investors to adopt a longer-term perspective on the stock markets. It warned that short-termism could lead to buying high and selling low, suggesting that full market panic might signal stocks have bottomed out.
Q.Which specific stock market index has been affected by the recent turbulent swings mentioned in the article?
Which specific stock market index has been affected by the recent turbulent swings mentioned in the article?
The turbulent swings in the market have erased $1.3 trillion from the CSI 300 index. This occurred two weeks after the index had reached a 13-year high.
Q.What is the broader context for these warnings from Ant Group and Tencent?
What is the broader context for these warnings from Ant Group and Tencent?
Their warnings coincide with efforts by Beijing to also calm markets. Chinese authorities are reportedly injecting funds and censoring social media search phrases to support the market.
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