The world this week - Business
The Chinese government widened its crackdown on businesses that don’t toe the Communist Party’s line, targeting private tutoring, an industry worth $100bn in revenue, which it decreed can now only operate without profit. Foreign investment will be restricted, no new licences issued, and curbs on teaching hours introduced. The constraints are harsher in tone than those imposed on the tech industry, but Chinese tech stocks swooned as investors wondered whether a broader clampdown was on the cards.
Tencent’s share-price fall was among the steepest; it shed a sixth of its value. The Chinese tech giant has suspended new registrations on its WeChat social network while it upgrades the platform to comply with the government’s latest edicts for the industry.
SoftBank is reportedly selling about a quarter of the stake it holds in Uber to offset the heavy losses from its holding in Didi Global, China’s biggest ride-hailing company. Didi’s market value slumped when Chinese regulators targeted it for investigation recently.
Meanwhile, China’s securities regulator approved a secondary listing of shares by state-owned China Telecom on the Shanghai stockmarket, which could raise $8.4bn.
Zomato’s IPO was a roaring success in Mumbai. The food-delivery app is the first of several tech firms in India to whet investors’ appetite with a market flotation. Paytm, a fintech firm, is next. Both it and Zomato count Jack Ma’s Ant Group among their backers.
Robinhood, a trading app used by hordes of small investors to buy and sell stocks, not least the “meme” variety, priced its shares at the lower end of its target range ahead of its debut on the Nasdaq stockmarket. The unconventional broker has taken an unconventional approach to an IPO, eschewing the usual boardroom presentations to institutional investors and selling a third of its shares to its customers.