Internet companies from Sina Corp. to Baidu Inc. slumped in New York after China’s central bank said it will tighten restrictions on online financial products.
Sina, the owner of China’s biggest Twitter-like service, dropped 1.7 percent yesterday, while Baidu Inc., the nation’s largest Internet search engine, sank to the lowest in a month. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. fell 0.1 percent to 96.43, extending a weekly slide to 7.1 percent. Yanzhou Coal Mining Co., China’s fourth-largest producer of the fuel, jumped 6.8 percent yesterday.
China’s central bank blocked plans by Tencent Holdings Ltd. and an affiliate of Alibaba Group Holding Ltd. to offer virtual credit cards, Xinhua News Agency said yesterday, citing Zhou Jinhuang, deputy head of the People’s Bank of China’s payment and settlement department. The virtual cards would have let consumers buy goods from online retail websites on credit.
“There is a clear negative impact from the PBOC action,” Andrew Wilkinson, the chief market analyst at Interactive Brokers LLC, said by phone from Greenwich, Connecticut yesterday. “Investors favor e-commerce companies on their potential expansion to financial services, and the roadblocks that we see right now stand in the way of the companies’ growth prospects.”
The suspension of virtual credit cards and so-called Quick Response codes is meant to regulate the Internet finance industry and protect consumers, Xinhua News reported, citing Jinhuang. QR codes are black-and-white squares containing information similar to bar codes. A smartphone user scans the codes with a downloaded application to learn more from an advertiser, to track a shipment or to verify a ticket stub.
Li Dongrong, deputy governor of People’s Bank of China, said March 3 the central bank is studying ways to regulate online finance.
The Bloomberg China-US gauge capped the biggest weekly slide since May 2012. Stocks joined a rout in emerging-market equities, which sent Brazil and Russia into bear markets, amid concern that the crisis in Ukraine will escalate.
Sina, based in Shanghai, dropped to $64.59, while Baidu sank 3.3 percent to $160.59. Yanzhou jumped to $6.78.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., added 0.2 percent to $33.03. The Shanghai Composite Index fell 0.7 percent to 2,004.34, extending weekly decline to 2.6 percent. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong retreated 0.3 percent to 9,298.64 to the lowest since July.