Chinese stocks extend losses amid crackdown from Beijing

Chinese stocks extended their recent losses Monday morning amid a renewed crackdown from Beijing that hit education and music-streaming companies.

Chinese tutoring companies were among the hardest hit with shares of NYSE-listed TAL Education down almost 24 percent in premarket trading, extending losses from last week.

The stock’s now trading at about $4.60 per share, down from more than $20 per share just last week.

And NYSE-listed shares of New Oriental Education fell more than 24 percent in premarket trading Monday, also extending losses of more than 50 percent on Friday.

The losses come after Beijing over the weekend issued a couple of new edicts targeting their homegrown tech companies.

Chinese financial news site Caixin reported Friday that new government restrictions on the education sector were starting to be implemented in Beijing and other major cities across the country.

Hang Seng Index
The losses come after Beijing issued a couple of new edicts targeting local tech companies.
Google Finance

Copies of the policy document that circulated online showed that educational-training companies are banned from raising money through stock listings under the rules. The document noted that exisinting violations must be addressed.

The document was dated July 19 and was issued by China’s State Council and the Chinese Communist Party’s central committee.

Separately, on Saturday, China’s State Administration for Market Regulation ordered Chinese tech giant Tencent to give up its exclusive music licensing rights and slapped the company with a minor fine for anti-competitive behavior

Hong Kong-listed shares of Tencent dropped more than 11 percent on Monday as investors reacted to the news.

A screen shows a message marking the listing of Baidu Inc. on the Hong Kong Stocks Exchange.
Shares of New Oriental Education fell more than 24 percent in premarket trading Monday.
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The latest bout of regulations comes amid a broader crackdown by Beijing as the government tries to reel in its tech companies, which have become increasingly powerful in recent years and begun to list their shares on US exchanges.

Shares of other Chinese companies that were not targeted by the most recent orders also fell as investors sought to anticipate further regulatory action.

New York Stock Exchange-listed shares of Alibaba slipped more than 3 percent in premarket trading Monday while shares of food-delivery giant Meituan fell more than 13 percent.