Alibaba And Tencent Added To The ‘Notorious Markets’ List

Tencent just claimed the tenth spot for the world’s most valuable companies by market capitalization, but right after, the Chinese kingpin, along with tech giant Alibaba (NASDAQ: BABA), has been hit by U.S. sanctions.

What is the U.S. ‘Notorious markets’ list?

The notorious markets list compiles companies that are said to be engaging in mass counterfeiting, copyright piracy, or trademark abuse. The United States Trades Representatives (USTR) consider these activities damaging to “U.S. innovation and creativity” and it “harms American workers.”

This includes rip-offs of established brands ranging from the likes of Nike to Dolce Gobana to Michael Kors and others. It’s not exclusive to fashion brands, but typically they get the brunt of the impact. If you wanted to look at it this way, it’s similar to how German retailers Aldi and LIDL operate, a pair well-known for their copy-cat branding approach. 

How will this affect Alibaba and Tencent?

When it comes to Chinese companies, Alibaba and Tencent are the pair that have ruled the roost for the last decade, and both have caught the attention of investors, but neither company is without risk. The tech crackdown in China has no end in sight, and U.S. sanctions certainly won’t help when it comes to picking stocks for a portfolio that you hope to rely on.

It could potentially damage the brand reputation too. Not that consumers aren’t generally aware of what they’re buying — some do in fact opt to pay a lesser price for the perceived brand value — but it could harm overall sales in America.

Are Chinese Stocks A Good Investment Right Now?

While it’s always a good thing to have geographic diversity in your portfolio, unfamiliar markets can sometimes leave us clueless about what’s really going on, and unnecessary headaches for investors. You can always achieve diversity by investing in home nation companies that have a strong geographic mix; a global presence with healthy operations outside of the U.S. too, someone like Apple for example. It’s important to relay the principles of ‘Buying What You Know’ and ‘Investing In Your Circle Of Competence’ when it comes to these predicaments.

Market AnalysisAlibabaTencent Holdings
David GranahanDavid Granahan
  • David Granahan
  • Financial Writer at MyWallSt

  • David’s favorite stock is Google. He’s a daily user of its YouTube platform, where you can learn or find something brand new at the touch of a button. He believes the company will continue to grow for many years to come.

Read More

Why the Tencent Share Price is Under Regulatory Pressure Ahead of EarningsWhy the Tencent Share Price is Under Regulatory Pressure Ahead of Earnings

Why the Tencent Share Price is Under Regulatory Pressure Ahead of Earnings

Tencent’s stock price is still reeling from China’s regulatory crackdown and has been hit again with an alleged fine for breaking anti-money laundering regulations. With the SEC also increasing efforts to delist Chinese stocks from US markets, the company could find a much-needed tailwind in its upcoming earnings, which are forecast to see a positive jump in revenues.

Market Analysis
  • Opto
  • Mar 22, 2022

Featured Image of this ArticleFeatured Image of this Article

What will China’s investment crackdown mean for tech stocks?

Shares in China big tech firms, including Tencent and Alibaba, have plunged once again after rumours of a potential regulatory crackdown on raising cash.

Market Analysis
  • Opto
  • Jan 31, 2022

What Alibaba’s New Server Chip Means for its Stock PriceWhat Alibaba’s New Server Chip Means for its Stock Price

Alibaba’s shares move from US to HK

When US markets opened at the start of the new trading year, Alibaba’s [BABA] share price dipped slightly on fears that investors were converting their holdings to Hong Kong shares.

Market Analysis
  • Opto
  • Jan 12, 2022

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button