Investors in Chinese fintech stocks are seeing some very bearish selling pressure today. Shares of Futu Holdings (NASDAQ:FUTU) and UP Fintech (NASDAQ:TIGR) are both down dramatically today. TIGR stock has seen declines of more than 20% at the time of writing, while FUTU stock is currently down more than 12%.
These declines continue a rather bearish trajectory for both companies. Futu is currently down approximately 65% from its 52-week high, with TIGR stock seeing a decline of nearly 80% from its peak.
Being Chinese companies, these fintech players have had their fair share of headwinds. A harsh regulatory crackdown from President Xi has stalled equity markets. What was a fast-rising market has turned into a place investors don’t want to touch. And today, it appears this view is more prevalent than ever.
Let’s dive into what’s driving these Chinese fintech stocks lower today.
FUTU Stock, TIGR Stock Lower on New Privacy Laws
Today, a number of reports point out the potential for continued regulatory risks in Chinese equities. For companies in China’s fintech space, these risks appear to be emboldened today.
New privacy laws set to be enacted at the beginning of November could result in increased compliance risks. An article in the official People’s Daily suggests these two companies could be in the crosshairs of regulators.
That’s because both companies aid Chinese investors in pursuing international investments. With China looking to keep its money flowing within its own economy, there’s suggestions these personal data privacy laws could be used to slow the flow of capital outside of China’s borders.
Indeed, investing in any Chinese stock right now is a high-risk, high-reward proposition. However, investors appear to be more focused on the risks today, for good reason.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.