Chinese Stocks Alert: Why Are TIGR, FUTU Stocks Down Today?

  • Chinese online brokers Futu (FUTU) and UP Fintech (TIGR) fell overnight.
  • China’s regulators say they can’t solicit international business from local traders.
  • FUTU and TIGR were operating in a legal gray area, which Chinese regulators have now painted black.
Chinese stocks - Chinese Stocks Alert: Why Are TIGR, FUTU Stocks Down Today?

Source: Poring Studio /

Chinese stocks Futu (NASDAQ:FUTU) and UP Fintech (NASDAQ:TIGR) fell hard in the pre-market on Dec. 30 after the China Securities Regulatory Commission (CSRC) told the two online brokers to stop soliciting local customers for international trading.

The fall may have been harder if it hadn’t been telegraphed back in 2021 when a Chinese central banker warned that the brokerages were skirting Chinese laws.

Futu, affiliated with local tech juggernaut Tencent Holdings (OTCMKTS:TCEHY), lost about 28% of its value but is still worth over $6 billion. UP Fintech fell 32% and its market capitalization fell below $500 million. The two online markets act like Robinhood Markets (NASDAQ:HOOD) in the U.S., catering to small traders.

Capital Flight?

The move could have broader implications. An analyst called Havokhedge on Stocktwits noted that letting small Chinese investors buy American or European stocks could be helping capital flee the country. But stopping it with regulation could reduce faith in local markets. Taking on Chinese customers for international trading was considered a “gray area” of regulation. China’s stock markets were close to unchanged overnight.

Futu responded by delaying a listing in Hong Kong. Futu said it was “clarifying” things with Hong Kong in announcing the delay. This move, too, could be a power play. China has been urging its U.S.-listed companies to get a second listing in Hong Kong for some time.

On Stocktwits, analysts noted that just 10-15% of Futu’s business comes from Mainland China. The move forecloses growth but should allow the businesses to continue while the regulatory dance plays out.

Before the government action, FUTU and TIGR were hot stocks in 2022. FUTU was up 50% on the year as of Dec. 27, and TIGR was close to even. Now FUTU is close to even and TIGR is down 30%.

Chinese Stocks: What Happens Next?

If Chinese regulators reverse course, these stocks will go back to their previous levels. If they don’t, it could spell trouble for all Chinese stocks in 2023.

Capitalism demands that capital be free to fly.

On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at, tweet him at @danablankenhorn, or subscribe to his Substack.

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