On May 21st, the Senate overwhelmingly approved legislation Wednesday that could lead to Chinese companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from listing on U.S. stock exchanges as reported by The Edge Singapore
This is an interesting piece of news, as many have purchase stocks in Alibaba, Baidu or other Chinese stocks. Not only Americans, but many of my friends and me personally own stocks in some of these Chinese companies. That’s why it is quite worrying to see what will happen, will they get delisted or is it just news and a strategy to make china allow these companies to be audited with US standards?
Why is this the issue?
In the article, it is covered that Chinese companies listed in the US exchanges are not subjected to the same form of auditing their peers are subjected to when they list on the exchanges. This is cause for concern for the companies engaging in fraud, with Luckin coffee being the most recent case of scandal and fraud causing investors to lose money.
What to do next?
For now, I would suggest monitoring the situation to see how the market will reach to the situation and if the US will push this bill into action. For now, I am still long for Alibaba. If you dont want the uncertainty, maybe you could explore buying Alibaba in the Hong kong stock exchange which Alibaba listed recently.