Didi

The lifting of the ban on new users for Didi is significant, to our minds.

After the Golden Dragon index fell by over a quarter, across February and March, we added to our emerging market exposures (of which China is a significant proportion). Modestly, perhaps, but still, adding.

China had sold off hard on the back of the tech sector/state champion crackdown (under the idea of social prosperity: penalising companies with either excessive market power, or abusive labour practices) and the ongoing disruptions associated with the property sector meltdown and (as if we didn’t have enough “ands”) the then-feared COVID resurgence (which did indeed lead to further lockdowns).

Russia, and the fear that China would be sanctioned for continuing to trade with Russia, was perhaps the “cherry on top”.

Thinking that things couldn’t get overly worse, we were happy to take a small additional exposure on valuation and sentiment grounds.

Fast-forwarding to now, the news that Didi is “released” from further regulatory intervention is good news incrementally for the region, as well as for stocks like Alibaba, Meituan, Tencent et al, and certainly seems to be part of the previously announced support for the economy, for the dual listings and for the tech sector in general.

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