Pressure on major tech stocks in Asia stems from uncertainty about the trade dispute between the US and China getting worse, a top analyst in Hong Kong has said.
Brett McGonegal, co-CEO of Seven Stars Cloud, told CNBC that big tech firms in the US were “extended by all metrics”.
“There is a massive difference now, which is probably not company specific, nor industry specific – it’s a sentiment thing. The pressure on Tencent and Alibaba and some of the bigger names [in Asia] is really borne out of the uncertainty that people have over what [President] Trump has said, over the shadow that Trump has put over the market,” he said.
“I think that what you have seen in the US is kind of a flight to safety. And the big tech names and the mega-caps have benefited from money seeking safer – or perceived safer havens.
“And if you look at the disparity between the US market and Shanghai comp[osite index], it probably tells the whole story there.”
McGonegal said he continued to believe that threats of further tariffs on Chinese goods were just an attempt by the Trump administration to leverage their position before going to the negotiating table to try to get a better deal with Beijing.
“But I do think this is .. the last play to get to the table and get something that’s desired [by] the Trump camp.”
Brett McGonegal is also a principal shareholder in Asia Times.