A ban on U.S. investment in Chinese tech could drive up market volatility — but some sectors may escape untouched, Bank of America analysts said.
The White House is reportedly considering an executive order to ban U.S. investment into high-end Chinese tech, such as artificial intelligence, quantum computing, 5G and advanced semiconductors, according to a Politico report last week.
It’s unclear whether or when such a rule might take effect. The report indicated ongoing internal debate within the U.S. government.
“If there were a strict investment ban on US investors, it could create a significant supply of shares over the grace period and hence potential large volatility in the near term,” Bank of America’s Hong Kong-based research analysts said in a note Tuesday. “Potential long-term impact is less clear.”
“Though AI is quite prevalent in today’s online world, companies that don’t have a large business in external AI solutions [will] likely see a lower chance [of] being targeted by the U.S. side,” the analysts said.
“Online travel companies, pureplay game and music companies, online verticals in auto and real estate, niche eCommerce specialties, and logistics-focus eCommerce companies are some of the examples,” the Bank of America report said.
The analysts did not name specific stocks.
Chinese stocks have recently tried to rebound after a plunge in the last two years.
This report’s information was first seen on CNBC; to read more, click this link.
You must be logged in to post a comment.