Chinese internet and e-commerce ETFs fall on JD earnings, delisting worries

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Thursday's sharp decline in shares of JD.com (NASDAQ:JD) put pressure on a series of ETFs tied to China's internet and e-commerce sectors, as investors worried about slowing revenue growth and further pressure for delisting. The sell-off included a substantial drop in the Invesco Golden Dragon China Portfolio ETF (NASDAQ:PGJ) and KraneShares CSI China Internet ETF (NYSEARCA:KWEB).

PGJ and KWEB both showed declines of about 10% in Thursday's midday trading. With the retreats, both ETFs also reached new intraday 52-week lows.

The slump in the ETFs coincides with a nearly 14% slide in JD following the release of the Chinese e-commerce giant's quarterly results. The company's non-GAAP earnings beat expectations. However, revenue growth slowed to 23%, a figure that failed to top analysts' consensus. Meanwhile, on a net basis, the company posted a quarterly loss.

Disappointment over the results sent JD lower by $9.22 in midday trading, with the stock reaching a level of $53.18 at about 11:30 a.m. ET. Earlier in the day, JD reached an intraday 52-week low of $50.60.

The selling carried over to the sector as a whole, dragging down the ETF complex surrounding the industry. KWEB, with $190.6M under management, has JD as its fourth top holding. The stock has a weighting of 8.3%.

Among the other funds dragged down by the JD slide, the Emerging Markets Internet & Ecommerce ETF (NYSEARCA:EMQQ) posted a decline of 7% in intraday action. The Emerging Markets Internet & E-commerce ETF (NASDAQ:EWEB) was also lower, dropping by nearly 8%.

For more detail on EMQQ, read a deep dive from earlier this year published by SA contributor BOOX Research.

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