Tag Archives: China

Australia: Sending mixed messages to China

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“Australia is sending very mixed messages to potential investors – because it’s one set of rules for some, and another for others.  These tighter new foreign investment rules apply to investors from countries that have recently signed Free Trade Agreements (FTAs) with Australia, such as Japan, Korea and China. But they don’t apply to countries with older FTAs such as the US, New Zealand and Chile. Investors from the latter countries only need to seek approval if their purchases of Australian rural land or agribusinesses exceed A$1.09 billion. That’s 73 times the threshold facing Chinese investors for rural land and 20 times that for agribusinesses.”

http://theconversation.com/playing-the-china-card-may-win-votes-but-its-bad-for-australia-39364

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Australia Orders More Foreign Homeowners to Sell

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“Several foreign owners of residential property across Australia have been ordered to sell as the government intensifies its crackdown on the abuse of homeownership laws by buyers from China and elsewhere.  Treasurer Joe Hockey said foreign investors have been ordered to sell six properties in the cities of Sydney, Brisbane and Perth.  The treasurer said he expects more divestment orders will be announced soon, and promised to increase penalties for those who break the rules. The conservative government is under pressure to make housing more affordable, and rein in surging investor buying that some fear may push the market to unsustainable levels, causing a crash.”

http://www.wsj.com/articles/australia-orders-more-foreign-homeowners-to-sell-1439024595

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Chinese Brokers Now Selling Margin Loan-Backed Securities

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“Now, the PBoC will look to supercharge efforts to re-engineer a stock market bubble via leverage by pushing brokerages to issue ABS backed by margin loans.  If brokerages simply offload the margin loan risk to investors and use the proceeds to fund still more margin lending which can also be turned into still more ABS, and so on, then the effect will be to pile leverage on top of leverage. What happens in the event the underlying stocks become completely illiquid (i.e. Beijing decides to suspend trading on three quarters of the market again)?  The punchline: the senior tranche (which accounts for CNY475 million of the total CNY500 million deal) is rated AAA.”

http://www.zerohedge.com/news/2015-08-08/peak-insanity-chinese-brokers-now-selling-margin-loan-backed-securities

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China Tells Investors: Go Ahead, Bet the House on Stocks

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“In China, you can now literally bet the house on the nation’s tumultuous stock market.  Under new rules announced Wednesday by the country’s securities regulator, real estate has become an acceptable form of collateral for Chinese margin traders, who borrow money from securities firms to amplify their wagers on equities. That means if share prices fall enough, individual investors who pledge their homes could be at risk of losing them to a broker.  The rule change was intended to help revive confidence in China’s $7.3 trillion stock market, down almost 30 percent in less than three weeks. Accepting real estate as collateral would tether brokerages to another troubled sector of the economy.”

http://www.bloomberg.com/news/articles/2015-07-02/china-to-individual-investors-go-ahead-bet-the-house-on-stocks

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China currency devaluation hits stocks; dollar gains on currency war fears

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“China’s 2 percent devaluation of the yuan on Tuesday pushed the U.S. dollar higher and hit Wall Street and other global equity markets as it raised fears of a new round of currency wars and fed worries about slowing Chinese economic growth.  U.S. stock indices dropped more than 1 percent and stocks also fell in Asia and Europe as investors contemplated the implications of a move designed to support China’s slowing economy and exports. Companies that sell to China were hit hard, with heavy equipment maker Caterpillar losing 3.13 percent and Germany’s Volkswagen dropping 4 percent. Energy and materials shares also tumbled on China demand concerns.”

 

http://www.reuters.com/article/2015/08/11/us-markets-global-idUSKCN0QG00F20150811

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The Stocks China’s Rescue Fund Is Buying

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“CSF’s silence on its strategy means the full picture is unclear. The agency is, however, leaving behind a few clues. Thanks to Chinese disclosure rules for large shareholders, exchange filings reveal the stocks in which CSF has built a major stake.  The disclosures show a preference for large-cap companies, and a particular affinity for railway shares. Outside that industry, CSF has positions in health care, food and technology stocks. The agency may also be investing through intermediaries, with the state-run China Securities Journal reporting last week that it plowed the equivalent of $32 billion into mutual funds.”

http://www.bloomberg.com/news/articles/2015-08-09/here-s-what-china-s-rescue-fund-is-buying-to-end-the-stocks-rout

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China Slashes U.S. Debt Stake by $180 Billion, Bonds Shrug

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“To get a sense of how robust demand is for U.S. Treasuries, consider that China has reduced its holdings by about $180 billion and the market barely reacted.  Instead, other sources of demand are filling the void. Regulations designed to prevent another financial crisis have caused banks and similar firms to stockpile highly rated assets. Also, mutual funds have been scooping up government debt, flush with cash from savers who are wary of stocks and want an alternative to bank deposits that pay almost nothing. It all adds up to a market in fine fettle as the Federal Reserve moves closer to raising interest rates as soon as next month.”

http://www.bloomberg.com/news/articles/2015-08-09/china-slashes-u-s-debt-stake-by-180-billion-and-bonds-shrug

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Asia’s $800 Billion Nuclear Splurge to Unlock Uranium Motherlode

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“A nuclear-power boom in Asia that’s set to drive up uranium prices is triggering a resurgence in mining in Australia, home to the world’s largest reserves.  Almost $800 billion of new reactors are under development in the region, driven by China and India where demand is climbing for the emission-free energy.  The value of uranium plunged in the wake of the 2011 Fukushima nuclear disaster in Japan. Now, with contract prices forecast to jump more than 60 percent, suppliers in Australia are planning about half a dozen new mines.  China will need the equivalent of about 1,000 nuclear reactors, 500,000 wind turbines or 50,000 solar farms as it steps up its fight against climate change.”

http://www.bloomberg.com/news/articles/2015-05-07/asia-s-800-billion-nuclear-splurge-to-unlock-uranium-motherlode

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Qualcomm cuts workforce by 15% as stock turns down

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“Qualcomm announced Wednesday that it would cut its workforce by about 15 percent contributing to a total of $1.4 billion in cost reductions. It also announced changes to its board and executive compensation.  The San Diego-based chipmaker said it would be reviewing structural alternatives to splitting the company. Reports surfaced earlier this week that Qualcomm could spin off its less profitable chip business.  Qualcomm has reduced the outlook for its semiconductor business for the fiscal fourth quarter, driven by reduced demand and lower sell through in China.  Shares of Qualcomm have tumbled more than 20 percent over the past 12 months.”

http://www.cnbc.com/2015/07/22/qualcomm-q3-earnings-2015.html

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Lucky Lobsters Jam China Flights, Sending U.S. Prices to Record

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“Every Sunday for the past seven months, about 60,000 live North American lobsters packed in wet newspapers and Styrofoam coolers make the 18-hour flight to Asia in a Korean Air Lines Co. cargo plane.  The 7,500-mile (12,000-kilometer) trip from Halifax, Nova Scotia, to Shanghai via South Korea has become a weekly routine this year with a surge in demand from China, where lobsters caught in North Atlantic waters are at least one-third the cost of competing supplies. As a result, exports have skyrocketed from Canada and the U.S., the world’s top producers, and American prices are the highest ever.”

http://www.bloomberg.com/news/articles/2015-08-03/lucky-lobsters-jamming-china-flights-send-u-s-prices-to-record

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