The Hang Seng Index was down 0.77 per cent or 168.87 points to 21,851.88 on Monday morning session close.
Shares in Hong Kong and mainland China declined at the mi-day trading pause, following retreats in most Asian equity markets as rate increases announced last week by the US Federal Reserve and Hong Kong Monetary Authority lead to capital outflow back to American shores.
“With the higher rates in US,Hong Kong stocks could be under pressure as capital could flow out of Hong Kong ,” said Ben Kwong Man-bun, executive director of KGI Asia.
Insurers led losses among Chinese companies on the Hang Seng China Enterprises Index, amid concerns that mainland regulators will further place their market investments under scrutiny.
Ping An Insurance Group Co. fell 1.7 per cent to a four-month low of HK$39.75 while AIA Group Ltd fell 1.5 per cent to HK$43.75.
China Vanke Co. fell in Shenzhen and Hong Kong after the country’s largest property developer scrapped a white knight rescue plan involving Shenzhen Metro, which was intended to help defend it from a hostile takeover.
Vanke shares fell by as much as 6.3 per cent, closing 4.5 per cent lower at HK$18.48 during the lunch pause. In Shenzhen, Vanke’s shares fell as much as 5.3 per cent, dropping 4.7 per cent to 21.40 yuan.
The Shanghai Composite Index dropped 0.1 per cent to 3,119.65. The Shenzhen Component index dropped 0.26 to 10,307.48, while the Shenzhen Composite Index declined 0.21 per cent to 1,987.49.
The Nasdaq style ChiNext closed 0.60 per cent lower at 1,986.22.
China’s monetary policy will be pursued in a “neutral” manner in the coming year, a departure from last year’s “flexible” stance, according to an analysis by Macquarie Capital’s Larry Hu, parsing the Communist Party’s Central Economic Work Conference last Friday. Read the rest of this entry »
The arrival of The Big Short in 2015 – available on streaming services now – and its subsequent nominations at the 88th Academy Awards, has reignited interest in the causes of the 2008 financial crisis.
The film would have you think that private greed on Wall Street and a lack of regulation caused the economic crash. While stories like this might make for a fun movie, The Big Short fails to align with the facts.
Learn more about the 2008 financial crisis in Peter’s book “Hidden in Plain Site: What Really Caused the World’s Worst Financial Crisis and Why It Could Happen Again“
A record net $674 billion left China last year, the International Institute of Finance estimates. A further $175 billion left China in the first quarter.
Saint Chatterjee reports: Hong Kong is conducting a multi-pronged customs, shipping and financial sector crackdown against so-called fake trade invoicing that allows billions of dollars of capital to leave China illegally.
Hong Kong’s central bank told Reuters it has beefed up its scrutiny of banks’ trade financing operations, while customs officials are doing more random checks on shipments crossing border posts and conducting raids on warehouses to ensure the authenticity of goods, senior officials working in shipping, logistics and banking said. The head of a logistics company said surprise customs inspections at Hong Kong border posts had doubled.
The sources declined to be identified given the sensitivity of the issues.
They said the increased efforts began this year and reflected concerns about billions of dollars in illicit cash authorities suspect are being channeled through Hong Kong following a stock market crash in China last year.
“Examinations and investigations reflect one of the strongest trends we are seeing now in the financial sector,” said Urszula McCormack, a partner at law firm King & Wood Mallesons, which helped co-author a report published by The Hong Kong Association of Banks in February that highlighted shipping as a sector where fake invoicing can thrive.
China has become increasingly concerned about capital outflows since the middle of last year when Chinese rushed to get money offshore for safekeeping or to invest following the stock market slump and unexpected yuan devaluation.
Hong Kong is the most popular route, analysts say, because of its proximity to China.
Chinese authorities have tried to staunch the outflows by tightening cross-border investment quotas, stepping up enforcement action of existing rules and restricting residents from buying financial products, such as insurance policies, offered in Hong Kong. But the trade channel had largely been left untouched given the complexity and magnitude of transactions involved.
A record net $674 billion left China last year, the International Institute of Finance estimates. A further $175 billion left China in the first quarter. China had been a long-term net importer of dollars. Read the rest of this entry »
The Dow Jones industrial average closed at session lows, off nearly 531 points and in correction territory for the first time since 2011 as all blue chips declined. The last time the index closed more than 500 points lower was on Aug. 10, 2011. In the last five years, the index has only had four instances with closing losses of more than 400 points.
“For investors the momentum and the drive of the market is now lower (than) it used to be because there’s no place to hide,” said Lance Roberts, general partner at STA Wealth Management. “Every time we hit the major technical points we kept selling.”
A trader noted that investors stopped looking at technicals and were plowing through them.
“It’s an expiration day and it looks like they’re to have for sale on the close maybe as much as a billion dollars,” said Art Cashin, director of floor trading for UBS.
The Nasdaq Composite lost 3.5 percent, also closing in correction territory and joining the other major averages in negative territory for the year.
“Right now there is a feeling of fear in the marketplace and all news is interpreted negatively and it’s interpreted indiscriminately,” said Tom Digenan, head of U.S. equities as UBS Global Asset Management…(read more)
Apple’s share of profits is remarkable given that it sells fewer than 20% of smartphones
“Roughly 1,000 companies make smartphones. Just one reaps nearly all the profits.”
A shooting took place at a church in Charleston, South Carolina on Wednesday night.
According to The Post and Courier, authorities responded to a shooting around 9 p.m. at 110 Calhoun Street, which is the location of Mother Emanuel AME Church.
BREAKING FOX24 #CHARLESTON: shooter is a white male in 20s, slender/small build, grey sweatshirt, blue jeans, clean shaven.
— Joe Bruno (@JoeBrunoFOX46) June 18, 2015
The publication noted that police are on the hunt for the gunman.
While there are victims, authorities don’t know how many…,
Developing… Read the rest of this entry »
Hong Kong is having another umbrella moment.
First there was the umbrella movement last year when young people took to the streets to defy China’s plan for watered-down democracy. Now there is an umbrella maker that’s stunned the stock market.
“It is a bit crazy. The fundamentals do not justify the current stock price.”
— Hannah Li, strategist at UOB-Kay Hian
Jicheng Umbrella Holdings Ltd.1027.HK +13.29% is an unlikely title holder of Hong Kong’s best performing newly listed stock in 2015. At its initial public offering back in February, it received little interest with bankers pricing it at the low end of an indicated price range. But once it got trading it went through the roof, and at one stage last month it rose nearly 20-fold from its IPO price and is still up 14-fold as of Friday.
“It is a bit crazy,” said Hannah Li, strategist at UOB-Kay Hian. “The fundamentals do not justify the current stock price.”
The rally means the company is worth 9.1 billion Hong Kong dollars ($1.17 billion), and is trading at a price-earnings ratio of 100, far higher than the 11.2 for the average of stocks in the Hang Seng index.
Exactly why investors are so keen on an umbrella maker to give it a sky high valuation is puzzling, while its shareholder structure looks even more bizarre. The Securities and Futures Commission, Hong Kong’s market regulator, issued a warning Thursday to investors that just 17 shareholders hold over 99% of the company’s shares (the major shareholder owns 75% of the company). This means a buyer could easily push the stock up substantially as there’s so few owners of the shares.
Ms. Li said while Jicheng’s business is in good shape, the small number of shares held by public shareholders is a major reason for the rally. Read the rest of this entry »