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16 June 2021
10:23 hour

FA Center: Why China’s new 3-child policy won’t ease headwinds on Chinese stocks anytime soon

Market Watch

10/06/2021 - 21:58

Population trends do impact stocks, but many decades in the future.


READ THE FULL ARTICLE ON MARKET WATCH

Related headlines:

  1. : China lifts 2-child policy to 3, as demographic crisis looms (01/06/2021 - Market Watch)
    The decision — made at the highest levels of Chinese politics — includes new supports for education and child-rearing.
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  2. China announces three-child policy, in major policy shift (31/05/2021 - Investing.com)

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  3. Anyone avoid Chinese stocks for moral reasons? (26/03/2021 - Reddit Stocks)
    I just sold my Chinese stocks today after hearing an ex prisoner from the Uighur Muslim camp talk of rape and torture committed by the Chinese government. It made me think the international community should do everything possible to discourage such action with sanctions and not participating in business with China, and then I realized “wait, I’m helping China by investing in their companies”. When I invested in them I had just heard China was booming so Alibaba and Tencent are a no brainer. Now I’m thinking fuck China and their authoritarian ways. Anyone else consider this, or do investors mostly just chase the money?   submitted by   /u/knowledgelover94 [link]   [comments]
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  4. Jinko Solar is not good stock? (03/04/2021 - Reddit Stocks)
    Biden said... they support only "American" green energy. And Biden said that they will compete with China. And many Chinese stocks falling because its now all about anti-China. If its import product, they get no money support. It's true, many Chinese stocks are undervalued but right now for some reason Americans selling Chinese stocks. Do you think its worth to risk with Jinko Solar while its China vs America?   submitted by   /u/MAARJA007 [link]   [comments]
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  5. China Exports - Chinese Herbal Medicine & Chinese Medicine (13/03/2021 - Trading Economics)
    Exports - Chinese Herbal Medicine & Chinese Medicine in China increased to 180500 USD THO in February from 128500 USD THO in December of 2020. Exports - Chinese Herbal Medicine & Chinese Medici in China averaged 107493.39 USD THO from 2014 until 2021, reaching an all time high of 180500 USD THO in February of 2021 and a record low of 58400 USD THO in February of 2019. This page includes a chart with historical data for China Exports of Chinese Herbal Medicine & Chinese Medi.
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  6. Balancing trade with China: More Chinese investment, taking advantage of local production incentives, can help build self-reliance (16/03/2021 - Financial Express)
    India has displayed policy maturity and pragmatism in recent weeks by reassessing the possibility of reviving Chinese investments in the economy.
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  7. China Exports of Chinese Medicined (20/03/2021 - Trading Economics)
    Exports of Chinese Medicined in China decreased to 14680 USD THO in February from 31526 USD THO in January of 2021. Exports of Chinese Medicined in China averaged 14738.56 USD THO from 1996 until 2021, reaching an all time high of 35957 USD THO in February of 2020 and a record low of 3396 USD THO in February of 1999. This page includes a chart with historical data for China Exports of Chinese Medicined.
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  8. Chinese Tech ETF (05/04/2021 - Reddit Stocks)
    Anyone have advice on a good US-traded Chinese technology ETF that buys their fund on a Chinese exchange? I sold my Nasdaq-listed JD and BABA and just want a fund that carries China tech out of Hong Kong where I don’t have to worry about delisting or return discounts. The best I could find are WisdomTree’s China ex-State Owned (CXSE) and iShares China Large cap (FXI). Neither are perfect but they may have to do. Global X’s China IT ETF doesn’t carry Tencent/BABA and most of the other ETFs buy US listings.   submitted by   /u/Investing8675309 [link]   [comments]
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  9. Is now the time to invest in Chinese EV stocks? (NIO, XPEV, BYDDY, LI) (28/02/2021 - Reddit Stocks)
    Chinese stocks, especially those in the EV sector have been selling off recently. The general consensus for the EV sell-off is of the global chip shortage causing EVs to pause production. However I came across this recent article that says China is stockpiling chips and machines to make them to combat potential US sanctions and be self-reliant. The logic follows that China should weather the chip shortage better than other countries, and that would mean their EV companies should see no slowdown. Given the recent sell-off and China's resilience to the global chip shortage, now could be a great time to invest in Chinese EV companies. I don't have a case of any one company over the other, so investing in all of them or an ETF should be fine. Positions: a few shares of TSLA, NIO, XPEV, and BYDDY   submitted by   /u/Yumewomiteru [link]   [comments]
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  10. How will Chinese stocks recover? (10/04/2021 - Reddit Stocks)
    Many Chinese stocks have fallen recently due to fears of delisting, Chinese inflation and anti-trust regulations. The Chinese market is massive so I want to focus on just a few stocks in my questioning. Mainly Alibaba, JD.com and Pinduoduo. DELISTING- First off, I do not believe a mass delisting will occur, and if it does, it will not delist massive corporations such as those named above and would instead target smaller cap corporations. This is the general sentiment of most analysts as well, as they agree the fear of this is overblown. There is no incentive to delist. Delisted companies could continue to be traded through over-the-counter markets in which massive amounts of money would be missed out on from the Nasdaq and NYSE. Also, if the goal is to delist due to concerns over accurate and ethical information reporting, the delisting of massive corporations such as Nio and Alibaba would be pointless because there is no reason to believe they are misleading investors. The only concern is among smaller cap corporations that definitely should be more moderated. I am not mentioning those within this but I acknowledge their mass delisting could affect all Chinese stocks, even if the concern is misplaced. INFLATION- Inflation concerns caused a dip today in many Chinese stocks because data showed greater than anticipated inflation through a rise in PPI. The PPI hit 4.4%, the highest mark since 2018 while analysts were predicting 3.6%. For comparison, the US PPI is at 4.2%, the largest annual gain in 9 1/2 years while a jump in 3.8% was expected. Though the rate was higher than anticipated, I agree with analysts that inflation is a temporary concern across the stock market. ANTI-TRUST- This is the largest concern I have. My main focus is Alibaba which holds >50% of the e-commerce market in China which is expected to grow faster as a sector in China/Asia than in any other market. Alibaba and other e-commerce corporations are being targeted with anti-trust fines and regulations seeking to limit their control over their business partners. Currently they have a policy that makes partners choose one company or another, they could not sell on both JD.com and Alibaba. This policy is under pressure from the government to increase competition. There is also a potential 975 million dollar fine being levied against Baba over similar anti-trust issues. QUESTIONS- Do you see Chinese stocks like Alibaba and JD.com recovering soon, if so, how quickly? Should I be more concerned about inflation in China? I am not concerned about global inflation and American inflation, but the Chinese market could have some alternative impacts from inflation Im not considering. What is the best play in E-commerce in China if anti-trust laws aimed at Alibaba pass and market share is decreased in the future? Am I missing any other forces impacting these companies that I should be considering? Thanks for reading and any feedback would be appreciated and you can definitely disagree. I tried to list my thoughts so you can understand my position on the situation. I just find it crazy calls for Alibaba for 300 expiring in a month are 20$. Is a quick turn around possible or will the price remain depressed?   submitted by   /u/Cassini__ [link]   [comments]
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  11. About Chinese companies listed in wall street (17/03/2021 - Reddit Stocks)
    Is a Chinese company like XPeng (XPEV) affected by how successful its business is in the US, in China or in both? I mean, if it's doing great in China but bad in USA, how will it affect the stock price?   submitted by   /u/whuuz [link]   [comments]
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  12. RLX Drops Around 50% (22/03/2021 - Reddit Stocks)
    I usually do not get involved with Chinese companies for obvious reasons, but this stock was a strong buy in my book. I have an average of $19 a share, which I was very comfortable with until this morning. Anyone have any idea what I should do with this stock now that China is imposing high regulation on E-Cigs and I am down nearly 50%? Does anyone know the severity of what China will do and if it will be detrimental to the company? China is a mass consumer of E-Cigs...does anyone think this is a unique buying opportunity? Thanks for any help https://markets.businessinsider.com/news/stocks/rlx-technology-stock-price-sinks-chinese-government-ecigarette-regulation-2021-3-1030233004   submitted by   /u/Potential-Guide-9562 [link]   [comments]
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  13. Your ETFs Are At Risk If US Delist Chinese Stocks (23/02/2021 - INO.com)
    At the beginning of January, the drama of delisting certain Chinese stocks controlled the headlines for a few days. Then, as we all know, other more newsworthy stories occurred, and we all forgot about the delisting of Chinese stocks due to 'national security' concerns. Several different stocks were being thrown around as possibly being delisted […] The post Your ETFs Are At Risk If US Delist Chinese Stocks appeared first on INO.com Trader's Blog.
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  14. Take Chinese Covid vaccine- China’s condition to give visa to Indians, 19 other countries (17/03/2021 - Financial Express)
    Are you an Indian? Do you have to visit China for work? Well, you will have to take the Chinese vaccine for the novel Coronavirus.
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  15. Do you still plan to invest in Chinese companies? (11/04/2021 - Reddit Stocks)
    I am open to investing on companies from other countries(other than U.S), but I am curious to know what you all think about China with all of the criticism they have been taking as of late. I am still bullish on Alibaba, JD and other top china companies but what about you guys? It seems to me China won't let big companies get bigger which is concerning, but I still plan to buy Chinese companies in the future.   submitted by   /u/gorays21 [link]   [comments]
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  16. Peter Morici: Industrial policy and Fed policy are the keys to confronting inequality and China (12/05/2021 - Market Watch)
    America's economic future depends upon outcompeting China in high tech, and upon quickly retraining the workers being left behind.
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  17. Webull is a Chinese company? (21/03/2021 - Reddit Stock Market)
    A friend referred me to Webull to trade stocks. After a bit of googling I found out it is headquartered in New York but is owned by Fumi Technology, a Chinese holding company that has received backing from Xiaomi and other private equity investors in China. According to its website it is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Its clearing firm is Apex Clearing Corp has purchased an additional insurance policy. The coverage limits provide protection for securities and cash up to an aggregate of $150 million, subject to maximum limits of $37.5 million for any one customer’s securities and $900,000 for any one customer’s cash. So with heightened Chinese/US tensions do people who use this have additional risk if relations further flame. Curious to any feedback as i'm new and want to be careful and i know a lot of other people are enjoying the service.   submitted by   /u/GVKO2021 [link]   [comments]
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  18. XPENG and LI (02/03/2021 - Reddit Stocks)
    Yeah I get it, EVs were extremely run up and there’s been a correction. Seems like these two companies are pretty undervalued compared to other EVs though? Chinese companies stock in general are underperforming. Is there some new tension with China I don’t know about? Even BABA is down significantly. LI had 9.5 bn in revenue 2020 - more than NIO and XPENG. Yet market cap is 22bn. 1/4 of NIO. The 3 Chinese EVs may be overvalued in the US but there is a lot more demand for EVs in China so it seems to me there will still be a lot of growth in the coming years. Would you buy these stocks or not at the current prices? LI has an average target of 38 and XPENG 54. Significant upside there and limited downside considering we are now at early November levels (start of the hype)   submitted by   /u/theepicone111 [link]   [comments]
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  19. Should you go for Child Plans as education cost shoots up? (27/03/2021 - Financial Express)
    With a child-plans investor gets a guaranteed payout for financing the child’s education and hobbies, hence, the child’s needs are taken care of even if the parents are not around.
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  20. Why are Chinese VIE companies even traded? They sound like a complete scam (19/02/2021 - Reddit Stocks)
    Everyone here knows BABA, NIO, XPENG and quite a few other Chinese “stonks”. However, while owning these stocks you do not have any share in the actual Chinese companies due to VIE structure - instead you own a share of fake BABA, NIO, XPENG - some Cayman shell company with the same name as the Chinese real one. The only thing investors get are promises to share some profits in the future. Due to Chinese laws, there is no way this promise can be enforced as VIE structure is in fact illegal in China. So to me this seems like a huge scam - why are they even traded? Why would fake VIE companies have any value if the actual Chinese companies decide in the future they are not willing to pay dividends and share profits? Investors would be basically holding empty bags of promises.   submitted by   /u/clint1reid [link]   [comments]
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  21. Thoughts on $MOMO and dealing with Chinese companies in the market (22/03/2021 - Reddit Stock Market)
    I have never bought into $BABA or any other Chinese company before. I've done some research, but are there any legitimate factors that limit Chinese stocks (like government regulation)? I have come across $MOMO and it seems to be very undervalued. This company has 100s of millions of daily users on dating and chatting apps. The company grew over 200% the past 4 years, but this past year it's revenue fell 7% year-over-year to 3.87 billion yuan ($547.5 million), missing estimates by $1.3 million and marking its second straight quarter of declining revenue. They are still highly profitable and have a new dividend coming this quarter. Some call it the "Tinder of China"... Eager to hear others' thoughts on $MOMO and Chinese stocks in general !   submitted by   /u/-bryson [link]   [comments]
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  22. Some figures summarizing what has been happening to Chinese stocks lately, just brutal!!! (27/03/2021 - Reddit Stocks)
    The Hang Seng Index contains all the Chinese giants (see fact sheet at): https://www.hsi.com.hk/static/uploads/contents/en/dl_centre/factsheets/hsteche.pdf This has gone down 25% from the peak on Feb 16. According to Bloomberg, this corresponds to a wipeout of about 732B USD from the market cap of the companies that the HSI is holding. What a carnage! Some related links: https://www.nasdaq.com/articles/breakingviews-china-delisting-drama-stings-u.s.-investors-worse-2021-03-26 https://www.bloomberg.com/news/articles/2021-03-26/down-732-billion-chinese-tech-stocks-are-still-far-from-cheap?utm_source=google&utm_medium=bd&cmpId=google   submitted by   /u/futureIsYes [link]   [comments]
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  23. New front for India vs China tussle: Coming battle over future Buddha Maitreya (25/05/2021 - Financial Express)
    The Chinese legends suggest that the noble future Maitreya Buddha will manifest in China - in the land of Amitabha Buddha or in the Western Pure Land – Sukhavati as the Chinese describe.
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  24. New front for India vs China tussle: Coming battle over future Buddha Maitreya (25/05/2021 - Financial Express)
    The Chinese legends suggest that the noble future Maitreya Buddha will manifest in China - in the land of Amitabha Buddha or in the Western Pure Land – Sukhavati as the Chinese describe.
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  25. Iron ore rebounds above $200/ton as Chinese production curbs could ease (01/06/2021 - Seeking Alpha)

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  26. Alibaba expands cloud products with livestream shopping in its battle against Amazon (08/06/2021 - Reddit Stocks)
    GUANGZHOU, China — Alibaba has launched a slew of new cloud computing products as the Chinese e-commerce giant looks to expand across Asia. Cloud computing is seen as a key profit driver for Alibaba over the long term and in the past few years, it has been boosting its presence aggressively outside of China. On Tuesday, Alibaba announced plans to open a new data center in the Philippines by the end of the year and launched a third data center in Indonesia. Expanding data centers allows cloud providers to boost their capacity in certain countries or regions. Alibaba also launched a cloud-based livestreaming product designed for online shopping. It will allow e-commerce players to launch a live stream shopping feature on their websites or apps that are hosted on Alibaba’s cloud. Livestream shopping usually involves a host talking about products that customers can buy directly via the live broadcast. It has become very popular in China and is growing in other parts of Asia. The Chinese e-commerce firm hopes that such a product can help it stand out from U.S. rivals including Microsoft and Amazon in the cloud market. In the Asia-Pacific region, Alibaba was the biggest public cloud market vendor at the end of 2020 with a 19.2% share, according to IDC, boosted by success in China. Amazon was second with a 10.5% share. However, in the global market, Alibaba still trails Microsoft, Amazon and Google. Alibaba’s cloud announcements come after it reported its first net loss as a public company in the January to March quarter. The company was hit with a massive $2.8 billion fine as a result of an anti-monopoly investigation by Chinese authorities. Maggie Wu, Alibaba’s CFO, said the company would invest “incremental profits and additional capital” in “new businesses and key strategic areas” in its current fiscal year. In China, Alibaba faces growing competition from other technology giants including Huawei and Tencent which more recently have stepped up their cloud computing investments. https://www.cnbc.com/2021/06/08/alibaba-cloud-expands-products-with-livestream-shopping-data-centers.html   submitted by   /u/TaxShield [link]   [comments]
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  27. Investing for a child (14/03/2021 - Reddit Stocks)
    I'm looking for ideas for the best ways to invest for a small child, like a toddler. I would like to take into account tax implications and pre tax contributions. I know the 529 is a obvious one but I'm looking more long term than college age. What sectors do see being dominant in the future. Individual stocks are welcome especially those with strong dividends.   submitted by   /u/errrr2222 [link]   [comments]
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  28. Jack Ma could be fined Miltimillion dollars on ALIBABA Baba (13/03/2021 - Reddit Stock Market)
    China Considering Million-Dollar Fine Against Jack Ma's Alibaba. The Wall Street Journal, the authorities are considering imposing a fine on the Chinese firm that exceeds the $975 million that Qualcomm Inc. paid in 2015 for anti-competitive practices. To date, Qualcomm's fine has been the largest in China's corporate history. Jack Ma, one of China's richest men, criticized his country's banking system during an event in Shanghai. Since then, the Chinese government has scrutinized his business more than ever.   submitted by   /u/Vast_Cricket [link]   [comments]
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  29. Goldman Sachs sold 10 billion worth of Chinese stocks. The tension with China is shaking up the market.???? (30/03/2021 - Reddit Stock Market)
      submitted by   /u/Stockfomo [link]   [comments]
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  30. The deterioration in Australia China relations (03/05/2021 - Financial Express)
    Australian Foreign Minister Marise Payne on 21 April cancelled two MOUs signed by the state of Victoria in 2018 and 2019 with China’s national Development and Reform Commission on Chinese participation in infrastructure projects under China’s Belt and Road initiatives.
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  31. Should we use Webull (11/04/2021 - Reddit Stocks)
    Anyone think the we shouldn’t use Webull because it is a Chinese company that adheres to the CCP demands at any time. I am still not using Robinhood but Webull seems even worse. They most likely are giving the same information to the Chinese government and market makers. Is there an American company or non CCP controlled company at least that you guys recommend. Honestly I don’t even like to mess with Chinese company stocks because the CCP gets their hands on things and ruins everything. They just decided to fine Ali baba a couple billion. They cooked the books for another company because they funnel money into them for government interest and eventually get caught dropping the price. Any takes on this. I just put a little in NIO but will never put Tesla money into it. Even from a humanitarian point of view I don’t want to invest in countries like China South Africa or Israel for reasons. Thanks   submitted by   /u/naymit650 [link]   [comments]
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  32. Would anyone be surprised if these Chinese stocks have 2 different accounting ledgers? (16/03/2021 - Reddit Stocks)
    I would have to believe the CCP runs a skim on top of that. Theres no way in my mind that they're not getting a cut of the action. Most of the Chinese penny stocks have crazy market cap valuations that appear completely fraudulent. Does anyone feel the same way or am I just missing something?   submitted by   /u/ImNotSmelly [link]   [comments]
    [visit article]
  33. Chinese online education stocks (07/06/2021 - Reddit Stocks)
    During last year, Chinese online education stocks like TAL and YQ have been pumped to unbelievable highs. My mom bought those two stocks and a few others, losing more than 60% on each of them. She's done no research on any of these companies, and yet says that they can grow higher. What do you think? Hold or sell?   submitted by   /u/Inferdo12 [link]   [comments]
    [visit article]
  34. Biden Tax on wealthy affecting Chinese stocks (23/04/2021 - Reddit Stocks)
    If Congress passes the rumor on this increased capital tax that was announced today, what does this mean for Chinese tech stocks that traded on the Nasdaq? Surely these companies operate off shores, so the tax wouldn't affect them. US tech companies like Apple and Microsoft would be paying higher taxes, but Alibaba or JD would not be affected if I'm not mistaken. Isn't this bullish for Chinese tech companies?   submitted by   /u/yushey1 [link]   [comments]
    [visit article]
  35. Washington to bar US investors from 59 Chinese companies (03/06/2021 - Reddit Stocks)
    Full article here: https://www.ft.com/content/91e6fb2a-6385-49b3-83aa-8044374805c4 President Joe Biden on Thursday signed an executive order banning investments in 59 companies, including marquee Chinese groups such as Huawei, the telecoms equipment manufacturer, and Semiconductor Manufacturing International Corporation, China’s largest chipmaker, which US intelligence says is critical to the Chinese military.   submitted by   /u/elephantsareblue [link]   [comments]
    [visit article]
  36. Dragon on the prowl: China’s geo-political games are still on (13/05/2021 - Financial Express)
    What is absolutely astonishing is the total silence on part of the WHO in leaving the investigation of the role of Chinese regime in managing and most importantly reporting the pandemic in a limbo. The actions of the Chinese Media houses stem from the failure of the WHO in arriving at conclusions.
    [visit article]
  37. Chinese EV charging station companies (03/04/2021 - Reddit Stocks)
    Hi all I am looking for companies that provide EV charging stations and infrastructure in China. Something like CHPT but what’s the leading one in China ? Apart from Tesla, I could find anything else about EV charging companies in China that are publicly traded! Thanks   submitted by   /u/makaros622 [link]   [comments]
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  38. Asia Markets: China stocks climb, but Taiwan equities tumble as rising COVID-19 cases force fresh restrictions (17/05/2021 - Market Watch)
    Global equities kicked off trading on Monday with a mixed session in Asia. Taiwan stocks took a hit from fresh pandemic restrictions, while Chinese stocks gained.
    [visit article]
  39. Capitol Report: Dueling child-cash plans take center stage as coronavirus-aid outline takes shape (08/02/2021 - Market Watch)
    The $1.9 trillion coronavirus aid package making its way through Congress is set to be the venue for a new debate between Democrats and Republicans -- how best to get more money to families with children.
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  40. Chinese whispers: WHO-China joint probe, as was expected, leaves nobody any wiser about SARS CoV-2’s origins (31/03/2021 - Financial Express)
    If the long delay wasn’t reason enough for any such probe to remain inconclusive, the fact that the probe was constantly under the shadow of the Chinese government should have been an indicator of the futility of undertaking any such exercise.
    [visit article]
  41. Europe Markets: European stocks inch toward fresh records as Chinese data cheer investors, while U.S. futures hold steady (16/04/2021 - Market Watch)
    European stocks are climbing after China follows strong U.S. growth with blowout data of its own. The Stoxx 600 and German DAX are headed for fresh record closes.
    [visit article]
  42. Ahead of US visit, China terms Taiwan exercises ‘combat drills’ (14/04/2021 - Financial Express)
    Taiwan has complained over the proximity of repeated Chinese military activity, including fighter jets and bombers entering its air defence zone and a Chinese aircraft carrier exercising off the island, claimed by Beijing.
    [visit article]
  43. Rising cost of education: Best ways to save for your child’s future (02/04/2021 - Financial Express)
    As parents, it is natural to want the very best for your child – the best schooling, best opportunities in life, etc.
    [visit article]
  44. Commodities Corner: U.S. looks to ease China’s monopoly on rare earths (12/03/2021 - Market Watch)
    Rare-earth metals are used to make just about everything, from smartphones and display panels, to speakers and televisions, and while China currently dominates the market for these commodities, the U.S. has taken interest --- and resource investors should too.
    [visit article]
  45. The Wall Street Journal: Biden expands list of blacklisted Chinese companies (04/06/2021 - Market Watch)
    President Joe Biden expanded a prohibition on Americans investing in Chinese companies with purported links to China’s military, adding more businesses to a blacklist that has angered Beijing and caused consternation among investors.
    [visit article]
  46. NIO and XPEV are oversold, will have a very strong bounce - BUY THE DIP! (26/03/2021 - Reddit Stocks)
    These stocks are getting hammered because of 2 reasons - semiconductor shortage and Holding Foreign Companies Accountable Act semiconductor shortage is temporary and is a non-issue. It will go away in a week or two HFCAA - the main thing this law does is to prevent companies being listed that are associated with Chinese military. And even then, companies have 3 years (!) to comply and can only be delisted after 3 years of non-compliance. Neither NIO nor XPEV has anymore connections to military than Tesla. And you can be sure that if these companies are pressured to delist, China is gonna respond with banning Tesla from China, and thats never going to happen! So all these factors brining these stocks down are complete hype and rubbish!! BUY THE DIP!!   submitted by   /u/th9901 [link]   [comments]
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  47. : I want to take a life-insurance policy out on my husband. He says ‘hell will freeze over’ before he’s worth more dead than alive (14/06/2021 - Market Watch)
    ‘The pandemic sent my life back to the 1950s, as I had to cook, provide tech support and homeschool our child.'
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  48. London Markets: Chinese inflation data take a bite out of U.K. mining stocks (09/06/2021 - Market Watch)
    Fears of rising inflation around the globe were heightened after China reported surging factory-orders prices. That hit U.K. miners particularly hard on Wednesday.
    [visit article]
  49. Ending China Stimulus / SEC Law Enacted Provide Unique Buying Opportunity For Chinese Companies (High Risk, High Reward) (26/03/2021 - Reddit Stock Market)
    With the Chinese Central Bank ending stimulus and the Holding Foreign Companies Accountable Act going into effect we have seen a mass selloff of Chinese securities as of late. This selloff has affected almost all Chinese companies only sparing a few that are involved in NFT and Bitcoin plays. This week alone $BIDU is down 22%, $BABA is down 6%, TIGR is down 22%, and FUTU is down 16%. These companies have shown strong growth and some even had amazing Q4 for 2020 during a pandemic (FUTU had a 281.6% increase of total revenue YoY for Q4). Below I am going to explain the two main reasons I see this sell off happening and why I believe it gives a unique buying opportunity. Note, I have links to news articles covering both issues below. · China Central Bank And Government Ending Pandemic Stimulus, Tighter Liquidity Market (1)(2) With China being the first major country to come out the other end of the pandemic the China Central Bank and government announced they will be ending the stimulus stance taken during the pandemic to prop up the economy. China is the first major country to emerge on the other side of the pandemic and has returned to normal even in places like Wuhan. With this returning to normal the china central bank has stopped stimulus measures as the worry of inflation creeps in causing stocks of Chinese companies to sink due to more restrictions on flow of money. Additionally, china has continued to crack down on credit use and ease lending worrying about high default rates and companies being over leveraged. This is one of the many reasons ANT was blocked (as well as internal country politics). While many would see this as a sign to be worried it is in fact quite the opposite. China is now positioned to grow rapidly while the rest of the world continues to be weigh down by Covid all the while doing its best to control inflation and risky lending ensuring a bright future for the Chinese economy. No longer having a need for stimulus is a bullish sign not a bearish and should be celebrated. · Risk Of Mass Chinese Delisting, Holding Foreign Companies Accountable Act (3)(4) On Wednesday March 24th the SEC moved to enact the Holding Foreign Companies Accountable Act (HFCA) which requires foreign companies to allow regulators to review financial audits of overseas companies as well as requires companies to submit documents to prove they are not owned by a government entity and list any board members who are government officials. Anyone who has dabbled in foreign companies will know that the vast majority report unaudited results. Doing so going forward could mean ejection from the NYSE or Nasdaq. China itself restricts what information companies can provide to foreign auditors so even if a company wanted to abide by this new rule it may be difficult. Additionally, the Chinese government is heavily involved in many of the major corporations that operate within China. This spells potential doom for a fast majority of Chinese companies currently listed. To be clear I am 100% for financials being audited and I would love for this to be a thing. I think the fear of government influence in companies is overblown and the US itself heavily plays with the scales of companies that operate in the US, think the bail outs as well as tax breaks for major manufacturers (Boeing). I see all of this as sabre rattling by both sides and since this is a Trump law it is unlikely to continue as is without some tweaks under the Biden admin. It is very unlikely that the us government is just going to mass delist so many companies wiping out trillions in us dollars (big banks invest in these companies!) as the firesale happens before they are ejected from the exchanges. A likely compromise will be reached quietly and both sides will claim victory. TLDR: Chinese dual listed and ADR stocks are taking a beating due to a new us law, Holding Foreign Companies Accountable Act, as well as China central bank and government ending pandemic stimulus. This has created a unique opportunity where many Chinese companies, ones with healthy books and set for expansion, are selling off. I believe the fear around US mass delisting Chinese companies is overblown and that the Chinese economy is set to continue its expansion in the coming years and that the end of stimulus was due. I see this as a great buying opportunity to get on great companies well below price. This sell off may continue for a few weeks but will come to a halt once the SEC law is changed / rescinded and good economic numbers come out of China. In the coming weeks I will be looking to expand my current holdings in TIGR, FINV, QD, and open new positions in FUTU, CLPS, BABA. Remember: “Be greedy when others are fearful” - Warren Buffett. News Article Links: (1) https://www.bloomberg.com/news/articles/2021-03-24/chinese-stocks-15-plunge-shows-what-happens-when-stimulus-ends (2) https://www.ft.com/content/a508addb-fbad-4708-b533-8180e60a1528 (3) https://www.cnbc.com/2021/03/25/chinese-tech-stocks-fall-as-us-sec-begins-law-aimed-at-delisting.html (4) https://www.scmp.com/business/markets/article/3126866/hong-kong-stocks-enter-correction-us-implements-law-audit-putting P.S. The above is my opinion, make sure to do your own DD folks.   submitted by   /u/Haxzors [link]   [comments]
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