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Quant Fund Gains 108% by Dumping China Stocks a Day After Buying

A Chinese quant-trading firm made 108% this year by selling every stock bought the previous day.

Zhang Ruiqi, the 34-year-old chairman of Shenzhen Qianhai United Fortune Fund Management Co., screens about a dozen mainland-listed stocks every day for their turnover, momentum and volatility. He then does it all over again the following day. That strategy, which he calls the “all-in-all-out” method, helped his flagship $5 million fund gain 108% this year through June, according to data provider Simuwang.com.

Rather than pick stocks based on their earnings prospects or dividends, quantitative stock funds typically rely on complex and proprietary mathematical models to generate returns. Instead of buy-and-hold, quants are known for their high-frequency trading systems that are well-suited for high turnover markets like China. Quant strategies have become extremely popular globally in the past few years as traditional stock-picking methods struggled to beat equity indexes.

“Our strategy allows us to make money from stocks that have the strongest market sentiment on a day-to-day basis — and that has turned out to be overwhelmingly successful so far this year,” said Zhang in a phone interview from his office in Shenzhen.

High trading volumes have been “essential” to the fund’s success, said Zhang. It has also been helped by certain sectors sustaining gains, particularly stocks associated with technology, health care, agriculture, consumer goods and baijiu liquor. “Market sentiment on hot sectors this year can typically be sustained for about three to five days, or more,” said Zhang. “So our win rate can be quite high by selling quickly.”

The fund includes other parameters to screen which stocks to pick on any given day — including volume, current market value, prices and net inflows. It employs an algorithmic trading mechanism for timing when to buy and sell. Investors in mainland China are not allowed to sell shares on the same day of purchase.

The strategy does have limitations, said Zhang. The bigger the fund’s size, the more market liquidity it needs — to the point where assets under management topping 100 million yuan ($14 million) would hurt the strategy’s effectiveness, he said. The fund is also not immune to extreme market conditions. “If the decline of the fund’s net asset value exceeds 10%, or if its recovery time is too long, we need to re-examine the strategy,” he said.

Further reading
Chinese Stocks at Five-Year High Are Only Just Getting Started
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China Accelerates Capital Market Reform to Counter Virus, U.S.
China Investor Buys Dirt Cheap Bank Stocks Nobody Else Wants

He is optimistic on the market’s prospects for the second half. The CSI 300 Index hit its highest level since 2015 on Friday and leverage is at a five-year high, demonstrating the return of risk appetite at a time Beijing is speeding up efforts to boost stock trading. Total average daily trading volume has hit more than 740 billion yuan so far this year, around 45% higher than that of the full year of 2019, according to data compiled by Bloomberg.

“As long as the trading volume remains above 400 billion yuan per day, this strategy will still be effective.” said Zhang, noting the upcoming revamp of the Shanghai Composite Index and ChiNext market reforms. “Volumes are unlikely to drop.”

— With assistance by Sharon Chen, Ken Wang, John Cheng, Mengchen Lu, and Kevin Dharmawan

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U.K. Considers Joining EU Virus Vaccine Drive in Race for Supply

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The U.K. is considering joining the European Union’s drive to develop and acquire coronavirus vaccines, despite formally quitting the 27-country bloc earlier this year.

“Work is ongoing to determine whether and how the U.K. participates in the EU Vaccines Strategy,” the U.K.’s Department for Business, Energy and Industrial Strategy said in an email on Friday.

The EU is spending more than 2 billion euros ($2.3 billion) to finance research into a vaccine as it tries to avoid falling behind the U.S. or China in obtaining supplies of any Covid-19 interventions. Earlier this month, EU health ministers gave the European Commission the green light to pursue advance purchase agreements with drug companies for hundreds of millions of doses.

52,291 in U.S.Most new cases today

-7% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​063 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-2.​3% Global GDP Tracker (annualized), May


In March, the U.K. was criticized for not joining an EU program to procure ventilators for patients suffering from coronavirus, despite being invited to join. Britain is due to complete its separation from the bloc on Jan 1. 2021 after the current transition period ends.

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Modi Says ‘Age of Expansionism’ Over Amid China Border Tensions

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Prime Minister Narendra Modi warned the “age of expansionism” was over, as he addressed troops involved in a bitter border standoff with China in the Himalayan region.

Speaking in the Ladakh region, that’s witnessing the country’s deadliest conflict with Beijing in four decades, he underlined India’s progress in developing border infrastructure and his government’s backing for the army.

“The age of expansionism is now over. This is the age of development,” Modi told soldiers at an army base in Ladakh, the epicenter of India’s border conflict with China where 20 Indian soldiers and an unknown number of Chinese troops were killed in a violent clash last month. “In past centuries expansionism has hurt the world the most.”

Since early May Indian and Chinese troops continue to remain locked in a standoff along their contested and unmarked Himalayan border. About 50 square kilometers (20 square miles) previously controlled by India in the Pangong Tso area — a glacial lake high on the Tibetan plateau — is now being held by Chinese personnel, according to Indian officials.

“The courage that you and your colleagues have shown now has sent the message to the whole world about India’s true strength,” Modi told the soldiers even as concerns remain about the border tensions lingering on. Three rounds of talks between senior military officials on both sides, meant to de-escalate hostilities, have so far ended inconclusively. Officials on both sides have said that more diplomatic and military talks are planned in the future to help lower the temperature.

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Think tank explains why it's 'pointless' to delist Chinese companies from U.S. stock markets

  • Delisting Chinese companies from U.S. stock exchanges will neither deny those firms access to American capital markets nor hurt China's growth, said a Peterson Institute for International Economics report.
  • There are other ways Chinese companies can get money from American investors, including through the private equity market and Hong Kong's stock market, according to the report.
  • U.S.-China relations are the worst they have been in decades, with President Donald Trump warning last month that "a complete decoupling from China" remained a policy option for his administration.

Delisting Chinese companies from U.S. stock exchanges is "a pointless drive" that will neither deny those firms access to American capital markets nor hurt China's growth, according to a report by think tank Peterson Institute for International Economics.

U.S.-China relations are the worst they have been in decades and the stock market appeared to be one of the latest fronts where tensions between the two countries are playing out. The Senate in May passed a bill that could ban many Chinese companies from listing shares in the U.S. Last month, President Donald Trump urged regulators to find ways to tighten scrutiny on those firms.

But there are several ways that Chinese companies can still get money from American investors, including through the private equity market and Hong Kong's stock market, said the PIIE report written by Nicholas Lardy and Tianlei Huang.

"The key point is that the market for capital is global. Shutting out Chinese firms from listing in the United States would not deny these firms access to US capital," the authors wrote.

There are about 230 Chinese companies — totaling about $1.8 trillion in market capitalization — listed on the Nasdaq and New York Stock Exchange, noted the report.

It pointed out that U.S. private equity firms have been buying out those listed Chinese companies. One example is Warburg Pincus and General Atlantic, which recently led a deal to take Chinese tech firm 58.com private, said PIIE.   

In addition, an increasing number of U.S.-listed Chinese companies have sought secondary listings in Hong Kong — a financial and business center in Asia that is open to international investors, said the report. Chinese companies that have launched secondary offerings in Hong Kong include major tech players Alibaba, JD.com and NetEase.

"US institutional investors and US residents who want to own shares in these companies will simply buy them in Hong Kong. Similarly, foreign investors who have invested in Chinese companies via New York listings will buy them in Hong Kong," read the report.

'Unlikely' decoupling

The difficulties in totally cutting Chinese companies off from U.S. investors underscore how interdependent the world's top two economies have become.

That integration looks likely to increase — especially in the financial sector — despite Trump's warning last month that "a complete decoupling from China" remained a policy option, said PIIE.

U.S. financial institutions are increasing their presence in China, where authorities are gradually loosening rules on foreign ownership. PIIE listed examples of American companies that have taken advantage of China's opening up its financial sector:

  • Goldman Sachs in March 2020 received approval to increase its stake in its joint venture securities firm, Goldman Sachs Gao Hua Securities, from 33% to 51%;
  • At the same time, Morgan Stanley similarly was allowed to increase its stake in its joint venture securities firm, Morgan Stanley Huaxin Securities, from 49% to 51%;
  • Just last month, American Express got the approval to be the first foreign credit card company to launch onshore operations in China through a joint venture.

Such developments will make financial decoupling between the U.S. and China "increasingly unlikely," wrote the PIIE authors.

"For all the fireworks over tariffs and investment restrictions, China's integration into global financial markets continues apace," they said.

"Indeed, that integration appears on most metrics to have accelerated over the past year. And US-based financial institutions are actively participating in this process, making financial decoupling between the United States and China increasingly unlikely."

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How Hong Kong beat coronavirus and avoided lockdown

  • Hong Kong, which has a population of 7.5 million people, has recorded around 1,200 cases of Covid-19.
  • With stores and restaurants remaining open throughout, much of Hong Kong has felt relatively normal this year compared with its peers, which enacted strict lockdown measures.
  • Today, office workers are back to work and the city has reopened its gyms and even nightclubs.

When Apple closed its retail stores around the globe amid the coronavirus pandemic, a handful of outlets were exempt, including its six locations in Hong Kong.

In fact, much of Hong Kong has felt relatively normal this year compared with its peers, which enacted strict lockdown measures.

Since its first confirmed case of Covid-19 on Jan. 22, Hong Kong went through phased closures of government offices, schools, gyms and bars. But other services were relatively unaffected, including dine-in service at restaurants, shops, malls, and trains.

Today, office workers are back to business and the city has reopened its gyms and even nightclubs.

By all accounts, Hong Kong's situation could have been bad. It's one of the world's densest cities. Public transit is often packed. There are even direct flights and trains from Wuhan, the Chinese city where Covid-19 first emerged late last year. In fact, more than 2.5 million people arrived from mainland China in January alone.

With a population of 7.5 million people, Hong Kong has recorded around 1,200 cases. Singapore, by comparison has had more than 43,000 cases, amid an outbreak in migrant worker housing. That caused the city-state to enact lockdown measures for more than two months.

In contrast, Hong Kong had consecutive weeks of zero new cases.

Hong Kong managed to avoid a lockdown while containing — and to a large extent — eliminating Covid-19.

Here's five reasons why Hong Kong managed to avoid lockdown while defeating Covid-19:

1. Experience

Many people in Hong Kong remember living through the severe acute respiratory syndrome (SARS) outbreak in 2003.

"We had never experienced something like that at that time," Leah Choi told CNBC recalling her experience of growing up in Hong Kong. "But because of our experience during SARS, the Hong Kong people are much more alert."

Choi recalled teachers taking her temperature and having to wear face masks all the time.

"Today, the Hong Kong people are much more diligent when facing the coronavirus outbreak, where we know what to do because we already had an experience of what could happen if we don't take all these safety measures against the virus," she said.

The outbreak, first identified in 2002, eventually came to infect nearly 1,800 people in Hong Kong. Following the health crisis, Hong Kong's government created the Center for Health Protection, which specializes in disease prevention and control.

"When they first heard about cases occurring in mainland China, people took it seriously," Keiji Fukuda, professor and director at the School of Public Health at The University of Hong Kong told CNBC.

"The public really responded and so, in most places in the city, you could really see that most people were wearing masks," he said referring to the days following the city's first confirmed case.

2. Decisive border control & strict quarantine measures

Hong Kong closed nine of its 12 border checkpoints in late January, leaving the remaining three open to facilitate the flow of goods. As the situation evolved, the city banned all non-residents from entering, starting on March 25. By early April, there were only about 100 daily visitor arrivals and those who arrived had to undergo a strict 14-day quarantine.

Marco Bellanda, a Hong Kong resident of six years, flew from his hometown in Italy back to the city on May 10, where he was immediately tested for Covid-19. Despite his test returning negative, he was still required to quarantine for 14 days. During that period, the government tracked his location through an app and an electronic wristband he was required to wear. 

"I have to sleep. I have to shower. I have to cook. I have to do everything with this," he told CNBC over video call while in quarantine in his home. When he returned to his apartment following his initial test, he was instructed to walk around his home, so the government could ensure his movement over the next two weeks would strictly be within his home's coordinates.

"I cannot go downstairs or outside, otherwise I think it will ring," he said. "Actually, I don't want to try because the fine would be HK$25,000  ($3,225) and six months jail."

Besides the wristband, Marco has also received sporadic calls from government officials on WhatsApp, ensuring he was home and asking if he had any symptoms or was feeling unwell.

As infection levels plunged, the city gradually eased some of its border controls at the end of April.

3. Contact tracing

Contact tracing is a method of locating people who may have been exposed to Covid-19. In many cases, these people are instructed to self-isolate for 14 days to monitor for any potential symptoms. The practice has been used extensively across many Asian countries during the coronavirus pandemic.

Upon his return to Hong Kong, government officials asked Bellandato write down the license plate of the taxicab that brought him home. This way authorities could contact the taxi driver in case Bellanda later tested positive for Covid-19.

The Hong Kong government also updates an interactive online map depicting detailed information about all the confirmed cases around the city, including dates and times of movement.

4. Centralized government

Hong Kong's relatively small population has made it easier for the government to monitor and control the movement of its people as opposed to places with bigger populations.

For example, the U.S. has had different responses to the pandemic at the federal, state, county and city levels, making a coordinated approach much more challenging.

5. Cultural habits

Professor Fukuda, whopreviously worked at the World Health Organization, has lived in both the U.S. and Asia. He thinks cultural outlook has played a large role in the way the outbreak has been contained in the latter.

"If you can get people and the government to work together, it's an amazingly powerful combination," he said. "There's a very high consciousness about not wanting to affect other people and not wanting to put them at risk. So, when the public says, we're part of the reason why things are going well, it's absolutely true."

Fukuda highlighted politicization has hindered the U.S. and its ability to contain the outbreak. The U.S. has now reported more than 2.6 million confirmed cases.

"In Asia, there is a very significant degree of concern about other people, about taking care of each other," he said. "In the States, it has really exposed that there are big cultural differences in the country. So, whether you are in the rural areas or in the cities, whether you are in red states or blue states."

"Whereas in Hong Kong, if anything, the outbreak has brought people closer together," he said.

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India Seeks to Halt $2.8 Billion of Power Gear Import From China

India will stop power equipment imports from China, power minister Raj Kumar Singh said, amid simmering border tensions between the two neighbors.

The South Asian nation has the capability to manufacture all kinds of electricity equipment, Singh said at a meeting with energy officials of states, encouraging them to promote local procurement. China accounted for 210 billion rupees ($2.8 billion) of the total 710 billion rupees of equipment for non-renewable power projects imported in the year ended March 2019, according to Singh. Shares of state-run Bharat Heavy ELectricals Ltd., the country’s largest power-equipment maker, surged as much as 5.3% after Singh’s comments.

India’s Prime Minister Narendra Modi is asking companies to look for Indian suppliers to spur economic recovery and create jobs after restrictions to contain the coronavirus halted businesses and disrupted global supply chains. The border tensions with China, India’s biggest source of imports, have accelerated those efforts.

“You have a country which transgresses into our territory, which kills our soldiers and yet we create jobs in that country and not in our country,” Singh said, in reference to deadly border skirmishes between the two countries last month. “This can’t happen.”

To check imports of renewable power equipment, the country plans tariff barriers instead of a complete ban on any country, Singh said. China accounts for about 80% of India’s solar module supplies.

Cyber threats are another reason why the country is choosing its suppliers carefully.

“Imports from other countries will be inspected for malware.” Singh said. “Power systems are sensitive systems and they’re vulnerable to cyber attacks.”

In October, a malware struck one of India’s nuclear power plants, infecting a computer network used for administrative functions, according to its operator Nuclear Power Corp. of India. A few months later the country introduced draft guidelines for operating power grids, asking operators to adopt cyber security measures.

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CLSA Trader Sparks Debate on Race at China’s Biggest Brokerage

A Black trader’s attempt to start a conversation about race at China’s biggest brokerage has cast a rare spotlight on how the state-owned company is grappling with issues of diversity as it expands overseas.

Misimi Osekita, a credit trader in the London office of Citic Securities Co.’s CLSA unit, sent an email to more than 100 employees in early June titled “Black Lives Matter,” according to people with direct knowledge of the correspondence. Writing in the wake of George Floyd’s death in Minneapolis, Osekita urged his fellow traders to learn about the challenges faced by Black people in the U.S. and around the world.

“As a black person myself, the events of the past week hit home hard and brought back memories of all the racist encounters I have had, and continue to have, in both my professional and personal life,” Osekita wrote. “Currently I think I am the only black person at least in the London office, which can feel like a lonely walk at times.”

What followed was a reply-all email exchange between Osekita and Jodi Wang — CLSA’s head of human resources — that prompted some employees to criticize the way she handled the situation.

While Wang offered to help organize an open discussion on race and assured Osekita that discrimination isn’t tolerated at CLSA, she also said that “group work emails are not an appropriate platform to express personal views on non-work related topics.” Wang, who’s based in Hong Kong, encouraged Osekita to speak with her or Richard Ziegler, chief executive officer of CLSA’s U.K. business, about how best to discuss the topic.

“I think it’s disappointing that you see it as a non-work related issue,” Osekita responded, adding that her reply had made him uncomfortable discussing the issue with CLSA managers. “It shows that there is a lot of work to be done.”

The episode underscores how America’s reckoning on race is putting pressure on companies around the world to address employees’ concerns about diversity and inclusion. While CLSA is hardly the first to face criticism for the way it has responded, the firm has been less vocal about the topic than its Western peers.

In the U.S., industry bellwethers from Goldman Sachs Group Inc. to JPMorgan Chase & Co. have in recent weeks vowed to elevate more Black executives and push forward with other initiatives on race — moves that Osekita alluded to in his reply to Wang. “I’d encourage you to take a look at how other investment banks are managing this situation and showing support for their black employees,” he wrote.

Read more:
Citi CFO, One of the Few Black Bank Executives, Weighs In
A Goldman Executive’s Advice to White Colleagues: Frederick Baba
Black and White on Wall Street: The Unwritten Code on Race
China Wants Its Own Goldman Sachs. It Has a Big Headache Instead

In an emailed response to questions from Bloomberg News, CLSA said it actively promotes equal opportunities and doesn’t discriminate on gender, race, ethnicity, physical ability or age. The firm added that it encourages discussions about diversity in the workplace and provides compulsory training on inclusion to all employees. CLSA didn’t disclose statistics on race for its staff in a November 2019 sustainability report; it said about 63% of its nearly 2,000 full-time employees were men.

Osekita, who is an associate director at CLSA, declined to comment.

Before it acquired CLSA seven years ago, Citic was an almost exclusively China-focused securities firm with an overwhelmingly Chinese staff. CLSA, founded in 1986 by two former journalists in Hong Kong, has always been more cosmopolitan and now has a workforce spanning 34 nationalities and 20 offices around the world.

Combining the two firms has at times been chaotic. Many of CLSA’s longest-serving international leaders have left over the past 18 months, in part due to a culture clash with the Chinese Communist Party members who run Citic.

Employing a global workforce is a relatively new phenomenon for China’s financial industry, which has tended toward Chinese staffers with Mandarin language skills even for roles in London or New York, said Bethan Howell, head of quantitative research and trading technology at Selby Jennings Hong Kong, a recruiting firm.

“Generally speaking, I would say that Western firms are a lot more diverse in their hiring,” Howell said.

China’s financial giants will have to catch up on diversity if they want to compete internationally, said Jerry Chang, a managing director at Barons & Co., a management consultant.

“Chinese banks going global need to understand what their competitors are doing and adapt to attract top talent,” Chang said. “Sensitive issues require careful handling.”

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China Warns U.S., U.K. to Stop Criticism of New Hong Kong Law

China on Thursday warned of strong countermeasures if the U.S., Australia and the U.K. continued taking actions in response to Beijing’s tough national security law in Hong Kong, saying foreign pressure would “never succeed.”

Chinese Foreign Ministry spokesman Zhao Lijian said China “deplores and firmly opposes” the U.S. House of Representatives’ unanimous passing of a bill on Wednesday that would level sanctions on banks that do business with Chinese officials involved in clamping down on Hong Kong’s pro-democracy protesters. Hundreds more were arrested Wednesday during demonstrations against the law, which came into effect on Tuesday.

“The U.S. attempt to obstruct this law is doomed to fail,” Zhao said at a regular briefing in Beijing. “We urge the U.S. side to grasp the situation, abide by the basic norms of international law and international relations, stop interfering in Hong Kong affairs and advancing or implementing this negative bill. Otherwise we will take strong countermeasures and they have to bear all the consequences.”

China’s move to impose the security law risks reshaping the financial hub’s character 23 years after Beijing took control of the former British colony. The law’s vague language generated confusion about what activities were allowed, adding uncertainty for some businesses that have operations in Hong Kong in part because of its independent British-inspired legal system.

For more on Hong Kong unrest:
  • China-Sanctions Bill on Hong Kong Law Passed by U.S. House
  • Hong Kong Faces Arrests, Confusion, Despair After China Shock
  • Xi’s Hong Kong Power Play Puts China Ever More at Odds With West
  • U.K. to Give Hong Kong Nationals Way Out After China Crackdown
  • What Are the New Laws China Has Passed for Hong Kong?: QuickTake

The U.K. has offered to upgrade the status of British National (Overseas) passport holders in Hong Kong to offer a path to citizenship. Some 350,000 residents hold BNO passports and another 2.5 million of the city’s 7.5 million people are eligible for them.

“China strongly condemns that and reserves the right to make further reactions,” Zhao said, adding that all BNO passport holders were Chinese citizens. “All the consequences shall be borne by the U.K. side.”

Prime Minister Boris Johnson said Wednesday that the new law flouted the 1984 treaty between the U.K. and China, which laid out the “one country, two systems” principle that underpins Hong Kong’s autonomy. When the U.K. first made the proposal earlier this year, China accused it of meddling in internal affairs.

“Before Hong Kong’s return to China, the British side clearly promised that they would not grant residence permits to the BNO holders,” Zhao said. Now the U.K. “obstinately changed its policy and introduced a new route for residence permits and citizenship for regular people in grave violation of its own promise, international law and basic norms governing international relations.”

Australian Prime Minister Scott Morrison said Thursday that his cabinet was “very actively” considering offering citizens safe haven, but didn’t provide further details. Zhao urged Australia to “stop moving further down the wrong path.”

Chinese officials on Wednesday described the law as a “sword of Damocles” hanging over the heads of its most strident critics. Its provisions, sketched out in 35 pages, went beyond what was expected by democracy advocates and even pro-Beijing politicians, raising fears among Hong Kong’s residents over what impact it will have on free speech and political activities, including the ability to protest.

Despite the opposition, Zhao defended the legislation, calling it “a burglar proof door for Hong Kong.”

“We’re sure it will help getting Hong Kong back on the track where it is properly named the Pearl of the Orient,” he said. “We have every confidence in this.”

— With assistance by Colum Murphy, and Karen Leigh

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U.S. Readies Sanctions on China Over Rights Abuses in Xinjiang

The U.S. is preparing to roll out long-delayed sanctions to punish senior Chinese officials over human-rights abuses against Muslims in Xinjiang, two people familiar with the matter said, part of a toughening of the Trump administration’s stance toward Beijing.

The sanctions are likely to target Communist Party officials responsible for the internment and persecution of minorities in Xinjiang, according to the people, though they declined to say who specifically would be cited or when the sanctions would be rolled out.

The administration is acting under the 2016 Global Magnitsky Human Rights Accountability Act, which give the U.S. broad authority to impose human-rights sanctions on foreign officials. The sanctions were delayed amid negotiations over a U.S.-China trade deal, but President Donald Trump signed a law last month requiring him to punish officials responsible for oppression of Uighurs and members of other minority groups.

A State Department spokesperson declined to comment. A Treasury Department spokesperson said the Office of Foreign Assets Control doesn’t comment on possible or pending investigations, including to confirm whether or not one exists.

The two people cautioned that Trump would still need to give final sign-off for any sanctions to go ahead. In the past, he has delayed or frozen sanctions for fear they would jeopardize trade talks or sour his relationship with Chinese President Xi Jinping, Russian President Vladimir Putin or North Korea’s leader, Kim Jong Un.

U.S.-China ties have soured badly in the months since the “phase one” trade deal was signed, while the coronavirus pandemic made many of its elements moot. Trump administration officials have at the same time ramped up their criticism of the Chinese Communist Party over its human-rights abuses, including in Xinjiang, and the erosion of political freedoms in Hong Kong.

Who Are the Uighurs and Why Is China Locking Them Up?: QuickTake

In a further sign of the U.S.’s determination to call China out over abuses in Xinjiang, the administration issued a new business advisory Wednesday warning companies about the risks of running their supply chains through firms which “engage in human-rights abuses, including forced labor in Xinjiang and elsewhere in China.”

The U.S. Congress has long sought to restrict American companies’ reliance on Chinese partners that rely on forced labor in Xinjiang.

Earlier this week, the Associated Press reported that China had subjected hundreds of thousands Uighur women and other minorities to forced sterilizations, abortions and pregnancy checks to slash birth rates in Xinjiang.

What Are the New Laws China Is Pushing for Hong Kong?: QuickTake

At a briefing on Wednesday, Secretary of State Michael Pompeo cited what he called “recent credible and deeply disturbing new reports” of forced sterilizations.

“This shocking news is sadly consistent with the CCP’s decades-long callous disregard for the sanctity of human rights,” Pompeo said, referring to the Chinese Communist Party.

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Asian Markets In Negative Territory

Asian stock markets are in negative territory on Thursday following the overnight sell-off on Wall Street as the spiking number of new coronavirus cases in several U.S. states dashed hopes of a quick economic recovery.

Adding to worries, the International Monetary Fund or IMF forecast a deeper recession for this year, saying it now expects the global economy to shrink by 4.9 percent in 2020, compared to a 3 percent contraction projected earlier.

The Australian market is declining, with the benchmark S&P/ASX 200 Index losing 73.40 points or 1.23 percent to 5,892.30, after touching a low of 5,856.70 earlier. The broader All Ordinaries Index is lower by 74.10 points or 1.22 percent to 6,007.50. Australian stocks closed modestly higher on Wednesday.

Among the major miners, BHP and Fortescue Metals are declining more than 1 percent each, while Rio Tinto is down almost 1 percent.

Gold miners are also weak as gold prices declined overnight. Evolution Mining is losing more than 2 percent and Newcrest Mining is lower by more than 1 percent.

The big four banks – Westpac, National Australia Bank, ANZ Banking and Commonwealth Bank – are lower in a range of 1.2 percent to 2.1 percent.

Oil stocks are lower after crude oil prices tumbled overnight. Oil Search is falling more than 3 percent, while Woodside Petroleum and Santos are losing more than 2 percent each.

Qantas Airways said it will cut at least 6,000 jobs and stand down 15,000 employees as part of a restructuring plan due to the COVID-19 pandemic and it also plans to raise A$1.9 billion through a share sale. The airline’s shares are in a trading halt ahead of the share sale.

Digital employment platform SEEK said that online job advertisements on its platform increased by 21.9 percent for the fortnight ended June 21. The company’s shares are lower by almost 1 percent.

In the currency market, the Australian dollar is lower against the U.S. dollar on Thursday. The local unit was quoted at $0.6855, compared to $0.6941 on Wednesday.

The Japanese market is notably lower, with the benchmark Nikkei 225 Index losing 227.85 points or 1.01 percent to 22,306.47, after touching a low of 22,246.78 in early trades. Japanese shares closed modestly lower on Wednesday.

Market heavyweight SoftBank Group is adding 0.2 percent, while Fast Retailing is declining more than 1 percent.

The major exporters are lower despite a weaker yen. Panasonic is losing almost 3 percent and Mitsubishi Electric is lower by almost 2 percent, while Sony and Canon are declining more than 1 percent each.

In the tech space, Advantest is lower by more than 1 percent and Tokyo Electron is down 0.2 percent. Among automakers, Honda is down almost 3 percent and Toyota is declining more than 2 percent.

In the oil sector, Inpex is losing almost 2 percent and Japan Petroleum is lower by more than 1 percent after crude oil prices fell overnight.

The Nikkei reported that telecom conglomerate Nippon Telegraph & Telephone or NTT will acquire a 5 percent stake in electronics company NEC Corp. for about 60 billion yen, as part of a tie-up to develop 5G wireless technology. Shares of NTT are down 0.3 percent, while NEC Corp.’s shares are rising more than 3 percent.

In economic news, Japan will see April figures for its all industry activity index today.

In the currency market, the U.S. dollar is trading in the lower 107 yen-range on Thursday.

Elsewhere in Asia, South Korea, New Zealand and Singapore are all declining more than 1 percent each, while Malaysia is down almost 1 percent and Indonesia is also lower. The markets in China, Taiwan and Hong Kong are closed on Thursday for the Dragon Boat Festival.

On Wall Street, stocks closed sharply lower on Wednesday as it seemed traders could no longer ignore the spiking number of new coronavirus cases in several U.S. states. Fueling the renewed concerns, Florida and California both reported their single biggest daily increases in new cases of COVID-19. Florida’s Department of Health confirmed 5,508 new cases on Tuesday, while the California Department of Public Health reported an additional 7,149 cases.

The Dow plummeted 710.16 points or 2.7 percent to 25,445.94, the Nasdaq tumbled 222.20 points or 2.2 percent to 9,909.17 and the S&P 500 plunged 80.96 points or 2.6 percent to 3,050.33.

The major European markets also showed substantial moves to the downside on Wednesday. The German DAX Index plunged by 3.4 percent, while the U.K.’s FTSE 100 Index and the French CAC 40 Index tumbled by 3.1 percent and 2.9 percent, respectively.

Crude oil prices declined sharply on Wednesday as worries about the outlook for energy demand rose after data showing a surge in coronavirus cases raised the possibility of another lockdown in several parts of the globe. WTI crude for August delivery plunged $2.36 or 5.85 percent to $38.01 a barrel.

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