Tag: China

  • Beijing-Shanghai High-Speed Railway Plans IPO

    Beijing-Shanghai High-Speed Railway Plans IPO

    Beijing-Shanghai High-Speed Railway Co that plans IPO

    Beijing-Shanghai High-Speed Railway Co that plans IPO reveals a company is more profitable than Apple
    Net profit scores 9.5 billion yuan ($1,34 billion), signifying a margin of 38%

    Beijing-Shanghai High-Speed Railway Co has requested to be listed on the Shanghai stock market.
    The company has filed an official application to enter the stock market. Now, the details about its operations are revealed. The company gained a net profit of $1.3 billion from the beginning of this year, which is a margin of almost 38% on the company’s revenue in the same period. This report shows them more profitable than Apple Inc, for example. The filing is published on Friday. Beijing-Shanghai High-Speed Railway Co covers the 1,300km line, made a net profit of $1.3 billion.

    The lucrativeness of the Beijing-Shanghai line shows how great success can be made with high-speed rail networks. This company’s trains drive at speeds of up to 350km/h which is about 217miles per hour. Thanks to these trains the distance between Shanghai and Beijing is possible to travel in 4,5 hours. The trains are comfortable and luxury. Last year this line transported more than 190 passengers which is approximately 6% of all high-speed rail users in China. From the beginning of this year, an average occupancy rate is 80%. The ticket costs are in a span of $78 (553 yuan) for the class of the standard seat up to $130 for the first class. 

    China’s railway efforts

    Despite the progress of this high-speed line, China Railway had a net loss of almost $29 million in the first 6 months of this year. Also, it reported notable debts of $0.75 trillion.
    The undivided attention is brought by Beijing-Shanghai’s IPO now.
    Analysts think that its planned initial public offering will be popular due to its good financial condition and prospects. For a long time, none of the Chinese railway companies didn’t show interest to be listed in the market. So, this easily could be a good sign for the industry’s presence in the market.

    The company stated in its filing it is positive about the future. The reason is clear. This route is most active and provides a potential for increasing traffic and more profit. The downside is that the company might be influenced by volatility in the macroeconomy.

    Beijing-Shanghai High-Speed Railway Co has 67 employees. Also, it has assets of $26.48 billion and liabilities of $3.82 billion. But this ratio of 14, 4% is not bad in comparison to the 65% average for China’s rail drivers. The biggest shareholder is China Railway, followed by Ping An Asset Management and China Social Security Fund, the company stated in its filing.

    The China Securities Regulatory Commission (CSRC) revealed the filing information on its website. CSRC showed it received the company’s planned PO on Oct. 22.

    China’s railway investment was stable in the first 8 months of this year.

    How to invest in China stocks

    There is a lot of logic to get portfolio exposure to China but it isn’t easy. There are risks and challenges.

    For example, if you want to buy stocks listed on Chinese exchanges, first check if your local brokerage will allow it. The Chinese exchanges may ask you to open a brokerage account with some Chinese companies.

    You can find a lot of Chinese stocks listed on US exchanges through ADRs. Those are certificates issued by American banks for shares of foreign stocks. In this way, foreign companies share are available to American investors. Or you can buy shares in ETF Another possibility is to buy stocks traded over the counter or on “pink sheets.” You will notice that their tickers have “OTC” or ÖTH” in the symbol included. These stocks have tickers that include “OTH” or “OTC”.

     

  • Trade War Spillover In The Stock Markets

    Trade War Spillover In The Stock Markets

    3 min read

    Trade War Spillover In The Stock Markets

    The U.S. Treasury announced in a Saturday statement that the administration “is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time.”  Following this news, Dow Jones futures grew a bit on Sunday evening, the same happened with S&P 500 futures and Nasdaq futures.

    Only one day before, Bloomberg reported the Trump administration is thinking about limiting the exposure of US investment to China. Such a decision would have an impact on public pension funds’ exposure to China’s market and limitation for Chinese companies in main stock indexes.

    The information about delisting Chinese stocks from U.S. exchanges frightened investors. The consequences of the trade war spillover were that Alibaba stock dropped 5.1%, slipping through its 50-day and 200-day moving averages. JD.com stock dropped 6% to a bit over its 200-day.  Two Chinese IPOs, Pinduoduo slipped 4.2% and Huya stock 9.4% due to trade war spillover. New Oriental Education stock, dropped 6.55%, which is under its 50-day line.

    Beijing described possible limitations on U.S. investments in China “the latest attempt at a decoupling,” published in Global Times on Sunday. All reports of Chinese state-owned media stated that the delisting Chinese companies from US stock exchanges would have deep impact on both, Chinese and US economies.

    Don’t miss this: Trading With Success – A FULL guide for beginners

    Monica Crowley’s, U.S. Treasury assistant secretary for public affairs, stated this weekend that US administration is not thinking to block Chinese companies: “We welcome investment in the United States.”

    The trade war between the US and China lasts almost one year. The next round of discussions will be held one week after China’s National Holiday, 70th anniversary of the founding of the People’s Republic of China on October 1.

    The Chinese economy is the second-largest in the world. Its progress in the field of artificial intelligence and chips is notable. Also, robotics, 5G, energy storage could lead China to be the most powerful in advanced technologies.

    What to watch in the stock market in the week ahead?

    The next few days will produce some earnings releases, which could give some individual stocks moving. 

    Costco

    Market Cap $125.758B

     

    Its earnings report appear this week. It looks that Costco had benefit throughout the quarter. The analysts estimated they have earnings of around $2.54 per share. Last year it was $2.36. So, the expectations are a 7.6% increase.

    Costco will reveal its results on Thursday. The investors are expecting to see good news. This warehouse retailing giant has enjoyed a nice increase in customer traffic lately. In the fiscal fourth quarter, it grew 6% in the U.S. market and over its global sales.

    Stitch Fix 

    Market Cap $1.85B

     

    This company’s earnings release will be revealed on October 1.

    Its stock has dropped more than half of its value during the past 12 months. But this online service that gives clothing services has built solid annual income growth in the past 3 years. 

    Client numbers rose 16.6%  in the fiscal third quarter. This is, of course, assuming Stitch Fix keeps its pricing in check. The analysts estimate is calling for $0.04 per share this week. Good news for shareholders.

    Constellation Brands 

    Market Cap $39.511B

     

    The company’s earnings release will be public on October 3.

    The company has succeeded to keep a very constant sales trend within an alcohol industry. In the last 5 years, Constellation Brands has grown its earnings from sales. Its investment in Canopy Growth was a weak move since the Canopy didn’t show some good results this year. But the company’s beer segment may show better condition. For now, that is the best part of Constellation Brands’ business.

     

  • China Will Take Your Money

    China Will Take Your Money

    2 min read

    foreign investments in China

    No, China will not take your money away but will accept it after having removed quotas for foreign institutional investments and consequently limits for their clients.

    Almost 20 years after first opening its capital markets to foreign investments, on Tuesday, September 10 Chinese State Administration for Foreign Exchange (SAFE) has announced the removal of $300 billion caps on foreign investments under its Qualified Foreign Institutional Investment (QFII) scheme. 

    Foreign investments in China

    Similar cap for renminbi-denominated RQFII scheme has also been removed. Combined with last week’s lowering of reserve requirement ratios by China’s central bank, this move is aimed at increasing the liquidity of Chinese financial markets. Changes to QFII and RQFII schemes will greatly simplify the investment procedures for foreign companies by removing the application for quotas process. “[F]oreign institutional investors with corresponding qualifications will only need to go through registration procedure” according to the SAFE statement.

    This move is being lauded as a great improvement to the convenience of foreign investors’ participation in Chinese financial markets, and effort to make China’s bond and stock markets more widely accepted by international markets. 

    Analysts cautions

    Many analysts are cautioning that this move will not cause a flood of off-shore investments, pointing out to the fact that only $111 billions of QFII cap was used to date. The figure which stayed, for all intents and purposes, unchanged since the cap was increased from $150 billion. According to Adrian Zuercher, head of the asset allocation for the Asia Pacific at UBS Wealth Management, “cap was an important roadblock for institutional investors which has now been removed.”

    It must be said that this move is a continuation of efforts to remove red tape and ease foreign investments in financial markets. The process which started last year by removing the lock-in periods under QFII and RQFII schemes, and allowing investors to repatriate their funds at any time. Previously, funds which could be repatriated in one go were subject to very severe limits, which was a considerable obstacle for many institutional investors. With cases of repatriation approval process taking up to four months.

    Positive or negative

    This development comes in the atmosphere of uncertainty surrounding the US-China trade negotiations and trade war. Some analysts see it as a positive which underscores the fact that trade war has positive effects on China by accelerating its reform agenda more than was expected. Reforms geared toward giving overseas investors the same access to markets as to local players. Part of it was last January’s license approval to rating agency S&P Global for operating in China, the first such license granted to a foreign agency.

    Separately, the Chinese government is allowing foreign banks and insurers to take a controlling stake in their joint ventures. Till today, JP Morgan, UBS Group, and Nomura Holdings have won approval, while Goldman Sachs and DBS Group are currently waiting on it. Also last week Deutsche Bank and BNP Paribas were given regulatory approval for underwriting debt in China.

    Stabilizing effect on the Chinese economy

    These moves serve the purpose of opening China’s financial markets to foreign investment. But, most likely, will also have a stabilizing effect on the Chinese economy in the state of the trade war with the US. Having in mind global trade tensions and the US imposed tariffs having a draining effect on China’s foreign currency reserves, this move could strengthen China’s balance of payment by providing an inflow of foreign currency.

    You might be interested: Asian Stock Markets Perform Careful Increases

  • PlusToken The Biggest Scam In The Second Part of 2019

    PlusToken The Biggest Scam In The Second Part of 2019

    3 min read

    PlusToken The Biggest Scam

    PlusToken was a classic Ponzi Scheme. Its operations were held in Korea, but also in the Chinese market. How Traders-Paradise is sure it was a Ponzi scheme? 

    PlusToken was founded in 2018 and announced high returns at various discount percentages for most active members. What does it mean? To really have the right on rebate, members were obliged to bring more and more newcomers and then would climb to the higher levels. A classic Ponzi. 

    At the beginning of this year, those criminals declared to have more than 10 million members.

    OMG, how many naive people! Greedy? Just a false number? Everything is possible. The fact is that those scammers snatched $3 billion from their members. But despite the fact they escaped from the law, their website is still alive as much as their social networks accounts. 

    Okay, they didn’t have enough time to wipe off everything. More important is to save the neck and fat wallet.

     

    PlusToken The Biggest Scam
    “Mr. Leo”, the co-founder of PlusToken

    PlusToken scammed about 10 million investors of $3 billion. 

    Actually, withdrawals on PlusToken started to stumble in June. 

    The scammers declared some technical problems as the reason. For everyone with less greed, promises given from these scammers should sound impossible to be executed. What did they promise? Nothing! No investment strategy, no valuable information, only 6 to 18% returns per month plus referral commission.

    Recent research exposed PlusToken as scammers, who were acting outside the internationally used crypto social media. They were a lonely player succeeded to raise billions. On the illegal way. The police in China took some action but it wasn’t finished with arrests or investigation. 

    The criminals with an offer of exceptional earnings succeeded to fill their own wallets with a Bitcoins.

    Dovey Wan, the co-founder of Primitive Crypto and one of the more influential Twitter accounts, brought the PlusToken story to the attention of a wider audience. 

    How do they stay so long unrevealed?

    The essential reason is lack of communication and the existence of rivalry between Western and Chinese crypto-fans and exchanges.  

    The PlusToken actions were mostly ignored. The other reasons could be using different social media or the presence of language barriers. That held Asian investors to the hell. 

    These scammers were not modest.

    Only a few weeks ago just a few days before their escape, PlusToken announced that it’s expecting to have over 10 million members to the end of 2019. Two or three months earlier they said to have 3 million users. It is obvious that they boosted those numbers because they never showed any relevant evidence for those words. Moreover, they operated under the radar, you cannot find so many details or information about the people behind this scam. As we mentioned, at the beginning of this article, some co-founder is mysterious Mr. Lee. 

    Take a look at the image above again.

    When the scam was revealed messaging platforms reveals members who said they’ve lost up to $5,000. If you take a look at some tweets you will find some members from China who had contacted Hunan province police. How all of this will end is still unclear, but something has to be said: never be greed, use the proven exchanges and wallets with an excellent reputation. Every time when you notice that someone is offering you enormous returns, run away from such.

    At any time you can check if some exchange is good in Traders-Paradise’s WALL OF FAME
    The scammers are in our WALL OF SHAME

  • Asian Stock Markets Perform Careful Increases

    Asian Stock Markets Perform Careful Increases

    2 min read

    Asian stock markets recorded substantial increases

    • Asian stock markets recorded substantial increases

    Asian stock markets carefully raised in early trading Monday. The previous week was volatile for overall markets because the U.S.-China trade tensions escalated.

    According to Goldman Sachs, a trade deal is pretty much impossible before the 2020 US presidential election. This US multinational investment bank cautioned that the open-ended trade war has a bigger influence on the U.S. economy than expected. In a letter to investors, this bank lowered its growth forecast for the market movements. Also, it warned the risk of recession is growing. The reason behind is the companies are reducing spending which is, of course, caused by trade-war risks.

    Asian stock markets recorded substantial increases

    Yesterday, 11/08/2019 Monday, China’s central bank set the yuan lower than 7 per U.S. dollar. The value is the same for the past three days. The People’s Bank of China set the currency’s reference limit at 7.0211 per dollar. That is lower than the level on Friday. The analysts had expected an even lower point.

    According to MarketWatch:

    “Hong Kong’s Hang Seng Index HSI, -0.18%   gave up early gains and was last about flat, while the Shanghai Composite SHCOMP, +1.45%   gained 0.7%. South Korea’s Kospi 180721, +0.23%   advanced 0.4%, while Taiwan’s TaiexY9999, -0.21%   was about flat and Indonesia’s JSX Composite JAKIDX, -0.40%   declined slightly. Australia’s S&P/ASX 200 XJO, +0.09%   was little changed. Markets in Japan and Singapore were closed for holidays.”

    Some individual stocks like Sunny Optical and Tencent raised in Hong Kong, but HSBC 5 fell. Samsung and SK Hynix increased in South Korea, in contrast to Rio Tinto that slipped in Australia.

    President Donald Trump statement

    The increases in Chinese stocks followed the U.S. President Donald Trump statement on Friday that he is “not ready to make a deal.”

    “China wants to do something, but I’m not doing anything yet,” Trump told Breitbart. “Twenty-five years of abuse. I’m not ready so fast.”

    In Trump’s opinion, as he said, it would be “fine” if the negotiation between the two countries planned for September, were “called off”.

    Meanwhile, China fixed currency’s reference limit at 7.0211 per dollar which is lower than the 7 expected value.
    Some very important data will come on Wednesday from China.  On the first place, information on industrial production, retail sales,  and the jobless rate.

    That will be interesting because Cathay Pacific Airways Limited (HK:0293) fell more than 4% just because China blamed it that its employees participated in anti-Beijing protests. Well, the pilot is suspended.

    There is Huawei too

    President Trump told CNBC that the U.S. administration will not have any relations with Huawei as the trade war proceeds to increase.

    “We are not going to do business with Huawei. … And I really made the decision. It’s much simpler not doing any business with Huawei. … That doesn’t mean we won’t agree to something if and when we make a trade deal,” Trump told CNBC.

    Speaking about Asian stock markets we cannot avoid Chinese tech stocks.

    The accepted opinion is that they should lag the rest of the market. That opinion supports Ari Wald, head of technical analysis at Oppenheimer.

    “We think the opportunity is on the U.S. side — U.S. tech — and we think the risk is in China tech,” Wald stated on CNBC’s “Trading Nation. ” and added “the S&P 500 is breaking out to the upside. We see this as the resumption of U.S. leadership.”