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China markets round-up: Credit Suisse plans full control of China JV, Sina chair proposes Nasdaq exit, former CSRC head calls for delisting reform

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By Addison Gong, Rebecca Feng
10 Jul 2020

In this round-up, Credit Suisse is reportedly seeking a bigger share in its onshore securities joint venture, Weibo’s parent Sina Corp considers delisting from Nasdaq after two decades and the former head of China’s securities regulator said easier delistings would improve the stock market.


Credit Suisse wants to increase its stake in its onshore securities joint venture, Credit Suisse Founder Securities, to 100%, Asia Pacific chief executive Helman Sitohang told Reuters in an interview.

The Swiss bank secured blessing from the China Securities Regulatory Commission (CSRC) to take control of the JV in April. It appointed Janice Hu, who has been with the bank for nearly 20 years, to chair CSFS

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Sina Corp, which listed on the Nasdaq 20 years ago, received a take-private proposal from an entity controlled by its chairman and chief executive, Charles Chao, according to a Monday evening announcement. The entity holds 58% of the voting rights in the Chinese internet company.

Chao proposed to buy all the outstanding ordinary shares not owned by the entity, called New Wave MMXV, for $41 per share. The price represents a 11.8% premium to last Thursday’s close of $36.67.

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Some 84% of US companies are not planning to exit China, with 38% of them saying they will keep or even increase their investment in the country, vice foreign minister Le Yucheng said, quoting a recent survey by the American Chamber of Commerce in China.

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Xiao Gang, former chairman at the CSRC, has called for a reform in the delisting mechanism in China’s A-share market. This could help change the current low delisting rate in the country, leading to a market that is ‘naturally selecting’, Xiao said.

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The CSRC has named and shamed 258 funding platforms and accused them of conducting illegal margin lending, according to a Wednesday statement. Securities margin lending can only be done by licenced brokerages.

The crackdown came as the onshore stock market surged in recent days, renewing the appeal of these margin lending platforms.

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Blue Orca Capital published a short report on China Feihe on Wednesday, accusing the Hong Kong-listed infant milk formula producer of exaggerating its revenues over the past two years.

The short-seller said Feihe’s actual revenues are 49% less than reported in 2018 to 2019. It values the company’s shares at HK$5.67 ($0.73) compared to HK$15.82 at the Tuesday close.

Feihe considers the allegations to be “inaccurate and misleading”, it said in a Wednesday lunch time filing. The company expects an over 40% increase in its revenue for the first half of 2020 because of “the substantial increase in the sales volume of high-end infant milk formula”. Its stock price jumped after the statement, from an intraday low of HK$14.98 to close at HK$17.04.

The Chinese firm was also targetted by GMT Research in November last year, just days after it was listed in HK.

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The People’s Bank of China skipped repo operations this week. A total of Rmb290bn ($41.5bn) of reverse repos matured. 

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The China Banking and Insurance Regulatory Commission plans to conduct a survey of insurers to gauge the impact of first-half volatility ─ particularly concerning Covid-19 ─ on the industry’s solvency and risk positions.

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Nasdaq-listed Bilibili is considering a secondary listing in Hong Kong. The company has held initial talks with investment banks about the prospect, Reuters reported, citing two unnamed sources.

The Chinese video streaming platform is mulling a sale of 5%-10% of its shares, which could come as early as next year, the wire said.

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The retail sales of passenger vehicles in June exceeded 1.65m units, after a 2.9% recovery from the month before, according to the China Passenger Car Association (CPCA). That is still 6.2% lower than June 2019.

In the first six months of 2020, some 7.7m passenger vehicles were sold, representing a 23% year-on-year decline, CPCA data showed.

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China’s weekly State Council meeting, chaired by Chinese premier Li Keqiang, suggested more equity and debt financing to support the construction of water conservancy projects in China.

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China’s vice premier Hu Chunhua said the country must do everything it can to stabilise foreign trade and foreign capital, in a Thursday meeting.

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China has assigned Rmb1.26tr of special purpose bond quotas to provincial-level local governments, local newspaper 21st Century Business Herald reported, citing local funding officials.

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Didi Chuxing, one of China’s largest ride-hailing companies, is partnering with the People’s Bank of China, testing the central bank’s digital currency on its platform, local media Caixin reported, citing people familiar with the matter.

China’s version of digital currency is known as Digital Currency Electronic Payment (DCEP). In April, the central bank was reportedly conducting internal trials of DCEP in four cities with state-owned banks.

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Google has shut down its cloud initiative in China, Bloomberg reported, citing Google employees familiar with the matter. The project was called Isolated Region, which would have allowed Google to offer cloud services in countries with strict data regulations. 


By Addison Gong, Rebecca Feng
10 Jul 2020