#Interview #MuddyDirtyWater

Financial writer Muddy Dirty Water: Money for blood, Hong Kong dried up. Now it's "keep the island, not the people"

Now that the national security law is passed, the stock market is actually thriving?

(11 Jul) After the enactment of the national security law, Hong Kong's stock market stayed bullish. Government officials presented this as proof that the "Hong Kong doomsday theory" was untrue. As an investor, what does Muddy Dirty Water [pen name] think? Why has the economy not been affected at all?

//the implications of 'keep the island, not the people' are getting stronger

//It's common knowledge that China's economic indicators aren't trustworthy.

//'street-stall economy'... actually means opening up the black market and sex industry again so that they become a part of the GDP. It's apparent that the situation isn't great.

//Hong Kong actually is a platform for Chinese capital

//The accountants' firms will also suffer because they're stuck between their clients and the Securities and Futures Commission... exposing falsified figures from private enterprises would become a violation of the national security law.

//how does China control private enterprises? It's through inserting the Party's provisions into the company's article of association (AoA).

//The renminbi is not internationally convertible... China's easiest way to get US dollars is from Hong Kong. This is Hong Kong's use for China.

//It's just like in 1997 when the British capital withdrew and Hong Kong capital stepped onto the plate. It's like the Second Handover: Hong Kong capital is now leaving and China's is coming up.

//With these sweeping policies, even if you didn't retreat, your money would run dry.

Full translation:
https://telegra.ph/Financial-writer-Muddy-Dirty-Water-Money-for-blood-Hong-Kong-dried-up-Now-its-keep-the-island-not-the-people-07-29

Source: Stand News
Translated by: Hong Kong Echo

Further reading:
HSBC takes to WeChat social network to deny ‘framing’ Huawei in US investigations as it comes under attack in Chinese media
https://www.scmp.com/business/banking-finance/article/3094702/hsbc-takes-chinas-social-media-defend-its-collaboration-us

#NationalSecurityLaw #StockMarket #SecondHandOver #Capital #Finance #USDollars #ChineseCompanies

Arm China CEO refuses to quit after removal by headquarters, accused of "creating a culture of fear"

In June this year, the UK-based chip designer Arm Ltd and the Chinese private equity firm Hopu Investments attempted to oust Arm China CEO, Allen Wu, after complaints of serious irregularities in his conduct.

Arm China published an open letter on Weibo accusing Arm Ltd of "threats and harassment" and attempting to cut Arm China's contracts with its business partners. It requested that the Chinese government intervene. In response, Arm Ltd blamed Wu for "propagating false information and creating a culture of fear and confusion among Arm China employees. It claimed that he "attempted to block the critical communication and support our China partners require from Arm for ongoing and future chip designs".

Wu currently owns 13.3% of Arm China's shares and has close ties with Huawei. He still holds the company's official seal and has used it to cancel his dismissal. Lawyers working closely with Arm China have expressed that China's complex seal system deterred confidence in foreign investors.

Sources: Yahoo Finance, (28-Jul); Apple Daily, (30-Jul); Reuters, (29-Jul)

Credit: Hong Kong Echo

#ArmLtd #Hopu #AllenWu #Finance #harassment #China

#Economy #Audit #Finance #ChinaPolicy #ChineseCompanies #US
#Trump Administration Advisors: Chinese Companies Must Comply with US Audit Requirements by 2022 or Risk Getting Delisted

Source: Stand News #Aug07
#TreasurySecretary #Mnuchin
#PublicCompanyAccountingOversightBoard #PresidentWorkingGroups

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https://t.me/guardiansofhongkong/24299

#Economy #Finance #Audit #ChinaPolicy #ChineseCompanies #US
#Trump Administration Advisors: Chinese Companies Must Comply with US Audit Requirements by 2022 or Risk Getting Delisted
 
The Trump administration advisers have proposed to President Trump that Chinese companies shall lose their listings on the US stock markets if they do not comply with US audit requirements by 2022.
 
The US Senate has already passed a bill in May 2020 requiring the Public Company Accounting Oversight Board (#PCAOB) to audit foreign listed companies.  If the relevant companies fail to comply for three consecutive years, the companies will be forced to give up their listings. The Wall Street Journal has reported that the President’s Working Group (#PWG) on Financial Markets, chaired by Treasury Secretary Mnuchin, has announced at a briefing on August 6th that they have completed a report on how to protect American investors.  At the briefing, the officials from the treasury department stated that Chinese companies currently listed on the US exchanges must disclose their accounts to the PCAOB, and that Chinese companies will be delisted from US stock markets if they fail to meet these audit requirements by 2022.  In other words, Chinese companies currently listed in the US still have more than a year to prepare their audits. 
 
According to a Reuters report, Chinese companies preparing to go public on the US exchanges must comply with the new audit regulations.  The report also states that Chinese firms can opt for a “co-audit” through U.S. accounting firms with China-based affiliates.
 
Source: Stand News #Aug07
#TreasurySecretary #Mnuchin
#PublicCompanyAccountingOversightBoard #PresidentWorkingGroups

https://thestandnews.com/finance/%E8%8F%AF%E5%BA%9C%E9%A1%A7%E5%95%8F-%E5%88%B0-2022-%E5%B9%B4%E4%BB%8D%E6%9C%AA%E7%AC%A6%E7%BE%8E%E5%AF%A9%E8%A8%88%E8%A6%81%E6%B1%82%E7%9A%84%E4%B8%AD%E8%B3%87%E4%BC%81%E6%A5%AD%E8%A6%81%E9%99%A4%E7%89%8C/

HSBC Reportedly Stops Posting on Social Media amid Scandals to Avoid Criticism

Having recently been implicated in such scandals as potentially being named in China’s list of unreliable entities, according to state media, and having processed funds associated with a Ponzi scheme, HSBC Holdings (0005) has instructed its employees to stop actively posting on social media platforms other than to respond to customer inquiries to avoid criticisms, says Bloomberg.

Bloomberg quoted an internal memo from Tricia Weener, marketing head of the bank’s global commercial and investment banking section, as saying that in view of the recent news, the bank had decided to stop actively posting on social media other than to address customer inquiries. This was to avoid the negative reactions, she explained. The ban was to last until 11 am UK time, 22 September for the moment.

HSBC has dozens of social media accounts across the globe, providing information on financial services and promoting its products. In June 2020, a photo was uploaded to the bank’s WeChat account showing its vice chairman and CEO Peter Wong Tung-shun signing a petition in support of the Hong Kong national security law at a booth on the streets. The photo has since caused controversy.

Source: Stand News #Sep22

#HSBC #China #SocialMedia #Finance

https://bit.ly/2GcCheB

US State Department Reportedly Recommends Putting China’s Ant Group on Trade Blacklist

As US-China relations remain tense, sources have indicated to Reuters that the State Department had proposed placing Ant Group on the trade blacklist to the Trump administration ahead of its listing on the US stock market.

A financial technology firm, Ant Group is planning to be listed on stock markets in Shanghai and Hong Kong with an estimated market value of a record-breaking 35 billion US dollars. It is unclear at the moment as to when the US government will add the firm to its Entity List, but it is believed that this is a sign from hardliners in Washington that American investors should refrain from taking part in the firm’s initial public offering.

While the local law makes it difficult for US firms to sell high-tech products to companies on the Entity List, how this latest move actually affects China is still a matter of debate. Reuters noted that while telecom companies like Huawei may suffer from being blacklisted, placing a fintech firm on the list could be more of a gesture.

Source: Stand News #Oct15

#US #China #AntGroup #EntityList #TradeWar #Finance

https://bit.ly/34cR2Yu

Sri Lankan Minister Defends Another Loan from China, Says “China Happens to Have the Cash”

Sri Lanka is seeking a loan of 700 million US dollars (approximately 5.4 billion Hong Kong dollars) from China. As the opposition and dissidents expressed their concerns about the government’s reliance on China, the Minister of Money, Capital Market and Public Enterprise Reform Minister Ajith Nivard Cabraal defended the loan by saying that it was because “it’s China that happens to have the cash now.”

In an interview with The Hindu, Cabraal said, “In different times in world history, different countries have been the ones who have had the most amount of cash. And now it happens to be China, so China will naturally invest all over the world.…I think we should all respect that.”

Despite the International Monetary Fund’s (IMF) estimate that Sri Lanka’s GDP would shrink by 7% this year due to the Wuhan virus pandemic, Cabraal was optimistic about the financial situation in Sri Lanka. He said that the country was seeking different ways to repay its debts, including getting more loans from China, securing a currency swap mechanism with China and India, and issuing samurai and panda bonds.

The Director of the CCP’s Central Foreign Affairs Commission Yang Jiechi is visiting Sri Lanka this month. Following the 500 million US dollars (approximately 3.9 billion Hong Kong dollars) that China gave Sri Lanka just this March to fight the Wuhan virus, the South Asian country is discussing another loan with the Chinese delegation. The country has so far borrowed over 5 billion US dollars (approximately 38.8 billion Hong Kong dollars) from China.

#SriLanka #China #AjithNivardCabraal #YangJiechi #Finance #Diplomacy #WuhanVirus #COVID19 #Pandemic

Source: Apple Daily #Oct20

https://bit.ly/2IZzZkv

According to reports, the Australian Ministry of Financial has rejected the Chinese state-owned enterprise China State Construction Company’s acquisition of an Australian construction company in response to national security risks 
 
China state-owned enterprise China State Construction Group planned to acquisition Australian Construction Company Probuild up to 300 million USD, which is 23.4 million HKD. However, Australian Finance Minister Josh Frydenberg and Foreign Investment Review Committee believed that the trade may constitute risks of national security in Australia. This is not in the interests of Australia, the Australian Federal Government will veto the transaction, and China State Construction will eventually cancel the acquisition.  
 
According to ABC, South African parent company of Probuild Wilson Bayly Holmes-Ovcon (WBHO) confirmed to the local media, China State Construction already cancel acquisition. The reason is Frydenberg, and Foreign Investment Review Committee thought that the trade is harmful to national security, so that Australian Government rejected the trade. WBHO also stated, they already communication with potential acquirer in very long time, both had reached consensus, but the transaction fell through.  
 
Australian Financial Department had not response to report and indicated to not commenting on foreign investment review arrangements. Australian Acting Prime Minister McCormack confirmed that China Construction withdraw the acquisition but said it could not disclose the reason for the rejection of foreign investment review.  
 
Source: Stand News #Jan12
 
 https://bit.ly/33sXZU9
 
#Australia #NationalSecurity #China #Construction #Finance #Risk #Probuild #WBHO 

#FailedState #1C1S
#CarrieLam is unable to confirm whether Beijing has issued a new mandate to “Regularize” Real Estate in Hong Kong

Hong Kong's #ChiefExecutive Carrie Lam met the media before attending the Executive Council meeting on the morning of September 21, 2021 and was asked about a Reuters report published the previous Friday, Septrmber 17, 2021, regarding Beijing’s pressure on Hong Kong property developers.

At first, she said that “I cannot confirm nor comment on this since they are all rumors.” She followed by saying that Beijing is very concerned about the livelihood of Hong Kong people. After they have “improved” the election system, they hope to enhance the effectiveness of the SAR’s governance. “After improving its effectiveness, of course they would want to help solve problems for the public.”

She added that the housing issue has been substantially adjusted by the current government, and now the remaining issue is the land issue.

“The current issue is a land problem. It is true that the developers have some privately own land, but when it is necessary, public powers can be exercised to recover some of these lands to develop public housing. Thus, solving a problem that has been bothering the city for a long time.”

#Beijing #RealEstateMandate
#Economy #Finance #PropertyMarket #HongKongMarket #CCPRules

Source: Stand News #Sept21
https://bit.ly/3m0SV2n

#Evergrande and other Chinese property giants have sizeable off-balance sheet debt: #JPMorgan

//Investment bank JPMorgan has estimated that troubled Chinese property giant Evergrande and many of its major rivals have billions of dollars worth of off-balance sheet debt that, once added on, ramp up their leverage ratios.

"Instead of true deleveraging, we think Evergrande has shifted some of the interest-bearing debt to off-balance sheet debt," JPMorgan's analysts said. "Commercial papers, wealth management products and perpetual capital securities, etc, which are not officially counted as debt."

They estimated Evergrande's "net gearing," as debt as a ratio of a firm's equity is known, was at least 177% at the end of the first half of the year, instead of the 100% its accounts reported.

"It is possible that the real gearing could be even higher, as data on some off-balance sheet debt is not publicly available," JPMorgan added, saying the "disguised" debt as it called it added up to 55% of Evergrande's overall debt.

Other major firms whose gearing levels were likely to be higher than formally reported included R&F Properties (2777.HK) at 139% versus the 123%, #SunacChina Holdings (1918.HK) at 138% versus 87% reported and #CountryGarden (2007.HK) at 76% versus 50% reported.//

Source: Reuters #Oct7

https://www.reuters.com/business/finance/evergrande-other-chinese-property-giants-have-sizeable-off-balance-sheet-debt-2021-10-07/

#PropertyAnalysis #Economy #Finance #CCPRules #Debt #ChinaMarket #Bubble