Investing in Chinese firms listed in the U.S. is like ‘playing fantasy football,’ says Hayman Capital
Investing in U.S.-listed Chinese companies is equivalent to playing “fantasy football” as U.S. regulators continue their audits into the firms, according to an asset management firm.
Kyle Bass, founder and CIO of Hayman Capital Management, said recent reports of the U.S. Public Company Accounting Oversight Board gaining “good access” to requested information have yet to be confirmed, and reiterated the financial risks that investors of U.S.-listed Chinese companies face.
“They own a stock that has a claim to a Cayman Islands subsidiary that has no voting rights, and no access to assets in the event of a bankruptcy,” he told CNBC’s “Street Signs Asia,” when asked if Chinese stocks in the U.S. were “investable.”
Chinese companies listed overseas, such as Alibaba and JD.com, use a variable interest entity structure, in which an offshore entity is set up, bypassing Chinese restrictions on foreign investment and preventing investors in the U.S. stock from having majority voting rights.
The U.S.-listed firm is commonly a holding company formed outside both the U.S. and China, and may not own stock in the China-based company.
“Investors really are just playing fantasy football with the Chinese companies because they actually don’t own anything,” he said.
— Jihye Lee
Shares of Indonesia’s GoTo fall 6% after company reports nine-month losses
Indonesia’s GoTo Group posted a higher nine-month accumulated loss compared to the same period a year ago, even though quarterly losses shrank with cost cuts.
Losses between January and September were 20.32 trillion rupiah ($1.29 billion), nearly double the 11.58 trillion rupiah loss reported a year ago.
Its share price fell 6% Tuesday morning in Jakarta, and marks a 48% decrease in share price since its listing in April this year.
The company announced last Friday to cut jobs as part of wider cost-cutting plans, which it expects to be reflected later in 2023, it said.
– Sheila Chiang
Malaysian kingmaker party GPS will support Perikatan Nasional, not Pakatan Harapan
One of the Malaysian election’s kingmakers Gabungan Parti Sarawak (GPS), a Sarawak-based national political alliance in east Malaysia, said it was supporting the Perikatan Nasional coalition to form government and would not work with Anwar Ibrahim’s Pakatan Harapan.
Malaysia’s king has asked leading coalitions to submit their prime minister candidates by 2 p.m. local time, after Saturday’s election was inconclusive.
“We have always been said [sic] that we will not be able to work with DAP here and also Pakatan,” GPS Secretary-General Alexander Nanta Linggi told CNBC’s “Squawk Box Asia.” DAP is a progressive component party of Pakatan.
“In the last few days during the election, they were attacking us so much. So it’s rather hard … to form government, to be very objective in that sense.”
In return for GPS’s support, Linggi said it would like the government to give the party members positions in ministries that matter to them, such as rural development and commodities.
— Su-Lin Tan
CNBC Pro: Amazon’s down 40% this year — is it time to buy? Market pros give their take
Once a Wall Street darling, Amazon has lost some of its luster this year. The e-commerce giant’s stock has fallen more than 40%, well underperforming the S&P 500, which has declined about 15% in the same period.
Is it time for investors to pile back in? Two market pros faced off on CNBC’s “Street Signs Asia” on Thursday to make a case for and against buying the stock.
— Zavier Ong
Baidu, Kuaishou shares fall ahead of earnings report
Baidu is expected to see a slight drop in revenue in the third quarter of 2022, a mean of estimates from a Refinitiv poll showed.
The company is expected to see a 0.05% drop in revenue to 31.904 billion yuan ($4.46 billion) for the July to September quarter, after it reported 31.92 billion yuan for the same period a year ago.
Meanwhile, Tiktok rival Kuaishou is expected to see a 10.2% growth in revenue for the third quarter to 22.58 billion yuan, a separate Refinitiv poll indicated — which would be the slowest pace of yearly growth since the company started reporting earnings.
CNBC Pro: Morgan Stanley’s Wilson says inflation is set to slide, but warns of a ‘new era’ ahead
Morgan Stanley’s Chief U.S. Equity Strategist Mike Wilson said he expects a “pretty steep decline in inflation,” and predicts when this could happen.
But he said there are two areas that are exceptions, where inflation could be “stickier.”
— Weizhen Tan
Oil prices flat after hitting lowest levels since January
Oil prices were little changed in Asia’s morning after reaching its lowest levels since January on Monday.
U.S. crude was fractionally higher at $80.08 per barrel after touching $75.08 in Monday’s session.
Brent crude gained slightly to $87.52 per barrel. It hit $82.31 in the previous session.
Oil futures briefly plunged on Monday after the Wall Street Journal reported OPEC+ was considering increasing supply by 500,000 barrels per day. Saudi Arabia later disputed that report.
— Abigail Ng
Singapore authorities explain why FTX wasn’t on its alert list
The Monetary Authority of Singapore (MAS) said embattled cryptocurrency exchange FTX was not on its investor alert list because it was not “actively soliciting users in Singapore,” in contrast to rival exchange Binance.
The MAS said there is a “clear distinction” between FTX and Binance in terms of targeting local users, according to a statement released Monday afternoon.
“Binance in fact went to the extent of offering listings in Singapore dollars and accepted Singapore-specific payment modes such as PayNow and PayLah,” it said in the statement, adding that it had received numerous complaints about Binance between January and August last year.
The MAS went onto reiterate the risks that investors face when trading digital assets.
“The most important lesson from the FTX debacle is that dealing in any cryptocurrency, on any platform, is hazardous,” it said, adding even Singapore-licensed crypto exchanges would be regulated solely to address risks on money laundering, and not to provide protection to investors.
“As MAS has repeatedly stated, there is no protection for customers who deal in cryptocurrencies. They can lose all their money,” it said.
– Jihye Lee
Stocks fall Monday to start short holiday week
Stocks slipped Monday in a volatile trading session to kick off the short holiday week.
The S&P 500 shed 0.39% to 3,949.94 and the Nasdaq Composite fell 1.09% to end the day at 11,024.51. The Dow Jones Industrial Average fell 45.41 points, or 0.13%, to 33,700.28, though losses on the index were mitigated by a jump in Disney shares, which surged more than 6%.
Disney jumped after the company announced that former CEO Bob Iger would replace Bob Chapek.