Roy escribió: ↑
Otro -4% de Chaina y los mecardos ni mu. Cuentense otro
While You Slept
Beijing's intense regulatory crackdown on their own companies continued on Tuesday, driving the Hang Seng Index down another 4.22%, and the Shanghai Composite down 2.49% in addition to mounting losses that have been piling up since Friday.
The mainland government has now implemented aggressive reforms targeting technology, real estate and education companies, forcing not just Chinese money out of their domestic marketplace but foreign investment to flee Chinese markets, which includes ADRs of Chinese companies listed in the U.S.
To say sentiment is taking a beating would be an understatement. Who or what is next? That is the question.
While stated reasons for such a crackdown on profitability are plenty, Beijing has announced enforcement measures to "protect" public safety, financial stability, "promote" social welfare, and restrain rising home prices.
What would provoke a nation to target its own industries, or its own companies? One thing is clear. As I have stated and written for probably several years now,
you own Chinese stocks at your own risk. Understand that no one owes you or even pretends to owe you a thing. There will be no respect for what you think is your property or your rights from that corner of the world.
Power will certainly be valued more highly than what we see as corporate rights. Those who appear to grow in popularity or prestige in their own spheres risk what they have. Hence, U.S. faves such as Alibaba (BABA) and Tencent Holdings (TCEHY) saw their U.S. issues sell off 11.4% and 14.2%, respectively, from their Thursday highs into Monday's close. If Asian markets are any indication, those shares will open lower still on Tuesday morning. It looks like Tencent Holdings has fallen another 9%, and Alibaba another 7% in Hong Kong.
Beijing's domestic aggression has roiled some global markets again on Tuesday. Once again, investors from outside the U.S. sought safe haven in the U.S. dollar, and the Japanese yen as well as U.S., U.K. and German sovereign debt.
Obviously, mainland Chinese businesses are not in control of their own destiny and cannot be seen as viable as their own government harpoons profitability -- unless the companies themselves are run by that government. In either case, for you and I, they are not investable. Why we in this nation ever allowed Chinese businesses to raise capital, our capital on our shores, is beyond me.
Lesson learned? One would hope. If they come back for some more dough after this, then you know that they think you and I are either stupid or greedy. Well, I know you're not stupid.
