Shareholders in some Chinese companies have cashed out more than US$1 billion from their holdings in the past week, taking advantage of improving market conditions brought on by an adrenaline shot to the country’s economy.
Internet investing firm Prosus NV has sold its entire stake in online travel agency Trip.com (攜程) in a US$743 million block trade, while entities tied to DCM Ventures LLC sold their entire stake in Kuaishou Technology (快手) for US$477 million. A group of pre-initial public offering holders of Sichuan Kelun-Biotech Biopharmaceutical Co (四川科倫博泰生醫) also raised US$49 million.
“The market has proven the ability to take big deals,” said Edward Byun, co-head of equity capital markets for Asia excluding Japan at Goldman Sachs Group Inc.
Photo:AFP
The share sales come as the Chinese government is rolling out more measures to help the economy. The country is considering injecting up to 1 trillion yuan (US$142 billion) of capital into its biggest state banks to increase their capacity to support the struggling economy, while China’s central bank this week cut a key short-term interest rate and announced plans to reduce the amount of money banks must hold in reserve to the lowest level since at least 2018.
The benchmark CSI 300 Index of Chinese stocks gained for a seventh straight session Thursday. Hong Kong’s Hang Seng Index has risen by roughly 17 percent this year.
Secondary share sales in Chinese companies have raised US$6.4 billion this year, according to data compiled by Bloomberg. That eclipses the US$2 billion and US$3.5 billion raised in all of 2022 and last year, respectively.
The recent deals came about a month after Walmart Inc unwound its eight-year partnership with Chinese e-commerce company JD.com Inc (京東), selling its entire holding for US$3.6 billion.
Foreign investors pulled a record amount of money from China in the second quarter of this year, likely reflecting deep pessimism about the world’s second-largest economy. The slowdown in China and rising geopolitical tensions have led some companies to reduce their exposure.
Chinese President Xi Jinping (習近平) and other top leaders admitted yesterday that the country was facing new “problems” and vowed to resolve a long-running crisis in the housing sector.
“Some new situations and problems have emerged in the current running of the economy,” Xinhua news agency reported after the ruling Chinese Communist Party convened a meeting of its top body, the Politburo, which was attended by Xi.
“We must view the current economic situation comprehensively, objectively and calmly, face difficulties squarely, [and] strengthen confidence,” it added.
Politburo members agreed on the need to “further improve the focus and effectiveness of policy measures” aimed at lifting the economy.
They also vowed to “respond to the people’s concerns” about the economic malaise.
Beijing would “adjust housing purchase restriction policies, lower interest rates on existing mortgage loans... and promote the construction of a new model for real estate development,” Xinhua said.
The state media readout suggested that more substantial support for the economy might be on the way, Capital Economics Ltd head of China economics Julian Evans-Pritchard said in a note.
“But concrete details are lacking and so it’s difficult to judge the scale of any additional fiscal support at this stage,” he said.
Additional reporting by AFP
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS