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Analysis: Barriers to China-U.S. investments could outlast Trump – Reuters Canada

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HONG KONG/NEW YORK (Reuters) – President Donald Trump raised barriers for Chinese companies seeking to invest or raise money in the United States that will have a lasting impact even if he does not win a second term, according to dealmakers and policy experts.

FILE PHOTO: Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019. REUTERS/Aly Song

Chinese acquisitions of U.S. companies dropped to $1.86 billion last year, a tiny fraction of the $61 billion they totaled in 2016, when they were at their peak right before Trump came into office, according to Refinitiv data.

Chinese venture capital investments into the United States, which peaked in 2016 at nearly $15.7 billion, totaled just $6.7 billion as of Oct. 27, according to PitchBook data.

Foreign direct investment from China into the United States has declined by 90% to $4.7 billion so far this year compared to 2016, according to the Rhodium Group.

Much of this is the result of Trump’s policies. The United States blocked many Chinese acquisitions, especially of U.S. technology firms, on national security grounds, and even ordered some Chinese firms such as the owners of social media apps TikTok and Grindr to divest them. U.S. stock exchanges raised their listing standards after many investors got burnt in auditing scandals involving Chinese firms, including coffee chain operator Luckin Coffee. And Chinese nationals found it harder to secure U.S. work permits.

This trend could continue, even if China-U.S. tensions over hot-button issues such as trade and the future of Hong Kong eased, dealmakers say. This is because concerns about corporate China abusing its technologic prowess and misleading investors are shared by both Republican and Democratic U.S. lawmakers.

“The United States no longer views China as a partner, but an enemy and a threat… America has become very unfriendly soil to anything Chinese,” said Fred Hu, chairman of Chinese private equity firm Primavera Capital Group, which has investments in U.S. companies. He added that U.S.-China relations were unlikely to improve in the short term.

Under Trump, the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes deals for potential national security risks, toughened its stance on Chinese companies.

CFIUS reviews are confidential, and the secretive government panel does not disclose how many deals it blocks each year. But in its annual reports to the U.S. Congress, CFIUS has revealed its heightened scrutiny of Chinese deals; it reviewed 140 deal applications by Chinese acquirers in the first three years of the Trump administration, more than those from any other country, compared to 20 such applications in the first three years of Barack Obama’s administration. This is despite Chinese applications with CFIUS for U.S. deals declining from 60 in 2017 to 25 in 2019.

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Among the deals that CFIUS blocked under Trump were Chinese financial technology giant Ant Group’s $1.2 billion acquisition of U.S. money transfer company MoneyGram International Inc MGI.O and China-based semiconductor investment fund Unic Capital Management’s $580 million acquisition of U.S. semiconductor testing equipment company Xcerra Corp. Some Chinese acquirers also abandoned their U.S. acquisitions before CFIUS blocked them.

“CFIUS has brought great changes for Chinese firms’ overseas acquisitions, in the tech sector especially,” said Peter Kuo, a partner in China-backed private equity fund Canyon Bridge, whose attempted $1.3 billion acquisition of U.S. chip maker Lattice Semiconductor Corp LSCC.O was thwarted by CFIUS in 2017. The fund is now focused on investing in Chinese companies.

The U.S. crackdown spilled over into venture capital investments. Many Chinese venture funds and some state-backed ones, who flooded into Silicon Valley several years ago in the search for reasonably valued unicorns, left the U.S. in the last couple years, as CFIUS also scrutinized sizeable minority stake investments. Some Chinese investors into U.S. venture capital firms also retreated.

“Now we have zero Chinese investors in our fund,” said Edith Yeung, general partner of Silicon Valley-based venture capital fund RaceCapital. She said she had to reject many Chinese investors from her fund due to the regulatory risk.

IPO SCRUTINY

Trump said this year he was also looking “very strongly” at the possibility of delisting Chinese companies that do not comply with U.S. accounting standards from U.S. exchanges, but did not follow through on that threat.

While the total value of Chinese companies listing in New York has reached $2.5 trillion so far this year – almost double the total four years ago before Trump came into office – Nasdaq has updated its rules to make it more difficult for small Chinese firms to float on their exchanges.

As a result, only five Chinese IPOs under $25 million landed in New York this year, compared to nine last year.

Policy experts said deep U.S. suspicion of China’s economic power, technological advances and accounting standards will likely result in many of the hurdles to cross-border investments remaining in place even if Trump’s Democratic challenger Joe Biden succeeds him in January.

“Our take is that the U.S. containment on China is bipartisan,” Natixis economists wrote in a note last week.

Reporting by Kane Wu in Hong Kong and Echo Wang in New York; Editing by Greg Roumeliotis and Christopher Cushing

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AIMA releases alternative investment guide – Wealth Professional

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Aside from due diligence question highlights, the guide includes media such as five-minute educational videos, an investor infographic, downside protection charts, and continuing education advisor presentations.

Readers can get better acquainted with key regulatory differences between fund structures. Advisors can also get practical guidance with questions to ask their head office when weighing allocations to hedge funds, private credit funds, alternative mutual funds, and alternative ETFs. The guide also features a directory of AIMA members organized by strategy and fund structure.

Beyond that, readers can also learn about asset-allocation trends, including alternative investment leadership and engagement by notable institutional investors in Canada.

Performance through the pandemic has proven that alternatives are resilient and essential to safeguard against the volatility in the market and the low-rate environment,” said Belle Kaura, VP Legal & CCO at Third Eye Capital, who is also chair of AIMA Canada’s board of directors and a member of the Executive Committee, 2018-2022.

“The proportion of alternatives will increase as advisors gain more access to these and there is greater familiarity with strategies and how to assess products to meet risk tolerance, liquidity needs and return targets,” Kaura said. “Strategies across a continuum of risk return profiles should dispel the notion that all alternatives are high risk, allowing advisors to allocate to better protect and create investor wealth.

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Canadian Penny Stocks – Tips For Canadian and USA Penny Stock Investors

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Canada is a civilized country with a booming economy, just like the USA. It is one of the hottest tourist destinations around the world. Additionally, Canada opens doors for investments not only in the real estate sector. Both small companies and individuals from Canada and USA can buy Canadian penny stocks. Small-scale businesses benefit because they get a rare opportunity to prove their abilities to create shareholder value. It is a type of share that trades for five dollars and below. The country’s good investment climate is not only attracting the locals but also USA investors. How does a Canadian investor begin buying penny stocks?

 

Canadian locals do not have a hard time investing in their country. The stocks are bought through the Toronto Stock Exchange and TSX Venture Exchange. The first thing a trader should do is to approach a stockbroker. He or she should make sure that the stockbroker could buy the Canadian penny stocks. Another thing one must be cautious about is the investment company. The ideal company creates competitive products, increases its sales and has a forward trend. It becomes very easy for investors to trust such a company to manage their shares. How does a USA investor begin buying penny stocks?

 

USA investors wishing to buy penny stocks offered in Canadian dollars have three main choices. First of all, an investor can buy the pink sheets. With this option, investors find listings of companies available to trade stocks daily. It is a very good idea to be informed about how to use pink sheets. This is a secondary market without regulations. Reading newsletters and other information, mainly on the Internet, is very important. The second choice a USA investor has is opening an account with a Canadian broker. The brokers are available, and they can be a source of extra information. The final choice is for a USA investor to open an account with a broker from his or her country. Make sure that the selected broker has access to Canadian stocks.

 

As everyone notices, the procedure of buying penny stocks in Canada is not difficult. It is either a procedure that a person can perform personally or choose to work with a broker. Those who are planning to try this investment soon will benefit from visiting the TSX website often. The portal shows how the various stocks trade in the country’s thriving economy. Making an investment decision is not very simple. It is even harder for a layman investor searching for a way to invest his or her extra money. This explains why working with a reputable broker is important. Generally, real expert investors use quantitative approaches to gather numerical data on economic indicators, interest rates and other industry valuations. It is usually a mathematical procedure used to derive a target price for stocks. A penny stock investor hopes that the prices of stocks will reach the target price. Data for quantitative analysis is often based on the experiences of previous penny stock companies enjoying a higher level today. The process of selecting the best Canadian penny stocks companies is based on fundamental and technical analysis too.

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Saudi Wealth Fund Looks For $7 Billion Loan For "Opportunistic Investments" – Baystreet.ca

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The Public Investment Fund, the sovereign wealth fund of the world’s largest oil exporter Saudi Arabia, has contacted international banks for a loan of up to US$7 billion to use for new investments, Bloomberg reported on Thursday, citing sources with knowledge of the plans.

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