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China Rebukes Top Investment Bank Over Lenovo’s Botched Listing – Yahoo Canada Finance

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(Bloomberg) — China’s securities regulator rebuked China International Capital Corp., saying the country’s top investment bank has failed in due diligence on Lenovo Group Ltd.’s recent application for a $1.6 billion stock listing in Shanghai.

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CICC, as the sponsor for the listing, was found to mainly rely on the explanatory documents provided by the issuer to draw conclusive opinions on the firm, according to a notice issued by the China Securities Regulatory Commission late Wednesday.

The CSRC summoned five CICC bankers involved in the deal for regulatory review on Dec. 23, after finding that they have failed to produce sufficient and accurate information to show Lenovo is qualified for a listing on the country’s Nasdaq-style trading board.

The staff, including Wang Sheng, head of CICC’s investment banking division, would have the right to appeal to local courts on the regulatory decision, according to the notice. While the CSRC didn’t say whether it will slap any fine or punishment, the summoning is viewed as a stern warning and is negative for the bank’s reputation.

In separate notices released late Wednesday, CSRC also criticized two other domestic brokerages, Wanlian Securities and Sinolink Securities, for their failure in due diligence on other initial public offerings.

The moves underscore Chinese authorities’ efforts to stamp out corporate malpractice and scrutinize domestic investment banks as the nation seeks to bring its capital markets closer in line with global standards. Since China started to adopt a registration-based IPO system in 2019, the CSRC has punished a slew of bankers, auditors and other intermediary agencies over irregularities.

In a rare move in April, the CSRC slapped almost 30 disciplinary notices on brokers including Haitong Securities Co. and Citic Securities Co. for negligence of duties as IPO sponsors.

CICC didn’t immediately respond to request seeking comment. The investment bank ranked No. 2 in underwriting Chinese companies’ IPOs this year, according to data compiled by Bloomberg. Its Shanghai and Hong Kong-listed shares gained more than 1% Thursday morning. Lenovo’s stock dropped 1.5% in Hong Kong as of 11:30 a.m.

Lenovo, the world’s largest personal computer maker, withdrew the plan to list on Shangha’s Star market in October, just days after its application was accepted by regulators. That surprise move led to a plunge in prices of its Hong Kong-listed shares. The company has said the validity of the information in its prospectus may have lapsed during the vetting process.

China’s securities regulator toughened listing requirements for first-time share sales on the Star market earlier this year in areas such as a firm’s research and development capability, patents, revenue growth rate and capacity to innovate. The move is part of stepped-up efforts to weed out a bevy of sub-par firms that have rushed to raise funds to take advantage of lax oversight and high valuations, with many chasing strong investor appetite for technology-related listings.

Lenovo had sought to raise about 10 billion yuan ($1.57 billion) from the Shanghai share sale to fund artificial intelligence and cloud services projects as well as industrial investments.

(Adds previous punishment from the sixth paragraph)

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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