UPDATE 2-Hong Kong stocks tumble as Xi appointments fan economic fears; yuan weakens - Yahoo Finance | Canada News Media
Connect with us

Business

UPDATE 2-Hong Kong stocks tumble as Xi appointments fan economic fears; yuan weakens – Yahoo Finance

Published

2 years ago

 on


(Recasts, adds market comment and updates prices)

By Xie Yu and Summer Zhen

HONG KONG, Oct 24 (Reuters) – Hong Kong stocks slid to 13-year lows on Monday and onshore yuan fell to its weakest level in 15 years after Xi Jinping’s newly unveiled leadership team heightened fears that economic growth will be sacrificed for ideology-driven policies.

The Hang Seng index slumped 5% in early afternoon trade, touching levels last seen during the 2008-2009 global financial crisis.

Hong Kong-listed shares of tech giants Alibaba Group Holding Ltd and Tencent Holdings Ltd plunged 10% and 8% respectively, dragging the Hang Seng Tech Index down 7% to a record low. Hong Kong-listed Chinese developers plummeted 9% to record lows.

Both the property and tech sectors have been targeted for far greater regulation under Xi.

Xi secured a precedent-breaking third leadership term on Sunday and introduced the new Politburo Standing Committee stacked with loyalists.

The appointments “show China moving from economic pragmatism to political ideology,” said Ales Koutny, emerging markets portfolio manager at Janus Henderson Investors.

“The message here is clear: COVID Zero lockdowns, shared prosperity agenda and sectorial crackdowns are not going anywhere,” he said, adding that he believed these risks would limit China’s annual economic growth to just 2-3%.

China’s gross domestic product (GDP) rose 3.9% in the July-September quarter year-on-year, official data showed on Monday, rebounding at a faster-than-expected pace but that was not enough to cheer investors.

FOREIGN OUTFLOWS

Stocks declines were more moderate for mainland markets which are less vulnerable to foreign selling and were bolstered by a surge in Chinese defence-related stocks as investors bet geopolitical tensions, particularly over Taiwan, will intensify.

China’s bluechip CSI300 index lost 2.3%, while the Shanghai Composite Index lost 1.4%.

Onshore yuan fell to its weakest level in 15 years. Offshore yuan, in which trade began from 2011, slipped to as low as 7.2790 per dollar, near its record low.

The cross-border China-Hong Kong Stock Connect saw a net outflow of roughly 9.2 billion yuan ($1.3 billion) on Monday morning.

“The short-term negative factor remains China’s extremely harsh COVID policies, which have hit foreign investors’ confidence toward China,” said Yuan Yuwei, fund manager at hedge fund house Water Wisdom Asset Management.

Ravaged by China’s zero-COVID policy, which seeks to stamp out all outbreaks and has resulted in frequent lockdowns, sectors such as tourism, leisure as well as hotel and catering saw steep declines.

COMMON PROSPERITY

During the Communist Party’s 20th Congress, Xi reaffirmed his Common Prosperity drive, vowing to distribute income more fairly, and “standardise wealth accumulation mechanisms.”

He also emphasised national security, saying China should secure supply chains, sufficient grains and energy as well as work towards technological self-reliance.

An amendment to the Communist Party’s constitution enshrined “developing fighting spirit, strengthening fighting ability”, while a call to oppose and deter forces seeking independence for Taiwan was also included for the first time.

With investors dumping internet companies and property developers , some of those funds were re-directed into chipmakers, high-end equipment producers and defence stocks.

Minyue Liu, Greater China investment specialist at BNP Paribas Asset Management, said that her portfolio has reduced its exposure to stocks vulnerable to an increase geopolitical risks, favouring instead shares related to tech innovation, industrial upgrades and energy transition.

Some investors are less pessimistic, arguing China’s new leadership team is well aware of the importance of economic growth.

“I think that there’s growing consensus among policymakers, that one priority should be to make the economic cake bigger, through quality growth,” said Mark Dong, general manager of Minority Asset Management (Hong Kong).

($1 = 7.2535 Chinese yuan) (Reporting by Shanghai and Hong Kong newsroom; Editing by Edwina Gibbs)

Adblock test (Why?)



Source link

Related Topics:
Continue Reading

Business

Carry On Canadian Business. Carry On!

Published

1 day ago

 on

October 22, 2024

By

business to start in Canada

Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

Continue Reading

Business

Imperial to cut prices in NWT community after low river prevented resupply by barges

Published

1 day ago

 on

October 22, 2024

By

 

NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Business

U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

Published

1 day ago

 on

October 22, 2024

By

 

TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version