Chinese shares plunged more than 8 percent yesterday after the nation’s securities regulator imposed margin trading curbs on three major brokerages, a sign that authorities are trying to rein in the market’s big gains.
The Shanghai Composite Index was down 8.3 percent at 3,096.64. Its dive rubbed off on Hong Kong, where the Hang Seng was down 2.1 percent at 23,605.00. Japan’s Nikkei 225 rose 0.9 percent to 17,014.29 and South Korea’s KOSPI gained 0.8 percent to 1,902.62. Australia’s S&P/ASX 200 Index rose 0.2 percent to 5,309.10. Shares were also higher in Taiwan, New Zealand and Southeast Asia.
The China Securities Regulatory Commission on Friday imposed curbs on margin financing, or borrowing to purchase stocks, following an investigation of the industry. The three affected brokerages, Citic Securities Co (中信證券), Haitong Securities Co (海通證券) and Guotai Junan Securities Co (國泰君安證券), were forbidden to lend money and shares to new customers for three months after they were allegedly caught extending margin trading contracts in violation of regulations.
The Shanghai Composite has surged almost 60 percent in the past year. Investors fear regulators believe prices have risen too much recently and might impose more curbs.
Kingston Securities (金利豐證券) executive director of research Dickie Wong (黃德几) said regulators want to tamp down some of the riskier financing practices underpinning an astonishing surge in the Chinese stock market that began half a year ago.
“The recent bull market is mainly driven by margin financing,” Wong said. With the rally “overdone,” regulators want to “simply give pause” to the brokerages.
Chinese regulators allowed margin financing and short-selling only in recent years and many Chinese investors might still be unaware of the risks involved, Wong added.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last