Money
$765b wiped out – the latest targets of Beijing’s crackdown
Beijing’s crackdown on US listed Chinese stocks is continuing and it’s having a massive impact on global markets – with $765 billion already erased
The impacted stocks have recorded their biggest back-to-back losses in more than a decade as China increases regulations over its technology and education sectors.
Investors scrambled to price in the growing risks from an intensifying crackdown by Beijing on some of the nation’s industries.
It follows an announcement that the nation will now ban education firms from teaching students about how to make profits in business, raise capital or even how to go public on the share market.
The new rules, published over the weekend by China’s Ministry of Education, apply to what the agency calls “online training institutions.”
“Capitalized operations are strictly prohibited,” the ministry wrote in its order. “Those who have violated regulations shall be cleaned up and rectified,” it added.
Following record highs in February, China’s biggest US listed companies are on track to record their biggest two-day drop since 2008.
High-profile investors, including Ark’s Cathie Wood have begun to unload their shares – with Ark cutting its China stocks from 8 percent in February to just 0.5 percent this month.
Stocks slumped on the mainland and in Hong Kong, with the benchmark CSI 300 Index dropping 3.2% and the Hang Seng Index tumbling 4.1%, the most since May last year.
“Driven by utilitarianism and bound by capital, a large number of out-of-school training institutions in primary and secondary schools, especially those with a wide range of unqualified training institutions, have deviated from the purpose of non-profit education,” said Dong Shengzu, director and researcher at the Shanghai Academy of Educational Sciences, in remarks published on the education ministry’s official website.
Warning to investors:
“I gotta tell you right now China stocks are just falling apart and they are completely off my radar,” Uhl told ticker.
“Whenever stock prices are going down, Brittany, the easiest thing to think about it is nobody wants to own it, and that’s exactly where I’m at right now.”
Uhl says these are the kind of stocks that it doesn’t matter if you’re a long term investor or a short term, short term day trader.
“Being in these stocks is as the wrong place to be. So yeah, absolutely. Right now it’s a it’s a flight to safety out of these tiny stocks.”
Foreign investors have been rattled by the pressures on Chinese tech
This includes moves that regulators made to investigate ride-hailing firm Didi just after its US IPO last month.
Following Didi’s controversial initial public offering, Chinese regulators are reportedly considering handing down serious and unprecedented penalties on the ride-share company
The decision made by Didi to go public has been viewed as an attack against the Cyberspace Administration of China and Beijing’s rule.
Chinese officials have begun an intense on-site investigation at the company in recent days.
Punishments may include a hefty fine, suspension of operations, or even the possibility of requiring a state-owned investor to become part of the organisation.
Money
Australian business insolvencies surge 50% due to rising costs
Business insolvencies rise 50% amid cost pressures, with projections reaching 16,000 this financial year; hospitality sector hit hard.
Business insolvencies rise 50% amid cost pressures, with projections reaching 16,000 this financial year.
Business failures in Australia have surged by 50% this financial year due to high operating expenses, cost of living pressures, and increased tax office debt collection efforts.
Expected insolvency appointments could reach 16,000, surpassing last year’s high of 11,053.
The Australian Securities & Investments Commission reports 7,483 appointments in just six months, a 47.1% rise from the previous year.
Small businesses face a challenging climate, with the current year’s insolvencies 84% higher than pre-Covid levels.
The troubled casino group Star Entertainment risks becoming Australia’s largest corporate collapse since Virgin Australia, facing significant financial uncertainty.
Anthony Albanese, Australia’s Prime Minister.
Victoria saw a 71% increase in insolvency appointments, while Queensland and NSW experienced rises of 51.4% and 30%, respectively.
Hospitality businesses in particular have struggled with rising costs for wages, energy, and food, resulting in a 70.2% increase in sector insolvencies.
The Australian Taxation Office’s strict approach to tax debts has significantly contributed to the rise in insolvencies, with the agency showing no signs of reducing enforcement actions.
This financial year has also seen high-profile insolvencies, including airline Rex’s move into voluntary administration.
Money
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