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$765b wiped out – the latest targets of Beijing’s crackdown

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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:

Christopher uhl from 10 minute trading joined ticker earlier with a warning to investors looking at buying Chinese stocks.

“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.

William is an Executive News Producer at TICKER NEWS, responsible for the production and direction of news bulletins. William is also the presenter of the hourly Weather + Climate segment. With qualifications in Journalism and Law (LLB), William previously worked at the Australian Broadcasting Corporation (ABC) before moving to TICKER NEWS. He was also an intern at the Seven Network's 'Sunrise'. A creative-minded individual, William has a passion for broadcast journalism and reporting on global politics and international affairs.

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Brad Banducci quits as Woolworths Australia CEO after TV blow-up

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Woolworths CEO Brad Banducci has revealed his decision to step down from his position, with Amanda Bardwell, head of loyalty and e-commerce, slated to succeed him as chief executive in September.

Bardwell’s appointment marks a historic moment as she becomes the first woman to lead the company in its nearly 100-year history.

Banducci’s departure comes at a critical juncture for Woolworths and its competitor, Coles, as they brace for an upcoming Senate inquiry led by the Greens.

The inquiry, scheduled for next month, is expected to scrutinise higher grocery costs, which Canberra has blamed for inflating supermarket profit margins at the expense of consumers.

Supermarket investigation

In addition to the Senate inquiry, Labor has urged the competition regulator to investigate the supermarkets, with Prime Minister Anthony Albanese suggesting potential abuse of market power by the retailers.

Woolworths chairman Scott Perkins clarified that Banducci’s succession timeline was not accelerated in response to the scrutiny faced by the supermarket industry.

Perkins stated that interviews with potential candidates for the CEO position had been ongoing since the latter half of the previous year.

“There has been an ongoing dialogue with Brad,” Perkins told media. “There was no change to the timetable, no expedition at all.”

Importance of authenticity

Banducci acknowledged that he had considered delaying his departure but ultimately decided against it, citing the importance of authenticity. Despite the challenges facing the industry, he expressed confidence in Bardwell’s ability to lead Woolworths into the future.

Analysts reacted to the news with a mix of surprise and caution.

In financial terms, Woolworths’ food retail division reported a 5.2 percent increase in sales, or 6.6 percent excluding tobacco.

However, the company noted a moderation in prices, with average increases of 1.3 percent in the last three months of 2023.

Despite this, margins continued to improve, and earnings for the division rose by 8.2 percent.

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Money

Walmart reports holiday sales as shoppers seek better value

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Walmart disclosed its fourth-quarter earnings showcasing a surge in sales during the holiday season, offering early insights into consumer spending trends amid a crucial period.

Despite a challenging economic climate, Walmart reported a 4 percent increase in comparable store sales for the three months ending in late January compared to the previous year.

The number of transactions also saw a notable uptick, rising by 4.3 percent. However, there was a slight decline of 0.3 percent in the average ticket price, indicating a tendency among shoppers to spend marginally less during their shopping trips.

The retail behemoth witnessed a significant boost in its online sales, with a 17 percent increase in the U.S. market and a remarkable 23 percent surge globally, surpassing the $100 billion mark. Walmart’s Chief Financial Officer, John David Rainey, attributed this growth partly to cost-saving measures in their e-commerce operations and the rising adoption of Walmart’s delivery services.

Discretionary purchases

While the e-commerce sector saw substantial gains, there was a noted decrease in discretionary purchases such as electronics, as consumers prioritized essential items amidst economic uncertainties.

Walmart’s emphasis on value and affordability played a pivotal role in driving sales, particularly in its grocery segment.

The company’s CEO, Doug McMillon, highlighted Walmart’s commitment to offering competitive prices, leveraging its substantial grocery business.

In a strategic move to enhance its offerings, Walmart announced the acquisition of television manufacturer Vizio in a deal worth $2.3 billion, further expanding its Walmart Connect advertising and media business.

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Money

Millions of Australians are struggling with credit card repayments

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Recent research has revealed a concerning trend: a significant number of Australians are falling behind on their credit card repayments, highlighting the financial strain faced by many households.

According to Finder’s Credit Card Report 2024, approximately 13% of Australian credit card holders, equivalent to nearly 1.8 million individuals, have missed at least one repayment in the past three months.

Of this group, 8% have fallen behind by 30 days, while 4% have missed payments by 60 days.

Read more – Is Paypal bringing back old school credit cards?

Alarmingly, 2% of cardholders have delayed repayments by more than 60 days.

Prevalent misuse

Amy Bradney-George, a credit card expert at Finder, expressed concern over the prevalent misuse of credit cards, attributing it partly to the escalating cost of living.

Bradney-George warned that missing a credit card payment often incurs late fees and interest charges, exacerbating financial burdens for individuals.

Bradney-George emphasised the detrimental impact of late payments on credit scores.

She highlighted that a missed payment can be recorded on a credit file within just 14 days, potentially affecting an individual’s ability to secure loans or new credit cards in the future.

With details of late payments lingering on credit reports for up to two years, the consequences could be long-lasting.

Currently, there are over 13 million credit cards in circulation across Australia, accumulating a national debt of $18.1 billion subject to interest charges.

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