Aug 07 2020 0
It's Friday so we'll look at the most important news around the world to get prepare for next week.
A US council recommends tightening disclosure requirements for Chinese companies listed on US exchanges, following growing concerns about possible fraud. the investors. The Council has yet to set the exact new rules that will be enforced, but a senior Finance Ministry official said the ultimate consequence of the fraud would be delisting. One of the major problems included a nearly two-decade dispute over China refusing to allow PCAOB (Public Company Accounting Supervision Committee) inspectors to evaluate audits.
Officials told reporters on Thursday that currently listed Chinese companies will have to comply by January 1, 2022, while companies looking to prepare to list will need to comply with new rules.
A chaotic market
Asian stocks appeared to have had a tumultuous start on Friday as investors were hoping for a stimulus deal from Washington amid ongoing US-China tensions. US stocks closed with a gain, while the dollar fell in value. The futures market changed little in Japan, declined in Australia and rose higher in Hong Kong. The S&P 500 has risen for the fifth day in a row, with Apple's leading gain as prices hit record highs. The number of US unemployment benefits fell unexpectedly last week, to its lowest level since March, bringing a glimmer of hope to the economy. Gold prolongs its rally amid speculation that interest rates will remain low for longer, while Treasury Bonds will rise. Oil futures fell for the first time in a week.
The rise of data
An investment in an Australian data center operator has helped a Sydney-based hedge fund outperform most competitors this year. So far, the Alceon High Conviction Absolute Return Fund has raked in 13% of profits by 2020 and is beating 98% of other funds. Portfolio manager Daniel Chersky said NextDC shares - one of the fund's first options in 2017 - were the main driver of returns during the coronavirus pandemic. NextDC shares have risen 82% this year due to increased demand for data storage services. "Although the current health crisis has highlighted the importance of the industry in the digital age, the shift to cloud services is still decades away," Chersky said.
Get ready for 20% volatility moves in some of China's most volatile and sought-after stocks. Shares on the ChiNext board like the Nasdaq will be allowed to rise or fall to double their current 10% limit as early as mid-August. Two companies have already started offering new shares in ChiNext on Tuesday, and announced it usually takes two to three weeks for those stocks to start trading after the issue of the prospectus. The changes - which won't apply to key panels in Shanghai and Shenzhen - mean the $1.4 trillion ChiNext could serve as a test base to see if Beijing can loosen the tightening transaction without causing chaos or not. In a market that typically sees daily volatility of 5% or more, greater volatility checks whether the official story is whether to encourage or contain them.