Hong Kong Stocks Take Losses as China Covid Cases Rise; Asian markets mixed

Shares of JD.com are falling after the company cut senior management pay

Hong Kong-listed shares of JD. com traded more than 5% lower in the afternoon after the company confirmed pay cuts for its senior management team.

The Chinese e-commerce giant confirmed it will cut the cash salaries of its senior management team by up to 20% starting January next year.

The company added that it would pay social security contributions for Deppon’s logistics workers and set up a housing fund.

“The employee benefits improvement plan is currently being promoted, with a focus on frontline workers,” the company told CNBC.

— Iris Wang

Investing in US-listed Chinese companies is like “playing fantasy football,” says Hayman Capital

Investing in US-listed Chinese companies is tantamount to playing “fantasy football” as US regulators continue their audits on the companies, an asset manager said.

Kyle Bass, founder and CIO of Hayman Capital Management, said recent reports from the US Public Company Accounting Oversight Board granting “proper access” to requested information have yet to be confirmed, reiterating the financial risks investors of US-listed Chinese companies are facing.

“They own a stock that has a claim on a Cayman Islands subsidiary that has no voting rights and no access to assets in the event of bankruptcy,” he told CNBC’s “Street Signs Asia,” when asked if Chinese stocks in the US were “investable”.

Chinese companies listed abroad, such as Alibaba and JD.com, use a floating rate entity structure, in which an offshore entity is set up, bypassing China’s restrictions on foreign investment and preventing investors in US stocks from holding majority voting rights .

The US-listed company is usually a holding company incorporated outside of both the US and China and may not own shares in the China-based company.

“Investors are really playing fantasy football with the Chinese companies because they don’t actually own anything,” he said.

— Jihye Lee

Shares of Indonesian GoTo are down 6% after the company reported losses nine months ago

Indonesia’s GoTo Group posted a higher nine-month accumulated loss compared to the same period a year ago, though quarterly losses eased due to cost cutting.

Losses between January and September amounted to 20.32 trillion rupiah ($1.29 billion), almost double the 11.58 trillion rupiah loss reported a year ago.

The share price fell 6% in Jakarta on Tuesday morning, marking a 48% fall in the share price since its listing in April this year.

The company announced last Friday that it would cut jobs as part of broader cost-cutting plans, which are expected to materialize later in 2023, it said.

—Sheila Chiang

The Malaysia King Party’s GPS will support Perikatan Nasional, not Pakatan Harapan

One of the kings of the Malaysian elections, Gabungan Parti Sarawak (GPS), a Sarawak-based national political alliance in East Malaysia, said it supported the Perikatan Nasional coalition to form a government and would not cooperate with Pakatan Harapan by Anwar Ibrahim.

The King of Malaysia has asked the leading coalitions to submit their candidates for prime minister by 2pm local time after Saturday’s elections were inconclusive.

“We’ve always said [sic] that we cannot cooperate with DAP and also with Pakatan here,” GPS General Secretary Alexander Nanta Linggi told CNBC’s “Squawk Box Asia.” DAP is a progressive party of Pakatan.

“In the last few days during the elections, they attacked us so much. So it’s kind of hard … to form a government, to be very objective in that sense.”

In exchange for GPS’s support, Linggi said it would like the government to give party members positions in ministries that are important to them, such as rural development and resources.

— Su Lin Tan

CNBC Pro: Amazon is down 40% this year – is it time to buy? Market professionals give their opinion

Once a Wall Street treasure, Amazon has lost some of its luster this year. Shares of the e-commerce giant are down more than 40%, much less than the S&P 500which has fallen by about 15% over the same period.

Is it time for investors to get back in? Two market professionals faced off on CNBC’s “Street Signs Asia” Thursday to argue for and against buying the stock.

CNBC Pro subscribers can read more here.

— Zavier Ong

Baidu, Kuaishou shares ahead of earnings report

Baidu is expected to see a slight decline in revenue in the third quarter of 2022, an average of estimates from a Refinitiv survey showed.

The company is expected to see a 0.05% decline in revenue to 31.904 billion yuan ($4.46 billion) for the July-September quarter, after reporting 31.92 billion yuan for the same period a year ago.

Meanwhile, Tiktok rival Kuaishou is expected to see revenue growth of 10.2% for the third quarter to 22.58 billion yuan, a separate Refinitiv poll found – which would be the slowest pace of annual growth since the company started reporting revenue.

Hong Kong-listed shares of Kuaishou fell 4.1% pre-earnings, while Baidu shares fell 0.44% in the morning session.

– Jihy Lee

CNBC Pro: Morgan Stanley’s Wilson says inflation will ease, but warns of a ‘new era’

Watch CNBC's full interview with Morgan Stanley's Mike Wilson

Mike Wilson, Morgan Stanley’s Chief US Equity Strategist, said he expects a “quite sharp drop in inflation” and predicts when it could happen.

But he said there are two areas that are exceptions, where inflation could be “stickier.”

CNBC Pro subscribers can read more here.

— Weizhen Tan

Oil prices just after hitting their lowest levels since January

Oil prices in Asia were little changed this morning after hitting their lowest level since January on Monday.

US crude oil was fractionally higher at $80.08 a barrel, after touching $75.08 during Monday’s session.

Brent rough up slightly to $87.52 a barrel. It reached $82.31 in the previous session.

Oil futures plummeted Monday shortly after the Wall Street Journal reported that OPEC+ is considering increasing supply by 500,000 barrels per day. Saudi Arabia later disputed that report.

— Abigail Ng

The Singaporean authorities explain why FTX was not on the warning list

The Monetary Authority of Singapore (MAS) said embattled cryptocurrency exchange FTX was not on its investor warning list because it was not “actively recruiting users in Singapore”, unlike rival exchange Binance.

The MAS said there is a “clear distinction” between FTX and Binance in terms of targeting local users, according to a statement released Monday afternoon.

“Binance even went so far as to offer offers in Singapore dollars and accept Singapore-specific payment methods such as PayNow and PayLah,” it said in the statement, adding that it had received numerous complaints about Binance between January and August last year.

The MAS then reiterated the risks investors face when trading digital assets.

“The main lesson from the FTX debacle is that trading any cryptocurrency, on any platform, is dangerous,” it said, adding that even Singapore-licensed crypto exchanges would be regulated solely to address money laundering risks. tackle, not to protect. to investors.

“As MAS has repeatedly stated, there is no protection for clients trading cryptocurrencies. They could lose all of their funds,” it said.

Jihy Lee

Shares drop Monday to start short holiday week

Shares fell during a volatile trading session on Monday to kick off the brief holiday week.

The S&P 500 lost 0.39% to 3,949.94 and the Nasdaq Composite fell 1.09% to close the day at 11,024.51. The Dow Jones Industrial Average fell 45.41 points, or 0.13%, to 33,700.28, although losses on the index were offset by an increase in disney stocks, which rose more than 6%.

Disney was shocked after the company announced that former CEO Bob Iger would replace Bob Chapek.

—Carmen Reinicke

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