RE: Stock Connect + Others27 Aug 2021 09:46
If you'll excuse me I'll quote from the positive sentiment of Christopher Wood's (Jefferies) Greed & Fear published yesterday as this appears relevant to us:
"There has been a bit of a rebound in the battered Chinese equity class this week. Confidence has been somewhat revived by a flurry of announcements over the past weekend which suggest that the mainland authorities care about the stock market and also want to encourage continued foreign investment into Chinese equities. This is important given the prevailing sentiment amongst many foreigners last week that President Xi Jinping has launched a full-scale attack on capitalism and wants to turn private-sector companies into SOEs."
"It is further worth highlighting, on a related subject, that an interview with Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority, was featured prominently in the mainland press on Monday (see Xinhua article: “HKMA chief says Hong Kong resilient as global financial hub”, 23 August 2021). The interview highlighted a point made here several times before, in terms of the ongoing important role to be played by Hong Kong as an offshore centre in the context of China’s continuing closed capital account."
"Meanwhile it is also worth noting that Joseph Yam, who ran the Hong Kong Monetary Authority for 16 years
until 2009, on Monday floated the idea of allowing investors to trade the 58 constituent stocks of the Hang
Seng Index in renminbi. He was speaking at a briefing in Hong Kong led by Beijing officials on China’s 14th
Five-Year plan."
"Another important development over the weekend, and an unexpected one so far as GREED & fear is concerned, is the news that the CSRC is working on a plan to try and resolve the impasse on the accounting issue for US-listed China ADRs (see South China Morning Post article: “China’s securities regulator signals willingness to work with US over audit inspections”, 21 August 2021). The proposal is apparently for joint audits which would, potentially, allow Chinese listed ADRs to comply with the rules set down by America’s Public Company Accounting Oversight Board (PCAOB), and therefore remove the delisting risk stemming from the Accelerating Holding Foreign Companies Accountable Act.This was passed by the Senate in late June and is awaiting a House of Representatives vote. Remember that the present situation is that 248 US-listed Chinese companies face being delisted if they do not confirm to these auditing requirements within three years, and
the deadline will be shortened to two years if the above-mentioned bill is enacted, as discussed at length recently."