Fairview HK: Many Chinese equities increased today on favourable regulatory news

CENTRAL, Hong Kong - Oct. 13, 2022 - PRLog -- Many Chinese equities increased today on favourable regulatory news but were also impacted by the expansion of COVID-19 cases throughout the country and some geopolitical tensions between China and Taiwan.

Shares of Alibaba Group Holding Limited (BABA), a significant e-commerce and technology business, rose as much as 5% higher today before giving up some of those gains and trading at approximately 2.2% higher as of 1 p.m. Today JD.com Inc. (JD), another e-commerce behemoth, traded around 3% higher, while Burning Rock Biotech Limited (BNR) was up almost 24%.

Recently, U.S. and Chinese financial authorities reached a preliminary deal to allow regulators to audit the operating financial statements of Chinese businesses trading on U.S. exchanges, potentially putting an end to a long-running conflict.

The Chinese government has refused to allow U.S. regulators to undertake similar audits since the early 2000's, claiming national security and data concerns. However, in 2020, Congress approved the Holding Foreign Companies Accountable Act, which specified that a foreign-listed corporation would be delisted if it did not submit to a formal audit for three consecutive years.

This pushed Chinese financial regulators to the negotiating table and a preliminary agreement has been reached that will send the Public Company Accounting Oversight Board (PCAOB), a congressionally mandated organization that audits publicly traded companies, to Hong Kong in September to begin on-the-ground audits.

According to a Reuter's story today, BABA and JD are anticipated to be among the first audited in September, bringing them one step closer to no longer fearing delisting.

However, the good regulatory news was greeted with several other occurrences that eroded some of today's gains. COVID-19 instances continue to spread in China, raising fears of more lockdowns. Lockdowns implemented earlier this year harmed economic development and recent statistics revealed that factory activity in China is still decreasing.

Today's Chinese stock market is a bit of a mixed bag. The agreement reached between U.S. and Chinese officials over the auditing disagreement is significant, although it has been known for a few days.

Meanwhile, escalating tensions between China and Taiwan are bad for the markets and additional COVID cases are bad news since they raise the risk of future lockdowns, which would hamper the country's economic growth even more.

Fairview HK Limited is one of the foremost privately owned Asia-Pacific orientated, boutique wealth management firms in Hong Kong. We offer our services to a selected group of families, family offices, institutions and fund managers, you may visit our website https://fairviewhk.com/ or contact us via email.