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Asian shares firm, dollar weak as traders eye earnings

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October 25, 2021

By Alun John

HONG KONG (Reuters) – Asian shares held recent gains on Monday ahead of a week packed with major quarterly earnings announcements, while news of trials of a property tax in China and ongoing troubles in the sector weighed on markets in Hong Kong and mainland China.

MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed – 0.07% higher – and still up 3.8% so far in October, while Japan’s Nikkei lost 0.7% on softer earnings by several local companies.

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Futures pointed to a solid open in European markets with the pan-region Euro Stoxx 50 futures up 0.24% in early trade and FTSE futures 0.26% higher.

U.S. stock futures, the S&P 500 e-minis, gained 0.12%.

In Asia, the regional benchmark was dragged down by muted performances in Chinese markets with property firms weighing heavily.

Chinese blue chips inched down 0.12%, and an real estate index shed 3%, while the Hong Kong benchmark traded flat despite a 3.4% fall in an index of Hong Kong listed mainland property firms.

The property stock declines followed a Saturday announcement by China’s parliament’s top decision-making body that will roll out a pilot real estate tax in some regions.

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Embattled developer China Evergrande Group last week appeared to avert a costly default with a last-minute bond coupon payment, and Reuters reported Monday that some bond holders had received payment.

“Although we had some news on the Evergrande front, I think we will see more pressure on the property sector, especially the smaller guys,” said Carlos Casanova Asia senior economist at UBP pointing to authorities’ efforts to ensure a correction in house prices, and the expansion of plans for a pilot property tax at a time when many property companies had bonds maturing in the coming months.

Also on investors’ minds is a string of company earnings due this week.

Hong Kong listed shares of HSBC, pared earlier gains to be last up 0.1% even after Europe’s second largest bank by assets reported a surprise 74% rise in third quarter profit.

Facebook will publish its quarterly results later on Monday, with other benchmark heavyweights due later in the week including tech giants Microsoft, Apple and Alphabet, and European and Asian financial behemoths from Deutsche Bank and Lloyds to China Construction Bank and Nomura.

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The risk friendlier mood that supported equities has weighed on safe-haven currencies, as have rising energy prices which supported currencies including the Aussie and Canadian dollars.

The dollar index was last at 93.532, down 0.14% on the day, having earlier touched a one month low of 93.483.

Traders are waiting for U.S. third quarter GDP figures due Thursday with a weak print likely to weigh on the dollar, according to analysts at CBA, while expectations that rising inflation will drive interest rate hikes in the U.K and Australia have been supporting sterling and the Aussie dollar.

Markets are still trying to position themselves for a widely expected tapering of the U.S. stimulus programme this year, and the possibility of rate hikes late in 2022

Federal Reserve Chair Jerome Powell on Friday said the U.S. central bank should start the process of reducing its support of the economy by cutting back on its asset purchases, but should not yet touch interest rates.

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As tapering looms, U.S. benchmark yields have been rising and yields on 10-year Treasury notes hit a five-month high of 1.7064% last week. They were last 1.6449%.

Oil prices rose further on Monday, with U.S. crude hitting a seven-year high as global supply remained tight amid strong demand worldwide.

Brent crude rose 0.83% to $86.24 a barrel, while U.S. crude rose 0.80% to $84.51

Spot gold rose 0.36% to $1,798 an ounce after posting gains for the past two weeks on rising inflation concerns, ad the weakening dollar.

Bitcoin another asset oft-described as an inflation hedge was last at $62,000 up 1.8% after last week’s turbulent trade when it hit a new high of $67,016.

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(Editing by Stephen Coates and Lincoln Feast.)

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Tesla sold 52,859 China-made vehicles in November – CPCA

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December 8, 2021

BEIJING (Reuters) – U.S. electric vehicle maker Tesla Inc sold 52,859 China-made vehicles in November, including 21,127 for export, the China Passenger Car Association (CPCA) said on Wednesday.

Tesla, which is making Model 3 sedans and Model Y sport-utility vehicles in Shanghai, sold 54,391 China-made vehicles in October, including 40,666 that were exported.

Chinese EV makers Nio Inc 10,878 cars last month, a monthly record high, and Xpeng Inc delivered 15,613 vehicles. Volkswagen AG said it sold over 14,000 ID. series EVs in China in November.

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CPCA said passenger car sales in November in China totalled 1.85 million, down 12.5% from a year earlier.

(Reporting by Sophie Yu, Brenda Goh; editing by Jason Neely)

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Renault Zoe goes from hero to zero in European safety agency rating

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December 8, 2021

By Nick Carey

LONDON (Reuters) – French carmaker Renault on Wednesday received a blow for its popular Zoe electric model, as the European New Car Assessment Programme (NCAP) gave it a zero-star safety rating in tests that are standards for Europe.

The carmaker, which is cutting costs and working to turn around its performance after overstretching itself over years of ambitious global expansion, also received a one-star rating for its electric Dacia Spring model.

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Euro NCAP said the latest Zoe had a worse seat-mounted side airbag than earlier versions. Euro NCAP noted the Renault Laguna had been the first car ever to receive a five-star rating in 2001.

“Renault was once synonymous with safety,” Euro NCAP secretary general Michiel van Ratingen said in a statement. “But these disappointing results for the ZOE and the Dacia Spring show that safety has now become collateral damage in the group’s transition to electric cars.”

In the year through October, the Zoe was the third top-selling fully-electric car in Europe, behind Tesla’s Model 3 in top place and Volkswagen’s ID.3.

In a press release titled “Hero to Zero,” UK insurance group Thatcham Research noted the Zoe had initially received a five-star rating back in 2013.

“It’s a shame to see Renault threaten a safety pedigree built from the inception of the rating,” said Matthew Avery, Thatcham’s chief research strategy officer and a Euro NCAP board member.

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Eleven cars received ratings in Euro NCAP’s final round of tests for 2021, which did not include Tesla models.

A number of other vehicles received five-star ratings, including BMW’s electric iX, Daimler’s electric Mercedes-Benz EQS, Nissan’s Qashqai and Volkswagen’s VW Caddy.

(Reporting By Nick Carey; Editing by Bernadette Baum)

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Weibo shares close down 7.2% in Hong Kong debut

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December 8, 2021

By Scott Murdoch

HONG KONG (Reuters) -Chinese social media giant Weibo Corp’s shares closed 7.2% below their issue price in Hong Kong on Wednesday, as it became the latest U.S.-listed China stock to seek out a secondary listing closer to home.

The Hong Kong debut was in line with a fall in Weibo’s primary listing in New York after a torrid week for U.S.-listed China shares, which are facing greater U.S. regulatory scrutiny and also under pressure from Chinese authorities.

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Weibo, which raised $385 million for its Hong Kong listing, opened at $256.20 and closed at HK$253.2 after a volatile debut session.

The stock had been priced at HK$272.80 each in its secondary listing in which 11 million shares were sold.

“For Weibo, it’s a matter of timing. The Hong Kong market had started to rebound this week and now we are seeing some softness emerging in the market,” said Louis Tse, Wealthy Securities director in Hong Kong.

Weibo’s fall came as Hong Kong’s Hang Seng Index closed Wednesday up 0.06% while the Tech Index was 0.03% higher.

Some major stocks such as Alibaba Group Holdings, down 4.35%, were off sharply as sentiment towards tech majors remains fragile.

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“The listing market in Hong Kong is very lukewarm right now,” said Dickie Wong, Kingston Securities executive director.

“Plus, there is regulatory pressure from the (U.S. Securities and Exchange Commission) on Chinese companies to disclose basically everything within three years.

“So there is a major trend that most of the U.S.-listed Chinese companies will seek secondary or dual primary in Hong Kong so they can exit the U.S. market if they need to.”

Ride-hailing giant Didi Global decided last week to delist from New York https://www.reuters.com/technology/didi-global-start-work-delisting-new-york-pursue-ipo-hong-kong-2021-12-03, succumbing to pressure from Chinese regulators concerned about data security and denting sentiment toward Chinese stocks.

Hong Kong and China’s mainland STAR Market have attracted $15.2 billion worth of secondary listings from U.S. listed Chinese companies so far this year, according to Refinitiv data.

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“The moves are probably based on the increasing recognition that the U.S.-China decoupling will not stop and will proceed steadily,” said LightStream Research analyst Mio Kato, who publishes on Smartkarma.

“I would expect a continuous flow of listings from New York to Hong Kong over the next year or two.”

The U.S administration is progressing plans to delist Chinese companies if they do not meet the country’s auditing rules, which could affect more than 200 companies.

Chinese companies https://www.reuters.com/business/us-sec-mandates-foreign-companies-spell-out-ownership-structure-disclose-2021-12-02 that list on U.S. stock exchanges must disclose whether they are owned or controlled by a government entity, and provide evidence of their auditing inspections, the Securities and Exchange Commission (SEC) said last week.

(Reporting by Scott Murdoch and Donny Kwok; editing by Richard Pullin and Louise Heavens)

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