Hong Kong stocks slide as China Covid cases surge; Asian markets mixed

JD.com shares fall after the company cuts executive salaries

Shares listed in Hong Kong JD.com was trading more than 5% lower in the afternoon after the company confirmed pay cuts to its senior management team.

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

The company added that it will pay social security contributions for Deppon Logistics employees and set up a housing fund.

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

– Iris Wang

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

Investing in US-listed Chinese companies is tantamount to playing “fantasy football” according to an asset management firm as US regulators continue their scrutiny of the companies.

Kyle Bass, founder and CIO of Hayman Capital Management, said the US Public Company Accounting Oversight Board’s recent reports giving “good access” to the requested information have yet to be confirmed, and reiterated the financial risks investors of US-listed Chinese companies are exposed.

“You own a stock that entitles you to a subsidiary in the Cayman Islands, which 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 are “investable”.

Chinese companies listed overseas, such as Alibaba and JD.com, use a variable interest entity structure that establishes an offshore entity, bypassing Chinese restrictions on foreign investment and preventing investors in US stocks from doing so to have the majority of the voting rights.

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

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

– Jihye Lee

Shares in Indonesia’s GoTo fall 6% after the company reports nine-month losses

Indonesia’s GoTo group posted a higher nine-month cumulative loss compared to the same period last year, although quarterly losses fell on cost-cutting.

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

The share price fell 6% Tuesday morning in Jakarta, marking a 48% drop in the share price since it was listed in April this year.

The company announced last Friday that it would make job cuts that it expects to be reflected later in 2023 as part of broader cost-cutting plans, it said.

– Sheila Chiang

Malaysian Kingmaker Party GPS will support Perikatan Nasional, not Pakatan Harapan

One of the kingmakers of the Malaysian election, Gabungan Parti Sarawak (GPS), a Sarawak-based national political alliance in east Malaysia, said it supports the Perikatan Nasional coalition in forming a government and will not work with Anwar Ibrahim’s Pakatan Harapan.

Malaysia’s king has asked the leading coalitions to present their candidates for prime minister by 2pm local time after Saturday’s elections ended inconclusively.

“We’ve always been told [sic] that we cannot work with the DAP here or in Pakatan,” GPS Secretary General Alexander Nanta Linggi told CNBC’s Squawk Box Asia. The DAP is a progressive sub-party of Pakatan.

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

In return for supporting GPS, Linggi said she wants the government to give party members posts in ministries they care about, such as rural development and commodities.

— Su-Lin Tan

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

Once a Wall Street darling, Amazon has lost some of its luster this year. The e-commerce giant’s stock is down more than 40%, significantly underperforming S&P500which fell by around 15% over the same period.

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

CNBC Pro subscribers can read more here.

– Zavier Ong

Baidu, Kuaishou shares fall ahead of earnings report

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

The company is expected to report a 0.05% drop in revenue to 31.904 billion yuan ($4.46 billion) for the July-September quarter, down from 31.92 billion yuan for the same period a year ago had reported.

Tiktok rival Kuaishou is expected to post third-quarter revenue growth of 10.2% to 22.58 billion yuan, a separate Refinitiv survey found — that would be the slowest pace of annual growth since the company began reporting earnings.

Shares listed in Hong Kong Kuaishou fell 4.1% ahead of earnings while baidu Shares fell 0.44% in the morning session.

– Jihye Lee

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

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

Mike Wilson, Morgan Stanley’s chief US equity strategist, said he expects a “rather steep fall in inflation” and predicts when that might happen.

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

CNBC Pro subscribers can read more here.

— Wheat Tan

Oil prices are flat after hitting their lowest level since January

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

US Crude Oil was marginally higher at $80.08 a barrel after hitting $75.08 in Monday’s session.

Brent crude oil edged up to $87.52 a barrel. In the previous session, it reached $82.31.

Oil futures tumbled briefly on Monday after the Wall Street Journal reported that OPEC+ is considering increasing supply by 500,000 barrels a day. Saudi Arabia later denied this report.

– Abigail Ng

Singapore authorities explain why FTX was not on its alert list

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

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 actually went as far as offering listings in Singapore dollars and accepting Singapore-specific payment methods such as PayNow and PayLah,” the statement said, adding that it received numerous complaints about Binance between January and August last year.

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

“The key lesson from the FTX debacle is that trading any cryptocurrency on any platform is dangerous,” it said, adding that even Singapore-licensed crypto exchanges are only regulated to address money laundering risks and not to offer protection to investors.

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

Jihye Lee

Stocks fall on Monday to start the short holiday week

Shares slipped Monday in a volatile trading session to start the short holiday week.

The S&P 500 lost 0.39% to 3,949.94 and the Nasdaq Composite fell 1.09% to end the day at 11,024.51. The Dow Jones Industrial Average fell 45.41 points, or 0.13%, to 33,700.28, although the index’s losses were mitigated by a rise Disney Stocks up more than 6%.

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

– Carmen Reinicke

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