E The Market For Non-US Stocks Is Moderately Upbeat

A year after the last big Chinese sell-off another one took place today. Already in 2018, Chinese shares did even worse than those listed in Hong Kong.

One reason is that China's Supreme Court authorized the Shenzhen bankruptcy court to look into Mainland business which are involved in commercial disputes, bankruptcy, or money laundering either directly or indirectly via Hong Kong. Under Hong Kong rules, there is no disclosure over the use of shares they own by controlling shareholders and of cross-shareholdings. But Shenzhen courts get the information.

While I oppose any crackdown on independence in the former British Crown colony, we have to be realistic. Using Hong Kong subs to hide Chinese assets so the parent company can declare bankruptcy and move its funds or assets out of China is a crime, not a civil rights issue. Hong Kong and China signed agreements on civil and commercial cases and recognized each others' insolvency orders.

After markets closed, the Chinese negotiators came up with a plan to boost US imports to eliminate our trade deficit over the next 6 years.

This is in preparation for the opening on Monday in Shanghai and Shenzhen which barely registered the last 20 minutes' trading today in Hong Kong, as well as a sop to the deficit-hating US president.

While we have more news from Hong Kong and China today, most of this issue is about the rest of the globe. But of course, talk of a China trade deal boosted markets overall.

*Beleaguered Tencent is plotting to buy NXC Corp., a holding company which controls two South Korean game developers owned by its sub-Naxon. Reuters writes that TCEHY is seeking US private equity partners for a bid around $9-10 trillion (US$7-9 bn) won to buy out NXC's 98.64% shareholder Kim Jung-Ju. Kim wants to sell. This has naturally boosted Nintendo up another 3%.

*TCEHY also gained, and this spilled over to Wall Street where the share is up 2.5%. Other solvent Chinese firms like Hollysys, HOLI, up nearly 5%; China Eastern Airlines, CEA, up 2.25%; China Mobile, our newest buy, CHL, up 0.9%. Hong Kong-listed insurance firm AIA Group, AAIGF, did not trade despite it getting an AA rating overnight from S&P for its reinsurance arm.

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