Green Shoots Review, AAC & Kuaishou Weigh On Hong Kong Tech

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fairly easy
Asian equities were mixed today in a quiet summer session.
Logo atop the Kuaishou Technology headquarters in Beijing, China, on Wednesday, Feb. 3, 2021. ... [+] Kuaishou Technology, the operator of China's most popular video service after ByteDance Ltd.'s Douyin, raised HK$42 billion ($5.4 billion) after pricing its Hong Kong initial public offering at the top of a marketed range. Photographer: Yan Cong/Bloomberg © 2021 Bloomberg Finance LP

Key News

Before diving into today's market action it is worth reviewing several "green shoots" that are not receiving media attention. This morning it is being reported that social media company JOYY Inc (YY US) will take itself private after the stock went from a high of $147 on February 16th to a low $40.50 on August 17th. The market cap of the company as of yesterday was $4.427B but the company had $2.592B of cash/cash equivalents and another $1.325B of short-term deposits according to the company's Q2 financial results reported on August 18th. The company has almost as much cash as investors are valuing the company!

Privatization deals marked the bottom in the summer of August 2015 during that Chinese stock sell-off. Another green shoot is clarity on regulation's finish line as China's Data Security Law and Critical Information Infrastructure regulation goes into effect on September 1st. Another green shoot was last Friday's CSRC statement on wanting to address the long-running audit issue which led to the Holding Foreign Companies Accountable Act. On Monday the State Council put out a statement saying the issue should be resolved saying it would "boost cross border accounting cooperation".

Yesterday there was an article based on Goldman Sachs research showing that exposure to Chinese internet stocks from hedge funds hit a low last week. We've seen research showing that global and emerging market active funds have left the space. This is dry powder that can come back into the space.

Today a government press conference was held today from Han Wenxiu who stated that common…
Brendan Ahern
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