178.00 -0.26 (-0.15%)
After hours: 4:14PM EDT
|Bid||177.94 x 800|
|Ask||177.94 x 900|
|Day's Range||174.85 - 178.63|
|52 Week Range||129.77 - 198.35|
|Beta (3Y Monthly)||1.84|
|PE Ratio (TTM)||50.98|
|Earnings Date||Aug 21, 2019 - Aug 26, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||217.88|
The trade tension between Washington and Beijing hasn't stopped the Chinese tech giant's ambitious plans for the U.S. market.
(Bloomberg) -- Alibaba Group Holding Ltd. is opening its oldest online platform to U.S. merchants, promising to help American businesses at a time U.S.-Chinese tensions are darkening the outlook for global trade.The Chinese e-commerce giant on Tuesday opened up Alibaba.com to U.S. sellers for the first time, allowing them to peddle to buyers around the world who seek merchandise to stock shelves or materials to make products. Alibaba says it now wants American producers to hawk their wares as well, eventually helping them tap a vast Chinese market. Fruit and vegetable wholesaler Robinson Fresh and Office Depot Inc. will be among the first U.S. names to join Alibaba.com.Two years after billionaire founder Jack Ma promised Donald Trump he would help create a million American jobs, Alibaba is opening up its wholesale platform to U.S. sellers who want to tap a multi-trillion dollar global procurement market. The initiative could generate new income and also goodwill for Alibaba in the U.S., particularly as Washington and Beijing spar over trade. The threat of rising tariffs is now encouraging businesses to source their merchandise and components locally, said John Caplan, president of Alibaba’s North American business-to-business effort.Rollout PlanU.S. business owners “increasingly want to find domestic producers because of trade concerns and this platform will allow them to do that,” he told Bloomberg News. He anticipates strong demand for American agricultural produce and consumer products. “Anything you put on or in your body.”Alibaba will send staff to promote the service to businesses and local chambers of commerce, and plans a September promotional event to drum up awareness, Caplan added.“The success of this program will depend on whether Alibaba can recruit a strong number of successful sellers,” said Jillian Ryan, principal analyst at researcher eMarketer. “It will ultimately determine whether Alibaba will be able go toe-to-toe with Amazon in the B2B commodity market.”The Chinese internet powerhouse is opening up Alibaba.com just as a decelerating home economy depresses the top line. The online retailer is expected to soon post its slowest quarterly revenue growth in three years.Oldest UnitUnlike its better-known consumer bazaars Taobao and Tmall, Alibaba.com was originally envisioned as a way to match foreign firms with Chinese wholesalers of everything from watches and shoes to raw textiles. Operating under the motto “global trade starts here,” Alibaba.com now connects about 150,000 mostly Chinese sellers. It had some 650,000 registered U.S.-based companies as of 2017. Those American businesses previously could only buy, not sell, via Alibaba.com.It’s the Chinese giant’s oldest business but now accounts for just a sliver of revenue, mostly through membership fees, marketing and shipping assistance.Alibaba still gets the vast majority of its revenue at home, but has taken steps to court international markets in recent years. It acquired Lazada to spearhead a foray into Southeast Asia. It’s also tweaking its main businesses: in June, it set up an English-language portal on Tmall for the first time to entice more merchants from around the world to sell to Chinese consumers.But like rival JD.com Inc., Alibaba is trying to grab a bigger slice of so-called cross-border e-commerce, particularly as affluent consumers in the world’s No. 2 economy buy more goods from abroad. That market is expected to reach 3.6 trillion yuan ($523 billion) by 2020, according to AliResearch, a unit of Alibaba.(Adds analyst comment)To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at email@example.com;Olivia Rockeman in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Edwin Chan at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Since the U.K. decided more than three years ago to leave the European Union, the nation's savviest investors have succeeded by putting their money where Brexit matters least.Uncertainty about the date of Britain’s departure (now pushed back to Oct. 31) and the terms of the divorce has meant purging the U.K. from their holdings or limiting them to investments traditionally impervious to man-made and natural disasters. Over 38 months, British sterling depreciated 16 percent, the worst shrinkage for any similar period in 8 years. The pound remains the poorest performer in the actively-traded foreign exchange market and inferior to the No. 3 euro.Europe's strongest major economy in the 21st century became a shadow of its former self, reversing two decades preceding the June 23, 2016 referendum when the U.K. outperformed the European Union in growth and investment. London's stock and bond markets similarly languished as laggards to world benchmarks, after beating them consistently in the 20 years prior to the decision to leave the EU, according to data compiled by Bloomberg.“If I give myself some credit, I would say that we acted reasonably fast liquidating U.K. shares” in 2016, said Ben Rogoff, whose Polar Capital Technology Trust PLC has been the most consistent winner out of the 212 British global funds with at least 1 billion pounds this year and during the past three years. His team's 114 percent total return (income plus appreciation) was 22 percentage points better than the Dow Jones World Technology Index, mostly because 68% of the fund is invested in the U.S., two-thirds of that in California companies, according to data compiled by Bloomberg. “It's all about the Internet and where do you get exposed to the Internet? The U.S. and China,” Rogoff said last month during an interview at Bloomberg in London.While Rogoff reduced his holdings of three California tech powers during the past year — Cupertino-based Apple Inc., Menlo Park-based Facebook and Santa Clara-based Advanced Micro Devices — he acquired more shares in Shenzhen-based Tencent Holdings Ltd., Hangzhou-based Alibaba Group Holding Ltd., South Korea's Samsung Electronics Co. and Tokyo-based Yahoo Japan Corp., according to data compiled by Bloomberg.The 46-year-old graduate of St. Catherine's College, Oxford, became the lead manager of the trust in 2006, “and at that time,” he said, “the U.K. weighting might have been 5% to 10%, so if you had already been backing away to the door, it's a lot easier to escape than if you built a career around being an expert in U.K. equities.” Since the Brexit referendum, he said, “There's just been a complete buyers' strike of U.K. equities.”Proof of such disdain comes with the crisis this year at the LF Woodford Equity Income Fund, Britain's most-prized investment when it was launched by star money manager Neil Woodford in 2014. The celebrated stock picker became even more prominent with his contrarian bullish stance on Brexit. The fund plummeted 31% during the past two years by holding a combination of large and small U.K. companies and has frozen redemptions indefinitely.“It's symptomatic of a broader problem,” Bank of England Governor Mark Carney told reporters earlier this month. “Our sense is that the financial-stability risks are increasing.”One U.K. investor who’s successfully resisted the trend away from domestic stocks is Nick Train, who manages Finsbury Growth & Income Trust. It returned 61% the past three years — more than twice the FTSE All-Share Index benchmark — as the most consistent one- and three-year performer among the 129 U.K.-based funds investing mostly in domestic stocks or bonds, according to data compiled by Bloomberg. Unlike Woodford, who doubled down on the British economy writ large, Train, a 60-year-old graduate of Queen’s College, Oxford, dramatically increased his holdings in consumer staples. These are the companies that make such essentials as food, beverages and household goods and can resist business cycles because their products always are in demand.Train, who declined to be interviewed, increased the consumer staples weighting relative to the benchmark to 27% from 23% in 2015 and he enhanced his holdings of Deerfield, Illinois-based Mondelez International Inc., which manufactures and markets packaged food products, and London-based Diageo PLC, the world's largest producer of spirits and beer, according to data compiled by Bloomberg.That's likely to be a safe bet as no one is counting on the British economy rebounding significantly from near the bottom of the EU while the uncertainty created by Brexit persists. “If you take a long view, then this may well be a great time to be investing in U.K. equity,” said Rogoff. “Thankfully, I don't have to make that binary call because there are very few U.K. companies I'm frankly interested in.”(Corrects location of Tencent Holdings headquarters in fifth paragraph of article published July 16.)\--With assistance from Shin Pei, Richard Dunsford-White, Kateryna Hrynchak and Suzy Waite.To contact the author of this story: Matthew A. Winkler at firstname.lastname@example.orgTo contact the editor responsible for this story: Jonathan Landman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Matthew A. Winkler is a Bloomberg Opinion columnist. He is the editor-in-chief emeritus of Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Logitech (LOGI) fiscal first-quarter results benefit from solid performance of Video Collaboration unit. Moreover, significant growth in Mobile Speakers business is a tailwind.
Chinese e-commerce giant Alibaba Group Holdings Ltd will allow small U.S. businesses to sell on Alibaba.com, the company said on Tuesday, as it seeks to tap into the business-to-business e-commerce market and fend off rivals like Amazon.com Inc . The change will open up markets to U.S. merchants in countries served by Alibaba, including India, Brazil and Canada. U.S. merchants, previously able to only buy on Alibaba.com, can now also sell to other U.S.-based businesses on the marketplace.
Alibaba.com, one of the world’s largest B2B ecommerce marketplaces and a business unit of Alibaba Group (BABA), today opened its platform to empower U.S. businesses to sell their products to millions of Alibaba.com buyers in the U.S. and around the globe. The first in-person Alibaba.com Build Up event will be held today in Brooklyn at Industry City – a community of innovative industrial and manufacturing businesses – along with co-hosts, the Brooklyn Chamber of Commerce and Industry City.
(Bloomberg Opinion) -- Supply-chain finance is the secret sauce behind Citigroup Inc.’s mid-20% return on equity from transaction banking.That might sound counterintuitive, especially in Asia. The export-led region is facing the brunt of supply dislocations as the U.S.-China trade war intensifies. But the skirmish isn’t a showstopper for financing. As production moves from one country to another, transactions that need to be greased with money or credit will occur somewhere else. They won’t disappear.For evidence, take a peek at Citi’s recent quarterly results. The bank has $715 billion in deposits from institutional clients. About $166 billion of it is in Asia, up 8% from a year earlier and growing faster than consumer banking deposits. What’s more, Citi doesn’t even have to aggressively seek corporate liquidity by promising high interest rates. It just has to work with a few hundred clients – not just Western multinationals like Procter & Gamble Co., but also Asian ones such as Alibaba Group Holding Ltd. and Xiaomi Corp. – by lubricating their vast global supply chains running into tens of thousands of vendors.Imagine a detergent maker in Indonesia that gets paid by P&G 90 days after billing. The company would be tempted to accept money from Citigroup even for 120 days if doing so helps to keep its domestic bank-financing lines unencumbered. Citi doesn’t take any credit risk on this small supplier because the bank is going to be paid by P&G, which also benefits by getting an extra 30 days to settle its bills. A big chunk of the corporate cash swirling on Citi’s balance sheet is what the multinationals have in their accounts at the bank , vast sums that ensure supply chains function smoothly.In a two-part series about virtual banking – the hottest new thing in Asian finance this year – my colleague Nisha Gopalan and I concluded that corporate cash management may be a more lucrative bastion than retail for the digital warriors to storm. That’s particularly so for Wall Street banks looking beyond fickle investment-banking revenue. However, even that “more modest leap of faith,” as we described the lure of transaction banking to the likes of Goldman Sachs Group Inc., will have trouble clearing Citi’s moat. It may not be impossible for an online-only bank to operate in more than 160 countries, deal with heavy penalties in case it flouts sanctions or gets dragged into a money-laundering scandal, and over time build its own war chest of deposits. But it’s certainly going to be difficult.None of this means that traditional transaction bankers can rest easy. In the world they’re familiar with, materials move one way; money in the opposite direction. The greater the risk of interruption to the flows, the higher the premium for ensuring they don’t. This age-old landscape is changing fast. The consumption of a Netflix movie or a Spotify song is purely digital. Deloitte estimates that by 2025, more than a third of all consumption in Australia, Hong Kong, Singapore and Malaysia will be done by people born after 1980. The spending of digital native generations – Y and Z – will be light on materials.Transaction bankers can’t dig themselves into a hole and pretend they’re engaged in a pure business-to-business activity. If you want to bank Uber Technologies Inc., you have to grapple with the financing of the discount coupons on late Uber Eats deliveries.Many things in the new digital supply chain will be done more efficiently by non-banks. Deloitte cites the example of Traxpay, chosen this year by Edeka Group, a large German food retailer, to handle the working capital needs of its vendors. Platforms like Traxpay will still need banks. But the real profit lies in owning the client relationships, not in providing money. To retain their edge banks will either have to buy promising fintech firms, or build their own rival products. Both options are capital-intensive; neither is guaranteed to succeed.We’ve previously characterized transaction banking as humdrum to distinguish it from its flashier cousin of retail digital banking. But not only is supply-chain finance juicy for banks, its meat-and-potatoes wholesomeness is drawing in fintech and Wall Street investment banks. The $715 billion of cheap liquidity sitting on the balance sheet of the big daddy of transaction banking is both a temptation for challengers, and a dare. It’ll be interesting to see where those deposits are five years from now.\--With assistance from Nisha Gopalan To contact the author of this story: Andy Mukherjee at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- They propelled a little-known semiconductor manufacturer to a 521% surge, traded a mid-sized railway company 13 times more feverishly than the world’s largest bank and valued a chipmaking-gear producer at an eye-watering 730 times earnings.Chinese investors greeted the opening of the country’s Nasdaq-style equity market with a frenzied burst of trading on Monday, driving gains in all 25 companies that made their debut. The stocks jumped an average 140% at the close in Shanghai, even as most slipped from their intraday highs. About 48.5 billion yuan ($7.1 billion) of shares changed hands on the so-called Star board, or about 13% of turnover in the rest of the market.The new venue is China’s latest attempt to avoid losing the next Alibaba Group Holding Ltd. or Tencent Holdings Ltd. to exchanges in New York or Hong Kong. Endorsement from top officials helped generate such enthusiasm that firms raised a combined $5.4 billion, about 20% more than planned. Demand from retail investors has outstripped supply by an average 1,800 times, even as some analysts voiced concern over lofty valuations.“Gains were much stronger than expected, either due to unreasonable IPO pricing or speculative trading,” said Zhu Junchun, a Shanghai-based analyst with Lianxun Securities Co. “It’s going to be a liquidity game in the first half year or one year of trading. Judging by the trading activity and gains on the board, it’s definitely a success.”The board is also a testing ground for regulators, who have waived rules on valuations and debut-day price limits for the first time since 2014. The venue is the only one in China to welcome companies that have yet to make a profit, as well as shares with unequal voting rights. The Shanghai stock exchange will create an index tracking the firms about two weeks after the 30th listing starts trading.Shares on the Star board have no daily price limits for the first five trading days, followed by a 20% cap in either direction. To limit volatility, the venue suspends activity for 10 minutes if a stock moves by 30% and then 60% from the opening price in the first five trading days, a wider band than the rest of the stock market. Only certain qualified foreign investors can buy the stocks directly, as there’s no access through trading links with Hong Kong.The first batch of listings included China Railway Signal & Communication Corporation Ltd., whose Hong Kong shares sank on huge volume as traders switched into the A shares. Advanced Micro-Fabrication Equipment Inc., which was the most expensive listing of the batch, jumped as much as 331%. Its 171 multiple compared with an average of 53 times for the group, and 33 for similar stocks on other Chinese venues.Despite the hype, there are questions about whether the excitement will give way to the lukewarm sentiment that’s blanketing the world’s second-largest equity market. On the other hand, a sustained period of ultra-high demand risks draining funds from other exchanges, where volumes are shrinking. The Shanghai Composite Index fell 1.3% on Monday, while the ChiNext Index was down 1.7%.It’s not the first time China has sought to create an alternative venue for smaller companies. The ChiNext board was launched in Shenzhen almost a decade ago with fewer listing requirements than the main venues. The tech-heavy exchange was at the center of a spectacular boom and bust in 2015 that burned hordes of novice traders. Officials will be keen to avoid such extreme volatility -- the ChiNext remains more than 60% below its peak four years ago.“I’m not going to participate in the Star board anytime soon,” said Qu Shaohua, managing director at Acroguardian Investment Co. “With prices at these levels it will take quite a long time for the market to fully digest the current valuation and adjust to a reasonable price.”The Star board’s launch dovetails with Beijing’s pledge to boost direct financing for companies struggling to raise funds, and has taken on added significance as heightened trade tensions with the U.S. threaten China’s technology supply chain.“I would say that the launch is a success,” said Fu Lichun, an analyst at Northeast Securities. “People are indeed quite enthusiastic, and maybe got a little over-excited at the open.”\--With assistance from Irene Huang, Lujia Yu, Fox Hu, Ken Wang, Ludi Wang and Michael Patterson.To contact Bloomberg News staff for this story: Evelyn Yu in Shanghai at firstname.lastname@example.org;April Ma in Beijing at email@example.com;Amanda Wang in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Sofia Horta e Costa at email@example.com;Sam Mamudi at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- aCommerce, a Bangkok-based startup that helps brands such as Samsung, L’Oreal and Unilever sell their products online across Southeast Asia, has raised more than $10 million from existing investors including KKR & Co.KKR’s Emerald Media, investment house Blue Sky, DKSH Holding AG and an arm of Indonesian conglomerate Sinar Mas also took part in the company’s latest funding round, intended to drive the startup’s expansion and help it reach profitability by early 2020. That in turn paves the way for an initial public offering in two to three years, Chief Executive Officer Paul Srivorakul said. The six-year-old firm plans to raise another $5 million by the end of this year as part of an extended Series B or early-stage funding round, he added.“We have the ambitions for an IPO so it’s really important that we grow a healthy, valuable business,” Srivorakul said in an interview.aCommerce is trying to set itself apart from other online retail startups that focus on growth over the bottom line. Rather than go head-to-head against Chinese giants from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. and JD.com Inc., which have made inroads into the region in recent years, the Thai outfit concentrates on supporting brands keen on expanding their own online sales.aCommerce makes money by providing services from distribution and marketing to warehousing and delivery. It operates in Singapore, Indonesia, Thailand, Malaysia and the Philippines. In 2018, revenue grew 73% to more than $100 million, and its core market of Thailand turned profitable, according to the CEO.It’s early days but the company may choose to list in Bangkok, Singapore or Australia to stay close to the Southeast Asian market, he said.To contact the reporter on this story: Yoolim Lee in Singapore at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Lulu Yilun ChenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- If you hold shares in New York-listed Alibaba Group Holding Ltd., you don’t own a stake in a Chinese internet powerhouse.What you have are the American depositary receipts of a Cayman Islands company that has a contract with the Chinese firm. In fact, the country’s largest search and e-commerce provider(1)is ultimately controlled by Alibaba Partnership, a collection of 38 people, most of whom hold senior positions in the company.This business structure, called a variable-interest entity, became common among Chinese companies because Beijing restricts foreign investment in certain sectors, such as the internet. It also enables firms to raise money abroad and lets early investors get their funds out of the country. Tencent Holdings Ltd., Meituan Dianping and Baidu Inc. all hew to various versions of the VIE, allowing them to exploit a gap in Chinese law.In total, almost $1.3 trillion in market capitalization is linked to Chinese VIEs listed outside the mainland, according to U.S. credit-ratings provider Standard & Poor’s Financial Services LLC.For now, these companies aren’t doing anything illegal and Beijing hasn’t seen the need to close this loophole. Keeping VIEs operating in a gray area gives policymakers the flexibility to crack down at will. But as the trade war intensifies, China has a growing incentive to keep its tech giants, and their cash, at home. In that light, it’s not inconceivable that officials would take steps to eliminate the structure, even if it spooks foreign investors.For years, knowledge that the Chinese government could take action at any time hung a legal cloud over VIEs. S&P previously accounted for such risk among VIEs operating in sensitive businesses, such as Alibaba and Tencent, though not for others in more mundane areas like retail.In a report last week, analysts Clifford Kurz and Sophie Lin wrote that recent changes in China’s foreign-investment law make no mention of VIEs, after an earlier draft sought to prohibit them. S&P interprets this to mean that concerns have diminished. I understand their reasoning, but disagree with the conclusion.Silence is certainly better than an explicit ban. Yet having a gray area within an opaque legal system simply puts such companies and investors at the whim of policymakers. There may indeed be a lack of incentive to dismantle VIEs today, and doing so probably would hurt foreign-investor sentiment. Neither factor amounts to much if Beijing one day gets fed up with Chinese companies using overseas listings as a way to get their assets offshore.This year alone, 31 Chinese companies chose to raise almost $6 billion by listing in the U.S. Not because they get better valuations there, but because founders and VCs know a public offering in China would give them illiquid assets subject to capital controls. Beijing has tried all sorts of things to encourage its companies to list at home, the latest being the SSE STAR Market – a Nasdaq-style tech board – for which regulators eased rules to attract interest. Yet as my colleague Nisha Gopalan wrote recently, Chinese companies still want to raise dollars, both to fund expansion and give Western venture-capital firms a hard-currency exit.If such carrots keep failing, Beijing could very well bring out sticks. Given the state of U.S.-China relations, there’s little reason to believe policymakers will prioritize the concerns of foreign investors over its own desire to prevent capital flight.This means that in assessing VIEs, foreign investors need to consider whether they’re willing to leave $1.3 trillion to the whims of a Chinese legal gray area.(1) Alibaba's revenue primarily comes from sellers paying to get elevated in search results on its platforms.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Alibaba (BABA) has been upgraded to a Zacks Rank 2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.Less than a year after President Xi Jinping first touted the project, China’s new stock venue designed for technology startups will start trading on Monday.Twenty-five companies will be part of the launch in Shanghai, out of the more than 100 hopefuls that applied to go public on the platform. Endorsement from top officials helped generate such enthusiasm that the firms raised a combined $5.4 billion, about 20% more than planned. Demand from retail investors has outstripped supply by an average 1,800 times, even as some analysts voiced concern over lofty valuations. One company priced its shares at 171 times earnings.“The first-batch listings are expected to be boosted by investor demand,” said Mark Huang, an analyst at Bright Smart Securities. “There’s a good chance we’ll see a rush into these stocks due to the limited supply.”Modeled after the Nasdaq Stock Market in the U.S., the so-called STAR board is China’s latest attempt to avoid losing the next Alibaba Group Holding Ltd. or Tencent Holdings Ltd. to exchanges in New York or Hong Kong. It’s also a testing ground for regulators, who have waived rules on valuations and first-day price limits for the first time since 2014. The venue will be the first in China to welcome companies that have yet to make a profit, as well as shares with unequal voting rights.The listing companies include China Railway Signal & Communication Corporation Ltd. -- already listed in Hong Kong -- and gastrointestinal equipment maker Micro-Tech (Nanjing) Co. Ltd. Advanced Micro-Fabrication Equipment Inc., which sells products used to make semiconductors, is the most expensive stock of the batch. Its 171 multiple compares with an average of 53 times for the group, and 33 for similar stocks on other Chinese venues.A handful of stocks linked to the first batch advanced on Friday, showing investor enthusiasm ahead of the new board’s debut. And another two firms joined the queue to list: Amlogic (Shanghai) Co. and Shanghai Friendess Electronic Technology are aiming to raise a combined 2 billion yuan ($291 million), according to their prospectuses.Despite the hype, there are questions about whether the excitement will give way to the lukewarm sentiment that’s blanketing the world’s second-largest equity market. On the other hand, a sustained period of ultra-high demand risks draining funds other exchanges, where volumes are shrinking. Mainland markets sank earlier this month after China announced the STAR board’s official start date. The Shanghai Composite Index rose 0.8% on Friday.It’s not the first time China has sought to create an alternative venue for smaller companies. The ChiNext board was launched in Shenzhen almost a decade ago with fewer listing requirements than the main venues. The tech-heavy exchange was at the center of a spectacular boom and bust in 2015 that burned hordes of novice traders. Officials will be keen to avoid such extreme volatility -- the ChiNext remains more than 60% below its peak four years ago.Shares on the STAR board will have no daily price limits for the first five trading days, followed by a 20% cap in either direction. To limit volatility, the venue will feature a mechanism that suspends activity for 10 minutes if a stock moves by 30% and then 60% from the opening price in the first five trading days, a wider band than the rest of the stock market.The STAR board’s launch dovetails with Beijing’s pledge to boost direct financing for companies struggling to raise funds, and has taken on added significance as heightened trade tensions with the U.S. threaten China’s technology supply chain.“It’s one of China’s key strategies to support technological innovation,” said Zhang Yankun, fund manager at Beijing Hone Investment Management Co. “If investors can get decent returns from these listings, it would attract more money to the sector and help China’s capital market compete with developed markets.”(Updates with stock moves in sixth and seventh paragraphs.)\--With assistance from Irene Huang and Lujia Yu.To contact Bloomberg News staff for this story: Ken Wang in Beijing at email@example.com;Evelyn Yu in Shanghai at firstname.lastname@example.org;Fox Hu in Hong Kong at email@example.com;Ludi Wang in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Sofia Horta e Costa at email@example.com;Sam Mamudi at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Forget medical school and engineering degrees. With a record 8.3 million university graduates this year, Beijing is urging its best and brightest to take up competitive video-gaming. ESports professionals can make triple the national average salary, according to the Ministry of Human Resources and Social Security. As the economy slows, pouring resources into China’s night-shift GDP might just be wacky enough to work. Municipal governments have taken the hint, luring gaming clubs with cash handouts and other perks. The resort island of Hainan is setting up a 1 billion yuan ($150 million) development fund and giving up to 10 million yuan in subsidies for international tournaments. Shanghai’s Yangpu district offers a 30% rental discount to businesses in the sector.The push has made unlikely pairings of 60-year-old local bureaucrats and thirtysomething eSports executives, who’ve been forced to ditch their PowerPoint presentations for formal government memos. Pan Jie, nicknamed “the Queen” among China’s professional gamers, has learned that Bohemian dresses and video-game T-shirts don’t go over well when officials visit the Hangzhou headquarters of her club, LGD-Gaming, one of China’s largest.With government support, Pan Jie’s dream of operating her own eSports stadium is getting closer to fruition. Still, you’d be forgiven for doubting that layers of statist procedure can springboard the competitive video-gaming sector, particularly when China’s private enterprises are already struggling to get the funding they need. Having scouted venues across China, Pan Jie settled on a plot of land on the outskirts of Hangzhou, within a shantytown development zone located in the Xia Cheng district. Beijing has been working to revive these areas since 2015, with the central bank flying in more than 3.5 trillion yuan of helicopter money to support such projects through pledged loans. The Xia Cheng district is hoping that a new eSports park – along with the tourism and tech jobs it can generate – will bring in over 1 billion yuan, more than 10% of the 8.9 billion yuan in fiscal revenue it collected in 2018. Judging from a publication by the district’s news office, officials seem to have outlined concrete policies rather than grand promises. Indeed, the local government was quick to act, tearing down old residential buildings to make space for the new construction, which will eventually house up to 1,000 startups. To help LGD-Gaming move into the new center by its May deadline, officials even called furniture shops late at night, demanding employees work overtime to meet the company’s needs. A handful of bureaucrats temporarily stationed at the park have been assigned as startup liaisons.Whether Xia Cheng can meet all the grand expectations is a big unknown. Hangzhou is home to China’s wealthiest businesses, including Alibaba Group Holding Ltd. Yet not all areas are created equal. Last year, Xia Cheng’s GDP grew 6.1% to 93 billion yuan, not even half that of the tourist district of Yu Hang. Meanwhile, Xia Cheng has entrenched business interests to deal with. Smack at the center of the eSports zone is a huge, five-story warehouse occupied by Zhejiang Food Stuff Corp., a provincial champion known for its cured ham. The district has to wait for the company to build another site before any demolition work can begin. For the time being, startups have occupied a small corner of the redevelopment zone, and Shenzhen-based Quantum Capital, a venture-capital firm, postponed opening a branch there. Over the next five years, China’s competitive video-gaming industry can absorb close to 2 million workers, according to the Ministry of Human Resources. But throwing cash at an idea isn’t enough. Bureaucrats will need to show that they can work effectively with what they once called the “lost souls” of the gig economy. During a recent visit to LGD-Gaming, one official pooh-poohed a hipster barbecue joint inside the eSports park: Grilling lamb chops on an open pit? How undignified, he apparently complained. The business was shut within days. “We were sad for a while, because their lamb tasted great,” Pan Jie lamented.To contact the author of this story: Shuli Ren at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Michael Kors, the namesake brand established by the world-renowned, award-winning designer of luxury accessories and ready-to-wear, today announced that it will open its digital flagship store on Tmall, which will be featured on Tmall Luxury Pavilion, Alibaba Group’s dedicated platform for luxury and premium brands. The new online store marks the first third-party partnership for Michael Kors in China and will provide Tmall customers in China with exclusive access to special products launched only on Tmall as well as the entire range of Michael Kors women’s and men’s products. “We are excited to launch our new Michael Kors digital flagship on Tmall and Tmall’s Luxury Pavilion.
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Investors have been keeping their eyes locked on the relationship between the US and China as the rhetoric spewing from the conflict has impacted the stock market for the over a year now.