China Delistings?
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- Опубліковано 28 вер 2024
- The United States and China appear to have reached a landmark deal that would allow Chinese companies to remain listed on US exchanges, halting the threatened delisting of about 200 stocks that trade in New York.
The announcement by US and Chinese regulators is a breakthrough after a prolonged standstill. Beijing has not allowed foreign regulators to inspect Chinese company audits, citing a desire to protect state secrets. US law requires Chinese companies to leave American stock exchanges if they do not comply with the countries audit rules.
The US Public Company Accounting Oversight Board, announced on Friday that it would have the power to select the companies, audit engagements and potential violations it inspects and investigates, without consulting Chinese authorities.
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You're going to run out of characters eventually.
"...and I *was* human." -- Zuck. That gave me a chuckle.
A bit creepy he said that without much content (was he talking about Metaverse?)
@@tsijr915 No, this was a few years ago.
"... but it is going to bother you because you're human and I was human ..." LOL!
🐊
There's nothing to prevent Chinese audit firms from selectively massaging/redacting financial data even with the deal
The best way forward is to delist the firms from US exchange and let those who wish to take the risk to buy and trade on the HK exchange.
On HK soil, PCAOB is unlikely to have the freedom or flexibility to look around if they have to validate or investigate some financial transactions/data further.
That's a fair point except not everyone has access to HK exchanges and also the big firms like Alibaba, and Baidu that are getting audited have as their auditors big American Audit companies like PwC. It's just the Chinese arm of that firm. So do you believe that the Chinese arm of an American company will lie to the PCAOB if an audit occurs?
Agreed. If you get their financial statements, it will be false information anyways.
Yeah smart but not smart. No one is going to pay $200-600 a month to get data feed to trade on HK markets. So this would be voided if it happened (meaning it would be useless for international trade)
@@Football__Junkie it's not like American market is the most transparent tbh
@@dhirajmeenavilli5508 yes. Some of these companies don’t even trust their own Chinese arms lol.
We'll see how this goes. I just don't see Chinese CCP officials being willing to tolerate U.S. based or employed auditors looking for bad accounting practices by Chinese companies. If a company in the U.S. like an Enron is exposed for shenanigans its a failure of that company's governance or its auditors. In an authoritarian regime where companies are seen as tendrils of the government, a bad finding is a mark against the CCP's facade of strength and knowing what's best for their citizens. This seems like an appeasement tactic to buy time for China while its economy is hurting. I don't see auditing standards improving while Xi is in charge.
it's simple as this: Chinese will do everything not to pay tax. so every book is cooked to the max.
second: they will inflate numbers if necessary (also to the max)
on a waaaaay more extreme level that the Western world. (even Chinese don't trust Chinese)
any audit will be flawed as there is no tomorrow. if one thinks the audits can be trusted one would be very naive.
what about the continued existence of amway?
well done explanation. the only podcaster where I don't increase the playback speed
notice the "stonks man" figurine in the bottom right-hand corner of the video on his shelf.
Every company in China is required to have a CCP member on the board of directors who can unilaterally over-rule the board of directors.
That includes the auditing firms.
So when Xi Jinping sets economic goals...those numbers get met.
Everything in China is high risk because you have no idea whats really going on.
Come on, why would it be different this time? Did anything change? If anything, relations are even worse!
The Chinese are just stalling. Look at what happened to Evergrande investors and don't invest in China if you want to get any money back!
atleast the state will compensate them, who compensated the losers of the 2007/2008 real estate crash in the US?
What a quality and outstanding content you put out through this channel. Excellent work!
Awesome analysis
PCAOB - the auditor’s auditor 😎
Fraud the PCAOB? So you have chosen death.
I am guessing this is just a stalling tactic. It is unlikely they will be able to audit what they want.
Mass delistings will ensue.
Exactly - this is a common tactic for the CCP.
@@samsonsoturian6013 When, after another decade of fraud?
@@asdisskagen6487 Is delisting chinse stocks from foreign market really that common?
I've been living in Beijing for 6 years now. I have a fiend who's father retired few years ago. He worked as an auditor for one very powerful branch of finance ministry. He was responsible of auditing largest Chinese companies. All of them government owned off course. Oil company, construction companies, banks and so on.
When my friend was getting married, he had to provide complete list of the guests who will attend the wedding to his boss so that no one gives them bribe disguised as wedding gifts.
When he retired he had to give his passport to the government so that he is unable to travel abroad. Because someone could bribe him, kidnap him or lure him in any other way to give in the secrets of their economy. And since he worked in very powerful branch he knows all the details about their financial state.
So he is in his mid 60s and prohibited from leaving anywhere. And of course he cannot trade on Chinese financial markets.
This short story tells you a lot how they operate.
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Isn't agreeing to this deal just a symptom of Chinese desperation for Capital? Grab what investment they can, and take the money and run?
What assurance can we possibly have that they will follow through on their side of the agreement?
People can skip town, countries can't.
@@samsonsoturian6013 You assume the CCP is playing by the same rule book as the rest of the world.
@@cases2939 yes, but a country's predatory behaviors work much differently than an individual's
Opine, with all evidences gathered, the conclusion can only be : Invest in CPC-China's companies' equities & bonds, at one's own peril. The warning signs and signals are all present, only the Risk - Seeking continues ...
Thanks Patrick
|
I'm just shocked you mentioned Expert Margaret thought am the only one trading with her
I was so surprised how she recovered my huge losses
Wow I know Mrs Margaret I met her at a conference in carlifornia 2019 where she introduced us her business strategy, she helped me cover my student loans
Maybe they should let Razzelkhan do the auditing as part of her work release?!
The renewal PR , like this video, on differences on audits is good. Investors should be aware! Label the products accordingly. Caveat emptor.
You mentioned companies looking for a market IPO with weak corporate governance, you may recall the Toronto exchange in the 80s and early 90s. Might make a good video.
Do you do this all in one take? Lol takes a real man to do that
State capitalism is an oxymoron. Capitalism requires that capital is held in private entities. You''d be better served by calling it fascism, since all corporations in China are owned by the state
this channel slaps
Chinese companies need to get off of US exchange and there should be full disclosure of Chinese companies because so many people have been hurt by their products or their business systems
I prognosticate the coin flip to be 95% no pudding proof...
Oh boy, we have the PCAOB in addition to the other wonderful agencies like the SEC, CFTC, FBI, DOJ, IRS, etc. We are in good competent hands I'm sure.
and it does (like the others) absolutely nothing!
Please, bring your own equipment to analyse ink age on the documents
This is going to be 2013 all over again. They should just delist the Chinese companies, and end this nonsense.
One band one sound 🤝
Back when regulators first stonewalled our auditors, the correct response would have been to tell the CCP that those regulators either hadn’t been told to allow the audits or were trying to undermine the CCP. It would put the commies into a position of either pretending the regulators hadn’t been informed (as a way out) or punishing them for following orders. If they didn’t, then it would embarrass the CCP on the international stage for making a deal and then immediately violating it in such a public way. It’s image being something the CCP cares about greatly.
LL B.S.,LOL THEY ALREADYMAGREED AND NEVE HELD TO IT,LOL😂😂😂😂😂😂
I attempted to cover these topics in 2 videos spanning over an hour and you've just done it succinctly in 15min :D my writing needs to improve
This feedback is invaluable. Thank you so much for putting in the time to provide this :)
For accountability I will note that I aim to improve my enunciation, flow including transitions, any credibility issues, aims and goals, all of which can be improved through better planning.
What did Zuckerberg mean by he was human?
#DIV/0!
👍
Nice
I appreciate your content but you should know that your deadpan humor is even better.
Of course Zhou Baiden would allow Chinese companies stay listed.
He has no say in the matter
Baiden doesn’t run anything he is just a puppet.
Nancy the queen has more say
@@sko1beer shut up
🙏
🇺🇦❤️🇺🇦❤️🇺🇦❤️🇺🇦❤️🇺🇦❤️
I feel China is just stringing them along for as long as possible. No way they are gonna look at the books
No books, it's all fraud.
Please, bring your own equipment to analyse ink age on the documents
Delist them anyway. They will still hide the truth. Just complete inspections and then delist anyway You can always cite some discrepancy which contravene the PCAOB rules.
Job done.
Didi’s financial statement was full of red flag, the Chinese gov did everyone a favor with didi. Any value investor would have spotted didi as a highly speculative company with no real return. But normal folks got fooled because they imagined didi as a Chinese Uber
Sounds like you did a great job of defining Uber.
American Chinese investors dont care, they trust their money with Chinese people more than any other race.
If DiDi is not Chinese Uber, what is DiDi's business? "no real return" - you mean DiDi does not have enough people to user their service in China to be lucratively profitable?
Didi IS the Chinese uber -a no profit scam based on breaking all pertinent laws and regulations.
@@kevinbarry71 lol hence why Uber stock is crap. Most people doesn’t realize just because you see a company’s logo all over the street, doesn’t mean that company is profitable.
Decouple China from Wall Street money. Invest in America..put Americans to work.
𝙐𝙎 𝙣𝙚𝙚𝙙𝙨 𝙩𝙤 𝙙𝙚𝙡𝙞𝙨𝙩 𝘾𝘾𝙋 𝙘𝙤𝙢𝙥𝙖𝙣𝙞𝙚𝙨 𝙛𝙧𝙤𝙢 𝙖𝙡𝙡 𝙤𝙪𝙧 𝙚𝙭𝙘𝙝𝙖𝙣𝙜𝙚𝙨, 𝙘𝙤𝙣𝙛𝙞𝙨𝙘𝙖𝙩𝙚 𝙖𝙡𝙡 𝙡𝙖𝙣𝙙 𝙤𝙬𝙣𝙚𝙙 𝙗𝙮 𝘾𝙝𝙞𝙣𝙚𝙨𝙚 𝙞𝙣𝙫𝙚𝙨𝙩𝙤𝙧𝙨, 𝙖𝙣𝙙 𝙨𝙩𝙧𝙖𝙣𝙜𝙡𝙚 𝙩𝙝𝙚𝙞𝙧 𝙖𝙘𝙘𝙚𝙨𝙨 𝙩𝙤 𝙤𝙪𝙧 𝙘𝙖𝙥𝙞𝙩𝙖𝙡. 𝘾𝙝𝙞𝙣𝙖 𝙞𝙨 𝙬𝙞𝙣𝙣𝙞𝙣𝙜 𝙩𝙝𝙚 𝙘𝙖𝙥𝙞𝙩𝙖𝙡 𝙬𝙖𝙧, 𝙖𝙣𝙙 𝙞𝙩 𝙞𝙨 𝙖 𝙣𝙖𝙩𝙞𝙤𝙣𝙖𝙡 𝙨𝙚𝙘𝙪𝙧𝙞𝙩𝙮 𝙧𝙞𝙨𝙠 𝙛𝙤𝙧 𝙪𝙨 𝙩𝙤 𝙖𝙘𝙩 𝙗𝙚𝙛𝙤𝙧𝙚 𝙞𝙩'𝙨 𝙩𝙤𝙤 𝙡𝙖𝙩𝙚.
I mean in that case shouldn't apple be one of the first casualties?
They dont majorly use American labour for their hardware manufacturing division at all, relying on Chinese, Taiwanese, Mexican and Indian companies to outsource that?
Weird priority, since virtually all US based large caps are global firms. Americans collectively own half the planet.
@@aravindpallippara1577 I don’t even think most Tesla cars are made in America anymore
What does it matter? They will just make up lies about the numbers. So, not getting the data and getting the wrong data are both worthless.
I'll believe it when I see it. It's amazing that the SEC allowed these companies in the first place. Somebody really needs to bust some heads over there.
with stooge boys like Gary Gensler in charge at the SEC, Wall Street (Goldman, etc) will continue to have their way.
Can China aspire to be an economic behemoth without developed chinese capital markets? For me, the answer is obvious.
@Lawofimprobability I can’t help but laugh hard at your comment. oh plz Jack Ma deserves what he gets by all means ! He’s brining THE WORST OF AMERICAN CAPITALISM to China. AKA unscrutinized solicitation of money-lending practice (HAVEN’T WE BANKRUPT ENOUGH PPL ALREADY IN AMERICA ALONE W/ THAT DISGUSTING SUBPRIME MORTGAGE & THE CLASSIC “CREDIT CARD” TRAP?!? ... btw lo & behold!!! now they even have the shame to put out that monstrous atrocity of so-called “pre-pay” service!? I pray this greedy monster would be dead in America ASAP so don’t even think about spread this virus to other nations!!!)
@Lawofimprobability He under went a sonic lobotomy so Ma is an entirely compliant citizen now.
Audited or not, anyone investing in a closed, authoritarian country like China is taking a huge risk, pure and simple.
Chinese don't invest their life savings into stocks the way Americans do with funds and retirement accounts. They buy 2-3-4th homes. IF CHINAS own people don't trust China's stocks, you're on crack to trust your own retirement on that crap.
When American companies lie on the books you get Enron, Worldcom, big news. When Chinese companies lie; good luck with that.
Black and white thinking. Yes, it is all a risk, BUT some risk is greater than others. Live in the grey my friend.
@@MSportsEngineering Which is exactly what I said, so I'm not sure what your point is. "Risk" is the *possibility* of loss of capital in varying degrees, so by definition it is not black or white, but on a continuum. In other words, risk comes in varying shades of grey. And the Chinese stock market, because it operates in an opaque and arbitrary environment, is greyer than most (but not entirely black). Live to understand definitions my friend.
A delaying tactics and time waster. Lol. Even a fool can see that. Let Trump deal with that and not Biden..a bad video in my opinion not worth the tape it is recorded on.
Imagine being invested in tutoring business stocks when the Chinese authorities shut them down overnight. That alone should make you think twice about investing in Chinese stocks when you have access to many more transparent makets.
An audit requires testing of management’s statements. I don’t see how getting audit papers from state run Chinese auditing partnerships in China will increase the testability of Chinese companies financial statements. Sounds like PR.
Exactly, it doesnt, essentially its just a big freestanding carboard cut out of Xi, with large speech bubble, "Trust me" it reads
Not at all. Regulators looking at audit working papers would allow them to determine if the requirements set out in the International Standard on Auditing have been followed by the auditors themselves. The client says they have a million dollars. The auditor verifies that the million dollars really do exist at the moment the client says they exist and then document their work in the AWP. Finally the regulators verify that the auditors have indeed found enough and good quality evidence to support that assertion. Some auditors get lazy and skip the part where you have to keep the client's bank statements on file before confirming a client's assertion.
@Lawofimprobability It's not about investigating China, it's about equal sharing of information for all companies. The Swiss if anything is a lot more secretive. Whereas a couple hackers were able to get access to 1 Billion records from Shanghai police dept, China is not that secretive.
"China Agreed", they don't deliver though, just consistently unreliable.
😅😅considering they the worlds factory your statement doesn't make sense
I don't hold chinese papers and at least EY known to be toothless if not criminal. But if a audit that does its job and gets the real books I would sell everything before their report comes out. Seeing the real world images of millions of book wealth of chinese real estate gives me a good idea how chinese business makes its fantastic numbers.
I don't see how a real audit can be conducted without being able to go on-site to check inventories and other items on the financial statements. Just looking at the papers in Hong Kong is no different that if they just scanned and emailed the documents anywhere in the world. There has to be real-world verification, including looking at plant and equipment and spot-checking warehouses (for example). Otherwise you're just believing the statements at the outset, the opposite of auditing.
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That's why my Didi ride never came. I clicked the app and picked the nearest Luckin coffee place. I thought it was because I didn't remember my alipay password
I really can't see the difference between Chinese companies that are "state-run" and non state-run. The CCP has their hooks in all firms of any significance. We have to treat all listed companies the same.
A fundamental tenet of the Chinese mindset is resentment and suspicious of everything foreign. The CCP is not a communist party. It is an authoritarian, nationalist state.
Are they agreeing to future audits just to stop the bleeding today? Kicking the can down the road to offer any bit of stability they can cling to.
They did that last time, I don't know about this time
"...and I was human"..!
You should do a video about the fake gurus. Most of them are hiding now 😅
Great video with detailed contents! I would say Patrick has a better and clearer understanding about the deal than many Chinese nationals. Btw, does anyone have the link to the report from Goldman Sachs regarding the 50% chance of delisting? I am not looking for the news article but the link to the actual report in pdf format. Would be great if PB could attached the link below the video, greatly appreciate it.
First, we have to trust the auditors. Plenty of reasons why that may not be possible.
The auditors want to be future wall street bankers, so not much is going to change. hahah
This America. The auditors have auditors.
Thank you Patrick! Great analysis as always. Your words invariable advocate for continuous improvement in transparency, scrutiny, and building reasonable mechanisms for assessment.
The point about being bi-partisan doesn't make it objective. Trump started a new red scare in America, and Biden, and Pelosi have unwittingly fallen into the White Nationalist's agenda.
If U.S. investors and regulators fall for this one it will be another Charlie Brown trying to kick a football held by Lucy moment. I agree with Kyle Bass that investment managers who place client funds in Chinese instruments need to be held accountable for breach of fiduciary duty if not out right fraud. Are you listening Ray Dalio? As a retired lawyer I cannot help consider returning to the profession. I can smell the sweet oder of treble punitive damages.
Sue these villains!
Well I'm not an ex-lawyer so maybe it really is a breach of fiduciary duty, but I think if a fund manager genuinely believes that Chinese equities is the place to get the best deals for their clients wouldn't that trigger their fiduciary duty to invest there given they adhere to the risk management and portfolio construction norms of the industry accounting for the possibility of their Chinese positions to go to 0. Like I just think it can't be a breach of fiduciary duty to buy speculative assets as a manager because if so derrivatives, crypto, and pretty much any non traditional non developed market asset with strong binary outcomes such as biotech would probably breach fiduciary duty. I don't know obviously if those are false equvilances I'm drawing but that's my opinion. Also weren't there managers who money in Russian stocks? In your opinion should they be sued by their investors for a breach of fiduciary duty?
As long as the explain to the clients that they aren't really buying that company with a big name and just a shell company in an island that is worth really nothing, then there's no breach
@@dhirajmeenavilli5508 people have opinions like farts. Rise above the narrative. You are asking all the right questions with clear common sense answers. We're staring at a very likely once in lifetime deal, or an epic rug pull that would cost china, a culture all about saving face and respect, all credibility just as they're getting started. This reset thing is happening
@Lawofimprobability that's lawyer language :)
I'm avoiding China stocks all together. Why bother when you can buy US stocks.
US consumer market is saturated but the Chinese market is not. Getting a cut of a growing market sounds like a good idea.
US companies are globally diversified
@@TBasianeyes not everyone is looking for low PE and high growth shares.
Maybe he just like to hold stuff like Tesla
@@sko1beer They dont want other countries profiting. China sees their businesses as an extension of the government. It adds a ton of risk i dont want, on top of questionable business practices being the norm. No thanks.
So unless I’m mistaken people on the inside create regulations then they go work on the outside as a hired gun to represent entities so they can get around the rules they put in place Sounds like a racket to me
They spend a year+ to work on financial labyrinth so they can lie to investor just a while longer. They need money now as their own liquidity market were forced to focus on real estate, so foreign investment is critical and they will do anything to get/keep them.
Crazy that they allowed state run corporations list without audits
There are two main reasons China would not agree to audits of Chinese public companies in foreign markets :
1. To hide continued fraudulent accounting
2. To maintain state control of Chinese boards.
There's also the laziness principal. US consumer protection is strict and there's a lot of paperwork and fact checking. Many foreign banks won't even do business in America for this reason, which is why traveler's checks exist.
Thanks Patrick. My 2 cent? Chinese stocks and bonds remain un-investable regardless of where they’re listed. They’re speculative only at this point in history.
Even the Chinese won't invest in Chinese stocks. That's why 70% of mainlander's wealth is tied up in real estate.
The term univestable is interesting though don't you think? Like it by defenition connotes low prices. That is like the place where alpha lives. Take for example the often cited, "Death of Equaties", best time to buy equaties or after the depression when you could pick things up for 3x earnings that were growing cash generation capacity, and taking market share. That's my 2 cents however
2 cent or tencent(TCEHY)? 🤣🤣🤣🤣🤣🤣
@@hypothalapotamus5293 you were the only one who got it i think…😀
Smoke and mirrors. Sadly, I don’t think anything close to an audit of Chinese company will ever happen.
Just blanket delistings instead
Anyone who says transparency is not acceptable is not something you want to trust or invest in.
Not always. Sometimes there's nukes involved.
But yeah, don't invest with someone who can't tell you what they do with your money.
Props for refusing to jump on the meta thought enforcement train 👍
How much you wanna bet their records will be putting Madoff's financial records to shame.
truth!
China should be open to their companies raising capital abroad. This is basically bringing loads of foreign money to help build up China.
They would rather keep their secrecy at any cost, and rely on whatever money they can get from risk-tolerant investors who are prepared to funnel money into companies whose performance can’t be measured
As we start QT theyll begin QE. Seems like an orchestra don't it? ☯️
Exactly why I sold Bio, and baba
Zuckerborg saying "I was human" is pretty great.
All Chinese 'audit' work needs a lot of creativity and imagination.
Communists need the West, the West does not need communism.
Audited and checked by?
Who can trust the numbers?🎉
Most of them hv 2 sets of accounts. Retail investors were burned so badly when all these s-chips were listed on the stk exch of Singapore. When investigated suddenly there is fire in the office, someone stole whatever in the office,just too many excuses.
So where did all the money from the DD rideshare IPO and up? Perhaps in the coffers of the CCP? Upon further analysis it looks like it was a scam
Very nice and informative video. Looking forward to the long term consequences of this. Keep up the good work.
Cool video 💥🔥💰
Need to stop dancing with these guys and delist them. Enough is enough! We look like the idiots and butt kissers we are!!
What happens to us shareholders of these companies when the company is delisted?
Often the shares are forcibly liquidated
@Peter Nothing happens. The end.
You have a great program here!
these big 4 auditors have chinese employees who were trained by the ccp to be cadres
Thank you for another great video
Hi Patrick. Great job, Great content
Hi Patrick, why do you want me to WhatsApp you???
beijing biden wont let that happen.
Great work ... as a banker or better "Risk-Manager" for 15 years: love Your videos!!!
Only fools believe the chineese will honor the contract.
Great video thank you :)
Hey Patrick great video! Are you able to provide a couple sources regarding the previous deal reached back in 2014 that you mentioned in your video? Thanks
BTW, the short clip tells us that Mark Zuckerberg is no longer human
If you trust them on China not cooking the books and if you lose American $ then you deserve it ! don't we have good enough American companies to invest on? ???????????
VIE structures are a non-issue to me. They are a legal construct like any other, to allow to be compliant with legislation. If you don't trust VIE, also don't trust in marriage or other contracts, simple as that.
I feel smarter after every single video presentation! Thank you Patrick 👌
Hey Patrick great work, thank you!
So if a British business is controlled by the Uk 🇬🇧 government, we won’t be allowed in the US? I thought we were partners!