5/14/2021 Financial News: Over 40% Private Equity Loss; Missing Risk Control Of 2.95 Billion Trust Products

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1.Over 40% private equity loss

Among the 455 private equity firms, a total of 269 private equity firms achieved positive returns from January to April this year, and 186 private equity firms reported losses. Since the beginning of this year, the number of private equity institutions that have lost money has accounted for as high as 40.88%. 67.81% of the stock private equity institutions have more than 80% positions, and 19.38% of the stock private equity institutions have positions between 50% and 80%. The average position of private equity institutions with a scale of 5 billion stocks is the highest, at 89.45%; followed by private equity placements of 10 billion stocks, with an average position of 87.39%.

2.Missing risk control of 2.95 billion trust products and scams intertwined

Everbright Trust Xinyuan 1 spent 2.95 billion yuan to purchase the 3.558 billion yuan of debt principal held by Tibet Financial Leasing, which is equivalent to a 30% discount. If the interest paid by the debtor is added, the book income of Xinyuan 1 will exceed 25%.

At that time, both parties to the transaction were licensed financial institutions, and the underlying assets were local urban investment claims with “state-owned enterprise beliefs”. Therefore, the financial security of the Xinyuan No. 1 Trust Plan should be guaranteed. Moreover, Tibet Financial Leasing also has a repurchase commitment for these claims.

3.Alibaba lost more than 7.6 billion, and its stock price plummeted by 5%

On May 13, Alibaba Group released its March quarter and full year financial reports for 2021. According to the financial report, Alibaba reported a quarterly operating loss of 7.663 billion yuan, the first quarterly loss since its listing. After the news came out, U.S. stocks rose sharply in the evening, but Alibaba dropped 5% directly. The latest stock price is US$208.68 for US stocks, with a market value of US$565.8 billion.

4.Outlet Bull Group was investigated by anti-monopoly

Recently, the Zhejiang Provincial Market Supervision and Administration Bureau filed an investigation into the suspected conduct of the Bull Group reaching and implementing a monopoly agreement with its counterparty. The case is currently under investigation. On the same day, the Bull Group opened lower. As of the close, the company’s stock price closed at 181.65 yuan, down 4.62% throughout the day. As of the end of 2020, there are a total of more than 260 fund holdings in the Bull Group, and the fund’s shareholding amounts to 23.21%. As of the end of the first quarter of 2021, the number of shares held by the fund has dropped to 3.19%, but Hillhouse Capital and the National Social Security Fund still hold certain positions in the Bull Group and are among the top ten shareholders of listed companies.

5.US PCAOB releases accounting rules again, Chinese concept stocks plummet

The American Public Company Accounting Oversight Board (PCAOB) solicited opinions on May 13 on how the “Holding Foreign Companies Accountable Act” determines that “accounting supervision cannot be effectively implemented”. This means that all the regulatory policies for China’s concept stocks have been drafted and will enter the substantive implementation stage. At the close of the market on the 13th, Chinese concept stocks fell sharply. New Oriental (NYSE: EDU) fell 14.42%, NetEase Youdao (NYSE: DAO) fell 10.55%, Pinduoduo (NASDAQ: PDD) fell 7.11%, and Bilibili (NASDAQ) : BILI) fell 6.83%, and Alibaba (NYSE: BABA) fell 6.28%.

6.U.S. trade chief: new legal tools needed to combat future China threats

WASHINGTON (Reuters) – The United States needs new trade law tools to head off anti-competitive threats from China against key American high-technology industries, rather than reacting once harm is done, U.S. Trade Representative Katherine Tai said on Thursday. On Wednesday, Tai called for an update to the 1962 “Section 232” national security trade statute that was used to impose tariffs on steel and aluminum imports. Tai said the review also will include what to do with many expired exclusions from “Section 301” tariffs on Chinese imports, noting that “time is of the essence” in completing the review.

By 【Financial Team – 小海星Starfish】
News Collection: 文罡

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