Stocks on China’s Nasdaq-like ChiNext board will be allowed to rise or fall 20% as of next week when the first batch of listings under revamped rules start trading. The Shenzhen Stock Exchange said Friday that the first batch of listings will start trading on Aug. 24, which means the 20% limit will be put into effect the same day, according to rules announced in June. The changes – which won’t yet apply to main boards in Shanghai and Shenzhen – will bring more volatility to an index that often sees daily moves of 5% or more. In doing so the $1.3 trillion ChiNext board will serve as a testing ground for whether Beijing can loosen its tight grip on trading. Having jumped 50% this year, the ChiNext Index has outperformed major global peers, powered by expectations that China will step up state support for homegrown technology.
Fewer China-built Teslas registered as competition builds
Registrations of locally made Tesla Inc. vehicles in China fell in July from the previous month as competition intensified in the world’s largest electric-car market. In July, 11,456 China-built Teslas were registered in the country, according to data from state-backed China Automotive Information Net. That’s a 24% decrease from June. Tesla doesn’t report monthly sales numbers for China. The world’s most-valuable carmaker is ramping up output after starting deliveries from its multibillion-dollar Shanghai plant around the beginning of the year. China is a crucial part of Elon Musk’s plan to expand beyond the U.S., and long-term success will require keeping local contenders such as NIO Inc. and global giants BMW AG and Volkswagen AG at bay.
Volvo owner’s China business posts 43% profit drop
Geely Automobile Holdings Ltd., the Chinese automaker controlled by Volvo Cars owner Li Shufu, reported a 43% drop in first-half profit after the coronavirus outbreak shuttered factories and decimated demand. Net income in the six months through June was 2.3 billion yuan ($331 million), the carmaker said in a statement yesterday. The pandemic kept consumers away from showrooms and forced carmakers to suspend production, exacerbating an industry slump that lasted for more than two years. With the outbreak receding in China, sales have started to revive in recent months and automakers are betting on the world’s largest market to help them return to growth. Geely said headwinds are set to persist, making “2020 among the most difficult year in the group’s history.” It also warned “the intense market competition in China could worsen further.”
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