Chinese Companies Pull Out of US Stock Market Amid Complaints Over Price
Posted by Jim Hoft on Tuesday, August 14, 2012, 11:58 AM
Chinese companies pulled out of the US stock market amid accusations of improper accounting by some companies and complaints over stock price.
The AP reported:
Just a few years after Chinese companies lined up to sell shares on Wall Street, a growing number are reversing course and pulling out of U.S. exchanges.
This week, Focus Media Holding Ltd., announced its chairman and private equity firms want to buy back its U.S.-traded shares and take the Shanghai-based advertising company private. The deal would value Focus Media at $3.5 billion, according to financial information firm Dealogic.
Smaller companies also are withdrawing from U.S. exchanges. In a sign of official encouragement, a Chinese business magazine said a state bank has provided $1 billion in loans to help companies with listings abroad move them to domestic exchanges.
The withdrawals follow accusations of improper accounting by some companies and a deadlock between Beijing and Washington over whether U.S. regulators can oversee their China-based auditors.
Some Chinese companies say they are pulling out of U.S. markets because a low share price fails to reflect the strength of their business. Withdrawing also eliminates the cost of complying with American financial reporting rules.
Focus Media “has been seriously undervalued on U.S. stock markets” and being taken private will help to promote its “long-term strategic development,” said a company spokeswoman, Lu Jing.
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GregInSeattle commented:
So it begins…
Patty commented:
COLLAPSE OF THE STATUS QUO
Great article by Charles Hugh Smith. The collapse has already begun. Rich people are pulling their money out of stocks, banks, and risk assets; stashing money away somewhere they believe is safe. People have lost faith in the stock market, 80% of which is either manipulated or run by computers. The government is bankrupt, both here and other countries. Banks are insolvent. Economies are slowing and contracting. Cities, states, and countries are facing bankruptcy. It’s already started.
People’s expectations have risen on the massive debt-fueled expansion of standards of living. When meter-maids are paid $100,000 per year, and 60 million other government workers are making a fortune doing nothing of any value, expectations have probably peaked. When tens of millions of people live entirely off the government, don’t work, and get free everything, expectations have again probably peaked. Yet, without credibility, the whole system collapses. The avalanche of lost credibility has already started. Many people that work for a living and are getting killed by taxes and regulations, people that actually contribute and produce, are looking forward to the collapse, for things to return to some semblance of sanity. It won’t be long now. I enjoyed this simple explanation, makes perfect sense to me.
[………………} PLEASE READ MORE HERE: http://www.theburningplatform.com/?p=38906
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Patty commented:
[......]So vast is this outflow of wealth that for the first time the outflow of capital from China exceeds the inflow of investment capital. The smart money is exiting, and the last batch of credulous “China story” rubes are dumping their capital down a rathole.
The same process is visible in global stock markets, where the smart money is selling. The loss of credibility in the digital bucket shop known as the U.S. stock market is evidenced by the outflow of some $200 billion over the past few years. To some degree, this has been offset by the influx of foreign capital desperate to escape the black hole of the euro, but the steady erosion of faith in the U.S. stock market is striking: as noted last week, 80% of the trading is either invisible, officially sanctioned manipulation or computers trading.
If the U.S. legal system weren’t hopelessly compromised, the U.S. stock markets would be shuttered as corrupted beyond redemption.
Globally, the erosion of petrocapitalism (more on that later this week, via correspondent Ray W.) and the self-destruction sequence of financialization are laying waste to the credibility of politicos’ promises. It was so easy to be a politico when financialization (exponential expansion of debt and leverage) raised the global tide, lifting all boats; extravagant promises based on everlasting “growth” could be issued, votes bought and the vested interests of crony-capitalist cartels and public employees lavishly rewarded.
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theBuckWheat commented:
Given the bad numbers that have come out of Chinese companies that are listed on US exchanges, I guess they want to be listed where the numbers don’t matter as much.
coolidgerules commented:
My brother works for a bank and said that people are better off going to a roulette wheel in Vegas than putting their money in the stock market. Beyond corrupted. This is what we get for letting communists run our institutions.
Patty commented:
Obama, no more money coming from China. They are going to purchase our products. They are doing as well economically. Now, What, Obama?
Bleed us dry?
Patty commented:
#5 August 14, 2012 at 1:48 pm
coolidgerules commented:
He’s right.
Jeremiah Lloyd commented:
China companies lie and obfuscate. It’s the wild, wild west. They don’t have any value because many of them are shell companies and frauds. Good riddance to them pulling out of the market.
One of the coal companies I owned had a camera put in front of it’s gates by a brokerage firm because it didn’t believe its numbers. They were right to do so, they found no activity, no trucks leaving the plant.
That’s why the market doesn’t value the companies, there is no way to assure under communist party rules that anything is legitimate. The party will doctor the earnings numbers whenever a goal isn’t met.
dwillmore commented:
I have no idea about Chinese companies. I do know that I gave up on our stock market after the crash. Unfortunately I am not wealthy enough to pull up stakes and leave. But soon everything I do have will probably be gone and then it is either look for scraps in the soup kitchen line of gather enough for steerage to another country.
The problem is that there is no other country in the world that offered what America did to legal immigrants. There really is no where left to go.
If you know of a place please tell me.
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