Asia News Bulletin - August 6


Due to the worsening COVID-19 situation across mainland China, Hong Kong is suspending quarantine exemptions for most China travellers, while new streamlined quarantine requirements have also been rolled out for overseas travellers. Hong Kong is set to become the destination for more IPO hopefuls due to increased scrutiny from Washington and Beijing, with five potential listings in the pipeline reported this week. In contrast of China’s strict stance on the cryptocurrency industry, Singapore has granted its first approval to a crypto exchange.



MAJOR HEADLINES IN ASIA

This section tracks major political, economic and business news from the key economies in Asia.

  • In response to Beijing’s clampdown on private industry, the US Securities and Exchange Commission said it will not allow Chinese companies to raise money in the US unless they fully explain their legal structures and disclose the risk of Beijing interfering in their businesses. Following this move by the US, China’s securities regulator called for talks with its American counterpart to increase communications and collaboration. – Reuters, Bloomberg

  • China and the United Arab Emirates have agreed to share intelligence concerning money laundering and terrorist financing, according to a statement. The signed MoU will enable regulators in the two countries to exchange information on investigations concerning financial transactions related to money laundering, terrorist financing and the persons or entities involved. – Caixin Global

  • Following the US, EU and Britain’s sanctions again Chinese officials in connection with serious alleged human rights abuses in Xinjiang, Australia will also adopt a similar sanctions law that allows targeted financial sanctions and travel bans against individuals who are "perpetrators of egregious acts of international concern", a reform which could be applied by the end of the year. – Reuters

  • Australian crypto exchange Independent Reserve has become the first cryptocurrency exchange to receive an “in-principle approval” from the Monetary Authority of Singapore to operate as a fully regulated virtual asset service provider. In contrast to China and Hong Kong’s stricter stance on the cryptocurrency industry, Singapore has made it easier for foreign crypto groups to establish offices and serve residents and businesses. – Cointelegraph, Financial Times

  • The Japanese government is preparing to draw up legislation aimed at boosting oversight of industries and technologies considered important from an economic security perspective, which will be centred on the foreign exchange and foreign trade law. – The Japan Times


EQUITY AND DEBT CAPITAL MARKETS

This section highlights the biggest ECM and DCM developments in China and Hong Kong which are moving markets and grabbing headlines.

CHINA

  • Shares of the e-cigarettes industry sank after Chinese state media Xinhua criticised the firms for continuing to illegally sell their products to under-18s, in the latest instance of such media attention tanking stocks. – Caixin Global

HONG KONG

  • Chinese startups hungry for foreign capital are increasingly turning to Hong Kong as hurdles to list in the US multiply. But not every firm will make the cut, and those that do might have to settle for lower valuations. – Bloomberg

  • Five companies, including garment label maker SML Group, Chinese music app Cloud Village, Apple glass supplier Biel, Chinese EV maker Li Auto, and cosmetic surgery company Beijing Evercare medical Technology Group are seeking IPOs in Hong Kong. – Bloomberg (SML), South China Morning Post (Cloud Village), Bloomberg (Biel), Bloomberg (Li Auto), Yicai Global (Evercare)


PE/VC DEAL ACTIVITY

This section tracks the fundraising, deals and other activities conducted by the PE/VC funds in Asia.


CHINA AND HONG KONG

  • Inceptio, a Chinese autonomous driving technology provider focusing on line-haul trucking, has raised a US$270 million Series B round led by JD Logistics, Meituan, and PAG. – AVCJ

  • Hong Kong-based private equity firm PAG has announced the final close of PAG Growth II, its second growth-focused PE fund, with total capital commitments of US$525 million. – DealStreetAsia

  • Vitalbridge Capital, a China-based venture capital firm that spun out from Trustbridge Partners, has achieved a first close of US$200 million on its second US dollar-denominated fund. – AVCJ

  • Berry Oncology has raised US$99.15 million in a Series B1 round of financing led by China Merchants Capital, to double down on developing genetic testing solutions for cancer screening. – DealStreetAsia

JAPAN AND KOREA

  • Japanese startup ispace has raised US$46 million in a fresh round of Series C funding led by Japanese VC firm Incubate Fund as it looks to complete three lunar lander missions in three years. – TechCrunch

  • South Korea’s Public Officials Benefit Association has approved a US$150 million commitment to North American alternative investment firm Brookfield Asset Management’s real estate secondaries fund. – DealStreetAsia

SOUTHEAST ASIA

  • Southeast Asia-focused Openspace Ventures has reached a first close of US$120 million on its debut growth fund, which will primarily participate in follow-on rounds for existing portfolio companies. – AVCJ

  • General Atlantic and Dragoneer Investment Group have led a US$250 million Series B round for Vietnamese financial technology provider VNLife. – PYMNTS

  • Singapore-headquartered crypto-finance venture Matrixport has become the latest startup to join the unicorn club after raising US$100 million in a funding round. – The Block


REGULATORY UPDATES

This section highlights the major regulations, policy changes and political developments in China and Hong Kong that have implications for the business environment.

CHINA

  • China has made a key judgment (link in Chinese) related to facial recognition technology, empowering individuals to reject facial recognition data collection by commercial entities such as hotels and banks. The decision makes it clear that if companies collect facial data without independent consent of the concerned individual, the act could be defined as an infringement of personal rights and interests which allows the victim to file a lawsuit for compensation. – South China Morning Post

HONG KONG

  • China’s top legislative body will take the first steps toward imposing an anti-sanctions law on Hong Kong, a move that could create complications for multinationals caught in rising tensions between Washington and Beijing. China’s top legislative body is expected to discuss the matter in meetings starting on 17 Aug. – Bloomberg, South China Morning Post

  • Hong Kong activist Tong Ying-kit has been sentenced to nine years in jail, after he became the first person to be convicted under the national security law Beijing imposed on the city. He was arrested last year for driving a motorcycle with a flag reading “Liberate Hong Kong, revolution of our times” into three police officers during a demonstration. – South China Morning Post, Hong Kong Free Press


ONE FOR THE WEEKEND

Each week we will select one or two articles which have caught our attention – long reads, institutional outlooks, analysis or interesting viewpoints


Political changes during the past two years in Hong Kong have sparked mass migration, which is accelerating and will likely be permanent. Despite many Hong Kong citizens’ decision to leave the city, signs of an investor exodus are harder to find, as the Asian financial hub remains the gateway to the lucrative mainland market for many global businesses. Read here for analysis from Bloomberg on the divergence between business and politics.



THE WEEK AHEAD

While the US-ASEAN relationship has seemed to be overshadowed by that between US and China during the early days after the Biden administration took office, ten Southeast Asian officials and US Secretary of State Anthony Blinken will meet virtually next week, as Washington seeks to show the region is a US priority. – Voice of America



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