Hong Kong has been on a streak of over 40 days of no untraceable cases, while the Government announces quarantine exemption for the city’s senior financial and industry executives and the “Early Vaccination for All” campaign to further boost the city’s sluggish inoculation rate. US expands investment ban on blacklisted Chinese companies, while Korea mulls taxing global IT corporates.
MAJOR HEADLINES IN ASIA
This section tracks major political, economic and business news from the key economies in Asia.
The Hong Kong Government announced that the city’s bankers, stock brokers, fund managers, insurers, and senior executives from 500 of the Hong Kong-listed companies who are fully vaccinated can apply for an exemption from the three-week compulsory quarantine. Each eligible company can seek exemption for four directors every month. – Bloomberg, Securities and Futures Commission
President Joe Biden on Thursday signed an executive order to prohibit investments in 59 companies, including marquee Chinese groups such as Huawei, the telecoms equipment manufacturer, and Semiconductor Manufacturing International Corporation, China’s largest chipmaker, which US intelligence says is critical to the Chinese military. – Financial Times
Korea’s finance ministry said global IT giants with offices in the country, including Netflix, Google, Amazon, Facebook and Apple will be subject to the so-called “Google tax,” whereby large digital companies will have to pay a certain amount of corporate tax, the rate of which is yet to be determined. – The Korea Times
Singapore is said to be one of the top choices for South Korea to launch a travel bubble with, and that the two countries had reportedly started preliminary exploratory talks in March. – The Straits Times
As Myanmar protestors took to the streets to denounce the country’s military, marking four months since it ousted Aung San Suu Kyi’s elected government, Myanmar is in the grip of a cash shortage. While caps are placed on withdrawals, bankers, foreign observers and businessmen said the country’s central bank is still not providing banks with enough cash to meet demand. – Financial 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.
The three heavyweight carriers of China telecommunications – China Mobile, China Telecom and China Unicom – are headed for a "reunion" in Shanghai after they were delisted from the New York Stock Exchange. – Shanghai Daily
A recent rebound in Chinese equities could face some headwinds as the lock-up period for nearly 900 billion yuan (US$141 billion) worth of mainland equities will end in June. The lifting of restrictions could pose an overhang for Chinese stocks as early investors, senior executives and major shareholders may opt to sell their shares after a rebound in the past few weeks. – Bloomberg
The World’s largest glove maker, Top Glove Corp Bhd, says it remains committed to its plan to list new shares in Hong Kong after it is reported that the proposed IPO has been delayed. – The Star
Despite JD Logistics’ debut boost, Hong Kong seems to see an IPO fatigue with two-thirds of the new listings this year in red and on average tumbled by a fifth, the worst among major global exchanges. 12 of the 18 listings over the past three months have traded below the issue price. - Nikkei Asia
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
KKR and Tiga Investments have agreed to acquire Hong Kong office space provider The Executive Centre, facilitating exits for HPEF Capital Partners and CVC Capital Partners. – AVCJ
Inmagene Biopharmaceuticals has closed US$100 million in a Series C round of financing jointly led by HighLight Capital and Panacea Venture. – DealStreetAsia
M&A and private investment-focused V-Capital has secured as much as US$235 million for a new RMB-denominated fund from a slew of government-led industry funds and state-backed conglomerates apart from its existing LPs. – DealStreetAsia
Sequoia Capital China and Yunfeng Capital have jointly led a Series B round of about US$228 million in Shiyue Daotian, a grain processor in China. – Yicai Global
Kathy Matsui, formerly Goldman Sachs chief Japan strategist, has launched what is described as Japan’s first global ESG-focused venture capital fund. The debut vehicle, MPower Partners Fund, is targeting US$150 million and has already won LP support from the likes of Sompo Holdings, Dai-ichi Life Insurance, and Sumitomo Mitsui Trust Holdings. – AVCJ
KKR is mobilising its recently established global impact fund to invest in Vietnamese K-12 bilingual school operator EQuest Education. The financial terms of the deal were not disclosed. – AVCJ
Zenyum, a Singapore-based dental startup, has raised US$40 million in its latest Series B round led by L Catterton. – TechinAsia
This section highlights the major regulations, policy changes and political developments in China and Hong Kong that have implications for the business environment.
Shenzhen is moving forward with a new draft law (link in Chinese) aimed at protecting personal data, in another signal of China’s ambition to rein in Big Tech and build a robust data management regime that balances privacy protection with appropriate business use. – South China Morning Post
Hong Kong plans to introduce a real-name registration system for mobile phone pre-paid SIM cards in September in a bid to fight crime in the financial hub, a move that is likely to stoke privacy and surveillance concerns. Secretary for Commerce and Economic Development said the new system would require people to register their name, identification card number and date of birth with the service provider, and authorities could use a warrant to request the information. – Reuters
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
This week China has announced a new three-child policy, further relaxing population controls after reporting that its population grew at the slowest rate in decades. But demographers said simply telling people they're allowed to have more kids is on its own not enough to address the demographic crisis, and that it would have had a bigger impact before the one-child mind-set took hold among the population. Reasons for not wanting to have a third child – or any child at all – were among the hottest trending topics on Chinese social media. – CNN, The Wall Street Journal, The Financial Times
THE WEEK AHEAD
The Alternative Investment Management Association (AIMA) will be hosting its virtual AIMA APAC Annual Forum 2021 on June 10, which brings together policy and regulatory figures, hedge fund and alternative investment managers and other thought leaders in Asia to address key regulatory, policy and operational focus areas anticipated for APAC managers in the coming year.
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