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On the heels of blockbuster earnings from major U.S. banks, investors are focused on whether an upcoming batch of earnings from major technology-related companies can sustain the season's early momentum. Estimated year-over-year first-quarter earnings growth for S&P 500 companies rose to 31% from 25% in the past week, based on Refinitiv data, driven by last week's stronger-than-expected results from Wells Fargo & Co, Goldman Sachs Group Inc and other banks. Tuesday brings results from stay-at-home winner Netflix Inc, which is part of the FAANG group of high-profile tech-related names.
TOKYO (Reuters) -Toshiba Corp on Tuesday dismissed a $20 billion buyout offer from CVC Capital Partners as lacking detail, putting a question mark over the future of the proposal. "This letter contained no specific and detailed information capable of detailed evaluation," Toshiba said in a statement. Following recent management changes at Toshiba, "we respectfully step aside to await your guidance," the letter said.
(Bloomberg) -- The budget unveiled by Canadian Prime Minister Justin Trudeau’s government on Monday includes a tax provision that could affect enterprises that rely heavily on debt financing, including private-equity firms and natural-resource companies.The change affects tax deductions that certain businesses can take for the interest they pay on loans. Trudeau’s government wants to limit those deductions to an amount equal to 40% of a company’s earnings starting in 2023, and 30% after that. It estimates the measure would raise C$5.3 billion ($4.2 billion) in additional revenue over five years.The measure is meant to prevent companies from minimizing their tax burden by having their Canadian units hold a disproportionate amount of debt. Several other countries in the Group of Seven and European Union are introducing similar limits on interest deductibility as part of a tax-fairness plan by the Organization for Economic Cooperation and Development.“This strengthening of the rules on interest deductibility will ensure that large companies pay their fair share and bring Canada in line with other jurisdictions, including all our G7 peers,” the budget proposal said.Private-equity and real estate firms rely heavily on debt financing for acquisitions, and miners and oil producers borrow heavily to pay for capital projects.The measure wouldn’t affect companies with less than C$15 million of taxable capital employed in Canada or net interest expenses of C$250,000 or lower.Interest expenses above the cap could be carried forward for as long as 20 years or backward for as long as three years.Because the proposal is based on net interest expenses, it would exclude financial institutions like banks and insurance companies, which typically earn more income from interest than they pay out in expenses. The government said it would consider “targeted measures” to address concerns of excessive interest deductions by banks and insurers.The Trudeau budget also proposes measures to tighten controls over so-called “hybrid mismatch arrangements” that multinational companies use to exploit differences between Canadian and international tax laws. Those proposals would add C$775 million in revenue over four years, starting in 2022-2023.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A trio of ether ETFs were approved by Canadian regulators last week.
Gold gained on Tuesday as a rise in U.S. Treasury yields stalled and the dollar steadied near multi-week lows. Spot gold was up 0.4% to $1,775.46 per ounce by 11:36 a.m. EDT (1536 GMT), after hitting $1,789.77 on Monday, its highest level since Feb. 25. U.S. Treasury yields eased and held in a narrow range as investors awaited further market developments, while the dollar index steadied near its lowest level in about seven weeks.
Major U.S. stock indexes fell from record levels on Monday as investors sought cues from first-quarter earnings reports to justify the rich valuation of equities, while Tesla shares fell following a fatal car crash. The electric-car maker was down 3.5% after a Tesla vehicle, which was believed to be operating without anyone in the driver's seat, crashed into a tree on Saturday night north of Houston, killing two occupants. The stock, which was the biggest drag on the S&P 500 and the Nasdaq, was also under pressure due to a sharp drop in bitcoin over the weekend.
(Bloomberg) -- U.S. stocks fell for a second day as rising virus cases around the world led to renewed concern over the continued economic impact, overshadowing a batch of solid corporate results.The S&P 500 extended its slide from an all-time high, with investors showing caution ahead of the brunt of the earnings season. All eyes will be on whether an anticipated rise in profits will bring with it forecasts for stronger growth ahead. International Business Machines Corp. climbed after reporting its largest revenue growth in 11 quarters, while United Airlines Holdings Inc. paced a selloff in travel stocks on a bigger-than-expected loss. Netflix Inc. plunged in postmarket trading as its first-quarter subscriber growth fell short of the average analyst estimate.Other corporate highlights:Johnson & Johnson posted stronger-than-expected sales, while Travelers Cos.’s earnings beat estimates and Philip Morris International Inc. raised its outlookProcter & Gamble Co. is boosting the prices of some consumer products as the household-goods behemoth grapples with higher commodity costsWhile American equities are trading at a valuation that’s about 35% above the average of the past decade, investors are focused on what’s forecast to be the best earnings season in two years. One of their biggest concerns is whether companies are equipped to handle mounting inflation pressures as the economic recovery gains momentum.“Earnings season is ramping up, and there’s this concern about how the multinationals will give their guidance in view of the fact that we haven’t drawn a line under Covid yet,” said Fiona Cincotta, senior financial markets analyst at City Index. “That is just starting to unnerve investors. Demand for riskier assets has come off.”For David Donabedian, chief investment officer at CIBC Private Wealth Management, the stock market has been just taking a breather after a big rally, but there are still reasons to be bullish.“The economic recovery has taken hold, the earnings recovery has taken hold, everything we’ve seen from first-quarter earnings so far has been that it’s going to be a blowout quarter,” he said.Elsewhere, the dollar rose for the first time in seven sessions, while the Treasury 10-year yield dropped to the lowest level in more than five weeks.Here are some key events to watch this week:EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data Friday.These are some of the main moves in markets:StocksThe S&P 500 decreased 0.7% at 4 p.m. New York timeThe Nasdaq 100 dipped 0.7%The Dow Jones Industrial Average decreased 0.8%The Russell 2000 dropped 2%The Stoxx Europe 600 sank 1.9%The MSCI World index dipped 0.9%CurrenciesThe Bloomberg Dollar Spot Index advanced 0.2%The euro was little changed at $1.2035The Japanese yen appreciated 0.1% to 108.09 per dollarBondsThe yield on 10-year Treasuries fell four basis points to 1.56%Germany’s 10-year yield fell three basis points to -0.26%Britain’s 10-year yield fell two basis points to 0.731%CommoditiesWest Texas Intermediate crude fell 1.5% to $62.44 a barrelGold climbed 0.5% to $1,779.10 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Stocks on Wall Street fell for a second straight day on Tuesday as a global spike in coronavirus cases hit travel-related shares and investors had second thoughts about big U.S. banks' apparently stellar earnings last week. Kansas City Southern surged on the prospect of a bidding war after Canadian National offered about $30 billion for the U.S. railroad, some $5 billion more than an earlier offer from Canadian Pacific. Shares of airline operators and cruiseliners including JetBlue Airways, American Airlines, Norwegian Cruise Line and Carnival Corp, which were hammered last year during lockdowns but have climbed recently on the reopening hopes, fell around 5%.
(Bloomberg) -- Asian stocks tumbled and U.S. futures declined Wednesday as rising virus cases around the world led to renewed concern about their economic impact. Treasuries held overnight gains.An MSCI Inc. gauge of Asia-Pacific shares was on track for its biggest decline in four weeks with Japan and Hong Kong leading declines. Nasdaq 100 futures underperformed. S&P 500 contracts fell after the benchmark dropped for a second day extending its slide from an all-time high, with investors showing caution ahead of the brunt of the earnings season. Treasuries held a rally that sent the 10-year yield to its lowest level in more than five weeks. The dollar stabilized and the yen climbed. Oil prices retreated.After rising to record highs, stocks find themselves under pressure from a renewed surge in Covid-19 case around the world, raising the prospect of new lockdowns and hampering the economic recovery. Tokyo and Osaka will ask the Japanese government to declare a state of emergency. Glitches with vaccine rollouts are also raising concerns about the pace of reopenings.“The data is very mixed: on the positive side we have great vaccine rollouts that are happening and then the negative is that we have J&J being halted,” Julie Biel, portfolio manager at Kayne Anderson Rudnick, said on Bloomberg TV. “Is that going to create more vaccine hesitancy? How much of that is going to impact longer term the ability to reopen?” The end of the pandemic “is going to be much more of a push-pull, it’s going to happen in increments,” she said.The World Health Organization said coronavirus cases are rising in all regions except Europe, with the largest increase last week seen in Southeast Asia as India battles its biggest wave of infections.Elsewhere, gold cemented an advance amid the risk-off move. Bitcoin fell for the fifth time in six days.Read: Stumble in Stocks Lacks Easy Explanation for Wall Street PunditsHere are some key events to watch this week:EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data Friday.These are some of the main moves in markets:StocksS&P 500 futures fell 0.1% as of 1:05 p.m. in Tokyo. The S&P 500 decreased 0.7%. The Nasdaq 100 dipped 0.7%Topix index fell 1.8%Australia’s S&P/ASX 200 Index dropped 1%Kospi index fell 1.6%Hang Seng Index lost 1.6%Shanghai Composite Index rose 0.2%Euro Stoxx 50 futures rose 0.2% CurrenciesThe yen traded at 108 per dollar, up 0.1%The offshore yuan was at 6.4980 per dollarThe Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.2030BondsThe yield on 10-year Treasuries held at 1.56%Australia’s 10-year bond yield fell five basis points to 1.73%CommoditiesWest Texas Intermediate crude fell 0.8% to $62.20 a barrelGold was at $1,781.81 an ounce, up 0.2%For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
German automaker BMW is aiming for a quarter of its sales in China to be pure battery electric vehicles by 2025, its China chief Jochen Goller said on Monday. Around 4% of BMW China sales were electric vehicles last year.
Wall Street's main indexes fell for a second straight day on Tuesday as a spike in coronavirus cases globally hit travel stocks, while Boeing slid on the unexpected departure of its finance chief. Shares of airline operators and cruiseliners including JetBlue Airways, American Airlines, Norwegian Cruise Line and Carnival Corp, which were hammered last year as widespread lockdowns led to a halt in global travel, fell between 5% and 9%. Wall Street's main indexes scaled record highs last week as investors bet on stocks such as industrials and miners that are deemed to benefit from a faster-than-expected economic rebound, while richly valued technology stocks found favor after a retreat in bond yields.
Coca-Cola signals a path toward recovery after a year of battling the COVID-19 pandemic.
Prices could rise in some parts of the UK after the supermarket's takeover, the competition watchdog says.
Meme-based cryptocurrency Dogecoin fell on Tuesday after hitting an all-time high in a wild session that saw supporters of the token once considered a parody use hashtags to fuel a rally until it lost steam. Dogecoin ultimately fell 15.4% to US$0.33, but during the session when it hit a record peak, its market capitalization soared to more than $50 billion. Dogecoin fans used the hashtags #DogeDay and #DogeDay420 to post memes, messages and videos on Twitter, Reddit and TikTok, referring to the informal April 20 holiday to celebrate cannabis which is marked by smoke-ins and street parties.
Cathie Wood, the founder of ARK Invest, is taking Wall Street by storm with her unconventional thematic investing. Namely, she follows an innovative fund style to find hyper-growth stocks with game-changing technology. Certainly, her unique method is working. To be sure, five out of six ARK ETFs posted more than 100% returns in last year alone. Result? Her funds saw a massive inflow of $20.6 billion, according to data from Morningstar, Portfolio Insider, and Nasdaq. Recently, Wall Street saw a heavy rotation into value stocks. But don’t count Cathie Wood as one of them. Instead, she is doubling down her bets on these innovative companies. “The benchmarks are filling up with value traps” due to the pace of innovation in fields including artificial intelligence and robotics, Wood said. “We think the big risk is in the benchmarks, not what we’re doing.” Billionaire Cathie Wood's predictions are must-follow because of her historic returns in the last three years -- with her picks soaring many times above their original share prices. Case in point: Last year, Ms. Wood’s ARK Genomic Revolution ETF, ARK Innovation ETF, and ARK Next Generation Internet ETF reaped returns of 159%, 203%, and 157%, respectively. Now, here are four technology stocks with huge potential that Cathie Wood has bought for her funds: 1. Coinbase (NASDAQ: COIN) Surely, Cathie Wood is bullish on cryptocurrency. She has been buying hand over fist in the largest cryptocurrency exchange and digital wallet service provider Coinbase. On the day when Coinbase made its public debut, ARK Invest scooped up 749,205 shares. A few days later, it added another 340,273 shares (worth nearly $112,970,000 million) to its position. Never shy from making bold predictions, Wood believes that digital wallets can develop into the most valuable technology of this era, pointing out its unprecedented speed of organic growth. "Digital wallets could become the most valuable technology developments per user of almost anything. We're pretty excited about that. If you were to draw a graph as we did in our big ideas showing how JPMorgan Chase & Co. (NYSE: JPM) got to these levels, it was one acquisition after the other, whereas Cash App and Venmo, because they are viral in nature, have gotten there organically," Cathie Wood said. Recent reports have supported Wood’s prediction. The digital wallet payments have surpassed the physical card for usage at contactless in-store payments and at the point-of-sale (POS) in 2020, according to the Global Payments Report. Plus, in-store cash payments fell by at least 50% in 2020 in advanced economies. 2. Unity Software (NYSE: U) A real-time 3D development platform Unity Software is trading at a bargain-basement price, in Cathie Wood’s view. She has been boosting her Unity Software stake over the last two months as the stock fell by 34% year to date. Despite the recent selloff, the company’s future fundamentals look strong based on revenue growth projections. Unity Software expects 2021 revenue in the range of $950 million to $970 million, in line with the company’s plan of sustaining 30% revenue growth in the long run. Unity CEO John Riccitiello said: “As the leader in creating and operating tools for the world of real-time 3D content, we continue to invest with the intent to capture what we believe is a substantial opportunity ahead in 2021 and years beyond.” 3. Shopify (NYSE: SHOP) Wood believes that Shopify can be as big as online retail giant Amazon (NASDAQ: AMZN) someday. As a result, Cathie Wood saw the dip in Shopify stock as a buying opportunity. Her firm added to its existing stake in e-commerce platform last week, according to Portfolio Insider. "We're trying to figure out how Amazon is going to deal with this notion of individuals seeing something on Instagram or elsewhere on Facebook or on Twitter, or on Snap and just buying there," Wood said. "That's a Shopify-enabled commerce opportunity and we think it's going to be big." Recently, Shopify’s stock price pulled back slightly from its recent all-time high of $1,500 that it had hit early in February. Regardless of the short-term price movements, SHOP’s stock price upside is likely to be tightly wounded to its growth trends. So far, so good: Shopify’s fourth-quarter revenue jumped 94% while 2020 revenue surged 86%. 4. Sea Limited (NYSE: SE) Cathie Wood has also been on a shopping spree with Sea Limited this year. The biggest lure of Sea Limited is how they can integrate dozens of their businesses into each other. Sea Limited has tentacles in eSports, mobile gaming, e-commerce, digital payments, and food delivery services. And the company is aggressively expanding its market penetration outside its home country in China, especially in Latin America and Southeast Asia. These segments have generated triple-digit revenue growth for Sea Limited. As a result, its consolidated revenue grew more than 100% in 2020, and it expects to extend that momentum into 2021. Cathie Wood first initiated a position in Sea Limited during the final quarter of 2019, and she has only continued to add her stake over time. See more from BenzingaClick here for options trades from Benzinga84% Of Warren Buffett's Portfolio In 2021 Is In These 3 Categories© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The student debt burden among older Americans is growing at an alarming rate.
It’s that time again – time to look for upwardly mobile stocks at relative bargain prices. We’ve just seen a pullback in market prices, but for some stocks the pullback started earlier and has run deeper. That’s opened up opportunities that Wall Street’s analysts have been quick to point out. These are Strong Buy stocks, despite their recent slips in share value. The analysts have noted that each one has a path toward near-term gains, making the risk-reward factors suitable for return-minded investors. And with prices down lately, these are suitable for bargain hunters, too. We’ve used TipRanks' database to find three stocks which meet that profile. Let's take a closer look. Farfetch, Ltd. (FTCH) Online retailers have obviously had an advantage in the past year, but on the flip side, the recent reopening of economies around the world has put some pressure on them. Farfetch, an online clothing retailer with an international profile – headquarters in London, offices in New York, LA, Tokyo, Shanghai, Portugal, and Brazil – shows both trends. The company’s gains in 2H20 pushed its market cap well above $16 billion, while recent stressors have forced the stock price down by 38% since its February peak. Farfetch has a solid foundation, based on more than 3 million active customers and over 1,300 sellers on the platform. The company saw, in 2020, over $3.2 billion gross merchandise offered through the site, making it the top global platform for buying luxury products online. The gross merchandise value was up 49% from the prior year. At the top line, Farfetch’s 2020 revenues were up 64% year-over-year, to $1.7 billion, with $540 million, about one-third of that total, coming in Q4. Covering Farfetch for J.P. Morgan, 5-star analyst Doug Anmuth notes that the recent weakness has created a “compelling buying opportunity.” This opportunity is based on: "1) FTCH’s position as the leading global marketplace in the $300B luxury market that is rapidly shifting online; 2) FTCH’s well-established e-concessions model that attracts more brands & inventory to the platform; and 3) FTCH’s strong position in the high growth China luxury market through both the FTCH app & recently launched store on Alibaba’s Tmall Luxury Pavilion. FTCH should also see its first full year of EBITDA profit in 2021, with a path to greater scalability over time driven by leverage in both Gross Margin and G&A.” In line with this bullish outlook, Anmuth rates FTCH an Overweight (i.e. Buy), with a $72 price target suggesting a one-year upside of 58%. (To watch Anmuth’s track record, click here) Overall, the Strong Buy consensus rating on Farfetch is based on 7 Buy reviews, which offset a single Hold. The stock’s share price is $45.50, and the average target of $74.38 implies ~63% upside for the next 12 months. (See FTCH stock analysis on TipRanks) Oncternal Therapeutics (ONCT) The next stock on our list, Oncternal, is a clinical stage biopharma company focused on oncology. The company is working to develop new treatments for cancers with unmet critical needs. The company’s pipeline has three drug candidate, in various stages of development from preclinical to a Phase 2 trial. The lead candidate in the pipeline, cirmtuzumab, is the one undergoing that trial. The drug is a monoclonal antibody that inhibits the ROR1 receptor in certain hematologic cancers. In December, the company released interim Phase 1/2 results of cirmtuzumab’s efficacy in combination with ibrutinib. The combination compared favorably to ibrutinib as a single agent. Cirmtuzumab is also in a Phase 1 clinical study as a treatment agent for breast cancer; updated results released earlier this month showed that a partial response or a stable disease in half or more of the patient cohort. Despite the positive clinical results, Oncternal’s stock tumbled 30% this month. According to Northland analyst Carl Bynes, in a note titled ‘Weakness Creates Buying Opportunity,’ investors should take this time to buy in. “We view shares of ONCT as an essential holding for those investing in the oncology segment, with multiple clinical updates anticipated in 2Q21 serving as MAJOR catalysts. We believe cirmtuzumab (anti-ROR1 mAb) is positioned to become a breakthrough therapeutic for treating MCL and other ROR1-expressing malignancies. Further, we anticipate first-in-human dosing of its ROR1 CAR-T candidate in 2H21 in China," Bynes opined. Congruent with his upbeat outlook, Bynes rates ONCT an Outperform (i.e. Buy), and his $21 price target implies an impressive upside of 265% in the year ahead. (To watch Bynes’ track record, click here) Wall Street has taken a unanimous stance on ONCT, giving the stock 4 recent positive reviews for a Strong Buy consensus rating. The average price target, at $15.50, indicates ~170% upside from the share price of $5.75. (See ONCT stock analysis on TipRanks) BioLife Solutions (BLFS) Drug companies can’t do their jobs without support services – or the products supplied by companies like BioLife. The company supplies cell and gene therapy bioproduction tools, including cryopreservation storage units, biopreservation for blood storage, hypothermic storage and shipping media, and, importantly, cell thawing media allowing use of biosamples after cryopreservation. BioLife’s quarterly top line has shown sequential gains in both Q3 and Q4. The third quarter gain was 14%, and increased to 30% in Q4. The Q4 revenue, at $14.7 million, was up 78% yoy. For the full year, the top line hit $48.1 million, a yoy gain of 76%. The company has provided 2021 revenue guidance in the range of $101 million to $110 million. With this in the background, we can look at the share performance. BLFS shares peaked in December, after rising 176% in 12 months. Since then, the shares have retreated 31%. Carl Bynes, of Northland Capital, sees that share retreat, again, as an ‘in’ for investors. "We view the recent pullback in BioLife shares as a buying opportunity. BioLife, in our view, is uniquely positioned to emerge as the leading consolidator of the enabling technologies segment supporting the high-growth cell and gene therapy sector. The Co., through internal development and acquisitions, has amassed a comprehensive breadth of product and service offerings that support cell and gene therapy applications from development through commercialization,” Bynes noted. To this end, Bynes rates BioLife an Outperform (i.e. Buy), along with a $55 price target to indicate a 12-month potential upside of ~75%. (To watch Bynes’ track record, click here) Looking at the consensus breakdown, Wall Street takes a bullish stance on BLFS. 6 Buys and 1 Hold issued over the previous three months make the stock a ‘Strong Buy.' BLFS shares are selling for $31.51, and their $55.83 average price target suggests a 77% upside. (See BLFS stock analysis on TipRanks) To find good ideas for beaten-down stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The DOGE frenzy appears to have spread to decentralized finance, where several imitator tokens have chalked up staggering single-day gains.
Overstock CEO Jonathan “JJ” Johnson says he's hoping that one day tZero, a much smaller trading platform that offers some services similar to Coinbase, will be a legitimate rival to the crypto behemoth that just listed on the Nasdaq Inc. last Wednesday with a valuation that briefly hit around $100 billion.
China will suspend the ability of foreign investors to trade if they cause serious market volatility through massive capital flows in a short period of time, a senior Chinese regulatory official has said. "Many people are asking whether foreign ownership will affect the stability of our stock market," said Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, at the Boao Forum for Asia on Monday. "What if massive amounts of foreign capital come in and go out? I can tell you that we will take precautionary measures." Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, says regulators are wary about the potential for market disruption by foreign hedge funds. Photo: Simon Song alt=Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, says regulators are wary about the potential for market disruption by foreign hedge funds. Photo: Simon Song> "We had a provision when we designed the Stock Connect that if a foreign investor comes in and causes significant volatility in the stock market, we can temporarily stop it from trading," he said. Stock Connect has a daily quota restricting the maximum net value of cross-boundary trading flows, with daily "northbound" flows into China limited to 52 billion yuan (US$7.9 billion) and "southbound" flows to Hong Kong capped at 42 billion yuan. Besides Stock Connect, foreigners can also invest in China A-shares via the Qualified Foreign Institutional Investor and RMB Qualified Foreign Institutional Investor programmes. Fang's comments come as foreign investors have increased their purchases of Chinese stocks, encouraged by liberalised rules last year that gave more leeway to overseas funds to repatriate their dividends and capital gains from the world's second-largest stock market. Following the easing of rules last year, a survey by Standard Chartered released last month showed 59 per cent of respondents would increase their allocations of Chinese assets in the coming 12 months. Foreign investors bought a net 16.3 billion yuan worth of Chinese A-shares via Stock Connect on Monday, the second highest net purchases this year, after having bought a net 24.7 billion yuan last week, exceeding the 18.7 billion for the month of March as a whole, according to the official Securities Daily. Driven by declining short-term interest rates and upbeat corporate earnings, the A-share market is expected to "continue to rebound", said Southwestern Securities in a note. But if capital was to start flowing out on a massive scale, there is a risk the Chinese currency would depreciate and trigger further capital outflows. This happened on a modest scale in February and March, with the yuan's exchange rate against the US dollar dropping more than 1 per cent as a result. Last month, FTSE Russell, the global index, data and analytics provider, added China A-Shares to the FTSE MPF Index Series, the core equity benchmarks used by the Mandatory Provident Fund industry. China's domestic equities had already joined MSCI's benchmark indexes in 2017. At the end of last month, foreigners owned 5 per cent of Chinese A-shares, still a "relatively low" level, said Fang. "With more foreign capital coming in recent years, our stock market has been running much smoother, as foreign capital is playing a more important role in market pricing ... We will continue to create conditions to lure more foreign investments," said Fang. Chinese authorities have a "clear view" about the priorities of foreign investors and are not worried about individual investors, whose proportion of overall stock ownership is very small and will not affect the financial stability, Fang said. The country also welcomes foreign mutual funds, pension funds and insurance companies, which have the highest proportion of A-shares among foreign investors. But Chinese regulators are wary about the potential for market disruption by foreign hedge funds and so their operations will be watched closely, said Fang. "Once massive volatility is caused by some investors, their trading will be suspended to prevent further volatility," he said. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.