In today’s briefing:
- Livestreaming E-Commerce – How the Sector Might Evolve After Viya Fine
- China Evergrande Group – Razing Cain
- Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
Livestreaming E-Commerce – How the Sector Might Evolve After Viya Fine
- Viya, China’s livestreaming queen, was fined RMB1.34 billion (USD210 billion) for tax evasion and related offences in 2019 and 2020 and her internet presence erased
- This exposes existing risks in the livestreaming sector including over-dependence on top KOLs, additional layer of costs and sector-specific regulatory crackdown
- In this Insight, we examine the cost structure of livestreaming e-commerce and discuss the Viya incident’s implications on the livestreaming e-commerce sector
China Evergrande Group – Razing Cain
- Bad To Worse:Under mainland China’s real estate development law, the government has the right to repossess idle land sold to any developer without compensation;
- Demolition Man: Danzhou City is now in on the act, forcing China Evergrande Group (3333.HK) [Evergrande] to demolish 39 buildings for various violations; and
- Banks To Eat This As Well: Without any compensation to Evergrande, mainland Chinese banks no doubt will finally be writing down their exposure on Evergrande’s now non-existent buildings.
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
US equity markets ended sharply lower, with the S&P and Nasdaq down 1.9% and 3.3% respectively. All sectors were in the red with Real Estate, IT and Communication Services down ~3% each. US 10Y Treasury yields continued to rise, by 7bp to 1.71%. The sharp moves in US equities and Treasuries come after the December’s FOMC minutes showed that the Fed may need to raise interest rates “sooner or at a faster pace” than officials had initially anticipated. European markets were higher with the DAX, CAC and FTSE up 0.7%, 0.8% and 0.2% respectively. Brazil’s Bovespa was down 2.4%. In the Middle East, UAE’s ADX was flat while Saudi TASI was up 0.9%. Asian markets have opened broadly lower today – Shanghai, HSI and Nikkei were down 0.2%, 0.4% and 2.2% respectively while STI was up 0.6%. US IG CDS spreads widened 2.2bp and HY CDS spreads widened 10bp. EU Main CDS spreads were 0.7bp wider and Crossover CDS spreads were 3.2bp wider. Asia ex-Japan CDS spreads widened 0.4bp.
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