Treasuries sold off as China firms shun US

Business | Reuters 20 Nov 2019

Chinese holdings of US Treasuries fell in September to US$1.102 trillion (HK$8.6 trillion) sliding for a third straight month, the lowest since May 2017 while Japan's holdings of Treasuries also declined by US$29 billion to US$1.145 trillion in September from US$1.174 trillion in the previous month.

Japan remained the top foreign holder of US Treasuries in September even after reducing its government securities holdings by the most since at least 2000.

Meanwhile, Chinese private firms are shunning the United States in their overseas expansion, and generally prefer a home listing to a US initial public offering, a private survey showed yesterday, highlighting the trade war's impact on executive decision-making.

The news comes at a time when US politicians are calling for tighter scrutiny over Chinese investment and capital-raising, while Beijing is encouraging domestic listings by Chinese companies.

The survey of more than 1,200 business leaders across China also found that 66 percent of the respondents see China as the most attractive listing venue, compared with just 18.7 percent who favor the US market.

Hong Kong, even with the city's violent protests, is also ahead of the US as a preferred IPO destination.

In other news, Huawei Technologies has dismissed a new 90-day extension by the Trump administration allowing US firms to continue doing business with the Chinese company as making little difference, repeating that it was being unfairly treated.

US regulators are crafting rules on telecommunications firms that pose national security risks. But after adding Huawei to an economic blacklist in May, the US Commerce Department has allowed it to purchase some American-made goods.

Its 90-day license extensions aim to minimize disruption for its customers, many of which operate networks in rural America.

Huawei said that the latest extension would not "have a substantial impact on Huawei's business either way."

And in money markets, the onshore yuan weakened to a two-week low, closing at 7.0238 US dollar yesterday.

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