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Business

Japan’s suspected FX intervention fails to stem yen slide

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  • Yen volatile as Tokyo suspected of intervention for 2nd day
  • FX officials remains tight lipped on intervention
  • Policymakers keep up warning vs excess FX volatility
  • BOJ Kuroda repeats need to keep ultra-low rates

TOKYO, Oct 24 (Reuters) – Japanese policymakers on Monday continued efforts to tame sharp yen falls, including through two straight market days of suspected intervention, but ultimately failed to prop up the currency against persistent dollar strength.

The yen’s sell-off is hurting the world’s third-largest economy by driving already surging import bills and challenges the Bank of Japan’s commitment to ultra-low rates in the face of rapid global monetary tightening to combat rampant inflation.

The Japanese currency jumped 4 yen to 145.28 per dollar in early Asia trade on Monday, suggesting authorities had stepped in for a second straight day after a similar move by Tokyo on Friday.

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“We won’t comment,” Masato Kanda, vice finance minister for international affairs, told reporters at the Ministry of Finance (MOF), when asked if they intervened again on Monday.

“We are monitoring the market 24/7 while taking appropriate responses. We’ll continue to do so from now on as well,” said Kanda, who oversees Japan’s exchange-rate policy.

However, the yen failed to cling to early gains and briefly hit a low of 149.70 per dollar, as markets continued to focus on the widening divergence between the Bank of Japan’s ultra-easy monetary policy and steady rate hike plans by the U.S. Federal Reserve. It last stood around 148.80.

“In the past crises involving British pound and Italy’s lira, authorities have ended up failing to defend their currencies. Likewise, Japan’s stealth intervention only has limited effects,” said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities.

“Strength in the dollar is the biggest factor behind the weak yen. If the United States shows signs of its rate hikes peaking out and even cutting interest rates, the yen would stop weakening even without intervention.”

BOJ’s BIND

The yen’s plight puts the BOJ under the spotlight as it meets for a two-day rate meeting ending on Friday, when it is widely expected to maintain ultra-loose monetary policy.

With inflation relatively modest and the economy unable to move into a faster gear, the central bank is wary of raising rates and risk triggering a recession.

“It’s extremely undesirable” that Japan’s real wages, adjusted for inflation continue to fall, BOJ Governor Haruhiko Kuroda told parliament on Monday.

“It’s desirable for inflation to stably achieve our 2% target accompanied by wage rises,” Kuroda said, stressing the need to keep supporting the economy with ultra-low rates.

The Fed, which meets the following week, is widely expected to hike rates again as it focuses on fighting red-hot inflation.

The widening U.S.-Japanese rate differential is likely to keep downward pressure on the yen, which has fallen more than 20% against the dollar this year.

Japanese authorities confirmed that they stepped into the market when it intervened on Sept. 22, spending 2.8 trillion yen ($18.80 billion) to prop up the yen for the first time since 1998.

Since then, authorities have remained silent on whether they made any further attempts to support the currency including on Friday, when Tokyo likely conducted stealth intervention.

At $1.33 trillion, Japan’s foreign reserves provide it with enough fire power to intervene many more times, but traders doubt that Tokyo will be able to reverse the yen’s downtrend on its own.

Finance Minister Shunichi Suzuki repeated that excessive currency moves were undesirable.

“We absolutely cannot tolerate excessive moves in the foreign exchange market based on speculation,” he told reporters at the finance ministry. “We will respond appropriately to excess volatility,” he said, a view echoed by Prime Minister Fumio Kishida in parliament later on Monday.

($1 = 148.9000 yen)

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Reporting by Tetsushi Kajimoto and Yoshifumi Takemoto; Additional reporting by Chang-Ran Kim, Sakura Murakami and Leika Kihara; Editing by Shri Navaratnam and Sam Holmes

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World

Russia hits Ukraine homes, evacuates Kherson, warns of escalation

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  • Missile smashes into Mykolaiv apartment block
  • Ukrainian forces on offensive in Kherson region
  • Kherson is gateway to Russian-annexed Crimea
  • Western nations reject Russia’s ‘dirty bomb’ accusation

MYKOLAIV, Ukraine, Oct 24 (Reuters) – Russia fired missiles and drones into the Ukrainian-held southern town of Mykolaiv, destroying an apartment block, and said the war was trending towards “uncontrolled escalation” in a flurry of telephone calls to Western defence ministers.

The strike on the shipbuilding town about 35 km (22 miles) northwest of the front line in Kherson came as Russia ordered 60,000 people to flee the region “to save your lives” in the face of a Ukrainian counter offensive.

Russian Defence Minister Sergei Shoigu discussed the “rapidly deteriorating situation” in phone calls with British, French and Turkish counterparts, the ministry said.

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He also spoke by phone with U.S. Defense Secretary Lloyd Austin for the second time in three days. The Pentagon said Austin told Shoigu he “rejected any pretext for Russian escalation.”

Without providing evidence, Shoigu said Ukraine could escalate by using a “dirty bomb”, or conventional explosives laced with radioactive material.

Ukraine does not possess nuclear weapons, while Russia has said it could protect its territory with its nuclear arsenal.

Ukrainian Foreign Minister Dmytro Kuleba rejected the accusation as “absurd” and “dangerous”, adding: “Russians often accuse others of what they plan themselves.”

In a joint statement after the talks, Britain, France and the United States said they were committed to supporting Ukraine “for as long as it takes” and rejected Russia’s warning about a “dirty bomb”.

“Our countries made clear that we all reject Russia’s transparently false allegations that Ukraine is preparing to use a dirty bomb on its own territory,” they said.

“The world would see through any attempt to use this allegation as a pretext for escalation.”

COMMUNICATION CHANNELS

Sunday’s missile strike in Mykolaiv wiped out the top floor of the apartment block, sending shrapnel and debris across a plaza and into neighbouring buildings, Reuters witnessed. No fatalities were recorded.

“After the first blast, I tried to get out, but the door was stuck,” said Oleksandr Mezinov, 50, who was woken from his bed by the blasts. “After a minute or two, there was a second loud blast. Our door was blown into the corridor.”

On Sunday, Ukraine’s General Staff said anti-aircraft defences had shot down 12 of Russia’s Iranian-made Shahed-136 attack drones in the past 24 hours.

Tehran denies supplying the weapons to Russia.

Britain’s defence ministry said Russia was using the Iranian uncrewed aerial vehicles (UAVs) to substitute for increasingly scarce Russian-made long-range precision weapons.

A local man throws debris out of a broken window in a residential building heavily damaged by a Russian missile attack in Mykolaiv, Ukraine October 23, 2022. REUTERS/Valentyn Ogirenko

But Ukraine’s efforts to contain the UAVs have been successful, the ministry added on Monday in its Twitter update.

Ukraine’s advances in recent weeks around Kherson and in the country’s northeast have been met with intensifying Russian missile and drone attacks on civilian infrastructure, which have destroyed about 40% of Ukraine’s power system ahead of winter.

On Monday, the region’s Russian-installed administration announced the formation of a local militia, saying that all men remaining in the city could join.

Russian troops have withdrawn from parts of the front and occupation authorities are evacuating civilians deeper into Russian-held territory before an expected battle for Kherson, the regional capital on the west bank of the Dnipro river.

Kherson is a gateway to Crimea, which Russia annexed in 2014.

“The situation today is difficult. It’s vital to save your lives,” Russian Education Minister Sergei Kravtsov said in a video message. “It won’t be for long. You will definitely return.”

Russia-installed authorities there reported insufficient vessels to ferry people across the river at one point on Sunday, blaming a “sharp increase in the number of people wishing to leave”.

About 25,000 people have been evacuated since Tuesday, the Interfax news agency said.

Ukraine’s military said it was making gains in the south, taking over at least two villages it said Russia had abandoned.

Russia’s defence ministry said on Sunday its forces had kept up attacks on Ukraine’s energy and military infrastructure, destroyed a large ammunition depot in the central Cherkasy region, and repelled Ukrainian counter-offensives in the south and east.

Reuters could not independently verify the accounts.

Ukrainian President Volodymyr Zelenskiy said the Russian attacks on energy infrastructure had struck on a “very wide” scale.

With the war about to start its ninth month and winter approaching, the potential for freezing misery loomed.

Volodymyr Kudritskiy, head of Ukraine’s national energy company, Ukrenergo, said power had been restored to more than 1.5 million customers after mass weekend attacks on energy targets.

Moscow denies targeting civilians in what it calls the “special military operation” in Ukraine.

Ukraine also accused Russia of hampering a deal on grain exports via the Black Sea, saying its ports were working only at 25% to 30% capacity.

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Additional reporting by Jake Cordell and Valentyn Ogirenko in Mykolaiv; Writing by Clarence Fernandez; Editing by Stephen Coates

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World

Korean Air says jet overran runway in Philippines, no injuries reported

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Oct 24 (Reuters) – A Korean Air Lines Co Ltd (003490.KS) jet with 173 people on board overshot the runway at Cebu International Airport in the Philippines late on Sunday, the airline said, adding that there were no injuries and all passengers had evacuated safely.

The Airbus SE (AIR.PA) A330 widebody flying from Seoul to Cebu had tried twice to land in poor weather before it overran the runway on the third attempt at 23:07 (1507 GMT), Korean Air said in a statement on Monday.

“Passengers have been escorted to three local hotels and an alternative flight is being arranged,” the airline said of flight KE361. “We are currently identifying the cause of the incident.”

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Video from the scene verified by Reuters showed widespread damage to the plane. The nose landing gear appeared to have collapsed.

Korean Air President Keehong Woo issued an apology on the airline’s website, saying a thorough investigation would be carried out by Philippine and South Korean authorities to determine the cause.

Response crews gather around a Korean Air Airbus A330 widebody flying from Seoul to Cebu, which tried to land twice in poor weather before it overran the runway on the third attempt on Sunday, in Lapu-Lapu City, Cebu, Philippines October 24, 2022 in this picture obtained from social media. Randyl Dungog/via REUTERS

“We remain committed to standing behind our promise of safe operations and will do our very best to institute measures to prevent its recurrence,” Woo said.

The A330-300 jet involved in the accident was delivered new to Korean Air in 1998, according to flight tracking website FlightRadar24, which said that other flights to Cebu had diverted to other airports or returned to their origin.

The Cebu airport said on its Facebook page that it had temporarily closed the runway to allow for the removal of the plane, meaning all domestic and international flights were cancelled until further notice.

Korean Air has not had a fatal passenger crash since 1997, according to Aviation Safety Network, a website that compiles aviation accidents.

The airline had a poor safety record at that time but sought outside help from Boeing Co (BA.N) and Delta Air Lines Inc (DAL.N) to improve its standards.

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Reporting by Jamie Freed in Sydney and Karen Lema in Manila; Editing by Mark Porter and Diane Craft

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World

Two Koreas exchange warning shots near maritime border amid tensions

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SEOUL, Oct 24 (Reuters) – North and South Korea exchanged warning shots off the west coast on Monday, accusing each other of breaching their western maritime border amid heightened military tension.

The South’s Joint Chiefs of Staff (JCS) said it broadcast warnings and fired warning shots to see off a North Korean merchant vessel that crossed the Northern Limit Line (NLL), the de facto sea boundary, at around 3:40 a.m. (1840 GMT Sunday).

The North’s military said it fired 10 artillery shells after a South Korean navy ship violated the NLL and fired warning shots “on the pretext of tracking down an unidentified ship,” according to state media.

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“We ordered initial countermeasures to strongly expel the enemy warship by firing 10 shells of multiple rocket launchers near the waters where the enemy movement occurred,” a spokesperson for the General Staff of the North’s Korean People’s Army said in a statement carried by the official KCNA news agency.

The JCS said it had conducted a “normal operation” over the border intrusion, and called the North’s move a “provocation” and a violation of a 2018 bilateral military pact banning “hostile acts” in the border areas.

“We once again urge North Korea to immediately cease consistent provocations and accusations which harm the peace and stability of the Korean peninsula as well as the international community,” the JCS said in a statement.

The latest exchange of fire came amid simmering tension, with the North carrying out weapons tests at an unprecedented pace this year.

In recent weeks, North Korea launched short-range ballistic missiles and hundreds of artillery rounds off its east and west coasts on several occasions in protest over the South’s military activities.

South Korea’s troops kicked off their annual Hoguk defence drills last week, designed to run until Oct. 28 and boost their own and combined ability with the United States to counter the North’s nuclear and missile threats.

Pyongyang has angrily reacted to the drills, calling them provocations and threatening countermeasures. Seoul and Washington say their exercises are defensive and aimed at deterring the North.

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Reporting by Soo-hyang Choi and Hyonhee Shin; editing by Diane Craft and Stephen Coates

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World

Boris Johnson drops UK PM comeback bid, Sunak favourite to win

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  • Johnson withdraws from contest
  • Sunak officially declares he will run
  • First ballot to be held on Monday
  • Sunak clearly leading other contender Mordaunt

LONDON, Oct 23 (Reuters) – Rishi Sunak looked set to become Britain’s next prime minister after Boris Johnson withdrew from the contest on Sunday, saying that although he had enough support to make the final ballot he realised the country and the Conservative Party needed unity.

Johnson had raced home from a holiday in the Caribbean to try and secure the backing of 100 lawmakers to enter Monday’s ballot to replace Liz Truss, the woman who succeeded him in September after he was forced to quit over a string of scandals.

Johnson said he had secured the backing of 102 lawmakers and could have been “back in Downing Street”, but that he had failed to persuade either Sunak, or the other contender Penny Mordaunt, to come together “in the national interest”.

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“Therefore I am afraid the best thing is that I do not allow my nomination to go forward and commit my support to whoever succeeds,” Johnson said in a statement late on Sunday.

“I believe I have much to offer but I am afraid that this is simply not the right time.”

Sterling rose more than half a cent against the dollar in early trading in Asia.

Johnson’s statement likely paves the way for his arch rival, the 42-year-old former finance minister Sunak, to become prime minister, possibly as soon as Monday. If confirmed, he would replace Truss who was forced to resign after she launched an economic programme that triggered turmoil on financial markets.

According to the rules of the accelerated contest, if only one candidate secures the backing of 100 Conservative lawmakers, they will be named prime minister on Monday.

If two candidates pass the threshold, they will go forward to a vote of the party membership, with the winner announced on Friday, just days before new finance minister Jeremy Hunt is due to lay bare the state of the country’s finances in a budget plan due to be released on Oct. 31.

That had raised concerns that Johnson would return to Downing Street with the backing of the party members, and not a majority of lawmakers in parliament, leaving him as a weakened leader.

Some Johnson supporters could switch to Mordaunt, who has presented herself as the unity candidate, but many immediately switched to Sunak. A source close to the Mordaunt campaign said the former defence minister would continue in the contest.

“She is the unifying candidate who is most likely to keep the wings of the Conservative Party together,” the source said.

TORN ITSELF APART

Johnson has loomed large over British politics ever since he became mayor of London in 2008 and went on to become the face of the Brexit vote in 2016. While he led the Conservative Party to a landslide election in 2019, he was forced out just three years later by a rebellion of his ministers.

Sunak said on Twitter that he hoped Johnson would continue to contribute to public life.

One Sunak supporter, who asked not to be named, said his main reaction was relief because if Johnson had won the “party would have torn itself apart”.

Another Conservative lawmaker Lucy Allan said on Twitter: “I backed Boris for PM, but I think he has done the right thing for the country.”

Other Johnson backers immediately jumped ship.

Cabinet office minister Nadhim Zahawi, who minutes earlier had published an article on the Daily Telegraph website praising Johnson, said “a day is a long time in politics”.

“Rishi is immensely talented, will command a strong majority in the parliamentary Conservative Party, and will have my full support and loyalty,” he said.

Earlier, many of the Conservative lawmakers who normally back Johnson switched their support to Sunak, saying the country needed a period of stability after months of turmoil that has sparked headlines – and raised alarm – around the world.

Johnson is also still facing a privileges committee investigation into whether he misled parliament over Downing Street parties during COVID-19 lockdowns. He could be forced to resign or be suspended from office if found guilty.

Sunak first came to national attention when, aged 39, he became finance minister under Johnson just as the COVID-19 pandemic arrived in Britain, developing a furlough scheme to support millions of people through multiple lockdowns.

“I served as your chancellor, helping to steer our economy through the toughest of times,” Sunak said in a statement on Sunday. “The challenges we face now are even greater. But the opportunities – if we make the right choice – are phenomenal.”

If chosen, Sunak would be the first prime minister of Indian origin in the United Kingdom.

His family migrated to Britain in the 1960s, a period when many people from Britain’s former colonies arrived to help rebuild the country after the Second World War.

After graduating from Oxford University, he later went to Stanford University where he met his wife Akshata Murthy, whose father is Indian billionaire N. R. Narayana Murthy, founder of outsourcing giant Infosys Ltd.

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Writing by Kate Holton; Editing by Toby Chopra and Daniel Wallis

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World

Russian fighter jet crashes into Siberian home, two pilots killed

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Oct 23 (Reuters) – A Russian military jet crashed into a residential building in the Siberian city of Irkutsk on Sunday and the two pilots were killed, officials said, the second such fatal incident in six days involving a Sukhoi fighter plane.

In a post on Telegram, Irkutsk governor Igor Kobzev said the plane crashed into a two-storey house in the city. He published a video showing firefighters clambering over the wreckage and directing jets of water at the still smouldering rubble.

No one on the ground was hurt, the governor said.

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Officials said the plane was a Sukhoi Su-30 fighter on a test flight. Last Monday, a Sukhoi Su-34 crashed into an apartment block in the southern city of Yeysk, near Ukraine, and at least 15 people were killed.

Videos of Sunday’s incident, shared on social media, showed the plane dived almost vertically before crashing in a fireball, sending dense black smoke into the sky.

Russia’s state Investigative Committee said it had launched a criminal investigation into violations of air safety rules.

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Reporting by Jake Cordell and Mark Trevelyan, Editing by William Maclean

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World

Tens of thousands march in Berlin in support of Iran protests

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  • Tens of thousands rally in Berlin in support of Iran protests
  • Crowd chants ‘Death to Khamenei’ at Berlin rally
  • Protests enter 6th week despite deadly crackdown
  • Revolutionary Guards warn cleric over ‘agitating’ in southeast

BERLIN/DUBAI, Oct 22 (Reuters) – Tens of thousands of people marched in Berlin on Saturday in a show of support for protesters in Iran where unrest ignited by Mahsa Amini’s death in police custody entered a sixth week despite a deadly state crackdown.

The protests have posed one of the boldest challenges to Iran’s clerical leadership since the 1979 revolution, even if they do not appear close to toppling a government that has deployed its powerful security apparatus to quell the unrest.

Amini, a 22-year-old Iranian Kurd, died in the custody of morality police after being detained for “improper attire”. Protests erupted at her funeral on Sept. 17 in the Kurdish town of Saqez before spreading across Iran. Rights groups say more than 200 people have been killed in the crackdown.

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Women have played a prominent part, waving and burning veils. The deaths of several teenaged girls reportedly killed during protests have fuelled more anger.

In Berlin, police estimated 80,000 people joined the march, with protesters waving Iranian flags and holding banners saying “Woman, Life, Freedom”. Organisers said Iranians had travelled from the United States, Canada and all over the European Union.

“From Zahedan to Tehran, I sacrifice my life for Iran,” human rights activist Fariba Balouch said after giving a speech at the Berlin gathering, referring to Iranian cities swept up in the protests. The crowd responded with “Death to Khamenei”, referring to Supreme Leader Ayatollah Ali Khamenei.

Anti-government activists said the Berlin march was the largest ever demonstration against the Islamic Republic by Iranians abroad.

“I feel very good, because we are here to (say) ‘We are with you, with all Iranian people’. I am Mahsa Amini’s voice,” said a protester who gave her name as Maru.

Videos posted on social media – which Reuters could not independently verify – showed protests continuing in Iran at several cities including Tehran, northeastern Mashhad, northwestern Mahabad, Dezful in the southwest and a number of universities across the country.

Videos showed protesters chanting in Tehran’s western Sadeghieh neighbourhood and lighting fires in the streets of the capital’s Lalehzar district. Another showed cars in Mashhad honking their horns and demonstrators chanting “Death to the dictator”.

Social media videos said to be from Dezful showed youths chanting “Freedom, freedom, freedom” as they confronted police in the predominantly ethnic Arab, oil-rich province of Khuzestan on the Iraqi border.

‘THE LAST WARNING’

Khamenei has warned nobody should dare think they can uproot the Islamic Republic, accusing its adversaries of fomenting the unrest. State TV has reported the deaths of at least 26 members of the security forces.

Some of the deadliest unrest has been in areas home to ethnic minorities with long-standing grievances against the state. These include the Sistan-Baluchistan province in the southeast and its provincial capital Zahedan.

Iran’s Revolutionary Guards on Saturday accused a leading Sunni cleric of agitating against the Islamic Republic and warned it may cost him dearly after he held officials including Khamenei responsible for dozens killed in Zahedan last month.

Amnesty International has said security forces killed at least 66 people in a crackdown after Friday prayers in Zahedan, on Sept. 30.

Molavi Abdolhamid, Zahedan’s leading Sunni cleric, said during his Friday sermon that officials including Khamenei, head of the Shi’ite-dominated state, were “responsible before God” for the Sept. 30 killings. He described the killing as a massacre, saying bullets had been fired at heads and chests.

A short statement on Sepah News, the Revolutionary Guards’ official news site, said: “Mr. Abdolhamid, encouraging and agitating youths against the sacred Islamic Republic of Iran may cost you dearly! This is the last warning!”

State media said at the time of the Sept. 30 violence that “unidentified armed individuals” opened fire on a police station, prompting security forces to return fire.

The Revolutionary Guards said five members of its forces and the volunteer Basij militia were killed during the Sept. 30 violence. Authorities blamed a Baluchi militant group. Neither that group nor any other faction claimed a role.

Protests had been fuelled by allegations of the rape of a local teenaged girl by a police officer. Officials have said the case was being investigated.

After protests erupted in Zahedan again on Friday, deputy interior minister for security, Majid Mir Ahmadi, said calm had returned, official news agency IRNA reported.

He said 150 “thugs attacked public property and even those shops belonging to Sunnis”.

Rights groups say the government has long discriminated against ethnic minorities including the Kurds.

The state denies accusations of discrimination.

In Iran’s Kurdish region on Saturday, videos posted online showed shopkeepers on strike in several cities in the northwestern Kurdish region, including Sanandaj, Saqez and Bukan.

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Reporting by Dubai newsroom and Victoria Waldersee, Leon Malherbe and Oliver Denzer in Berlin; writing by Tom Perry; editing by Alex Richardson and Christina Fincher

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Business

Nasdaq halts IPOs of small Chinese companies as it probes stock rallies

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NEW YORK, Oct 22 (Reuters) – Nasdaq Inc (NDAQ.O) has put the brakes on initial public offering (IPO) preparations of at least four small Chinese companies while it investigates short-lived stock rallies of such firms following their debuts, according to lawyers and bankers who work on such stock launches.

The stock exchange operator’s actions come amid a surge in the shares of Chinese companies that raise small amounts, typically $50 million or less, in their IPO. These stocks rise as much as 2,000% in their debuts, only to nosedive in the days that follow, bruising investors who are bold enough to speculate on penny stocks.

Douglas Ellenoff, a corporate and securities attorney at Ellenoff Grossman & Schole LLP, said he was informed by the Nasdaq that certain IPOs will not be allowed to proceed “until they determined what has been the aberrational trading activity in certain Chinese issuers earlier this year.”

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“These were last-minute phone calls, just as we thought we were going to go somewhere with the deals,” Ellenoff said.

Nasdaq started asking the advisers of small Chinese IPO candidates questions in mid-September. The questions concerned the identity of their existing shareholders, where they reside, how much they are investing and if they were offered interest-free debt so they can participate, according to one of the bankers, Dan McClory, who is head of equity capital markets at Boustead Securities.

The lawyers and bankers spoke to Reuters on condition that the names of the four companies whose IPOs were halted not be disclosed.

It is not clear what action the Nasdaq will take once it completes its probe and whether all or some of the halted IPOs will be allowed to continue. A Nasdaq spokesman declined to comment.

Seven sources who work on IPOs of small Chinese companies spoke to Reuters on the condition that neither they nor their clients be identified. These sources said that the ephemeral stock rallies were caused by a few overseas investors who concealed their identities and snapped up most of the shares in the offerings, creating the perception that the debuts were in demand.

As a result, Chinese IPOs in the United States have returned this year on average a staggering 426% in their first day of trading, compared with 68% for all other IPOs, according to data from Dealogic.

The Securities and Exchange Commission (SEC) and other U.S. financial regulators have yet to announce a case of successfully prosecuting such pump-and-dump schemes because Chinese companies and their overseas bankers have so far been effective in carrying them out secretly, the seven sources said.

An SEC spokesperson did not immediately respond to a request for comment.

LOOPHOLES

Nasdaq’s intervention underscores how liquidity standards it adopted in the last three years to prevent stock manipulation in small IPOs have loopholes that Chinese companies are exploiting. The rules dictate that a company going public should have at least 300 investors holding at least 100 shares each, totaling a minimum of $2,500.

Yet these requirements have not been sufficient to prevent trading manipulation in some penny stocks. Small Chinese companies have been attracted to Nasdaq’s exchange rather than the New York Stock Exchange because the former has traditionally been the venue of red-hot technology startups – an image these companies often try to project.

“Almost all of these microcap IPOs are ‘story’ stocks, where the promoters try to convince unsophisticated retail investors that this could be the next Moderna or this could be the next Facebook,” said Jay Ritter, a University of Florida professor who studies IPOs.

There have been 57 listings of small Chinese companies in the last five years, up from 17 listings in the prior five years, according to Dealogic. So far this year there have been nine such listings despite the U.S. IPO market facing its worst drought in nearly two decades due to market volatility fueled by the Federal Reserve raising interest rates to fight inflation.

McClory said the trend highlights the looser regulatory requirements for listings in the United States compared with China. “It is virtually impossible for these companies to list onshore in China, and now the Hong Kong market has completely shut down as well,” he said.

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Reporting by Echo Wang in New York
Editing by Greg Roumeliotis and Matthew Lewis

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World

Russia pounds Ukraine infrastructure, power cut

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KYIV, Oct 22 (Reuters) – Critical infrastructure across Ukraine was pounded by more than a dozen Russian missiles on Saturday, the Ukrainian air force said, with several regions reporting strikes on energy facilities and power outages.

Ukraine’s air force command reported that 33 missiles had been fired at Ukraine on Saturday morning, and that 18 of those had been shot down.

Since Oct. 10, Russia has launched a series of devastating salvos at Ukraine’s power infrastructure, which have hit at least half of its thermal power generation and up to 40% of the entire system.

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Shortly after daybreak on Saturday, local officials in regions across Ukraine began reporting strikes on energy facilities and power outages as engineers scrambled to restore the ruined network. Governors advised residents to stock up on water in case of cut-offs.

Presidential advisor Kyrylo Tymoshenko said that as of Saturday afternoon, more than a million people across Ukraine were without power, with 672,000 of those in the western region of Khmelnytskyi alone.

After the first wave of missiles hit early in the morning, air raid sirens rang out again nationwide at 11.15 a.m. local time (0815 GMT).

Ukrainian presidential aide Mykhailo Podolyak said Moscow wanted to create a new wave of refugees into Europe with the strikes, while foreign minister Dmytro Kuleba said they constituted genocide.

“Deliberate strikes on Ukraine’s critical civilian infrastructure are part of Russia’s genocide of Ukrainians,” Kuleba wrote on Twitter.

Moscow has acknowledged targeting energy infrastructure but denies targeting civilians.

State grid operator Ukrenergo said the attacks targeted transmission infrastructure in western Ukraine, but that power supply restrictions were being put in place in ten regions across the entire country, including in the capital, Kyiv.

“The scale of damage is comparable or may exceed the consequences of the attacks (between) October 10-12,” Ukrenergo wrote on the Telegram app, referring to the first wave of strikes on Ukraine’s power system last week.

Meanwhile, the deputy head of Kyiv’s city administration, Petro Panteleev, warned Russian strikes could leave Ukraine’s capital without power and heat for “several days or weeks”.

“This possibility exists…we have to understand and remember this,” he told Ukrainian outlet Ekonomichna Pravda.

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Reporting by Max Hunder in Kyiv and Valentyn Ogirenko in Mykolaiv; Editing by Kirsten Donovan

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World

Former Chinese president Hu Jintao escorted out of party congress

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BEIJING, Oct 22 (Reuters) – Former Chinese President Hu Jintao, Xi Jinping’s immediate predecessor, was unexpectedly escorted out of the closing ceremony of a congress of the ruling Communist Party on Saturday.

Hu, 79, who was seated to the left of Xi, was led off the stage of the main auditorium of the Great Hall of the People in Beijing by two stewards, a Reuters witness at the congress said.

According to videos taken by some journalists at the venue and shared on social media, Hu appeared confused as the stewards escorted him out.

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On his way out, Hu exchanged words with Xi and patted Premier Li Keqiang, seated to the right of Xi, on the shoulder.

Hu had appeared slightly unsteady last Sunday when he was assisted onto the same stage for the opening ceremony of the congress.

The once-in-five-years congress concluded with amendments to the party’s constitution that cements the core status of Xi and the guiding role of his political thought within the party.

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Reporting by Eduardo Baptista and Ryan Woo; Editing by Robert Birsel and Lincoln Feast

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