China curbs short selling

Good morning. Here's what happened overnight and what you need to know today.

---

1.

Curbing shorts: Chinese regulators will suspend the lending of certain shares for short selling from Monday, in an effort to support the country’s sinking stock markets. Investors will be restricted from lending out shares during specified lock-up periods. The move follows news that Chinese authorities are considering a USD288 billion ($438 billion) rescue package to stabilise the flailing stock market, an update which temporarily buoyed stocks last week before they retreated again on Friday. (Bloomberg)

2.

Middle East conflict: Three American troops were killed and 25 more wounded in a drone strike on a US base in Jordan on Sunday. In a statement, President Joe Biden blamed the attack on "radical Iran-backed militant groups operating in Syria and Iraq”. The deaths are the first direct American fatalities amid months of strikes against US forces by Iran-backed groups across the Middle East, the frequency of which has increased as the Israel-Hamas conflict continues. The attack also came a day after a British warship destroyed a Houthi drone that was targeting the naval vessel in the Red Sea, according to UK officials. (Reuters)(The White House)

3.

Chip subsidies: The Biden administration is set to award billions of dollars in subsidies to leading semiconductor companies to build new factories, reported the Wall Street Journal, citing unnamed industry sources. Intel and TSMC are among firms expected to receive the subsidies as part of the USD53 billion Chips Act, which aims to reduce reliance on China’s rapidly growing chip industry by strengthening manufacturing in the US. (Wall Street Journal)

4.

Tax reform: Labor is facing pressure from business groups and some tax experts to prioritise tax reform over short-term politics. The groups told the AFR that both major parties should develop bold tax reform plans ahead of the next election to rectify an over-reliance on income tax. Meanwhile, the Australian reported that some MPs within Albanese’s government have expressed support for revisiting the party’s negative gearing policies to help younger generations enter the property market, as well as consider additional cost-of-living assistance before the stage 3 tax cuts are come into effect in July. (AFR) (The Australian)

5.

The Cuts of March: Ahead of the Federal Reserve’s two-day policy meeting ending Wednesday afternoon, investors are allocating almost even odds to the possibility that the US will begin cutting rates from March, and will be looking for any signal that Fed chair Jerome Powell may send this week. On one hand, inflation numbers continue to surprise to the downside, while on the other, consumer spending remains strong. (Bloomberg)

6.

Cement spinoff: Holcim, the world’s largest cement maker, is planning to carve out its North-American business ahead of a US listing in 2025. The company estimates the business could be valued at up to USD30 billion. The Switzerland-based company was formed in a 2015 merger and has since seen rapid growth in North America. CEO Jan Jenisch told the FT that: “We are too successful in North America, we are too big to manage this as a subsidiary.” (Financial Times)

7.

Streaming profits: Disney has seen a blockbuster 33% increase in Australian profit, ahead of its crackdown on password sharing as part of efforts to gain ground on market leader Netflix. The streaming and entertainment behemoth reported a lift in local profits from $46.3 million in 2022 to $60.1 million in FY2023, on $810.6 million in total revenue. (Capital Brief)

8.

Lang Walker: Renowned Australian property developer Lang Walker died over the weekend, aged 78. The pioneering developer is known for high-profile Sydney projects including King Street Wharf, Broadway Shopping Centre, the Finger Wharf in Woolloomooloo and Parramatta Square. (AFR)