Finance

China stocks just had their best day in 16 years, sending related U.S. ETFs soaring

Published

3 months ago

September 30, 2024

Business Finance News

A shareholder at a securities hall in Hangzhou, the capital of Zhejiang province in east China, on Sept. 24, 2024.

Cfoto | Future Publishing | Getty Images

China stocks rallied to their best day in 16 years, with related U.S. ETFs also soaring after recent economic stimulus buoyed investor optimism in the market.

The Shanghai Composite rallied 8.06% in its best day since September 2008, and capping a nine-day win streak for the index. It ended September up 17.39%, its first monthly gain in five and its best monthly performance going back to April 2015.

The Shenzhen Composite Index closed up 10.9%, its best day since April 1996. It gained 24.8% in September, its best month going back to April 2007.

The China ADR index gained nearly 6%.

The U.S. listed shares of human resources company Kanzhun surged 9% along with online video company Bilibili. Tencent Music Entertainment gained 2.9%, while online brokerage company Futu Holdings rose 15%.

China ADR Index

The KraneShares CSI China Internet ETF (KWEB) gained 4.2%, while the iShares China Large-Cap ETF (FXI) rose 2.2%.

The U.S. listed shares of Alibaba had gained more than 4%, while JD.com was up by 5.4%.

Chinese stocks have been on a tear after Beijing last week unveiled a slew of economic stimulus measures including interest rate cuts to support the weak property market. On Thursday, state media said Chinese President Xi Jinping and other top leaders affirmed the measures.

“While we don’t know for sure if there’s going to be enough to really kick the economy back into gear, it’s certainly the right first step,” said Art Hogan, chief market strategist at B. Riley Securities. “I think the impact of a strengthening China can’t be underestimated.”

“On balance, this is going to be an ambiguous positive for markets going forward,” he added. “And I think that there’s a lot of investors are going to have to quickly recalibrate their expectations.”

More U.S. investors are bullish on the market following the move. Last week, billionaire hedge fund founder David Tepper said he is overwhelmingly bullish on Chinese equities, having bought “everything” related to China following the Federal Reserve’s recent rate cut.

— CNBC’s Gina Francolla, Nick Wells, Lim Hui Jie and Evelyn Cheng contributed to this report.

Finance

Treasury delays deadline for small businesses to file new BOI form

Published

31 minutes ago

December 26, 2024

Business Finance News

Janet Yellen, U.S. Treasury secretary, on a tour of the Financial Crimes Enforcement Network (FinCEN) in Vienna, Virginia, on Jan. 8, 2024.

Valerie Plesch/Bloomberg via Getty Images

The U.S. Treasury Department has delayed the deadline for millions of small businesses to Jan. 13, 2025, to file a new form, known as a Beneficial Ownership Information report.

The Treasury had initially required many businesses to file the report to the agency’s Financial Crimes Enforcement Network, known as FinCEN, by Jan. 1. Noncompliance carries potential fines that could exceed $10,000.

This delay comes as a result of legal challenges to the new reporting requirement under the Corporate Transparency Act.

The rule applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.

Businesses and owners that didn’t comply would potentially face civil penalties of up to $591 a day, adjusted for inflation, according to FinCEN. They could also face up to $10,000 in criminal fines and up to two years in prison.

However, many small businesses are exempt. For example, those with over $5 million in gross sales and more than 20 full-time employees may not need to file a report.

Why Treasury delayed the BOI reporting requirement

The Treasury delayed the compliance deadline following a recent court ruling.

A federal court in Texas on Dec. 3 had issued a nationwide preliminary injunction that temporarily blocked FinCEN from enforcing the rule. However, the 5th U.S. Circuit Court of Appeals reversed that injunction on Monday.

CNBC Small Business Survey finds confidence rising among small businesses

“Because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline,” according to the FinCEN website.

FinCEN didn’t return a request from CNBC for comment about the number of businesses that have filed a BOI report to date.

Some data, however, suggests few have done so.

The federal government had received about 9.5 million filings as of Dec. 1, according to statistics that FinCEN provided to the office of Rep. French Hill, R-Ark. That figure is about 30% of the estimated total.

Hill has called for the repeal of the Corporate Transparency Act, passed in 2021, which created the BOI requirement. Hill’s office provided the data to CNBC.

“Most non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,” Daniel Stipano, a partner at law firm Davis Polk & Wardwell, wrote in an e-mail.

There’s a potential silver lining for businesses: It’s “unlikely” FinCEN would impose financial penalties “except in cases of bad faith or intentional violations,” Stipano said.

“In its public statements, FinCEN has made clear that its primary goal at this point is to educate the public about the requirement, as opposed to taking enforcement actions against noncompliant companies,” he said.

Certain businesses are exempt from BOI filing

The BOI filing isn’t an annual requirement. Businesses only need to resubmit the form to update or correct information.

Many exempt businesses — such as large companies, banks, credit unions, tax-exempt entities and public utilities — already furnish similar data.

Businesses have different compliance deadlines depending on when they were formed.

For example, those created or registered before 2024 have until Jan. 13, 2025, to file their initial BOI reports, according to FinCEN. Those that do so on or after Jan. 1, 2025, have 30 days to file a report.

There will likely be additional court rulings that could impact reporting, Stipano said.

For one, litigation is ongoing in the 5th Circuit, which hasn’t formally ruled on the constitutionality of the Corporate Transparency Act.

“Judicial actions challenging the law have been brought in multiple jurisdictions, and these actions may eventually reach the Supreme Court,” he wrote. “As of now, it is unclear whether the incoming Trump administration will continue to support the Government’s position in these cases.”