In the News: Insider Trading, Tax Reductions and Commercial Real Estate
February 12, 2019 | BY
Jacelyn JohnsonCSRC takes measures to prevent insider trading in M&A deals; tax reductions for private businesses in Shenzhen rose 10.2% year on year; and China's commercial real estate market grows 50% year on year in investments from foreign investors.
China Steps Up Measures to Prevent Insider Trading in M&A Deals
China Securities Regulatory Commission (CSRC) announced that they are taking measures to prevent insider trading in mergers and acquisitions (M&A) deals, reported Xinhua.
Listed companies are required to submit a list of names with knowledge of M&A deals once they file the initial plans with the stock exchanges and update the list when there are major changes to the deals or when new information arises such as valuation and proposed pricing.
According to CSRC, If abnormal fluctuations in the companies' stock prices are spotted after the filing of the M&A plans, the stock exchanges could ask the firms to update the insider list. Insider trading in M&A deals are among the key market irregularities that the CSRC vowed to crack down on this year. The CSRC imposed a record-high amount of fines in 2018, with insider trading amounting to the highest number of penalized cases.
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Shenzhen Gives $25b in Tax Reductions
Tax reductions for private businesses in Shenzhen rose 10.2% year on year reaching over $25 billion in 2018, reported Shenzhen's taxation authorities. The figure accounted for more than 70% of the city's entire tax reductions.
Xinhua reported that the private sector contributes to about 70% of tax revenue in the region. The number of private enterprises in Shenzhen totaled 1.86 million, accounting for 96% of all enterprises, as of September 2018. Shenzhen implemented a series of preferential tax policies in 2018 to encourage the development of the high-tech industry.
The taxation administration worked with multiple banks to provide innovative financial services based on private enterprises' tax-paying credits in order to solve their financial difficulties.
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Foreign Investors Eye China's Commercial Real Estate
China's commercial real estate market saw an increase in investments from foreign investors in 2018, up 50% year on year, amounting to about $10.38 billion, said CBRE Group, a global leading commercial real estate services.
Foreign investment accounted for about 60% of Shanghai's major property deals in the fourth quarter of 2018. Reports also show that foreign investment demand for China's real estate market is expected to grow in 2019.
CBRE Group predicts that the invested assets of property funds eyeing China will rise over $35 billion between 2019 and 2024, with investment mainly on value-added and opportunistic real estate projects.
According to Xinhua, Singapore's CapitaLand announced it would acquire about 70% of Pufa Tower in Shanghai's central business district through a joint venture for Rmb2.75 billion.
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