(Bloomberg) — The Senate overwhelmingly approved legislation Wednesday that could lead to Chinese companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from listing on U.S. stock exchanges amid increasingly tense relations between the world’s two largest economies.The bill, introduced by Senator John Kennedy, a Republican from Louisiana, and Chris Van Hollen, a Democrat from Maryland, was approved by unanimous consent and would require companies to certify that they are not under the control of a foreign government.If a company can’t show that it is not under such control or the Public Company Accounting Oversight Board isn’t able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company’s securities would be banned from the exchanges.“I do not want to get into a new Cold War,” Kennedy said on the Senate floor, adding that he wants “China to play by the rules.”So far, no companion measure has been introduced in the House of Representatives, according to a Senate aide familiar with the bill.“Publicly listed companies should all be held to the same standards, and this bill makes common sense changes to level the playing field and give investors the transparency they need to make informed decisions,” Van Hollen said in a statement. “I’m proud that we were able to pass it today with overwhelming bipartisan support, and I urge our House colleagues to act quickly.”The legislation — S. 945 — is another example of the rising bipartisan pushback against China in Congress that had been building over trade and other issues. It has been amplified especially by Republicans as President Donald Trump has sought to blame China as the main culprit in the coronavirus pandemic.GOP lawmakers have in recent weeks unleashed a torrent of legislation aimed at punishing China for not being more forthcoming with information or proactive in restricting travel as the coronavirus began to spread from the Wuhan province, where it was first detected.But the president’s focus on blaming China for the pandemic has threatened what had been a strong bipartisan consensus that the U.S. needs to get tougher on the country. Some Democrats have begun to shy away from initiatives that could be seen as further politicizing the issue as the U.S. heads toward November’s presidential election.Kennedy told Fox Business on Tuesday that the bill would apply to U.S. exchanges such as NASDAQ and the New York Stock Exchange.“I would not turn my back on the Chinese Communist Party if they were two days dead,” Kennedy said. “They cheat. And I’ve got a bill to stop them from cheating.”At issue is China’s longstanding refusal to allow the PCAOB to examine audits of firms whose shares trade on the New York Stock Exchange, Nasdaq and other U.S. platforms. The inspections by the little-known agency, which Congress stood up in 2002 in response to the massive Enron Corp. accounting scandal, are meant to prevent fraud and wrongdoing that could wipe out shareholders.Since then China and the U.S. have been at odds on the issue even as companies including Alibaba and Baidu have raised billions of dollars selling shares in American markets. The long-simmering feud came to the forefront last year as Washington and Beijing clashed over broader trade and economic issues, and some in the White House have been urging Trump to take a harder line on the audit inspections.Last week, Trump said in an interview on Fox Business that he’s “looking at” Chinese companies that trade on the NYSE and Nasdaq exchanges but do not follow U.S. accounting rules. Still, he said that cracking down could backfire and simply result in the firms moving to exchanges in London or Hong Kong.While not technically part of the government, the PCAOB is overseen by the Securities and Exchange Commission. The ability to inspect audits of Chinese firms that list in the U.S. is certain to come up at a roundtable that the SEC is holding on July 9 on risks of investing in China and other emerging markets.Senators Kevin Cramer, Tom Cotton, Bob Menendez, Marco Rubio and Rick Scott are also sponsors of the bill. Rubio applauded the passage of the Kennedy-Van Hollen bill and said it incorporated aspects of a similar bill he introduced last year.“I was proud to work with Senator Kennedy on this important legislation that would protect American retail investors and pensioners from risky investments in fraudulent, opaque Chinese companies that are listed on U.S. exchanges and trade on over-the-counter markets,” Rubio said in a statement. “If Chinese companies want access to the U.S. capital markets, they must comply with American laws and regulations for financial transparency and accountability.”According to the SEC, 224 U.S.-listed companies representing more than $1.8 trillion in combined market capitalization are located in countries where there are obstacles to PCAOB inspections of the kind this legislation mandates.(Updates with statement by co-sponsor, details on oversight beginning in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
from Yahoo Finance https://ift.tt/36otGig
Facebook and Amazon are increasingly moving into each others' territories, and it could get ugly.
Royal Caribbean Cruises Ltd. (RCL) warned Wednesday that it expects to post a net loss in the second quarter as the magnitude and duration of the coronavirus pandemic remains uncertain. Shares dropped 2.7% to $41.03 in afternoon trading.The ailing cruise operator said it will need to pay between $590 million to $610 million in interest on its debt for the rest of the year. Royal Caribbean also disclosed that it expects to continue to halt its sailings until July 31, after previously saying it may resume operations in June.In response to the outbreak of the coronavirus pandemic, Royal Caribbean on March 13 suspended its global cruise operations leading to the cancellation of 130 sailings during the first quarter. The company said it estimates its cash burn to be, on average, in the range of about $250 million to $275 million a month during a prolonged suspension of operations.Taking steps to cope with the financial fallout of the sailings halt, the embattled cruise operator this month raised $3.3 billion through a debt sale, improving its liquidity position by about $1 billion, it said.For the first quarter ended March 31, Royal Caribbean reported a net loss attributable to the company of $1.44 billion, or $6.91 per share compared to a net income of $249.7 million, or $1.19 earnings per share year-on-year.Excluding one-time items, the cruise operator lost $1.48 per share, much more than analysts’ expectations of 63 cents loss per share.As of April 30, Royal Caribbean had $2.3 billion in cash and cash equivalents. The company expects debt maturities for the rest of 2020 and 2021, of $0.4 billion and $0.9 billion, respectively, as of May 19.Ahead of the financial results, Wedbush analyst James Hardiman last week maintained his Buy rating on the stock with a $63 price target, saying that this year’s steep 70% decline in the stock is “overdone”.“RCL is a high-risk trade during the short and medium term,” Hardiman wrote in a note to investors. “Longer-term however, while peak demand is likely impaired and peak earnings power has certainly been reduced, we believe RCL has positioned itself to eventually emerge from the pandemic and ultimately flourish.”The rest of Wall Street analysts is more cautiously optimistic than Hardiman. The stock’s 12 analyst ratings consist of 7 Buys, 4 Holds and 1 Sell adding up to a Moderate Buy consensus. The $60 average price target implies 46% upside potential in the shares in the coming 12 months. (See Royal Caribbean stock analysis on TipRanks).Related News: Southwest Pops Almost 6% As May Passenger Bookings Outpace Cancellations Walmart’s Quarterly Sales Surprise As Lockdown Drives Online, Store Delivery Traffic Urban Outfitters Reports Slow Quarter, Predicts More Dramatic Sales Decline in Upcoming Quarter More recent articles from Smarter Analyst: * Inovio Pops Almost 10% on ‘Positive’ Preclinical Results For Its Covid-19 Vaccine * Clorox Bumps Up Dividend By 5%; Shares Rise In Pre-Market * Urban Outfitters Reports Slow Quarter, Predicts More Dramatic Sales Decline in Upcoming Quarter * Facebook Canada Faces C$9 Million Fine Over ‘False’ Privacy Claims