Chinese online brokerages resumed downslide
$Futu Holdings Ltd(FUTU.US$ $UP Fintech(TIGR.US$ $Robinhood(HOOD.US$After initially unscathed from the crackdown on internet platforms, the regulatory risk seemed to be rearing its ugly head for the Chinese online brokerages. The subsequent rapid rebound in online brokerages $Futu Holdings Ltd(FUTU.US$and $UP Fintech(TIGR.US$provided a strong rebuttal to naysayers including yours truly.
Sun Tianqi, head of the Financial Stability Department at the People's Bank of China (PBOC), echoed my reservations at a financial forum over the previous weekend. He specifically highlighted (in Chinese) certain securities trading institutions that provided securities investment services overseas mainly to domestic investors were conducting "illegal financial activities" when they did not obtain the relevant domestic licenses.
"According to professional media reports, 80% of the deposit accounts of Company A registered in the Cayman Islands are from China, and 55% of Company B registered in Hong Kong. From the perspective of business nature, cross-border Internet brokerages are driving without a license in China and are illegal financial activities." - Sun Tianqi (translation by Google)
Sun explained that financial institutions such as China's securities firms "dare not provide services similar to the cross-border delivery model in the United States." Hence, it does not make sense for foreign registered brokerages to offer services to Chinese domestic users.
Nevertheless, I don't think it's fatal for Futu Holdings and UP Fintech if they can't serve their Chinese accounts in the future. Futu still has nearly half its customers overseas and its Moomoo trading app is popular thanks to the rich features it offers. UP Fintech, better known as Tiger Brokers, has rapidly increased its overseas customer base. Its trading app is also welcomed by users.
In the U.S., $Robinhood(HOOD.US$is having a rough time as well following lackluster quarterly results and guidance. HOOD stock fell 21.7 percent over the past month. FUTU and TIGR stocks fared worse, with both down nearly 40 percent in the same period.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Roy Peck : What this mean.??
Holkkie : when you buy stonk on the red days you need to turn your phone upside down to see the real chart.. to the moon!
understanding Antelo Holkkie: I like to upside down of the phone part..
Aloy61 : why are you posting old news about the Chinese online brokerages?
headingtothemoon Holkkie: Thanks. This way give me confidence
101866878 Holkkie:
Oavbab : KC, FUTU, JD have asymmetrical upside.
Johnsh : This time of the year = CWEB for me.
T_shares : I do not agree on FUTU and TIGR: I think they must get a license to offer trading services of non-mainland stocks to the Chinese population. Here is where the growth is huge!
Why should a US citizen chose a Chinese broker fighting with Chinese authorities when there are so many safer, more reliable and very cost effective alternative available?
Stitch-fu : Does anyone know Ant's IPO updates ? I think this will be additional catalyst for BABA post earnings on Nov4th.
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