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Analysts on Shanghai’s new Nasdaq-style STAR tech board

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People take pictures during an opening ceremony of the Shanghai Stock Exchange’s Sci-Tech Innovation Board in Shanghai on July 22, 2019.

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The first tranche of companies on China’s new Nasdaq-style tech board started trading on Monday, with all the stocks seeing gains on their public debut.

Still, some are cautioning against jumping quickly into the action.

“I think this market, it needs to … basically take a little bit of patience to develop,” Eugene Qian, president of UBS Securities, told CNBC’s “Squawk Box” on Monday.

“For anything new in China, there is a tendency for retail-oriented markets like China to overly speculate,” Qian said, adding that this would contribute to a “short-term bubble” that may not be sustainable.

The new technology board — the Science and Technology Innovation Board, or “STAR Market,” which is operated by the Shanghai Stock Exchange — comes as China attempts to address investor concerns about market volatility and the lack of governance.

It’s easier for firms to go public in the new STAR Market tech board, compared to listing on the Shanghai A-share market, as companies need to go through a registration instead of waiting for regulatory approval which could take longer.

“I think a lot of people are going to really be behind this,” Gareth Nicholson, head of fixed income at Bank of Singapore, told CNBC on Monday. “This is gonna be pretty wild.”

‘Focus on individual companies’

Prior to their public debut, initial public offerings on the STAR Market saw an average over-subscription of about 1,700 times among retail investors, Reuters reported. In the first five days of a company’s listing, no daily price limits will be placed. But after that period, a stock will be allowed to trade within a 20% range.

In comparison, listings elsewhere in China are subjected to a gain cap of 44% on their debut and limited to a 10% gain or loss thereafter.

J.P. Morgan’s Chief China Economist and Head of China Equity Strategy, Haibin Zhu, urged investors to “focus on individual companies.”

“You need to focus on the sector and the company itself, and make sure that they have decent or stable earnings outlook,” Zhu told CNBC’s “Street Signs” on Monday.

With the new stock board primarily aimed at domestic investors, opportunities for foreign participation will be minimal for now.

UBS Securities’ Qian said foreign investors are likely to watch “with a lot of interest” but will likely “wait a little bit out.”

Many of the stocks listed on the new tech board are similar to those on the Chinext in Shenzhen, which is already included by MSCI in its indexes, Qian said.

“I think there will be opportunities for long-term, value-driven … international investors later on,” he said.

Looking ahead, the Shanghai Stock Exchange said an index tracking the STAR Market will be launched on the 11th trading day following the debut of the 30th company on the board.

— CNBC’s Evelyn Cheng, Yen Nee Lee and Reuters contributed to this report.

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China travel restrictions will hit Asian economies

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Economies in Asia will have to brace for a tough year ahead as China deals with an outbreak, analysts and officials warned as travel restrictions hit.

China has halted all group tours both domestically and to other countries to contain the spread of a new coronavirus that was thought to have originated from the central Chinese city of Wuhan in Hubei province.

By the end of Monday, there were 4,515 confirmed cases of the coronavirus, China’s National Health Commission said in a notice. The death toll was 106.

Coronavirus are a large family of viruses that includes the common cold and SARS, the epidemic which killed almost 800 globally in an outbreak from 2002 to 2003.

The new coronavirus strain called “2019-nCoV” is believed to have an incubation period of two to 14 days, according to the U.S. Centers for Disease Control and Prevention.

Cancellations during peak travel season

Halting group tours from China has sent a wave of cancellations across the travel sector, with booking platforms and travel agents issuing refunds to customers.

Trip.com, China’s top online travel booking platform has set up a $200 million disaster relief fund to refund customers who have already paid for travel packages but who now cannot travel due to restrictions, said Jane Sun, the CEO of the company.

It’s “not only our company, the whole country will take a hit,” said Sun.

But there were already multiple cases of the coronavirus outside of China, ahead of the peak Lunar New Year season which started on Jan. 25.

Countries that have confirmed cases of the new coronavirus include Thailand, Vietnam, South Korea, Singapore, Malaysia, Japan, Australia, France and the United States.

Chinese tourism curbs to hit Asia Pacific economies

The outbreak will hit Asia Pacific economies, particularly in retail, restaurants, conferences, sporting events, tourism and commercial aviation, said Rajiv Biswas, Asia Pacific chief economist at IHS Markit.

“The rapid rise in household incomes in China has triggered a boom in Chinese tourism visits abroad, which have risen from 20 million in 2003 to 150 million in 2018. Consequently the vulnerability of many Asia-Pacific economies to a slowdown in Chinese tourism visits has increased significantly over the past two decades,” said Biswas in a note on Tuesday.

“Over the past two decades, the rapid economic growth of China has made it a key export market for many Asia-Pacific nations. However, China’s growing importance in Asia-Pacific trade and investment flows has also created considerable vulnerability for the Asia-Pacific region from this type of unpredictable ‘black swan’ event currently hitting the Chinese economy,” said Biswas.

Thailand, Japan and Vietnam are among the economies that will be hit by the new Chinese travel restrictions and sharp near-term slowdown in Chinese tourist visits, Biswas said.

He said Thailand has been one of the “most notable beneficiaries of the boom in Chinese tourism,” with total annual Chinese tourist visits rising from 2.7 million in 2012 to 10.5 million in 2019. Chinese tourist spending in Thailand was estimated to have reached $17 billion in 2019.

The Tourism Authority of Thailand is meeting with the private sector on Tuesday to address concerns from an expected slump in business, the Bangkok Post reported.

Japan’s services industry is also getting hit by a rash of trip and hotel cancellations, the Nikkei Asian Review reported.

The country is a top vacation spot and IHS’ Biswas noted that total Chinese tourist visits to Japan hitting 9.6 million in 2019, accounting for 30% of total foreign tourist visits.

Meanwhile, Chinese tourism arrivals accounted for one-third of international visits to Vietnam, and 15% of total international tourist visits to Australia.

Biswas said governments in Asia Pacific are likely to respond with a range of fiscal and monetary policy stimulus to prop up near-term growth.

Singapore’s Trade and Industry Minister Chan Chun Sing said the outbreak is expected to affect the economy of the city-state, Reuters reported. The government is considering support measures like worker levy cuts for impacted sectors like tourism, Chan reportedly said.

Watch the next few weeks

It will be another few weeks before the impact of implemented public health measures can be assessed, due to the incubation period of the virus, said Paul Tambyah, a professor at the NUS Yong Loo Lin School of Medicine.

“In order to stop a virus from spreading, you got to isolate everybody who’s sick. You need to find every case, isolate them, make sure they don’t spread it to anyone else and then, you can stop the epidemic,” Tambyah told CNBC.

Tambyah said there was no need for the general public to avoid travel to anywhere outside of China right now as there has been no evidence of local transmission elsewhere. But, be sensible.

“If you’re sitting beside someone who’s hacking away, maybe you should move away or put on a mask, or use an extra dose of hand sanitizer. And if you do get sick, then you should see your doctor,” said Tambyah.

Trip.com’s Sun said she was hopeful that the measures the Chinese government has implemented will help contain the outbreak in weeks and send pent-up demand back up once the virus is under control — just like what it was in 2003.

“When the SARS was under control, we saw double or triple the demand coming back very strongly,” said Sun, adding it was the same with Chinese GDP growth.

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MacKenzie Bezos sells $400 million of her Amazon shares

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24 April 2018, Germany, Berlin: Head of Amazon Jeff Bezos and his wife MacKenzie Bezos arrive for the Axel Springer award ceremony. Bezos will be receiving the award later. Photo: Jörg Carstensen/dpa (Photo by Jörg Carstensen/picture alliance via Getty Images)

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MacKenzie Bezos has reduced her stake in Amazon by about $400 million, according to a recent SEC filing.

The drop in Bezos’ stake was reported in the Friday filing, under her ex-husband and Amazon CEO Jeff Bezos’ name. Jeff Bezos retains sole voting control of MacKenzie Bezos’ stake, which now stands at 19.5 million shares, or about 200,000 fewer shares than the 19.7 million she received as part of their divorce.

Bezos became one of the world’s wealthiest women following her divorce from Jeff Bezos, the richest person in the world. She received a 4% stake in Amazon, which handed her a $37 billion fortune.

Last May, MacKenzie Bezos signed the Giving Pledge, which was started by Warren Buffett and Bill and Melinda Gates in 2010. As part of the move, she pledged to give away half of her wealth to charitable causes.

Jeff Bezos has yet to sign the pledge, but applauded his ex-wife’s decision.

Follow @CNBCtech on Twitter for the latest tech industry news.

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Philippines suspends visa upon arrival for Chinese amid coronavirus concerns

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Filipinos flock to Manilas Chinatown to celebrate Chinese New Year on January 25, 2020 in Manila, Philippines.

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The Philippines announced Tuesday it will temporarily suspend issuing visas upon arrival (VUA) for Chinese nationals amid concerns of a coronavirus outbreak.

“We are now temporarily suspending the issuance of VUA for Chinese nationals to slow down the influx of group tours,” Bureau of Immigration Commissioner Jaime Morente said in a press release dated Tuesday.

Morente said the measure was taken to “slow down travel” and potentially aid in preventing the entry of the virus. Still, he clarified that there is no order barring Chinese nationals from entering the Philippines.

The decision comes amid an outbreak that Chinese officials said has already claimed more than 100 lives in China and infected more than 4,500 in the country.

Multiple cases of the virus have been confirmed in Hong Kong, Macao, Taipei, Thailand, Vietnam, South Korea, Singapore, Malaysia, Japan, Australia, France and the United States.

On Monday, local authorities in Germany confirmed the country’s first case. Nepal has confirmed one case. Cambodia confirmed its first case on Monday, according to Reuters, citing Health Minister Mam Bunheng. Sri Lanka also confirmed its first case on Monday, Reuters reported.

Paul Tambyah, professor at the Department of Medicine at the NUS Yong Loo Lin School of Medicine, told CNBC’s “Street Signs” on Tuesday that the situation was “advancing pretty rapidly.”

“We do have to wait a while to see the impact of the public health interventions but right now, I think it’s something that’s focused the attention of public health authorities all over the world,” he said.

— CNBC’s Berkeley Lovelace Jr., William Feuer and Christine Wang contributed to this report.

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