China Stocks End Mixed
BEIJING -- China stocks ended mixed Friday, with the Hang Seng edging up 0.1% to 16,460, while the Shanghai Composite declined 0.7% to 1730.
On Thursday in New York, some of the biggest China wireless names suffered a brutal sell-off, courtesy of new regulations from lead mobile operator China Mobile (CHL). Tom Online (TOMO) lost 9.8% of its value to close at $17; Kongzhong (KONG) fell 8.5% to $7.50; Linktone (LTON) dropped 5% to $5.36; and Hurray (HRAY) was down 7% to $5.33.
The early read on policy changes was, to say the least, bearish.
The mobile sector had been nervously awaiting the news since late May, when rumors first surfaced that China Mobile planned to revamp some of its terms with local wireless services outfits (which provide short message service, multimedia messaging service and Internet portals over cell phones).Based on initial reports after China Mobile's Thursday meeting with wireless companies, the regulations look likely to take an uncomfortably big bite out of wireless players' revenues, especially in the third quarter. Under the new regime, wireless players must extend their free trial subscriptions and start sending customers monthly fee reminders. Also, China Mobile will implement a much-feared double confirmation policy, according to Bin Liu, an analyst at telecom research firm BDA. Double confirmation requires subscribers to confirm twice when they sign up for new services, effective July 10. Investment banking analysts did not mention the double confirmation change in notes that discussed the other policy shifts -- which in themselves will pose a substantial revenue drag. But BDA's Liu said China Mobile sent a circular to provincial operators on July 4 outlining the new confirmation policy in addition to the other two changes. Double confirmation "is the most severe change and will have the biggest impact on SP [service provider] revenue," he said.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV