China’s Finance Ministry announced earlier this week that the country’s telecom companies will be included in an ongoing value-added-tax trial program, starting June 1. According to the rules, China Mobile, China Telecom and China Unicom will all have to pay an 11% basic tax rate, as well as a 6% rate on value-added telecom services.
The trio of state-owned telecom responded Thursday by issuing warnings, saying the new scheme could affect their short-term profitability, although the negative impact might fade over the following years. And so, China Mobile is down 1.8%, China Telecom is falling 2.5%, and China Unicom is suffering a 3.9% loss.
On the other hand, tech and casino stocks are rebounding: Tencent Holdings is up 2.6%, and software provider Kingsoft Corp. is advancing 1.9%. Casino operator Wynn Macau is jumping 4.6%, and rival MGM China Holdings is up 2.6%.
As for the mainland Chinese markets, they are scheduled to resume trading Monday.