Fitch Ratings Downgrades Country Garden’s Rating
Fitch Ratings lowered China’s homebuilder Country Garden Holdings’ long-term foreign and domestic currency issuer ratings (IDRs), the top unsecured ratings and the rating on its outstanding bonds to ‘BB+’ from ‘BBB-‘.
“The downgrade reflects Country Garden’s weak financial resilience due to challenges in the real estate sector in China,” Fitch said in a note.
“Fitch believes that Country Garden’s buffer liquidity, while adequate, is under pressure as lower sales combined with working capital commitments are putting pressure on cash generation, while a deterioration in capital market conditions has tightened the company’s funding sources.”
– So Lin Tan
Chinese real estate stocks make a sudden jump after Beijing pledges to guarantee bonds
Chinese real estate shares unexpectedly rose after Beijing ordered China Bond Insurance Co. State-owned Ltd offering guarantees for internal bond issuance by “typical private developers”, including Hong Kong-listed Longfor Group.
Although Hang Seng is down 1.73% with major stocks tumbling across the stock exchange – including Tencent, Ping An and Petrochina, there are strong signs among Chinese developers like Longfor.
Shares of Longfor rose 11% while the largest real estate developer Country Garden jumped 9%. The rally was also strong across Chine Res Land, up 3.2%, R&F Properties up 1.26% and China Vanke, up 1.72%.
In order to revive the beleaguered Chinese (residential) real estate market, regulators plan to provide liquidity support to selected private developers by underwriting new domestic bonds raised, according to the financial information provider, according to REDD.
However, Jessica T, investment specialist in Asia and Greater China at BNP Paribas Asset Management, said investors will remain skeptical until they see evidence that these private developers are benefiting from government funding support.
“However, we believe that the recent mortgage boycott is unlikely to cause any systemic risks, unless the situation spirals out of control,” T said.
“Crucially, Beijing’s policy response to this problem has been swift, as the authorities are trying to find some solutions including allowing mortgage payments to be allowed for affected homeowners and mobilizing banking, environmental and local government resources to revive suspended projects and ease the funding shortfall in developers.”
Te added that further expected easing of macroeconomic policy would reduce the risks that the real estate market may pose to economic growth.
– So Lin Tan
More growth policies are seen as necessary for the Chinese economy despite the interest rate cuts
China still needs more growth policies to stabilize its economy after the central bank unexpectedly moved to cut key interest rates, China’s central bank-backed Financial News said on Tuesday.
The People’s Bank of China cut the one-year policy loan rate by 10 basis points to 2.75% and the 7-day reverse repo rate to 2% from 2.1% on Monday. He defied economists’ expectations that the central bank would cut interest rates.
Quoting Wen Bin, chief economist at China Minsheng Bank, Financial News said that for the economy to recover further, the rate of increase in infrastructure investment needed to accelerate, especially after the recovery momentum slowed.
Wen also said weak domestic demand was a problem for the economy and that Beijing would need to put in place policies that would support economic growth.
Wang Qing, chief macroeconomic analyst at Dongfang Jincheng, was also quoted as saying that Beijing is likely to strengthen fiscal and industrial policies to drive recovery.
In light of a possible future epidemic outbreak, Beijing should prioritize adjusting macro policies in a bid to improve the economy, said Lu Huangyi, chief macro researcher at the Zhengxin Investment Research Institute.
– So Lin Tan
Professor says China’s interest rate cuts are a modest first step
People’s Bank of China Surprise Interest rate cuts on borrowing costs for medium-term policy loans are a modest first step, according to Eswar Prasad, senior professor of international trade policy at Cornell University.
“The rate cut we’ve seen now is very modest. Ten basis points doesn’t amount to much, although it does unleash some liquidity,” he told CNBC’s “Squawk Box Asia” on Tuesday.
The People’s Bank of China (PBOC) cut its one-year medium-term lending facility on 400 billion yuan ($59.3 billion) in loans to some financial institutions by 10 basis points to 2.75%, according to an announcement on the central bank’s website. It also lowered the seven-day reverse repo rate by 10 basis points to 2%.
“It appears to be a very small step,” the professor added. “But the People’s Bank of China is trying to send a very subtle signal here that it is ready to step in if circumstances require it.”
“I think he is very cautious about unleashing any major monetary stimulus because they know it will create medium-term financial risks.”
– Sumathi Bala
Australia to consider competition and consumer issues for social media services
The Anti-Corruption Commission said its report will also look at YouTube, Reddit and Discord.
She said in statement. The authority plans to look at “whether newcomers like TikTok have changed the competitive landscape.”
on Friday, China released a list of algorithms Push the success of technology giants, including the success of Alibaba and Tencent. The recording also mentions how Douyin, the Chinese version of TikTok, uses such data to recommend content to users.
– Ji Lee
Gas prices continue to rise north as Japanese industries slow
Energy prices will continue to move north amid strong consumption, senior trader at Skylar Capital Management and CEO Bill Perkins told Street Swings Asia.
Soaring gas prices have seen northern hemisphere countries, including Asian countries like Japan, scramble to import LNG. Asian benchmark spot price is on an upward trajectory while Japanese industrial stocks are in the red on Tuesday.
“I think these declines are with profit-taking traders and concerns in China about the recession and real estate conditions there. They are concerns but they are exaggerated in relation to the overall trends going on in this cycle,” he said.
Perkins said there will be no softening in higher oil prices, and expects the WPI to move north by $100 a barrel and Brent crude above $120 a barrel.
– So Lin Tan
Anglo-Australian mining company BHP rises after posting its second largest profit in history
Anglo-Australian BHP . miner Shares rose 3.80% after posting the second-biggest gain in history and posting a record $16.3 billion in profit.
Its results for the full year ended June 30 beat expectations.
BHP CEO Mike Henry said BHP is entering fiscal 2023 “in a big way, strategically, operationally and financially”.
It is also expected that “China will emerge as a source of stabilizing commodity demand in the coming year, with policy support gradually solidifying”.
“At the same time, we expect to see a slowdown in advanced economies as monetary policy tightens, as well as persistent geopolitical uncertainty and inflationary pressures,” he said in a press release.
“The direct and indirect effects of the energy crisis in Europe are a particular point of concern. Tight labor markets will continue to be a challenge for global and domestic supply chains.”
– So Lin Tan
The United States, Japan and South Korea complete the search and tracking of missiles
The US Navy, the Japan Maritime Self-Defense Force and the South Korean Navy have completed missile warning and search and track ballistic missile exercises off the coast of the Pacific Missile Range Facility (PMRF) in Hawaii, the Pentagon said.
Participants from the United States, Japan and the Republic of Korea exchanged TDL information in accordance with a Tripartite Information Sharing Agreement.
“Following the United States, Republic of Korea and Japan Tripartite Ministerial Meeting on June 11 in Singapore, this missile warning and ballistic missile search and tracking exercise demonstrated the commitment of the United States, the Republic of Korea and Japan to enhance trilateral cooperation to respond to the challenges of the DPRK, safeguard common security and prosperity, and strengthen the existing international order on the rules,” the Pentagon said in a note.
– So Lin Tan
Chinese fast food company Yum enters the initial list in Hong Kong
Chinese fast food operator yum china Holdings announced Monday that it has applied to convert its secondary listing to primary listing status in Hong Kong. It currently has a double listing on the New York Stock Exchange.
He added, “A dual core listing will bring us closer to our employees, customers and other stakeholders. This strategic move will expand our shareholder world, increase liquidity and mitigate the risk of delisting from the New York Stock Exchange.”
– So Lin Tan
CNBC Pro: Strategist identifies global stocks to buy despite slowing growth
Patrick Armstrong, chief investment officer at Ploremi Group, said there are pockets of “compelling value” in three sectors – even amid the economic slowdown.
These segments are “incredibly cheap,” he told CNBC’s Squawk Box Europe, explaining his favorite stocks and explaining why he likes them.
– Weezin Tan
CNBC Pro: Fund manager says Tesla’s valuation doesn’t make sense until it reaches this level
Tesla It may be one of the best-known electric car makers, but fund manager and technology investor Paul Mix thinks the stock is still too expensive.
Meeks revealed to CNBC professional conversations The rating in which he would find Tesla “more interesting”.
Professional subscribers can Read the story here.
– Xavier Ong