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Nomura analysts were equally downbeat on China's economic outlook. Most economists see downside risk to Chinese growth but they don't expect a recession. It was the slowest growth since December 2022, and shows just how much of a challenge authorities face as they try to make consumption the key driver of future economic growth. MORE STIMULUSAsian stocks stalled at one-month lows, the yuan hit a 9-month nadir while the dollar held broadly firm after the weak Chinese data and latest policy easing measures. But we do need to lower our expectations for China's growth."
Persons: Julian Evans, Pritchard, Nomura, Nie Wen, Robert Carnell, Liangping Gao, Albee Zhang, Shri Navaratnam Organizations: National Bureau of Statistics, Capital Economics, Retail, Hwabao Trust, Investment, Reuters, ING, NBS, Nomura, Thomson Locations: BEIJING, Beijing, China, Asia, Pacific
Industrial output and retail sales growth both slowed from a month earlier to a year-on-year pace of 3.7% and 2.5% respectively, missing expectations. J.P. Morgan analysts warned of a "vicious cycle" of real estate financing challenges and said trust defaults could wipe 0.3% to 0.4% from China's growth directly. The S&P 500 (.SPX) rose 0.6% overnight and futures rose 0.1% in Asia. European futures rose 0.4%. In bond markets, benchmark 10-year Treasury yields rose 2 basis points to 4.20% on Tuesday.
Persons: Androniki, HSI, Morgan, John Vail, Morgan Stanley, Tom Westbrook, Jamie Freed Organizations: Nikkei, REUTERS, China, SYDNEY, Reuters, Property, Nomura, HK, International Trust Co, Nikko Asset Management, U.S, Nvidia, Brent, Thomson Locations: Tokyo, Japan, China, Asia, Pacific, China’s, JAPAN, Australia
In contrast, nearly $1 billion went into emerging market ex-China mutual funds, according to Refinitiv data that Reuters cited. Here are some alternatives to China and the stocks to invest in, according to the pros. Japan Japan stocks have been an investor favorite this year, seeing the highest inflows in 20 years, according to Eastspring Investments. Demand for Japan funds has surged among European investors, according to data from research firm Cerulli. The bank screened for Japan stocks with the following attributes: resilient earnings, price-to-book (P/B) ratio below 1.5, and potential P/B upside relative to return on equity.
Persons: Morningstar, , , Derrick Irwin, there's, Oliver Lee, BofA, Joanne Peng, Allspring's Irwin, Irwin, Fomento, He's, Morgan Stanley, Will, ” Irwin, Cerulli’s Peng Organizations: Morningstar, CNBC Pro, Reuters, Allspring Global Investments, CNBC, , Eastspring Investments, Ivailo, Mitsui & Co, Honda Motor, Nomura, Kansai Electric Power, Mitsubishi Motors, Panasonic, Mexicano, HDFC Bank, HDFC Locations: European, China, India, Beijing, Japan Japan, Japan, Europe, Vietnam, Asia, Indonesia, Malaysia, Southeast Asia, Mexico, America, Will China
Real estate problems persist with once-healthy developer Country Garden now on the brink of default. Real estate dragChina's massive real estate sector, where the majority of household wealth is parked, has reemerged as an area of concern that it could drag down the broader economy. Developer Country Garden announced over the weekend it was suspending trading in at least 10 of its mainland-China traded yuan bonds. The more the government tries to help the real estate industry, the longer it takes for the industry to find a reasonable bottom. State-owned developers have also fared better in terms of recent sales than non-state-owned developers, data show.
Persons: Aly Song, Lu Ting, corporates, Xiangrong Yu, Goldman Sachs, Louis Lau Brandes, Louis Lau Organizations: Bund, Reuters, Nomura, Citi New, Citi, Garden, ., Country Garden's U.S, China U.S, Goldman, Louis Lau Brandes Investment Partners, Brandes Investment Partners Locations: Pudong, Shanghai, China, Reuters BEIJING, Japan, today's China, corporates, State, South Korea
Why It MattersJapan is the world’s third-largest economy, and the largest creditor by far. Covid didn’t hit Japan’s economy as hard as it did other countries. The anemic yen has been a double-edged sword for the economy, said Takahide Kiuchi, an economist at the Nomura Research Institute. “However, it could undermine consumption.”BackgroundJapan’s has long suffered from sluggish economic growth. Recent softness in China, Japan’s largest trade partner, is a particular source of worry.
Persons: didn’t, Takahide Kiuchi, , Japan’s, Izumi Devalier, Ms, Devalier, ” Mr, Kiuchi Organizations: Nomura Research Institute, Bank of Japan, Bank of America Locations: Japan, United States, China, Europe
The company logo of Chinese developer Country Garden is pictured at the Shanghai Country Garden Center in Shanghai, China August 9, 2023. REUTERS/Aly Song/File PhotoAug 14 (Reuters) - Turmoil at China's largest private developer Country Garden could set off a "vicious cycle" of financing stress on the country's real estate investment trusts (REITs), brokerage J.P. Morgan warned on Monday. These fresh worries come as Country Garden sought to delay payment on a private onshore bond for the first time and suspended trading in 11 onshore bonds. "The default events may lead to a chain reaction on developer financing, adding stress to POE (privately owned enterprise) developers and their creditors." Rising trust defaults would drag economic growth by 0.3-0.4 percentage points directly, J.P.Morgan warned.
Persons: Aly, Morgan, Katherine Lei, POE, J.P.Morgan, Nomura, Roshan Abraham, Susan Mathew, Danilo Masoni, Varun, Arun Koyyur Organizations: Shanghai Country Garden, REUTERS, China's, Zhongzhi Enterprise Group, Zhongrong, China Evergrande, Thomson Locations: Shanghai, China, HK, Beijing, Bengaluru, Milan
The warning is a "prelude to an ultimate credit event," paving the way for debt restructuring, per JPMorgan. Country Garden racked up 1.4 trillion Chinese yuan, or almost $200 billion, in liabilities at the end of 2022. It also faces 7.8 billion Chinese yuan, or $1.1 billion, in payments for notes and bonds in September. Another analyst feels Country Garden could restructure if it's unable to raise cash in time. Country Garden and CICC did not immediately respond to requests from Insider for comment.
Persons: JPMorgan Chase, Karl Chan, Nicholas Chen, CreditInsights, Chen, Iris Chen, Yang Huiyan, CICC Organizations: JPMorgan, Service, Garden, China International Capital Corporation, Reuters, Nomura, Bloomberg, Hong Locations: Wall, Silicon, China, Hong Kong, Beijing
Country Garden, a massive Chinese property developer, missed interest payments on two dollar bonds this week. On Friday, Yang could receive $28 million in dividends from her personal stake in Country Garden's services unit, according to Bloomberg calculations. Most of her wealth comes from a 52.60% stake in Country Garden Holdings, Insider previously reported. Country Garden did not respond to a request for comment from Insider. Hong Kong-listed Country Garden Holdings shares are down 6% to 98 Hong Kong cents apiece at last check.
Persons: Yang Huiyan, Yeung Kwok, Yang Guoqiang —, Yang, Hui Ka Yan, JPMorgan Chase, Iris Chen, Chen Organizations: Bloomberg, Service, Garden Holdings, Hong, JPMorgan, Nomura, . Locations: Wall, Silicon, Beijing, Hong Kong, . Hong Kong
China's real estate market roiled by default fears again
  + stars: | 2023-08-10 | by ( Evelyn Cheng | ) www.cnbc.com   time to read: +6 min
Qilai Shen | Bloomberg | Getty ImagesBEIJING — Two years after Evergrande's debt troubles, worries about China's real estate sector are coming to the forefront again. In late July, its top leaders indicated a shift toward greater support for the real estate sector, paving the way for local governments to implement specific policies. For the last several years, Chinese authorities have attempted to curb debt-fueled speculation in the country's massive — and hot — real estate market. Real estate and related industries have accounted for about a quarter of China's economy. He pointed out that since China started its deleveraging campaign in 2016, it is very unlikely the state would step in to bail out real estate developers.
Persons: Qilai Shen, Dalian Wanda, Liu Haibo, Sandra Chow, Nomura, Chow, Evergrande, Redmond Wong, , Wong, Vanke, that's Organizations: Country Garden Holdings Co, Bloomberg, Getty, BEIJING, Reuters, CNBC, Country, Asia Pacific Research, CreditSights, Fitch, Saxo Markets Hong, China's, House Research, Stock, Poly Development, Research Locations: Baoding, Hebei province, China, Dalian, Hong Kong, Beijing, Saxo Markets Hong Kong
People wearing face masks are seen on an overpass in front of a residential building in Beijing, China August 11, 2020. Investors may get their first read on the market reaction when official property investment and price data for August is released next month. It was not the curbs that were holding the market down, they said, but Chinese doubts about better days ahead. While not bullish on real estate, she thinks of big-city properties as a "slightly bruised apple amidst a bunch of rotten ones." "I'm concerned about the change," said a 26-year-old pharmaceuticals worker surnamed Song, who had considered buying a property in Beijing before realising he needed his parents' support.
Persons: Tingshu Wang, Kate Ren, hasn't, Ren, Ting Lu, Sophia Chen, Chen, Zhuran Zhang, Zhang, Song, Liangping Gao, Ella Cao, Shuyan Wang, Marius Zaharia, Sam Holmes Organizations: REUTERS, Nomura, Investors, July's Communist Party, Reuters, Thomson Locations: Beijing, China, BEIJING, HONG KONG, Shanghai, China's, Zhengzhou, Hangzhou
China's exports contracted 14.5% on-year in July, worse than the 12.5% fall analysts had expected. Imports into China fell 12.4% on-year in July, far more than the 5% decline analysts had expected. The two readings reflect weak demand both, externally and internally for China's post-COVID economy. China's exports in dollar terms contracted 14.5% in July from a year ago, making their worst on-year contraction since the COVID-19 pandemic started in early 2020, according to the official data. In particular, high-tech products — which make up a quarter of China's total goods exports — fell 4.4% on-month in July, marking its fourth straight month of decline, Loo added.
Persons: Louise Loo, Loo, Nomura Organizations: Imports, Service, Reuters, European Union, Oxford Economics, Nomura Locations: China, Wall, Silicon
China's property market is a huge part of the economy, but it's now in a deep slump. This measure was introduced in August 2020 to limit the amount of money property developers could borrow. Other Chinese real-estate developers ran into similar issues, and the sector started to default on its bond payments. In the background, there were concerns that China's property crisis could spill over into the broader domestic and global economy. In 2022, China's economy grew 3% — well below its official 5.5% target, intensifying the drag on the property sector.
Persons: it's, Xi Jinping, Xi, Lina Batarags, Evergrande, Bo Zhuang, Loomis Sayles, Zhuang, Shenzhen —, Nomura Organizations: Authorities, Service, Bloomberg, Spain's Caixa Bank, Nikkei, Reuters Locations: Beijing, Wall, Silicon, China, Expectedly, Shenzhen
China's Zhengzhou city launches property support measures
  + stars: | 2023-08-04 | by ( ) www.reuters.com   time to read: +2 min
REUTERS/Thomas Peter/File PhotoBEIJING, Aug 4 (Reuters) - China's Zhengzhou city has launched measures to support its property market, including easing home resale restrictions, in what analysts said were the first such moves by a big city heeding signals from policymakers. "Zhengzhou's property easing measures will most likely be warmly welcomed by markets, and we expect other tier-2 cities and even tier-1 cities to follow," said Nomura in a research note on Friday. "We are also concerned that merely easing restrictions on existing home sales without lifting restrictions on home purchase may add supply and depress home prices." On Thursday, China's central bank governor pledged to guide more financial resources towards private firms including property. Demand for the property sector, once a pillar of economic growth, has remained weak in recent weeks - property sales between May and June showed the largest monthly drop this year, based on sales by floor area.
Persons: Thomas Peter, Nomura, Liangping Gao, Ryan Woo, Himani Sarkar, Muralikumar Organizations: REUTERS, Communist Party, Thomson Locations: Zhengzhou, Henan province, China, BEIJING, China's, Henan
With the population in Japan shrinking and Japanese buyers vastly preferring new over used homes, older homes are often abandoned when owners die or younger generations refuse to inherit them. The Japanese government estimated in 2018 that there were nearly 8.5 million abandoned homes in the country. Jaya Thursfield and his wife, Chihiro, moved from London to Japan after buying an abandoned Japanese farmhouse in Ibaraki, a Japanese prefecture about an hour's drive northeast from Tokyo. With many Japanese buyers preferring newly built houses, some homes are demolished after only 20-30 years. And while houses in the US typically appreciate in value, houses in Japan tend to gradually depreciate in value over time.
Persons: Jaya Thursfield, Chihiro, Richard Koo, Koo, Bethany Nakamura, Nakamura, it's Organizations: Service, Privacy, Japan, Japan's Ministry of Land, Transport, Tourism, YouTube, Law, Nomura Research Institute Locations: Wall, Silicon, Japan, Infrastructure, London, Ibaraki, Tokyo, Jaya, America
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe market is priced for perfection 'in an imperfect world': Nomura Private Capital's Matthew RoweMatthew Rowe, Nomura Private Capital head of cross assets strategies and senior portfolio manager, joins 'Squawk Box' to discuss the fallout from the Fitch downgrade, Bill Ackman betting against 30-year U.S. Treasurys, the Fed's rate hike campaign, and more.
Persons: Capital's Matthew Rowe Matthew Rowe, Fitch, Ackman Organizations: Nomura, Capital, Treasurys
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailData supported a 25-basis-point rate hike from the Bank of England, strategist saysJordan Rochester, G10 FX strategist at Nomura, discusses market implications of the Bank of England's 25-basis-point rate hike.
Persons: Jordan Rochester Organizations: Bank of England, Nomura, Bank of England's
Carlyle’s big fee strain comes into sharper view
  + stars: | 2023-08-02 | by ( ) www.reuters.com   time to read: +2 min
The logo for Carlyle is seen at the company’s offices in New York City, U.S., June 28, 2022. REUTERS/Brendan McDermidNEW YORK, Aug 2 (Reuters Breakingviews) - Private equity veteran Carlyle (CG.O) is behind the buyout times. Carlyle and Blackstone kicked off the latest results season at opposite ends of the valuation spectrum. Carlyle trades at about 10 times expected earnings for 2023, according to Refinitiv, the lowest among major peers. And yet, Carlyle’s primary business of doing deals held up relatively better: Proceeds from asset sales declined 36%, versus an 82% slump at Blackstone.
Persons: Carlyle, Brendan McDermid, Harvey Schwartz, Blackstone, Steve Schwarzman, Schwartz, Jonathan Guilford, Aston Martin, Jeffrey Goldfarb, Sharon Lam Organizations: REUTERS, Reuters, Blackstone, Twitter, Thomson Locations: New York City, U.S, Japan
On Monday, the central government announced 20 measures to support tourism, as well as spur consumption of electric cars and so-called smart appliances. The support measures announced included an entire section on spurring rural consumption. Specifics included subsidizing trade-ins for purchase of smart household appliances, improving delivery services and promoting rural tourism. Median disposable income for rural households rose by 6.1% in the first half of the year from a year ago, official data showed. But at 8,920 yuan ($1,245) in disposable income, rural households only had about 40% of what urban households had to spend.
Persons: Yang Bo, Xu Hongcai, Li Chunlin, Li, Nomura, Xu, Wang Jun Organizations: China News Service, Getty, China Association of Policy, National Development, Reform Commission, CNBC, Boston Consulting Group, U.S . Authorities, Huatai Asset Management Locations: Nanjing, China, BEIJING, Beijing, Hong Kong
Coca-Cola bottler bulks up challenged empire
  + stars: | 2023-08-02 | by ( ) www.reuters.com   time to read: +2 min
MILAN, Aug 2 (Reuters Breakingviews) - The world’s largest maker of Coca-Cola bottles is growing bigger. Pouncing on Coca-Cola Beverages Philippines, which Coca-Cola (KO.N) itself is selling, is a no-brainer. The $267 billion U.S. drink maker run by James Quincey is offloading its bottling manufacturing around the world to concentrate on its ubiquitous products. At just over 1 times 2022 sales, the price tag looks cheap compared to CCEP’s own nearly 2 times multiple. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Persons: James Quincey, CCEP, Damian Gammell, Lisa Jucca, Aston Martin, Neil Unmack, Oliver Taslic Organizations: MILAN, Reuters, Cola Europacific Partners, Aboitiz Equity Ventures, Cola Beverages Philippines, Twitter, Thomson Locations: Philippines, Japan, India
Klein's UK SPAC deal is more swan song than encore
  + stars: | 2023-08-02 | by ( ) www.reuters.com   time to read: +3 min
The northern English county is the home of serial acquirer CorpAcq, led by the brother of “Take That” singer Jason Orange, which Klein’s Churchill Capital Corp VII (CVII.N) special-purpose acquisition company vehicle now hopes to buy. The deal, which values the investor in plumbing to fork-lift leasing groups at $1.6 billion including debt, may struggle to relight the fire of the depressed SPAC sector. Klein’s planned deal comes amid a growing lack of patience by SPAC investors. CorpAcq could yet be magic for SPAC investors. Churchill’s sponsors, including Klein, will waive most of their founder shares, which typically vest when a deal is done.
Persons: Peter Rawlinson, Michael Klein, acquirer, , Jason Orange, Klein’s, SPACs, Klein, Simon Orange’s, Pamela Barbaglia, Aston Martin, Neil Unmack, Streisand Neto Organizations: Lucid, Churchill Capital Corp, Nasdaq, Lucid Motors, Reuters, Blank, Cotton Traders, Twitter, Thomson Locations: New York City , New York, U.S, Cheshire, Stockholm, Brexit, Japan
Japan market rally fails to mask Nomura’s woes
  + stars: | 2023-08-01 | by ( ) www.reuters.com   time to read: +2 min
It also powered a near-fivefold increase in pre-tax earnings at the bank’s retail unit from the same period last year. Nomura’s own stock has also benefitted, though its 20% rise this year to a two-year high lags the broader market. And the rally did nothing to fix the abysmal underperformance at its mainstay wholesale division. Revenue at the unit that comprises the volatile investment banking and trading businesses fell 4% to 191 billion yen ($1.3 billion). They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Persons: Nomura, Morgan Stanley, Kentaro Okuda, Steve Cohen, Antony Currie, Oliver Taslic Organizations: Reuters, Revenue, Global, Twitter, Sequoia, Thomson Locations: SINGAPORE, India
The drop in new home sales in China is the steepest monthly decline since July 2022. For the first seven months of this year, new home sales by the 100 developers fell 4.7% from a year earlier. China’s huge property industry was long an important engine of economic growth, accounting for as much as 30% of the country’s GDP. As a result China’s property industry has been mired in a historic downturn in the past two years. And late last year Beijing unveiled a 16-point plan to ease a liquidity crisis in the real estate sector.
Persons: , , , Nomura, , Li Qiang, ” Nomura Organizations: Hong Kong CNN, China’s, Hong, Estate Information Corp, People’s Bank of Locations: Hong Kong, China, Beijing, Guangzhou, Shenzhen, People’s Bank of China
Aston Martin flips from cash-guzzler to carmaker
  + stars: | 2023-08-01 | by ( ) www.reuters.com   time to read: +2 min
LONDON, Aug 1 (Reuters Breakingviews) - Aston Martin Lagonda (AML.L) is making a painful transition from cash-guzzler to viable carmaker. A 216 million pound cash call on Monday brings its total capital raised since 2018 to just under 1.8 billion pounds. By this year, Aston Martin will have grown revenue by 13% per annum since 2019, according to Refinitiv data, thanks to new models like the DB12 and higher prices. Aston’s current enterprise value is just under 2 times forecast 2024 sales, a discount to Porsche, and far below Ferrari’s (RACE.MI) more than 8 times multiple. Yet Aston still needs to show it can make an electric vehicle, with the first due in 2025.
Persons: Aston Martin Lagonda, James Bond, Lawrence Stroll’s, Aston Martin, Aston, Neil Unmack, Steve Cohen, Liam Proud, Oliver Taslic Organizations: Reuters, Public Investment Fund, Porsche AG, Porsche, Twitter, Sequoia, Thomson Locations: Japan, India
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBank of Japan will likely abandon yield curve control in the first quarter of 2024: NomuraRob Subbaraman of Nomura expects the Japanese yen to strengthen against the U.S. dollar in the medium term as the Bank of Japan embarks on the journey of monetary policy normalization.
Persons: Nomura Rob Subbaraman, Nomura Organizations: Email Bank of, U.S, Bank of Japan Locations: Email Bank of Japan
Uber drives further up the road to redemption
  + stars: | 2023-08-01 | by ( ) www.reuters.com   time to read: +2 min
Uber branding is seen on private hire vehicle parking rank at Chopin Airport in Warsaw, Poland, March 22, 2023. NEW YORK, Aug 1 (Reuters Breakingviews) - Uber Technologies (UBER.N) Chief Executive Dara Khosrowshahi is shifting the ride-hailing company into a higher gear, but investors are lagging behind. Uber shares fell almost 6% on Tuesday morning, taking some of the shine off a stock that has almost doubled since the beginning of the year. Khosrowshahi remains some way from his destination on the road to redemption. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Persons: Dara Khosrowshahi, Lyft, Tony Xu, Jennifer Saba, Aston Martin, Steve Cohen, Peter Thal Larsen, Sharon Lam Organizations: Chopin, NEW, Reuters, Technologies, Twitter, Thomson Locations: Warsaw, Poland, DoorDash, Khosrowshahi, Japan, India
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