DIRS.INFO The most relevant business & tech news

☆ A key Chinese shadow bank has missed payments on dozens of investments, and it shows just how bad things are in the world's second-largest economy
▼ + stars: | 2023-08-16 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Zhongrong, a Chinese trust company, missed payments on dozens of investment products, per Bloomberg. The missed payments came days just after property giant Country Garden missed coupon payments. These alarming troubles at Zhongrong come just days after Country Garden, China's biggest private-sector developer by sales, missed interest payments on two US-dollar-denominated bonds. Both events are concerning because China's trust companies sell investment or trust products to corporate and wealthy clients. As of the end of 2022, China's trust sector's exposure to real estate was about 2.2 trillion yuan, or $302 billion, accounting for 10% of its total assets, per Bloomberg Economics.

Persons: Wang Qiang, —, Wang, Zhongrong doesn't, Nomura, Zhongrong Organizations: Bloomberg, Service, Zhongrong Locations: Wall, Silicon, China, Shanghai, Zhongrong

☆ Zhongrong Trust's missed payments trigger fears among Chinese investors
▼ + stars: | 2023-08-16 | by ( ) www.reuters.com time to read: +3 min

Investors look at an electronic board showing stock information at a brokerage house in Shanghai, China, March 7, 2016. REUTERS/Aly Song/File Photo Acquire Licensing RightsSHANGHAI, Aug 16 (Reuters) - Anxious Chinese retail investors are bombarding listed companies with questions about their exposure to Zhongrong International Trust Co after missed payments by the trust company triggered fears of contagion across the country's financial system. Zhongrong managed assets worth 785.7 billion yuan ($107.69 billion) at the end of 2022, out of which 629.3 billion yuan were linked to trust products, according to its latest annual report. Its missed payments had added to stress in the financial sector from the country's worsening property crisis. One investor on Wednesday asked Shanghai-listed New China Life Insurance Company (601336.SS) - which owned 14 billion yuan ($1.92 billion) of products from Zhongrong at the end of last year - whether there was a risk of missed payments.

Persons: Aly, Huang Yan, Jason Xue, Tom Westbrook, Tomasz Janowski, Jason Neely Organizations: REUTERS, Rights, Zhongrong International, Co, Investors, Shanghai QiuYang, Zhongzhi Enterprise Group, Wednesday, Shanghai, China Life Insurance, KBC Corp, Bescient Technology, Shanghai New Vision Microelectronics, Nanhua, Jiangsu Azure Corp, Topsperity Securities, Thomson Locations: Shanghai, China, Shenzhen, Zhongrong, Jiangsu, Singapore

☆ China may 'miss the 5%' growth target this year as downside risks spread
▼ + stars: | 2023-08-16 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +5 min

Greg Baker | Afp | Getty ImagesBEIJING — Without more stimulus, China is increasingly likely to miss its growth target of around 5% this year, economists said. "In such a case, economic momentum may stay subdued in the rest of the year and China may miss this year's growth target of around 5%," she said. China is the world's second-largest economy, and accounted for nearly 18% of global GDP in 2022, according to World Bank data. "We also see bigger downside risk to our 4.9% y-o-y growth forecast for both Q3 and Q4, and it is increasingly possible that annual GDP growth this year will miss the 5.0% mark," the report said. Growth vs. national securityChinese authorities' initial crackdown on real estate developers in 2020 was an attempt to curb their high reliance on growth.

Persons: Greg Baker, Tao Wang, spender, Nomura Ting Lu, Ting Lu, haven't, Louise Loo, Loo, that's, Xiangrong Yu, Gabriel Wildau, Teneo, Wildau Organizations: Afp, Getty, UBS Investment Bank, Bank, China, People's Bank of, Oxford Economics, Zhongrong International Trust, Information, Beijing, CNBC, Baoshang Bank, Anbang Locations: Beijing, BEIJING, China, Asia, People's Bank of China

REUTERS/Aly Song/File PhotoHONG KONG/NEW YORK, Aug 15 (Reuters) - Chinese fears of a spillover from missed payments on some shadow banking linked trust products and worsening consumer sentiment are expected to hasten a policy response to revive the country's cash-starved property sector. Zhongrong International Trust Co, which traditionally had sizable real estate exposure, has recently missed repayments on some investment products, fuelling contagion fears. 'CONTAGION'The trust sector had been a major fundraising channel for property developers seeking rapid expansion. The outstanding value of trust products invested in the property sector was 1.2 trillion yuan as of end-2022, down about 30% year-on-year. Still, exposure to the real estate sector varies from different trust firms.

Persons: Aly, Yan Wang, Nomura, Arthur Kroeber, Kamil Dimmich, Phillip Wool, Wool, Vidya Ranganathan, Laura Matthews, David Randall, Ziyi Tang, Sumeet Chatterjee, Alexander Smith Organizations: REUTERS, HONG KONG, Trust Co, Barclays, International Trust, South Capital LLP, China Equity ETF, Beijing, Thomson Locations: Shanghai, China, HONG, Zhongrong, Beijing, New York, London, Singapore, Summer Zhen

☆ Asia stocks stall at one-month lows as slowing China cuts rates
▼ + stars: | 2023-08-15 | by ( Tom Westbrook | ) www.reuters.com time to read: +5 min

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

☆ Hedge funds dump Chinese stocks aggressively as growth outlook dims
▼ + stars: | 2023-08-15 | by ( Carolina Mandl | ) www.reuters.com time to read: +2 min

REUTERS/Tingshu Wang/File Photo Acquire Licensing RightsNEW YORK, Aug 15 (Reuters) - Global hedge funds are "aggressively" selling Chinese stocks amid heightened concerns over the country's property sector and a weak batch of economic data, a Goldman Sachs report on Tuesday showed. "Hedge funds have net sold Chinese stocks in eight of the last ten sessions on the prime book through 8/14," it said, adding its clients divested both their long and short positions. Goldman Sachs, as one of the biggest providers of lending and trading services through its prime brokerage unit to investors, is able to track hedge funds' investment trends. On Tuesday, a broad array of Chinese economic data highlighted intensifying pressure on the economy from multiple fronts, prompting Beijing to cut key policy rates to shore up activity. Hedge funds are increasingly wary of their exposure to China.

Persons: Tingshu Wang, Goldman Sachs, Carolina Mandl, Sonali Paul Organizations: REUTERS, Global, International Trust Co, D1 Capital, Tiger, Carolina, Thomson Locations: Beijing, China, HK, U.S, New York

Japanese Yen and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. The dollar hit a one-month high against a basket of major currencies, before steadying, as investors sought a safe haven on concerns about China's economy. Japan's currency weakened to as low as 145.22 per dollar in early Asian hours, its lowest since Nov. 10, before quickly reversing course in a volatile start to the week. Japan intervened in currency markets last September when the dollar rose past 145 yen, prompting the Ministry of Finance (MOF) to buy the yen and push the pair back to around 140 yen. With the yen loitering around the 145 level again, traders expect Japanese officials to start warning of intervention soon as they did in June.

Persons: Yen, Dado Ruvic, Charu Chanana, Chris Turner, Russia's rouble, Sterling, Joey Chew, Ankur Banerjee, Harry Robertson, Shri Navaratnam, Lincoln, Susan Fenton Organizations: REUTERS, Bank of Japan, Ministry of Finance, Saxo Markets, International Trust Co, ING, Australian, Federal, Asia FX, HSBC, Thomson Locations: SINGAPORE, Japan, United States, China, U.S, Russian, Ukraine, Asia, Singapore, London

☆ Asia suffers China blues; dollar hits 2023 top on yen
▼ + stars: | 2023-08-14 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) eased another 1.1%, after shedding 2% last week. Japan's Nikkei (.N225) was off 0.5%, even as exporters drew support from the weak yen. The sour mood saw S&P 500 futures and Nasdaq futures shed early gains to each ease 0.1%. That rise juiced the dollar against the low-yielding yen, lifting it as far as 145.22 and a peak not seen since November last year. The rise in the dollar and yields was weighing on gold at $1,911 an ounce , having fallen for three weeks in a row.

Persons: Goldman Sachs, Brent, Wayne Cole, Shri Navaratnam, Sam Holmes Organizations: Nikkei, SYDNEY, Japan's Nikkei, Zhongrong International Trust Co, HK, Nasdaq, Amazon's, Federal, Goldman, Thomson Locations: China, Beijing, Russian, Black, Asia, Pacific, Japan

☆ China's Country Garden woes raise fears of REIT defaults - J.P.Morgan
▼ + stars: | 2023-08-14 | by ( ) www.reuters.com time to read: +2 min

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

CONTAGION RISKTrust firms were dubbed "shadow banks" because of how they operated outside many of the rules that govern commercial banks. Zhongrong International Trust has been working with local governments, including Qingdao provincial authorities, to source early stage deals in intelligent manufacturing, an executive there said. CCB Trust, Zhongrong International Trust and Avic Trust did not respond to requests for comment. Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust and Minmetals International Trust have all bought project companies from struggling developers in the last few months, corporate records and company announcements showed. Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust and Minmetals International Trust did not respond to requests for comment.

Search resuls for: "Zhongrong International"

10 mentions found