Chinese consumers are beginning to doubt the market
In today’s roundup of regional news headlines, China’s new home prices post a rare decline amid a growing boycott crisis, banking giant HSBC continues to push back against break-up pressure, and Hong Kong lender Hang Seng reports a profit plunge on credit losses tied to mainland real estate.
China’s New Home Prices Record 1st Decline in 8 Months
China’s new home prices fell in July for the first time in eight months amid a widening mortgage boycott crisis and a lack of progress on the debt woes of distressed developers.
New homes in 100 Chinese cities fetched RMB 16,204 ($2,402) per square metre on average in July, 0.01 percent lower than in June, according to data from property researcher CREIS released on Monday. Read more>>
HSBC in Talks With Ping An but Pushes Back on Split-Up Call
HSBC is in talks with its biggest shareholder, Ping An Insurance Group, but continues to push back at suggestions that the banking giant should be split up.
Ping An has held talks with HSBC on the idea of spinning off the bank’s Asian operations and listing them separately in Hong Kong, Bloomberg reported in April. China’s largest insurer owned more than 8 percent of London-based HSBC at the end of 2021. A majority of HSBC’s profit before tax comes from Asia, compared with roughly a fifth from Europe. Read more>>
HSBC Makes Dividend Pledge Amid Break-Up Pressure
Banking giant HSBC has vowed to return shareholder dividend payouts to pre-pandemic levels “as soon as possible” as it comes under pressure from its biggest investor to break up the group.
Chief executive Noel Quinn made the pledge as he seeks to head off calls from China’s Ping An to spin off its burgeoning Asian arm from the UK business. Read more>>
One-Third of HSBC’s $12B China Property Exposure Impaired
HSBC has said it will take further charges against its more than $12 billion of exposure to China commercial real estate, as a third of those assets are “substandard” or “impaired”, according to chief financial officer Ewen Stevenson.
“There is really only one portfolio globally that we are paying close attention to. That is the offshore book of our China commercial real estate exposure,” Stevenson said in an interview with Bloomberg TV on Monday. “We are some quarters away from saying we are through the worst of it.” Read more>>
China’s PBOC Pledges Stable Financing for Property Sector
China’s central bank pledged to keep overall loan growth stable and facilitate financing for the property sector to aid the economy’s recovery.
The People’s Bank of China will keep financing for the real estate sector stable via channels including bonds and loans, while accelerating efforts to explore a new development model for the industry, according to a statement after a meeting on major tasks for the second half. The central bank will also ensure liquidity is “reasonably ample” by using multiple monetary tools. Read more>>
Hang Seng’s Net Profit Dives 46% on China Property Woes
Hong Kong-based Hang Seng Bank reported a 46 percent decline in first-half net profit to HK$4.7 billion ($600 million) on a fivefold increase in expected credit losses to HK$2.1 billion, mainly from the Chinese property sector.
Hang Seng declared a second interim dividend of 70 HK cents per share for 2022, 80 cents less year-on-year. Read more>>
State-Owned Developers Borrow Cheaply as Peers Shut Out
A divide in funding access is widening among Chinese developers, as most struggle to raise cash in the domestic bond market amid a deepening sector crisis while mostly state-backed builders manage to borrow at the lowest cost in 12 years.
The average coupon on builders’ onshore bonds issued last month fell to 3.32 percent, the lowest since September 2010 when two notes were sold, according to data compiled by Bloomberg. Read more>>
Missfresh Highlights Troubles Facing Chinese Online Grocers
China’s online grocery market, where big technology companies and startups once fiercely competed, is facing a blow as companies grapple with continuous losses and cash shortages compounded by a slowing economy and tighter regulations.
Missfresh, one of China’s top grocery delivery companies, said last week that it has shut down its main business of same-day grocery delivery. Hundreds of employees, accounting for most of Missfresh’s workforce, have lost their jobs, according to employees who were laid off. Read more>>
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