The People’s Bank of China is adding liquidity in an attempt to spark the economy
Disappointing data on China’s economy prompted some of today’s biggest headlines, with the mainland’s central bank moving quickly to cut rates at same time that JP Morgan analysts are predicting more gloom for developers.
Also in the news, an SGX-listed REIT of mainland retail properties halts distributions after losing money in the first half of the year and Singapore’s Straits Trading is preparing to share the benefits from the sale of its interest in ARA Asset Management to ESR.
Disappointing July Data Prompts Unexpected China Rate Cut
China’s economy stumbled in July as a two-month boost from easing lockdowns faded, prompting the country’s central bank to unexpectedly cut two key interest rates in an effort to shore up faltering growth.
A raft of data released Monday showed economic activity slowed across the board in July, including factory output, investment, consumer spending, youth hiring and real estate, highlighting the breadth of the economic challenge facing policy makers in a politically sensitive year for leader Xi Jinping, who is expected to break with recent precedent and seek a third term in power this fall. Read more>>
Dasin Retail Trust Halts Distributions After $41M Loss
Dasin Retail Trust on Sunday reported a S$56.4 million ($41 million) loss based on financial statements prepared on a going concern basis for the first half ended June 2022, versus a profit of S$2.9 million in the year-ago period.
No distribution per unit (DPU) has been declared for the period under review, as opposed to a H1 DPU of 2.98 Singapore cents the previous year. This is after factoring in a “distribution waiver” that waives a portion of major unitholders’ entitlement to distribution. Read more>>
Straits Trading Plans Special Distribution Following ARA Divestment
Straits Trading, following exceptional gains of more than S$1 billion ($727 million) from the divestment of its stake in ARA Investment, is offering shareholders a distribution in specie worth some 50 cents per share.
Shareholders can choose between receiving 180 Straits Trading shares, or 145 ESR shares. Last year, Hong Kong-based real estate manager ESR acquired ARA Investment for $5.2 billion. Straits Trading held a stake of around one-fifth in ARA Investment. Read more>>
Hanwha Life to Boost Overseas Real Estate Investment via US Unit
South Korea’s Hanwha Life Insurance Co. is set to kick off direct investment in overseas real estate via its subsidiary in the US, according to investment banking sources on 10 August.
The Korean insurer earlier this month injected KRW 211.3 billion ($161 million) into its US-based subsidiary DP Real Estate America LLC, a real estate investment firm founded in June 2022. It was first reported by the Bell, a Korean financial news outlet. Read more>>
‘No One Immune’ Amid China Property Turmoil Says JPMorgan
Chinese developers may report a 30 percent year-on-year decline in first-half earnings due this month, which will likely weigh on sentiment, according to JPMorgan Chase & Co. analysts.
“No one is immune” amid the industry turmoil and investors’ concerns about the liquidity of most private developers are set to linger, analysts including Karl Chan wrote in a note Sunday, as they downgraded developers including CIFI Holdings Group Co. and KWG Group Holdings Ltd. Read more>>
Chinese Cities Create Incentives for Farmers to Buy Urban Homes
Chinese cities, including Changchun and Zunyi, have been issuing easing policies for the property market to encourage rural residents to buy houses in urban areas.
Changchun, the capital of northeastern China’s Jilin province, recently released a policy covering farmers moving to the city, college graduates, and technical personnel of intermediate level or above to obtain a subsidy of RMB 200 ($30) per square meter when purchasing eligible new commercial properties. Read more>>
China Crisis Wipes Out $90B of Developer Market Value
Chinese developers have suffered a meltdown of at least $90 billion in stocks and US dollar bonds this year, with a bursting housing bubble and an intensifying debt crisis threatening to inflict even more pain.
The builders have lost about $55 billion in share value since 2022 began, a Bloomberg Intelligence stock gauge showed. The sector’s US dollar notes have fallen more than $35 billion, according to calculations based on a Bloomberg bond index, the constituents of which can change over time. The wipeouts have pushed developer stocks down to levels not seen in a decade and junk dollar notes to record lows. Read more>>
China Life, Petrochina and Sinopec To Delist From NYSE
Five Chinese state-owned companies are seeking to delist from the US amid an unresolved auditing dispute that could see dozens of mainland Chinese firms ejected from American exchanges, as ties between the two nations continue to worsen.
China Life Insurance, PetroChina and China Petroleum and Chemical Corporation (Sinopec) said they would apply for the “voluntary delisting” of their American depositary shares (ADS) from the New York Stock Exchange, according to their filings on Friday to the Hong Kong stock exchange where their shares are also listed. Read more>>
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