2014-11-14

China's "Deepening" Slowdown, Plus News Roundup for the Week Ended November 14

The headlines were focused on slowing investment and industrial production in China this week. I posted the charts yesterday, see Chinese Investment Bounces in October. Yes, the growth rates actually ticked up in October, which is not too surprising considering the burst of optimism in the real estate sector. On a cumulative basis though, the numbers are still heading down and as you can see in the charts, the bounce in October didn't take any figures above the cumulative trend. The numbers will continue dropping into November and also December barring a miraculous reversal. Also, since the monthly figures are having less impact on the cumulative figure here, if the numbers weaken into early 2015 there could be a "shock" print in February. Stories such as China Slowdown Deepens as Leaders Said to Mull Target Cut and Weak Demand, Real-Estate Slump Signal Headwinds for China are therefore both correct, but in fact the data telling the story were out at least a month ago. More such headlines are coming in the months ahead.

Here's some stories I wasn't able to cover during a busy week.

Vanke and other developers are raising capital to pay down bank loans and reduce their cost of capital. Developers are looking towards self-financing their operations via the capital markets. iFeng: 13家房企中票融资料达千亿 直接融资大门渐开

Cash crunch for developers could intensify. The top ten developers have raised 111.5 billion yuan, only 85% of the total at this point in 2013. Two thirds of financing came from overseas, or 74 billion yuan. iFeng: 10家标杆房企前10月海外融资740亿 钱荒或加剧

A new housing rescue policy: Hubei province (capital Wuhan) will allow parents and children to access each others' housing fund money. iFeng: 湖北买房父母子女可用对方公积金 支持省内异地贷款

Only 6 developes are on track to hit their annual sales targets as of October; some have no hope. Vanke, Evergrande and Greentown are three of the developers that have already reached 80% of their targets. Firms usually achieve 40% of their target in 1H, 60% in 2H. iFeng: 前10月仅六家上市房企销售达标 部分完成目标无望

21 Risks to Be Aware of in the Shanghai-Hong Kong Connect. The article focuses on the risks for Chinese investors. Mostly deals with the differences between the markets, things Chinese investors will not know or understand about HK. 上交所沪港通专栏(十六):牢记投资风险

Central bank policy has been aimed at easing financing costs, and it has room to further ease financing costs. Some discussion from analysts about the recent dip in CPI allowing room for RRR cuts. 21st CBH: 公开市场操作不温不火 货币宽松还有更大空间

No comments:

Post a Comment