S&P: China developers on shaky ground
Bondholders, beware. China’s property developers face rising risks of default, according to the latest stress tests conducted by Moody’s and Standard & Poor’s.
The two rating agencies published reports on Thursday that suggest the sector will continue to deteriorate over the coming months because of falling sales volumes and dwindling funding options. Continue reading »
When China slows, who slows with it?
China is slowing, that much is clear. Which economies will suffer most as a result?
Lombard Street Research has identified a few export-dependent countries that “could soon regret having put all their eggs in the China basket”. Continue reading »
HK IPO liability won’t worry banks
The proposal by Hong Kong’s securities watchdog to create an explicit civil and criminal liability for investment bank sponsors of new listings should be welcomed.
Yet, even if the Securities and Futures Commission gets what it wants – and that is a big ‘if’, since the proposals require a change to Hong Kong’s legislation – sponsors have little to fear. Continue reading »
Sino-Forest suffers another blow
Things keep getting worse for Sino-Forest, the Toronto-listed Chinese forestry company that filed for bankruptcy protection last week.
Ernst & Young resigned as Sino-Forest’s auditor on Thursday, and the Toronto stock exchange announced that the company’s shares will be delisted next month. Continue reading »
Wen drink warning hits moutai shares
First cars, now booze. Chinese liquor producers saw their shares tumble on Tuesday after Premier Wen Jaibao vowed to ban government officials from squandering public funds on cigarettes and luxury alcohol.
The move, designed to quell public anger at official excess, comes just a month after Beijing proposed banning the purchase of any car that is foreign, big or extravagant, for official vehicle fleets. Continue reading »
Chinese property bonds: they’re back
During the second half of 2011, Chinese property developers were pariahs of global bond markets. As fears mounted about the prospect of a Chinese property crash, mainland developers discovered that they were no longer able to sell bonds to foreign investors.
In recent weeks, however, the market appears to have reopened – at least for some of the stronger developers. Continue reading »
Rmb: bearish forward signs
China bulls, watch out.
Forwards markets are once again flashing bearish signs for the renminbi. For the first time since mid-January, non-deliverable forwards are pricing in zero appreciation of the Chinese currency against the US dollar over the coming year.
That contrasts starkly with the expectations of most investment bank economists, who forecast that the renminbi will rise about 3 per cent against the dollar over the next 12 months. Continue reading »
RMB gold ETF: investors wanted
[This post replaces a previous version in which we misinterpreted the direction of the ETF's currency hedging strategy. Thanks to BB readers MJT and Justin Cormack for spotting our error.]
The world’s first renminbi-denominated ETF tracking the gold price launched this week, seeking to take advantage of surging appetite for both bullion and the Chinese currency. Yet, since it started trading in Hong Kong on Tuesday, the Hang Seng RMB Gold ETF has failed to attract much interest from investors. Continue reading »
Indonesian bonds: time to sell?
Investors love Indonesia these days, especially its sovereign debt.
As investors have piled into the market over the past 12 months, yields on Indonesia’s 10-year government bonds have almost halved, to 5.15 per cent. And since last month, two out of the three big rating agencies now rate the country as “investment grade”.
The question, however, is whether the consensus has become overly bullish and investors are about to get burned.
China: digger sales in the ditch
How worried should investors be about a slowdown in China? According to the latest GDP statistics, China’s economy expanded 8.9 per cent in the fourth quarter of last year, confounding those who had been predicting a “hard landing” for the country.
But other indicators, such as sales of earthmoving equipment, tell a different story.
Carson Block to go long China
Carson Block, the man behind research firm Muddy Waters, gained a fearsome reputation by accusing US-listed Chinese companies of fraud and profiting handsomely when their shares plunged. But the notorious short-seller is changing tack. This week he told Bloomberg he was on the hunt for US-listed Chinese companies in which to invest. Continue reading »
Sino-Forest begs bondholders for mercy
Step by step, Sino-Forest is moving closer towards bankruptcy or a restructuring of its $1.8bn of bonds.
On Monday, the scandal-plagued Chinese forestry company announced it had received notices of default from the holders of its bonds due 2014 and 2017 after failing to publish its third-quarter results, which were due last week. Continue reading »
Sino-Forest: the saga continues
For investors in Sino-Forest, the Chinese forestry group fighting allegations of fraud, things are going from bad to worse.
Late on Monday, the Toronto-listed company said it would miss an interest payment on its debt and was unable to say when it would be able to publish its earnings statement, which would put it in default on $1.8bn worth of bonds.
The company’s bonds fell sharply on Tuesday as investors continued to abandon what was once a darling of the Canadian stock market and one of the biggest issuers of debt the Asian bond market. Continue reading »
Market disruption hits Asian loans
Taiwanese banks have started to trigger “market disruption clauses” on syndicated loans to Asian companies, the latest sign of how the eurozone debt crisis is sending shockwaves through emerging markets. Continue reading »
Hong Kong finance: job vacancies
Jobseekers, take note. The financial industry may be shedding thousands of employees in New York and London, but so far the wave of cuts has yet to crash on the shores of Hong Kong, Asia’s pre-eminent financial centre.
Until recently, the pattern of hiring and firing in Hong Kong’s securities industry was something of a mystery. No longer – thanks to David Webb, a corporate governance activist and an expert in computer coding. Continue reading »
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