Problems are mounting for China’s largest surviving property developer, Country Garden Holdings, which is desperately trying to avoid the same fate as its many defaulted rivals, the Wall Street Journal reported. The 31-year-old company said that it expects to post its worst loss since going public 16 years ago, and estimated the red ink could be as much as the equivalent of $7.6 billion for the first half of 2023. The developer also said its contracted sales slumped 60% in July from a year earlier—a much bigger decline than in previous months.
Resources Per Country
- Afghanistan
- Armenia
- Australia
- Azerbaijan
- Bangladesh
- Brunei
- Cambodia
- China
- Cook Islands
- Cyprus
- Fiji
- Georgia
- Hong Kong
- India
- Indonesia
- Japan
- Kazakhstan
- Kyrgyzstan
- Laos
- Macau
- Malaysia
- Maldives
- Mongolia
- Myanmar
- Nepal
- New Zealand
- North Korea
- Pakistan
- Papua New Guinea
- Philippines
- Singapore
- South Korea
- Sri Lanka
- Taiwan
- Tajikistan
- Thailand
- Turkey
- Uzbekistan
- Vanuatu
- Vietnam
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A “surge” of businesses will collapse across the country as the ATO goes after mounting legacy debt, experts have warned, The Australian reported. The ATO and other creditors currently pose the greatest ‘threat’ to cash-strapped small and medium-sized businesses, says Insolvency Australia, which has just released its latest Corporate Insolvency Index. It comes as a popular West Australian business Barretts Bakery, this week was put into administration after it owed the ATO $2 million.
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WeWork's warning of a bankruptcy risk would not have an impact on its India unit, regional CEO Karan Virwani said on Wednesday, Reuters reported. New York-based WeWork, which was valued at $47 billion in 2019, on Tuesday raised "substantial" doubt around the continuance of its operations and warned of a possible bankruptcy. WeWork India, which is backed and owned in majority by Indian real estate firm Embassy Group, said it was focused on growth with sustained profitability and the fundamentals of its business remain strong.
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Ratings agency Moody's on Thursday downgraded Chinese developer Country Garden's corporate family rating (CFR) to Caa1 from B1, citing heightened liquidity and refinancing risk after the company missed bond payments, Reuters reported. Caa1 rating is a level that signals a very high credit risk, according to the ratings agency's website. Country Garden expects to record a half-year loss owing to higher impairment provisions on projects, it said on Thursday.
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Foreign investors funneled over $3 billion into Chinese debt in July in the first net monthly inflows this year for the world's second-largest economy, data from the Institute of International Finance (IIF) showed on Thursday, Reuters reported. Inflows were less than a third of the $10.6 billion poured into Chinese bonds in December as China geared up to lift nearly two years of strict COVID-19 curbs. July also saw a $7.7 billion inflow from non-locals to Chinese stocks, a big jump from the $1.9 billion in June and the second-largest monthly inflows in 2023.
The Reserve Bank of India asked lenders to set aside more cash, stepping up measures to drain liquidity in the financial system, Bloomberg News reported. Bank stocks fell. The central bank ordered lenders to set aside 10% of their incremental deposits garnered between May 19 and July 28, Governor Shaktikanta Das said Thursday. The move will remove a little over one trillion rupees ($12 billion) from the banking system, he said after leaving interest rates unchanged.
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A Taliban delegation discussed facilitating international financial transactions with private banks on a recent trip to Kazakhstan in a bid to ease the Afghan banking sector's isolation, the acting commerce minister said, Reuters reported. Nooruddin Azizi, acting Minister of Commerce and Industry, led a business delegation to Kazakhstan last week. In addition to banking he discussed the possibility of preferential trade tariffs, telecommunications projects and transit routes, including for possible shipments of Russian oil to South Asia, he told Reuters in an interview on Wednesday.
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Country Garden, China’s biggest developer by sales, has been pummeled in the markets twice in the past week, the New York Times reported. Investors are panicked by two events: On Aug. 1, the company scrapped a plan to inject cash into the business, something it needs. This week, it missed two interest payments on bonds. The bond payments, which are owed in U.S. dollars, are relatively small in value, but by missing them, the company put itself at risk of default. Country Garden’s market value has more than halved since the start of the year.
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China’s deepening economic malaise has entered a potentially dangerous new phase, the Wall Street Journal reported. In July, consumer prices in the world’s second-largest economy tipped into deflationary territory for the first time in two years, as a host of other problems weigh on its recovery after lifting Covid-19 curbs. A drop in exports is accelerating, youth unemployment has hit record highs and its housing market is mired in a protracted downturn.
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Kiyoshi Hashimoto's machinery factory outside Tokyo should be buzzing with industry. Instead, it's so quiet you can hear him practising the recorder. The 82-year-old entrepreneur founded his company nearly 40 years ago, but well past retirement age he has neither a successor nor a buyer for a business that retains loyal clients, the Japan Times reported. It is a problem that Japan's government warns could affect up to a third of all small businesses in the country by 2025, as the country's population shrinks and ages.
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