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Top Reads of The Week 10/12/2023
Richard @ The Asia Report
December 10, 2023
What a difference a month makes!
Despite’s the Fed’s pushback, markets are now pricing in decline in interest rates next year.
The result is interest rate sensitive assets have staged a significant rally, with Singapore REITs rallying almost 10% since the start of November.
However, tighter monetary conditions continue to claim casualties globally and investors should remain weary of companies that are highly levered or have poor interest coverage ratios.
Unfortunately, even easing monetary conditions have not eased the pain in Hong Kong and China.
Broad based selling continues - and even mighty property Hong Kong tycoons are not spared.
Of late, New World hit a staggering 20 year low, and its bonds are trading at distressed levels. It trades at just 0.14x its book value of its assets, highlighting how dire the situation is.
Top Reads of The Week (Special Edition)
Fed's Jerome Powell Says It's Too Soon to Speculate on Interest Rate Cuts
Jerome Powell said it is premature for investors to assume the Fed will pause interest rate hikes or start cutting rates in 2023.
He pushed back against market expectations of rate cuts next year. He wants clear evidence inflation is controlled before speculating on potential rate cuts.
Credit Update: Suntec REIT Aggregate Leverage Ratio Getting Close to the Edge
Suntec REIT's rising aggregate leverage ratio is approaching the maximum limit set by authorities. Management emphasizes deleveraging moving forward to regain debt capacity.
Hong Kong Stocks Hover Near One-Year Low After JPMorgan, HSBC Cast Pall Over Growth Hopes For Months
Hong Kong stocks tumbled to approach one-year lows after major banks JPMorgan and HSBC predicted minimal economic growth in Hong Kong over the coming months in 2023.
Hong Kong Billionaire Cheng Family Boosts New World Stake
Hong Kong's billionaire Cheng family has increased its ownership stake in the struggling New World Development real estate company to nearly 10% as the firm's shares linger around historic lows.
Signa Founder Rene Benko Goes From High-Flying Billionaire to Wealth Blowup
Austrian billionaire Rene Benko's astronomical wealth has rapidly evaporated as his Signa Holding empire spanning real estate, retail, and media crumbles under high debt burdens amid rising interest rates and plunging property valuations.
Once Compared to Warren Buffet, his fortunes now parallel the failing global economy.
Moody's Cuts Outlook on Chinese Banks After Sovereign Downgrade
After downgrading China's sovereign debt rating outlook, Moody's also revised downward the baseline credit assessments for many large Chinese banks.
This raises future risks for Chinese lenders if growth stagnates further.
China’s Property Lifeline Exposes Banks to Big Losses, Job Cuts
China's worst property crisis in decades is forcing banks to absorb major loan losses as the government prioritises avoiding full-on developer collapses over protecting lenders, leading financial firms to brace for more bad debt and potential staff cuts if the housing market downturn intensifies.
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