Business
Anbang crisis threatens whole financial sector, say analysts
The fallout from the unfolding crisis at Anbang Insurance, whose chairman, the high-profile tycoon Wu Xiaohui, has stepped down amid reports he has been taken away by the authorities, could reverberate through the whole financial sector, analysts said.
Anbang, one of China’s most aggressive overseas investors, said on Wednesday Wu cannot perform his role “for personal reasons”, and has delegated his authority to other executives.
But a source familiar with the matter confirmed earlier reports in a Chinese magazine that he had been “assisting” an investigation into alleged irregularities at the company and has not returned to his office or home since the end of last week.
Analysts are worried his apparent disappearance – which comes amid a wide-ranging government campaign to impose discipline in the financial markets – could lead to a liquidity crunch that infects the wider industry.
The most worrying issue would be an intensivecancellation of [insurance] policies which would severely weigh on Anbang’s cash flow
Guo Zhenhua, Shanghai University of International Business and Economics
Wu’s case could undermine a widely-held public perception of Anbang as one of China’s most resourceful and powerful companies, according to Guo Zhenhua, head of the insurance department at Shanghai University of International Business and Economics.
“The most worrying issue would be an intensive cancellation of [insurance] policies which would severely weigh on Anbang’s cash flow,” he said.
The company has relied heavily on selling high-risk, short-term insurance policies to beef up its war chest for takeover bids through the capital market.
Capital flow into Anbang will inevitably slow down because of Wu’s case and the enhanced scrutiny of regulators, which will make the company’s situation difficult, said Guo.
Anbang Life Insurance, the flagship of Anbang Insurance Group, reported a solvency ratio of 129 by the end of the first quarter, a sharp drop from 290 per cent in the same period of 2016, but still above the 100 per cent regulatory red line. Solvency ratio is a measurement that broadly describes a company’s ability to cover the financial risks it takes.
Anbang has been at the forefront of developing and promoting short-term, high-yield insurance policies, known as universal life insurance and similar to wealth management products, which in turn has fuelled a spending spree by the firm both in China and abroad in the past few years.
Wu himself has become a household name in China based on his reputation for raising huge sums of money in the blink of an eye, his marriage to former leader Deng Xiaoping’s granddaughter, and his powerful connections with regulators and the second generations of China’s former leaders.
Shares of several publicly traded companies part-owned by Anbang Insurance Group fell in Hong Kong and mainland China on Wednesday. Publicly available information shows Anbang holds major stakes (above 5 per cent) in eight firms listed in Shanghai, Shenzhen and Hong Kong.
Anbang-owned stocks decline in Hong Kong, China in sign of strain at country’s biggest asset buyer
Business
China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
China’s new home prices fell for the 17th month in October, declining 0.5% from September, but slowing, indicating potential market stabilization amid supportive measures. Second-hand home prices showed mixed trends.
Decline in China’s Home Prices Stabilizes
China’s new home prices continued to decline in October for the 17th consecutive month, although the drop showed signs of slowing. Recent support measures from Beijing appear to be inching the market toward stabilization, as evidenced by a lighter decline compared to earlier months.
Monthly and Yearly Comparisons
According to the latest data from the National Bureau of Statistics, new home prices across 70 mainland cities fell by 0.5% from September, marking the smallest decrease in seven months. Year-on-year, prices dropped by 6.2%, slightly worse than the September decline of 6.1%. In tier-1 cities like Beijing and Shanghai, prices decreased by 0.2%, a smaller fall than 0.5% in the previous month.
Second-Hand Home Market Trends
Second-hand home prices in tier-1 cities experienced a 0.4% increase in October, reversing a 13-month downward trend. Conversely, tier-2 cities observed a 0.4% drop in second-hand prices, while tier-3 cities faced a similar 0.5% decline. Overall, recent trends indicate a potential stabilization in China’s property market.
Source : China’s new home prices slow 17-month decline after support measures kick in
Business
Business Update: Southern Sun Reports Earnings Growth; China Stimulates Property Market – News24
Southern Sun reports increased earnings, attributed to growth in the hospitality sector, while China’s property market receives a boost, reflecting economic recovery and renewed investor confidence.
Southern Sun Earnings Surge
Southern Sun has reported a significant increase in its earnings, showcasing solid financial performance amid evolving market conditions. This growth highlights the company’s resilience and adaptability to changing consumer demands, positioning it well for future opportunities in the hospitality industry.
China’s Property Market Recovery
In a bid to rejuvenate its economy, China has introduced measures to boost its property market. These initiatives aim to stabilize real estate prices and encourage investment, which is crucial for maintaining economic momentum. The government’s commitment to supporting the sector reflects its understanding of the industry’s importance in overall economic health.
Broader Economic Implications
The rise in Southern Sun’s earnings and China’s proactive approach to revitalizing its property market indicate broader economic trends. Investors and stakeholders are keenly observing these developments, as they may signal recovery and growth opportunities in both the hospitality and real estate sectors. The collaboration between local businesses and governmental actions will be pivotal in shaping future economic landscapes.
Source : Business brief | Southern Sun sees earnings rise; China boosts its property market – News24
Business
News Update: China’s Stimulus Falls Short; Sensex and Nifty Decline; Bitcoin Surges Over $82,000
Asian markets showed mixed trends amid China’s stimulus measures and disappointing inflation data. Meanwhile, Indian equities remained stable, with mutual fund inflows rising. Bitcoin surged following Trump’s presidential win.
Business Hook Daily News Podcast
Good evening! Welcome to Business Hook’s daily news podcast. I’m Avni Raja, and today is November 11, 2024. Let’s dive into the day’s top business stories.
Market Reactions and Economic Data
Asian markets experienced a mixed session as investors digested new economic data and stimulus measures from China. The Chinese government announced a $1.4 trillion package targeting local government debt, although analysts deemed it underwhelming. October’s inflation rate of 0.3% fell short of estimates and declined for the second month in a row. As a result, the CSI 300 saw a slight gain, while Hong Kong’s Hang Seng dropped over 1.5%. In India, the Sensex closed below 74,500, and the Nifty ended above 24,100, with a majority of Nifty stocks declining.
Mutual Fund Inflows and Upcoming IPOs
There’s encouraging news in the mutual fund sector, with October seeing net inflows of 2.4 lakh crore rupees, reversing the previous month’s outflows. Record equity inflows have risen to nearly 42,000 crore rupees, reflecting robust domestic investor confidence. In the IPO space, LG Electronics prepares to raise $1.5 billion by listing its Indian arm, with banks like Axis Capital involved in the process, potentially leading to an IPO as early as 2025.
Cryptocurrency Surge
In cryptocurrency news, Bitcoin has achieved new highs, surpassing $82,000. This surge is attributed to Donald Trump’s recent presidential victory, which has favored cryptocurrencies compared to more cautious Democratic approaches. Experts speculate that Bitcoin could surpass $90,000 soon. That’s all for today’s wrap-up. Join us again tomorrow, and check out the Business Hook YouTube channel for more updates.
Source : News Wrap | China Stimulus Disappoints; Sensex & Nifty Slip; Bitcoin Soars Past $82,000
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- Business Update: Southern Sun Reports Earnings Growth; China Stimulates Property Market – News24
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