Salient to Investors: China’s biggest banks are resisting government pressure to lower borrowing costs amid an economic slowdown as they seek to maintain the profitability of their lending operations. Banks are not authorized to speak publicly. Rainy Yuan at Masterlink Securities said banks can no longer afford to ramp up lending
READ MORE... →Salient to Investors: A U.S. drought is adding to the risk of a rebound in inflation in China. Credit Agricole CIB says the Chinese inflation rate may approach 4 percent by year-end, Citigroup estimates 3.5 percent. Dariusz Kowalczyk at Credit Agricole CIB said inflation will rise in Q4 as pork and other food prices climb
READ MORE... →Salient to Investors: Mark McCombe at BlackRock said China’s economic growth is poised to recover after once-in-a-decade leadership transition, and boost stock markets . The focus on consumption will benefit health-care and education stocks. BlackRock and Citigroup say policies to boost China’s growth will be clearer after the leadership change. Other analysts. Chen Ruiming at Haitong Securities
READ MORE... →Salient to Investors: Bruce McCain at KeyCorp said we’re back to a period where investors become less enthusiastic as they realize the problems of the world have not gone away. Bloomberg poll estimates S&P 500 earnings will fall 1.7 percent in Q3, the first decline since 2009. Gina Martin Adams at Wells Fargo said earnings are weakening fairly quickly –
READ MORE... →Salient to Investors: It’s unlikely the leaders will allow any escalation into open conflict. Richard Samuels at MIT said the conflict is due to domestic political considerations as the whole region is roiling amid uncertainty over leadership. Samuels says there is always the danger of miscalculation which is why Japan patrols with
READ MORE... →Salient to Investors: Ho-Fung Hung at Johns Hopkins University said the central government appears to be paralyzed and the situation is looking increasingly dire. Direct foreign investment has fallen for 9 months out of the past 10, and industrial output is rising at the slowest rate in three years. FedEx warned that China’s
READ MORE... →Salient to Investors: Song Guoqing at Peking University said the economic slowdown may run into 2013 amid a lack of funding for approved infrastructure projects. Song expects growth of 7.3 to 7.4 percent in Q4 and 7 to 7.5 percent in half1 2013. Wu Kan at Dazhong Insurance sees room for the market to drop. The Shanghai index is
READ MORE... →Salient to Investors: Men’s wages are growing faster than women’s in China. Japan and South Korea have famously thick glass ceilings. China has an estimated 20 million to 30 million surplus men, and India is not far behind. In the 2020s in China and northwest India, marriageable men will outnumber marriageable females by 15 to 20
READ MORE... →Salient to Investors: Yuan Gangming at Chinese Academy of Social Sciences said: China’s economic slowdown may last longer than during the global financial crisis and extend into Q1 2013; aggravated by unsustainable local-government spending plans Medium and small-sized businesses are finding it increasingly hard to borrow from banks China’s target for 14 percent growth in M2 too
READ MORE... →Salient to Investors: Jim Chanos at Kynikos Associates says: He expects declines in companies that may be inexpensive compared with earnings, like in natural gas, which have enormous cash needs, and iron-ore producers, where industry capacity will expand globally even as demand stalls because of China’s slowdown A number of high-profile natural gas companies may be in financial
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