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Emirates News Agency – China’s economy returned to a relatively slow pace in July



Emirates News Agency - China's economy returned to a relatively slow pace in July

BEIJING, Aug. 16 (WAM) – China’s economy continued its recovery in July, but growth in industrial production and retail has slowed due to the corona virus novel, natural disasters in some parts of China and increasing uncertainty from abroad. Shown today.

The country’s industrial output rose 6.4 percent in July from a year earlier, to 8.3 percent in June, according to the National Bureau of Statistics. The figure came in at 7.8 per cent and 7.9 per cent against expectations. The two-year average growth was 5.6 percent.

Retail sales of consumer goods rose 8.5 percent last month, down from 12.1 percent in June. This was lower than expectations for an increase of 11.5% and 10.9%, and saw a two-year average growth of 3.6%.

At the press conference, Fu Linghui, a spokesman for the National Statistics Office, said that some key indicators had seen a slowdown in growth due to increased uncertainty overseas, domestic flooding and the Govt-19 cases, but the indicators were still within reasonable range, and the economy continued to recover.

On the other hand, investment in fixed assets increased by 10.3 percent in the first seven months. Growth was also up against expectations of 11.3 percent. The two-year average saw growth of 4.3 percent. Private sector investment increased by 13.4 per cent from January to July, accounting for 60 per cent of total investment.

The estimated unemployment rate was 5.1 percent in July, up from 5 percent in June, according to the National Bureau of Statistics. China has set a 5.5 percent unemployment rate for the full year.

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The recession of key economic indicators led to continued growth, including heavy rains and flooding in Henan Province and the Yangtze River Delta, delta-changing eruptions in Nanjing, and targeted austerity measures in polluting properties. And fields.

Speaking about the impact of the floods on domestic consumption, Fu Linghui, a spokesman for the National Bureau of Statistics, said consumption in July in provinces such as Henan, Jiangsu and Hunan was lower than in the previous month, and in hotels and sectors. Restaurants also saw a slowdown in growth.

The recession is short-lived, Fu said, and consumption recovery is expected to continue. With more people being vaccinated, new cases being effectively controlled and employment and population rising, the consumer market is expected to remain stable.

In the first half of this year, the real growth rate of personal disposable income was 12 percent over last year, much faster than in the first quarter of the year. Per capita consumer spending actually increased by 17.4 percent in the first half, accelerating faster than 12 percent growth in resident income, which, according to Fu Linghui, represents an increase in population consumption preference.

However, experts expect retail sales to fall sharply in August as the delta variable spread to many parts of China and local governments imposed drastic measures.

Wam / Qawla Jafri Al-Sharif

WAM / China / Zakaria Mohiltin

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The world’s central banks are increasing their reserves… Details in 10 facts



The world’s central banks are increasing their reserves… Details in 10 facts

Books – Islam Saeed

Sunday, December 3, 2023 at 03:00 AM

Central banks around the world continue to demand… Gold In 2023, gold trends for the third quarter of the current year 2023 as per the reports of the World Gold Council show that the demand for gold by banks has increased.

Central banks added 337 tonnes in the third quarter of 2023

The third largest buying level in the quarter reached by central banks

In the third quarter of 2022, banks bought a large amount of 459 tonnes of gold..

Since the beginning of 2023, demand by central banks has increased by more than 14%.

Total bank purchases of gold since the beginning of 2023 have reached a record high of 800 tonnes of gold.

Gold reserves reported by global central banks rose by a net 77 tonnes in September.

Central bank’s gold sale is only 1 ton.

– Fund outflows from gold investment funds continued in October, $2 billion

Since the beginning of the year, the funds’ investments have fallen 6%.

– Total cash outflows from gold-backed global investment funds have hit $13 billion since the start of the year

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Oil loses 2% as investors worry about OPEC plus cuts



Oil loses 2% as investors worry about OPEC plus cuts

Oil prices settled up more than 2% – yesterday, Friday – after a volatile trading week as the market anxiously watched the latest round of OPEC Plus production cuts and a slowdown in global production activity.

Brent crude futures for February delivery were down 2.45% at $78.88 a barrel, while US West Texas Intermediate crude futures were down 1.9% at $74.07.

For the week, Brent posted a decline of about 2.1%, while the West Texas Intermediate posted a decline of more than 1.9%.

On Thursday, oil-producing countries in the OPEC Plus alliance – which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and other countries including Russia – agreed to cut global oil production by about 2.2 million barrels on the world market. per day in the first quarter of next year, including… extending current voluntary cuts by 1.3 million barrels per day from Saudi Arabia and Russia.

The OPEC Plus alliance – which accounts for more than 40% of the world’s oil – is focused on cutting production, with prices falling from around $98 a barrel in late September, amid fears of weaker economic growth in 2024.

A survey showed that the US manufacturing sector is still weak, with the factory employment rate falling last November.

On Friday, talks to extend a week-long ceasefire between Israel and the Palestinian Islamist movement (Hamas) collapsed, leading to renewed fighting in Gaza that could disrupt global oil supplies, Reuters reported.

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A private credit boom leads to a new crisis



A private credit boom leads to a new crisis

If this is a “golden moment” for private lending, where will things go? What are the risks? Higher interest rates and turmoil in regional banks earlier this year have boosted confidence in the recovery of private credit. According to data provider Preqin, the market is expected to grow from $1.6 trillion to $2.8 trillion this year. BlackRock takes a more optimistic view, predicting the market will grow to $3.2 trillion.

Mark Rowan, CEO of private equity firm Apollo, sees “de-banking” in its early stages, while John Gray, chairman of BlackRock, coined the phrase “golden moment” to describe conditions in private capital at the start of the year. .

If the new banking rules under Federal Reserve regulations are considered a catalyst, capital requirements for the commercial banking industry in the US are likely to increase by up to 35%, according to Oliver Wyman, the world’s leading management consultancy. company — and no wonder Jamie Dimon said. , head of JP Morgan, said private lenders would be “very happy.”

How things develop in the market will be a key issue not only for large firms and banks in the private market, but also for traditional asset managers who have begun to use the capabilities of the private market to avoid the extreme rise of passive asset management. . This coincides with at least 26 traditional asset managers buying or launching new private credit units in the past two years.

This shift confirms the extent to which the structure of the financial market has changed. 20 years ago, when I was working at Morgan Stanley, I noted in a research paper that investor flows would split into barbells. On the one hand, investors would flock to passive, exchange-traded funds to get record returns. They are cheap and convenient. On the other hand, investors looking for higher returns will use asset allocation with specialist fund managers who invest in private equity, hedge funds and real estate. For traditional “major” fund managers, caught between the two, they will be pressured to make their investment machines more specialized or merge to increase their size, which has already been achieved.

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According to ETFGI, ETFs have grown from $218 billion in 2003 to $10.3 trillion last October, but what’s surprising is how unbalanced the situation has become in terms of returns, with management fees likely to account for half of the investment sector. to alternative asset managers in 2023 from 28% in 2003.

Central banks are now scaling back their quantitative easing, which was implemented to support economies and markets, which has traditionally supported corporate profits. Without these tailwinds, the pressures on fund managers become more severe. So, how will the transition to private lending proceed?

Currently, Preqin estimates that just 10 companies have received 40% of private credit resources in the last 24 months. There are three reasons why private credit growth has disproportionately favored these large firms.

First, a good amount of growth is expected from the sale of investment portfolios by regional banks, which have to reduce their debt and are forced to sell good assets. The central bank’s new rules signal an inability for big banks to step up. In light of the large portfolio sizes and the speed required for transactions, the acquisition of these assets is a specialized venture that is in the interest of large companies that can underwrite the risks.

Second, a growing number of deals require more money, and August saw a new record for the largest loan, reaching $4.8 billion for fintech firm Finastra. The third and most important reason is that banks prefer to enter into partnerships so as not to lose access to customers. Even though tougher rules mean they have to divest assets, banks want to continue lending and partnering to help manage deal flows, which could benefit larger firms.

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Several major banks have already closed deals and more are expected to follow. Citi is the latest bank to report its intention to launch a new unit in 2024.

A changing interest rate regime will mean loan losses rise as funding costs normalize and exposed weak balance sheets, which will be a source of challenges for private lenders. It may be unwise for new companies to try to exploit the growth. This requires a strong focus on the risks and rewards of selection and contracts, and teams that specialize in reconciliation, which many of the major players in the market have.

Of course, there will be key opportunities, such as hard credit or energy infrastructure credit, that are places that efficient companies can tap into, but they may not be on the scale that traditional companies need to maximize opportunities.

In general, a complete and comprehensive shift in capital allocation awaits us, requiring a major shift towards private credit, as Howard Marks recently argued, but the coming tide will not smooth all boats.

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