Posted by stockraider > 2022-01-10 14:37 | Report Abuse

Correctloh....positive outlook on plantation co....with firm future average price above Rm 4,000 compare with Maybank average forecast of Rm 3,200 per tonnes loh!

This means the prospect of palmoil companies are within much better than what maybank had forecast earlier loh!

Do not be silly, if u compare the USA great recession and sub-prime problem vs china current temporary property setback....is just a small issue, but being blow out of proportion by this conman uncensored with intention to bad mouth china & to mislead u loh!

China temporary property setback are driven by the smart chinese govt, to release air prematurely in order to avoid the future & further risk like the usa subprime that affect the whole economy, when the bubble eventually burst in 2008 loh!

This reflect strength of Chinese Govt, in its ability able to recognise things early & take appropriate corrective action earlier, unlike the west who always need to do deal with boom & burst situation loh!

The china govt system is definitely more superior than the west mah!



Posted by uncensored > Jan 10, 2022 2:14 PM | Report Abuse

Andrew Hunt is CEO of Hunt Economics and former adviser to Dresdner Asset Management in Asia. Ben Ashby is a former managing director in JPMorgan's Chief Investment Office.

The well-documented problems at some of China's largest property developers are merely symptoms of the deeper structural challenges the country now faces.

We previously highlighted in the article "Why Ray Dalio is wrong about China" published online on July 11 that China was highly incentivized to encourage foreign investment in order to delay hard domestic decisions.

These inbound capital flows are however unlikely to be sufficient, and they would leave China vulnerable to foreign monetary policy. Since China will likely prioritize domestic order and control over a shorter lived but painful structural adjustment, a Great Pause in their economic growth seems probable.

How long this 'great pause' will take is hard to say. Yet despite the clear signs, investors are still to fully price the implications of this hiatus and what it means for industrial commodities or regional demand for goods.

Given many developing countries' high dependence on the Chinese economy, the next few years could be particularly difficult and make their recovery from COVID even harder.

The roots of these problems run deep. China's economic model has traditionally relied on the intensive use of credit in order to finance the country's impressive growth. As a result, the rate of increase in China's debts has been fast, outgrowing the economy itself: a dynamic that is ultimately not sustainable.

Though some of this credit was used to fund the creation of industrial capacity, much of it was used to fund a rapid and massive expansion of housing stock.

China's property and construction sectors have therefore become extremely large by comparison with the overall economy. Our research suggests that these sectors have been more than twice as important to the overall economy as their equivalent sectors were in Japan during that country's property bubble, or even the U.S. in 2005-2006.

We also estimate that property wealth is at least as important to China's savers' wealth as financial assets are to U.S savers at present. A decline in the fortunes of the property market will therefore depress domestic growth for a considerable time.

China's property-driven growth has run into several constraints of late, including affordability, market saturation and access to funding. Its banking system has also reached an unprecedented size, not just in relation to the size of China's own economy but increasingly in relation to the entire global economy.

Real estate-related lending and property-based collateral have come to dominate the system. China's banks themselves are deeply exposed to the sector, to the exclusion of other sectors, and will struggle to maintain their balance sheets if problems in the sector increase.

These problems imply two sets of consequences. First, China will not be able to liberalize its savings markets anytime soon to the disappointment of many Western financial institutions. Second, credit growth in the future will likely be much more carefully controlled.

Every day, then, credit to China's private sector is becoming more constrained and this, of course, means that lending has to be rationed among competing uses.

Perhaps not surprisingly, the authorities in Beijing have decreed that the property and construction sectors, together with a number of other sectors that have been deemed unproductive or not aligned with the government's vision for "common prosperity" will be largely excluded from the credit markets. These important sectors now face years of enforced austerity.