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Chinese stock markets are struggling on Monday as a big property company raised concerns over the health of the economy.
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Hong Kong’s Hang Seng index is down by 2.1% after China’s biggest private property developer, Country Garden, said it would suspend trading in some bonds. Here is a sign of the turmoil in the company’s debt:
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Country Garden's January 2024 dollar bond is yielding 2500%. Trading at 9 cents. Any takers? pic.twitter.com/ASRO9OMC46
— David Ingles (@DavidInglesTV) August 13, 2023
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(Yields rise as prices fall, so this chart shows that investors are dumping the debt
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Reuters reported:
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\n
Chinese property giant Country Garden’s debt problems deepened after its onshore bonds were suspended, sending its shares plunging 16% to a record low on Monday in a fresh blow to policymakers trying to shore up confidence in a stuttering economy.
\n
Markets remain jittery as the trouble in China’s largest private property developer could have a chilling effect on homebuyers and financial institutions, further dampening the prospect of a near-term recovery in the sector and the broader economy.
\n
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Shares in Shanghai, China’s other big financial centre, have not responded as dramatically: they dropped 0.3% on Monday. But the property sector is struggling.
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⚡Country Garden extends decline to 11%, leading the property sector down in Hong Kong.#China #CountryGarden #Property #Realestate pic.twitter.com/fP9GcJab4V
— CN Wire (@Sino_Market) August 14, 2023
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Good morning, and welcome to our live coverage of business, economics and financial markets.
","elementId":"ba80ac5d-d6c0-48af-952f-2d8d5f97ef77"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
UK employers are expecting to continue raising pay for staff as they battle to retain people, even as the economy is expected to stutter, according to a new survey.
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Businesses expect to offer pay rises of up to 5% over the coming year, the highest level since 2012 and sustained from the last two quarters, according to the poll of 2,000 human resources executives by the Chartered Institute of Personnel and Development (CIPD), a professional body.
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More employers also expect to try to retain staff who have said they want to leave with counteroffers – trying to beat offers from elsewhere with pay increases or other perks. 40% of UK employers have made a counteroffer in the past 12 months, the CIPD said. 38% of employers who made offers matched the salary of the new job offer and 40% offered even higher sums.
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The findings suggest the UK labour market remains tight, with unemployment still near record lows at 4% in May, although it did increase more than expected from 3.8% in April.
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The Bank of England has been raising interest rates steadily to try to reduce inflation, which has remained stubbornly high. That is expected to cause a slowdown in the UK economy which would likely lead to higher employment. However, there has been little sign of major changes yet.
","elementId":"40592442-87d2-4319-842a-95ce61de6fd7"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
Wage data on Tuesday is expected to show further increases, according to Reuters:
","elementId":"190a1529-c62b-4eef-9566-158ee8eb3cb3"},{"_type":"model.dotcomrendering.pageElements.BlockquoteBlockElement","html":"
\n
The BoE said on 3 August that pay growth had failed to slow, creating a risk of persistent high inflation and higher interest rates.
\n
Growth in earnings excluding bonuses – which typically runs slightly higher than pay settlements – was an annual 7.3% in the three months to May. Data on Tuesday is forecast to show a further increase.
\n
","elementId":"722c2ace-1ed4-4c05-bfae-bdefa19ee72f"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
Employers make the most counteroffers in London (58% of London-based employers made one in the last 12 months). That makes it the “counteroffer capital” of the UK, the CIPD said.
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Jon Boys, senior labour market economist for the CIPD, said:
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\n
The fact that counteroffers are so widespread suggests they do have a role in matching people and jobs. Employers need to approach them with caution though and have clear internal processes for when these situations arise. Counteroffers may help to retain key staff and avoid knowledge drains and the cost to hire new people, but this must be weighed up against other considerations. For instance, counteroffers could exacerbate pay gaps, cause equal pay challenges, or result in a drop in employee engagement. They may also only work for the short term.
\n
While pay is often the most typical focus of a counteroffer, there are other things employers should consider in making roles more attractive, such as flexible working, additional paid holiday, opportunities for career development, or better pension contributions.
\n
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Key events
China shares fall as big property developer struggles
Chinese stock markets are struggling on Monday as a big property company raised concerns over the health of the economy.
Hong Kong’s Hang Seng index is down by 2.1% after China’s biggest private property developer, Country Garden, said it would suspend trading in some bonds. Here is a sign of the turmoil in the company’s debt:
Country Garden's January 2024 dollar bond is yielding 2500%. Trading at 9 cents. Any takers? pic.twitter.com/ASRO9OMC46
— David Ingles (@DavidInglesTV) August 13, 2023
\n","url":"https://twitter.com/DavidInglesTV/status/1690866143362523136","id":"1690866143362523136","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"ad6e994c-3723-456e-bf51-b191d5c943f5"}}”>
(Yields rise as prices fall, so this chart shows that investors are dumping the debt
Reuters reported:
Chinese property giant Country Garden’s debt problems deepened after its onshore bonds were suspended, sending its shares plunging 16% to a record low on Monday in a fresh blow to policymakers trying to shore up confidence in a stuttering economy.
Markets remain jittery as the trouble in China’s largest private property developer could have a chilling effect on homebuyers and financial institutions, further dampening the prospect of a near-term recovery in the sector and the broader economy.
Shares in Shanghai, China’s other big financial centre, have not responded as dramatically: they dropped 0.3% on Monday. But the property sector is struggling.
⚡Country Garden extends decline to 11%, leading the property sector down in Hong Kong.#China #CountryGarden #Property #Realestate pic.twitter.com/fP9GcJab4V
— CN Wire (@Sino_Market) August 14, 2023
\n","url":"https://twitter.com/Sino_Market/status/1690903634287235072","id":"1690903634287235072","hasMedia":false,"role":"inline","isThirdPartyTracking":false,"source":"Twitter","elementId":"60846584-acf9-4132-8394-0b89a7de1d77"}}”>
European stock markets have dipped amid rumbling concerns over China’s economy (more on those soon).
The FTSE 100 is down 0.1%, as are Germany’s Dax and the broad Europe Stoxx 600 index.
France’s Cac 40 is down 0.2% at the open.
Employers expect 5% pay rises amid rise in ‘counteroffers’ to keep staff
Good morning, and welcome to our live coverage of business, economics and financial markets.
UK employers are expecting to continue raising pay for staff as they battle to retain people, even as the economy is expected to stutter, according to a new survey.
Businesses expect to offer pay rises of up to 5% over the coming year, the highest level since 2012 and sustained from the last two quarters, according to the poll of 2,000 human resources executives by the Chartered Institute of Personnel and Development (CIPD), a professional body.
More employers also expect to try to retain staff who have said they want to leave with counteroffers – trying to beat offers from elsewhere with pay increases or other perks. 40% of UK employers have made a counteroffer in the past 12 months, the CIPD said. 38% of employers who made offers matched the salary of the new job offer and 40% offered even higher sums.
The findings suggest the UK labour market remains tight, with unemployment still near record lows at 4% in May, although it did increase more than expected from 3.8% in April.
The Bank of England has been raising interest rates steadily to try to reduce inflation, which has remained stubbornly high. That is expected to cause a slowdown in the UK economy which would likely lead to higher employment. However, there has been little sign of major changes yet.
Wage data on Tuesday is expected to show further increases, according to Reuters:
The BoE said on 3 August that pay growth had failed to slow, creating a risk of persistent high inflation and higher interest rates.
Growth in earnings excluding bonuses – which typically runs slightly higher than pay settlements – was an annual 7.3% in the three months to May. Data on Tuesday is forecast to show a further increase.
Employers make the most counteroffers in London (58% of London-based employers made one in the last 12 months). That makes it the “counteroffer capital” of the UK, the CIPD said.
Jon Boys, senior labour market economist for the CIPD, said:
The fact that counteroffers are so widespread suggests they do have a role in matching people and jobs. Employers need to approach them with caution though and have clear internal processes for when these situations arise. Counteroffers may help to retain key staff and avoid knowledge drains and the cost to hire new people, but this must be weighed up against other considerations. For instance, counteroffers could exacerbate pay gaps, cause equal pay challenges, or result in a drop in employee engagement. They may also only work for the short term.
While pay is often the most typical focus of a counteroffer, there are other things employers should consider in making roles more attractive, such as flexible working, additional paid holiday, opportunities for career development, or better pension contributions.
