It’s carnage in Chinese markets today. These four charts show just how ugly it’s getting. 🧵 1/5
Chinese stocks listed in Hong Kong had their worst day since the global financial crisis. Concerns over Beijing’s close relationship with Russia and renewed regulatory risks sparked panic selling. 2/5… via @JeannyYu @CharlotteYTYang
Only a year ago Chinese stocks in the U.S. were enjoying an unprecedented boom. Now they’re mired in a 72% plunge within spitting distance of the Nasdaq’s 78% peak-to-trough slump during early 2000s dot-com bust. 3/5… via @frostyhk
Chinese real estate firms’ dollar bonds are in freefall – notes are set for another day of fresh lows. Contagion is reaching some of China’s stronger and state-linked developers. 4/5… via my latest take in Bloomberg’s China credit tracker
China’s slowing growth momentum is taking the wind out the yuan’s rally and lifting sovereign bonds as traders ramp up bets for the central bank to loosen policy further. 5/5… via @mkcheok

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More from @RChoongWilkins

Mar 15
China’s markets are imploding. Why? Because the priority is common prosperity – not protecting profits for Western investors. Here’s what to watch 🧵 1/5
“What we are experiencing is a seismic shift in the ownership of Chinese stocks. US institutional investors are still major players… But look at what’s been happening: Chinese investors have been buying on dip” writes @shuli_ren 2/5…
Hong Kong stocks haven’t been this oversold since 1987 -- the Hang Seng Index’s 14-day RSI, which helps measure whether an asset is in so-called overbought or oversold territory, plunged to 15. This hasn’t happened since the Wall Street crash. 3/5
Via @KevinKingsbury
Read 5 tweets
Mar 8
China’s property crisis is spilling over to some of its stronger builders, leaving investors with even fewer places to hide.

Analysts are warning of an “unstoppable downward spiral.” 1/5

Read my latest breakdown in Bloomberg’s China credit tracker 👇…
China’s developers have been rocked by at least 14 defaults since authorities began cracking down on the housing market in 2020.

Authorities are allowing selective policy relief but that’s had very little effect on credit markets. 2/5
Traders betting on better times ahead for China property are in a difficult position now that builders once shielded from the wild swings look increasingly vulnerable. (Made worse by global risk-off following the invasion of Ukraine.)

That’s keeping stress elevated offshore 3/5
Read 6 tweets
Mar 7
This is what the NPC means for China's beleaguered property sector. A🧵

TLDR: No turnaround for developers. This is about limiting the fallout of the crisis: boosting growth, supporting local govts, encouraging state-led projects, reducing systemic risks as defaults rise. 1/10
TOP LEVEL: China’s ambitious 5.5% growth target suggests more stimulus is on the way. Ultimately accommodating monetary/credit/fiscal policies are about stabilizing growth. Not reversing the clampdown on developer debt. 2/10…
LOCAL GOVERNMENT: Local govts are getting more cash: transfer payments to local govts will jump 18% vs last year. That'll help make up for falling land sales.

Inexpedient to allow the first default of a public LGFV bond, but don't rule it out, finances remain precarious. 3/10
Read 10 tweets
Jan 8
China’s property crisis is going to get much worse before it gets better. A 🧵.

The debt crunch at ‘better’ firms like Shimao is key signal of what’s to come, even now that massive uncertainties like Evergrande and Kaisa defaults are out of the way. 1/8
TLDR on China's property crisis: 2022 is not just going to be about how much property firms owe in debt – but who OWNS that debt. 2/8
As the economy slows, the property crackdown rolls on and the network of real estate trusts, weaker banks/FIs, suppliers, contractors, workers etc all suffer – there’s going to be a lot less willingness to grant property firms a break when they get behind on payments. 3/8
Read 8 tweets
Dec 12, 2021
For debt nerds some thoughts on Evergrande's restructure:

PBOC Yi Gang’s remarks that this will be a market-oriented, creditors will be treated according to seniority isn’t new to investors. China’s been pushing for this since at least 2017 when it began allowing record defaults
The issue for Evergrande’s global bondholders won’t be about seniority -- nearly all the offshore bonds hold the same status. Instead, all eyes are on whether notes issued by different units of Evergrande will be considered pari passu when it comes to any potential haircuts
It’s not clear whether bonds issued by Evergrande’s Hong Kong-listed unit (EVERRE) or those sold by a Scenery Journey (TIANHL) that have keepwells from its main onshore property business, Hengda Real Estate, will be considered on an equal footing in a restructuring scenario
Read 4 tweets
Dec 12, 2021
It's been a historic week in China's credit market -- the second largest in the world.

This is the run down of what happened, why it matters and what to watch for in 2022:

👇 THREAD 1/…
2/ China’s efforts to prevent a developer debt crisis from sparking financial contagion helped stemmed the biggest selloff in a decade.

But Xi Jinping’s government still faces a long list of challenges as it tries to maintain calm in its $13 trillion credit market in 2022.
3/ There've been seismic changes in China's credit markets this year. In 2022 watch out for:
* Surprise defaults
* Home sales
* Policy easing
* Pickier investors

Bloomberg's China credit tracker breaks all this down:…
Read 11 tweets

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