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Has Asia’s commercial property bull market peaked? Here are three reasons to suggest it has further to run

One of the attractions of investing in real estate is that the returns on offer are invariably higher than those on benchmark government bonds. Yet, over the past decade or so, the spread, or gap, between rental yields and their fixed-income equivalents has narrowed sharply as property yields have shrunk, driving up prices. In the commercial real estate market, the average prime yield across 50 major cities tracked by property adviser CBRE has fallen from about 7 per cent in 2009 to just over 4… Source link

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China 

Chinese services figures suggest economy was stabilising before Donald Trump’s latest trade war threat

The Chinese service sector remained resilient in April, according to the monthly Caixin/Markit survey released on Monday, a further sign that the Chinese economy was stabilising before Donald Trump’s most recent tariff threat.On Sunday, the US President tweeted that he would raise tariffs on US$200 billion of Chinese imports on Friday because he was disappointed by the lack of progress in talks to end the trade war.If implemented, the tariffs are likely to put further downward pressure on the… Source link

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China 

You thought 2018 was bad for China’s stock market? Profit warnings suggest worse may be yet to come

Last year was a dreadful one for mainland Chinese equities as a slowdown in economic growth and the trade war with the US combined to crush market sentiment. The bad news for investors is that the worst may be yet to come. Preliminary announcements showed that 390 companies listed on China’s bourses are set to report a combined loss to the tune of 330 billion yuan (US$49 billion) for 2018. That means the total loss for the country’s listed firms is on track to be three times greater than a…

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China and Europe’s economic insecurity suggest the glory days for the convergence trade are over

Are the glory days over for the China convergence trade? The world is in turmoil, investor perceptions are in disarray and cosy notions about Chinese interest rate and bond yield convergence to the United States are open to question. Chinese yield spreads over the US are so wafer thin, further narrowing may be pushing the boundaries of risk-reward credibility. China’s government bonds may be a novel diversification opportunity for investors, but perceptions of “fair-value” might have reached the end of the road and spread divergence may be the next step…

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China 

‘I suggest that we must pick our battles,’ celebrated Chinese state banker warned Beijing against trade war

The former head of a Chinese policy bank pleaded for China not to engage in a tit-for-tat trade war with the United States, a newly-published speech from last September shows. The speech by Li Ruogu, the former president of the Export and Import Bank of China (China Exim), a giant state-owned lender that gives loans to foreign companies to purchase Chinese goods or services, sheds new light on the internal struggle in Beijing over how to manage the trade dispute with Washington. “When the weak side is fighting a war…

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