Dear Reader,
The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.
The data are in. The Chine?se economy is slowing. Retail sales growth slowed to 2.5 percent year-on-year in August, industrial production growth fell well short of targets and the services sector was affected by a COVID outbreak in key regions.
The surveyed jobless rate, an imperfect measurement of unemployment that does not include migrant workers, stood at 5.1 per cent in August, reported the South China Morning Post.
The pandemic is clearly having an effect despite China’s strict measures to contain it. As if these weren’t bad enough, there is the spectre of the Evergrande Group bubble bursting and hitting the Chinese economy.
The group has the largest amount of debt in the world in absolute terms – $ 300 billion. That number is quite close to the GDP of Bangladesh and South Africa.
The Chinese government has stepped in now to save the company from bankruptcy after its shares fell by 80 percent. A lot of it has to do Evergrande’s sheer size of debt which could have ripple effect across the Chinese economy and thereby, the world.
As our Eastern Window column notes, the property sector accounts for 28 percent of China’s economic output and the government can hardly allow it to spiral downwards. Read more about the effort here.
Elsewhere, the pandemic has forced a change in consumption patterns. And this is having an effect on the shipping sector.
Consider this piece of statistics: Before COVID-19, 40 percent of incremental freight flows were to the US and European countries; now it is 85 percent.
This disruption, accompanied by port congestion, high levels of delay, and shortage of ships and containers, has led to high freight rates. Many shipping companies are benefiting, but Indian firms seemed to have missed out on the party. To find out why, read this story.
Investing insights from our research team:
Ami Organics: Should one book profit as strong listing narrows valuation gap?
Macrotech Developers: Long-term story is still in place
Vijaya Diagnostic: What does this regional player offer as industry consolidation builds?
What else are we reading today?
Opinion
Zee Entertainment: Is shareholder activism really going up?
Why the government wants to rein in runaway edible oil prices
Does GST recovery overdrive smack of tax terrorism?
Indian IT grapples with scarcity amid plenty
Cryptocurrency: Rise of decentralised finance sparks ‘dirty money’ fears (Republished from the FT)
Picks from our technical analysts: ICICI Prudential, L&T Technology Services and Hero MotoCorp (These are published every trading day before markets open and can be read on the app)
Ravi Krishnan
Moneycontrol Pro
