IMF chief calls on China to “reinvent itself” to end mounting property crisis

“China faces a fork in the road — rely on the policies that have worked in the past, or reinvent itself for a new era of high-quality growth,” IMF head Kristalina Georgieva said at the China Development Forum on Sunday, the Financial Times reports. Georgieva urged China to implement policies to “reinvent itself,” including measures that would boost domestic consumption and production rates and end the country’s mounting property crisis.

By the numbers: A more domestic consumption-centered policy mix could add USD 3.5 tn to China’s economy over the next 15 years, but this depends on “boosting the spending power of individuals and families,” reducing risks from local government debt, and completing abandoned housing projects, Georgieva said.

The Chinese economic miracle no more? Foreign direct investment to the world’s factory in 2023 hit its lowest level in three decades on the back of slow post-pandemic recovery and the property crisis continuing to worsen with the country’s largest property developer defaulting on a USD bond in October. The slowdown in China also led credit rating agency Moody’s to downgrade its outlook on the country’s sovereign credit rating to negative from stable in December.

ALSO WORTH NOTING-

• OQ Oman taps advisors for upcoming IPOs: Omani state-owned oil and gas player OQ has tapped HSBC to help list the company’s exploration and production arm that could raise a record USD 1 bn — a record for the country. Morgan Stanley will help list the company’s methanol and liquefied petroleum gas business. (Bloomberg)
• Bahraini wealth fund takes over UK’s McLaren: Bahraini sovereign wealth fund Mumtalakat has become the sole owner of the UK’s supercar maker McLaren Group after increasing its share to 100% from 60%. (BBC)

THE MARKET THIS MORNING-

Asian markets are in the red and US and European futures largely unchanged as traders look ahead to a holiday-shortened trading week. Dow, S&P, and Nasdaq futures were all down by fractions of a percentage point. The Kospi, Hang Seng, Nikkei, and Shanghai Composite were all (just) in the red at dispatch time this morning.

THE CLOSING BELL: TADAWUL-

The TASI fell -0.3% yesterday on turnover of SAR 6.6 bn. The index is up 6.7% YTD.

In the green: Saudi Cable (+10%), Amiantit (+10%) and Chubb (+9.9%).

In the red: East Pipes (-6.7%), MIS (-6.3%), Amana Ins. (-6.2%).

THE CLOSING BELL: NOMU-

The NomuC fell -1.9% yesterday on turnover of SAR 40.4 mn. The index is up 9.4% YTD.

In the green: Riyadh Steel (+10.3%), United Mining (+9%) and Osool and Bakheet (+8.2%).

In the red: Jahez (-7.3%), Knowledge Net (-6.4%) and Ladun (-5.5%)

CORPORATE ACTIONS-

#1- The Capital Market Authority (CMA) has approved the Saudi Investment Bank (SAIB)’s request to hike its capital to SAR 12.5 bn from SAR 10 bn through issuing one new share for every four existing shares, according to a statement by the CMA yesterday. This will be financed by transferring SAR 2.5 bn from the company’s statutory reserves to increase the number of outstanding shares by 250 mn shares to 1.25 bn.

#2- Saudi Ceramic’s board has recommended a SAR 200 mn capital hike to SAR 1 bn through a bonus shares issuance in a bid to fuel its expansion plans, it said in a disclosure to Tadawul. This would be financed through the capitalizing of SAR 200 mn from retained earnings.

#3- Amiantit has settled debt it owes to Saudi National Bank (SNB) at a 50% markdown, paying only SAR 156.5 mn, according to a disclosure to Tadawul.

#4- Nomu-listed National Building and Marketing’s BoD has recommended not paying a dividend for FY 2023, it said in a disclosure to Tadawul yesterday. The company said the decision comes as it looks to focus on completing and financing its projects pipeline and improving liquidity.

#5- Advertising and PR firm Tihama’s BoD has approved liquidation procedures for some of its dormant subsidiaries, it said in a disclosure to Tadawul yesterday. The move aims “to protect the company and its interests and correct the legal conditions to address the company’s situation to reduce and stop financial losses and legal risks,” it said.

REMEMBER- Tihama’s net income fell 54% y-o-y in 9M 2023 to SAR 32 mn, while revenues were down 20.1% y-o-y to SAR 57 mn in the same period.