NAIROBI, Nov 29 (Reuters) – Kenya’s Centum Investment (CTUM.NR) plans to buy back up to 10% of its issued shares, it said on Tuesday after reporting a wider first-half loss.
The group, which invests in listed firms and private companies, said it planned to buy the shares from the market over a period of 18 months at a maximum of 9.03 shillings per share and a minimum of 0.50 shillings.
Centrum’s shares were trading at 8.00 shillings by 0723 GMT, up 1.3% on the day.
“The share buyback is expected to provide liquidity to shareholders who may not have been able to trade due to the current depressed market conditions,” said James Mworia, Centum’s chief executive officer.
Centum’s performance is keenly watched by investors as it offers exposure to opportunities such as shopping mall developments and companies across East Africa.
The group’s pretax loss widened to 1.24 billion shillings ($10.14 million) in the six months to end-September from a loss of 697 million shillings in the same period a year earlier.
“This performance was primarily driven by the impact of unrealised foreign exchange losses on U.S. dollar liabilities and currency translation losses on Uganda shilling,” Mworia said.
The Kenyan shilling has fallen 7.6% versus the dollar so far this year and 2.7% versus the Ugandan currency.
Unrealised foreign exchange losses rose to 517 million shillings from 48 million shillings in the same period of 2021, the company said in a presentation.
Group results include the performance of Centum’s subsidiaries, associates and joint-venture investments.
Centum said company net asset value per share, a key measure of performance for investment firms, fell to 59.77 shillings from 62.10 shillings.
It said it expected the sale of its 83.4% stake in Kenya’s Sidian Bank to Nigeria’s Access Bank, for 4.3 billion shillings, to be completed in December.
($1 = 122.3500 Kenyan shillings)
Reporting by George Obulutsa; Editing by Alexander Winning, Kirsten Donovan
Our Standards: The Thomson Reuters Trust Principles.
Nov 28 (Reuters) – China Evergrande Group (3333.HK) said on Monday its unit has entered into a deal to sell a piece of commercial land in Shenzhen for 7.54 billion yuan ($1.05 billion), as the embattled property developer looks to shave off its massive debt.
Evergrande, which has about $300 billion in liabilities, has been at the centre of a deepening property debt crisis in China that has seen multiple developers defaulting on their offshore debt obligations over the past year, prompting many to consider debt restructuring. read more
The company said it will sell the land to Shenzhen Anhe No. 1 Property Development, a unit of Shenzhen Anju Construction Investment and Operation. Real-estate firm China Vanke (000002.SZ) holds a 20% stake in Shenzhen Anju.
Evergrande expects a loss of about 163 million yuan from the disposal of the 10,376.82 square meter landholding located in Shenzhen.
The company said the proceeds from the sale will be used to repay relevant debts in respect of the land, while adding the land did not generate any rental income in 2020 and 2021.
($1 = 7.2095 Chinese yuan renminbi)
Reporting by Jaskiran Singh in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli
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BEIJING, Nov 23 (Reuters) – Three of China’s biggest commercial banks have agreed to provide fundraising support to property developers, including industry giant Vanke (000002.SZ), in a coordinated effort to support the country’s embattled property sector.
It marks one of the latest moves by state-owned banks to respond to Beijing’s call to ease pressure on debt-laden developers and reverse a housing slump.
The property sector makes up about a quarter of China’s economy.
Bank of Communications Co Ltd (BoCom) (601328.SS) said it agreed to provide a 100 billion yuan ($13.98 billion) line of credit to Vanke and a 20 billion yuan line of credit to Midea Real Estate Holding Ltd (3990.HK), two separate statements issued by the bank said on Wednesday.
Under the agreements, BoCom will be likely to offer the two developers property development loans, loans for M&A deals and bond investments.
The agreement is part of BoCom’s efforts to implement 16 measures outlined by Chinese regulators that aim to boost liquidity in the property sector, the bank said in the statements.
“BoCom will continue to fulfill the responsibility of a state-owned bank, (and) accurately promote high-quality economic development with high-quality financial services,” it said.
Also on Wednesday, Agricultural Bank of China Ltd (AgBank) (601288.SS) said it has signed strategic agreements to provide fundraising support to five property companies, including Vanke, Longfor Group Holdings Ltd (0960.HK) and China Resources Land Ltd (1109.HK). The bank did not give further details on the scale of the support.
Bank of China Ltd (601988.SS), also said on Wednesday it agreed to provide a line of credit of up to 100 billion yuan to Vanke.
Vanke is the country’s second-largest developer by sales.
China’s property sector, once a pillar of growth, has slowed sharply this year due to government efforts to restrict excessive borrowing by developers.
The clampdown has triggered falls in property investment, sales and prices, and a growing number of bond defaults. Construction of many housing projects has stalled, scaring away potential home buyers.
Chinese authorities have announced a flurry of fiscal measures recently to ease the developers’ liquidity crisis.
In the latest policy move, China’s central bank will provide 200 billion yuan in loans to six commercial banks for housing completions, according to a deputy central bank official quoted by the state-run Economic Daily on Monday.
In response to Beijing’s policy guidance, more banks are expected to sign agreements with developers to increase real estate loan issuance, said Liu Shui, an analyst at China Index Academy.
Many analysts, however, believe the property market will take a long time to recover.
“(A) broad recovery in new-home sales remains the key for a sustained improvement in developers’ liquidity profiles,” a Fitch Ratings report said on Wednesday.
“We expect no material improvement in the operating environment, as homebuyers’ confidence remains fragile amid weak economic prospects and uncertainty surrounding delivery of pre-sold properties,” the Fitch report said.
($1=7.1531 Chinese yuan renminbi)
Reporting by Ziyi Tang and Ryan Woo; Editing by Muralikumar Anantharaman, Kim Coghill and Jane Merriman
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Nov 22 (Reuters) – Japan’s Mazda Motor Corp (7261.T) will invest about 1.5 trillion yen ($10.58 billion)to electrify its vehicles, including boosting production of battery EVs, and aims to increase their share in the company’s overall global car sales by 2030.
Mazda’s senior managing executive officer Akira Koga said the investment would be made along with its “partners”, without elaborating, and will be used for research and development. The news was first reported by the Nikkei business daily.
The ratio of electric vehicles (EVs) in global sales is expected to rise to between 25 percent and 40 percent as of 2030, from 25% previously, the company said in a statement.
Mazda CEO Akira Marumoto also told a news conference that the company had reached an agreement with Envision AESC, the battery business of Chinese renewable energy group Envision, to procure batteries for EVs produced in Japan.
The automaker also said it had agreed to work with seven companies, including electric component manufacturer Rohm Co (6963.T), to jointly develop and produce electric drive units.
Automakers worldwide are spending billions of dollars to ramp up battery and EV production in the face of tougher environmental regulations.
In August, Toyota Motor Corp (7203.T) said it would invest up to 730 billion yen in Japan and the United States to make batteries for fully electric vehicles as opposed to hybrid gasoline-electric cars like the Prius.
Its rival Honda Motor Co (7267.T) also said in the same month it would build a new $4.4 billion lithium-ion battery plant for EVs in the United States with Korean battery supplier LG Energy Solution Ltd (373220.KS).
Mazda is aiming for about 4.5 trillion yen in net sales for the business year ending March 2026, a jump of about 45% from the financial year ending March 2022, the company said.
Shoichi Matsumoto, Envision AESC chief executive, told Reuters last month it was in talks with automakers in Japan, Europe, the United States and China for new supply deals.
Envision AESC, based in Japan, was originally established as a joint venture between Nissan Motor Co (7201.T), NEC Corp (6701.T) and its subsidiary NEC TOKIN Corporation.
($1 = 141.7400 yen)
($1 = 141.7500 yen)
Reporting by Tokyo Newsroom; Editing by Christopher Cushing, Kenneth Maxwell and Ana Nicolaci da Costa
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BUDAPEST, Nov 21 (Reuters) – Commercial banks in Hungary cannot pay an interest rate that is higher than the yield on the three-month discount bill on deposits by certain large institutional and private investors, the Minister for Economic Development said on Monday.
Marton Nagy, a former central bank deputy governor, told state news agency MTI that the step was aimed at investors who took advantage of high central bank rates by investing their money in central bank deposits through commercial banks.
The National Bank of Hungary announced an emergency rate hike last month and introduced a quick deposit facility with an 18% interest rate, which helped shore up the forint currency following its fall to a record low in October.
Under the measure outlined on Monday by Nagy, until March 31, 2023 commercial banks cannot pay an interest rate that is higher than the yield on the three-month discount bill on deposits by investment companies, savings banks, building societies, investment funds and private citizens’ deposits of more than 20 million forints ($49,980.01).
These investors made use of high central bank rate and “they realized a risk-free interest rate of up to 18% that was, in the end, paid by the state,” Nagy said.
The yield on the three-month discount bill was about 12% on Monday.
The central bank did not immediately respond to questions from Reuters on the new regulation.
“This means that (the government) is neutralizing part of the monetary policy transmission mechanism. There will be a segment of the economy where high interest rates will not apply as some market participants will not be able to access them,” Peter Virovacz, senior economist at ING said.
The government has already introduced regulation on interest rates on certain loans. Nagy announced last month that Hungary would include variable-rate loans to small- and medium-sized businesses in a scheme designed to cap loan rates and avoid a recession. read more
($1 = 400.1600 forints)
Reporting by Anita Komuves, Editing by William Maclean
Our Standards: The Thomson Reuters Trust Principles.
BEIJING, Nov 18 (Reuters) – China’s property sector will remain weak but will see a gradual recovery in 2023, economists said in a Reuters poll, expecting further stimulus measures and looser COVID-19 curbs to support the crisis-stricken sector next year.
New home prices are expected to fall in the first half of next year before rising for the whole of 2023 while sales are seen falling more slowly as the year progresses, according to the 16 analysts and economists polled by Reuters between Nov. 9 to 17.
According to the survey, new home prices are seen falling 0.5% in the first half of 2023, down from a 2.0% growth forecast for that period in a September survey. But prices were expected to rise 1.8% for the full year.
“For 2023, property indexes are expected to see a turning point and consumer confidence will improve with the economy completely stabilised after COVID restrictions ease,” said Li Zongguang, chief economist at China Renaissance Holdings Limited.
“Property measures are expected to strengthen support, which will improve residents’ confidence.”
Woes in China’s real estate market, which accounts for about a quarter of its $17 trillion economy, deepened in October, weighed down by COVID-19 curbs and industry-wide problems. New home prices fell at their fastest pace in over seven years in October and sales slumped for the 15th straight month.
A recent slew of support measures, including loan repayment extensions, aimed at improving liquidity in the property sector has underpinned market sentiment.
But analysts and economists in the poll expected concerns about falling house prices, protracted COVID restrictions, and delays in construction to continue to weigh on demand.
Property sales were seen slumping 5.0% in the first half of 2023, a smaller drop than the 15.0% fall forecast in the September poll. Economists expected a 1.0% slump in sales for the whole of 2023, the survey showed.
Huang Yu, vice president of China Index Academy, expected the market to gradually stabilise as the financing measures boosted confidence, but she did not expect a V-shaped rebound, stressing the need for more policies targeting demand.
“More home purchase support policy is needed,” especially a move to ease some home purchase curbs in major cities, Huang added.
Demand for property took a big hit this past year as many developers lurched from crisis to crisis and halted the construction of apartments as they ran out of money.
Beijing last week eased some of its COVID curbs with officials flagging further fine-tuning of restrictions, raising hopes of a complete reopening after annul parliamentary meetings in the spring of 2023.
Some analysts say average house prices will need to fall by around 20% to 30% to entice demand.
(For other stories from the Reuters quarterly housing market polls:)
Reporting by Liangping Gao, Shuyan Wang and Ryan Woo; Editing by Ana Nicolaci da Costa
Our Standards: The Thomson Reuters Trust Principles.
BEIJING/HONG KONG, Nov 18 (Reuters) – A slew of recent supportive measures will bring China’s cash-strapped property developers much needed relief, but a full recovery of the sector will be hobbled by increasingly elusive buyers, say bankers, developers and analysts.
From a sweeping purge a couple of years ago to a series of financing measures now, China’s changed approach towards the property sector, a key pillar of the economy, reflects how dire the situation has become.
Weighed down by protracted COVID-19 curbs, falling home prices and rising unemployment in the world’s second-largest economy, many prospective buyers are putting off their plans, creating challenges for developers and policymakers.
“These policies will have little lasting effect and the property prices will not go up significantly,” said Jack Yang, an engineer in Beijing, noting “future income” had become a key concern for homebuyers.
Yang said he had put plans to sell his home and buy a new one on hold due to COVID restrictions, cuts in his salary and concerns he may lose his job.
Chinese regulators outlined 16 supportive measures last week, mainly aimed at boosting liquidity for developers, in the most comprehensive rescue package for the sector since it was hit by a debt crisis last year.
Markets cheered the measures, which included loan repayment extensions and easier access to fresh funding, but bankers and analysts say they only address the property market’s supply problems, with the demand recovery still a key concern.
Demand for property, a sector that accounts for roughly a quarter of China’s economy, took a big hit this past year as many developers lurched from crisis to crisis and halted the construction of apartments as they ran out of money.
The economic fallout of COVID lockdowns in many cities also contributed to buyers like Yang putting off plans to take on debt to buy new homes – a trend, bankers and analysts say, is unlikely to change anytime soon.
Property sales measured by floor area fell for a 15th straight month in October, while new home prices fell at their fastest pace in over seven years, official data showed this week.
John Lam, head of China and Hong Kong property research at UBS said the government’s move to support liquidity “kind of breaks the negative cycle”, adding this “should be a positive in terms of the demand recovery”.
But rating agency Fitch said on Tuesday it was sticking to its forecast for a “largely flat trend” in new home sales in 2023 even after the latest support measures.
Housing demand “hinges on a recovery in homebuyers’ sentiment and employment prospects, which we think depends on sustained easing of China’s pandemic-related controls,” it said.
China last week eased some COVID rules, but analysts say the zero-COVID strategy will continue to weigh on economic activity.
While Beijing has cut mortgage costs and relaxed some curbs this year to boost new home purchases, analysts say authorities’ focus mostly on affordable housing and President Xi Jinping’s “common prosperity” push are likely to keep a lid on demand.
CREDIT RISK
The fall in home prices is a major concern for homebuyers in China given a large share of them buy new homes as an investment option, with returns historically reaching as high as 30%-50% over a period of time in some cities.
Despite the recent liquidity-boosting measures, some bankers say developers continue to face credit risks given the uncertain outlook.
“The measures will improve the real estate financing environment, which means that for banks, the vicious cycle and death spiral between real estate risks and financial risks have been alleviated,” said an official at a mid-sized commercial bank.
“But it is too early to say that the credit risk alert of real estate has been lifted,” said the banker, who declined to be named as he was not authorised to speak to the media.
According to UBS, Chinese banks have roughly 88 trillion yuan ($12.43 trillion) worth of exposure to the property sector.
It estimates the property sector downturn will cost the banking system up to 1.4-1.5 trillion yuan in the next few years, mainly from potential losses in banks’ unsecured property development loans, bonds, and non-standard assets.
For now, however, the main concern for some homebuyers is whether the latest measures will enable developers to come out of the crisis and resume the construction of apartments.
Sam Wang, a 22-year-old freelancer in the catering industry, said a relative had bought “a property for presale in full payment” in Wuhan about three years ago, but it was still unfinished.
“For me, I am about to buy a house for residential purposes, and in the short term, I’ll take a wait-and-see attitude,” said Wang.
($1 = 7.0802 Chinese yuan renminbi)
Reporting by Liangping Gao, Ziyi Tang, Engen Tham, Xie Yu, Clare Jim and Rong Ma; Graphics by Riddhima Talwani and Kripa Jayaram; Writing by Sumeet Chatterjee; Editing by Ana Nicolaci da Costa
Our Standards: The Thomson Reuters Trust Principles.
BEIJING, Nov 14 (Reuters) – China’s financial regulator will allow property developers to access some pre-sale housing funds, it said in a notice published on Monday, the latest move to ease a liquidity crunch which has plagued the real estate sector since mid-2020.
The notice follows an extensive package outlined by Chinese regulators to shore up financing in the struggling property sector. Chinese property stocks and bonds surged on Monday as the market cheered the measures.
Commercial banks are allowed to issue letters of guarantee to real estate firms for escrow pre-sale housing funds, according to the notice published by China’s Banking and Insurance Regulatory Commission (CBIRC).
The funds obtained by real estate companies from escrow funds accounts shall be prioritised to construct projects and repay debts, said the notice.
Real estate companies are banned from using the funds for land acquisition, new investment or repayment loans by shareholders.
Property developers can sell residential projects before completing them but are required to put those funds in escrow accounts.
China’s property sector, contributing roughly a quarter of China’s $17 trillion of output, has struggled with defaults and stalled projects, hitting market confidence and weighing on growth.
Previous efforts by policymakers to help ease the cash crunch have done little to bolster the property market.
Reporting by Liangping Gao and Ryan Woo
Editing by David Goodman and Emelia Sithole-Matarise
Our Standards: The Thomson Reuters Trust Principles.
HONG KONG, Nov 9 (Reuters) – Chinese property developers’ share prices surged on Wednesday after regulators expanded a financing programme aimed at supporting bond issuance in the crisis-ridden sector.
CIFI Holdings (Group) Co Ltd (0884.HK) soared 40% while Country Garden Holdings Co Ltd (2007.HK) surged 23%. The Hang Seng Mainland Properties Index (.HSMPI) rose 8%.
The National Association of Financial Market Institutional Investors late on Tuesday said it will widen a programme to support about 250 billion yuan ($34.5 billion) worth of debt sales by private firms, including property developers.
The semi-official association under the central bank also said the programme can be expanded further.
“Even though the programme may not actually help developers that much, it’s the message from the central government, showing its determination to stabilise the sector and the economy, that is boosting sentiment,” said Alvin Cheung, associate director of Prudential Brokerage in Hong Kong.
The move comes as cash-strapped property developers struggle to tap sources of funding to finish projects and pay suppliers. Several developers have defaulted on offshore debt obligations in the past year.
More recently, investors have been fretting about the crisis deepening as developers widely believed to have had government backing also missed payments, such as CIFI and Greenland Holdings Corp Ltd (600606.SS).
“We think this is a big step to help ease liquidity for top private developers after recent defaults,” said Jefferies analyst Shujin Chen in a client note.
Still, there will likely be more defaults given weak recovery in property sales, Chen said.
Developers’ offshore U.S. dollar bonds also rebounded. A Seazen 2026 bond was trading at 14.35 cents on the dollar on Wednesday, showed data from Duration Finance, more than 3 cents higher than a day earlier.
Nomura said benefits from the expanded programme are unlikely to be sufficient to resolve developers’ financial woes as prolonged contraction in new home sales may reduce funding sources this year by 3.3 trillion yuan.
The property market continued its slump in October, with private data showing home prices and sales falling, indicating lacklustre sentiment and a bleak outlook amid strict COVID-19 curbs that have rattled consumer confidence.
($1 = 7.2470 Chinese yuan)
Reporting by Xie Yu and Clare Jim; Editing by Edwina Gibbs and Christopher Cushing
Our Standards: The Thomson Reuters Trust Principles.
DUBAI, Nov 8 (Reuters) – Dubai state developer Nakheel has secured 17 billion dirhams ($4.63 billion) in financing from local banks for new projects including Dubai Islands and other waterfront developments, it said on Tuesday.
The developer of the palm shaped islands off Dubai said the financing was through a syndicate of three local lenders, Emirates NBD (ENBD.DU), MashreqBank (MASB.DU) and Dubai Islamic Bank (DISB.DU).
The transaction comprises of 11 billion dirhams in refinancing and additional funds of 6 billion dirhams through the syndicate.
Nakheel is planning to develop another man-made island named Dubai Islands, formerly known as Deira Islands, comprising five islands over a total area of 17 sq km.
The transactions will further strengthen Nakheel’s financial position, a company spokesperson said, adding that it “reflects the confidence of the banking institutions in the strategic new focus of the company”.
The state-owned business was one of the developers worst hit by Dubai’s real estate crash at the turn of the decade, forcing it into a massive debt restructuring.
Dubai’s red-hot property market surged in the first half of this year as investors piled in, with Russians among the top five buyers as the emirate benefits from an influx of wealth in the wake of Western sanctions against Russia over its invasion of Ukraine.
First-half residential real estate transaction volumes rose 60%, with an 85% rise in the value of properties sold, property consultancy Betterhomes said in a July report.
Dubai’s property market began its recovery early last year after the emirate eased pandemic restrictions faster than most cities around the world.
($1 = 3.6726 UAE dirham)
Reporting by Hadeel Al Sayegh
Editing by Janane Venkatraman and David Goodman
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