Police are investigating a Chinese wealth management company owned by Zhongzhi Enterprise Group days after the firm told investors it was insolvent
HONG KONG — Police are investigating suspected crimes of a Chinese wealth company owned by Zhongzhi Enterprise Group, according to the Beijing Public Security Bureau, days after the firm told investors it was insolvent.
In a statement published on the social media platform WeChat over the weekend, the police said they had taken “criminal enforcement measures” against several suspects to investigate and had urged affected investors to lodge a complaint.
“Investors are requested to actively cooperate with the police in investigating and collecting evidence and safeguard their rights and interests through legal channels,” the statement said.
Authorities did not specify what crimes they were investigating. In the past, defaults or other troubles in the financial sector have prompted protests by aggrieved investors.
Zhongzhi, which is based in Beijing, did not immediately respond to an email for comment and phone calls to a number listed for the company did not connect.
The investigation came after media reports last week that Zhongzhi had apologized to investors in a letter, saying it was insolvent with up to $64 billion in liabilities. That far exceeds its total assets of about $28 billion.
Zhongzhi is one of China’s largest shadow banks, companies that provide financial services similar to banks while operating outside of banking regulations. It began showing signs of trouble in August when its subsidiary Zhongrong International Trust missed payments on some of its investment products.
As one of the major Chinese shadow banks, Zhongzhi has lent billions of yuan (dollars) for real estate dealings. The property sector is currently embroiled in a debt crisis, with many of China’s big developers having either defaulted or remaining at risk of default after the government restricted borrowing beginning in 2021.
To prevent troubles spilling into the economy from the property sector, Chinese regulators have drafted a list of 50 developers eligible for financing support, according to a Bloomberg report last week that cited unnamed people familiar with the matter.
Real estate drove China’s economic boom, but developers borrowed heavily as they turned cities into forests of apartment and office towers. That has helped to push total corporate, government and household debt to the equivalent of more than 300% of annual economic output, unusually high for a middle-income country.
Zhongzhi Enterprise Group has investments spanning real estate, mining, semiconductors and vehicle manufacturing. It was founded in 1995 in northeastern China’s Heilongjiang province.
Published: Nov. 8, 2023 at 3:16 a.m. ET
By Ian Walker
UK Commercial Property REIT said it is in all-share merger talks with Picton Property Income, while cautioning that there is no certainty a deal will be agreed.
The real-estate investment trust said Wednesday that Picton has until Dec. 6 to either make an offer for the company or walk away under U.K. Takeover Panel rules.
…
By Ian Walker
UK Commercial Property REIT said it is in all-share merger talks with Picton Property Income, while cautioning that there is no certainty a deal will be agreed.
The real-estate investment trust said Wednesday that Picton has until Dec. 6 to either make an offer for the company or walk away under U.K. Takeover Panel rules.
No further information on the talks has been disclosed. Any merged company will be worth around 1.1 billion pounds ($1.35 billion) based on the companies closing share prices on Tuesday.
Separately, Picton confirmed that it was in talks with UK Commercial Property over a merger and said that any combined company would be internally managed.
UK Commercial Property shares at 0810 GMT were down 0.40 pence, or 0.7%, at 55.60 pence; Picton shares were up 1.50 pence, or 2.3%, at 68.0 pence.
Write to Ian Walker at ian.walker@wsj.com
As a co–chief investment officer of Bridgewater Associates, the world’s biggest hedge-fund firm, Karen Karniol-Tambour scours global markets for good investment opportunities. She’s increasingly finding them outside the U.S.
“I’m definitely a little bit bearish on U.S. stocks, and I especially don’t like their valuation relative to other opportunities around the world,” Karniol-Tambour said in an interview with MarketWatch. “U.S. stocks are pricing in perfection because what’s happened is the U.S. has just outperformed the world for so long.”
At age 38, Karniol-Tambour has watched U.S. stocks outperform for much of her professional career, as she climbed the ranks at Bridgewater before being named co–investment chief earlier this year. With the retirement of Ray Dalio and the leadership change at Bridgewater, Karniol-Tambour is set to play an outsized role at the firm for years to come and lands on the MarketWatch 50 list of the most influential people in markets.
When U.S. stocks started to outperform stocks in other countries years ago, Karniol-Tambour recalls, U.S. stock valuations were relatively low and positive earnings surprises would boost them. But these days, she says, valuations for U.S. stocks reflect pretty reasonable expectations for earnings.
“In other words, I don’t think companies are going to struggle that much because I don’t expect growth to be a total disaster. They’re not amazing. I think prospects are OK. The problem is, it’s already in the price. Valuation already reflects that,” Karniol-Tambour said. “So it’s just much easier to get a downside surprise, whereas in other parts of the world there’s much weaker earnings expected. It’s just not already valued. It’s not already in the price. It’s much easier to outperform.”
Specifically, Karniol-Tambour referenced the exposure in so many portfolios to big tech companies, such as Apple
AAPL
,
Microsoft
MSFT
and Alphabet
GOOGL
GOOG
,
that have driven so much of the gains of the S&P 500
SPX.
At some point, investors will view a portfolio rebalancing as prudent, she added, making U.S. stocks more vulnerable.
Opinion: This market pro likes the ‘Magnificent Seven’ but thinks stocks are on thin ice
So where else in the world can investors go? Karniol-Tambour thinks they should take a close look at Japan. These days, when Karniol-Tambour talks about the opportunities in Japan, she often feels people look at her like she’s stuck in the 1980s. But Karniol-Tambour says that because investors ignored Japan for so long — not buying Japanese stocks or bonds — the result was that Japanese companies just didn’t even think about returning money to shareholders. But that is starting to change.
“You have some of the best valuations because of that history of that success not already being priced in,” Karniol-Tambour said.
Back home in the U.S., Karniol-Tambour says the economy remains pretty strong, as several forces offset the Federal Reserve’s tightening efforts. Her projection is that the economy will gradually weaken but that inflation will remain a little too sticky and limit the U.S. central bank’s ability to come to the rescue.
“As the economy stays strong and just kind of gradually grinds down, you don’t get enough decline in inflation to really make the Federal Reserve comfortable with really strongly easing into those conditions,” says Karniol-Tambour. “So could they ease a little bit? Sure. Could they ease a lot? I think that’s challenging to see without a very significant economic slowdown.”
Will there be a recession in the U.S. next year? Karniol-Tambour says the odds are reasonable and the Fed will have a tough time responding the way it has in recent years. “Eventually, the fact that you can’t ease just changes the game from the one we’ve gotten familiar with where any slowdown gets immediately reversed.”
Published: Oct. 30, 2023 at 4:31 p.m. ET
Shares of Canadian Apartment Properties Real Estate Investment Trust Un CAR.UT inched 0.00% higher to C$40.92 Monday, in what proved to be an all-around positive trading session for the Canadian market, with the S&P/TSX Composite Index GSPTSE rising 0.64% to 18,856.76. Canadian Apartment Properties Real Estate Investment Trust Un closed C$12.06 below its 52-week high (C$52.98), which the company achieved on July 14th. Trading volume of 396,010 shares eclipsed its 50-day average volume of 318,560.
…
Shares of Canadian Apartment Properties Real Estate Investment Trust Un
CAR.UT
inched 0.00% higher to C$40.92 Monday, in what proved to be an all-around positive trading session for the Canadian market, with the S&P/TSX Composite Index
GSPTSE
rising 0.64% to 18,856.76. Canadian Apartment Properties Real Estate Investment Trust Un closed C$12.06 below its 52-week high (C$52.98), which the company achieved on July 14th. Trading volume of 396,010 shares eclipsed its 50-day average volume of 318,560.
Editor’s Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.
Published: Oct. 26, 2023 at 4:31 p.m. ET
Shares of Canadian Apartment Properties Real Estate Investment Trust Un CAR.UT slid 0.75% to C$41.19 Thursday, in what proved to be an all-around negative trading session for the Canadian market, with the S&P/TSX Composite Index GSPTSE falling 0.38% to 18,875.31. Canadian Apartment Properties Real Estate Investment Trust Un closed C$11.79 below its 52-week high (C$52.98), which the company achieved on July 14th. Trading volume of 274,011 shares remained below its 50-day average volume of 318,937.
…
Shares of Canadian Apartment Properties Real Estate Investment Trust Un
CAR.UT
slid 0.75% to C$41.19 Thursday, in what proved to be an all-around negative trading session for the Canadian market, with the S&P/TSX Composite Index
GSPTSE
falling 0.38% to 18,875.31. Canadian Apartment Properties Real Estate Investment Trust Un closed C$11.79 below its 52-week high (C$52.98), which the company achieved on July 14th. Trading volume of 274,011 shares remained below its 50-day average volume of 318,937.
Editor’s Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.
Citigroup has hired the head of Evercore’s debt advisory unit in Europe to lead the healthcare team within its commercial bank — a big area of expansion for the Wall Street lender.
Nauman Ansari has been named global industry head of healthcare at Citigroup’s commercial bank, according to a memo seen by Financial News and confirmed by a bank spokesperson. He will be based in London and report to Gaurang Hattangdi, its global head of coverage.
Ansari was latterly head of the corporate debt advisory team for Europe, the Middle East and Africa at Evercore. He has also worked in senior leveraged finance roles at HSBC, Morgan Stanley and Bank of America.
Citigroup is in the midst of a strategic overhaul unveiled by chief executive Jane Fraser in September, which will see layers of management stripped out and reorganisation around five key business lines. The changes are likely to result in job losses, with 250 jobs currently under review in its London operations.
READ Citigroup to review 250 London jobs as CEO Jane Fraser’s overhaul kicks off
However, the commercial banking division has been singled out as an area of expansion after Citi unveiled financial targets on an investor day last year. It plans to ramp up recruitment, bringing in 900 new hires over the next three years, a large part of which will be within its Asia-Pacific operations.
The unit is headed by London-based Tasnim Ghiawadwala, who returned to Citi to become global head of its commercial bank in 2021 after a stint at Barclays. It has around 2,800 employees.
JPMorgan is one of the other large US banks that is also building its commercial banking unit, even as investment banking activity has stalled over the past 18 months. It added a team of 20 bankers in July to its UK-based commercial banking team, following on from the December recruits of Roger Fix, Franz Kramer and Thibaud De Maria from UBS, BNP Paribas and Deutsche Bank respectively.
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To contact the author of this story with feedback or news, email Paul Clarke
Profitability at US commercial vehicle insurers has deteriorated this year in a sign that headwinds for the troubled segment are strengthening, AM Best says.
Underwriting losses hit $US3.3 billion ($5.22 million) last year on a combined ratio of 105.4%.
In the first six months of 2023, the direct incurred liability loss ratio was 72.7%. AM Best says that was the “worst by a wide margin” over previous years.
“Early results for 2023 show continued deterioration for the line, indicating that headwinds are beyond persisting and are strengthening,” the ratings agency says in a new report.
Commercial auto pricing rose by an average 7% in 2022, which AM Best says “may seem like a considerable hike,” but did not keep pace with inflation, which averaged 8%. Aggressive price increases in the first half of 2023, coupled with lower inflation, create a “potential bright spot” in the short term.
Since 2012, commercial auto insurance in the US has been one of the worst-performing lines of business in the national industry, generating a higher combined ratio each year than broader commercial lines.
The combined ratio for physical damage has been below the 100 break-even point since 2018. Lawyer involvement in claims will keep adding to loss severity as well.
More than half the recent underwriting loss can be attributed to adverse loss development on older accident years, which was over $US2.1 billion ($3.32 billion) in 2022. Over half was from accident years 2018 and 2019, suggesting “more may be on the way.”
Most of the top 20 US insurers have generated combined ratios higher than 100% almost every year since 2018 — some for all five years. For most, commercial auto is a small piece of their commercial portfolios and may be a loss leader or a diversifying line that is written as part of a package that includes the more profitable general liability and workers’ compensation coverages, the report says.