Connect with us

World

Greece’s welcome debt upgrade fails to end concerns over its long-term economic health

Published

on

A protestor holds a banner outside the Greek parliament during in a demonstration by municipal contract workers in Athens, Greece, on Thursday, June 29, 2017.

Kostas Tsironis | Bloomberg | Getty Images

A protestor holds a banner outside the Greek parliament during in a demonstration by municipal contract workers in Athens, Greece, on Thursday, June 29, 2017.

Analysts remain unconvinced that Greece is over its troubled economic past, despite a warmly received upgrade on Monday by the ratings agency Fitch.

The yield on the five-year Greek sovereign bond dipped by 5 basis points Monday following the upgrade, with Fitch citing improved economic conditions in the southern European country. The country’s 10-year bond yield had also dropped more than 14 points basis last Friday, showing that investors are turning more confident on the embattled economy.

However, some market participants are still cautious about the medium to long-term prospects of Greece and are watching out for plans from the euro zone to make Greece’s debt more sustainable in the long term.

“Greece is definitely turning a corner, as it will exit its economic program successfully unlike the two other programs. On top of that, after growing by 1.3 percent in 2017, the Greek economy is likely to outperform the euro area this year,” Yvan Mamalet, senior euro economist at Societe Generale, told CNBC via email.

“However, the medium-term fundamental situation remains problematic,” he said, “without significant debt relief measures, such as the ones recommended by the IMF (International Monetary Fund), the Greek debt level would most likely remain at (an) unsustainable level.”

European creditors have agreed to grant some relief to Greece by making its debt more sustainable. However, the final details of such debt restructuring are still being prepared. Nonetheless, they are expected to be implemented only after the program has come to an end, which is scheduled to take place in August, and only if market conditions require such measures to be triggered.

Source link

World

More than 1 billion doses administered

Published

on

A medical worker receives the Covid-19 vaccine at the First Affiliated Hospital of Sun Yat-sen University on April 7, 2021 in Guangzhou, Guangdong Province of China.

Southern Visual | Visual China Group | Getty Images

GUANGZHOU, China — China has administered more than a billion doses of its Covid-19 vaccines, a key milestone in the world’s largest inoculation drive.

As of Saturday, 1,010,489,000 doses had been given to people in China, according to the country’s National Health Commission (NHC). More than 100 million doses had been administered in the six days up to and including Saturday.

It’s unclear how many people have been full inoculated as the government does not release those numbers. But Zhong Nanshan, one of China’s top health experts attached to the NHC, said in March that the country is aiming to have 40% of the population fully vaccinated by the end of June.

After the outbreak of the coronavirus in China last year, authorities moved to quickly bring it under control and largely succeeded in reopening the economy and returning life to normal. One reason behind the slow start to China’s vaccination drive earlier this year was that people did not see the urgency for getting inoculated.

But the campaign has since ramped up. It took China 25 days to climb from 100 million doses to 200 million doses — and just six days from 800 million to 900 million, according to state-run media Xinhua.

Still, new coronavirus outbreaks have happened in the country over the past year. Since late May, the major city of Guangzhou in the south of China has been battling the delta variant, which first emerged in India. It is the first time that variant has seen local transmission in mainland China.

The city reported zero new locally transmitted cases on Sunday following a mass testing drive and local lockdowns.

CNBC two visited vaccination sites in the city earlier this month and saw long lines as people rushed to get vaccinated.

The World Health Organization has approved for emergency use the Chinese-made Sinopharm since May, and Sinovac Covid-19 vaccines since June.

China has been shipping its vaccines to countries around the world including Brazil, the United Arab Emirates and Malaysia. However, U.S. and European health authorities have not authorized any Chinese vaccines for emergency use.

There have been questions over the effectiveness of the China-made vaccines. Efficacy rates for China’s Covid vaccines have been found to be lower than those developed by PfizerBioNTech and Moderna

Chile, another recipient of Chinese vaccines, released the results of a real-world study of over 10 million people in April. It found that the Sinovac vaccine reduces deaths by 80%. However, despite being one of the world’s most highly vaccinated countries, Chile saw cases surge in April.

Source link

Continue Reading

World

Slow income growth is ‘holding back’ the Chinese consumer: Barclays

Published

on

Consumer spending in China has largely lagged the country’s overall economic recovery from the pandemic and that sluggishness stems from slower household income growth, according to Jian Chang, chief China economist at Barclays Asia Pacific.

Data released Wednesday showed China’s retail sales once again missed analyst expectations. Official data reported retail sales rose 12.4% in May from a year ago, less than the 13.6% increase forecast by analysts.

Barclays economists said in a Wednesday note they do not see growth in China’s consumption and services returning to pre-Covid levels this year.

“A fundamental issue, I think, that has been holding back the Chinese consumer spending is really the … slower household income growth, and particularly for lower income group,” Chang told CNBC’s “Squawk Box Asia” on Friday.

Read more about China from CNBC Pro

In 2020, China’s cash-strapped poor took on more debt after the pandemic hit job prospects.

Chang pointed to comments from Premier Li Keqiang last year in which he said roughly 600 million people earn just 1,000 renminbi per month (about $155).

She noted that migrant worker salaries have also struggled to recover, posting growth of just 2.5% as compared with 6.5% pre-pandemic.

These are headwinds for Beijing as the Chinese government hopes to promote its “dual circulation” policy, which places greater emphasis on consumption as a key economic driver.

“To improve household consumption share in the GDP you really need to improve household income share in the GDP,” Chang said.

“That means you really need to improve income distribution … which we know that is quite difficult, especially after the global financial crisis and after the pandemic. We really see globally, you know, there is the widening of income gap and the widening of wealth gap,” she said.

Chang said there’s also a gap in where spending occurs. While larger stores and shopping malls have been “quite strong,” Chang said smaller stores are not seeing the same performance.

“If you look at the smaller store sales, which accounts for two-thirds of overall retail sales, that has really been underperforming and is not even half of its growth rate pre-pandemic,” Chang said.

— CNBC’s Evelyn Cheng contributed to this report.

Source link

Continue Reading

World

Hasbro, Mattel monitor China shipping delays as holiday season nears

Published

on

A shopper wearing a face mask due to the coronavirus disease (COVID-19) pandemic browses toys at a Target store in King of Prussia, Pennsylvania, November 20, 2020.

Mark Makela | Reuters

There may be fewer boxes under the tree this holiday season, as toymakers grapple with the possibility of a massive shortage in everything from dolls and action figures to vehicles and puzzles.

The coronavirus pandemic created a bottleneck in the global transportation pipeline, which was later worsened by the blockage of the Suez Canal in March. These shipping delays have hit almost every industry, including electronics, apparel and food.

Exacerbating these troubles is a fresh wave of Covid outbreaks in China. All the while, inventory continues to pile up, leading to manufacturing delays. With shipping containers scarce — or worse, more than double pre-pandemic prices — toymakers are faced with tough decisions ahead of the industry’s most important sales season.

“We’re not seeing any panic yet about the flow of holiday goods,” said Jefferies analyst Stephanie Wissink.

She noted that toy companies are just entering the ramp-up period of production for products that ship in September and October for the holidays.

“If we see persistent constraints into late-summer, then we will start to worry a bit more,” Wissink said.

Currently, the industry is seeing delays of two to three weeks, Wissink said. This is consistent with a report from Davidson analyst Linda Bolton Weiser that was published Friday, although Weiser said delays could be as long as a month.

Weiser told CNBC that the toy industry has faced shipping challenges in the past and persevered. She noted that several years ago, there was a workers strike at the Port of Los Angeles that threatened holiday sales.

“Toy stocks tanked, but [Christmas] went off without a hitch,” she said. “Toy companies were able to get their toys loaded on the tops of freighters and unloaded the fastest.”

Weiser said her most recent chat with Mattel a few days ago indicated the company was “still quite confident about their sales growth for the year.”

Representatives for Hasbro and Mattel did not immediately respond to CNBC’s request for comment.

Toy companies are keeping a careful eye on developments overseas, hoping that pressure on the ports will loosen as vaccines are more widely distributed globally, outbreaks are more isolated and more air traffic routes reopen.

For now, toy companies have not passed on additional shipping costs to the customer, Wissink said. However, there is always a possibility that this could change if the shipping situation does not alleviate.

“We note that holiday purchases are very much oriented toward gifting so price sensitivity is somewhat less,” she said. “That said, consumers will notice if there’s a dramatic increase in prices, but we don’t expect that at this stage.”

Both Mattel and Habro shares were recently trading down more than 1% on Friday. Mattel’s stock has gained nearly 9% since January, putting its market value at $6.64 billion. Hasbro’s stock is down 3% year to date, which puts its market value at $12.5 billion.

Source link

Continue Reading

Trending