Aurelia Butler

SYDNEY (Reuters) – Australia’s Dexus on Wednesday swung to its first net loss since 2009 as higher interest rates wiped nearly A$1.2 billion ($773.16 million) off the value of its property portfolio, in a fresh blow for the troubled real estate sector.The property industry globally, and office building owners in particular, are struggling as home working and e-commerce lead tenants to reconsider floor space just as higher interest rates reduce building values and raise debt servicing costs.Dexus, one of Australia’s largest office landlords, delivered a net loss of A$752.7 million for the year ended June 30, down from a A$1.62 billion profit a year earlier.The loss was driven by a A$1.18 billion valuation downgrade across its A$17.4 billion property portfolio, predominantly in the office sector, where values fell by 8.8%. Adjusted funds from operations (AFFO), which excludes valuation changes and one-off charges, were A$555 million, down 3% from a year earlier.Shares fell 4% at the open before rallying slightly to be down 2.8% after the first half hour.”Operating in an uncertain economic environment remains challenging,” Dexus CEO Darren Steinberg said in a statement. “In this environment we have continued to diversify our capital sources, and grow and diversify our funds management business, while we re-weight the Dexus portfolio.”Occupancy across Dexus’ portfolio of 62 office properties was 95.9%. Roughly a third of tenancy renewals last financial year added floor space, versus 9% of those contracting, the company said. Dexus continued to raise equity over the past financial year, reporting A$1.6 billion in third-party equity commitments and an oversubscribed new airport investment vehicle.The company secured A$2.6 billion in new financing, including a A$500 million exchangeable note issue. Pro-forma gearing was 27.9%, below its 30% to 40% target range.”Dexus has operationally outperformed the market from their higher quality portfolio, however investors will remain cautious of global office fundamentals,” Citi analysts said in a note. Dexus forecast a slightly lower AFFO in fiscal 2024, driven by a fall in trading profits.($1 = 1.5521 Australian dollars) More

The Financial Services Commission (FSC) said it would provide a total of 23 trillion won ($17.2 billion) worth of financial support for exporters through public and private banks from September, along with other measures to ease difficulty in trade financing. It comes on top of 41 trillion won worth of financial support already provided through policy funds so far this year, the FSC said in a statement. Specific measures include expanded credit and lower borrowing costs for companies entering new markets, bidding for overseas project orders, and making investment in major industries such as semiconductor, rechargeable battery, biopharmaceuticals and nuclear energy.The measures are aimed at supporting a recovery in exports as well as improvement in mid- and long-term competitiveness of exporting companies, the FSC said, citing difficult conditions they are facing from weakened supply chains and intensified competition for advanced technologies to high interest rates. South Korea’s July exports fell for the 10th straight month and at the steepest pace in more than three years, raising concerns that the downturn may drag on longer than expected amid weak demand.South Korea’s economic growth sped up in the second quarter, after narrowly averting a recession in the first, but it was due largely to an improvement in net trade as imports fell more than exports, while consumer and business spending weakened.($1 = 1,336.4600 won) More

TOKYO (Reuters) – Big Japanese manufacturers and service-sector firms signalled improved business morale in August, a monthly Reuters poll showed on Wednesday, reflecting a gradual economic recovery from COVID-induced doldrums despite an uncertain global outlook.Their indexes rose to plus 12 and plus 32, respectively, in August, from plus 3 and plus 23 in the previous month, according to the Reuters Tankan survey, which is strongly correlated with the Bank of Japan’s key quarterly tankan.The strong results came on the heels of government gross domestic product (GDP} data out on Tuesday that showed much stronger-than-expected growth for the second quarter in the world’s third-largest economy, driven by solid car exports.However, many firms were wary about the outlook, particularly over slowing growth in China, Japan’s largest trading partner.”Declines in demand for chip-related business and softening of Chinese markets for auto-parts and environment-related products are continuing,” wrote a manager of an industrial ceramic maker.”Orders for production goods are declining due to slump in demand for capital expenditures amid China’s economic slowdown,” according to a machinery maker’s manager.The Reuters poll of about 500 large companies, of which roughly half responded, also recorded that many firms are struggling to pass on elevated costs of raw materials.The service-sector index fared much better , with the non-manufacturers index rising 9 points to +32, posting the first increase in three months.The Reuters poll, conducted from Aug. 1-11, found corporate confidence was expected to continue rising over the coming three months, with manufacturers’ sentiment seen at +14. The service sector sentiment is somewhat seen down at +26.The Reuters Tankan indexes, which can serve as leading indicators for the Bank of Japan tankan surveys, are calculated by subtracting the percentage of pessimistic respondents from optimistic ones. A positive figure means optimists outnumber pessimists. Respondents reply on condition of anonymity. More

Speaking at an event hosted by XP (NASDAQ:XP), she said the central bank has sought to stress that the conditions put in place to change the pace of easing are “very difficult” to be achieved and that “the bar is too high.””We are very committed to the pace that we foresee,” she said. The central bank cut its benchmark rate by 50 basis points earlier this month to 13.25% after holding it steady for nearly a year, and stressed that an acceleration would “require substantial positive surprises” in inflation.Guardado said a meaningful surprise in inflationary dynamics couldn’t be expected to arise from marginal fluctuations of “5bps here or there” or positive statistical outliers confined to a single month.She also highlighted that re-anchoring inflation expectations towards the official targets was only partial, still being “uncomfortable.””It is up to the central bank to take action and demonstrate its firmness,” she said. “We are very committed to the convergence of inflation towards the 3% target.”The director also said that the central bank will act firmly to ensure that there will be no leniency “by any means” and is confident in its current strategy. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.The word ‘crisis’ should always be used responsibly and judiciously when covering financial markets, business and economics, but are we at that point now with China?Developments in the last 24 hours from the world’s second largest economy – another string of top-tier data ‘misses’, a shock interest rate cut and an abrupt announcement that (record high) youth unemployment data will no longer be published – suggest we might be.The deepening concern around China’s economy, policy options and financial markets will weigh heavily on Asian investor sentiment on Wednesday, with an interest rate decision from New Zealand and the latest manufacturing and service sector ‘tankan’ surveys from Japan also on tap.It’s not all doom and gloom in Asia – Japan’s economy grew twice as fast in the second quarter as economists had expected – but China’s travails are front and center right now.Perhaps even more worrying for investors than the misses on investment, industrial production and retail sales, or the surprise rate cut, was Beijing’s decision to suspend the publication of youth unemployment figures for an unspecified length of time.The official rate in June was a record 21.3%. That’s bad enough, but in an online post last month – since removed – Peking University professor Zhang Dandan estimated it could be closer to 50%.The latest snapshot of Chinese house prices will be released on Wednesday, and again, another weak report could be in store, with the country’s property sector in a genuine state of crisis.JP Morgan on Tuesday said if developer Country Garden suffers a full-scale default, it will more than double China’s year-to-date property default tally to $17 billion, adding to the $100 billion racked up over the past two and a half years.The People’s Bank of China may have finally pulled the interest rate lever, but it had the expected impact of slamming the exchange rate. The offshore yuan tumbled through 7.30 per dollar to its weakest level this year and is now flirting with November’s historic low of around 7.35 per dollar.Compare and contrast China with Japan, as per Tuesday’s bumper Q2 GDP data, and the U.S., where figures on Tuesday showed a surge in retail sales. The Atlanta Fed’s GDPNow model is projecting annualized Q3 growth of 5.0%.Global stocks, Wall Street and emerging markets all buckled on Tuesday under the weight of rising bond yields, ‘higher for longer’ Fed rate expectations and a buoyant dollar.The MSCI Asia ex-Japan index fell for a fourth day and has now only risen twice in the last 11 sessions. Among the biggest losers in Asia on Tuesday was Hong Kong’s mainland property index, which fell 1% to take its year-to-date decline to 16%.Here are key developments that could provide more direction to markets on Wednesday:- New Zealand interest rate decision- China house prices (July)- Japan tankan surveys (August) (By Jamie McGeever; Editing by Josie Kao) More

Good morning. We start today with more bad economic news from China, as Beijing said it would stop publishing data on youth unemployment, weeks after the gauge hit a record level. The decision is a sign of mounting pressure on policymakers as new data pointed to weakness in the recovery of the world’s second-largest economy. The People’s Bank of China on Tuesday also unexpectedly cut a benchmark interest rate by the biggest margin since the start of the coronavirus pandemic, reflecting official concerns over a loss of momentum months after Covid-19 restrictions were lifted.Youth unemployment, which China began reporting in 2018, hit 21.3 per cent in June, but the figure was not included in a wider data release for July on Tuesday. The report largely undershot expectations and showed growth slowed in retail sales and industrial production, two intended engines of the country’s economic recovery.“Today’s cuts suggest that the authorities’ concern about the state of the macroeconomy is mounting,” Robert Carnell, head of Asia-Pacific research at ING, wrote in a note. “If it isn’t there, it must be bad news,” he said of the unemployment figures. Read the full story.Here’s what else I’m keeping tabs on today:Economic data: The UK releases several important pieces of data on how the economy performed in July, including inflation data, house price index and monthly employment figures. The focus will be on how far UK inflation falls, as the headline rate is expected to continue to dip after the Bank of England’s aggressive rate rises. Results: Chinese ecommerce platform JD.com and tech giant Tencent report second-quarter earnings. Thailand: The constitutional court is expected to rule on the legality of a move to block Pita Limjaroenrat, the leader of the progressive Move Forward party that prevailed in May’s election, from being renominated for prime minister after he was rejected by the national assembly on his first attempt last month.Five more top stories1. Donald Trump and 18 others have been charged with trying to overturn the results of the 2020 presidential election in the state of Georgia. Prosecutors allege the former president and the other defendants “constituted a criminal organisation” that “refused to accept that Trump lost” and “joined a conspiracy to unlawfully change the outcome of the election in favour of Trump”. The Georgia charges are the fourth criminal case brought against Trump in the space of five months.Trump’s White House bid: Indictments are galvanising the former president’s Republican base but Americans’ views of him more broadly are not shifting much.More US news: A lawyer defending US president Joe Biden’s son Hunter in a federal criminal case is seeking to withdraw as counsel because he might become a witness. 2. Exclusive: Private equity group TPG Capital has approached EY about buying a stake in its consulting arm in a deal that would herald a second attempt at breaking up the Big Four firm. TPG outlined its plan for a debt-and-equity deal to separate the consulting arm from EY’s audit business in a letter sent to the firm’s global and US bosses. Here’s what we know about TPG’s proposal. 3. Resurgent car exports propelled Japan’s economy to a larger than expected expansion in the second quarter of the year, offsetting immediate concerns that the country was vulnerable to global recession. But several economists cautioned that a recovery of post-pandemic domestic consumption remained unconvincing. Read the latest on Japan’s economy.4. Istanbul mayor Ekrem İmamoğlu has announced he intends to run for re-election in next year’s municipal polls, firing the starting gun in a race seen as a crucial signal of whether the opposition can present a serious challenge to Turkish president Recep Tayyip Erdoğan. The campaign for Istanbul comes at a fraught moment for Turkey’s opposition, which lost in May’s presidential race. Read the full story.5. The economist who coined the Brics acronym has slammed as “ridiculous” the notion that the group of emerging nations might develop its own currency, as Brazil, Russia, India, China and South Africa prepare to discuss whether to expand the bloc. “They’re going to create a Brics central bank? How would you do that? It’s embarrassing almost,” Lord Jim O’Neill told the FT. Read the full interview. The Big Read

© FT montage/Rory Griffiths/Getty Images

Binance co-founder and chief executive Changpeng Zhao appeared to have the world at his feet by the end of 2022. The collapse of rival FTX made Binance the undisputed leader in digital assets, controlling more than half of the fast-evolving cryptocurrency market. But while the prices of main cryptocurrencies such as bitcoin have stabilised, Binance has struggled and finds itself beset by regulatory setbacks.We’re also reading . . . ‘Right to disconnect’: Over the past six years a handful of countries have brought in new rules on work technology. But don’t fall for performative policymaking, writes Sarah O’Connor.Making music from brain activity: Scientists recreated Pink Floyd’s classic song Another Brick in the Wall using AI techniques from the brainwaves of people listening to it. Industrial policy: Trade restrictions and preferential treatment of US companies will hurt the people America’s new approach is meant to help, writes Pinelopi Goldberg.Chart of the daySelling shares in Chinese companies offshore used to be a money-spinner for US investment banks, but that’s no longer the case, writes Kaye Wiggins in this smart column. Beijing put the brakes on offshore listings in a sweeping crackdown from 2021, then announced new rules in February that gave mainland regulators far more influence than before. Take a break from the newsTwo new histories of central Asia — Sex in the Land of Genghis Khan, by Mongolian anthropologist Baasanjav Terbish, and Empires of the Steppes, from historian Kenneth Harl — offer radically different approaches to the region. “Now, more than ever, we need a better understanding of this area and its history,” the FT’s Gillian Tett writes in this thoughtful book review.

Additional contributions by Grace Ramos and Gordon Smith More