Hopes for state aid for Evergrande fade - Kathrein ...
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Hopes for state aid for Evergrande fade
away
• According to party-a liated media, an Evergrande bankruptcy would not be comparable to the
collapse of the US investment bank Lehman Brothers
• Financial market watchers see dwindling chances of a government bailout
• Evergrande share price lost for the fifth day in a row, slipping another 13 % to its lowest level in
about a decade
Shenzhen (APA) - Doubts are growing in China that the ailing Chinese real estate giant Evergrande
can count on government support. For the first time, a commentary describing government
intervention as unlikely appeared in a state-related medium on Friday. The author was Hu Xijin,
editor-in-chief of the tabloid "Global Times". However, the views expressed in the commentary do not
necessarily reflect those of the government.
According to him, an Evergrande bankruptcy would probably not shake the financial system as much
as the collapse of the US investment bank Lehman Brothers once did. China's second-largest
property developer is not so significant that its failure must be prevented by all means, Hu judged in a
post on social media. The paper is part of the ruling communist party's empire. Financial market
observers also see dwindling chances of a state bailout. This is also shown by the development of the
Evergrande share price. It fell for the fifth day in a row and slid another 13 per cent to its lowest level
in about ten years.
The real estate giant is scrambling to raise fresh funds to pay its numerous banks, suppliers and
bondholders on time. It is groaning under a debt burden of more than 300 billion dollars (255 billion
euros).
Newspaper: ECB could reach inflation Vonovia and Deutsche Wohnen sell
target by 2025 almost 15,000 properties
• ECB medium-term reference scenario shows • Vonovia and Deutsche Wohnen sell properties
inflation should land at 2 % shortly after the in Berlin to the public sector for 2.46 billion
end of the current forecast period euros
• Economists forecast an inflation rate of 2.2 % • Degewo, Howoge and Berlinovo bought a
for this year total of around 14,750 flats
• For 2022, economists raised their inflation • Berlin Senate wants to expand municipal
forecast from 1.5 % to 1.7 % housing stock in the capital city
Frankfurt (APA/Reuters) - The European Bochum/Berlin (APA/Reuters) - The housing
Central Bank (ECB) could reach its inflation giants Vonovia and Deutsche Wohnen, which
target of two percent by 2025, according to a are about to merge, are selling properties in
media report. ECB chief economist Philip Lane Berlin to the public sector for 2.46 billion euros.
said this in a private conversation with German The negotiations have been concluded, said
economists, reports the Financial Times (FT). Finance Senator Matthias Kollatz. The public
Lane told the economists that the ECB's housing companies Degewo, Howoge and
medium-term reference scenario shows that Berlinovo bought a total of around 14,750 flats.
inflation should end up at two per cent shortly In addition, there are about 450 commercial
after the end of the current forecast period. units.
The Berlin Senate wants to expand the
The ECB has not yet published this long-term municipal housing stock in the capital. Kollatz
forecast. Lane is therefore likely to face said that part of the housing stock on o er is
questions about why he has shared this as yet about to expire. The return into municipal hands
unpublished information with people outside now creates security for the tenants. According
the central bank. An ECB spokesperson did not to their own statements, the two companies
want to comment on this. want to "counter the tense rental situation in the
federal capital" with the sale. They had also
The ECB had updated its forecasts last week. become the subject of political debate due to
Economists forecast an inflation rate of 2.2 per their merger plans.
cent this year. The inflation rate had shot up to
3.0 per cent in August, the highest value in The industry leader Vonovia is about to take
about ten years. For 2022, economists raised over its smaller competitor and is o ering its
their inflation forecast from 1.5 to 1.7 per cent, shareholders 53 euros per share. The two real
for 2023 from 1.4 to 1.5 per cent. estate giants together own about 550,000 flats
worth more than 80 billion euros, most of them
The ECB had recently set a new medium-term in Germany. Deutsche Wohnen's main focus is in
inflation target of two per cent. Previously, it Berlin, but there the company has also faced
had been set at just under two per cent. The strong political headwind. A referendum is to be
new target also necessitated an adjustment of held in the capital to vote on the possible
the interest rate outlook. The monetary socialisation of the housing stocks of large real
guardians now want to keep their key interest estate companies. The background to this is the
rates at the current level or at an even lower sharp rise in rents in recent years.
level until it can be seen that inflation will reach
two percent and then remain at that level for the Vonovia boss Rolf Buch and Deutsche Wohnen
time being. boss Michael Zahn want to take
countermeasures - they are o ering about
20,000 of the approximately 150,000 units in
Berlin for sale to the public sector. An
agreement has now been reached for over
14,000 of these flats, which will go to the three
state companies.
Stock market newcomer Vitesco valued
at 2.4 billion euros
• The first price for the shares on the Frankfurt Stock Exchange was 59.80 euros on Thursday
• At the same time, the Conti share fell by 12 % to 99.63 euros
• Five Continental and one Vitesco share together are worth 1.3 % less than five Conti shares had
cost on Wednesday evening
Hanover (APA) - The drive technology manufacturer Vitesco, which was spun o from Continental, is
valued at 2.4 billion euros at its stock market debut. The first price for the shares of the
Regensburg-based company was set at 59.80 euros on the Frankfurt Stock Exchange on Thursday.
Conti had distributed a good 40 million Vitesco shares to its own shareholders, one for every five
Conti shares. At the same time, the Conti share fell by twelve percent to 99.63 euros.
For the shareholders - above all the Franconian entrepreneurial family Schae er - the spin-o has
thus not been worthwhile for the time being. Five Continental shares and one Vitesco share together
are worth 1.3 percent less than five Conti shares had cost on Wednesday evening.Latest developments
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