Developer Vanke Is Selling 300 Million Shares To Allocate For The Proceeds To Debt Repayment

The real estate market has suffered from the pandemic and high inflation, especially in China. Sales have fallen but costs have not disappeared, which is why real estate developers are doing their best to cover debts.

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In this article:

• The car market
• Real estate sector in China
• The demand for bonds
• What to invest in?

The car market

The car market is constantly changing from a slow transition from combustion cars to electric cars, and the type of trade is changing from traditional to online. There are challenges ahead for sellers and products, and the sooner they seize the opportunity, the better.

Consumers are increasingly frustrated with high prices. New car prices have hit an all-time high due to parts shortages and high demand for cars, especially for Americans who have moved to suburban areas during the Covid-19 pandemic and need their personal vehicles as their primary mode of transportation.

Is the car dealership on its way out? Watch the video to learn how these companies are taking over the auto dealership industry. https://t.co/OHiXPfWUPW pic.twitter.com/Nv3JPoV2aq

— CNBC (@CNBC) March 1, 2023

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Real estate sector in China

The real estate sector in China has been facing a serious liquidity crisis since mid-2021, with many developers defaulting or delaying debt repayments. Developer companies are trying to solve this problem.

China Vanke Co Ltd is seeking to raise approximately USD 500 million through a new equity offering in Hong Kong. The state-backed developer Vanke is selling 300 million shares, the company plans to allocate 60% of the proceeds to debt repayment and the rest to supplement working capital.

Property developer China Vanke to raise $500 mln via share placement - term sheet https://t.co/gtwqIChl45 pic.twitter.com/oaA5jczVP7

— Reuters Business (@ReutersBiz) March 1, 2023

The demand for bonds

After a decade of near-zero interest rates around the world, interest rates have risen as central banks scramble to contain inflation, hitting markets as a result. However, amid signs that inflation is coming down and interest rate hikes may be slowing, the bond market could be the main beneficiary.

In light of the slowdown in economic growth, markets are betting that central banks will back off from raising interest rates as the risk of a recession mounts. This direction strengthens the demand for bonds, which are perceived as safe assets. Overall, the prospect of a slowdown in interest rate hikes could mean good news for the Developed Markets bond markets, which are expected to see further positive returns in 2023.

Global bonds surged 4.1% to start the year, their best performance in over two decades. But the tightening cycle is not over yet, so will the bond market rebound last? https://t.co/TY5CqLlDn9 pic.twitter.com/tqofW9EymP

— J.P. Morgan (@jpmorgan) February 28, 2023

What to invest in?

Brutal market performance in 2022 has reignited the narrative that active funds can handle market turmoil better than passive peers. But a year is not enough to draw conclusions.

Investors have a hard nut to crack when it comes to what to invest in.

Should investors turn to active funds?

Despite an uptick in success by U.S. stock-pickers, the latest evidence debunks the claim that active funds better navigate market turmoil than their passive peers.

Here's our latest Active/Passive Barometer report: https://t.co/XNMFQLNqhl

— Morningstar, Inc. (@MorningstarInc) February 28, 2023