Chinese banks have agreed to lend US$17.2 billion to the property industry.

Chinese banks have agreed to provide loans worth $17.2 billion to developers in an effort to increase liquidity in the country's property sector. However, it has been reported that some of the funding is in the form of adjusting repayment plans or extending existing loans, rather than providing new credit facilities. The Chinese government has been making efforts to revive the property sector, which was severely affected by the debt crisis and to boost consumer confidence. In January, Chinese banks released a white list that allows local governments to recommend housing projects for funding support. So far, 214 localities across China have set up mechanisms to recommend over 5,300 projects to banks. Construction loans worth 29.4 billion yuan have been disbursed to finance 162 projects in 57 cities, with loans worth 123.6 billion yuan approved. However, it is uncertain whether adjusting existing loans will alleviate the liquidity pressures faced by Chinese property developers.

https://internasional.kontan.co.id/news/perbankan-china-setuju-kuncurkan-kredit-us-172-miliar-ke-industri-properti
 

Rising Default Risk in Emerging Market Debt

The World Bank is recommending that developing countries speed up their economic growth to prevent debt repayment problems caused by increasing interest costs. In January, developing countries issued a record-breaking $47 billion worth of global bonds, with emerging countries such as Saudi Arabia, Mexico, and Romania also issuing bonds. However, some high-risk emerging markets also issued bonds with high interest rates, raising concerns about their ability to make timely repayments. For instance, Kenya issued a global bond with an interest rate exceeding 10%, which experts believe will be difficult to repay. According to the Institute of International Finance, global debt levels are projected to reach a record $313 trillion by 2023, with the debt-to-GDP ratio of developing countries already at its peak. This ratio indicates a country's ability to repay debt and is expected to increase further in the future.

https://internasional.kontan.co.id/news/risiko-gagal-bayar-utang-negara-berkembang-naik

Japan's stock market has reached its highest peak since 1989.

On Thursday, Japanese stocks reached record highs, surpassing levels last seen in 1989 during the country's economic bubble. This surge was driven by attractively valued stocks and corporate reforms that caught the attention of foreign investors seeking an alternative to the struggling Chinese market. The Nikkei stock average reached 39,156.97 points, surpassing the previous intraday peak of 38,957.44 points recorded in 1989. It took 34 years to achieve this milestone, which is longer than the recovery time needed by Wall Street after the 1929 crash and Great Depression. Market analysts in Tokyo view this as the arrival of a new era and a sign that deflation has been overcome. The Nikkei index has risen by almost 17% this year and 28% in 2023, making it the best-performing major Asian market.

https://internasional.kontan.co.id/news/bursa-jepang-capai-puncak-rekor-tertinggi-sejak-1989