Thursday, November 27, 2008

Chinese "Shocker" From Home Improvement Retailer Kingfisher

No major news but similar stories are popping up now on a daily basis and are a clear sign that something is brewing in China....... Add this story from the NYT to the mix and combine this with the following image ........ No wonder the Communist Party is very busy ( slashing rates & reserve requirements, stimulus plans, stop the YUAN appreciation, elimination or reducing export tariffs , etc ...... )

Die Meldung für sich genommen ist nicht sonderlich spektakulär. Da man aber momentan fast tagtäglich mit ähnlich lautenden Meldungen aus dem einstigen Hoffnungsträger konfrontiert wird, kann man es wohl als Zeichen sehen das sich irgendetwas ernsthaftes in China zusammenbraut...... Passend hierzu auch der sehr anschauliche Bericht der NYT. Wenn man die aktuelle Nachrichtenlage nun mit der nachfolgenden Illustration kombiniert....... Kein Wunder das die Kommunistische Partei sich in letzter Zeit hyperaktiv zeigt ( radikale Senkung der Zinssätze sowie der Mindestreservesätze, ein nicht gerade kleines Konjunkturpaket, Aussetzung der YUAN Aufwertung, Streichung oder Reduzierung von Exportzöllen usw.......... )

UPDATE: Chinese official warns on downturn via FT Alphaville

The downturn in the Chinese economy accelerated over the past month and could lead to high unemployment and social unrest, the country’s top economic planner warned on Thursday.

Nov. 27 (Bloomberg) -- Kingfisher Plc, Europe's largest home-improvement retailer, fell in London trading after reporting a wider loss and tumbling sales in China, one of the overseas markets it counts on as U.K. demand withers.

Slowing demand in China is ``likely to be weaker and last longer than previously anticipated,'' the London-based company said today, as fewer consumers buy new apartments and seek out homewares. The retailer, which reported third-quarter results today, said confidence was ``shaken'' in all its markets.

The Chinese unit reported a loss of 17 million pounds ($26 million) and sales fell 28.7 percent.

The Chinese market continued to deteriorate and new apartment sales were again significantly down. The property slowdown has particularly impacted &Q’s business as half its sales were generated from internal design and fit out of new apartments.
The Chinese loss is a ``shocker,'' offsets better-than- expected results in Europe and is ``forcing a reassessment of how major a restructuring could be required,'' Investec analyst David Jeary wrote in a note. He rates Kingfisher ``sell.''

The retailer was the first international home-improvement chain to enter China, where it has about 60 stores
. Revenue there had been falling since last year after the government raised home-deposit requirements to curb speculation. Since July, China has had to shift its focus from containing inflation to sustaining growth as the global economic slowdown spreads.

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Blogger jmf said...

If you only read one thing on China this fall …

Brad Setser on China

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