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PBOC survey shows more want to save, than spend or invest

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While mainland China faced its worst wave of Covid-19 since the initial shock of the pandemic, a central bank survey found more Chinese wanted to save money than spend or invest it.

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BEIJING — Chinese consumers are becoming more cautious than they were near the start of the pandemic, according to a survey by the People’s Bank of China released Wednesday.

Instead of spending or investing their money, more Chinese people wanted to save in the first three months of 2022, findings from the quarterly survey showed.

Survey respondents who said they were more inclined to save in the first quarter rose to 54.7% — the most on record since the third quarter of 2002, according to data accessed through Wind Information.

In the last few weeks, the spread of the highly transmissible omicron variant in major economic areas like Shenzhen and Shanghai have disrupted business and daily life with lockdowns and quarantines.

As Covid-19 enters its third year, there are signs Chinese authorities are shifting their narrative away from maintaining such a stringent zero-Covid policy to “a more pragmatic approach,” Carlos Casanova, senior Asia economist at UBP, said Thursday on CNBC’s “Capital Connection.”

But he doesn’t expect those changes will take place until the second half of the year, Casanova said. His firm is cutting its second-quarter China GDP forecast, he said, without specifying a figure.

Although the central bank survey found that the share of respondents who wanted to spend money in the first quarter fell to 23.7%, that level was only the lowest in a year, data accessed through Wind showed. An even lower 22% had expressed interest in spending during the worst of the pandemic in the first quarter of 2020.

Education was the top category in which Chinese consumers planned to increase their spending over the next three months. The PBOC survey found that 28.9% expressed such an intent — up from 27.2% in the fourth quarter last year.

And despite the struggles of China’s real estate industry, the share of respondents planning to buy a house remained the same for both quarters, at 17.9%, the survey said.

Fewer interested in buying stocks

While planning to cut down on spending, Chinese consumers said they were not inclined to invest their money either.

The share of respondents wanting to invest fell to 21.6%, the lowest on record going back to the first quarter of 2009, according to Wind.

Appetite for stock investing was the lowest among the three investment categories listed, and the share of respondents wanting to buy stocks falling to 16.2% in the first quarter — down from 17.3% in the previous quarter, survey data showed.

The PBOC said its quarterly survey, conducted since 1999, covered 20,000 people with bank deposits across 50 large-, medium- and small-sized cities in the country.

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IMF hikes global growth forecast as inflation cools

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The IMF has revised its global economic outlook upwards.

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The International Monetary Fund on Monday revised upward its global growth projections for the year, but warned that higher interest rates and Russia’s invasion of Ukraine would likely still weigh on activity.

In its latest economic update, the institution said the global economy will grow 2.9% this year — which represents a 0.2 percentage point improvement from its previous forecast in October. However, it said that number would still mean a fall from an expansion of 3.4% in 2022.

It also revised its projection for 2024 down to 3.1%.

“Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research department at the IMF, said in a blog post.

The Fund turned more positive on the global economy due to better-than-expected domestic factors in several countries, such as the United States.

“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas said, also noting that inflationary pressures have come down.

Global outlook is better but don't get too optimistic, IMF chief warns at Davos

In addition, China announced the reopening of its economy after strict Covid-19 lockdowns, which is expected to contribute to higher global growth. A weaker U.S. dollar has also brightened the prospects for emerging countries that hold debt in foreign currency.

However, the picture isn’t totally positive. IMF Managing Director Kristalina Georgieva warned earlier this month that the economy was not as bad as some feared, “but less bad doesn’t quite yet mean good.”

“We have to be cautious,” she said during a CNBC-moderated panel at the World Economic Forum in Davos, Switzerland.

The IMF on Monday warned of several factors that could deteriorate the outlook in the coming months. These included the fact that China’s Covid reopening could stall; inflation could remain high; Russia’s invasion of Ukraine could shake energy and food costs even further; and markets could turn sour on worse-than-expected inflation prints.

IMF calculations say that about 84% of nations will face lower headline inflation this year compared to 2022, but they still forecast an annual average rate of 6.6% in 2023 and of 4.3% in 2024.

As such, the Washington, D.C.-based institution said one of the main policy priorities is that central banks keep addressing the surge in consumer prices.

“Clear central bank communication and appropriate reactions to shifts in the data will help keep inflation expectations anchored and lessen wage and price pressures,” the IMF said in its latest report.

“Central banks’ balance sheets will need to be unwound carefully, amid market liquidity risks,” it added.



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Credit Suisse see Apple beating the Street this week for a few reasons

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Most Adani shares continue losses; founder loses $28 billion in month

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Gautam Adani, chairperson of Indian conglomerate Adani Group, at the World Congress of Accountants in Mumbai on Nov. 19, 2022. Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to rank seventh on the Bloomberg’s Billionaire Index.

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Shares of most of Adani Group companies continued to see sharp losses for a third consecutive trading session as the company attempted to rebut short seller firm Hindenburg’s report, which accused the conglomerate of stock manipulation and an “accounting fraud scheme.”

Adani Enterprises erased earlier gains of up to 10% and last traded flat in Mumbai’s afternoon trade after the group published a lengthy response of over 400 pages to Hindenburg’s report over the weekend, saying that it will exercise its rights to “pursue remedies” to protect its investors “before all appropriate authorities.”

Adani Enterprises’ stock price remains more than 25% lower in the month to date, Refinitiv data showed. It proceeded with a secondary share sale worth $2.5 billion, which were overshadowed by a rout that wiped out a total of $48 billion as of last week’s close.

Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to seventh place on the Bloomberg’s Billionaire Index.

His net worth fell $27.9 billion year to date, the index showed. It peaked at $150 billion on Sept. 20, 2022, before falling to to $92.7 billion as of last week’s close, according to the index.

Despite small gains seen in Adani Enterprises, other affiliates of the Adani Group continued to plunge.

‘Attack on India’

Adani Group said Hindenburg’s allegations were a “calculated attack on India, independence, integrity and quality of Indian institutions, and growth story and ambition of India,” in the response it released over the weekend.

The group’s chief financial officer Jugeshinder Singh said in an interview with CNBC-TV18, an affiliate of CNBC, that the value of Adani Enterprises has not changed “simply because” of share price volatility, adding it instead lies in its “ability to incubate new businesses.”

He added that he is confident Adani Enterprises‘ follow-on public offering will be fully subscribed, calling Hindenburg’s report “simply a lie” and the timing of the report “malicious.”

Hindenburg on Monday morning described the group’s response “bloated” and claimed it “ignores every key allegation” against the conglomerate that it raised.

“Fraud cannot be obfuscated by nationalism of a bloated response that ignores every key allegation we raised,” the short seller titled its response to Adani Group.



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