‘ February 24, 2016
It’s about to become clear just how much pain the recent devaluation of the yuan caused to Chinese companies. As earnings season accelerates in Hong Kong, Shanghai and Shenzhen, investors can brace themselves for larger losses from foreign exchange and rising interest expenses. That’s just the beginning.
With the yuan having reversed course from steady appreciation to rapid devaluation, companies such as developer Shimao are griping about rising interest costs and trying to replace foreign debt. Any such move will come too late to save investors from sharing the pain. There are more than 200 publicly traded Chinese companies which have issued bonds in either U. S. or Hong Kong dollars and publish financial reports in yuan. All added, they have more than $364 billion in syndicated loans and bonds in the two currencies.
This post was published at David Stockmans Contra Corner By Christopher Langner Bloomberg.
Recent Comments