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Listed Chinese companies suffer first profit drop since 2008
SHANGHAI -- Publicly traded companies in China saw net profit dip in 2015 for the first time since the global financial crisis hit in 2008, as a wide range of businesses from resources to home appliances struggled amid the country's economic slowdown.
The combined net profit for 2,862 listed companies fell 1.1% from 2014 to 2.47 trillion yuan ($382 billion), based on comparable data from financial information firm Shanghai DZH. Aggregate sales declined 2.1% to 29.47 trillion yuan. Publicly traded corporations in China are required to publish results within four months of their fiscal year-end in December.
Excluding banks and brokerages, net profit dropped 15.7% to 922.2 billion yuan. These figures reflect factors such as retroactive changes made by companies on their earnings and do not match data compiled by government-affiliated publications in the past.
Steel and other resource-related corporations continued to struggle in 2015, burdened by excess staff and output capacity. Steel titans such as Baoshan Iron & Steel all saw net losses or significant profit declines. Chongqing Iron & Steel ended up with a net loss of nearly 6 billion yuan. With the company's capital ratio fallen to just slightly over 10%, the Chongqing municipal government has been forced to consider rehabilitation measures.
Reserve Bank of Australia Governor Glenn Stevens and his board lowered the cash rate by 25 basis points to 1.75 percent Tuesday, a move predicted by just 12 of 27 economists surveyed by Bloomberg. The rest had seen no change. Data last week showed quarterly deflation in the consumer price index and the weakest annual pace on record for core inflation -- which the RBA aims to keep between 2 percent and 3 percent on average.
A Moody's team of analysts led by Erick Rodrigues said in a report that the number of companies facing high funding risks rose to 33 percent last year, from 28 percent in 2014. More debt is maturing than companies can generate cash to make payments, while banks are refinancing fewer loans, the analysts said.
China Presses Economists to Brighten Their Outlooks
Chinese authorities are training their sights on a new set of targets: economists, analysts and business reporters with gloomy views on China’s economy. Securities regulators, media censors and other government officials have issued verbal warnings to commentators whose public remarks on the economy are out of step with the government’s upbeat statements, according to government officials and economic commentators with knowledge of the matter. Lin Caiyi, chief economist at Guotai Junan Securities Co. 601211 1.91 % who has been outspoken about rising corporate debt, a glut of housing and the weakening Chinese currency, received a warning in recent weeks, these people said. It was her second. The first came from the securities regulator, and the later one, these people said, from her state-owned firm’s compliance department, which instructed her to avoid making “overly bearish” […]