16 July 2019 FT — Articles to Read

16 July 2019


Question: According to MSN: Money, what is the composite percentages that contribute to credit score?


China grows at slowest pace since 1992 as trade war dents exports – Pg. 1

  • GDP grew at 6.2% year-on-year…
  • Tax cuts enacted earlier in the year helped boost the domestic economy, offsetting the problems with trade,…
  • Most of the weakness in second-quarter GDP came from exprots…


Surge in emerging market debt amplifies global strains – Pg. 2

  • Debt in the developing world has risen to an all-time high, adding to strains on a global economy flagging under the weight of rising trade protectionism and shifting supply chains
  • Emerging economies had the highest-ever level of debt at the end of the first quarter, in dollar terms and as a share of their GDP…
  • The US Federal Reserved changed its outlook and a string of emerging market central banks cut interest rates; dollar-based funding costs have fallen in anticipation of the Fed’s next move
  • The biggest contributor has been China, where companies owed more than 155% of GDP, up from about 100% of GDP two decades ago


Fed signal on interest rate cuts fails to weaken dollar – Pg. 3

  • In May, the US Treasury added Ireland, Italy and Germany to its currency manipulator watchlist, placing them alongside China, Vietnam and Singapore, even though they are part of the Eurozone and have no direct national control over monetary policy
  • The strong dollar is the result of the US outperforming other economies, while the fact that its interest rate is higher than most other developed nations helps trigger capital inflows


Buyback habit: Share repurchases have companies hooked – Pg. 11

  • Reducing the share count of a listed company improves its per-share earnings, one of the main metrics investors gauge when evaluating stocks. It also boosts the pay packets of managers rewarded by increasing EPS
  • Companies are tapping the debt markets to fund buybacks, spurred by persistently low interest rates


Foreign operators take on Chinese elderly care – Pg. 12

  • Lendlease joins a growing number of foreign aged-care operators targeting China, where the number of people over 60 reached 250m last year and is expected to surpass 300m by 2025. China is home to just 30,000 elderly care institutions
  • A falling birthrate means that by 2050 a quarter of China’s population is forecast to be over 65, a process that will challenge social norms in a society where care has typically been provided by family members
  • About 90% of Chinese seniors rely mainly on family support, 7% of residential community-based care services and 3% on nursing homes, …
  • Only 9% of China’s elderly care homes were profitable in 2015,…


Answer: 35% (Paying bills on time); 30% (Credit Utilization); 15% (Length of credit score); 10% (Number of new credit inquiries you have recently made) (Prof Note: The remaining 10% is credit mix)