Local and International Headlines

Chinese Real Estate Giant and Central Banks at the Center of Stock Exchanges

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On the European stock exchanges, attention on Monday will be focused on the Chinese real estate developer China Evergrande Group, which is in danger of collapse.

 

That is also a problem for hundreds of financial institutions that have loans outstanding with the group, which threatens a domino effect and possibly a new crisis as a result.

Later in the week, investors will mainly focus on central bank interest rate decisions. On Wednesday, the Bank of Japan and the US Federal Reserve will announce the results of their policy meetings. In addition, the interest rate decisions of the Bank of England and the Turkish central bank are scheduled for Thursday.

Based on the opening indicators, the AEX index on Beursplein 5 seems to be 0.9 percent lower in the new week. The other European stock markets are also expected to open in the red. In Frankfurt, the DAX per Monday does not consist of 30 but 40 companies. It is the most significant change to the leading German index in its 33-year history.

In the Asian region, stock markets in Japan, China and South Korea were closed on Monday. Hong Kong was traded, and the Hang Seng index lost 3 percent in the meantime. Evergrande plunged 14 percent to its lowest level in 11 years. Investors were shocked by the news that the faltering Chinese real estate developer wants to repay its creditors with discounted real estate instead of cash.

Unilever is in the spotlight on Damrak. According to Het Financieele Dagblad, the food group has become a target for activist investors who can aim to split the company. The reason is that the price of the maker of Calvé peanut butter and Dove soap lags behind competitors such as Nestlé and Danone.

ASMI’s stock may move on a change in advice. Analysts at the British bank Barclays reduced their recommendation for the chip supplier. In Frankfurt, the focus is on Lufthansa. The German aviation group wants to raise more than 2 billion euros with the issuance of shares to repay the government support it received.

The euro was worth $1.1713, against $1.1733 on Friday. The price of a barrel of US oil fell 0.7 percent to $71.46. Brent oil cost 0.5 percent less at $ 74.93 a barrel.

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