Chinese firms lose their ability to keep the prices of their products and maintain profitability earlier
According to statistics, Mizuho Securities Asia manufacturing inflation in China in September fell by 3.6%, and a negative trend remains without stimulation at least until the second half of next year. The September decline was the seventh in a row and was the largest since October 2009. The decline in prices is caused by lower external demand while excess capacity.
According to the Statistical Office of the Chinese corporate profits of Chinese companies in August declined by 6.2%, which was the fifth decline in a row, which was also the largest in the last year. Data for September will be published on 27 October. The decline in profitability of firms is reflected in major stock indices in the country. Shanghai Composite this year so far lost 3%, and directed toward the third annual decline in a row.For comparison, the MSCI Asia Pacific Index this year attributed to assess the level of 7%.
Government Statistics for September showed signs of improvement in the overall economic situation. According to the historical experience of the business sector takes about 2 quarter than could reflect a general improvement in the results of companies.
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