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takuyakjp · 4 days ago

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The average purchase of daily necessities during July 7-13 was 911 rubles, a decrease of 28 rubles (3.1%) from the previous week. Compared to the same period last year, purchases increased by 62 rubles, or 7.3%.

Corporate Bankruptcies. In the April-June period, 1,580 bankruptcy cases were initiated, down 30.4% y/y; for the six-month period, 3,208 cases were initiated, down 26.5% y/y. The courts are working diligently on debt restructuring, as evidenced by a record 675 debt restructuring plan approvals in the second quarter of 2025. Over the six-month period, the Court approved 1,152 debt restructuring plans, 2.3 times the number approved during the same period in 2024.

※Debt restructuring is an effective tool if future growth and profitability are expected. Choosing simply by way of avoiding bankruptcy can lead to future risks and requires prudence. Risk Factors. Debt restructuring is a temporary bailout, and unless underlying economic and financial structure issues are resolved, the company may face debt problems again in the future. If debt restructuring is inadequate or if a company's profitability does not recover after restructuring, it may lead to bankruptcy or a reduction in the size of the business, which could lead to stagnation in employment and production activities. Debt restructuring may temporarily reduce the repayment burden, which may reduce incentives for reform and delay necessary structural reforms. In the event of default, there is a risk of loss of credit and difficulty in obtaining new financing. If the debt problem worsens, credit may contract and economic activity may be braked as financial institutions become reluctant to lend.

According to Fedresurs, in the second quarter of 2025, the number of individual judicial bankruptcies increased by 36.5% year-on-year to 138.9 thousand cases. The increase during this half-year period was 35.7% compared to the first half of 2024. It is noted that the number of entrepreneurs initiating their own bankruptcy in the second quarter increased by 17% compared to last year's data. The share of creditors applying for registration of debtors' financial insolvency status is also increasing: the growth from 66 to 68%.

In Russia, the volume of overdue consumer loans has exceeded Br1.5 trillion, the highest level since 2019. Over the past year, the number of bad debts has increased by 400 billion rubles, which is 5.7% of total retail loans. Director General of the United Credit Bureau Mikhail Aleksin confirmed the worsening situation with the repayment of debts. He noted that the main wave of delinquencies occurred in the first months of 2025. In the credit card segment, the number of customers with overdue payments increased by 70-90% compared to the second half of 2024. Experts warn that the growth of overdue debt was expected for the banking sector. The high cost of borrowing is one of the main reasons for this. Even with the decline in the volume of new loans, monthly payments remain high, which reduces the solvency of citizens against the backdrop of inflation and rising prices. Also, many current delinquencies are formed at the expense of clients with high debt load, who initially did not have sufficient resources to service loans. Even strict measures to assess solvency cannot completely eliminate the risk of default.

Other.

Conditions in Russia's Coal Industry Continue to Deteriorate, with 51 Companies Now Closed or on the Verge of Closure - Ministry of Energy.

The Russian pulp and paper and wood processing industry is facing a systemic crisis. According to the industry association, in 2024, compared to 2021, timber harvesting will decrease by 13%, production of sawn timber - by 11%, plywood - by 23%, pulp - by 3%. The industry asks the Ministry of Industry and Trade to create an operational headquarters and hold an emergency meeting with the participation of the head of the ministry. Segezha Group and ULK have already restructured loans in 2023-2024 due to falling volumes and prices. In 2025, the situation has only worsened: the enterprises are becoming unprofitable, some may be shut down. Lumber prices are falling, and there are no sales for wood chips, pellets and other products.

The volume of cargo transportation on the Russian Railways network in 1H 2025 decreased by 6.6% YoY to 613.5 mln tons - Interfax Domestic shipments were 9.5% lower in this period - 355.6 mln tons. In 1H 2025, exports via the Russian Railways network decreased by 2.5% YoY to 203 mln tons, transportation via ports decreased by 1.8% to 155.9 mln tons and via border crossings by 4.7% to 47.1 mln tons.

From July 2024 to June 2025, 458,727 apartments in new buildings with an area of 21.9 million square meters were sold in Russia. This is 38.7% less in lots and 37.2% less in meters compared to the previous year, according to Dom.RF. Similar data is given by Cian - minus 39% of transactions to 477,000.

Trade with Russia is also declining: at the end of the first half of 2025, exports from China to Russia fell by 8.4%, imports by 9.6%, and total trade turnover fell by 9.1%. The reasons are oversaturation of the Russian market, the slowdown of the Russian economy and a decline in logistics activity. Thus, sea freight from China to Russia fell by 17%, railroad tariffs - by 13%.

According to data from the Ministry of Finance, oil and gas revenues fell 33.7% y/y in the single month of June, compared to 16.9% y/y in the January-June period. To achieve the revenue plan, economists at “Spydell_finance” noted that which will require collecting 17.3 trillion rubles in non-oil and gas revenues. The budget has not yet felt the negative impact of market conditions, as the decline in oil and gas revenues will have a delayed impact on tax revenues, but this will appear later. The budget deficit is projected to exceed the new plan by RUB 1 trillion by the end of the year, and the final size of the budget deficit by the end of the year is expected to be about RUB 4.5-4.8 trillion. The 2025 budget law provides for a deficit of up to 3.8 trillion rubles (1.7% of GDP). According to the Ministry of Finance, it has already reached 1.7% of GDP (3.7 trillion rubles in absolute terms) from January to June.

For the whole of 2024, the volume of corporate bond placements amounted to about ₽5.8 trillion, and since the beginning of 2025 the figure has already reached ₽3.7 trillion, said Head of the Sales Division of the bond Market Department of Mosbirzhi.

※Corporate bonds are risky and prone to default and other unforeseen events. Small and medium enterprises in particular are unstable . Corporate bonds are a type of debt, and the principal and interest must eventually be repaid. Issuing a large number of corporate bonds may put pressure on a company's finances in the future. In particular, if business performance deteriorates, the risk of difficulty in repayment increases. Issuing corporate bonds involves costs such as fees and registration fees. Costs may be greater for large or multiple issues. In the case of convertible bonds, if a large number of convertible bonds are converted into shares, the shareholding ratio of existing shareholders may decrease and the value of their shares may be diluted. In addition, some investors may become large shareholders holding large amounts of shares. The emergence of a large shareholder may affect management. Corporate bonds are issued based on the creditworthiness of the issuing company. If business conditions deteriorate, there is an increased risk of default on interest and principal payments.

This means that companies are using corporate bonds and P2P loans instead of bank loans because the banks are on the defens. This is risky and has a high probability of becoming non-performing given that it is being used to pay for the company's operating expenses.

In the first four months of this year, delinquent debts of private business owners increased by 38%. As of May 1, 2025, Russian business owners had failed to repay 115.3 billion rubles of debt. This is twice as much as in May of last year and a 34% increase compared to January of this year. According to a report released by the Russian Statistical Office at the end of June, the amount of unpaid wages in Russia at the end of May 2025 was 1,662.3 million rubles, an increase of 180.4 million rubles (12.2%) from the previous month. compared to May 2024. From January to June, the number of new bankruptcy cases of companies engaged in real estate management and maintenance amounted to 87 cases, which is three times less than in the same period last year. Experts note that if a company is recognized as financially insolvent, its assets significantly decrease in value. It is often problematic to sell such objects at auctions. Therefore, banks and other players in the sector prefer to restructure debts, given that many of the developers apply for state support. As an alternative to bankruptcy, postponement of payments, capitalization of interest and amicable agreements are considered. On the other hand. According to the Central Bank, the share of overdue debt on investment platforms in the first quarter of 2025 amounted to 15.3% (against 9.9% a year earlier). In previous years, according to market participants, this figure did not exceed 10%. According to Russian” P2P” Companies, the volume of defaults has certainly increased. “As part of our ‘risk-free’ product, we buy back defaults incurred by our investor clients,” points out. In particular, in May the volume of redemption amounted to 22 mln rubles.

The Accounts Chamber noted a sharp increase in the volume of overdue receivables in the execution of the federal budget. Obligations of government contractors have almost doubled. The main reasons for this are the wider advance payment of government orders (up to 100% of the contract amount) and an increase in the terms of their fulfillment, which on average increased by two years. In addition, companies that have received subsidies do not always report on the spending of budget funds, a representative of the Accounts Chamber of the Russian Federation told Vedomosti.According to the control agency’s conclusion on the government’s report for 2024, published on July 7, 2025, the amount of overdue debt on advances has almost doubled: as of January 1, 2025, it amounted to ₽1.34 trillion against ₽634.9 billion a year earlier. About half of this amount (₽600 billion or 44.7%) can be repaid within a year, and another ₽443.1 billion (33.3%) - within three years.The total amount of receivables on federal budget expenditures increased by more than a third over the year - by ₽4.4 trillion, amounting to ₽16.9 trillion, which is equivalent to 42.1% of all cash expenditures of the budget. The bulk of this amount (₽16.2 trillion) is made up of advance payments under contracts. At the same time, 65.4% of these funds are used for public procurement of goods, services and works. In general, 155 organizations working under government contracts account for almost 89% of the total debt.

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takuyakjp · 11 days ago

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China's real estate market fundamentals remain relatively fragile, with related demand continuing at a low pace. Since the second quarter, real estate market sentiment has fallen again, with a marginal slowdown in real estate sales. As of mid-to-late June, the sales area of commercial properties in 30 large and medium-sized cities fell by more than 10% month-on-month, falling for three consecutive months. Risks in the real estate market remain, mainly reflected in the tight liquidity of real estate developers.As the real estate market as a whole remained in a contraction, the annualized sales capacity of most developers continued to decline, and the decrease in operating cash flow resulted in cash flow pressure remaining at a high-pressure level, with half of the listed real estate companies having a cash-to-short-debt ratio of less than 1. The vast majority of developers in the domestic head of the top 20 real estate enterprises, its annualized sales are still in the process of downward movement, liquidity pressure is still the most important factor dragging down real estate investment. The second half of the real estate enterprises debt service pressure is still not small, real estate enterprises bonds due to repay the scale of about 175.6 billion yuan, more than in the first half of about 17.8 billion yuan, more than the same period last year, about 27.4 billion yuan; debt service accounted for the scale of the overall in place of the funds of 20%, which means that the real estate enterprises are still required to resolve the pressure of debt servicing through a variety of financing channels to try to expand the willingness to invest in the weaker. As housing prices remain low, real estate developers are also facing the risk of stock asset impairment, and the scale of asset impairment of listed real estate enterprises is expected to exceed 100 billion yuan for the whole year. In the second half of the year, some real estate enterprises with operational difficulties may still choose to take the initiative to cut their balance sheets; even so, there is still no way to ensure that individual entities do not experience a minefield situation. The downturn in the real estate market will be a drag on other important areas. The continued decline in land transfer revenues will drag down local government fund expenditures and limit local infrastructure construction capacity. The downturn in real estate construction is the main factor contributing to the current downturn in industrial enterprise profits and the continued low price level of industrial goods, with commodity prices such as rebar, cement and coal generally falling to multi-year lows. Constrained by all these factors, real estate investment in the second half of this year is likely to remain a drag on economic growth, with up and down movements of -10%. The share of real estate investment in nominal GDP is projected to fall further to 6.4% in 2025, the last time it was below this level dating back to the 2008 global financial crisis. For the year as a whole, the contribution of real estate investment to nominal GDP declines by 19%, dragging down nominal GDP growth by 0.75 percentage points and widening the drag on nominal GDP by about 0.2 percentage points from 2023. Among them, real estate investment dragged down the growth rate of fixed asset investment by 2 percentage points, dragging down the growth rate of total retail sales of consumer goods by 2.1 percentage points, for the fourth consecutive year of real estate investment fell sharply is the most important factor dragging down the growth of China's economy and the source of risk.

Private investment may be weaker. Since 2023, China's private fixed asset investment growth rate has continued to be less than 1%, much lower than the growth rate of fixed asset investment in the same period, half of which was negative growth; private investment in the cumulative period from January to May this year was 0.0% year-on-year（The average recovery period for accounts receivable of private enterprises above designated size is more than 70 days, which is higher than the average level and at a historically high level, indicating that the investment capacity of private enterprises is weak.） The low growth rate of private investment is the result of multiple structural contradictions. First, the real estate market downturn is the most important factor dragging down private investment. During the year, the growth rate of private fixed-asset investment was zero, and after deducting real estate investment, private investment grew by 5.8% year-on-year.Private capital in the real estate market accounted for the vast majority of investment, building materials, home furnishings and other real estate upstream and downstream private enterprises accounted for the same high proportion of real estate dragged by the greater impact. Secondly, the contraction of internal and external demand has brought about a reduction in orders, coupled with rising operating costs such as personnel and energy, the profitability of private enterprises has narrowed, and the momentum for expanding investment has weakened. Third, the impact of market access restrictions and enhanced industry regulation.Although policies have been adjusted accordingly to encourage the participation of private capital in social investment, the proportion of private enterprises in monopolized industries and some areas of public service remains low. Enhanced regulation in areas such as the platform economy, influenced by individual incidents, has also affected investment incentives to some extent. Fourth, the private economy business environment deficiencies and some local governments owed private enterprises accounts and other issues superimposed on the overall private enterprises poor sales returns, investment confidence is not enough. Fifth is 『China's military activities.』 In the second half of the year, due to the uncertainty of external demand is still serious, the private enterprise capital cycle problem is difficult to be solved in the short term, and the continued decline in real estate investment led to the overall private enterprise investment return is expected to continue to decline, it is expected that the annual growth rate of private investment is still at a low level.

Consumption growth may face a “policy cliff”. Due to the front-loading of domestic demand expansion policies, the balance available for the current year under the policy support plan formulated at the beginning of the year's “two sessions” may face difficulties and problems in the second half of the year, such as insufficient resources and lack of follow-up.In the second half of the year, the amount of special funds for trade-in was 138 billion yuan, 24 billion yuan less than in the first half of the year, which may not be as effective as in the first half of the year in driving the total consumption of related durable goods. In general public budget expenditure, some areas linked to service consumption, such as education, culture and tourism, social security and other aspects of the first half of the expenditure growth rate has been higher than the budget growth target set at the beginning of the year, the second half of the expenditure space is limited. From the point of view of the overall residents' consumption tendency, affected by the decline in real estate prices and total income growth is expected to slow down, the current residents' consumption willingness to conservative, and part of the basic commodities consumption demand by the “trade-in” and other policies ‘Crowding Out’ or “over draw”, the policy stimulus effect may diminish at the margin. “over draw”, the policy stimulus effect may be marginal diminishing. Subsequently, if there is no more incremental policy support, the second half of the difficulty of boosting consumption will rise. And real estate sales downturn, the residents of the related goods consumption expenditure reduction, and real estate closely related products, such as construction and decoration materials category, cultural and office supplies category sales outlook for the second half of the year may be weaker.

The pressure on local government finances and debt remains not low. This pressure on local governments is mainly focused on three aspects: first, the continued contraction of land finance revenues and the limited growth of local comprehensive financial resources; local general financial revenues from January to May were slightly better than those of the same period last year, and the cumulative revenue from state-owned land concessions declined by 11.9% year-on-year. The scale of payments from the central government to localities for the year reached a record high of 11.6 trillion yuan. Local financial dependence on central transfer payments continue to rise, to a certain extent, will restrict the growth of infrastructure investment space. Secondly, the pressure of local government debt payment is still high, and the funding arrangement or part of the debt has excessively squeezed the project investment space. This year, the scale of local government debt has exceeded 51 trillion yuan, the debt ratio remained above 165%, the annual interest payment expenditure of more than 1.3 trillion yuan. The ability to issue government bonds in the central and western regions is still low, and liquidity risk remains. Generally speaking, credit indicators are ahead of economic data and have a certain weathervane effect. credit growth has fallen back to 6.7% in May, and the scale of new credit, especially corporate medium- and long-term credit, is significantly lower than the level of the same period in the past two years. Although the large-scale issuance of government bonds and the arrangement of the bonds on the credit expansion to form a certain squeeze effect, but the credit demand of real enterprises, especially medium- and long-term credit demand is obviously insufficient, at the same time, small and medium-sized micro-enterprises financing difficulties and financing problems have not yet been adequately resolved.

China's real estate market downturn intensified in June as new home prices fell 0.3% from a year earlier and second-hand homes and rents continued to decline. Sales area and sales of commercial properties fell 5.5% and 10.8% year-on-year, with real estate companies strapped for cash, investment slumping 12.9%, and inventory backlogs severe. Policies have eased restrictions on home purchases and lowered interest rates, but demand has peaked as a result of declining urbanization and birth rates, and the effect of the bailout has been limited.

Calculated on the basis of data released by the National Bureau of Statistics , new home prices in 70 major cities fell by 0.3% q-o-q in June, continuing a weakening trend that has persisted since May 2023 and widening by 0.1 percentage points from the 0.2% q-o-q decline in prices in May. In June, 56 cities reported year-over-year declines in new home prices, up three from 53 in May. Compared with a year ago, new home prices fell 3.7% in June. Of those 70 cities, 67 reported annual price declines, the same as in May, calculations show. In June, second-hand residential sales prices in first-tier cities fell by 0.7% on a year-on-year basis, the same rate of decline as in the previous month. Sales prices of second-hand homes in second- and third-tier cities both fell by 0.6% on a year-on-year basis, with the rate of decline widening by 0.1 percentage points. Year-on-year, sales prices of second-hand residential properties fell by 3.0% in first-tier cities, with the rate of decline widening by 0.3 percentage points from the previous month. In second- and third-tier cities, they fell by 5.8% and 6.7% year-on-year, with the rate of decline narrowing by 0.3 and 0.2 percentage points respectively.

According to data released by the China Index Research Institute, the average residential rent in the 50 cities in June was RMB 35.0 per square meter per month, down 0.27% sequentially and 3.71% year-on-year.

Data from the National Bureau of Statistics showed that new home sales in the first half of the year were 458.51 million square meters, down 3.5% year-on-year, which can be extrapolated to 105.36 million square meters in June, down 5.5% year-on-year. Sales of commercial real estate in the first half of the year amounted to 4,424.1 billion yuan, down 5.5% in the first half of the year after a 3.8% drop from January to May. It can be extrapolated that new home sales in June were 1015 billion yuan, a sharp decline of 10.8 percent year-on-year.

According to the sales data of TOP100 real estate enterprises released by China Index Research Institute, in the first half of 2025, their sales dropped by 11.8% year-on-year. In the single month of June, the year-on-year sales decline of TOP100 real estate enterprises widened to 18.5%.

From the perspective of residential lending, household sector demand for commercial housing has also shrunk sharply. Data from the central bank showed that in the first half of 2025, new loans to the household sector amounted to 1,170.1 billion yuan, down sharply by 20.5% year-on-year. Data from the National Bureau of Statistics showed that personal mortgage loans in the first half of the year amounted to 684.7 billion yuan, a year-on-year decline of 11.4%, including 120.2 billion yuan in June, a decline of 22.9%. With sales continuing to decline on the one hand, and the need to continue to invest in the construction of buildings that are still unfinished and to repay debt as it comes due on the other, financially strapped real estate developers cut back on their investments. New construction starts in the first half of the year fell by 20.0% year-on-year. The downturn in the real estate market continues to be a drag on overall growth, with real estate investment falling 11.2% year-on-year in the first half of the year after sliding 10.7% from January to May. It can therefore be extrapolated to have fallen 12.9% in June. A deterioration from the previous month.

The round of real estate major adjustment that began in 2021, home prices across China fell by an average of 30%-40%, and some cities even fell by 50%-60%, with home prices generally falling back to 2016-2017. In the five-year period from 2018-2022, 108 million new and used homes were sold in China.And as of the end of 2024, there were 494 million family households in China. That is to say, this round of real estate adjustment, 22% of China's households totaling 100 million households were deeply trapped. In 2021, the total market value of China's housing is about 450 trillion yuan, according to the minimum range of housing prices fell 30% calculation, this round of bear market, China's housing market value evaporated at least 135 trillion, equivalent to China's loss of 240,000 per household.2024 China's annual GDP 134.9 trillion. This is equivalent to evaporating an entire year's GDP.

On July 14, Vanke Enterprise Co Ltd (Vanke A, 000002.SZ) released its 2025 half-year performance forecast. The data show that in the first half of the year, Vanke's net profit attributable to shareholders of listed companies is shown to be a loss of 10 billion yuan to 12 billion yuan, and the net profit after deducting non-recurring gains and losses is a loss of 9.5 billion yuan to 11.5 billion yuan. Other than that, according to the announcement released by Vanke, during the year, Shenzhen Metro Group has accumulated over 21.8 billion yuan of loans to Vanke. According to the 2024 annual audit report, within the scope of the consolidated statement of 2024, Shenzhen Railway Group incurred a loss of 33.461 billion yuan, as of the end of 2023, the group's net assets were 316.431 billion yuan, and the loss incurred within the scope of the consolidated statement of 2024, accounting for the proportion of net assets at the end of 2023, amounted to 10.46%, amounted to 10.46%. At the beginning of 2025, Vanke's announcement showed that Shenzhen Metro Group increased its shareholding to 42.5% through directional issuance and debt swap, while in 2024 Vanke first incurred the largest loss (about RMB 49.778 billion) in the 34 years since it was listed, resulting in the recognition of an investment loss on Shenzhen Metro's long-term equity investment in the associate. This factor directly led to Shenzhen Metro's loss of RMB 33.46 billion in that year, accounting for 10.46% of its net assets in that year. As a result, Shenzhen Metro, which was the only profitable metro sector in China as of 2024, is now in the red. This indicates that China's subway program is at risk in terms of profitability at this time.

2025年全国新增专项债限额达4.4万亿元，同比增长12.8%，创5年来最大增幅。根据Wind数据，上半年新增地方政府专项债总发行量为21606.53亿元，新增专项债发行进度接近50%。与2024年同期相比，发行规模增长约44.7%。截至2025年6月22日，全国共有26个省市公示了专项债收储项目，累计覆盖4259块宗地，资金规模（含拟定）约为4776.48亿元。其中广东省公示项目294宗地块，涉及金额超614亿元；重庆市公示项目365宗地块，涉及金额超500亿元；安徽公示项目311宗地块，涉及金额超450亿元。从已公示的项目情况看，拟收储土地中住宅用地占比超60%，且多为2020——2024年间出让未开发地块。此外，收储土地主要归属地方国企。根据Wind数据，新增土储专项债发行21只，发行总额达1708亿元，占专项债总规模的7.9%。从发行节奏看，二季度以来月度发行量呈稳步上升态势：4月份发行190.38亿元，5月份发行482.15亿元，6月份发行695.83亿元；上海、浙江、广东、福建等东部省份通过特殊新增专项债放量发行。

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