Seeing red in China
Whilst the colour red in China means prosperity, to the accountant/ analyst in the west, it's the opposite.
So just as Chinese President Xi was cutting the ribbon at the G-20 Summit in Hangzhou, the final company profit figures for the first half year were announced for Chinese companies listed on China's two main share-markets (Shanghai and Shenzhen). And the ink was red.
Profits fell 4.1%, the worst outcome since 2009. The slowest economic growth in decades is beginning to hurt corporate China.
Profits of oil companies fell 63%, an expected result: roughly mirroring the downturn of major global oil companies. Surprisingly, companies in the financial services industry were badly hit, with profits falling 8%.
Unlike the US, where Wall Street has continued to rise in the face of falling profits, each of the two major Chinese exchanges had very poor first halves: Shanghai A-Share* index fell 17.2% and Shenzen A-Share index fell 14.5%.
But somehow W&D thinks that President Xi's wealth would be intact. Just a guess.
* A-shares are shares of mainland China-based companies and were historically only available for purchase by mainland citizens since foreign investment was restricted. Since 2003, select foreign institutions are allowed to purchase them through a program called the Qualified Foreign Institutional Investor (QFII) system.
A-shares are defined in opposition to B-shares. B-shares are quoted in foreign currencies (such as the U.S. dollar) and are open to both domestic and foreign investment, although they are difficult to access for most Chinese investors, most notably for currency exchange reasons. A-shares, on the other hand, are only quoted in Chinese renminbi.