Monday September 7 Housing and Economic stories

TOP STORIES:

Angry investors capture head of China metals exchange - (www.cnbc.com)  The head of a Chinese exchange that trades minor metals was captured by angry investors in a dawn raid and turned over to Shanghai police, as the investors attempted to force the authorities to investigate why their funds have been frozen. Investors have been protesting for weeks after the Fanya Metals Exchange in July ceased making payments on financial investment products. The exchange, based in the southwestern city of Kunming, bought and stockpiled minor metals such as indium and bismuth, while also offering high interest, highly-liquid investment products from its offices in Shanghai and its financing branch in Kunming. Troubles at the exchange are one of many factors contributing to turbulence in China's financial markets, as a slowing economy exposes the weaknesses of the country's debt-driven growth.

Commodities Slide to Lowest in 16 Years as Oil Extends Collapse - (www.bloomberg.com) A measure of returns from commodities sank to its lowest since 1999 and shares in resource companies tumbled by the most since the financial crisis on concern that a slowing Chinese economy will exacerbate supply gluts. The Bloomberg Commodity Index of 22 raw materials from oil to metals lost 2.2 percent to end the day at 85.8531, the lowest closing since August 1999. Shares in miners and explorers including Glencore Plc, BHP Billiton Ltd. and Exxon Mobil Corp. tumbled while Brent crude fell below $45 a barrel for the first time since 2009. “Sentiment is extremely negative across the commodity complex,” Mark Keenan, head of commodities research for Asia at Societe Generale SA in Singapore, said in an e-mail. “Markets are plagued by concerns of oversupply.”

Taiwan Stocks Sink Most Since 1990 as China Equity Rout Spreads - (www.bloomberg.com)  Taiwan stocks fell, sending the benchmark index to the lowest level since 2012 amid growing concern that a slowdown in China will derail global economic growth. The Taiex sank 4.8 percent to close at 7,410.34, after slumping as much as 7.5 percent earlier. Taiwan Semiconductor Manufacturing Co. slid 5 percent in Taipei. Government 10-year bond yields fell to a record low. China’s Shanghai Composite Index tumbled as much as 9 percent. Taiwan equities entered a bear market last week amid concern China’s slowdown and currency devaluation will further dent exports, which has already dragged on the island’s economic growth to the slowest pace in three years. Panic selling, combined with margin calls, caused equities to plunge, KGI Securities Investment President Chu Yen-min said.

Credit Risk Surges for Europe's High-Yield Companies Amid Rout - (www.bloomberg.com)   Credit risk around the world is surging on concern that a rout in stocks and commodities may hurt companies’ finances and increase the chances of default. The cost of insuring U.S. companies’ debt against default climbed to the highest since 2013, based on credit-default swaps. In Europe, a similar gauge for high-yield companies rose to the highest this year, while a measure for investment-grade debt increased to the most in almost two months. Corporate bonds are being drawn into the vortex of an equities selloff that has wiped more than $5 trillion from the value of stocks worldwide since China unexpectedly devalued the yuan on Aug. 11. Concern that global growth won’t be strong enough to withstand a slowdown in the world’s second-largest economy prompted investors to sell risky assets and seek the safety of sovereign securities.

Beijing capitulates after spending $200bn to prop up equities - (www.ft.com)  After spending about $200bn buying shares to prop up falling equity prices over the past seven weeks, Beijing capitulated to market forces on Monday by choosing not to intervene as the benchmark Shanghai Composite Index fell 8.5 per cent. The fall was the worst since February 2007. But unlike on most other days since the government launched an unprecedented effort to reverse plunging equities last month, the “national team” of state-owned stock buyers did not jump in to support the market. Beijing’s leaders appear to have belatedly decided it is too expensive and ultimately futile to fight gravity in the equity market, especially as the government is now intervening separately on a massive scale to stop its currency from devaluing further. Since the People’s Bank of China devalued its currency and introduced a new “market-oriented” foreign exchange price-setting mechanism on August 11, it has had to spend as much as $200bn of the country’s foreign exchange reserves to prevent the renminbi from falling more than it wants, according to people familiar with the central bank and its market interventions.

OTHER STORIES:

U.S. Stock-Index Futures Decline After Steepest Slump Since 2011 - (www.bloomberg.com)
Asia Braces for More Market Turbulence - (www.bloomberg.com)
Could China's Yuan Devaluation Spark a New Financial Crisis? - (www.bloomberg.com)
S&P Bulls Are Betrayed By Their Most Loved Stocks - (www.bloomberg.com)
Hedge Funds Can’t Exit Crop Markets Fast Enough Amid Big Supply - (www.bloomberg.com)

Gulf markets’ plunge points to more pain - (www.ft.com)
Angry investors capture head of China metals exchange - (www.ft.com)
Market turmoil leaves tech sector exposed - (www.ft.com)

China Stocks Erase 2015 Gain as State Support Fails to Stop Rout - (www.bloomberg.com)
Taiwan Stocks Sink Most Since 1990 as China Equity Rout Spreads - (www.bloomberg.com)
Japan’s Topix Heads for Correction as Shanghai Leads Global Rout - (www.bloomberg.com)