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Evergrande liquidation sends shockwaves through China

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A Hong Kong court has ordered the liquidation of Evergrande Group, unleashing reverberations throughout the Chinese economy.

The decision has far-reaching implications, not only for China’s beleaguered property sector but also for the broader economy, as highlighted by the Reserve Bank of Australia’s concerns about the impact on Chinese demand for Australian goods and services.

The announcement of Evergrande’s liquidation sent shockwaves through financial markets, with shares in the company trading in Hong Kong plummeting by a staggering 21 percent.

Widely anticipated

This decline was widely anticipated but still served as a stark reminder of the turmoil that has engulfed Chinese and Hong Kong equities, erasing trillions of dollars in value since their peak in 2021.

Analysts have expressed skepticism about the prospects of offshore creditors recovering a significant portion of their investments in the troubled property giant.

Uncertainty surrounds the unfolding of the liquidation order, particularly concerning Evergrande’s numerous projects in China, which are primarily operated by local developers answerable to government authorities.

These local entities may be hesitant to cooperate with foreign creditors, given the potential political ramifications. Most of Evergrande’s assets are concentrated in mainland China.

Global financial stability

The turbulence in the Chinese property sector has been a source of concern for global financial stability.

The Reserve Bank of Australia, in its October Financial Stability Assessment, emphasized the property sector’s significance in the Chinese economy and its potential to exacerbate macro-financial imbalances through ties to local government financing, shadow banking activities, and banks.

Evergrande, once China’s largest property developer, initially defaulted on bond repayments in December 2021, accumulating a staggering debt exceeding $300 billion.

The treatment of international creditors during the liquidation process will be closely monitored by foreign investors who are growing increasingly wary of China’s business climate.

Foreign capital

The Chinese government, led by Xi Jinping, has expressed its desire to attract more foreign capital after years of regulatory uncertainty.

While iron prices remain robust due to stockpiling by Chinese steel mills ahead of the Lunar New Year holidays, mining companies are closely watching for any signs that Evergrande’s liquidation may dampen demand for steel.

Billions of dollars worth of unfinished construction projects hang in the balance, which could affect steel consumption.

Ahron Young is an award winning journalist who has covered major news events around the world. Ahron is the Managing Editor and Founder of TICKER NEWS.

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How will Disney’s AI strategy boost shares?

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Activist investor Blackwells has called upon Disney to implement a robust artificial intelligence strategy aimed at bolstering the company’s shares.

“Disney must produce an artificial intelligence strategy, and share elements of that strategy with its shareholders.”, said Blackwells in a recent presentation.

New groove

Blackwells, known for pushing corporations to adopt innovative approaches, contends that a well-crafted AI strategy could drive shareholder value and position Disney for sustained success in the entertainment landscape.

The activist investor emphasises that harnessing the power of AI could optimise content creation, enhance customer experiences, and streamline operational efficiency within Disney.

Disney’s response

The company opposed the suggestion to replace board members with activists’ nominees, emphasising the potential disruption to ongoing progress.

Additionally, Disney disagreed with Blackwells’ proposal to spin off land and hotels into a real estate investment trust, arguing it reflected a misunderstanding of the synergies within its businesses.

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Boeing woes will lead to higher airfares: Ryanair

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Ryanair, one of Europe’s leading low-cost airlines, is grappling with the possibility of scaling back its summer flight schedule due to ongoing delays in the delivery of Boeing aircraft.

The airline had initially anticipated a boost in its fleet with the arrival of new Boeing planes, enabling an expansion of routes and increased passenger capacity.

However, prolonged delays in the manufacturing and delivery process have cast a shadow over these plans.

Growing pains

The airline industry, already navigating challenges posed by the global pandemic, now confronts the additional hurdle of supply chain disruptions impacting major aircraft manufacturers.

Ryanair’s dependence on Boeing for its fleet expansion has made it particularly vulnerable to these delays.

As the summer travel season approaches, the airline faces the tough decision of either operating with a reduced fleet or adjusting its schedule, potentially impacting travel plans for passengers.

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Gender pay gap – Calls grow for accountability

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The unveiling of gender pay gaps within large Australian organisations marks a significant milestone for gender equality, but experts emphasise the urgent need for greater accountability and action from employers, asserts a University of South Australia researcher.

Professor Carol Kulik, an authority in workplace diversity, underscores the importance of the Workplace Gender Equality Agency’s release of gender pay gap data for large Australian employers as a pivotal step forward.

However, she stresses that the true impact of this revelation will hinge on the proactive measures taken by organizations to address and narrow the existing disparity.

The WGEA’s disclosure will shed light on gender pay gaps among private sector employers with 100 or more employees for the first time.

This move comes amid ongoing efforts to promote and enhance workplace gender equality.

Pay gap

According to the WGEA’s 2023 report, the average gender pay gap in Australia stands at 21.7%, translating to women earning an average of $26,393 less per year than their male counterparts.

Professor Kulik, a member of the SA Gender Pay Gap Taskforce, underscores the importance of further actions to ensure that organizations are held accountable for addressing pay gaps.

“We now must be asking employers important questions,” Professor Kulik asserts.

“In what roles and levels of employment are pay gaps most prevalent? How are employers supporting employees’ caring responsibilities? What measures are being implemented to facilitate women’s advancement into higher-paying roles? How soon can employers commit to closing their pay gaps?”

Tend to escalate

Highlighting the trajectory of pay gaps over time, Professor Kulik notes that initial disparities between men and women at the outset of their careers tend to escalate as pay rises are often calculated as a percentage of an employee’s current salary.

Career breaks and caregiving responsibilities further exacerbate these discrepancies, resulting in women retiring with significantly lower superannuation than men.

Drawing parallels from regulatory interventions in other countries, Professor Kulik underscores the unintended consequences that may arise.

For instance, while legislative mandates in Denmark narrowed the gender pay gap, they also prompted employers to compress salary distributions, impacting both male and female employees.

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