—— China Population Could Fall by 51 million; Spirit Airline Files for Bankruptcy; US Rent Inflation May Not Subdue Till 2026; HSBC Could Eliminate Hundreds of Managers; Wegovy Enters Chinese Market at a Low Price; Banks and BlackRock Build Corporate Bond Platform
1. China Population Could Fall by 51 million
China’s population is projected to decline by 51 million over the next decade, an issue that policymakers are finding difficult to address due to persistently low birth rates, as reported by Bloomberg Intelligence.
By 2035, the population is anticipated to fall to 1.36 billion, a figure last seen in 2012, marking a decrease from the peak of 1.41 billion in 2021. Ada Li, a senior industry analyst at BI, provided these estimates.
There is an expectation of a temporary increase in births in 2024, coinciding with the Year of the Dragon, which is traditionally seen as a favorable time for having children in Chinese culture. However, historical trends suggest that such spikes in birth rates tend to be ephemeral.
This potential increase may not sustain, particularly as marriage rates are currently at their lowest, according to Li.
Source: Bloomberg – China Population Set for 51 Million Drop as Pro-Birth Moves Fail
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2. Spirit Airline Files for Bankruptcy
Spirit Airlines Inc. has declared bankruptcy amid intensified competition and financial instability following the collapse of its proposed merger with JetBlue Airways Corp. The airline has entered Chapter 11 proceedings in New York, with court documents showing assets and liabilities ranging between $1 billion and $10 billion.
The financial troubles for Spirit escalated after a federal judge halted JetBlue’s $3.8 billion acquisition of the airline, agreeing with federal concerns that the merger would reduce competition and increase fares for cost-conscious flyers.
Additionally, the U.S. government had opposed the merger on antitrust grounds. Spirit’s negotiations for a merger with Frontier Group Holdings Inc. also ended without an agreement.
Source: Bloomberg – Spirit Air Files Bankruptcy Following Failed JetBlue Tie-Up
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3. US Rent Inflation May Not Subdue Till 2026
Federal Reserve Chair Jerome Powell emphasized last week that central bankers are closely monitoring housing inflation, which has not yet returned to pre-pandemic levels. He suggested that the normalization of rent inflation might take an extended period, potentially lasting until mid-2026.
Research from the Cleveland Fed supports this outlook, indicating that while there are signs of decreasing rents for new leases, the overall rent inflation seen in the consumer price index (CPI) is slow to adjust. This lag is partly due to fewer people moving and entering new rental agreements, which results in less turnover being reflected in the CPI data.
Housing costs, notably shelter, represent the largest component of the CPI and contributed to more than half of the index’s increase in October.
If rent inflation remains high for another year and a half as projected, it could complicate efforts by policymakers who are considering reducing interest rates based on improvements in overall inflation metrics.
Source: Bloomberg – Rent Inflation Won’t Ebb Until 2026, Cleveland Fed Model Shows
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4. HSBC Could Eliminate Hundreds of Managers
HSBC Holdings Plc is requiring hundreds of its managers to reapply for their positions within the newly established corporate and institutional banking (CIB) division, as CEO Georges Elhedery seeks more efficient operational methods.
Interviews are already taking place, and the process involves senior staff from both the commercial banking and global banking and markets units competing for roles in the merged CIB division. This restructuring is expected to lead to the dismissal of several hundred managing directors and other senior bankers in the upcoming weeks, according to insiders who requested anonymity.
Additionally, as part of the organizational overhaul, HSBC plans to eliminate the use of the general manager titles, traditionally given to some of its top executives. These will be replaced with managing director titles, aligning with common practices in the financial services industry.
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5. Wegovy Enters Chinese Market at a Low Price
Novo Nordisk A/S is introducing its highly successful Wegovy obesity drug to the Chinese market at a significantly lower price compared to the U.S., marking a significant move to tap into a large and rapidly expanding market.
The first prescriptions of Wegovy are expected to be issued in Shanghai this week, as reported by Yicai news service. Additionally, the drug is now available for pre-orders on various e-commerce platforms, where patients can schedule clinical visits to determine if they are eligible for the treatment.
The cost of Wegovy will vary depending on the dosage; however, a one-month supply of the 0.25 mg starter dose is priced at 1,400 yuan (approximately $193.31), according to Yicai and online listings.
Unlike in the U.S. and Europe, where many patients receive partial coverage for the drug from insurance, in China, buyers will predominantly need to cover the cost themselves.
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6. Banks and BlackRock Build Corporate Bond Platform
Several leading banks on Wall Street are collaborating with BlackRock Inc.’s Aladdin technology system to offer real-time pricing data for trading U.S. corporate bonds, a sector traditionally known for its lack of transparency.
This initiative represents a significant move towards greater openness in a market where banks have traditionally kept pricing information under wraps. Through this collaboration, the banks will provide data to Aladdin via BondCliQ Inc., which is the first and only consolidated quote system for U.S. corporate bonds.
Key participants in this arrangement include major dealers such as Bank of America Corp., Morgan Stanley, and JPMorgan Chase & Co.
These banks’ involvement marks an important step in transforming the trading landscape for corporate bonds. Representatives for the banks had not yet responded to requests for comments at the time of reporting.
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7. ValueAct Takes $1bn Stake in Meta
ValueAct Capital Management has acquired a $1 billion stake in Meta Platforms Inc., the parent company of Facebook, according to a source familiar with the situation.
This investment is described as passive, with ValueAct currently not intending to initiate any activist actions at Meta. The source, who preferred to remain anonymous as the details are not yet public, mentioned that ValueAct might disclose this position in an upcoming filing, potentially this week, coinciding with the Nov. 14 deadline for investors to submit their 13F filings to the Securities and Exchange Commission.
ValueAct, based in San Francisco, has a history of advocating for changes at various companies, including Walt Disney Co.
CNBC was the first to report ValueAct’s investment in Meta. Under the leadership of CEO Mark Zuckerberg, Meta reported last month a 19% increase in third-quarter sales year-over-year.
The company’s growth is primarily driven by its social networks, Facebook and Instagram, alongside significant investments in AI and other advanced technologies. Over the past year, Meta’s stock has increased by 77%.
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。