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26 Apr 2016
China: March industrial enterprise financial data preview - ING
Tim Condon, Chief Economist at ING, suggests that China’s strong profits growth would be evidence of relaxing cash constraints, which we consider essential for avoiding a hard landing.
Key Quotes
“March industrial enterprise financial data are due tomorrow at 9.30am local time. The focus is on profits. There is no consensus forecast. Profits grew 4.8% YoY in January- February, the first positive print since September 2014. Like most things economic, profits move with production. Based on the acceleration of industrial production growth in March we expect profits growth to accelerate.
The path to a hard landing starts with financial distress in highly-leveraged corporates and runs through a banking crisis. Relaxing enterprise cash constraints is the key to avoiding one. Strong profits growth would be evidence of relaxing cash constraints.”
Key Quotes
“March industrial enterprise financial data are due tomorrow at 9.30am local time. The focus is on profits. There is no consensus forecast. Profits grew 4.8% YoY in January- February, the first positive print since September 2014. Like most things economic, profits move with production. Based on the acceleration of industrial production growth in March we expect profits growth to accelerate.
The path to a hard landing starts with financial distress in highly-leveraged corporates and runs through a banking crisis. Relaxing enterprise cash constraints is the key to avoiding one. Strong profits growth would be evidence of relaxing cash constraints.”