MNI China Daily Summary: Thursday, July 25

MNI BRIEF: Japan Govt Keeps Econ View, Cuts Exports

MNI: PBOC Conducts CNY200 Bln via MLF Thurs; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.1321 Thurs; -1.92% Y/Y

CHINA PBOC CONDUCTS CNY235.1 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1321 THURS VS 7.1358

CBI Price Expectations for Three Months Ahead Lowest Since December 2020

MNI: UK JUL CBI INDUSTRIAL TRENDS TOTAL ORDERS -32

Broad-Based IFO Weakness Reinforces Narrative of Recovery Stall

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Phoenix Grp: Solid Results, No Investment Blow-ups To Worry Credit

FINANCIALS
Phoenix Group FY23 results (PHNX LN) look solid from a credit perspective and the lateral to the major lifecos is solid, too. There’s little here to drive a change in spreads but some may have feared a Swiss Life-style issue around CRE in the investments book, which appears absent.

  • Key credit metrics: solvency II ratio is 176% (from 180% at Jun-23, in line with consensus) with the nominal surplus static at GBP3.9bn. Total cash generation was GBP2bn (from GBP0.9bn at Jun-23, so a decent 2H) and the hit from consumer duty provisioning was just GBP70m. So solid all round.
  • Operating performance: 2H23adjusted PBT is GBP351m (cons: 324m) and the bottom line is back in profit after the loss-making first half. The lateral here is marginally positive for the life company peers – positively there’s nothing here to indicate stress from rising rates on the investment books nor specific blow-ups (e.g. CRE exposure for shareholders).
  • Outlook: key here is a “new capital allocation framework” which, in contrast to comments about “the capacity to raise debt” with 1H23 results, now indicates “further deleveraging”.
Conf call 0930 (London time) at: https://storm-virtual-uk.zoom.us/webinar/register/.../registration
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