Ice Cream Woes Highlight Struggles Global Food Giants Face in China
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Yahoo
15 minutes ago
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China to Tax Bond Interest Income After Decades of Exemption
(Bloomberg) -- China said it plans to tax interest income on bonds issued by the government and financial institutions, in a surprise move that's prompted investors to reevaluate their debt market positions. We Should All Be Biking Along the Beach Seeking Relief From Heat and Smog, Cities Follow the Wind Chicago Curbs Hiring, Travel to Tackle $1 Billion Budget Hole NYC Mayor Adams Gives Bally's Bronx Casino Plan a Second Chance The government will resume collection of value-added tax on interest income from bonds sold by central and local governments, as well as those from financial institutions starting Aug. 8, the Ministry of Finance said in a statement released on Friday. Bonds issued before that, including the reopening sales on these notes, will be exempted from the tax. The new rule is likely to push up the cost of borrowing new debt, especially as the interest income on sovereign bonds had been tax exempt since the 1990s. It has also spurred investors to lap up existing bonds, pushing yields further down, as they seek to avoid the tax on new bonds. Taking the general 6% rate on value-added tax into consideration, 'the change in tax policy will introduce a cost for investing in newly-issued bonds, and make the old notes appealing,' Huatai Securities analysts including Zhang Jiqiang wrote in a note. This may widen the yield gap between existing and new bonds by about five to ten basis points, they estimate. Outstanding amount of bonds issued by the central and local governments, as well as those from financial institutions accounted for nearly 70% of the nation's total as of end-June. The tax on these notes would provide another route for Beijing to expand its revenue and support growth, but it could also raise the cost of funding at a time when the economy remains vulnerable. Yields on China's 30-year bonds initially edged lower on Friday on the news, before paring the drop on Monday to 1.94%. The nation's 10-year yield steadied at 1.7% after falling one basis point in the past session. Tax exemption on sovereign bonds' interest income was initially introduced to encourage buying and to facilitate fund-raising by the government, China Financial and Economic News, a newspaper overseen by the finance ministry reported on Friday. These policies were extended in China's value-added tax system overhaul in 2016. 'With China's bond market now ranking second largest in the world, the preferential policy of exempting bond interest income from value-added tax has completed its historical mission,' the report said, citing Liang Ji, a research director at Chinese Academy of Fiscal Sciences. How Podcast-Obsessed Tech Investors Made a New Media Industry Russia Builds a New Web Around Kremlin's Handpicked Super App Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off What's Really Behind Those Rosy GDP Numbers? Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
23 minutes ago
- Bloomberg
China to Tax Bond Interest Income After Decades of Exemption
China said it plans to tax interest income on bonds issued by the government and financial institutions, in a surprise move that's prompted investors to reevaluate their debt market positions. The government will resume collection of value-added tax on interest income from bonds sold by central and local governments, as well as those from financial institutions starting Aug. 8, the Ministry of Finance said in a statement released on Friday. Bonds issued before that, including the reopening sales on these notes, will be exempted from the tax.
Yahoo
35 minutes ago
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What To Expect From Yum China's (YUMC) Q2 Earnings
Fast-food company Yum China (NYSE:YUMC) will be announcing earnings results this Tuesday morning. Here's what investors should know. Yum China missed analysts' revenue expectations by 3.7% last quarter, reporting revenues of $2.98 billion, flat year on year. It was a softer quarter for the company, with a miss of analysts' EBITDA estimates and a slight miss of analysts' EPS estimates. Is Yum China a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Yum China's revenue to grow 4.6% year on year to $2.80 billion, improving from its flat revenue in the same quarter last year. Adjusted earnings are expected to come in at $0.59 per share. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Yum China has missed Wall Street's revenue estimates six times over the last two years. Looking at Yum China's peers in the traditional fast food segment, some have already reported their Q2 results, giving us a hint as to what we can expect. El Pollo Loco delivered year-on-year revenue growth of 3%, beating analysts' expectations by 0.6%, and Domino's reported revenues up 4.3%, in line with consensus estimates. El Pollo Loco traded up 1.4% following the results while Domino's was also up 3%. Read our full analysis of El Pollo Loco's results here and Domino's results here. The euphoria surrounding Trump's November win lit a fire under major indices, but potential tariffs have caused the market to do a 180 in 2025. While some of the traditional fast food stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 7.6% on average over the last month. Yum China is down 2.3% during the same time and is heading into earnings with an average analyst price target of $58.21 (compared to the current share price of $46.50). Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Sign in to access your portfolio
