In just one day, the owner of LVMH, Bernard Arnault, became richer by as much as $17 billion, according to CNN. The billionaire's shares appreciated significantly after China announced a new package to revitalize its economy. This is one of LVMH's key markets.
In one day alone, on Thursday, Arnault's net worth increased by as much as $17 billion to a total of as much as $201 billion. According to the Bloomberg Billionaires Index, which publishes data on billionaires' wealth, this is the third highest increase in wealth in one day in history.
He made up for some of his losses
Thus, Arnault made up for a significant part of the losses brought by him last year. In the 12 months alone, as of Thursday morning, his fortune had decreased by $24 billion. Shares of Arnault's empire were falling, and investors feared a collapse in the luxury goods market.
LVMH reported in July that the company's sales in Asia fell by 10%. in the first six months of this year. This market, which accounted for 31 percent LVMH's total revenue last year is dominated by China.
China wants to stimulate the economy
China's central bank announced a package of measures on Tuesday to stimulate the economy, including lowering banks' reserve requirements and further cuts in mortgage rates.
People's Bank of China (PBoC) Governor Mr. Gongsheng said the reserve requirement ratio – the amount of money commercial lenders must hold – would be reduced by half a percentage point. The move will bring about one trillion yuan (over $141 billion) of “long-term liquidity” to the financial market, Pan said. He added that interest rate will be reduced by a further 0.25-0.5 percentage points at an “appropriate time during the year”.
Beijing will also reduce interest rates on existing mortgage loans by about half a percentage point and will “instruct commercial banks to reduce interest rates on existing mortgage loans to levels similar to those on new loans.”
On Wednesday, the State Council presented a 24-point set of guidelines aimed at prioritizing job creation and preventing the risk of large-scale unemployment, especially among youth.
Also on Thursday, the government in Beijing said in a separate statement that people in financial difficulty will receive one-time benefits, the amount of which was not specified, before next week's national holiday.
Chinese leaders also pledged to implement “necessary spending” to achieve this year's economic growth target of about 5 percent.
Main photo source: Blondet Eliot/ABACA/PAP