Daily Insolvency News Headlines

Wed., August 26, 2015

Wed., August 26, 2015

China’s central bank on Tuesday cut its benchmark interest rate and freed banks to lend more, the latest signs of the government’s growing distress over slumping stocks and slowing economic growth, the International New York Times reported. The central bank’s action followed a global stock market rout in which China led the declines. The main Shanghai share index plunged an additional 7.6 percent on Tuesday, to its lowest level this year. That brought its three-day decline to 22 percent, signaling that two months’ worth of attempts by the government to prop up stock prices had limited effect. On Tuesday, China’s prime minister, Li Keqiang, acknowledged that the country was feeling the effects of market turbulence, but insisted that the economy remained sound. “Currently, global economic trends are opaque and confusing, and market volatility is quite large, and this has had some impact on the Chinese economy,” Mr. Li said, according to a report on Chinese television news. “But fundamentally the overall stability of the Chinese economy has not changed, and positive factors sustaining a turn for the better in the real economy are accumulating.” China, he added, would be able to fulfill its economic goals for the year. Mr. Li also noted that there would be no continued depreciation of China’s currency, the renminbi, after a sharp devaluation earlier this month. Read more. (Subscription required.)

Wed., August 26, 2015

World trade recorded its biggest contraction since the financial crisis in the first half of this year, according to figures that will fuel a debate over whether globalisation has peaked, the Financial Times reported. The volume of global trade fell 0.5 per cent in the three months to June compared with the first quarter, the Netherlands Bureau for Economic Policy Analysis, keepers of the World Trade Monitor, said on Tuesday. Economists there also revised down their result for the first quarter to a 1.5 per cent contraction, making the first half of 2015 the worst recorded since the 2009 collapse in global trade that followed the crisis. Global trade actually rebounded 2 per cent in June, according to the World Trade Monitor but its authors warned that the monthly numbers were volatile and the more revealing pattern lay in the longer term figures. Those numbers built on what has been a grim pattern for global trade in recent years and the unwinding of a decades-old rule that saw trade grow at twice the rate of the global economy as a result of what some have called hyperglobalisation. Read more. (Subscription required.)

Wed., August 26, 2015

A Western Australian electrical contractor that has been operating for more than 30 years and supplied machinery for mining in the Pilbara region has collapsed into voluntary administration, SmartCompany.com.au reported. Cape Range Electrical Contractors is a Newman-based electrical contractor business specialising in the supply, installation and maintenance for individual and commercial clients. The family-owned business has been operating since 1973 and mainly services the Newman and Pilbara region. A tagline on the company’s website states “no job is too small or too big for us to handle”, the site also claims Cape Range Electrical Contractors is “powering up the Pilbara”. The business also leases vehicles and other earthmoving machinery for mining and major contractor projects. Administrators Rob Kirman and Keith Crawford of McGrathNicol were appointed to manage the voluntary administration of the company on August 18. Read more.

Wed., August 26, 2015

Madrid has sought to draw a line under austerity, setting out a budget proposal that includes tax cuts, higher salaries for public workers and more spending on education, defence and diplomacy. In a sign of the country’s return to economic strength, ministers vowed to couple spending increases with further budget consolidation. Public debt is set to fall to 98.2 per cent of gross domestic product, the first decline since the start of the crisis. Thanks to rising output and higher tax revenues, Spain’s deficit is also in decline, falling to below 3 per cent of GDP next year, as mandated by the European Commission. With an election looming before the end of the year, Spain’s centre-right government is at pains to show voters that their financial hardship is at last coming to an end. Read more. (Subscription required.)

Wed., August 26, 2015

Brazil’s troubled economy showed more signs of deterioration on Tuesday as consumer confidence sank to a record low and unemployment climbed, The Wall Street Journal reported. It is the latest blow to a country beset with high inflation, a slumping currency and a festering corruption scandal that has left President Dilma Rousseff with approval ratings in the single digits. More bad news is expected Friday, when a report on gross domestic product is projected to show that Brazil’s economy is officially in recession. Slowing Chinese demand for commodities has slammed Brazil’s economy, while a massive graft scandal at state-run oil giant Petróleo Brasileiro S. A.has forced a sharp cutback in investment in the critical oil-and-gas sector, sending shock waves through the rest of the economy. Nervous businesses and consumers have trimmed spending, fueling layoffs that have further weakened demand. In 2015 through July, Brazil has lost nearly a half-million jobs, according to the Labor Ministry. Read more. (Subscription required.)

Wed., August 26, 2015

The China-led turmoil that has rocked global markets in the past two weeks has also shaken the ruling Communist party and left Li Keqiang, the prime minister, fighting for his political future, according to analysts and people familiar with the internal workings of the party. Among party officials and politically connected people in Beijing, the hottest topic of conversation is whether Mr Li will take the fall for Beijing’s perceived mismanagement of the stock market crash and the country’s broader economic slowdown. “Premier Li’s position has certainly become more precarious as a result of the current crisis,” said Willy Lam, an expert on Chinese politics at the Chinese University of Hong Kong. “If the situation worsens and if there comes a point where [President Xi Jinping] really needs a scapegoat, then Li fits the bill.” Read more. (Subscription required.)

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