Asia Pacific

Soaring household debt in Asia is one of the starkest legacies of the post-2008 low rates world order. If 10 years ago US households stood out as some of the most leveraged in the world, today, Asia is home to the highest household debt globally. But some Asian countries, even those with household debt equal to over 80 per cent of GDP, are faring better than others, the Financial Times reported. Countries where debt has grown gradually and where regulators implemented pre-emptive macro prudential policies are more likely to minimise blows to economic growth.

The surge in lending to emerging markets that helped fuel their own — and much of the world's — growth over the past 15 years has come to a halt, and may now give way to a "vicious circle" of deleveraging, financial market turmoil and a global economic downturn, the Bank for International Settlements has warned, CNBC reported on a Financial Times story.

Japanese industrial conglomerate Toshiba Corp expects a bigger full-year loss than previously anticipated, amid mounting restructuring costs after a $1.3 billion accounting scandal, Reuters reported. Toshiba said on Thursday it now expected a net loss of 710 billion yen ($6 billion) compared with a previously expected loss of 550 billion yen. Chief Executive Masashi Muromachi told a press conference that Toshiba had lowered its expectations to fully reflect possible downside risks to its business.

Global steelmakers face another year of pain with more capacity closures and job losses expected, even as steel prices start to stabilise thanks to painful production cuts, depleted stockpiles and rising trade barriers, Reuters reported. Capacity closures and bankruptcies picked up across the globe last year and top producers like ArcelorMittal and Nippon Steel slashed earnings forecasts as prices lost a third of their value, sliding to 12-year lows.

Thai hotel group Minor International has made its biggest ever acquisition with a 294 million euro ($320 million) deal to buy 14 Tivoli chain hotels that belonged to the collapsed Espirito Santo Group, Reuters reported. The purchase of the properties in Portuagl and Brazil is part of Minor's aggressive eoverseas expansion plan. The group said last year that it wanted to have 190 hotels by 2019. The Tivoli deal lifts its tally to 145.

The uncertain future of Baha Mar, a $3.5 billion mega-resort nearing completion on Nassau’s white-sand Cable Beach, points to the challenges China faces as it finances and builds large-scale construction projects overseas amid language and cultural barriers, lack of regulation and allegations of graft. “The more problems there are and, in a way, the more media attention these problems attract, they erode positive attitudes towards Chinese presence in the region,” said Ariel C.

A Chinese online finance company bilked investors out of more than $7.6 billion, spent lavishly on gifts and salaries and buried the evidence, according to local authorities who described the operation as an enormous Ponzi scheme, the International New York Times DealBook blog reported. The accusations throw a shadow over China’s online finance industry, a lucrative area for many global leaders in the sector, but one that the authorities say has also drawn a growing number of cases of fraud and flameouts.

The Australian law firm that snapped up the bulk of scandal-hit insurance claims company Quindell has been forced into restructuring talks amid concerns over the deteriorating state of its finances, The Telegraph reported. Lenders to Slater & Gordon, Australia’s largest class-action law firm, have hired turnaround experts FTI Consulting in the UK as its problems mount following the company’s shock takeover of Quindell’s legal arm last year.

An archaic part of China’s banking system meant to provide short-term funding to companies is coming under renewed scrutiny after at least two cases of fraud were uncovered recently, Bloomberg News reported. An alleged fraud of almost 1 billion yuan ($152 million) was discovered late last year at China Citic Bank Corp., where an employee colluded to fake documentation that companies typically use to get quick funds, people familiar with the matter said Thursday. Agricultural Bank of China Ltd.

China is ramping up efforts to halt a flood of money leaving the country in response to an economic slowdown, moves that risk undermining Beijing’s ambition to elevate the yuan’s profile on the world stage, The Wall Street Journal reported. Its latest steps involve curbing the ability of foreign companies in China to repatriate earnings, shrinking the pool of Chinese yuan available for banks in Hong Kong to make loans, and banning yuan-based funds for overseas investments, people with direct knowledge of the matter said.