Asia Pacific

China’s “national team” owns at least 6 per cent of the mainland stock market as a result of the massive state-sponsored rescue effort this year to prop up share prices following the summer equity market crash, the Financial Times reported. One member of the team, China Securities Finance Corp, the main conduit for the injection of government funds, owned 742 different stocks at the end of September, up from only two at the end of June. CSF was one of a number of government rescue funds that were corralled into buying shares when stock markets went into meltdown over the summer.

Policy makers in Seoul are accelerating efforts to restructure debt-laden and unprofitable companies before an anticipated rise in U.S. interest rates and any further slowdown in China reverberates in South Korea, Bloomberg News reported. Falling exports and huge losses among some of Korea’s corporate giants have injected urgency into efforts to sell poorly performing assets and raise competitiveness. Overseas shipments have dropped every month this year, with notable weakness in sales to China.

The Bankruptcy Law Reforms Committee (BLRC), while submitting its report to the government earlier this month, had recommended the need for a single code to resolve insolvency for all companies, limited liability partnerships, partnership firms and individuals, The Business Standard reported in a commentary. "In order to ensure legal clarity, the Committee recommends that provisions in all existing law that deals with insolvency of registered entities be removed and replaced by this Code," the committee said in its report.

China said it cracked the nation’s biggest “underground bank,” which handled 410 billion yuan ($64 billion) of illegal foreign-exchange transactions, as the authorities try to combat corruption and rein in capital outflows that have hit records this year, Bloomberg News reported. More than 370 people have been arrested or face lawsuits or other punishment in the case centered in eastern Zhejiang province, the official People’s Daily reported on Friday, citing police officials.

The Bank of Japan kept its monetary stimulus programme unchanged on Thursday, with Governor Haruhiko Kuroda holding fast to his view that the corporate capital expenditure vital to economic growth will pick up - suggesting that no new monetary easing is imminent, the International New York Times reported on a Reuters story. The BOJ offered a slightly more cautious view on inflation expectations - or how the public perceives future price moves - than at last month's meeting, underscoring its concerns over a lack of success in nudging companies into boosting wages and investment.

Chinese borrowers are taking on record amounts of debt to repay interest on their existing obligations, raising the risk of defaults and adding pressure on policy makers to keep financing costs low, Bloomberg News reported. The amount of loans, bonds and shadow finance arranged to cover interest payments will probably rise 5 percent this year to a record 7.6 trillion yuan ($1.2 trillion), according to Beijing-based Hua Chuang Securities Co., whose lead fixed-income analyst was top-ranked by China’s New Fortune magazine in 2012 and 2013.

The government has been preparing to preemptively restructure insolvent companies ahead of the anticipated interest rate hike by the U.S. central bank, and a new study showed that nearly 6 percent of Korean companies could need it, Korea JoongAng Daily reported. According to a report by private corporate analysis agency Korea CXO Institute, 117 of Korea’s 2,000 companies, excluding financial firms, have debt-to-asset ratios of over 200 percent and are also suffering from operating and net losses as of last year.

The Norwegian mining subsidiary of Australia's Northern Iron Ltd will file for bankruptcy on Wednesday as its $100 million debt has become unsustainable, Northern Iron told a new conference on Wednesday. Attempts to find new investors for the Sydvaranger Gruve AS mining firm, which has close to 400 employees, had also failed, it added. The two largest creditors were top Norwegian bank DNB and government investment agency Innovation Norway, Northern iron said.

Creditors of integrated steel producer Essar Steel Ltd may consider conversion of debt into equity under the strategic debt restructuring (SDR) route should the company not succeed in its attempt to monetize assets or bring on board a strategic investor, two people familiar with the matter said. The SDR scheme, introduced by the Reserve Bank of India in June, allows lenders to convert debt into majority equity holding and take over the management of a company. The bankers then have 18 months to find a suitable buyer.

Despite a sharp slowdown in economic growth and the stock market crash, consumers in China’s commercial capital have proven resilient, according to FT Confidential Research, a research service from the Financial Times. A survey of consumers across the city found they spent an average Rmb4,959 a month over the past 12 months, compared with Rmb1,737 across urban areas nationwide. They increasingly favour a quality meal and foreign goods, while nearly 70 per cent said they travelled abroad during the past 12 months. But cracks are appearing in the Shanghai consumer story.