Asia Pacific

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.

Bad news from China has sparked a firestorm in the developing countries that feed its vast industrial machine, leaving a swath of economies with few good ways to escape a crunch, The Wall Street Journal reported. In Indonesia, coal once bound for China is piled up in port. In South Africa, mines that fed China’s voracious demand for metals are firing workers. In financial markets, investors have responded by pulling out. On Monday, the currencies of Russia, Indonesia, South Africa, Brazil and other commodity exporters tumbled to multiyear lows against the U.S. dollar.

After spending about $200bn buying shares to prop up falling equity prices over the past seven weeks, Beijing capitulated to market forces on Monday by choosing not to intervene as the benchmark Shanghai Composite Index fell 8.5 per cent, the Financial Times reported. The fall was the worst since February 2007. But unlike on most other days since the government launched an unprecedented effort to reverse plunging equities last month, the “national team” of state-owned stock buyers did not jump in to support the market.

The financial regulator will set up companies specializing in debt restructuring programs next year, seeking to let them take over jobs from lenders struggling to manage debt-driven corporations, The Korea Times reported. The Financial Services Commission (FSC) said Friday it will establish debt-restructuring companies by collecting funds from banks. About 10 financial institutions are expected to join the project, including the state-run Korea Development Bank (KDB) and the Export-Import Bank of Korea (Korea Eximbank). "How much do bankers know about the shipbuilding industry?

The People’s Bank of China is preparing to flood the banking system with liquidity to boost lending, according to officials and advisers to the central bank, as its recent currency moves are squeezing yuan funds out of the market and renewing concerns over capital leaving Chinese shores, The Wall Street Journal reported.

The Bank of Portugal is in exclusive talks with China's Anbang Insurance Group Co on the sale of state-rescued Novo Banco, leaving two other bidders on the sidelines, sources said. Two sources close to the bidding process told Reuters China's Fosun International and U.S. fund Apollo Global Management had also made binding bids and could re-enter the race if talks with privately-held Anbang fail. A Beijing-based spokeswoman for Anbang declined to comment.

Chinese stock markets took a wild ride on Wednesday, tumbling and soaring in a session that made little sense other than to highlight that investors have almost no faith in a month-long government effort to stabilize them, the International New York Times reported. The Shanghai and Shenzhen markets fell 3 percent in morning trade, taking their losses to more than 8 percent since investors stampeded without warning on Tuesday. But state-backed buyers later rushed in, enabling stocks to finish the day more than 1 percent higher.

Jurong Aromatics Corp, operator of one of the world's largest petrochemical plants, cannot service its interest payments and is negotiating a debt restructuring with bankers amid a plunge in oil prices, people familiar with the situation said, The Straits Times reported. Operations at the US$2.4 billion (S$3.4 billion) plant have stalled since December as the Singapore-based group remains locked in talks with lenders including BNP Paribas and Standard Chartered, as well as suppliers Glencore, BP and SK Energy, the sources said.

Genesis Energy will cancel its coal supply agreement with Solid Energy from October using a clause triggered by the coal mining company's voluntary administration, Stuff.co.nz reported. The move is a blow for the country's largest coal miner, Solid Energy, as it prepares for a meeting next month in which debtors will be asked to consider a two-and-a-half year repayment halt while the company is organised for sale. In March, Solid Energy was negotiating $320 million debt with banks, and was last week placed into voluntary administration in a last ditch attempt to save the company.

The shock waves from China’s surprise yuan devaluation are ricocheting through African economies, sending currencies tumbling and stoking anxiety that the continent’s biggest trading partner might be losing its appetite for everything from oil to wine, The Wall Street Journal reported. In South Africa, the rand hit a 14-year low of 12.94 to the dollar on Monday, extending a 2% drop since Aug. 10 and a 12% slide this year.