Asia Pacific

Chinese company debt twice the size of Ireland’s economy will come due in 2014, spurring concern the nation is on the cusp of its first corporate bond default, Bloomberg reported. A record 2.6 trillion yuan ($427 billion) of interest and principal on securities issued by non-financial companies must be repaid next year, 19 percent more than this year and the most since China International Capital Corp. began compiling the data in 2008. Ten-year AAA corporate bond yields surged 89 basis points since Dec. 31 to 6.18 percent, touching a record 6.23 percent on Nov. 27.

The new chairman of State Bank of India has pledged to crack down on rising levels of corporate bad debt that have alarmed policy makers and foreign investors in Asia’s third-largest economy, the Financial Times reported. Arundhati Bhattacharya took over the state-backed bank in October. India’s biggest lender, which controls about a fifth of the country’s $1.5tn of bank assets, has struggled to cope with a sharp increase in non-performing loans in the aftermath of India’s recent economic slowdown.

Shares of India realty major Unitech today plunged by nearly 10 per cent amid reports that the company has received a default notice from LIC Housing Finance on a loan taken in 2007 for a luxury housing project in Noida, The Economic Times reported. Unitech's scrip tanked 9.54 per cent to close the day at Rs 15.65 on BSE. Intra-day, the scrip lost 14.45 per cent to Rs 14.80. On NSE, the stock slumped by 8.99 per cent to Rs 15.70 apiece. With share price plunging, Unitech market value shrunk by by Rs 435 crore to Rs 4,091 crore.

Kookmin Bank, South Korea’s largest lender by assets, said it will close 55 branches in January as the country’s lenders struggle with the lowest lending margins in four years, Bloomberg reported. The closures will cut costs and help the Seoul-based bank, a unit of KB Financial Group Inc., better serve Korean customers who are using Internet banking more frequently, Kookmin Bank said in an e-mailed statement today. The lender has 1,205 branches across South Korea, company data show. Kookmin Bank is joining Standard Chartered Plc and Citigroup Inc.

NZAX-listed tourism marketing company Jasons Travel Media has suspended trading after being placed in receivership and breaching stock exchange listing rules, The Dominion Post reported. The company, which distributes travel information in print and online, said that given the company's rapidly deteriorating financial position, the unlikely prospects of a recovery in the short term, and the consequential need to protect creditors and preserve the assets of the company, the board had asked ANZ to appoint a receiver.

The prevalence of so-called "wilful" defaults is symptomatic of what critics say is a loose credit culture that plagues Asia's third-biggest economy, keeping underperforming companies in business, crowding out other borrowers and leaving taxpayers on the hook to recapitalise state banks, The Economic Times reported. The Reserve Bank of India defines a wilful defaulter as a borrower that is able but unwilling to pay, has diverted loan proceeds for other than their initially stated use, or has overstated profits in order to obtain a loan.

Pensioners in developed economies are no longer being spared the worst effects of the financial crisis as fiscal austerity programmes aimed at curtailing spending on the elderly start to kick in, the OECD has warned, the Financial Times reported. Spending on pensions, which accounts for nearly a fifth of government outlays on average across the 34-nation Organisation for Economic Co-operation and Development, is being limited through a variety of benefit changes including raising state retirement ages and freezing – or even cutting – payouts.

Australia's Treasury painted a grimmer growth outlook for the US$1.5 trillion economy, as the new conservative government searched for support to end a political impasse over the country's debt ceiling, The Wall Street Journal reported. Australia's Treasury Secretary Martin Parkinson said it would be "prudent" to raise the legislated debt cap from 300 billion Australian dollars (US$282 billion) to A$500 billion, given a worsening economic outlook as the country grapples with the end of a decadelong resources boom.

A fall in the number of first-home buyers in the housing market is an issue in Australia as well, which suggests rising prices are to blame, rather than the Reserve Bank's mortgage restrictions, says Finance Minister Bill English, The New Zealand Herald reported. The Reserve Bank and Government have come under fire over the loan-to-value ratio (LVR) limits on buyers with less than a 20 per cent deposit which took effect at the beginning of October, with critics saying they are hitting new home building and forcing first-home buyers out of the market.

Thailand’s biggest bout of political unrest under the current government has increased economic risks, threatening to crimp a rebound from recession as protests damp local consumption and investment while weakening the currency. Gross domestic product will rise an average 3.6 percent this year, according to the median estimate in a Bloomberg survey of 26 economists, lower than a forecast of 4 percent in August. GDP probably expanded last quarter from the previous three months after contracting in the first half of the year, a separate survey showed ahead of a report due Nov. 18.