Asia

Mahindra & Mahindra, India’s foremost producer of sports utility vehicles (SUV), took the first step to acquire Ssangyong Motor, Korea’s smallest automaker, after the two signed a memorandum of understanding Monday, The Korea Times reported. Early this month, Mahindra was picked as the preferred bidder of the flagging Korean carmaker. After completing due diligence, both sides are set to finalize a definite agreement later this year, possibly in November.
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Worried by a sharp slowdown in the economy and a strong yen, Japan's government is considering another round of stimulus to stoke growth as measures enacted during the recent financial crisis begin to expire, The Wall Street Journal reported. But policy makers face a daunting challenge balancing any new spending with their pledges to curb the country's debt, which is already approaching twice the size of Japan's gross domestic product.
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Hong Kong bankruptcy petitions in July fell 1.07 percent to 833 from June and were down 43.5 percent from a year earlier, government data showed on Friday, Reuters reported. The number of bankruptcy petitions totalled 5,664 for the first seven months of 2010, down 46.8 percent from a year earlier. Bankruptcy orders stood at 5,629 for January-July, down 46.6 percent from a year earlier. Last week, the government raised its full-year economic growth forecast for 2010 to 5-6 percent from the previous forecast of 4-5 percent.
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Nakheel, a troubled Dubai-based developer, has paid Dh2.5bn ($681m) to trade creditors as it pushes towards agreement on Dh4bn in unpaid bills to contactors as part of the broader restructuring at Dubai World, its parent, the Financial Times reported. Ali Lootah, Nakheel’s chairman, told a local newspaper on Sunday that the developer had agreed claims with 80 per cent of its trade creditors as it pushes towards the 95 per cent threshold needed to finalise a restructuring agreement.
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Pakistan is to ask the International Monetary Fund to ease restrictions on a $10bn loan it received in 2008 after concluding that the recent devastating floods had made the conditions attached to the lending programme impossible to meet, the Financial Times reported. Abdul Hafeez Shaikh, Pakistan’s finance minister, will travel to Washington next week to ask the IMF to restructure the current loan or consider new financing, according to Pakistani officials.
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Household and corporate debts are continuing on an upward trend, spawning fears that they will combine to create a toxic cocktail for the Korean economy with the prolonged slump in the real estate market, The Korea Times reported. The central bank said Tuesday that households and corporate lending reached 1,409 trillion won ($1.2 trillion) in June, as a low interest rate led them to take out loans from financial companies.
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Regulators, suspecting that banks and trusts are secretly repackaging old loans and moving them off bank balance sheets, are concerned that financial institutions in China may have engaged in the same sort of financial engineering that got Western banks into trouble. On Aug. 10, government overseers acted again, ordering banks to move any off-balance-sheet loans back onto their books and to make provisions to safeguard against a rise in bad loans, according to a copy of the government order given to The New York Times by an industry expert.
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China faces the threats of faltering demand for exports, rising wages and the risk of bad loans from record lending after surpassing Japan as the world’s second- biggest economy last quarter, Bloomberg reported. The boost to China’s “national pride” from the second- quarter milestone may not count for much if it fails to boost domestic consumption and reduce its reliance on exports and investment for growth, said Brian Jackson, an emerging-markets strategist at Royal Bank of Canada in Hong Kong.
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About three in 10 households suffered from a deficit in the second quarter, the worst figure in six years, and further confirmation that the ongoing recovery has not yet benefited the household economy, The Korea Times reported. According to Statistics Korea, 28.1 percent of households sustained a deficit from April to June, up 0.3 percentage points compared to the same period in the previous year. It is the worst ratio in the comparison of the same quarter since 2004, when 28.2 percent surveyed said that their expenditure surpassed their “disposable” income.
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Cash-strapped South Korean car maker Ssangyong Motor Co., still under bankruptcy protection, Friday said improved sales helped narrow net losses in the second quarter, with an expanded product lineup in the second half to further boost earnings in the second half, Dow Jones Daily Bankruptcy Review reported. The net loss narrowed to KRW21.54 billion ($18 million) in the three months ended June 30 from KRW177.17 billion a year earlier, the result of higher sales and debt-rescheduling associated with its court-ordered bankruptcy protection, Ssangyong said in a statement.
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