As China tightens its belt economically in response to the coronavirus, African leaders are anxious about the future of infrastructure projects, trade and, in some cases, are requesting debt relief, VOA reported. China is Africa’s largest trading partner with over $200 billion in combined imports and exports annually.
India’s credit rating was cut to the lowest investment grade by Moody’s Investors Service, citing policy challenges in addressing a prolonged slowdown and the government’s deteriorating fiscal position, Bloomberg News reported. The nation’s long-term foreign-currency credit rating was cut to Baa3 from Baa2, according to a statement. The outlook remains negative. “The negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy,” Moody’s said.
Indonesian companies from airlines to builders of luxury condominiums and cement makers are warning investors of plunging revenue and profit as the coronavirus pandemic ravages Southeast Asia’s largest economy, Bloomberg News reported. While national carrier PT Garuda Indonesia and PT AirAsia Indonesia are hit by a ban on domestic travel and large scale social distancing rules, property developers are reporting declines in their sales as buyers turn more cautious.
PizzaExpress is planning to launch a pasta brand to bring in extra revenue amid negotiations over its large debt pile and the possible closure of some of its restaurants, the Financial Times reported. The chain’s owners, Chinese private equity firm Hony Capital, are considering options for its future, including a “company voluntary arrangement”, an administration process that would allow the business to reduce its costs by closing some of its 627 restaurants.
Japan’s financial regulator is closely watching global credit markets for renewed signs of stress because there’s no guarantee that support measures will keep borrowers afloat during the pandemic, officials said, Bloomberg News reported. Efforts in the U.S. and elsewhere have so far staved off a potential implosion of securities like collateralized loan obligations, which are favored by yield-starved Japanese banks.
To some short sellers, GSX Techedu Inc. is an “almost completely empty box,” with numbers that are too good to be true, Bloomberg News reported. To many analysts -- including those at Credit Suisse Group AG, which led the company’s initial public offering -- the Chinese online education firm remains a buy, and detractors just don’t understand the business model.
India may need to inject up to 1.5 trillion rupees ($19.81 billion) into its state-owned lenders as their pile of soured assets is expected to double during the coronavirus pandemic, three government and banking sources told Reuters, Reuters reported. The government initially considered a budget of around 250 billion rupees for bank recapitalisations but that has risen significantly, a senior government source with direct knowledge of the matter said, with loan defaults likely to rise as businesses take a severe hit from nationwide lockdowns to tackle the coronavirus.
Sri Lanka’s finances were fragile long before the coronavirus delivered its blow, but unless the country can secure aid from allies like China, economists say it may have to make a fresh appeal to the IMF or default on its debt, Reuters reported. All the tell-tale crisis signs are there: a tumbling currency, credit rating downgrades, bonds at half their face value, debt-to-GDP levels above 90% and almost 70% of government revenues being spent on interest payments alone.
South Korean bank stocks have gone from cheap to extremely cheap in a matter of months as concerns grow over their loan books tied to the nation’s flagging property sector, Bloomberg News reported. The MSCI Korea Financials Index, in which banks carry a 65% weighting, is trading at 0.34 times its members’ book value, down from about 0.5 times at the end of 2019, according to Bloomberg-compiled data.
Thai Airways International Pcl on Wednesday said it appointed board members as rehabilitation planners in a bankruptcy court submission, Reuters reported. The court accepted the airline’s request for bankruptcy protection earlier in the day, setting the first hearing for August 17. It gave creditors until three days before then to submit objections. The rehabilitation committee comprises the flagship carrier’s chairman Chaiyapruk Didyasarin, acting president Chakkrit Parapuntakul and three newly appointed board members, including its former CEO, Piyasvasti Amranand.