Asia

Turkey’s economy is expected to contract in 2019 after a decade of strong growth, and economists are predicting a longer recession ahead after a recent bout of volatility in the lira, a Reuters poll showed on Friday. The Turkish economy contracted 3 percent in the fourth quarter of last year after a currency crisis devalued the lira by nearly 30 percent against the dollar, Reuters reported. It drove inflation to a 15-year high, severely limited companies’ ability to service foreign debt and multiplied bad loans in the banking sector.

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Chinese independent refiner Shandong Haiyou Petrochemical Group aims to restart its key crude oil unit in June, a year after it was idled following a bankruptcy filing, according to four sources with knowledge of the matter, Reuters reported. The refinery in Juxian county in the eastern province of Shandong is preparing to restart a 70,000 barrels per day crude unit shut since last May after local government-led investment helped the firm clear most of its debts. “The dead is returning...

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Jet Airways pilots announced on Sunday that they would go on strike over unpaid salaries, heaping more pressure on the cash-strapped Indian carrier to find a new owner to bail it out, the Financial Times reported. The airline is saddled with more than $1.2bn debt and has not been able to pay pilots their salaries for over three months. It left passengers around the world stranded on Thursday when it cancelled its international flights. The carrier is down to fewer than 10 operational aeroplanes out of a fleet of 123, raising fears of an imminent shutdown.

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Local governments in China have flooded the market with Rmb1.2tn ($179bn) in bond issuance during the first three months of the year, in another sign of how Beijing hopes to kick-start economic growth with infrastructure spending, the Financial Times reported. The fundraisings represent a dramatic shift in how China is allowing smaller governments to raise debt — there was no local bond issuance during the first quarter over the past two years, according to data from Moody’s. The efforts come as China faces its slowest rate of economic growth in almost three decades.

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ArcelorMittal’s plan to buy a bankrupt Indian steel company for $6 billion was halted temporarily by the nation’s top court, further delaying tycoon Lakshmi Mittal’s efforts to enter the world’s second-biggest market, Bloomberg News reported. The Supreme Court ruled that Essar Steel India Ltd.’s current status has to be maintained, pending a review by a bankruptcy tribunal hearing appeals related to the sale. The company is currently being managed by a court-appointed administrator.

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China’s savers are turning a deaf ear to government warnings about one of their favorite investments. Individuals hold nearly 90 percent of instruments known as wealth management products, a record share, because many believe they’re shielded from losses -- a view officials have tried hard to discourage, Bloomberg News reported. The assumption of safety has been buttressed by the fact that the large banks that issue WMPs have at times dipped into their own balance sheets to protect investors from losses or even outright defaults.

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Turkey’s lira dipped to its weakest level in more than two weeks on Thursday on concerns over the country’s dwindling net reserves, with disappointment over an economic reform plan and local election uncertainty also weighing on sentiment, Reuters reported. The lira weakened 1.2 percent to 5.75 against the dollar on Thursday after the central bank’s international net reserves fell to $27.94 billion as of April 5, from $29.72 billion a week earlier. Analysts say Turks converting their savings into foreign currencies have signaled a decline of confidence in the lira.

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India will probably see more bank mergers as digital technology transforms the industry and non-bank financing companies seek to avoid a cash crunch, according to a senior official at the nation’s largest lender, Bloomberg News reported. Finance firms that don’t take deposits “need a stable source of capital and banks can help with that,” said Dinesh Kumar Khara, a managing director at State Bank of India who has overseen about 10 mergers. “Banks also want to expand their liabilities and NBFCs can help with that,” he said in an interview.

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Faced with high borrowing costs and a sustained shortage of liquidity in India’s money markets, shadow banks are increasingly pitching bonds with high coupon rates to the public, who may not be aware of the risks they’re taking on, Bloomberg News reported. Still roiling from the shock of defaults at Infrastructure Leasing & Financial Services Ltd., non-bank financing companies are exploring this relatively expensive funding channel.

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In a first, the Department of Telecommunications (DoT) has constituted an ‘Insolvency Issues Committee’ to examine how it can protect its interest in cases where telecom operators are undergoing insolvency proceedings, BusinessLine reported. The moves comes as two operators – Aircel and Reliance Communications (RCom) – are undergoing bankruptcy proceedings. As per rules under the Insolvency and Bankruptcy Code (IBC) rules, DoT is an operational creditor when telecom companies initiate Corporate Insolvency Resolution Process (CIRP).

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