Asia

Last year marked the deepest deterioration in Asian liquidity conditions since 2008. While it’s nowhere close to over, the worst of the squeeze may have passed, a Bloomberg View reported. The gears of the region’s asset markets could turn more smoothly in the second half of the year. The signals are faint, so they’re easy to miss. In India, shadow banks’ liquidity crunch is still dangerously close to becoming an insolvency crisis for property developers. In China, economists’ forecasts of large-scale monetary stimulus are yet to materialize.

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Lenders to Jet Airways India Ltd. proposed a bailout of the beleaguered carrier, potentially paving the way for a revival of the airline that was on the verge of collapse, Bloomberg News reported. Mumbai-based Jet Airways, which needs 85 billion rupees ($1.2 billion) to help it get back on its feet, will be revamped, with banks becoming the biggest shareholders of the company, according to a filing Thursday. The restructuring would involve a mix of debt-to-equity swap, new capital infusion and asset sales, the company said, without elaborating.

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The International Bank of Azerbaijan (IBA) is working with a consultant to prepare a recovery strategy ahead of its privatisation, the head of its supervisory board said. State-run IBA restructured its $3.3 billion in international debt in 2017 after receiving approval from creditors, Reuters reported. “We are currently working with a well-known international consultant company on a business strategy for a recovery of the International Bank and are going to begin its implementation this year,” Shahmar Movsumov said.

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China's bad debt managers, whom Beijing hopes to play a key role in resolving financial risks, are in danger of becoming bad credits themselves as the leverage crackdown that fuelled a boom in their business now threatens their own access to funding, the International New York Times reported on a Reuters story. The practice of buying banks' non-performing loans (NPLs) at a discount and recovering them for a profit has grown rapidly in China since 2016.

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Prathap C. Reddy and his family, founders of India’s Apollo Hospitals Enterprise Ltd., plan to sell their holdings in an insurance venture with Munich Re AG to repay debt, people with knowledge of the matter said. The family is seeking to sell its entire holding of 41 percent in Apollo Munich Health Insurance Co., for about 12 billion rupees ($170 million) in six months, the people said asking not to be identified as the discussions are private, Bloomberg News reported.

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China’s state planning agency will investigate corporate bond issuers’ ability to repay maturing notes, a sign of Beijing’s concern about financial risks amid a slowing economy and tight liquidity that has made refinancing difficult for many borrowers, the Financial Times reported. Chinese bond defaults reached an all-time high last year, and issuers are facing a wave of maturities in 2019. A series of high-profile defaults in recent weeks have shaken market confidence.

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The collapse in China of a complex web of debt guarantees involving several private firms highlights risks in its financial system and opens up a potentially hazardous front for an economy in the grip of its slowest growth in nearly three decades, Reuters reported. It is the last thing Beijing needs as it tries to fight off intensifying pressure on growth from a months-long trade dispute with the United States.

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Nissan lowered its profit forecast for the full year on Tuesday, partly due to special charges related to alleged false financial reporting by its former chairman, Carlos Ghosn. Nissan Motor Co.'s profit in the October-December quarter was 70.4 billion yen ($637 million), down from 301.6 billion yen the previous year, he International New York Times reported on an Associated Press story. Quarterly sales grew 6 percent to 3.05 trillion yen ($27.5 billion). The main factor behind the sharp weakening in profit for the fiscal third quarter was the absence of a lift from U.S.

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Chinese investors are snapping up the safest assets in the bond market, complicating authorities’ efforts to help revive the economy by directing funds into cash-strapped private firms, Bloomberg News reported. Traders are piling into corporate debt with high credit ratings, and bonds sold by the central government and local authorities, according to data compiled by Bloomberg. Junk notes, many of which are sold by the kind of smaller private companies that officials vowed to support, are falling out of favor; spreads are at the widest in almost seven years.

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Indiabulls Asset Management and DHFL Pramerica Mutual Fund have seen their assets plunge by more than half in the December quarter. That shows fears of India’s non-bank finance companies still linger, Bloomberg News reported. The dwindling in assets is the most among any mutual-fund company in India during the period, data compiled by Bloomberg show.

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