Headlines

A consultancy firm that allegedly arranged a fraudulent $184 million loan announced by Nigerian oil company Lekoil Ltd said on Wednesday that it welcomed an investigation into the matter, Reuters reported. Shares in Lekoil Ltd fell by more than 70% following a suspension of trading after the firm discovered the loan was fraudulent. Lekoil had suspended trading of its shares on the London Stock Exchange on Monday after finding that the $184 million loan it had announced from the Qatar Investment Authority was a “complex facade” by individuals pretending to represent the QIA.

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State-owned Monte dei Paschi joined fellow Italian banks in a start-of-year bond issuance rush on Wednesday, paying an 8% coupon to sell a junior bond to fulfil commitments under its bailout agreement, Reuters reported. Italian lenders, including UniCredit, Banco BPM and UBI Banca, have sold higher risk and relatively costlier debt this month, taking advantage of investors’ moves to start to spend their new year budgets.

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The cognoscenti of international economics are once again agape, and not in a flattering way, at the budget surpluses Germany’s government keeps running, when instead it should be stimulating the economy with tax cuts and higher spending, Bloomberg News reported in a commentary. The surplus revealed this week for 2019, at 13.5 billion euros ($15 billion), is the fifth in a row, and the biggest ever. Many Germans still regard such numbers as signs of economic virtue and virility, as they keep slashing public debt and reveling in high employment numbers.

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Lebanon’s government has been warned by rating companies that a proposed Eurobond swap with local banks would be considered a “selective default,” a person familiar with the matter said, Bloomberg News reported. The Finance Ministry sent a letter to the central bank Wednesday asking it to hold off on the deal, according to the person, who asked not be identified because the information isn’t public.

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Reform of the euro zone bailout fund will remain frozen until at least March, a senior official said on Wednesday, as governments are still divided over technical details on bond restructuring, Reuters reported. The reform, which would allow the European Stability Mechanism (ESM) to play a role in future rescues of failing banks, was to be adopted last December but last-minute objections from Italy forced a delay. Back then, the head of the Eurogroup of euro zone finance ministers, Mario Centeno, said that an agreement was possible in January, after acknowledging more time was needed.

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Ghanaian prosecutors charged the chief executive officers of two defunct lenders for alleged crimes that contributed to a banking crisis that cost the West African nation 12.5-billion cedis ($2.2 billion) in bailouts, Bloomberg News reported. Michael Nyinaku, the former CEO of Beige Bank Ltd., appeared in the Accra Circuit Court on Tuesday on counts of stealing 341 million cedis and money laundering, court documents showed.

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Shandong Ruyi is facing serious disruption to its access to cotton supplies after the company, once hailed as the “LVMH of China”, was placed on an industry blacklist that will halt much of its trading in the commodity with major global groups, the Financial Times reported. Details from a recent arbitration case with a Bangladeshi group, in which Shandong Ruyi was ordered to pay compensation but has not, have also shone a spotlight on the extent of the Chinese company’s difficulties in paying off debts.

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Argentina’s inflation rate hit 53.8 per cent in 2019, climbing to its highest level in almost three decades and underlining the scale of the challenges facing the embattled country’s new leftist president, Alberto Fernández, the Financial Times reported. The national statistics agency announced on Wednesday that prices rose 3.7 per cent in December after renewed currency volatility ahead of elections last year, confirming Argentina’s place among the top five countries with the highest inflation rates in the world — behind Venezuela, Zimbabwe, South Sudan and Sudan.  Even so, Argentin

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State-owned South African Airways (SAA) urgently needs the government to provide the 2 billion rand it promised the airline last month or it could have to suspend some flights and delay salary payments, a senior trade union official said on Wednesday, Reuters reported. SAA entered a form of bankruptcy protection last month in an effort to rescue the company and 10,000 related jobs. At the time it was promised 2 billion rand from the government and 2 billion rand from lenders.

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