Headlines

Italy’s prime minister has called on Brussels to allow Rome “a little bit of time” to cut its debt by investing in economic growth, in his first meeting with the incoming president of the European Commission, the Financial Times reported. Giuseppe Conte, who was this week sworn in by lawmakers as the leader of Italy’s new coalition government, said that he would not pursue policies that would risk financial stability after a meeting in Brussels on Wednesday with Ursula von der Leyen, the commission’s incoming head.

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Investors may be forgiven for wondering what’s taking Moody’s Investors Service so long to downgrade South Africa to junk, Bloomberg News reported. Financial markets have been pricing in a downgrade for months, and the two other major rating companies have had South Africa on junk for two years. Yet Moody’s said this week South Africa’s investment rating is probably safe for another 12 to 18 months and President Cyril Ramaphosa’s government needs time to implement economic reforms, including fixing the loss-making power utility Eskom Holdings SOC Ltd.

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The financial health of Indian firms is worsening, adding pressure on Prime Minister Narendra Modi to come up with more measures to kick-start a sputtering economy, Bloomberg News reported. Debt quality deteriorated for the fourth straight month in August, the Care Ratings Debt Quality Index showed. That’s the longest losing streak for the gauge that tracks 1,601 domestic firms since April 2014, and puts it at a 20-month low. India’s economic growth cooled for a fifth straight quarter to 5% in the three months ended June, the slowest pace since March 2013. Read more about that here.

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Argentina is, by nearly all accounts, catapulting toward default after running up more than $100 billion of debt. Some say it’s just months away. Others say it’s actually already happened on a small portion of bonds, Bloomberg News reported. For even the casual observer, the whole thing has a certain feeling of deja vu. The South American nation is a defaulting machine with few peers in the world. The first episode came in 1827, just 11 years after independence. The most recent one came in 2014.

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Concerns over PPI, which was supposed to protect customers if they fell ill or lost their jobs, first surfaced more than two decades ago. But the unprecedented scale of what has become by far the UK’s biggest mis-selling scandal has not lost its power to shock, The Irish Times reported. A flood of last-minute claims was widely expected before an August 29th deadline, but the scale of the rush has been little short of astonishing.

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Billionaire Mike Ashley failed to appoint an auditor in time for Sports Direct’s annual general meeting on Wednesday, throwing the UK retailer deeper into chaos, The Irish Times reported. Sports Direct has been racing to find a replacement for Grant Thornton, which quit as auditor last month following the company’s delayed posting of annual results because of a last-minute €674 million tax bill. The big four auditing firms have turned down the role, citing conflicts of interest.

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A year ago, the rallying cry among Chinese policymakers was deleveraging the economy — but now the country’s senior leadership is moving quickly to revive bank lending in a fight against flagging economic growth, the Financial Times reported. The change in tactics, underlined by a Rmb900bn ($126.4bn) boost to bank lending capacity last week, is a sign that China’s policymakers acknowledge they must do more to support the country’s economy as US tariffs on Chinese goods take a greater toll than originally expected.

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With the evolution of economies over time, there are some countries for whom cutting interest rates from already very low levels is likely to suppress, rather than stimulate, demand. This is now the case for major developed nations. The latest round of monetary easing, likely to continue with the European Central Bank on Thursday and the Federal Reserve next week, may make the global economy weaker rather than stronger, the Financial Times reported.

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Grocery retailer Iceland again boosted sales across its estate in the Republic, but profit slipped further into the red as costs spiked almost 62 per cent, The Irish Times reported. The UK frozen foods retailer posted a rise in sales of 17 per cent to €57.7 million as it continued to expand its store network here in the year to March 29th, 2019. Iceland now has 26 outlets spread across the country in locations such as Donegal, Cork, Dublin and Galway.

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South Africa’s unsecured lending boom has left 40% of borrowers in default and millions of people in a debt trap, according to fund manager Differential Capital, Bloomberg News reported. About 7.8 million of the country’s 60 million residents have taken out a combined 225 billion rand ($15 billion) of loans without collateral, mostly for short-term needs such as furniture and urgent family care, the Johannesburg-based firm said in a report. South Africa eased controls on unsecured lending in 2007 to boost financial inclusion in one of the world’s most unequal nations.

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