Headlines

Developing economies borrowed at a blistering pace at the start of the year after a record 2020, prompting questions among investors about whether they are building up debt problems for the future, the Wall Street Journal reported. Governments and companies in developing countries have sold close to $100 billion of bonds so far in January, using the cash to plug budget deficits and shield themselves from the economic impact of the coronavirus pandemic, according to data from Dealogic. In all of 2020, they borrowed $847 billion.

American affiliates of Canadian restaurant business Yatsen Group sought Chapter 15 recognition in Delaware bankruptcy court, saying COVID-19 has ravaged its business and left its locations unable to pay rent, Law360 reported. Yatsen Group of Companies Inc., SAR Real Estate Inc. and 36 affiliates filed their petition late Monday, while a foreign, main case proceeds in Canada.

Government debt around the world shot up last year to approach levels last seen in the aftermath of World War II, as nations stepped up spending to fight the Covid-19 pandemic and its economic fallout, the International Monetary Fund said yesterday, the Wall Street Journal reported. Public debt as a share of global gross domestic product surged to 98% by the end of December from 84% at the end of 2019, before the pandemic struck, the IMF said in an update to its semiannual Fiscal Monitor report.

Germany’s financial watchdog has reported one of its employees to state prosecutors on suspicion of insider trading linked to Wirecard, shortly before the payment firm’s spectacular collapse, Reuters reported. BaFin’s admission is a fresh indictment of Germany’s supervision of a company that began by processing payments for gambling and pornography before becoming a star of ‘fintech’ - financial technology - and finally Germany’s biggest fraud case.

In a move designed to position itself for future growth, satellite communications provider SpeedCast International Ltd is to emerge from U.S. chapter 11 bankruptcy protection after gaining bankruptcy court approval to restructure under a new owner, private equity firm Centerbridge Partners, Financier Worldwide reported.

Hong Kong’s stock rally is so dependent on mainland capital that the mere suggestion the record inflows will slow has the potential to stir panic in the city’s $7.1 trillion market, Bloomberg News reported. Such was the case on Tuesday, when the People’s Bank of China withdrew incremental liquidity and an adviser warned obliquely of asset bubbles. The result was the biggest drop in eight months for the Hang Seng Index.

Store and office vacancies are surging across the U.K. as the pandemic hammers retailers and workers stay at home, Bloomberg News reported. The amount of empty space in the U.K.’s malls and stores is rising at the fastest pace since at least 1999, when records began, according to a survey of brokers conducted by the Royal Institution of Chartered Surveyors. The number of brokers reporting higher office vacancy rates was the highest since the depths of the last financial crisis. U.K.

Bankruptcies fell 40 percent last year in France and Britain, and were down 25 percent on average in the European Union, the New York Times reported. By contrast, chapter 11 bankruptcy filings in the U.S. rose in the third quarter to the highest level since the 2010 financial crisis, a trend that is expected to continue in 2021, according to an index compiled by the U.S. law firm Polsinelli. The difference is the enormous sums European countries are spending to keep businesses afloat. But some worry they’ve gone too far; bankruptcies are plunging to levels not seen in decades.

The European Union granted equivalence to a set of U.S. clearinghouses, easing their access to its financial markets, Bloomberg News reported. The decision, which allows U.S. central counterparties to provide clearing services in the European Union, is conditional and applies to U.S. Securities and Exchange Commission-regulated firms, according to a statement Wednesday. Clearinghouses stand between the two sides of a derivatives trade and hold collateral, also known as margin, from both in case a member defaults.