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More expensive services and industrial goods led a rebound in inflation in January after months of falling prices, offsetting the downward pull of cheaper energy, data showed on Tuesday, Reuters reported. The European Union’s statistics office Eurostat confirmed earlier estimates that consumer prices in the 19 countries sharing the euro rose 0.2% month-on-month for a 0.9% year-on-year increase, as expected by economists. Volatile energy prices were 3.8% higher on the month but still 4.2% lower than a year earlier and unprocessed food was 1.2% more expensive on the month and 2.0% year-on-year.
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Planemakers Airbus and Boeing are bracing for hefty jet order cancellations from troubled Norwegian Air amid restructuring proceedings, Reuters reported. Norwegian last year won protection from bankruptcy in both Norway and Ireland, where most of its assets are registered, and is aiming to emerge with fewer aircraft and less debt. The Irish High Court this week is hearing arguments concerning the repudiation of some of Norwegian’s liabilities including aircraft leases. Norwegian has 88 A320neo-family narrow-body jets on order from Airbus, according to the manufacturer.
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Puerto Rico would substantially reduce its core government debt load under a new deal announced on Tuesday, but obstacles remain for the U.S. territory’s exit from bankruptcy, Reuters reported. The island’s federally created financial oversight board said that its agreement with certain bondholders was a major step toward resolving the bankruptcy, which began in 2017 in an effort to restructure about $120 billion of debt and other liabilities, including unfunded pensions.
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Chinese bondholders are gaining more power in the corporate restructuring process, underscoring a renewed push by authorities to reform the nation’s $5.2 trillion credit market, Bloomberg News reported. Following a slew of defaults late last year that rattled markets, disgruntled creditors have successfully pushed for borrower concessions that would have seemed out of reach in China only a year ago.
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Sovereign wealth funds pulled $16.3 billion from public market investment strategies, largely equities, in the fourth quarter, the most in almost four years, driven largely by redemptions, according to data and research firm eVestment, Reuters reported. The move followed a year in which some funds, including those from Norway, Azerbaijan and Kazakhstan, planned withdrawals to help their governments cope with the coronavirus crisis. Net outflows from equity strategies managed by third-party fund managers reached $18.5 billion in the final three months of 2020, eVestment data showed.
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Ulster Bank executives confirmed on Tuesday that the bank’s 88-strong branch network in Ireland forms part of discussions with Permanent TSB, which is looking to acquire a large part of the exiting bank’s assets, the Irish Times reported. Sources said on Friday that PTSB is in talks to acquire much of Ulster Bank’s €14 billion mortgage book and up to €700 million of small business loans in a deal that could almost double its assets and potentially require a capital injection from the Government. PTSB is 75 percent State-owned.
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The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted insolvency proceedings against Topsgrup Services and Solutions, popularly known as Tops Security, the Economic Times reported. The bench has also appointed chartered accountant Rajendra Karanmal Bhuta as interim resolution professional (IRP) to oversee the company’s day-to-day affairs and revival plans.
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China’s banking regulator formalized rules that will force Ant Group Co. and other online lenders to have more skin in the game when they make loans with banks, dealing a blow to a burgeoning business that helped drive Chinese consumer spending in recent years, the Wall Street Journal reported. Starting in 2022, internet-lending platforms in the country will have to fund at least 30% of every loan they make jointly with commercial lenders, which include banks, trust companies, and finance companies.
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European banks have seemingly weathered the coronavirus crisis well, but there are still some major challenges ahead that have the potential to rattle the sector, CNBC.com reported. There’s been a noticeable difference between the pandemic and the global financial crisis of 2008: European banks have a much stronger capital position now than they did before. This is in part thanks to much tougher requirements imposed by regulators in the wake of the 2008 shock — and it looks to be paying off.
Mexico President Andres Manuel Lopez Obrador announced new tax benefits for Pemex as the beleaguered state oil company seeks to reverse long-term production declines and reduce debt, Bloomberg News reported. Petroleos Mexicanos will get an additional 14% credit stimulus to apply to the taxes it pays on hydrocarbons capped at 73.3 billion pesos ($3.6 billion) for this year, according to a presidential decree. The new benefit comes in addition to previous measures that reduced Pemex’s profit-sharing duty from 65%, to 58% in 2020 and 54% in 2021, respectively.