Headlines

Airlines are on course to lose a total $157 billion this year and next, their main global body warned on Tuesday, further downgrading its industry outlook in response to a second wave of coronavirus infections and shutdowns afflicting major markets, Reuters reported. The International Air Transport Association (IATA), which in June had forecast $100 billion in losses for the two-year period, said it now projects a $118.5 billion deficit this year alone, and a further $38.7 billion for 2021.

German insurers are in the final stages of negotiating a six-month extension to a COVID-19 credit insurance backstop with the German government, Reuters reported. Insurers and the government struck a deal earlier this year for up to 30 billion euros ($35.64 billion) in guarantees for the commercial credit insurance industry for 2020, a move important for fostering the smooth flow of trade during the pandemic. With 2020 winding down, Joerg Asmussen, head of the GDV German insurance association, said an agreement for the extension could be reached “within days”.

British real estate agent Countrywide has appointed former William Hill chief Philip Bowcock as its CEO to lead talks on a new rescue deal, as shareholders rejected an offer from private equity firm Alchemy Partners, Reuters reported. The London-based company, one of several agents hurt by a coronavirus-driven drop in property sales this year, also said on Tuesday that executive chairman Peter Long had stepped down from his role and retired as a director with immediate effect.

Creditors of Yongcheng Coal & Electricity Holding Group Co have agreed to a proposed repayment plan, the bond’s chief underwriter said on Tuesday, after the company missed payments on maturing short-term commercial paper, Reuters reported. Creditors unanimously approved a plan for Yongcheng to first repay 50% of the principal on the 1 billion yuan ($151.88 million) short-term commercial paper, and to extend the repayment period on the remainder for 270 days, China Everbright Bank said in a statement posted on the website of the National Interbank Funding Center.

India’s stressed asset deals are starting to look cosy. Local tycoon Gautam Adani’s roads-to-mining empire narrowly outbid U.S.-based Oaktree with a $4 billion bid for a collapsed housing lender, but it was submitted after a deadline passed and cheekily expanded on its original plan, Reuters reported. It’s the second time in just a few months that the industrialist has blindsided foreign buyers. The higher offer from Adani Enterprises might be welcomed by creditors led by State Bank of India.

A massive increase in projected government debt poses a “major threat” to financial stability in South Africa, the central bank warned on Tuesday, while problem mortgages were also a risk, Reuters reported. South Africa’s government debt is now set to hit 82% of gross domestic product this year as the Treasury grapples with the impact of the COVID-19 pandemic. In its bi-annual review on the soundness of the financial system, the South African Reserve Bank (SARB) said this meant close links between the financial sector and government were now a serious worry.

Canada’s Cirque du Soleil Entertainment Group said on Tuesday it had emerged from bankruptcy, after the COVID-19 pandemic forced the famed circus operator to cancel shows and lay off artists earlier this year, Reuters reported. The once high-flying Cirque, which grew from a troupe of street performers in the 1980s to a company with global reach, has slashed about 95% of its workforce and suspended shows due to the pandemic. It had filed for bankruptcy protection in June and reached a new purchase agreement with secured lenders shortly after.

A spurt of missed debt repayments by three Chinese state-owned firms - a coal miner, a chipmaker and an automobile company - has shaken local markets and heightened speculation that a campaign to wean the economy off heavy credit is back, Reuters reported. The defaults have angered investors, who say their faith in the firms’ top-notch ratings, seemingly sound finances and implicit state backing has been violated.

The massive policy response from the Bank of Canada and the federal government successfully prevented the country’s financial system from buckling, though vigilance is still needed, according to a top central banker, Bloomberg News reported. Signs of overwhelming financial strain are few, and the risk of a wave of consumer defaults seems low, Deputy Governor Toni Gravelle said in remarks via video conference to the Autorite des marches financiers.

Japan’s bankers celebrated the end of the 1980s with raucous parties and an all-time high of 38,957 on the Nikkei stock index, the Financial Times reported. It had been a magnificent decade and they all looked forward to another one. The economy had grown by an average of 4 per cent a year and seemed well set to continue on a similar path. By 1995, forecast Nomura Securities, the Nikkei index would hit 63,700. It was a thrilling, golden era. Foreign officials, financiers and journalists rushed to Tokyo. Everyone wanted to learn the lessons of Japan. They still do.