Headlines

For emerging economies, coronavirus struck first through the financial markets. Long before the numbers of cases and deaths in these countries began to spread alarm, many emerging markets experienced a sudden halt in foreign investment inflows, the Financial Times reported in a commentary. Overseas investors have taken $95bn out of EM stocks and bonds since late January, according to the Institute of International Finance, dwarfing the withdrawals that followed the onset of the global financial crisis in September 2008.

London-based hedge fund Cheyne Capital’s total return credit fund lost almost a quarter of its value last month as debt markets convulsed over the impact of the deadly coronavirus pandemic, Bloomberg News reported. The fund referred to as TRCF December 2024 lost 24.7% on top of a 5.3% decline in February, according to an investor letter seen by Bloomberg News. It mainly focuses on investment-grade companies which are less likely to default on their debts and includes bets using credit derivatives.

France is preparing fiscal stimulus focusing on investment and financial aid for industrial sectors including the automotive industry, Finance Minister Bruno Le Maire said, giving the first indication of how the government plans to reboot the economy after the coronavirus crisis, Bloomberg News reported. Like other European countries, France has so far focused the heft of emergency spending on benefits for furloughed workers and a vast loan guarantee program to prevent bankruptcies. But the government is now working on a plan for when the confinements are lifted and businesses reopen.

The Central Bank has warned that the coronavirus crisis is likely to blow a €22 billion hole in the State’s finances and could see half a million people losing their jobs, The Irish Times reported. In its latest quarterly bulletin, published on Friday, it says lost tax revenue and increased spending on various support schemes will see the exchequer move from a €2.2 billion surplus to a €19.6 billion deficit this year. It predicts the crisis will lead to the loss of up to 500,000 jobs as the economy shrinks by 8.3 per cent.

Banks are under increased pressure to raise loan margins in the Greater China region as the coronavirus pandemic weakens lending and a global dollar liquidity squeeze pushes up funding costs, Bloomberg News reported. That’s a key takeaway from a Bloomberg survey of 15 major syndicated loan arrangers operating in the region, including international and Chinese banks. The survey was conducted between March 30 and April 1.

India’s checkered history with foreign investors is making one of the biggest emerging markets look particularly vulnerable at a time when its need for overseas funding has never been clearer, Bloomberg News reported. Decades of semi-socialist, self-reliance based policies following independence left a legacy of ambivalence, or even skepticism, towards overseas capital. As recently as last year, plans for an inaugural offshore sovereign bond provoked a wave of controversy. That could all change now that India faces both a sharp economic slowdown and a rapid expansion in borrowing needs.

Swissport International AG, the airport ground services firm owned by beleaguered Chinese conglomerate HNA Group Co., hired advisers to review its debt as passenger air traffic grinds to a halt because of coronavirus restrictions, Bloomberg News reported. The company appointed Houlihan Lokey Inc. as financial adviser as it considers a restructuring of its 1.6 billion euros ($1.7 billion) of debt, according to people familiar with the matter who asked not to be identified because the appointment is private.

German restaurant franchise company Vapiano said on Thursday it had applied to start insolvency proceedings, becoming another high street casualty of a national coronavirus lockdown that is expected to remain in force for weeks, Reuters reported. Parent company Vapiano SE said it had filed for insolvency at a district court in Cologne and was evaluating whether insolvency applications would need to be filed for its group subsidiaries.

Argentina’s debt restructuring talks with creditors will continue for at least two more weeks after the centre-left government failed to meet its deadline of March 31 to cut a deal, the Financial Times reported. The deadline had been considered to be ambitious by investors and economy minister Martin Guzmán admitted on Tuesday that the outbreak of the coronavirus pandemic, which has now claimed 27 lives in Argentina, had further delayed progress in negotiations.

Zambia’s bonds have slumped after the country’s government called in advisers to help restructure its debt, as investors worry that the coronavirus crisis could trigger a wave of defaults in emerging markets, the Financial Times reported. The copper exporter was already struggling with a growing debt burden, much of it in the form of loans from China, before the pandemic caused big outflows from emerging-market debt funds and a plunge in metals prices.