Headlines

A sharp drop in German exports in November has added to the impression that Europe’s largest economy had a shaky end to last year, when it is widely expected to have suffered its worst performance for six years, the Financial Times reported. Data published on Thursday gave a mixed picture for the German economy. There was a much larger monthly fall in exports than expected of 2.3 per cent in November, while industrial production rebounded slightly faster than economists had forecast.

China’s record boom in debt issuance abroad in recent years has left a sour after-taste for bondholders: missed payments on billions of dollars worth of securities. In what’s now become a new normal for the $815 billion-plus Chinese offshore-debt market, at least seven borrowers defaulted in 2019, Bloomberg News reported. About $3.6 billion of bonds went into default last year, up from $3.3 billion the year before, according to data compiled by Bloomberg. The 2019 tally spanned a state-owned commodity trader to a onetime Coca-Cola Co. acquisition target.

It’s the last thing India’s stricken credit markets need: a record debt bill. Companies must repay an unprecedented 5.9 trillion rupees ($83 billion) of local notes this year, just as corporate defaults spike, Bloomberg News reported. Many firms are already struggling after economic growth slumped to its weakest since 2009. That’s putting India behind China, Indonesia and a few others in the region. Credit market scares have impeded Prime Minister Narendra Modi’s efforts to revive growth.

Rising debt burdens are forcing some of the world’s poorest countries to cut already meagre levels of public sending still further, campaigners have warned. All but one of a group of 15 low-income countries where debt servicing costs consume 18 per cent or more of government revenues have cut non-debt related public spending since 2015, according to the Jubilee Debt Campaign, the Financial Times reported.

India’s shadow banks, which lend to everyone from teashop merchants to property tycoons, get a mixed bill of health in Bloomberg’s latest check, Bloomberg News reported. The sector has been stung by a crisis set off by the shock collapse of non-bank lender IL&FS group in 2018. There’ve been even more setbacks in recent weeks: Altico Capital India Ltd., a real estate-focused lender, has seen some potential rescuers demur. Revitalization of the industry, whose woes mounted last year when major mortgage lender Dewan Housing Finance Corp.

Buenos Aires’s plan to seek talks with creditors ahead of a debt payment due this month has torpedoed one of the world’s best bond rallies, Bloomberg News reported. The province’s $500 million of notes due in January 2021 tumbled 5.3 cents Wednesday to 64 cents on the dollar, their worst day in more than four months. The securities had returned 54% from the end of August through Tuesday, putting them among the top performers in emerging markets.

Russia’s VTB Capital has sued Mozambique to recover its share of defaulted debts at the heart of the impoverished African nation’s $2bn “tuna bond” scandal, the Financial Times reported. State-owned VTB is demanding repayment of a $535m loan, according to a lawsuit that it filed against the Mozambican government in London. In 2013 and 2014 Mozambique borrowed $1.4bn from VTB and Credit Suisse tied to maritime security projects, alongside a $850m bond it sold to investors for the financing of a tuna-fishing fleet.

When China’s bond issuers run into trouble, investors face an increasingly tough task in extracting any returns, the Financial Times reported. Bond defaults across the world’s second-biggest economy are rising, with more borrowers failing either to repay creditors’ initial investments, or make regular interest payments. Typically, some investors can find a way to hold on to so-called distressed debt and recover scraps of cash. Specialist investors also buy this debt on the cheap, in what can be a lucrative if risky strategy. Now, though, returns are shrinking.

The National Company Law Tribunal (NCLT) has ordered insolvency resolution process against a company, in probably the first such case in India where the petitioner that approached the bankruptcy court alleging payment default is a firm that had earlier provided it services on insolvency resolution, The Economic Times reported.

The two-year recession in Germany’s industrial heartlands is deepening, according to new data showing that orders in the country’s core manufacturing sector fell by more than expected in November — defying expectations of a rebound, the Financial Times reported. New German manufacturing orders fell by 1.3 per cent in November compared with the previous month, according to provisional figures published by the Federal Statistics Office on Wednesday. Economists polled by Reuters had expected an increase of 0.2 per cent.