Headlines

Germany’s stagnant economy is dragging down the eurozone, economists have warned, as new data showed Europe’s largest economy is on track for another sluggish year. Figures form IHS Markit showed the country’s purchasing managers’ index (PMI) fell to 43.4 in December from 44.1 the previous month, the first downward movement in three months. The result was worse than the 44.5 reading predicted by economists in a survey by Reuters. And the eurozone also saw a drop in the PMI, an index of prevailing direction of economic trends in manufacturing and services.

Thailand's household debt in the second half this year has slowed from the first half thanks to weak housing demand, excess supply in the property market and tighter lending from financial institutions, the Bangkok Post reported. Car loans slowed down because of lower car and motorcycle sales, while most financial institutions retained strict scrutiny for credit lending, according to a report to the cabinet yesterday by state planning unit National Economic and Social Development Council (NESDC). Yet loans for other personal consumption increased, mainly for credit cards.

Europe’s economy is struggling to gain traction after years of anemic growth. But the rock-bottom interest rates meant to power a recovery are fueling a property boom that is creating a new set of problems, the International New York Times reported. Money is so cheap — a 20-year mortgage can be had in Paris or Frankfurt at a rate of less than 1 percent — that borrowers are flocking to buy apartments and houses. And institutional investors, seeing a chance for lucrative returns, are acquiring swaths of residential real estate in cities across Europe.

Pre-tax losses at a holding company for Michael JF Wright’s hospitality group last year increased almost threefold to €1.2 million, The Irish Times reported. However, the group is in expansion mode and has plans to open St Andrew’s Food Hall at Suffolk Street next year. Accounts lodged by The Wright Bar Group Ltd show that pre-tax losses increased from €419,809 to €1.2 million, due mainly to an exceptional cost. The group recorded the increase in losses as revenues declined marginally from €16.87 million to €16.31 million in the 12 months to the end of June last year.

Anti-government protests have prompted investors to pull some $5bn out of Hong Kong since April, according to the Bank of England, the Financial Times reported. That amount is equivalent to 1.25 per cent of the gross domestic product of the Asia financial hub, the UK central bank said in its biannual Financial Stability Report. The bank cited data from EPFR Global, Refinitiv and its own calculations. However, the $5bn in outflows from investment funds since April is modest in the context of Hong Kong’s monetary system.

Irish banking stocks fell in Dublin on Tuesday as the Bank of England ordered lenders with businesses in the UK hold additional capital to absorb losses in the event of a sudden downturn, The Irish Times reported. Sentiment towards the sector was further dented as UK prime minister Boris Johnson put the threat of a no-deal Brexit back on the table as he outlined plans to legislate to ensure the transition phase of the European Union withdrawal will not extend beyond the end of 2020.

Foreigners have withdrawn from Brazilian equities at a record pace this year, amid persistent scepticism from global investors about the country’s economic recovery, the Financial Times reported. In total, foreign investors have pulled a net R$15.2bn (US$3.7bn) out of the country’s stock markets this year, data from the São Paulo stock exchange show. The São Paulo stock exchange has surged higher, with the benchmark Bovespa up more than 25 per cent this year. But the persistent withdrawals from foreign accounts show how heavily this rally depends on local investors.

Sweden’s Riksbank is expected to raise interest rates to zero per cent on Thursday, ending a five-year experiment with negative interest rates and becoming the first central bank in the world to ditch the controversial policy, the Financial Times reported. But with the Nordic economy slowing, some traders are already betting that Sweden may struggle to leave behind sub-zero rates for long. The bank’s monetary policy committee is scheduled to announce its decision on borrowing costs on Thursday.

A tribunal has started insolvency proceedings in the case of Chennai-based wind turbine manufacturer ReGen Powertech, emphasising the dire times the wind energy sector is passing through, The Economic Times reported. The National Company Law Tribunal ordered the commencement of a corporate insolvency resolution process of ReGen Powertech on December 9, the interim resolution professional said in a notice dated December 13 in the Times of India. “This does not come as a surprise… They have not been able to ramp up their order book since 2017,” said an industry expert.

Croatia prepared on Friday to rush through new legislation to protect the economy from big corporate failures, as the country‘s biggest private company Agrokor tried to secure a debt restructuring deal, the Stock Daily Dish reported. Some local media reported on Friday that Agrokor had signed a deal with creditors overnight to restructure its debt, but the company declined comment and there was no confirmation from its creditors.