Headlines

Investors have poured more than $10bn into junk bond funds since early June, highlighting the intensity of their hunt for yield amid a big rally in the bond market. Net inflows into the asset class registered $2.3bn in the week to Wednesday, according to EPFR data, the Financial Times reported. That brought the boost over the past five weeks to $10.6bn, the largest increase over any such period since 2017.

Britain’s four largest privately owned care home operators have racked up debts of £40,000 a bed, meaning their annual interest charges alone absorb eight weeks of average fees paid by local authorities on behalf of residents, the Financial Times reported.

Bank of Italy Governor Ignazio Visco has renewed his call for a review of European rules on banking crises that limit the ability to help ailing lenders, Bloomberg News reported. “A legislation initiative of the new European Commission to review the BRRD directive would represent the occasion to tweak current rules, in order to make the regulation framework more flexible and appropriate for the nature of the banking industry,” Visco, who also sits on the European Central Bank’s Governing Council, said in a Friday speech to Italy’s bankers in Milan.

Venezuela, and its state-owned oil company Petróleos de Venezuela SA, have stopped making payments on a lot of their debts. Many of these debts are in the form of bonds governed by New York law, and so bondholders have sued Venezuela in U.S. courts asking for their money back, a Bloomberg View reported. This is not, in sovereign debt cases, a foolproof approach: The court can tell Venezuela to give them their money back, but it can’t make Venezuela do it; Venezuela is its own country and doesn’t have to listen to U.S. courts.

The global trade dispute and travails of Germany’s car industry have begun leaving their mark on Swiss industry, with chemicals-specialist EMS-Chemie Holding AG citing the fallout this week, joining a number of other companies across the region, Bloomberg News reported. The euro area is Switzerland’s top trading partner, and Swiss exports to the southern German state of Baden Wuerttemberg exceed those to China. The bloc’s economy is in the throes of a slowdown that could yet get worse and Germany is possibly on the verge of a recession.

A state-backed plan to revive Italy’s sickly construction industry through a series of mergers could take a step forward next week when its biggest builder, Salini Impregilo, expects to approve a takeover bid for its nearest rival, Reuters reported. Known as “Project Italy”, the joint public-private initiative has evolving for months in response to an industry crisis that has sent about 120,000 firms broke over the past decade and saddled others with crippling debts.

Barely three weeks ago, Daimler AG dialed back profit expectations for the year. The move was seen as a housekeeping exercise to allow Chief Executive Officer Ola Kallenius to start with a clean slate. But on Friday, the Mercedes-Benz maker cut its earnings outlook again -- the fourth warning in just over a year -- suggesting an alarming degree of disarray at the world’s biggest producer of luxury cars at a time when slowing sales and huge investments in new technology are testing the industry, Bloomberg News reported.

Beleaguered Indian shadow lender Dewan Housing Finance Corp. posted its first quarterly loss in more than a decade, missed interest payments and cast doubt on its ability to continue as a going concern, Bloomberg News reported. DHFL posted a loss of 22.23 billion rupees ($324 million) for the quarter ended March compared with 1.34 billion in net income a year ago, it said in a stock-exchange filing. That would be its first loss in data going back to June 2008. The financier also said in a separate filing that it missed interest payments amounting to 480 million rupees due last week.

Risky borrowers are running into trouble in China and that is putting pressure on trust companies, an important corner of the country’s shadow-banking system, The Wall Street Journal reported. The fear is that this could further reduce the credit available for private businesses, acting as a drag on an economy whose growth is already slowing. Lightly regulated trust companies have been critical lenders for these firms, as traditional banks deal mostly with favored state-owned enterprises. These problems could also bounce back on many small investors.

Jet Airways shut down its operations on April 17 following the refusal by its lenders to advance any funds for its operations, The News Minute reported. Subsequently, State Bank of India filed an application with the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against the airline company. News has now come in that Etihad Airways has expressed its interest in the resolution of the Jet Airways imbroglio.