Headlines

South Africa’s economy has suffered its most severe quarterly slump in a decade, ratcheting up the pressure on President Cyril Ramaphosa to revive the continent’s most industrialised country, the Financial Times reported. Severe power shortages caused by the crisis at Eskom, the struggling state power utility, dragged economic output 3.2 per cent lower in the first quarter on an annualised basis, according to Treasury data released on Tuesday. The bigger-than-expected drop was the largest quarterly fall since the depths of the global financial crisis in 2009.

Mozambique’s top court has ruled that a government-guaranteed $850 million Eurobond issued by state-run tuna-fishing company Ematum in 2013 was illegal, court documents showed, Reuters reported. Mozambique has been battling to restructure its finances after the emergence in 2016 of about $1.4 billion of undisclosed borrowing that prompted the International Monetary Fund and foreign donors to cut financial support, triggering a currency crisis and a sovereign debt default.

Billionaire Beny Steinmetz’s mining company sought bankruptcy protection in the U.S., two months after losing a $2 billion arbitration award to Brazilian mining giant Vale SA, Bloomberg News reported. The court filing by BSG Resources Ltd. on Monday could stymie Vale’s effort to enforce the award, which stems from an ill-fated joint venture with BSGR at the Simandou iron ore mine in Guinea. The government stripped their venture of its rights to Simandou following a probe that found licenses were obtained through corruption. BSGR lists its only U.S.

Chinese debt is a potential billion-dollar market for international credit-rating companies. It’s also one riven with pitfalls. The world’s third-largest debt market can no longer be ignored. Chinese companies sold more than $1.4 trillion of bonds last year, more than was raised by their U.S. counterparts. Eager to attract more foreign investors, the government in January allowed the Beijing-based unit of S&P Global Ratings to offer corporate ratings services, a Bloomberg View reported.

Two major Indian lenders slumped in the bond market after their credit ratings were cut to junk by Fitch Ratings, in the latest sign of concerns about the nation’s banks that are battling the world’s worst bad-loan ratio, Bloomberg News reported. Fitch lowered its long-term issuer default ratings on ICICI Bank Ltd. and Axis Bank Ltd. to BB+ from BBB- late on Monday. Certain dollar bonds from ICICI slumped the most in more than a year, while ones from Axis Bank fell the most in over six months on Tuesday.

A court hearing following Zambia’s decision to name a provisional liquidator to run Vedanta Resources’ Konkola Copper Mines (KCM) business was adjourned for a week on Tuesday without tackling Vedanta’s demands to be involved, the company said, Reuters reported. Vedanta Resources, part-owner of the Mumbai-listed Vedanta group of companies, is KCM’s majority shareholder while Zambian state mining company ZCCM-IH holds a stake of about 20%. In a statement, Vedanta said the judge had considered preliminary issues brought by ZCCM and reserved judgment until June 11.

Arcadia Group agreed to provide 210 million pounds ($266.64 million) in security to its pension schemes, which includes an additional 25 million pounds agreed with The Pensions Regulator, the company said in a statement on Tuesday, Reuters reported. The agreed security amount is in addition to the 100 million pound cash support that Christina Green, British retail businessman Philip Green’s wife, agreed to provide to the scheme in May.

Venezuela has defaulted on a gold swap agreement valued at $750 million with Deutsche Bank AG, prompting the lender to take control of the precious metal used as collateral and close out the contract, according to two people with direct knowledge of the matter, Bloomberg News reported. As part of a financing agreement signed in 2016, Venezuela received a cash loan from Deutsche Bank and put up 20 tons of gold as collateral.

Odebrecht SA’s failure to sell its controlling stake in petrochemical company Braskem SA to LyondellBasell Industries NV and lack of cash are complicating the task of restructuring 80 billion reais ($20.67 billion) in debt owed by the corruption-ensnared conglomerate, three sources with knowledge of the matter said, Reuters reported. The three people requested anonymity to disclose private discussions. The conglomerate was counting on Braskem dividends to service its debt.

Business conditions in Italy’s manufacturing industry deteriorated in May for the eighth successive month, although the rate of decline slowed, according to a closely watched survey released on Monday, the Financial Times reported. The IHS Markit purchasing managers’ index for the manufacturing industry in Italy on Monday reported a rise in May to 49.7, which indicates the majority of manufacturers still reported a contraction in activity, from 49.1 a month earlier. The reading was stronger than the 48.6 consensus from Reuters poll of analysts.