Headlines

European shares dipped on Tuesday, with bank stocks capturing investors’ attention as concerns about a possible fine on Italy due to the indebted country’s yawning budget deficit exacted a heavy toll on risk sentiment, Reuters reported. The pan-region STOXX 600 fell 0.2%, with banks shedding 0.4% and chemicals stocks declining 1%. London-listed shares edged down as they traded for the first time this week, while Germany’s DAX ended 0.4% lower, matching the decline in Paris-traded equities.

Kenya’s headroom for new borrowing has shrunk since it tapped the Eurobond market this month and it is time for the country to begin reorganising its debt, central bank governor Patrick Njoroge said on Tuesday, Reuters reported. Njoroge, whose term is due to end next month, told reporters that the $2.1 billion Eurobond issuance in mid-May allowed Kenya to refinance some of its existing loans and “hopefully (give) us more room to expand the economy” and increase export capacity.

Matteo Salvini has called for a “fiscal shock” of tax cuts in Italy as he exerts his political influence after a resounding victory in the European elections, but Brussels is preparing to hit back over Rome’s budget plans, the Financial Times reported. Italy’s deputy prime minister and leader of the anti-immigration League party said that Italy “must lower taxes”. “We need a Trump cure, an Orban cure, a positive fiscal shock to restart the country,” Mr Salvini said in a radio interview on Tuesday.

UK shopping centres owned by private equity groups including Lone Star and Oaktree have breached the terms of their loans, after retail failures triggered steep falls in property values, the Financial Times reported. Market players say the breaches will probably trigger a series of asset sales that will crystallise price falls in secondary retail properties.

Aiful Corp., the consumer lender brought to the edge of bankruptcy a decade ago, is on the verge of selling Japan’s first yen-denominated junk bond in the public markets, showing how local investors are willing to take on more risks as negative interest rates linger, Bloomberg News reported. The issuance would be a milestone in Japan’s bond market, where companies haven’t felt compelled to sell speculative-grade notes as they’ve traditionally had close ties with banks, who can be more forgiving than bondholders in tough times.

Eskom Holdings SOC Ltd.’s 96-year history is replete with former chief executive officers who rose from within South Africa’s debt-laden state utility to run the company, Bloomberg News reported. There are few obvious choices for the next CEO to come from those same ranks. Two possible candidates from Eskom’s executive team to replace Phakamani Hadebe have strengths but also weaknesses. Chief Financial Officer Calib Cassim is a chartered accountant who’s worked at Eskom for 17 years, yet he has little technical expertise.

Latin America is on the verge of suffering another lost decade. The region, still struggling to cope with the end of the commodities boom, has expanded only 0.7% a year on average during the past few years, Bloomberg News reported. That’s hardly enough to keep up with population growth, meaning that people are poorer today than they were in 2012, according to the International Monetary Fund. Now its biggest economies -- Brazil, Mexico and Argentina -- have contracted simultaneously for the second time in just over three years, causing yet another headache for policy makers.

Turkey’s industrial giants are struggling to keep a lid on soaring finance expenses that are threatening to engulf operating income as the lira’s depreciation pushes up foreign-borrowing costs, Bloomberg News reported. Istanbul’s top 500 industrial firms, which together account for almost half of the nation’s exports, reported finance expenses of 95.8 billion lira ($16 billion) last year, compared with 35.2 billion liras in 2017, according to Istanbul Chamber of Industry Chairman Erdal Bahcivan. The ratio of financial costs to operating profits almost doubled to 88.9%, he said.

Is it the start of a new era for China’s $42 trillion financial industry, or a one-time shock that will be quickly forgotten? Five days after the first government seizure of a Chinese bank in 20 years, investors are still grasping for answers, Bloomberg News reported. The takeover of Baoshang Bank Co. -- announced with scant explanation on Friday night -- left China watchers guessing at whether it marks an end to the implicit backstop for banks that has served as a linchpin of the country’s financial stability for decades.

An ally of Ukrainian President Volodymyr Zelenskiy rejected an influential businessman’s call to default on the nation’s external debt, saying the proposal is the view of a “detached oligarch,” Bloomberg News reported. "Default is not in the interest of the state. Any responsible government must avoid it," former Finance Minister Oleksandr Danylyuk, who advised Zelenskiy’s campaign and is slated to join the National Defense and Security Council in the new administration, told Bloomberg.