Headlines

The powerful Lebanese Shi'ite group Hezbollah on Tuesday urged the new government to launch talks with banks to bring down the cost of servicing the state's massive public debt, setting out its view on the major problem in unusually clear terms, the International New York Times reported on a Reuters story. The remarks by a Hezbollah lawmaker in parliament point to the wider influence his heavily armed group aims to exercise over the way Lebanon is governed as it departs from the more marginal role it has played in the past.

The European Central Bank should pause plans to ditch its crisis-era stimulus, the governor of the Dutch central bank has said, in a sign that concerns over disappointing economic growth have spread to the eurozone’s most hawkish circles, the Financial Times reported. Klaas Knot, a contender to replace Mario Draghi as ECB president, told the Financial Times that the central bank needed to gauge how badly the economy was faring before pressing ahead with plans to normalise monetary policy.

Thyssenkrupp shares fell to a three-year low on Tuesday after the company warned that economic and political uncertainties were growing as it unveiled disappointing results, the Financial Times reported. The German industrial group, which produces a range of products from steel to elevators, reported a sharp 37 per cent drop in operating earnings in the last three months of 2018 — the first quarter of the company’s financial year.

Severe blackouts have South Africans firing up candles, flashlights and generators as crisis-plagued Eskom Holdings SOC Ltd., which provides most of the country’s electricity, struggles to meet demand. The state-owned power company took almost 10 percent of its generation capacity offline to prevent the collapse of the national grid, a consequence of construction problems at two new plants and years of deferred maintenance, Bloomberg Businessweek reported. But Eskom’s problems run far deeper than temporary shortfalls.

Chinese investors are snapping up the safest assets in the bond market, complicating authorities’ efforts to help revive the economy by directing funds into cash-strapped private firms, Bloomberg News reported. Traders are piling into corporate debt with high credit ratings, and bonds sold by the central government and local authorities, according to data compiled by Bloomberg. Junk notes, many of which are sold by the kind of smaller private companies that officials vowed to support, are falling out of favor; spreads are at the widest in almost seven years.

Banco Santander SA reminded investors that juicy bonds can come with nasty surprises. The Spanish lender rattled the bank Additional Tier 1 market by saying it will skip an option to call 1.5 billion euros ($1.7 billion) of perpetual contingent-convertible notes next month, sending the bonds tumbling, Bloomberg News reoprted. The announcement came late Tuesday, right at the deadline for a decision, after the bank kept investors in the dark for weeks regarding the call option and in the aftermath of another deal, a sale of dollar AT1 notes on Wednesday.

Debenhams Plc secured a lifeline from some of its lenders, giving the troubled U.K. department-store chain 40 million pounds ($51 million) in liquidity as it attempts a broader refinancing, Bloomberg News reported. The company, which operates middle-market stores that anchor many of Britain’s malls, also struck an agreement with export and logistics company Li & Fung Ltd. on a sourcing partnership for Debenhams own-brand products. The deal will help the retailer anticipate trends more quickly and boost quality, Chief Executive Officer Sergio Bucher said in a statement Tuesday.

Indiabulls Asset Management and DHFL Pramerica Mutual Fund have seen their assets plunge by more than half in the December quarter. That shows fears of India’s non-bank finance companies still linger, Bloomberg News reported. The dwindling in assets is the most among any mutual-fund company in India during the period, data compiled by Bloomberg show.

The Treasury has gone “Awol” in recent weeks, ignoring banks’ efforts to co-ordinate an emergency funding programme for small businesses in the event of a no-deal Brexit, according to senior industry figures. Three senior bankers said the Treasury had ignored requests from banks to provide support for small and medium-sized enterprises, despite fears that a disorderly exit would disrupt SMEs’ cash flow, triggering a sharp increase in loan defaults across the sector, the Financial Times reported.

Authorities in Lebanon, which has one of the world’s highest debt to GDP ratios, have not asked the International Monetary Fund to provide funding, the IMF’s regional head told Reuters on Monday. Lebanon has some of the world’s worst debt and balance-of-payments ratios and recently spent more than nine months without a government it needed to enact long-overdue reforms, Reuters reported. Concern grew over the state of the economy and government finances as the impasse dragged on. But despite its problems, the government has avoided asking for IMF aid.