Headlines

China’s bid to ease funding strains faced by private sector firms is proving to be tough going and signs are that things may get gloomier, Bloomberg News reported. Local company bond failures are at their highest levels this year and show no indications of abating. Junk bond sales have slumped to 2014 lows and spreads between lower and top rated borrowers are hovering near the widest in more than two years. What makes all this worse is the slowing economy, according to Nanjing Securities Co.

Italian government bond yields have fallen to their lowest level since the end of September, in the wake of media reports that Rome was seeking a compromise with Brussels over its controversial deficit-boosting budget, the Financial Times reported. The yield on 10-year Italian government debt fell 10 basis points from Friday’s close to 3.11 per cent, taking its spread over the equivalent German Bund to 280 bps, its narrowest since early October. Italian finance minister Giovanni Tria met European Commission vice-president Valdis Dombrovskis in Brussels on Monday.

The completion of Greece’s financial rescue programme this summer marked the end of the eurozone crisis. At least those were the hopes of European policymakers. Reality, however, is less forgiving, the Financial Times reported. The confrontation between Italy and the European Commission over fiscal rules has shown that the eurozone remains vulnerable to bond market breakdowns.

The digital estate agency Emoov has entered administration, six months after a merger with two rivals that it had said made it the UK’s second-largest online agency, the Financial Times reported. Russell Quirk, chief executive, told the Financial Times the eight-year-old company had “voluntarily applied for administration, albeit [with] lots of potential buyers hovering”.

Fitch has downgraded Sri Lanka’s long-term debt rating in the latest blow to the cash-strapped country as it grapples with ongoing political turmoil, the Financial Times reported.

Euro-area finance ministers gather in Brussels on Monday for their final meeting on buttressing the currency bloc before passing the baton to their leaders, who are expected to strike a deal later this month, Bloomberg News reported. “I don’t think the European countries are living through a period of particularly excellent economic welfare otherwise we wouldn’t have had Brexit,” Italian Deputy Premier Matteo Salvini said during a Politico conference in Brussels. “The basics of the budget won’t change: the pension overhaul, the reforms of the work conditions,” Salvini said.

Corporate treasury departments in India have become so concerned about credit risk they’re increasingly parking their cash in securities maturing overnight. Assets with overnight funds soared to 123 billion rupees ($1.8 billion) last month, from 39 billion rupees in September, as companies chose safety over returns in the wake of a rare debt default, data from Morningstar Investment Adviser India Pvt. show, Bloomberg News reported.

Bondholders of Odebrecht SA’s builder unit won’t see any of the money the troubled company is getting from a long-delayed sale in Peru, one person with direct knowledge of the matter said. Of the $1.4 billion price tag of the Chaglla hydroelectric plant in 2017, Odebrecht will likely get about $640 million, Bloomberg News reported. Half of that will go to pay damages to the Peruvian government, Justice Minister Vicente Zeballos said last week. Almost all the rest will go to creditors of the project itself, the person said, asking not to be named because the matter isn’t public.

A struggling Conservative council in the Midlands has been handed an effective bailout after it was allowed to use proceeds from selling its headquarters for day-to-day spending, averting a financial crisis, the Financial Times reported. Ministers have given the green light to Northamptonshire county council to break the usual prohibition on councils using capital receipts for day-to-day purposes. The authority plans to use £70m of capital receipts, £60m of which comes from selling its new headquarters, to pay off a £35m deficit from last year and top up its reserves.

Pakistan’s currency plunged as much as 5 per cent on Friday in what traders suspect was a devaluation of the currency amid rescue talks with the IMF, the Financial Times reported. The currency traded as weak as 141 rupees to the US dollar, from Thursday’s closing level of 133.9, according to Refinitiv data. ”The IMF’s main demands [for a new loan] included a devaluation of the rupee,” a central bank official in Karachi told the Financial Times. The rupee has tumbled about a fifth since the end of last year in a series of devaluations to avoid a balance of payments crisis.