Headlines

South African state-owned power firm Eskom has hired financial adviser Lazard to draft a plan to shore up its balance sheet as it struggles to emerge from a financial crisis, two banking sources told Reuters. Cash-strapped Eskom is critical to Africa’s most industrialised economy as it supplies more than 90 percent of its power and is one of its most indebted state firms, Reuters reported. President Cyril Ramaphosa appointed a new board at Eskom early this year in one of his first interventions since becoming leader of the ruling African National Congress (ANC).

United Arab Emirates-based energy company Dana Gas reported a 14 percent decrease in second quarter net profit on Tuesday, citing one-off sukuk restructuring costs, Reuters reported. Dana Gas has been at the centre of a long and complex legal dispute with its creditors when last year it halted payments on $700 million in sukuk, or Islamic bonds, saying the instruments had become unlawful in the UAE.

Ghana’s central bank plans to prosecute executives of failed local lenders suspected of dissipating depositors’ funds and insider dealing, the regulator told Reuters on Tuesday. The Bank of Ghana on Aug. 1 said it had revoked the licenses of Unibank and smaller peers Royal Bank, Beige Bank, Sovereign Bank and Construction Bank, and had appointed a receiver to manage their assets because they had become insolvent, Reuters reported.

Croatian food producer and retailer Agrokor, which is in the process of being taken over by its creditors, reported a big rise in first-half core earnings on Monday, as cost cuts helped to offset lower revenues, Reuters reported. The largest private company in the Balkans with 52,000 staff said earnings before interest, tax, depreciation and amortization (EBITDA) jumped 70.5 percent year-on-year to 729.7 million Croatian kuna ($112 million). That was despite a 13.3 percent drop in non-consolidated revenues to 11 billion kuna.

Investors are fretting about emerging markets again. Turkey is the front-burner concern at the moment, but what really is getting people’s attention is the prospect that the financial problems there could spread to other fast-growing but risky countries, the International New York Times reported. If history is any indication, that has the potential to quickly turn a local crisis into a global one. Or maybe not. Over the last week the value of the Turkish lira collapsed by more than 20 percent, shocking financial markets.

In a related story, The Irish Times reported that Turkey’s economic crisis poses a threat to European banks with business in the country. Spain’s BBVA, Italy’s UniCredit, France’s BNP Paribas, Dutch bank ING and Britain’s HSBC are the most exposed to Turkey and vulnerable to its free-falling currency. Analysts see as manageable even a worst case scenario which they deem unlikely at present – under which these banks would be forced to write off completely their local operations or exit the country.

Cristina Fernández de Kirchner, the former president of Argentina, on Monday sought to paint herself as the victim of a conspiracy in the face of bribery allegations that have unsettled markets and led to comparisons with the corruption inquiry that has shaken Brazil, the Financial Times reported. Ms Fernández de Kirchner called for the case to be abandoned in written testimony on the first day of her trial, and took to Twitter to denounce what she claimed was a conspiracy between Mauricio Macri, her successor, his media allies and Claudio Bonadio, the presiding judge.

Rodrigo Duterte was sworn in as Philippine president more than two years ago on a promise to be different from his predecessors. Like them, however, he is proving vulnerable on inflation and that will prove a challenge for his legislative agenda, the Financial Times reported. FTCR’s Economic Sentiment Index for the Philippines dropped to 48.9 in the second quarter, marking the first time consumers have turned pessimistic since the fourth quarter of 2015, and since Mr Duterte took office in June 2016.

Opposition politicians and consumer advocates have criticised Ulster Bank for agreeing to sell a €1.4 billion portfolio of distressed Irish home loans to the US investment giant, Cerberus Capital Management. The portfolio, known as Project Scariff, includes about 2,300 owner-occupied home loans, as well as 2,900 buy-to-let mortgages secured on investment properties, The Irish Times reported. The deal is the third such sale by an Irish bank in recent weeks, following similar moves by Permanent TSB and KBC Bank Ireland.

Air France KLM shares slumped on Monday after the airline’s biggest pilots union said over the weekend that there were risks of further strikes if pay talks with management did not resume, The Irish Times reported. Air France KLM shares were down 5.8 per cent in early trading, making them the worst performers on Paris’ SBF-120 equity index. The stock has fallen by around 40 per cent so far in 2018.