Headlines

Zambia has seen ‘unprecedented infrastructure’ development in the last six years but at what cost to the economy? In Zambia’s past, debt has been a millstone which has held the country back. The current situation of rising fiscal deficits and public debt coupled with increased spending and flat revenues is a recipe for economic disaster. In recent years, public debt is once again rising at a significant pace, The Mast reported. Maintenance of debt sustainability will remain pivotal in the rebalancing of the Zambian economy.

The Hyderabad Bench of the National Company Law Tribunal (NCLT) has given its nod for Corporate Insolvency Resolution Proceedings (CIRP) to be initiated against Ramky Infrastructure Ltd, Bar & Bench reported. The company is publicly listed and has a paid-up share capital of over Rs. 57 crores. Judicial Member Bikki Raveendra Babu passed orders after hearing a petition filed by one of Ramky’s operational creditors, Todi Minerals Pvt Ltd.

Bondholders’ relief over a Gulf pledge to prop up Bahrain’s struggling economy has given way to anxiety now that three weeks have passed without any sign aid is on the way, Bloomberg News reported. Saudi Arabia, Kuwait and the United Arab Emirates are waiting for Bahrain to submit its proposal for economic reforms before giving any money to the cash-strapped nation, according to three people familiar with the issue, who declined to be identified because of the sensitivity of the discussions.

A homegrown Singaporean company that owns one of the financial center’s three seawater desalination plants is struggling to stay afloat, a Bloomberg View reported. Whether Hyflux Ltd. sinks or swims will matter to creditors and shareholders. The strategic stakes, though, are far higher. Now that Singapore’s old foe Mahathir Mohamad is back as Malaysia’s prime minister, and once again threatening to renegotiate a 1962 agreement to supply raw water to the city-state, making sure the Hyflux plant is owned until 2038 by a friendly buyer could become an issue of national security.

Credit investors worried there won’t be enough liquidity in a downturn are taking bigger steps to avoid getting stuck with hard-to-trade corporate bonds, Bloomberg News reported. They’re snapping up index derivatives -- synthetic products that are easier to buy and sell than cash bonds -- in increasing numbers as a way to stay light-footed should the big one hit. Volume on Markit’s CDX North American Investment Grade Index, which tracks default swaps on 125 high-grade corporate bonds, reached a new milestone in the first half of 2018 of $1.56 trillion.

Italy's recent bond shock showed that the financial derivatives market designed to insure against sovereign defaults hasn't been killed off by doubts about whether those contracts would pay out when the time came, the International New York Times reported on a Reuters story. The market for sovereign credit default swaps (CDS) is half the size it was six years ago at the height of the euro zone debt crisis, following a government clampdown and a patchy record as a hedge for a credit event.

Shares of Asiana Airlines shot up more than 20 per cent on Tuesday morning on a media report that SK Group is considering buying the troubled airline - a claim the conglomerate later denied, the Financial Times reported. Asiana shares climbed as much as 23 per cent to Won5,130 ($4.57), their highest since May 21, after local online media News Tomato said SK Group, South Korea’s third-largest conglomerate, is considering a takeover.  But SK Holdings, the holding company of SK Group, denied the media report in a regulatory filing, making Asiana shares give up much of the gains.

International investors are too fixated on trade tension between the US and China. Instead, they would do well to take heed as Beijing continues a war against non-bank lenders and fintech companies that is tightening liquidity and spooking investors in mainland China, the Financial Times reported in a commentary. Money remains tight on the mainland even as financial stability has replaced deleveraging as the official order of the day.

Italy's anti-establishment coalition government is likely to delay a planned reform of the country's mutual banks through a decree it will approve next week, two sources familiar with the matter said on Tuesday. The right-wing League party has been pushing for a moratorium of the reform, which was introduced by the former centre-left government and is forcing hundreds of small mutual banks (BCCs) to merge to create larger groups, the International New York Times reported on a Reuters story.

The European Central Bank has started the hunt to fill one of the most important jobs in eurozone finance — bank supervisor-in-chief. Danièle Nouy is about to complete her term at the helm of the Single Supervisory Mechanism, the ECB’s banking watchdog set up in the throes of the financial crisis, the Financial Times reported. While she is credited with shepherding the supervisor creditably through its first five years, her successor will have much to do to build the standing of a young institution whose reputation has been marred by squabbles with eurozone member states.