Headlines

Crisis-hit Steinhoff will sell Austrian property assets valued at 490 million euros (428.3 million pounds) to tycoon Rene Benko's Signa Holding, it said on Friday, the latest sale by the South African retailer following an accounting scandal, the International New York Times reported on a Reuters story. Steinhoff has been battling to stay afloat since last December when it revealed holes in its accounts that sent its shares crashing and forced it into selling some of its assets to pay down debt and beef up its liquidity.

Euro zone finance ministers and leaders will seek agreement in the next eight days on a series of reforms to make the currency area more resilient to future crises, the International New York Times reported on a Reuters story. Below are ideas for new powers for the European Stability Mechanism (ESM), the euro zone bailout fund for states with a firepower of 500 billion euros (438.5 billion pounds), discussed by finance ministers and to be considered by a European Union summit on June 29.

The creditors of Croatia’s indebted food producer and retailer Agrokor will vote on a settlement deal on July 4, a local commercial court said on Thursday. For the deal to be approved, two-thirds of creditors must vote for it, which is widely expected, Reuters. The legal deadline for the vote, aimed at avoiding Agrokor’s bankruptcy, is July 10. Earlier this week the representatives of major creditors in the so-called interim creditors’ council have accepted the settlement contract, which includes a debt-to-equity swap and some loan write-offs..

Saudi shares rose at the open on Thursday, while Dubai-listed Air Arabia tumbled after the carrier revealed it had an exposure of $336 million to embattled Dubai private equity firm Abraaj, Reuters reported. The Tadawul All-Share Index was up 0.3 percent, led by financial shares, after the kingdom’s bourse was granted inclusion by MSCI into the index provider’s emerging markets benchmark. Al Rajhi Bank and the country’s largest lender National Commercial Bank were both up one percent.

A mad scramble by Chinese property developers to build up their land banks is taking its toll on the industry’s creditworthiness, with builders singled out as having the highest risk of default as channels of credit tighten, Bloomberg News reported. The Bloomberg Default risk model, which tracks metrics including share performance, liabilities and cash flow, shows a 0.87 percent average probability that builders will renege on its obligations in the next 12 months. While the proportion may look small, it’s triple the likelihood of delinquency in the technology industry.

France and Germany’s “historic” agreement to establish a eurozone budget has run into immediate opposition from hawkish governments that are sceptical of plans to create a fiscal capacity for the single currency area, the Financial Times reported. Eurozone finance ministers are meeting in Luxembourg today for the first eurogroup gathering since a Franco-German deal this week on the next steps to reform monetary union. It includes a plan to develop a euro-area budget to help economies “converge” and boost investment during downturns.

Do markets look a little weird right now? That is a question many investors might be asking. In recent weeks geopolitical tensions have intensified, and the monetary policy cycle is turning in both the US and Europe. Equity markets quivered on Monday, which was the day after China said it would retaliate against new US tariffs by imposing tariffs of its own, but the jitters were modest, the Financial Times reported in a commentary. Indeed, the MSCI world equity index is up 10 per cent up for the past 12 months — never mind that pesky trade war. This is odd.

The property market has fallen a little closer to Earth: prices dropped by 9% between September and January, largely because of a surfeit of pricey new flats. They then steadied, and are around 5% below the peak—and 50% higher than at the start of 2013, calculates Valueguard, a data provider. As Swedes have borrowed to buy, their debts have risen, The Economist reported. Finansinspektionen (FI), the financial-stability supervisor, estimates that borrowers’ debts rose by 36% between 2012 and 2017, while disposable incomes went up by 13%.

Eurozone governments have brokered a long-awaited debt relief deal for Greece, pushing back repayment deadlines on almost €100bn of bailout loans as the country prepares to exit its era of financial rescue programmes, the Financial Times reported. Finance ministers hammered out the final points of an agreement in more than six hours of talks that stretched into the night in Luxembourg on Thursday.

Italian government bond prices and stocks fell sharply in value on Thursday after two staunchly Eurosceptic lawmakers from the far-right League were tapped to lead key Italian parliamentary committees that deal with economic policy, the Financial Times reported. The yield on two-year government bonds rose as much as 33 basis points to 0.912 per cent while the 10-year was up 16bp to 2.721 per cent as debt prices fell.