Headlines

Around half of Germans are against granting debt relief to Greece and around three in 10 want the debt-laden country to quit the euro zone, a survey showed on Friday. The INSA poll for the newspaper Bild showed 46.4 percent of people living in Germany, Europe’s paymaster, thought giving Greece debt relief would be unfair for other euro zone countries, Reuters reported. That compared with around one fifth (18.4 percent) who did not share that view and 9.1 percent who said they did not care.

Kuwait’s pension fund is trying to force private-equity firm Abraaj Group into bankruptcy proceedings over allegedly not repaying a $100 million loan, according to a court document, upending efforts to save Dubai’s star investor, The Wall Street Journal reported. In a document filed May 22 in the Cayman Islands court system, Kuwait’s Public Institution for Social Security says Abraaj is “substantially insolvent” and unable to repay the loan and $7 million interest by the agreed upon date, which is Sunday.

European bank executives are facing the return of an all too familiar problem: political panic. After years of slowly healing from past crises, European banks have recently had the luxury of turning their focus to boosting profit and shedding bad loans, The Wall Street Journal reported. But the political turmoil in Italy—home to arguably Europe’s most problematic banking sector—has rekindled fears that the euro’s fragility, and authorities’ failure to unify the region’s disparate banking system, will continue to haunt the industry.

India’s bankruptcy appeals court delayed a hearing of Reliance Communications’ (RCom) plea seeking to overturn insolvency proceedings against the company to Wednesday, Reuters reported. The National Company Law Appellate Tribunal’s (NCLAT) move comes after local television stations reported that RCom had offered to pay 5 billion rupees to the Swedish telecom gear maker Ericsson, which had dragged the Indian telecom company into bankruptcy courts. The NCLAT has given RCom time until Wednesday to reach a settlement with Ericsson, the CNBC TV18 and ET Now channels reported.

Malaysia’s new government has wasted no time training its sights on 1MDB, the scandal-ridden state investment company that’s spurred criminal and regulatory probes around the world, Bloomberg News reported. Less than a day after taking office, new Finance Minister Lim Guan Eng had ousted premier Najib Razak in his cross-hairs as he spoke of a cover-up of 1MDB’s finances. In his latest salvo, Lim asked Najib to explain where $8.3 billion raised and planned for certain ventures had "gone to," implying funds may have been misused when the former leader was chairman of 1MDB’s advisory board.

The latest jolt to European political stability may be an opportune time to snap up Italian banking shares, many of which have just resurfaced from years of being in the doldrums, Bloomberg News reported. “It’s definitely a close-your-eyes and hold-your-nose purchase,” said Ben Kumar, a London-based money manager at Seven Investment Management, which manages about $16 billion.

Credit Suisse AG is closing in on an agreement to settle a $1.2 billion derivatives demand against bankrupt Lehman Brothers Holdings Inc., reducing the claim to $385 million, according to a person with knowledge of the matter. The settlement would end a 10-year fight over costs the Swiss lender said it incurred to replace tens of thousands of derivatives trades it had entered with Lehman before its collapse in 2008, Bloomberg News reported. Lehman had accused Credit Suisse of inflating its claim by over $1 billion.

Investors face a rapidly rising cost to protect against a default on Italian debt, marking the latest sign of the mounting concern about the Southern European country, the Financial Times reported. Spread on Italy’s five-year credit default swap, an instrument that provides investors a payment upon a debt default, rose to 224 basis points on Tuesday from 174 bps on Monday, according to Markit data compiled by Reuters. That means it now costs $224,000 a year to insure a notional $10m of Italian five-year debt against default.

Weaker growth in the eurozone would “significantly affect Portugal”, the International Monetary Fund warned on Tuesday, saying “lingering domestic vulnerabilities” would amplify any external shock to the former bailout country’s economic recovery, the Financial Times reported. The caution came as fallout from the Italian political crisis pushed Portugal’s 10-year debt yield up 12 basis points on Tuesday. Lisbon’s PSI 20 stock market index fell 2.4 per cent. Within this, shares in Millennium BCP, the country’s largest listed bank, shed more than 7 per cent.

Spanish stocks followed Italian equities sharply lower on Tuesday, knocked by uncertainty over the future of the minority government of Mariano Rajoy and extending declines for a fifth straight day, the Financial Times reported. The Ibex 35 index of leading Spanish shares fell by 2.5 per cent, following a decline of 0.6 per cent on Monday and 1.7 per cent on Friday. The Madrid bourse has lost almost 4.5 per cent over the course of May, and is down more than 5 per cent since the start of the year.