Headlines

Profits almost doubled at Serco in the first six months of the year, with the outsourcer heralding the earnings growth as a sign its five-year strategy was yielding results despite “less than ideal” market conditions, the Financial Times reported. A drop-off in contracts sent revenues down almost 9 per cent in the half-year to June from the same period a year earlier to £1.4bn, exacerbated by currency headwinds, as acquisitions failed to offset contracts that came to an end.

Businesses across the eurozone are becoming increasingly concerned about the prospect of a further slowdown in economic growth, with a poll by an influential German think-tank indicating that global trade tension is affecting confidence, the Financial Times reported. In its latest survey of the eurozone’s economic climate, the Munich-based Ifo institute said companies’ expectations were increasingly gloomy, reaching their lowest level in more than five years.

Malaysia's Khazanah Nasional will likely cut stakes in some top state-linked firms as the government overhauls the sovereign wealth fund's investment strategy, after revamping its board last week, to boost transparency and slash national debt, the International New York Times reported on a Reuters story.

Oi SA, Brazil’s largest fixed-line telecom firm, is about to formally call for a general shareholders’ meeting, a source with direct knowledge of the matter told Reuters, as the company pushes ahead with its aggressive restructuring plan. According to the source, who requested anonymity to discuss the matter before the announcement, the firm plans to file a formal invite for the meeting to officially approve a 4 billion reais ($1.07 billion) capital injection into the firm this week or next, Reuters reported.

In a related story, Reuters reported that Brazilian telephone carrier Oi SA said on Wednesday that a judge in Lisbon had decided against validating the company’s restructuring plan in Portugal for now, adding that the decision will not keep the plan from going into effect. In a securities filing, Oi said a judge determined that there are outstanding appeals related to the firm’s restructuring of 65 billion reais ($17.4 billion) in debt that must be resolved before the Portuguese court signs off on the plan.

For Jaguar Land Rover, the only way out of its deep pothole may be to get a tow from China. The luxury unit of Tata Motors Ltd. posted dismal fiscal first-quarter results Tuesday, recording an unexpected pretax loss of 264 million pounds ($346 million) after running into trouble in many of its main markets, Bloomberg News reported. JLR, usually the profit engine for Tata, effectively wiped out a sharp turnaround at the rest of the Indian company’s business. About half the loss was because of China, where lower margins and declining prices weighed on performance.

Companies raising debt in Europe’s leveraged loan market have crowded the room and spoilt their own party. After raising more than 55 billion euros ($64.3 billion) through the end of July, already 70 percent of last year’s total, they have overwhelmed appetite from previously compliant lenders, Bloomberg News reported. July alone brought loans worth 7.1 billion euros to market, empowering investors to become more fussy and demand better terms. Numerous issuers have been forced to pay more for their debt and to stomach tighter restrictions on loan documentation.

China’s central bank has started actively encouraging banks to extend more credit by taking a softer stance on loan quotas, people familiar with the matter said, as authorities ratchet up efforts to bolster a cooling economy, Bloomberg News reported. The People’s Bank of China has delivered the message via so-called window guidance, said the people, who asked not to be named discussing private information. The central bank hasn’t provided specific targets, but it indicated a willingness to be more flexible on banks’ government-imposed lending caps, the people said.

India's government seems intent on abandoning good ideas for dealing with the country's banking crisis and encouraging bad ones, a Bloomberg View reported. Perhaps that shouldn't be surprising, given that the bureaucrats don't yet seem to have grappled with the real nature of the problem. The latest terrible proposal for dealing with the bad loans weighing down India's state-owned banks, which control more than two-thirds of deposits, is to create a "bad bank" -- an asset-management company that would take stressed assets off their balance sheets.

Bonds sold by Italy’s companies are outperforming the country’s sovereign debt, in an unusual situation that suggests investors have more confidence in its corporations than in its government. The Markit iBoxx Total Return index of Italian corporate debt is down 2 per cent so far this year, but the equivalent benchmark for sovereign bonds has fallen 3.3 per cent, the Financial Times reported. Italian energy and consumer goods groups are performing particularly well, as many have significant international revenues that help offset any weakness in domestic performance.