Headlines

While money managers from Goldman Sachs Group Inc. to UBS Wealth Management still tout investing opportunities in emerging markets, the asset class has one notable critic: Harvard professor Carmen Reinhart. The Cuban-born economist points to mounting debt loads, weakening terms of trade, rising global interest rates and stalling growth as reasons for concern, Bloomberg News reported.

Brokers and investment platforms have admitted they are powerless to prevent customer funds being tapped in the event of an insolvency, after a brokerage collapsed with “huge ramifications” for investors, the Financial Times reported. Some clients of Beaufort Securities, which was closed by Financial Conduct Authority in March, have been told they will have to foot the bill for costly insolvency proceedings being carried out by PwC, the professional services group.

Not so long ago a document as radical as the draft Italian coalition program that surfaced on Tuesday night would have sent the markets into meltdown, The Wall Street Journal reported. It revealed that the 5 Star Movement and the League were still discussing this week proposals that included a demand that the European Central Bank cancel €250 billion ($297 billion) of Italian government debt.

Patrick Neary, the former chief executive of the now-defunct Irish Financial Services Regulatory Authority (Ifsra), told an inquiry into Irish Nationwide Building Society that the authority’s board was not willing to tackle a series of problems at the company for fear of upsetting its planned sale, the Irish Times reported.

Declining productivity should be “a wake-up call” for the UK, business leaders warned after new data showed it dropped sharply during the first three months of 2018, the Financial Times reported. Output per hour worked fell by 0.5 per cent during the first quarter of 2018 as hours worked rose without a matching increase in economic growth, according to figures published by the Office for National Statistics on Tuesday. Other labour market data produced by the ONS pointed to increases in wage growth and employment in the first quarter of the year.

Europe’s largest economy cooled sharply in the first quarter amid a drop in government spending and weak exports—a sign that a stronger euro and global tensions are beginning to leave a mark on the German economy, The Wall Street Journal reported. Germany’s annualized growth rate slowed to 1.2% from 2.5% in the fourth quarter of last year, the Federal Statistical Office said Tuesday. This means that the German economy was growing more slowly than the U.S., which registered growth of 2.3% in the same period.

Thomson Reuters is planning to transfer its widely used foreign exchange derivatives trading from London to Dublin to be ready for the UK’s departure from the EU next year, the Irish Times reported. In a media advisory note sent on Tuesday morning Thomson said it had commenced the process of applying to the Central Bank of Ireland for authorisation to operate the business here. The move of the company’s multilateral trading facility comes directly as a result of the UK’s planned departure from the European Union, Thomson Reuters said.

India’s bankruptcy court on Tuesday admitted an insolvency plea filed by Sweden’s Ericsson against Reliance Communications, potentially delaying the Indian firm’s plans to sell assets to lighten its debt load, Reuters reported. Ericsson, which signed a seven-year deal in 2014 to operate and manage Reliance Communications’ nationwide telecoms network, is seeking 11.55 billion rupees ($170 million) from the company and two of its subsidiaries.

Among the reams of documents filed in the US for the proposed €79 million Smyths Toys takeover of the central European division of Toys R Us, there is some redacted material about the financing of the bid and how payments will be structured, the Irish Times reported. What could be so secret about some portions of the transaction? Smyths is proposing to buy 93 mostly German (with some Swiss and Austrian) Toys R Us stores, instantly launching the Irish company to the top of the table of speciality toy retailers in Europe.

Just seven years ago, Noble Group was an $11 billion-plus Asian commodity powerhouse, trading everything from soybeans to oil. Now it's worth barely $80 million, rooted among Singapore's penny stocks, the International New York Times reported on a Reuters story. Noble has posted huge losses provoked by a lack of trade financing and market calls that went sour, while also whittling down a mountain of debt. On Tuesday, it reported a narrower first-quarter loss than a year ago, although saying its performance was still beset by constraints on liquidity and trade finance.