Headlines

China will further overhaul its bloated state enterprises and push for mergers in sectors such as power and coal, which are plagued by zombie firms, bankruptcy and debt defaults, according to the head of the agency that oversees state assets valued at $26 trillion, Bloomberg News reported. "Some of the central state-owned enterprises in certain industries are too fragmented and have low efficiency," said Xiao Yaqing, chairman of the State-Owned Assets Supervision and Administration Commission, referring to SOEs directly regulated by the central government.

Russia’s credit risk jumped above South Africa’s for the first time in more than 18 months. The cost of insuring Russian debt against non-payment, as measured by five-year credit default swaps, has climbed 40 basis points this week to 162 as the stand-off with the U.S. over Syria intensifies, Bloomberg News reported. South Africa’s has risen 8 basis points to 160. Cristian Maggio, head of emerging markets strategy at TD Securities in London, says Russia’s relations with the U.S. have reached a new low.

If there is any smart money in Venezuela these days, it is probably in a $2.5bn, 8.5 per cent bond issued by PDVSA, the state oil company, due on October 27, 2020. Despite being declared in default, it trades around 85 cents on the dollar, suggesting investors believe they still have a good chance of getting paid, the Financial Times reported in a commentary. Compare that with a $650m 8.5 per cent bond issued by Elecar, a state electric utility, that matured on Tuesday, April 10.

Creditors of India's Monnet Ispat and Energy Ltd have approved a joint bid here from AION Investments and JSW Steel to take over the bankrupt firm, according to a regulatory filing on Tuesday. Monnet Ispat is among India's 12 biggest loan defaulters here, which were pushed into bankruptcy last year, as part of the country's new bankruptcy law aimed at cutting close to $150 billion of accumulated soured loans, Reuters reported.

Senior scholars in Islamic finance are exploring ways to prevent legal disputes that have roiled the industry, with new rules aiming to clarify responsibilities, while others raise the prospect of penalties for their peers, Reuters reported. The discussions are part of the annual sharia conference of the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), one of the industry’s top standard-setting bodies.

Investors are bracing for trouble at Turkey’s banks as some of the nation’s biggest conglomerates struggle to repay their debts, Bloomberg News reported. The Borsa Istanbul Banks Index, which comprises 13 lenders, underperformed the Borsa Istanbul 100 by 20 percent over the past year. Valuations dropped to a nine-year low in November, and have remained there. The banks index trades at 4.9 times estimated earnings, compared with 7.6 times for the broader market.

EasyJet Plc, Air France-KLM Group and Cerberus Capital Management have made a joint approach to the Italian airline Alitalia SpA about a possible takeover, said a person familiar with the matter, betting the unprofitable carrier will provide a gateway to expansion in the Mediterranean market, Bloomberg News reported. EasyJet, Europe’s second-biggest low-cost airline, said Tuesday it has submitted a “revised expression of interest for a restructured Alitalia” as part of a consortium, without naming the other members.

The eurozone’s bailout chief has become the latest senior official to warn governments to find a compromise over ambitious single currency reforms or risk a missing a crucial window of opportunity, the Financial Times reported. Klaus Regling, head of the European Stability Mechanism, said the political momentum was being lost as governments were becoming entrenched in their opposition to different elements of how to advance the banking union and create new eurozone instruments. “In December, it looked as if Europe was doing exactly that: seizing the momentum.

French insurer AXA is restructuring its Swiss business in a move that would hit its results in the short term, but is expected to give it more financial flexibility ahead of the $15 billion (10.59 billion pounds) acquisition of XL Group, the International New York Times reported on a Reuters story. AXA, Europe's second-biggest insurer by market value behind Allianz, said it would make its Swiss Group Life insurance unit a semi-autonomous business focusing on small-to-medium sized enterprises (SMEs).

Richard Elman, the founder and largest shareholder of Noble Group Ltd., is pushing the embattled commodities trader’s creditors for a new restructuring deal, according to people familiar with the matter, casting fresh doubt on the survival of the company, Bloomberg News reported. Noble needs the support of at least half of the shareholders that vote in a special meeting for a $3.5 billion debt-for-equity restructuring plan that will all but wipe out existing equity investors. If shareholders reject the deal, the company plans to file for insolvency in London.