Headlines

Italy is not the only potential source of future economic instability for the eurozone, but it is the most foreseeable. Other possible triggers are a trade war and a global economic downturn — or more likely both, the Financial Times reported. A trade war remains a clear and present danger. The EU has secured a reprieve from US steel and aluminium tariffs. But the European trading bloc is dangerously dependent on the export of manufactured goods. And we should be careful not to misinterpret the announcement of a short delay as a sign of appeasement by Donald Trump.

The world’s poorest countries are increasing their borrowing at a worrying pace and face the mounting risk of debt crises, the IMF has warned. Since 2013, the median ratio of public debt to gross domestic product in low-income countries has risen 13 percentage points to hit 47 per cent in 2017, according to new research by the IMF. The research found that 40 per cent of low-income developing countries face “significant debt-related challenges”, up from 21 per cent just five years ago, the Financial Times reported.

Bank creditors of detained Saudi Arabian tycoon, Maan al-Sanea, have asked his advisers for more details on a proposed settlement covering 16 billion riyals ($4.3 billion) in claims before they agree to move forward with the process, sources close to the matter said. Banks met in Dubai on Wednesday as they seek to resolve the debt crisis that has rumbled on since al-Sanea’s company Saad Group defaulted on its debt in 2009, Reuters reported.

Call it the Holy Grail of the euro zone. Ever since the financial crisis, economists have been seeking ways to create a safe financial instrument, which banks in the single currency area can buy without having to load up on domestic sovereign bonds, a Bloomberg View reported. Many placed their hopes in the proposal of a bundle of sovereign bonds called “European Safe Bonds” (ESBies); but that looks set to disappoint. The purpose of a European “safe asset” is to dismantle the so-called doom loop between lenders and governments.

India may allow more time for the restructuring plans of defaulting companies to be approved, according to people with knowledge of the matter, as a slew of lawsuits from owners, lenders and bidders slows the insolvency process and tests a new bankruptcy law, Bloomberg News reported. The rules mandate that a bad-loan resolution plan must be agreed upon within 270 days, failing which they require liquidation of the company’s assets.

Cold weather, skills shortages, the strong euro and global political uncertainty are dampening the spirits of eurozone business executives according to a surveys of purchasing managers issued on Wednesday by IHS Markit. IHS Markit's composite flash PMI for the eurozone, generally seen as a good gauge of economic health, fell to 55.3 this month, below forecasts collected by Reuters which put March’s readings at 56.7, down from February’s 57.1, the Financial Times reported.

Noble Group Ltd said more creditors backed its debt restructuring agreement, making it difficult for those who opposed the deal to try and wind up the company, after it defaulted on a $394 million bond that matured this week, Reuters reported. The Singapore-listed commodity trader is seeking a $3.4 billion debt restructuring seen as critical for the beleaguered firm’s survival. But the deal has been opposed by some bondholders and shareholders, including Goldilocks Investment Co, which has an 8.1 percent stake in the firm.

Creditors and landlords of New Look overwhelmingly approved the British fashion retailer’s restructuring plan at a meeting on Wednesday, enabling it to stave off a potential fall into administration, the company said. Earlier this month, the chain, owned by South African investment heavyweight Brait and saddled with 1.2 billion pounds ($1.7 billion) of debt, said it would seek creditor approval for a Company Voluntary Arrangement (CVA), Reuters reported.

Bargain Booze’s owner, Conviviality, has made clear it is likely to go bust unless it can raise £125m, as it issued its third profits warning in a month, The Guardian reported. The company, in a stock exchange announcement, said it was holding meetings with investors to raise £125m via a share placing that would help it pay a £30m tax bill due at the end of the month, fund overdue payments to creditors and repay a £30m loan.

As China’s President Xi Jinping steps up efforts to rein in excessive borrowing, the nation’s corporate bond market faces rising default risks as weaker firms and local borrowers struggle to roll over obligations, Bloomberg News reported. The latest salvo came last month, when the top economic planning body said it will step up scrutiny of the public works-related assets held by companies seeking to sell bonds. The National Development and Reform Commission, or NDRC, also said it would further regulate bond sales by public-private partnership projects.