Headlines

To see how far Dubai has come, take a look at its credit default swaps. The extra cost investors pay to insure the sheikhdom’s bonds versus those of its oil-rich neighbor, Abu Dhabi, has fallen below 60 basis points this month for the first time on record, Bloomberg News reported. That’s down from 555 basis points back in 2009, when Dubai’s government-related companies were in talks to restructure billions of dollars in debt and Abu Dhabi came to the emirate’s rescue with a bailout. Dubai is a rare example of a Gulf economy that doesn’t rely almost entirely on oil revenue to fund expansion.

Rising corporate profits are providing Chinese policymakers with room to do more to tackle the country’s growing debt problems without inflicting major damage on the economy, the International New York Times reported on a Reuters story. Profits are increasing even though financial conditions are tightening in some significant areas of the economy; lending rates have inched higher, regulators have clamped down against risky lending and have moved to take the heat out of the property sector.

When lenders have trouble collecting debts, it is normally blamed on truant borrowers. But Provident Financial’s woes — revealed on Tuesday with the second profits warning in as many months — seem to be largely self-inflicted, the Financial Times reported. The consumer credit group in February decided to restructure its doorstep lending business, but problems with recruitment caused a slump in collections. As a result, the company has had to cut its profits guidance for the business by £100m in the space of a few weeks.

Everybody is good at something. Air Berlin has shown skill at losing money, doing so at the operating level for eight of the past nine years. Last week, Germany’s second-largest airline filed for insolvency after its largest shareholder Etihad, the UAE-based carrier, halted financial support, the Financial Times reported. National champion Lufthansa looks to have the inside track on buying up Air Berlin. Already the former has bought planes from Air Berlin, leasing them back, thereby making the flag carrier a creditor.

As markets await the annual Jackson Hole gathering of central bankers later this week, signs of tension are beginning to emerge in the eurozone’s bond markets, the Financial Times reported. The spread between Italian and German government debt yields – a reliable warning indicator of political tension – has hit a five-week high. All eurozone governments’ debt costs compare unfavourably to those of ultra-safe Germany, but that spread is important for none more than Italy.

Lufthansa has received more German government support in its bid to take over substantial assets of insolvent rival Air Berlin, with German Economy Minister Brigitte Zypries saying she would welcome such a move, Reuters reported. "Lufthansa is already an aviation champion - its position can be strengthened further though," she was quoted saying by German daily Handelsblatt on Monday. However, a spokesman for the ministry later attempted to play down the remarks, saying it had no preferred bidder. Industry rivals have voiced concerns at the way the insolvency process is being handled.

Paladin Energy, operators of Kayelekela Uranaium Mine in Karonga Malawi and Langer Heinrich in Namibia has filed for insolvency at the Australian high court after the company failed to pay a debt of USD277 million to a France based company called Electricite de France, The Southern Times reported. Kayelekera Uranium Mine in northern Malawi was the country’s only large-scale mining operation. But for more than five years, the mine is not operating and is under ‘care and maintenance’ because of global low uranium prices.

The Co-operative Bank cleared has cleared one of the last remaining hurdles in its latest attempt to get back on its feet, The Independent reported. In reality, the result of the EGM to approve its £700m recapitalisation (it achieved 96 per cent support) was never really in doubt. Such votes aren’t held in the City if there’s a chance that they will be lost. The question now is whether the bank will now be able to move on from here and successfully re-establish itself as a small, but still viable, niche player able to hold its own in a competitive market.

ICICI Bank Ltd, a major lender to Unimark Remedies Ltd, is in talks with Edelweiss Asset Reconstruction Co. (ARC) Ltd to sell its loans, according to two people aware of the development. A couple of other ARCs, including Multiples ARC Pvt. Ltd, have also evinced interested in Mumbai-based Unimark but the discussions were unsuccessful, one of the two people said, requesting anonymity. The discussions with Edelweiss ARC is at a preliminary stage, the second person said on condition of anonymity.

Employers’ group Ibec has warned of imminent business closures in the wake of another significant slide in the value of sterling, the Irish Times reported. The Brexit-related collapse in the British currency has accelerated in recent days on the back of lacklustre economic data, heaping further pain on exporters here. On Friday, it was trading at just over 91 pence against the euro, having been at 77pence prior to the UK’s referendum on EU membership last year.