Headlines

Corporate bankruptcies are increasing at double-digit rates in most advanced economies as borrowing costs rise and governments unwind pandemic-era measures to support business worth trillions of dollars, the Financial Times reported. Following a decade of decline the number of US corporate bankruptcies rose 30 per cent in the 12 months to September compared with the year-ago period, according to courts data. Germany, the EU’s largest economy, said bankruptcies rose 25 per cent from January to September compared with the year-ago period.

A Chinese developer partially owned by the southern city of Shenzhen warned it can’t pay interest due Wednesday as it races to win support from creditors to extend dollar bond deadlines, raising the risk of its first default, Bloomberg News reported. China South City Holdings Ltd. said in a stock exchange filing that it doesn’t have the resources to pay the interest of its 9% notes due July 2024 — with $235 million of principal outstanding — by the end of a grace period Dec.

Chinese banks are putting bad loans up for sale at a record pace, as regulators push for faster disposal of sour debts amid rising consumer defaults during an ailing post-COVID economic recovery, Reuters reported. Issuance this year of securities backed by non-performing loans (NPLs) is set to jump about 40% from a year ago to a record, data from a ratings agency showed, as lenders rush to offload distressed assets linked to mortgage, credit card and consumer borrowings.

China's state planner on Monday said it aimed to stimulate private investment with a greater effort in 2024 and continue to enhance the "positive" economic recovery trend, Reuters reported. China would expand consumption of renewable energy, the National Development and Reform Commission said in a statement, adding that it would actively and steadily promote carbon peak and carbon neutrality.

Germany's economy is likely to shrink again slightly in the current fourth quarter, the country's central bank said Monday, while a survey showed business confidence retreating unexpectedly, the Associated Press reported. Europe’s biggest economy contracted by 0.1% in the third quarter after growing by the same amount in the previous three-month period, according to official figures.

Ethiopia's only international government bond slipped in price on Monday after credit ratings agency S&P Global Ratings downgraded it to "Default" after the east African country failed to make a key 'coupon' payment, Reuters reported. The $1 billion bond, which matures in December 2024 with a full principal repayment known as a bullet payment, dipped 0.4 cents on the dollar to 66.5 cents having jumped roughly 10% since the start of the month.

Mexico's central bank could weigh a rate cut in the first quarter of 2024, the bank board's governor said in an interview published on Monday, Reuters reported. "Inflation has dropped significantly, but we need to be cautious," central bank governor Victoria Rodriguez said in an interview with local outlet El Financiero. "When downward (rate) adjustments occur, we are anticipating them to be gradual." Mexico's annual inflation hit 4.32% in November, ending a nine-month slowing streak and still above the bank's target of 3% plus or minus one percentage point.

Bank of Israel Governor Amir Yaron urged government leaders and lawmakers to maintain responsible fiscal policies during the war with Palestinian militant group Hamas, as Prime Minister Benjamin Netanyahu promised to boost defense spending, Reuters reported. Speaking on Sunday at an inauguration for his second five-year term as central bank chief, Yaron said that Israel needs to adapt its economic policy to the war since investors, ratings agencies, financial markets and the public "are currently keeping a close eye on policy in Israel".

Multi-trillion dollar non-banking finance saw its first major retreat last year since the global financial crisis in 2009, with the shrinkage due to higher interest rates hitting asset valuations, a global watchdog said on Monday, Reuters reported. Non-banks, such as investment funds and insurers, have come under closer regulatory scrutiny after the sector, less regulated than banks in parts, grew sharply after the financial crisis as money shifted from the more heavily regulated lenders.

Russia’s central bank on Friday increased its key interest rate by 1 percentage point, to 16 percent, as it continued to battle what it called “high inflationary pressures,” the New York Times reported. The rate increase was the fifth in a row since the central bank began its current cycle of monetary tightening in July, when the rate was 7.5.