Headlines

South Africa’s credit rating was cut to one level above junk by Standard & Poor’s as the longest mining strike in the nation’s history threatens to drag the economy into recession, curbing government revenue, Bloomberg News reported. The foreign-currency rating was lowered to BBB- from BBB and the local-currency rating was reduced to BBB+ from A-, S&P said in a statement yesterday. The outlook on the ratings were raised to stable from negative. Fitch Ratings also lowered the outlook on its BBB grading to negative from stable.

Competition to acquire the French energy equipment maker Alstom was expected to intensify on Monday, as Siemens of Germany and Mitsubishi Heavy Industries of Japan were said to be preparing to make a joint offer that could pressure General Electric to improve its $13.5 billion bid, the International New York Times DealBook blog reported. G.E.’s bid for Alstom’s power generation and transmission business, made in April, has been opposed by French government officials even though Alstom’s board approved the deal.

Portugal has taken the unusual step of sacrificing a €2.6bn loan payment to avoid being rushed into drawing up alternatives to budget measures overturned by the country’s constitutional court, the Financial Times reported. Lisbon’s official lenders had set a deadline of June 30 for the government to devise other ways of saving an estimated €500m-€800m this year to offset the budget cuts that the court ruled to have breached the constitution.

British finance minister George Osborne said on Thursday that he would give the Bank of England stronger powers to curb mortgage lending and reduce the risks that the housing market poses to financial stability, Reuters reported. British house prices have risen by 11 percent over the past year and are close to pre-crisis levels. The International Monetary Fund urged Britain last week to take steps to cool the housing market and reduce the risk of a bubble. Osborne said the housing market was not an immediate threat to Britain's financial stability but could become one in future.

China’s home buyers are being offered no-money-down purchases in an echo of the subprime lending that triggered a U.S. economic meltdown and the global financial crisis, Bloomberg News reported. Deals skirting government requirements for minimum 30 percent down payments have emerged this year from Guangzhou and Shenzhen in the south to Beijing in the north as real-estate sales slump, according to state media and statements by government agencies and developers.

Ireland's recovery is under way, but its fragile lenders and the large amounts of debt held by households pose considerable threats to stability, the Irish central bank said Thursday, in a report aimed at identifying the substantial risks faced by the country, The Wall Street Journal reported. Marking significant milestones, the country exited its three-year international bailout in December and has regained full access to government debt markets, at historically low yields.

Average daily oil output at bankrupt Brazilian oil company Oleo e Gas Participacoes SA fell 2.5 percent in May compared with April, according to data released by the company on Thursday, reducing the volume of oil available to pay for its restructuring, Reuters reported. Total output from the company's two producing offshore fields east of Rio de Janeiro was 424,464 barrels, or an average of 13,692 barrels a day (bpd). That compares with 421,287 barrels, or an average 14,043 bpd, in April.

The purchase of three major Irish businesses over the past two years by the billionaire businessman Denis O’Brien involved total bank write-offs of more than €300 million, the Irish Times reported. The deals saw the businessman invest €230 million to acquire the Siteserv Group, the Topaz Group and the Beacon Private Hospital. The Siteserv deal saw the State-owned Irish Bank Resolution Corporation, which is now in liquidation, write off €110 million of the €150 million it was owed.

The world must act to contain the risk of another devastating housing crash, the International Monetary Fund warned on Wednesday, as it published new data showing house prices are well above their historical average in many countries, the Financial Times reported. The warning from the IMF shows how an acceleration in global house prices from already high levels has emerged as one of the major threats to economic stability, with countries making limited progress in keeping them under control.

The next governor of Greece’s central bank will be Yannis Stournaras, a Greek economist and former finance minister who led a two-year austerity drive that stabilized the economy but fueled a social crisis, the International New York Times reported. The announcement on Wednesday, by the General Council of the Bank of Greece, followed a sweeping cabinet shuffle on Monday that installed Gikas Hardouvelis, another economist and former government adviser, as Greece’s new finance minister.