Headlines

Portugal's center-right Social Democrats had little time to savor their return to power Monday, launching immediately into getting a ruinous debt burden under control despite a shrinking economy, the Associated Press reported. Social Democrat leader Pedro Passos Coelho scored an emphatic win at the ballot box Sunday, with his party collecting 39 percent of the vote to 28 percent for the second-placed Socialist Party, which had governed for the past six years. Passos Coelho takes over as prime minister later this month with Portugal in the middle of a financial storm.

Britain does not need to change its current economic policies as recent weak growth and high inflation is likely to be temporary, but a new approach may be needed if these problems persist, the IMF said on Monday, Reuters reported. In an annual report on the UK economy, the International Monetary Fund broadly endorsed the deficit-reduction policies being pursued by the ruling coalition of Conservatives and Liberal Democrats, which the opposition say are causing weaker growth. The IMF said the government should maintain its current course.

Hong Kong banks may have succeeded where the government failed as rising mortgage rates curb home price gains and cut sales to the lowest level in two years, signaling the property market may have peaked, Bloomberg reported. HSBC Holdings Plc (HSBA), which controls two of the city’s three- biggest banks by customers, is among lenders that accelerated mortgage rate increases in April as liquidity dried up.

Bank of Ireland has offered to buy back debt from subordinated bondholders for 10 per cent or 20 per cent of its original value in return for cash, or double this level if they accept shares instead, the Irish Times reported. The offer is part of the bank’s efforts to raise €5.2 billion to meet the Central Bank’s capital target. The bank announced plans to impose losses on the bondholders on Tuesday and released more details yesterday on the offer relating to €2.6 billion of debt. Analysts estimate that the bank will raise about €2 billion from the liability management exercise.

Thousands of Greeks protested outside parliament on Sunday against a fresh austerity package agreed in return for the country’s second bail-out in 13 months by the European Union and International Monetary Fund, the Financial Times reported. “Thieves, thieves….Where did our money go?” the protestors shouted, blowing whistles and waving Greek flags as riot police thickened ranks around the parliament building on Syntagma square in the centre of the capital.

Spain's central bank could offer asset protection schemes for bank takeovers at a later point in the restructuring of the country's ailing savings banks, the central bank's governor, Miguel Angel Fernandez Ordonez, said Friday, The Wall Street Journal reported. "Right now it doesn't make sense," Mr. Fernandez Ordonez, a member of the European Central Bank governing council, said, adding the Spanish central bank is trying to establish a market value for the ailing unlisted banks known as cajas without protection schemes for investors.

The International Monetary Fund agreed Sunday to lend Egypt $3 billion with few stated conditions to help the country mend its ailing economy, The Wall Street Journal reported. Egypt's finance minister, Samir Radwan, and the deputy director of the IMF's Middle East and Central Asia Department, Ratna Sahay, at a news conference announced a 1.5% interest rate on the one-year loan, which is to be paid in full within five years.

Overseas buyers are lining up to take control of one of the largest online exporters of NZ-made consumer goods after the company was tipped into liquidation, Business Day reported. New Zealand Global Ltd, which sells a wide range of locally made products to consumers around the world via its shopnewzealand.co.nz website, has been put on the market by liquidator Gareth Hoole of Staples Rodway, who said he hoped to have a sale finalised as early as this week. Hoole said a number of potential buyers had shown interest in the business and most were based in China or Malaysia.

Indian tycoon Pankaj Oswal has been blocked in an attempt to gain access to key documents related to the looming $1 billion sale of his controlling stake in Australia's biggest ammonia producer, Burrup Fertilisers, The Australian reported. Federal Court judge Michael Barker ruled yesterday that Mr Oswal, who left Australia last December as the ANZ Bank put Burrup Fertilisers into receivership, could not see the documents even though he remains a director of the company.

The federal government has promised significant regulatory reform of the insolvency industry but has rejected a Senate committee's recommendation to strip the Australian Securities & Investments Commission of its powers and create a single industry regulator, The Australian reported. A 120-page options paper for reform was unveiled yesterday by David Bradbury, parliamentary secretary to the Treasurer. The paper canvasses an overhaul of the profession's regulatory architecture to address concerns about misconduct and to improve value for money.