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Six years after India’s shadow-banking sector blew up, pockets of stress are building again, prompting firms to start pulling back amid scrutiny from the regulator, Bloomberg News reported. Bajaj Finance Ltd., the country’s largest shadow lender, joined rivals including Shriram Finance Ltd., Mahindra & Mahindra Financial Services Ltd., and IIFL Finance Ltd. that posted higher delinquencies on unsecured loans in their second quarter earnings reports. Most firms also set aside more capital for provisions and had lower profits than expected.
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Banks in China are foreclosing on a growing number of apartments after homeowners could not pay their mortgages, as the country’s housing crash threatens the financial system, the New York Times reported. The roster of homes seized and listed for auction leaped 43 percent last year, according to official data. Numerous Chinese banks have disclosed increases in mortgage defaults during the first half of this year. The downward spiral in apartment prices has since accelerated. The legal system is struggling to keep up with evictions.
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A threat by Donald Trump, who has been elected as the next U.S. president, to impose 60% tariffs on U.S. imports of Chinese goods poses major growth risks for the world's second-largest economy, Reuters reported. Not only are the tariff rates much higher than the 7.5%-25% levied on China during his first term, the economy is also in a much more vulnerable position. In 2018, the property market was strong, driving about a quarter of China's economic activity. That meant local government finances, heavily reliant on auctioning land for residential projects, were not questioned so forcefully.
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Indonesia plans to cancel as much as $550 million of bad loans owed by small businesses to drive new lending and boost growth in Southeast Asia’s largest economy, Bloomberg News reported. President Prabowo Subianto signed a regulation on Tuesday that paves the way for state-owned lenders such as PT Bank Mandiri and PT Bank Rakyat Indonesia to forgive as much as 8.7 trillion rupiah ($550 million) of troubled loans of small businesses, especially those in agriculture and fishery. Regulators still need to work out what types of loans could be forgiven, he added.
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The Bank of England is likely to lower its key interest rate on Thursday and at three further meetings next year before inflation settles at the central bank’s target, the National Institute of Economic and Social Research said Wednesday, the Wall Street Journal reported. In a quarterly report on the outlook for the U.K. and global economies, Britain’s leading economic research body said the annual rate of inflation will likely rise above 3% at the start of next year, from 1.7% in September.
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German manufacturing orders jumped more than expected in September, driven by large-scale orders, offering a glimpse of hope that the recent downturn in the beleaguered sector may be abating, the Wall Street Journal reported. Orders climbed 4.2% on month in September, according to data published Wednesday by Germany’s statistics agency Destatis. That was better than economists’ expectations for a 1.4% rise, according to a Wall Street Journal poll, and contrasts with the 5.4% fall in August orders.
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Malaysia’s central bank kept its benchmark interest rate at the same level it has been at since May last year, as a stable economic backdrop gives policymakers room to hang tight, the Wall Street Journal reported. Bank Negara Malaysia on Wednesday maintained its overnight policy rate at 3.00%. The central bank reiterated that its stance remains supportive of the economy and in line with its assessment of inflation and growth. Economists had largely expected another rate hold, as Malaysia’s inflation has remained under control and its growth trajectory intact.
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Kenya’s economy is on the mend and the country is unlikely to need further assistance from the International Monetary Fund, according to the head of President William Ruto’s economic council, Bloomberg News reported. Kenya signed a four-year, $3.6 billion financing deal with the IMF amid the Covid-19 pandemic in 2021. That program expires in April and both Kenya’s Treasury and an IMF head of mission in the country have confirmed that talks about a new one have begun.
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On October 30, the Moscow Arbitration Court extended the bankruptcy procedure of Radio Liberty (RFE/RL, the media corporation is recognized in Russia as a foreign agent and an undesirable organization, LLC is its Russian legal entity) until June 30, 2025, Oreanda News reported. In the definition on the court's website, the specific date of the next report of the bankruptcy trustee of RCE/RS LLC, Yulia Aga-Kulieva, is not indicated.
Some Bank of Canada officials worried cutting interest rates by half a percentage point would be misinterpreted as a sign of trouble for the economy, Bloomberg reported. Part of the bank’s governing council feared that a larger-than-typical reduction in borrowing costs would lead investors and Canadians to anticipate additional jumbo cuts, according to a summary of deliberations of the October rate decision.