Headlines

The U.K.'s top central banker poured cold water on hopes for a quick recovery of the country's economy, saying much will depend on how quickly banks can raise the capital they need to resume normal lending, The Wall Street Journal reported. Bank of England Governor Mervyn King said that predicting the country's economic outlook has become "extraordinarily difficult" and that any rebound is likely to be slower than previously thought.

Chinese exports fell steeply in April for the sixth month in succession, suggesting the worst might not be over for the world’s third largest economy, the Financial Times reported. The total value of Chinese exports fell 22.6 per cent to $91.9 billion last month compared with the same month a year earlier--a faster rate of decline than the 17.1 per cent year-on-year drop in March. Imports fell 23 per cent from a year earlier to $78.8 billion in what some analysts said was a sign that domestic investors remained unwilling to invest in new capacity.

The Hungarian forint may tumble as much as 13 percent against the euro, reversing a two-month rally, as the nation’s economic slump deepens, Bloomberg reported. The forint lost 3.04 percent versus the euro in the past two days, the biggest drop in emerging markets, after rising as much as 13 percent since March 6. The country is suffering as the euro area, which buys 57 percent of its goods, reduces purchases of products manufactured in Hungary such as Audi cars and Nokia mobile phones. Exports fell 18.2 percent from a year ago in March, according to government figures.

Construction has resumed at the $700 million Hilton Hotel development site at Surfers Paradise after Brookfield Multiplex stepped in to save the project, the Brisbane Times reported. The property heavyweight announced on Thursday a deal had been brokered to ensure the development would go ahead as planned. Construction of the first upscale hotel to be built on the Gold Coast in more than a decade is now expected to be completed in 2011.

Sharemarket operator NZX has called on New Zealand Shareholders' Association chairman Bruce Sheppard to publicly name the nine listed companies he thinks may have defaulted on debt payments, The National Business Review reported. Many companies do not disclose the terms of their loans, known as covenants, but Mr Sheppard warned yesterday that three weeks of research revealed nine companies were probably in breach of bank covenants in 2008 and a further 11 close to being in breach.

RHJ International, a European buyout firm with holdings in the auto-parts industry, has emerged as a suitor for General Motors Corp.'s European operations, a person familiar with the matter said, adding to the list of possible buyers scrambling to strike a deal with the U.S. car maker before the end of the month, The Wall Street Journal reported. Brussels-based RHJ is considering an offer for GM operations including Adam Opel GmbH in Germany, this person said.

A luxury boat builder on the Gold Coast that is in voluntary receivership may not go under the hammer as first thought, the Brisbane Times reported. Deloitte receiver Chris Campbell said he had received expressions of interest for Riviera--which employs about 550 people--but a sale was not the only option for the company. "Given the current economic climate it is likely that the best return to creditors is likely to come from a restructure and turnaround of the operations of the business, rather than an immediate sale," Mr Campbell said in a statement on Tuesday.

Printing services provider R.R. Donnelley & Sons Co said it offered to buy the assets and properties of Quebecor World for about $1.35 billion in a cash and stock deal to expand into Canada, Reuters reported. RR Donnelley said it will pay the insolvent commercial printer's debtors about $957 million in cash, and 30 million of its shares, valued at $394.2 million, based on Monday's close of $13.14.

The German cabinet Wednesday approved a draft bill to help banks remove so-called "toxic assets" from their balance sheets and to boost liquidity supply, with the potential costs of the measures to be met by the banks' owners, a finance ministry spokesman said. The draft bill aims to let financial holding companies, banks and their subsidiaries transfer structured securities, such as asset-backed securities and collateralized-debt obligations, to a government-backed unit on a voluntary basis, The Wall Street Journal reported.

In a related story, Bloomberg reported that Germany has allocated enough funds to deal with toxic assets, Finance Minister Peer Steinbrueck said, seeking to tackle the $1 trillion banking crisis without forcing taxpayers to spend more on bailouts in an election year. The government’s Soffin bank-rescue fund has €260 billion ($356 billion) left, with a maximum of €190 billion in toxic assets still on banks’ books, he said. Chancellor Business owners have complained that Steinbrueck stalled as he sought to limit the burden to taxpayers before Sept. 27 national elections.