Headlines

China’s gigantic real estate bubble has popped, but despite the market’s prolonged downturn, prices still haven’t fallen much, the Wall Street Journal reported. In part, that is because of price controls which many Chinese cities imposed on housing over the past two years to keep values stable. Now China is starting to loosen the rules—with unpredictable consequences. Under the rules, which were applied in dozens of cities, local governments typically blocked developers of new homes from offering discounts of 10% to 15% or more on unsold properties.

Hui Ka Yan, the billionaire chairman of beleaguered property developer China Evergrande Group, has been placed under police control, Bloomberg News reported. Hui was taken away by Chinese police earlier this month and is being monitored at a designated location. It’s not clear why Hui is under so-called residential surveillance, a type of police action that falls short of formal detention or arrest and doesn’t mean Hui will be charged with a crime.

The turmoil in Vietnam’s property sector continues, with creditors embroiled in a dispute with developer Novaland Investment Group Corp. after it failed to pay interest on a $300 million bond, Bloomberg News reported. The company is committed to resolving the impasse with holders of its 2026 overseas convertible note in “a cooperative spirit, aiming to find optimal solutions that safeguard the interests of bondholders,” Novaland said Tuesday.

New Zealand-based Cooks Coffee Company plans to place its Triple Two coffee franchise business in the UK into an insolvency process, VerdictFoodService.com reported. For this, the company intends to appoint administrators for its franchise business, which includes Triple Two Holdings and its subsidiaries. In a statement, Cooks Coffee Company said: “Triple Two was growing rapidly before the Covid-19 pandemic and had shown continuing momentum in FY22.

French grocery delivery startup La Belle Vie is acquiring Frichti, another food delivery service that was placed under court-ordered receivership, TechCrunch.com reported. The court picked La Belle Vie’s offer over three other offers. This is yet another chapter in the tumultuous story of quick commerce and food delivery services in France and Europe. Frichti was started in 2015 and had raised around €100 million over the years to deliver ready-to-eat meals for the lunch break. With the COVID-19 pandemic, the company expanded its offering and started delivering groceries as well.

Canada’s banking regulator said he’s concerned about the prevalence of ultra-long mortgages and that his agency is working with lenders to stem the ubiquity of such loans, Bloomberg News reported. The country’s banks have about C$250 billion ($185 billion) of mortgages with amortization periods — the length of time permitted to pay off the loan — that sit at 35 years or longer, according to Peter Routledge, the superintendent of financial institutions.

Higher interest rates in Europe will put pressure on the credit ratings of the region's companies and banks, S&P Global said on Tuesday, Reuters reported. "The trend in credit quality is turning negative for corporates, especially for speculative-grade issuers, as financing conditions tighten," the rating firm said in a new report. "Real estate remains one of the most exposed sectors. For European banks, while asset quality deterioration will emerge, credit losses are expected to only normalize," the report added.

When Olayemi Cardoso takes full control of Nigeria‘s central bank this week, his biggest challenges will be to restore its credibility after eight years of mismanagement, boost confidence in Africa’s worst-performing currency and slow an inflation rate that’s among the highest on the continent, Bloomberg News reported. Since taking office in May, President Bola Tinubu has instituted a raft of new policies — scrapping a $10 billion annual fuel subsidy and liberalizing the foreign-exchange market. The reforms were much-needed, but crippled an economy long on its knees.

Guangdong Adway Construction has filed for bankruptcy in a Shenzhen court due to its inability to repay debts amid China’s stressed real-estate sector, the Wall Street Journal reported. The company filed the application with the Shenzhen Intermediate People’s Court, seeking restructuring to reduce its debt burden and improve operations, Adway said in a filing on Monday. Adway, which provides interior and exterior decoration and design services, is the latest company to fall victim to China’s weak property sector, which has weighed on the world’s second-largest economy.

A major group of offshore creditors of China Evergrande Group is planning to join a winding-up court petition filed against the cash-strapped developer if it doesn't submit a new debt revamp plan by next month, Reuters reported. The creditor group holds a large portion of Evergrande offshore bonds and, if it decides to join, would add more weight to the winding-up petition filed against the developer by an investor in a Hong Kong court.