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Chinese banks are facing increasing risks from rising non-performing loans (NPLs) and diminishing returns, making them a lightning rod for investors' worries about the world's second-largest economy, Reuters reported. Concerns about their exposure to local government financing vehicles (LGFVs), the investment firms that fund mainly infrastructure projects for local governments, and the crisis-hit property sector have pummelled their shares this week, dragging them to their steepest drops in about eight years.
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Chinese electric vehicle startup Singulato Motors is now facing bankruptcy proceedings initiated by a group of creditors, Pingwest reported. Singulato had been exposed for widespread unpaid wages and insolvency, leading to court-ordered enforcement. Established in 2014, Singulato received investments from local governments such as Tongling in Anhui, Zhuzhou in Hunan, and Suzhou in Jiangsu. Zhou Hongyi, founder and CEO of Qihoo 360, is also a major investor in Singulato. In total, the EV startup raised a funding amount of 17 billion yuan throughout its history.
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A U.S. court of appeals on Friday rejected Venezuela's bid to prevent six companies from joining a proposed court auction of shares in a Citgo Petroleum parent to enforce judgments for past expropriation of assets, Reuters reported. The decision allows the six to move ahead with their about $3 billion in combined claims against Venezuela state oil firm PDVSA in a Delaware federal court. That court is in the initial steps of preparing an auction as soon as September.
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Costa Rica’s annual inflation rate turned negative in June after soaring to double digits last year, following a series of rate hikes, falling oil prices and a strong local currency, Bloomberg reported. Consumer prices fell 1.04% year-on-year in June, the biggest annual decline since March 2016. Prices rose as much as 12.1% in August 2022. Most of Costa Rica’s inflation was imported via goods, especially gasoline, Adriana Rodriguez, head of local brokerage Grupo Financiero Acobo, said.
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France's central bank head Francois Villeroy de Galhau pushed back on Sunday against a suggestion from some French economists to raise the European Central Bank's (ECB) 2% inflation target, Reuters reported. Villeroy, who sits on the ECB's governing council, also said that its interest rate hikes were close to topping out and that rates would be kept at elevated levels long enough for the impact to feed through the economy. The aim is to bring inflation down to the 2% target by 2025, Villeroy said at an economics conference in the southern French city of Aix-en-Province.
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Svenska Handelsbanken AB, Sweden’s third biggest bank by market value, may see its public credit rating lowered if the fallout from the country’s property crisis continues to deepen, Bloomberg News reported. That’s the assessment of Moody’s Investors Service, which late on Friday lowered the lender’s credit rating outlook to negative from stable owing to its relatively high exposure to the real estate sector. The Stockholm-based lender has a “very significant” 29% of its loan book exposed to the real estate sector, according to Moody’s.
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Katie Price is to face questioning in court over her £3.2 million debt after she declared bankruptcy in 2019, the Daily Mail reported. The former glamour model, once estimated to be worth £45 million, previously agreed to pay £12,000 a month but has not been sticking to the deal, according to those owed the money. Ms. Price previously opened up about her bankruptcy, claiming it is related to two people in her past, according to The Mirror — insisting that her West Sussex home “Mucky Mansion” is safe.
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Washington and Beijing are talking again. The test now is whether they can settle into a new normal that avoids upending the global economy — or fall back into a cycle of acrimony and retaliation, the Wall Street Journal reported. Treasury Secretary Janet Yellen heads to China on Thursday through Sunday to meet with senior government officials, her department said. The trip comes as tensions over trade, technology and Taiwan prompt both countries to reconsider the deep commercial and investment ties that have defined the relationship for decades.
Brazil's currency will likely enjoy some support in the near term from faster economic growth and progress on reforms, despite the prospect of less favorable interest rate spreads ahead, a Reuters poll showed, Reuters reported. The real appreciated last month to its firmest level in a year after several forecasts were improved and key fiscal changes proposed by the government of President Luiz Inacio Lula da Silva made headway in congress. The real is seen gaining a further 0.6% in three months to 4.81 per U.S.
Cracks are showing in a pillar of China’s debt market: local-government financing vehicles (LGFVs), the Washington Post reported. Created to fund such things as roads, airports and power infrastructure, they rarely generate enough returns to cover their obligations. That means most rely on injections of municipal funds to stay solvent. With many local authorities facing cash-flow problems due to a real estate crisis, there are growing concerns about this $9 trillion debt market — prompting the country’s biggest state banks to take steps to avert a credit crunch.