Vienna is to hit creditors in the remnants of Hypo Alpe Adria, after finding a capital hole of up to 7.6 bln euros. Unlike the recent bail-in of Portugal’s BES, senior bondholders get haircut too. EU reforms to protect taxpayers from banks are being used on deserving candidates.
The government has pushed back its deficit reduction target in order to boost spending on roads, rail and power. New Delhi is now unmistakably pursuing a public investment-led growth strategy. It’s an opportunity that rich nations, which can borrow far more cheaply, are missing.
The government’s ambitious plan will require finesse in raising money. But the investment case is strong. India’s British rulers reaped huge productivity gains by building out the railways 150 years ago. Modernizing the dilapidated network could produce even better returns.
Investors snapped up shares in Thailand’s Jasmine broadband fund and may do the same for Hong Kong provider HKBN, reflecting the view that U.S. interest rates will remain lower for longer. As long as money remains cheap, shareholders will chase generous and reliable dividends.
The clip to borrowing costs won’t much change life for credit addicts or for savers. The central bank’s move is little more than a signal from on high that planners are up with events. When it comes to managing the Chinese economy, official interest rates play a limited role.
The government plans to charge fees to foreign buyers and enforce restrictions on sales of existing homes. After Hong Kong and Singapore, another hot real estate market is cooling to Chinese money. It adds to the political pressure on other countries to become less welcoming.
Departing chief Magnus Bocker’s successor will inherit a business suffering from existential angst. Trading volumes are static and big listings scarce. The outlook is brighter for derivatives, but given the absence of M&A targets it will be hard for debt-free SGX to grow.