UK economy beds down for slow, sluggish recovery 25 Nov 2020 Finance minister Rishi Sunak is set to hike borrowing to 394 bln pounds to pay for the pandemic. New savings from foreign aid and freezing public sector pay will do little to help the economy that is only set to grow 5.5% next year. A no-deal Brexit would make matters worse.
Bond defaults air China’s dirty municipal laundry 25 Nov 2020 Missed payments and misconduct by state firms are putting provinces like Henan under fresh stress. It’s now having trouble issuing debt even as fiscal revenue shrinks. Henan and its peers are mandated to create millions of jobs, but tighter credit could slow recovery.
How to limit future emerging market debt crises 23 Nov 2020 The IMF says countries could sweeten future debt restructurings with extras that will jump in value in good times. A better option may be to copy a junk bond instrument that offers respite during cash crunches. Persuading investors to accept either will be the biggest hurdle.
Corona Capital: Dimon weighs in, Gen Z 18 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: JPMorgan’s chief executive calls for U.S. politicians to “just split the baby” on stimulus; and Generation Z deals a new body blow to the idea that office life will emerge from the pandemic unscathed.
Indian bank rescue moves in right direction 18 Nov 2020 Singapore’s $47 bln DBS will supersize its branch network by absorbing stricken Lakshmi Vilas under an RBI plan. It’s a small deal with larger implications. Welcoming a foreign owner suggests regulators are ready to look beyond weak state entities for the country’s lending needs.
Zambia default risks bitter reckoning for all 16 Nov 2020 The African country failed to make a $42 mln interest payment to bondholders. Meagre reserves and mining exports mean its economy can limp on, although neighbour Zimbabwe shows the dangers of financial exclusion. Compromise between China and Western creditors is the only way out.
Trump vs. Biden is sideshow for Xi 30 Oct 2020 U.S. elections are closely followed in China, but the outcome of this year’s presidential ballot may matter less this time. Trump's tough act on Beijing has wrought little real damage. And while neither candidate is likely to thaw relations, the pandemic has left America weaker.
Argentina’s creditors made two silly mistakes 28 Oct 2020 Some investors say their newly restructured bonds have tanked due to President Fernandez’s lousy policies. They’re right. But they’re shouting in the wind, because they agreed to a debt rejig based on unenforceable promises, and gave up what leverage they had in the process.
Election debate victor is big D – America’s debt 23 Oct 2020 The final televised face-off between Donald Trump and Joe Biden offered the first real side-by-side comparison of their policies. The president promised little change while his rival pledged plenty of fiscal spending. Markets will be reassured that austerity is not on the ballot.
Guest view: Latin America has a Covid-19 cash gap 16 Oct 2020 Economic weakness has helped make the region’s health crisis one of the world’s worst, write former Citibank Chairman William Rhodes and epidemiologist Cristina Valencia. Even if a vaccine arrives, the recovery will demand more direct funding from the international community.
Viewsroom: On the road again, Zambia, Super-apps 15 Oct 2020 Airlines columnist Ed Cropley boards his first plane since Covid-19 hit, and experiences travel in the pandemic era on a visit to Munich. He also discusses the financial proxy war over Zambia’s debt restructuring. Meantime, Asia goes mad for all-singing mobile applications.
Zambia sucks China and West into debt showdown 15 Oct 2020 The African nation is careering towards default after delaying a bond payment. Western governments, Chinese state banks and private creditors owed $11 bln could have averted a crisis by burying their mutual distrust. A hasty sticking-plaster solution may set some bad precedents.
IMF enters brave new debt world with old map 14 Oct 2020 The international lender's approach to government debt restructurings is under scrutiny at its annual meetings this week. The debt landscape is shifting: Players and legal norms have changed, and ultra-low interest rates have upended risk metrics. The fund may struggle to adapt.
Corona Capital: Oil, Delta, Hunger 13 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: OPEC and the International Energy Agency issue forecasts that bode ill for crude demand; the U.S. airline steers through turbulence; and a food crisis is exacerbating problems facing the most vulnerable in society.
Argentina’s debt victory lap is way too early 1 Sep 2020 Buenos Aires is crowing about getting 99% approval for its $65 bln restructuring deal. It’s a good first step, but it should have been easier. Negotiating a realistic reform plan with the IMF will be tricky, and balancing growth and stability in the future will be harder still.
EU banks’ sovereign-debt relapse brings new risks 24 Aug 2020 Lenders from Italy’s Intesa Sanpaolo to Spain’s BBVA have boosted holdings of domestic government bonds, helped by cheap ECB funds. The exposure leaves them vulnerable if euro zone breakup fears return. And it makes completing Europe’s banking union and cross-border M&A harder.
IMF worsened Argentina debt fiasco 6 Aug 2020 The lender couldn't prevent another restructuring and may have added to the rancor. An ill-conceived $44 bln deal with the prior president was the tipoff. And the IMF's premature release of debt projections enabled posturing. Ivory-tower hubris is partly to blame.
Ecuador spat reveals sovereign-debt market cracks 30 Jul 2020 Investors are suing to halt the country’s $17.4 bln restructuring, claiming it’s hoodwinking bondholders. They have a point. Going to court is a long shot, but Ecuador’s tactics will hurt its market-friendly makeover. And it may prompt an overhaul of how countries borrow, too.
Ecuador is willing pawn in Argentina debt standoff 20 Jul 2020 Quito will tweak voting rules in its $17.4 bln restructuring, helping creditors pressure the larger LatAm debtor to do likewise. It’s an easy change to make and would still help emerging-market borrowers avoid being held to ransom in the future. Buenos Aires should take the hint.
Argentina remains the bad boy of sovereign debt 14 Jul 2020 The serial defaulter’s new restructuring proposal offers creditors decent value – but only after months of off-the-charts acrimony. Creditors were a tough bunch to please, but the government’s strategy stymied progress. The country can’t get out of its own way.