CHINA BANK LOANS
Sri Lanka reaches deal on debt restructuring with bilateral creditors including India, China and France
Sri Lankan President Ranil Wickremesinghe announced a debt restructuring deal with India, France, Japan, and China, a critical step in economic recovery after the 2022 debt default. Under an IMF bailout program, the agreement is expected to revive stalled foreign projects. Sri Lanka declared bankruptcy in 2022 due to economic mismanagement, COVID-19 impacts, and tax cuts. The deal defers loan payments until 2028 and extends repayment until 2043. Supporters celebrated the announcement in Colombo as it promises to restart crucial infrastructure projects.
Sri Lanka survived two tough years of economic crisis; possibly because of India's support: President Wickremesinghe
Sri Lanka's President Ranil Wickremesinghe expressed gratitude for India's financial support of USD 3.5 billion, helping the country survive an economic crisis. Wickremesinghe emphasised a strong partnership with India, focusing on sustainable energy projects and infrastructure development. Sri Lanka recently declared its first-ever sovereign default, but is working on debt restructuring with international organisations. Wickremesinghe is optimistic about the country's economic recovery.
China President Xi’s mystery plans surface with biggest shift in years
China is potentially on the brink of major monetary policy changes, responding to President Xi Jinping's call to enrich the policy toolbox. Governor Pan Gongsheng hinted at plans to trade government bonds in the secondary market and make adjustments to the interest-rate system, aiming to refine technical tools and improve transparency. These proposed changes could allow the People's Bank of China to exert greater influence over interest rates and market conditions, signaling a shift towards market-driven policies and a more efficient use of credit.
China's factory output falls 5.6% on year as housing remains a drag
The central bank kept its rate for 1-year medium-term lending facility loans, used as a benchmark for other lending rates, at 2.5%. The decision aligned with expectations: instead of cutting already low interest rates Beijing has focused on channeling spending to areas considered to be high priorities such as high-tech industries.
China's central bank leaves key policy rate unchanged as expected
China's central bank kept the medium-term lending facility (MLF) rate unchanged at 2.50%, aligning with market expectations. The decision reflects concerns over narrowing bank profit margins and a weakening yuan. The unchanged MLF rate, which influences loan prime rates, indicates limited room for easing monetary policy amidst internal and external economic pressures.
Indian corporates are likely to go slow on overseas dollar loans: BofA
Indian corporates are likely to reduce overseas dollar loans due to expensive current rates. There is a 'huge pent-up demand' for investing in local firms' equity. Borrowing costs in the US have increased sharply, leading to a preference for IPOs and follow-ons in India.
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5 world market themes for the week ahead
Central bank decisions in Britain, Switzerland, and Norway will show the rate cutting trend, while retail sales data from the US and China will indicate consumer health. Europe gears up for the Euros 2024 tournament in Germany. Investors are monitoring cocoa supply issues in Ivory Coast, Ghana, and other countries like Brazil.
Europe wants affordable electric vehicles from China. But not at the cost of its own auto industry
The European Union plans to increase tariffs on Chinese-made electric vehicles due to unfair subsidies. This move aims to address the surge in Chinese EV exports to Europe, posing a threat to EU manufacturers and green tech industries.
Pakistani Prime Minister Sharif meets China's Xi in Beijing ahead of IMF talks
China's President Xi Jinping met Pakistani Prime Minister Shehbaz Sharif in Beijing, affirming China's support for Pakistan's sovereignty and economic development. The meeting occurred ahead of Pakistan's annual budget and anticipated IMF loan application. Pakistan's strategic location on the Arabian Sea is vital for China's trade routes. Pakistan owes China $27 billion, nearly 13% of its total debt, mainly for infrastructure projects. Xi emphasized the importance of the China-Pakistan Economic Corridor and called for enhanced security for Chinese projects, following a recent attack on Chinese engineers.
'Made in China' housing crisis solution may not be enough
China grapples with a colossal housing crisis, with millions of unoccupied apartments and unfinished developments, threatening its economy. Beijing's plan involves massive state intervention, buying unsold properties and converting them into social housing. However, doubts still persist about its adequacy and efficacy, raising concerns about the broader economic impact on China
China allocates billions of dollars to bailout its crisis-hit property sector
China has taken decisive measures to tackle the crisis in its property sector, which has been a crucial driver of its economic growth. The People's Bank of China has announced a 300-billion-yuan relending facility to support government-subsidized housing projects. Local state-owned enterprises are encouraged to purchase completed commercial homes to provide affordable housing. Commercial banks have issued significant loans for real estate development and individual housing.
China considers government purchases of unsold homes: Reports
China plans for local governments to buy unsold homes to address the property crisis, with the State Council evaluating feasibility and awaiting a decision from the country's leaders.
PSU banks' profit jumps over 4 times in 3 years to Rs 1.4 lakh crore in FY24
PSU banks' net profit skyrockets to Rs 1.4 lakh crore in FY24, driven by key factors like asset quality improvements, robust margins, and strong loan book growth. SBI emerges as a major contributor, showcasing a remarkable earnings turnaround.
Maldives gets IMF debt warning as more Chinese loans loom
Maldives warned by IMF of 'debt distress' due to heavy borrowing from China. Urgent need to increase revenue, reduce spending, and limit external borrowing to avoid economic crisis amid high risks and dependence on Chinese funding.
What's the new RBI proposal giving cold sweats to lenders?
The Reserve Bank of India (RBI) has proposed stringent new rules for project finance, aiming to minimize risks associated with long-gestation infrastructure projects. These regulations include higher provisioning during construction phases and classification of delayed projects as non-performing assets. However, banks and NBFCs fear these rules may hinder project viability and impede India's capital expenditure momentum.
China firms go 'underground' on Russia payments as banks pull back
Chinese appliance maker struggles with Russia payments due to U.S. sanctions. Banking restrictions prompt unconventional payment methods. State-owned banks wary, impacting Chinese exports. Security concerns prevail, urging financial vigilance against potential threats.
India-Russia joint venture to manage strategic Sri Lanka airport
A joint venture between an Indian and a Russian firm has won a 30-year contract to manage Sri Lanka's Mattala Rajapaksa International Airport, located near Hambantota. The airport, once known as the "world's emptiest airport," was built at a cost of $209 million. This marks the second India-Russia joint project in India's neighborhood, following the Roopur nuclear power plant in Bangladesh. The airport's management contract was awarded to the JV of Shaurya Aeronautics (Pvt) Ltd of India and Russia's Airports of Regions Management Company after the Sri Lankan Cabinet called for expressions of interest.
Indian company to manage Sri Lanka's China-funded airport
Sri Lanka plans to transfer management of its Chinese-built Mattala Rajapaksa International Airport to Indian and Russian companies to mitigate losses. The airport, funded by China EXIM Bank, has faced operational challenges since 2013. Sri Lanka is also seeking to restructure its loan with China EXIM Bank amid financial crisis.
China's yuan hits 5-month low, strong official fix limits losses
Earlier in the day, the central bank kept a key policy interest rate steady as widely expected when rolling over maturing medium-term loans, and drained some cash from the banking system through the bond instrument.
China pushes banks to speed approvals of new loans to private developers, say sources
Chinese regulators are urging banks to expedite the approval of new loans to cash-starved private property developers to revive homebuyer sentiment and alleviate lenders' asset quality. The "whitelist" mechanism, Beijing's latest support measure, aims to ease the sector's liquidity squeeze and stimulate home purchases. Despite repeated nudges from Beijing, most top domestic banks have remained reluctant to bolster credit exposure to the crisis-hit property sector.
HDFC bank raises $1 billion in 3-yr syndicated loan
HDFC Bank, India's largest lender by market value and the biggest Nifty constituent by weighting, has doubled its overseas borrowing through a term loan syndication from 23 global banks in a greenshoe option. The bank initially borrowed $500 million from Japan's largest lender MUFG in December. HDFC Bank chose to exercise the green shoe option to raise another $500 million, taking the total proceeds to $1 billion in what is the largest three-year overseas loan organized by an Indian bank.
China's central bank leaves key policy rate unchanged, as expected
China's central bank maintained key policy rate, keeping one-year MLF loan rate at 2.50%. 89% expected unchanged borrowing costs in Reuters poll, with 13 billion yuan injected through seven-day reverse repos.
Corp affairs ministry probing Chinese cos linked to loan apps; investigations at advanced stages
The Indian corporate affairs ministry is investigating several Chinese companies, particularly those connected to loan apps, for alleged violations, with some probes in advanced stages. Authorities are tightening scrutiny on entities operating illegal loan apps, and the ministry, which enforces the companies law, is examining potential fraud and beneficial ownership concealment
HSBC's shares slide as $3 billion China bank hit mars record profit
HSBC Holdings on Wednesday reported a shock $3 billion charge on its stake in a Chinese bank amid mounting bad loans in the country, sending the British bank's shares plunging and taking the shine off its record annual profit.
China central bank cuts benchmark lending rate to boost economy
The one-year rate was last lowered in August, while the five-year LPR had previously been reduced in June. Closely followed by markets, both rates are at historic lows. Tuesday's moves are aimed at encouraging commercial banks to grant more credit and at more advantageous rates.
China seen cutting mortgage reference rate for first time since June
China is expected to trim its benchmark mortgage reference rate at a monthly fixing to stimulate the faltering economy growth. Reductions are expected in the five-year LPR and one-year tenor. Recent reductions in the medium-term policy rate, RRR, and deposit rates support this move.
China central bank leaves medium-term policy rate unchanged as expected
The People's Bank of China (PBOC) said it was keeping the rate on 500 billion yuan ($69.51 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50% from the previous operation.
Cash-strapped Pakistan seeks $2 billion loan from China
Cash-strapped Pakistan has requested $2 billion in financial aid from China for a year, seeking to roll over the debt as the deposit time for the loan from China ends on March 23. The caretaker Prime Minister Anwaarul Haq Kakar expressed gratitude to China for its assistance, noting that Pakistan has secured a total of $4 billion in loans from China, reducing pressure on external debt payments.
China expands access to loans for property developers, acting to end its prolonged debt crisis
China has introduced new rules aimed at expanding access to commercial bank loans for property developers, allowing them to use loans secured against commercial properties like offices and shopping malls to repay existing loans and cover operating costs. These measures are part of Beijing's broader efforts to address the real estate industry crisis.
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