Wed, Apr 11, 2018 - Page 10 News List

World Business Quick Take



Global debt at new high

Global debt rose to a record US$237 trillion in the fourth quarter of last year, more than US$70 trillion higher from a decade earlier, an analysis by the Institute of International Finance said. Among mature markets, household debt as a percentage of GDP hit all-time highs in Belgium, Canada, France, Luxembourg, Norway, Sweden and Switzerland. That is a worrying signal, with interest rates beginning to rise globally. Ireland and Italy are the only major countries where household debt as a percentage of GDP is below 50 percent. Still, the ratio of global debt-to-GDP fell for the fifth consecutive quarter as the world’s economic growth accelerated.


LVMH shares soar

Shares in France’s LVMH Moet Hennessy Louis Vuitton SE rose more than 5 percent to record highs in early trading yesterday after the Louis Vuitton owner posted better-than-expected sales growth in the first quarter, helped by thriving Chinese appetite for luxury goods. The upbeat start to the year for LVMH, the industry’s biggest company and parent to brands like Christian Dior and Moet & Chandon, sets an encouraging tone for peers at the start of their reporting season. Luxury goods firms last year benefited from a strong rebound in Asian demand, a momentum that has shown little signs of fading.


Air France assesses costs

Air France yesterday said that seven day-long strikes since February by workers demanding higher pay are set to cost it 170 million euros (US$210 million). “The impact on Air France’s operating profit of seven days of strikes between February 22 and April 11 is estimated at 170 million euros,” the group said. The estimate was contained in a statement on the passenger numbers of Air France-KLM, which said they had increased by 5.4 percent last month.


Three-part bond sale begins

The sale of a three-part US dollar bond started yesterday, as the kingdom seeks funds to plug its budget deficit. The world’s biggest oil exporter set initial price guidance for the 2025 notes at 170 basis points area over US Treasuries, 2030 securities in the 200 basis points area and 2049 bonds in the 235 basis points area, according to a term sheet seen by Bloomberg. Global books open and the deal is today’s business. The government plans to borrow the equivalent of US$31 billion this year to bridge an expected budget deficit of US$52 billion and fund growth plans after its economy shrank last year. Last month, it increased a US$10 billion syndicated loan by US$6 billion on higher demand.


Inflation slows unexpectedly

Inflation unexpectedly slowed last month, casting doubt on the central bank’s plan to start tightening interest rates after the summer. Underlying consumer prices last month rose 1.2 percent from a year earlier, below the 1.4 percent estimated by analysts. Headline inflation was unchanged at 2.2 percent, missing the 2.4 percent estimate. Underlying inflation is falling deeper below the central bank’s newly minted 2 percent target. Policymakers have said they would start raising rates “after summer” in anticipation a pick up in economic growth and falling unemployment would push up price growth. The krone yesterday fell 0.16 percent to 9.6075 per euro.

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