Thu, Dec 13, 2018 - Page 10 News List

World Business Quick Take

Agencies

BANKING

Boost expected in the US

The US banking sector is set to see a flurry of deals next year, Ernst & Young LLP said on Tuesday. Transactions are to be fueled by easing regulations and a US tax overhaul, which has helped lenders build up a war chest to spend on acquisitions and technology, the financial advisory firm said in a report. The value of mergers and acquisitions in the US financial services sector has this year more than doubled to US$196.5 billion, from US$82.3 billion last year, the report showed.

FOREIGN EXCHANGE

Pound makes a comeback

The pound rallied yesterday as the market judged that British Prime Minister Theresa May might survive a threat to her leadership. Sterling recovered from a 20-month low and gilts fell after May said that she would contest a vote of no confidence and many of her Cabinet ministers came out in support of her. Options betting on overnight pound-US dollar volatility soared to the highest since June last year, ahead of the vote yesterday evening. Sterling climbed 0.4 percent to US$1.2539 by 9:27am in London after touching US$1.2478, the lowest since April last year. It gained 0.3 percent against the euro to £0.9034 per euro.

CHINA

Firms’ default risk soars

Default risk for companies has climbed to the highest in 13 years as Beijing seeks to rein in its post-crisis construction boom, Moody’s Analytics said. The research group’s measure of expected default frequency has risen above early-warning levels for about 25 percent of corporate borrowers. China has already seen a record pace of bond defaults this year, a consequence in part of policymakers’ efforts to reduce leverage in the financial system. While the economy remains in relatively firm shape, the country is now at a pivotal juncture, the firm said in a report.

SOUTH AFRICA

Inflation accelerates to 5.2%

The nation’s inflation rate jumped to the highest level since May last year as surging transport costs continue to weigh on the economy. Consumer prices rose 5.2 percent from a year earlier, compared with 5.1 percent in October, Statistics South Africa said in a statement yesterday. The median estimate of 17 economists surveyed by Bloomberg was for 5.1 percent. The unexpected acceleration in inflation might ease criticism of the central bank’s decision to raise interest rates last month as the headline number moves further away from the midpoint of its target range. Fuel prices jumped 19 percent over the past 12 months after the rand weakened against the US dollar.

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