SOVEREIGN DEBT
Argentina may default again
Argentina has urged a US appeals court to reconsider an order for the country to pay in full holders of US$1.47 billion in defaulted debt. In a petition filed on Friday, Argentina pointed to “grave legal errors” in last month’s 2nd US Circuit Court of Appeals ruling that ordered Buenos Aires to pay the money to two hedge funds that refused to participate in two debt restructurings. The case has its roots in Argentina’s 2001 default on US$100 billion worth of sovereign debt. The Argentine government has argued that bondholders who took part in the 2005 and 2010 restructuring of the debt, which forced on them huge writedowns of the face value of the bonds, would now be able to lay claim to 100 percent compensation. That could overwhelm the country’s finances and lead to a fresh default, according to Buenos Aires.
ENERGY
PRC enters massive oilfield
Chinese President Xi Jinping (習近平) yesterday oversaw China’s entry into Kashagan, a vast oilfield in Kazakhstan, as he toured post-Soviet Central Asia to secure hydrocarbons for the world’s largest energy consumer. The US$5 billion deal further increases China’s rising clout in Central Asia, once Russia’s imperial backyard, and blocks an attempt by global rival India to get a stake in the oilfield, the world’s largest oil discovery in five decades. Kazakhstan will sell 8.33 percent of the offshore oilfield to China for about US$5 billion in a deal signed yesterday, Kazakh government sources said. The sale and purchase agreement will be signed by Kazakh national oil and gas company KazMunaiGas and China National Petroleum Corp (中國石油天然氣).
TELECOMS
Verizon sued by shareholder
Verizon Communications Inc has been sued by a shareholder seeking to void its US$130 billion buyout of Vodafone Group PLC’s stake in the companies’ wireless joint venture on the grounds the price is too high. Natalie Gordon said Verizon shareholders are being “shortchanged” by the purchase of Vodafone’s 45 percent stake in Verizon Wireless, the largest US mobile phone operator. Verizon, which owns the other 55 percent, agreed to pay Vodafone US$59 billion in cash, US$60 billion in stock and other sums. “It is evident that Verizon has overpaid,” Gordon said, adding that “Wall Street analysts concur” and that Moody’s Investors Service downgraded Verizon’s credit.
AUTOMAKERS
Asians invest in classic cars
Classic cars such as Ferraris, Bugattis and Bentleys soared by 28 percent in value in the year to June, outstripping gold, art and luxury London property thanks to rising demand from wealthy Asians. Property consultancy Knight Frank said the world’s wealthy were putting more money into tangible items that they could enjoy as the world economy looks to be recovering. In July, a rare 1954 Mercedes-Benz W196 in which five-time Formula 1 World Champion driver Juan Manuel Fangio of Argentina won two grand prix, was sold at auction for ￡19.6 million (US$30.6 million), making it the most expensive car ever sold at auction. This is in stark contrast to gold, seen as a safe haven investment in difficult periods, whose value has slumped by 23 percent over the same period following a 12-year bull run.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
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