Monday, April 4, 2016

Bank of Japan ready to ease more; India's $120bn sour debt; Apple campus enters home stretch

1 Bank of Japan ready to ease more (Straits Times) Bank of Japan governor Haruhiko Kuroda has stressed his readiness to expand monetary policy still further, saying that market moves would be key factors the central bank would examine in deciding when and how it might next expand stimulus.

Mr Kuroda maintained his optimism that Japan's economy was recovering moderately, despite last week's "tankan" survey that showed business mood souring on weak emerging market demand. But he reiterated the BOJ's readiness to ease again if risks threatened prospects for accelerating inflation, now at a dead halt, toward its 2 per cent target.

The BOJ would not hesitate to take action either by accelerating asset purchases, buying more risky assets or pushing interest rates deeper into negative territory, he said. Mr Kuroda said developments in financial markets, as well as in the economy and in prices, would be key factors for the BOJ when deciding whether, when and how it would expand stimulus.

The BOJ stunned markets in January by deciding to add negative interest rates to its massive asset-buying programme in a fresh attempt to reflate the economy out of the doldrums, but the move has failed to boost stock prices or arrest an unwelcome rise in the yen.

Japan's economy shrank in October-December last year on weak exports and consumption. Many analysts expect it to show another contraction in January-March, posting two straight quarters of negative growth and meeting the technical definition of a recession.

2 India’s $120bn sour debt (Money Control) Global distressed asset buyers such as J C Flowers & Co and Apollo Global are flocking to India, where banks have been ordered to clean up an estimated $120 billion of bad and troubled loans. Bad loans at Indian banks jumped by nearly a third to around 4 trillion rupees ($ 60.3 billion) late last year as the central bank drives a national clean-up of banks' balance sheets.

That figure doubles to a record amount when restructured, or rolled over, loans are included - amounting to 11.3 percent of all loans, the government says. Foreign firms have been similarly attracted to China, which has also seen an explosion in bank bad loans, though, unlike India, China is not pushing banks to carry out a thorough asset quality review that would increase the number of bad loans.

Reserve Bank of India Governor Raghuram Rajan wants lenders to fully disclose and provide for all problem loans by next March, an exercise that could force banks to consider selling off chunks of bad loans to specialists to free up capital.

Other foreign investors with tie-ups to India's distressed asset sector include KKR & Co, which recently won approval to buy a stake in International Asset Reconstruction Co. KKR has also announced a distressed debt joint venture in China. Billionaire Ajay Piramal's Piramal Group has also said it intends to set up a $1 billion fund to invest in distressed assets.

3 Apple campus enters home stretch (Khaleej Times) Apple may get its new spaceship-like campus in California completed before its planned completion date. It was set for the end of 2016 or early 2017, a media report said.

"A new drone video shows Apple's massive campus coming together. It is estimated to cost close to $5 billion," a report said. A few months ago, the buildings appeared to be in their primary stages. However, the latest aerial drone video of the campus shows glass and solar panels being put in place.

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