More than 140 investors have applied for purchasing new Russian Eurobonds, with 55 percent of them banks, the Russian Finance Ministry said on Friday. “Despite the informal recommendation of the US and the EU regulators not to purchase Russian bonds, demand on the part of foreign investors from different regions confirmed the high level of confidence of market participants in Russia as an issuer,” according to the ministry. The volume of the bid book exceeded the offer more than twice and reached about $7 billion, TASS said, citing the statement.
Former Prime Minister of Finland and Chairman of the board of directors of EastOffice of Finnish Industries Esko Tapani Aho has entered the supervisory board of Sberbank, TASS reports. On Friday, shareholders of Russia’s largest savings bank held its annual general meeting. They elected the new line-up of its supervisory board.
Russia’s banking system is not able to lend to the economy, presidential aide Andrey Belousov told TASS, adding that alternative mechanisms of financing enterprises have to be developed. Businessmen consider high interest rates in the banking system as the key barrier to investment and economic growth. “The banking system won’t be mainly used for lending to the economy, particularly long-term lending in the near future,” he said. The key challenges are lack of capital and surging bad loans, Belousov said, adding that there is also an uncommitted resource of business profits, which have risen in certain cases due to the ruble’s devaluation.
General Motors’ main Chinese joint venture is recalling 2.2 million cars to deal with insufficient corrosion resistance on crankcase valves, AP reports. Shanghai-GM had received complaints about engine damage, according to the country’s product quality regulator. The recall applies to Buick Excelle sedans and Chevrolet Cruzes, Epicas and Aveos. The automaker is a joint venture between GM and state-owned Shanghai Automotive Industries Corp. Last year, sales by GM and its Chinese partners of GM-brand vehicles rose 5.2 percent to 3.6 million units.
The leaders of the Group of Seven rich economies ended a summit on Friday by issuing an action plan for countering terrorism and other risks to peace and global growth, AP said. They claimed a “special responsibility” for beefing up policies to stimulate and sustain growth of their sluggish economies, but the declaration said each country would take into account “country-specific circumstances.” Weak demand and unaddressed structural problems are “the key factors weighing on actual and potential growth,” the G7 said. The host, Japanese Prime Minister Shinzo Abe said he had won support for his “three arrows” economic strategy of ultra-loose monetary policy, public spending and longer-term reforms.
China stocks ended slightly lower on Friday, capping a sixth straight week of losses for the Shanghai Composite Index. Industrial profit data added to fears that a recent pick-up in the economy is fizzling out, Reuters said. The Shanghai Composite Index was fractionally lower at 2,821.05 points, and slipped 0.2 percent for the week. The index has now lost more than eight percent since mid-April. The blue-chip CSI300 index fell 0.1 percent, to 3,062.50, declining 0.5 percent for the week. Many investors are worried about China's economic health and the impact of a possible US interest rate hike.
French President Francois Hollande said on Friday that a British exit from the EU would be bad news for the global economy, Reuters reported. “Economically, it would be bad news, bad news for the UK, as well as the world, not just Europe,” the president said after the conclusion of a Group of Seven leaders summit in Japan. “That would trigger capital transfers as well as the relocation of some activities,” he said. Hollande added, however, that it was not for France to say what Britain should do.