The ongoing tensions between the United States and China have entered a new dimension reports suggest that China is likely to reduce its Holdings of the US debt to protect its trade from currency market fluctuations.

China reduces US debt exposure for the third month

The country's ongoing economic crisis has had major collateral damage. And that's its once-fledging textile industry. The textile, which accounts for 60% of Pakistan's exports, has struggled, ever since the economy fell by the wayside due to the balance of payments crisis. Moreover, the global economic slowdown has not helped the industry's case either. In 2022-2023, textile exports fell by 15% to 16.5 billion dollars.

Pakistan's textile industry in tatters

China's ballooning local government debt has become a problem that cannot be brushed aside

Local government debt threatens China's financial stability

China's household debt has surged to 63.5% and is now approaching the IMF's warning line of 65%. What explains the surging debt? What is china doing to bring it down? Molly Gambhir reports

Gravitas: China's household debt approaches IMF red line

China's household debt levels have reached record levels, a South China Morning Post report has said.

According to a report released by the National Institution for Finance and Development (NIFD), the country’s household debt increased from 61.9 per cent at the end of last year to 63.5 per cent in the second quarter of 2023. The debt rate is inching closer to the International Monetary Fund (IMF) warning point of 65 per cent, which indicates potential financial risks.

The rise in household debt comes amid an economic downturn and the Xi Jinping-led administration's push to increase consumption in order to stimulate the economy.

As on June 30, consumer loans, credit card debt, private borrowings, and loans used to fund business operations occupied the majority of China's household debt at 38.6 trillion yuan (US$5.38 trillion).

Given that consumer income growth has trailed behind economic recovery and that people are increasingly likely to save money for future expenses such as mortgage payments, energy bills, child care, and their own uncertain futures, analysts are now more concerned about consumers’ actual ability to spend.

The NIFD report noted that citizens are more inclined to use their savings to pay off debt in order to lower asset risks rather than to consume and invest due to the debt pressure due to their "pessimistic expectations of future economic growth". &nbsp;

Moreover, the Economist Intelligence Unit (EIU) has cautioned that the lack of decisive measures, such as household-focused fiscal transfers, could restrict the effectiveness of Beijing’s increase in big-budget expenditure.

China’s falling exports worries experts

While the primary cause of China’s dramatic decline in exports is thought to be the widespread impact of a global economic slowdown, economists and trade experts quoted by the South China Morning Post caution that the impact of developed countries’ “de-risking” activities should not be understated because “the worst is yet to come”.

After falling by 7.5 per cent in May, Chinese exports experienced their sharpest downturn since the early months of 2020 in June, falling by 12.4 per cent compared to a year earlier.

Except for Russia, where Chinese exports surged by 91 per cent year-on-year, the majority of China’s trading partners, including established and emerging economies, experienced a dip in June. Notably, only 3.4 per cent of China’s total exports were accounted for by Russia.

As per reports, one-fourth of all exports from China are shipped to the US and EU. But since late last year, consumer demand for Chinese goods has declined due to Western economies slowing down and rising prices.

There is also a strong and growing sentiment among fashion companies in the US to “reduce China exposure” due to worries about the risks of forced labour in the supply chain and escalating US-China tensions. South China Morning Post quoted Sheng Lu, an associate professor with the Department of Fashion and Apparel Studies at the University of Delaware, as saying that the impact of the “de-risk” movement on China’s exports should not be underestimated.

However, Phillip Maro from the Economist Intelligence Unit added that many businesses are realising how challenging it is to transition away from the fiercely competitive and sophisticated Chinese Chinese manufacturing ecosystem.

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China's household debt levels have reached record levels, a South China Morning Post report has said. According to a report released by the National Institution for Finance and Development (NIFD), the country’s household debt increased from 61.

China's household debt levels have reached record levels, a South China Morning Post report has said. According to a report released by the National Institution for Finance and Development (NIFD), the country’s household debt increased from 61.9 per cent at the end of last year to 63.5 per cent in the second quarter of 2023. The debt rate is inching closer to the International Monetary Fund (IMF) warning point of 65 per cent, which indicates potential financial risks. The rise in household debt comes amid an economic downturn and the Xi Jinping-led administration's push to increase consumption in order to stimulate the economy. As on June 30, consumer loans, credit card debt, private borrowings, and loans used to fund business operations occupied the majority of China's household debt at 38.6 trillion yuan (US$5.38 trillion). Given that consumer income growth has trailed behind economic recovery and that people are increasingly likely to save money for future expenses such as mortgage payments, energy bills, child care, and their own uncertain futures, analysts are now more concerned about consumers’ actual ability to spend. The NIFD report noted that citizens are more inclined to use their savings to pay off debt in order to lower asset risks rather than to consume and invest due to the debt pressure due to their "pessimistic expectations of future economic growth". Moreover, the Economist Intelligence Unit (EIU) has cautioned that the lack of decisive measures, such as household-focused fiscal transfers, could restrict the effectiveness of Beijing’s increase in big-budget expenditure. China’s falling exports worries experts While the primary cause of China’s dramatic decline in exports is thought to be the widespread impact of a global economic slowdown, economists and trade experts quoted by the South China Morning Post caution that the impact of developed countries’ “de-risking” activities should not be understated because “the worst is yet to come”. After falling by 7.5 per cent in May, Chinese exports experienced their sharpest downturn since the early months of 2020 in June, falling by 12.4 per cent compared to a year earlier. Except for Russia, where Chinese exports surged by 91 per cent year-on-year, the majority of China’s trading partners, including established and emerging economies, experienced a dip in June. Notably, only 3.4 per cent of China’s total exports were accounted for by Russia. As per reports, one-fourth of all exports from China are shipped to the US and EU. But since late last year, consumer demand for Chinese goods has declined due to Western economies slowing down and rising prices. There is also a strong and growing sentiment among fashion companies in the US to “reduce China exposure” due to worries about the risks of forced labour in the supply chain and escalating US-China tensions. South China Morning Post quoted Sheng Lu, an associate professor with the Department of Fashion and Apparel Studies at the University of Delaware, as saying that the impact of the “de-risk” movement on China’s exports should not be underestimated. However, Phillip Maro from the Economist Intelligence Unit added that many businesses are realising how challenging it is to transition away from the fiercely competitive and sophisticated Chinese Chinese manufacturing ecosystem. WATCH WION LIVE HERE

More economic trouble for China?: Household debt rate inches closer to the IMF warning line

Gabon became the African nation to launch a debt-for-nature swap, on Tuesday (July 25) and plans to buy up at least $450 million of its government debt in exchange for an eco-friendly blue bond, reported Reuters.&nbsp;

The debt-for-nature swaps have recently gained some popularity among conservation finance, particularly after Ecuador struck the biggest deal of its kind and refinanced $1.6 billion of its commercial debt.&nbsp;

<h2>What are ‘debt-for-nature swaps’?</h2>

Debt-for-nature swap is when creditors provide debt relief for developing countries who commit to taking steps towards the conservation of the environment, like decarbonizing the economy, investing in climate-resilient infrastructure, or protecting biodiverse forests or reefs, according to the International Monetary Fund (IMF).&nbsp;

These so-called swaps can be useful for countries that are most vulnerable to climate change and often unable to afford investment to strengthen climate change-related resilience. Typically, a country’s debt, bought up by banks or specialist investors is replaced with cheaper ones with the help of a multilateral development bank “credit guarantee” or “risk insurance”.&nbsp;

Therefore, these debt-for-nature swaps free up fiscal resources for governments to improve resilience without triggering a fiscal crisis or sacrificing spending on other development priorities, said the IMF.&nbsp;

The supporters of this concept, which was first ideated by the late “godfather of biodiversity,” Thomas Lovejoy,&nbsp;in the 1980s, call it a win-win for financiers, countries and conservationists, as per media reports.

<h2>About Gabon’s deal</h2>

The central African nation’s beaches and coastal waters are home to nearly a third of the global population and the world’s largest population of leatherback turtles, an endangered species.&nbsp;

Citing a regulatory filing, Reuters reported that Gabon on the London Stock Exchange had “launched invitations to tender for purchase by the Republic for cash its 2025 Notes and 2031 Notes”.&nbsp;

The filing has since prompted the three Eurobonds, that it referred, to rise as much as 2.2 cents on the dollar, reported the news agency. Furthermore, the February 2031 maturity rose 2.203 cents to 83.702 cents and the November 2031 maturity jumped 2.129 cents to 83.573 cents.&nbsp;

The Gabonese government offered to buy back the bonds for 85 cents per $1 of the bond. Meanwhile, the 2025 maturity, which rose 1.194 cents to 95.4 cents, is also lower than the offer price of 96.75 cents.

A report by Reuters citing industry sources also said that the United States International Development Finance Corporation (DFC) would provide political risk insurance as it has for Ecuador and Belize.

Earlier this year, Ecuador sealed the world’s largest debt-for-nature swap on record amounting to $1.6 billion which has freed up as much as $18 million every year for the next two decades. The amount currently serves as a consistent revenue stream for the conservation of the Galapagos Islands, one of the world’s most precious ecosystems. 
 
(With inputs from agencies)&nbsp; 
 
&nbsp;

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Gabon became the African nation to launch a debt-for-nature swap, on Tuesday (July 25) and plans to buy up at least $450 million of its government debt in exchange for an eco-friendly blue bond, reported Reuters.

Gabon became the African nation to launch a debt-for-nature swap, on Tuesday (July 25) and plans to buy up at least $450 million of its government debt in exchange for an eco-friendly blue bond, reported Reuters. The debt-for-nature swaps have recently gained some popularity among conservation finance, particularly after Ecuador struck the biggest deal of its kind and refinanced $1.6 billion of its commercial debt. What are ‘debt-for-nature swaps’? Debt-for-nature swap is when creditors provide debt relief for developing countries who commit to taking steps towards the conservation of the environment, like decarbonizing the economy, investing in climate-resilient infrastructure, or protecting biodiverse forests or reefs, according to the International Monetary Fund (IMF). These so-called swaps can be useful for countries that are most vulnerable to climate change and often unable to afford investment to strengthen climate change-related resilience. Typically, a country’s debt, bought up by banks or specialist investors is replaced with cheaper ones with the help of a multilateral development bank “credit guarantee” or “risk insurance”. Therefore, these debt-for-nature swaps free up fiscal resources for governments to improve resilience without triggering a fiscal crisis or sacrificing spending on other development priorities, said the IMF. The supporters of this concept, which was first ideated by the late “godfather of biodiversity,” Thomas Lovejoy, in the 1980s, call it a win-win for financiers, countries and conservationists, as per media reports. About Gabon’s deal The central African nation’s beaches and coastal waters are home to nearly a third of the global population and the world’s largest population of leatherback turtles, an endangered species. Citing a regulatory filing, Reuters reported that Gabon on the London Stock Exchange had “launched invitations to tender for purchase by the Republic for cash its 2025 Notes and 2031 Notes”. The filing has since prompted the three Eurobonds, that it referred, to rise as much as 2.2 cents on the dollar, reported the news agency. Furthermore, the February 2031 maturity rose 2.203 cents to 83.702 cents and the November 2031 maturity jumped 2.129 cents to 83.573 cents. The Gabonese government offered to buy back the bonds for 85 cents per $1 of the bond. Meanwhile, the 2025 maturity, which rose 1.194 cents to 95.4 cents, is also lower than the offer price of 96.75 cents. A report by Reuters citing industry sources also said that the United States International Development Finance Corporation (DFC) would provide political risk insurance as it has for Ecuador and Belize. Earlier this year, Ecuador sealed the world’s largest debt-for-nature swap on record amounting to $1.6 billion which has freed up as much as $18 million every year for the next two decades. The amount currently serves as a consistent revenue stream for the conservation of the Galapagos Islands, one of the world’s most precious ecosystems. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Gabon releases tender for Africa’s first 'debt-for-nature swap': What is it?

Yuan Jiajun, a politburo member of the communist party of China, has concluded his three-day visit to Nepal. During his visit, he pledged over a million-dollar grant for Nepal's 7 provinces to boost agriculture. He however skipped controversy surrounding b-r-i projects during his meeting with top political leaders in Nepal. Even as Nepal says none of the projects under the bri are complete.

China pledges over $1 million grant to fund Nepal's agriculture projects

The International Monetary Fund(IMF) has released a staff report about Pakistan's poor handling of the economy and its inability to maintain steady operations. The IMF reports also uncover the conditions tied to a $3 bn standby arrangement package provided to Pakistan with risk to program implementation exceptionally high, policy slippage, and delays in external financing disbursement. This could jeopardise the country's macro-financial stability and debt sustainability.

IMF urges tightening measures as Pakistan's economy falters

A recently-published United Nations report reveals that global public debt has reached an unprecedented milestone of $92 trillion. Governments around the world resorted to borrowing loans to tackle catastrophic events like the COVID-19 pandemic, which devastated numerous families, overwhelmed the global healthcare system, and severely disrupted the international economy.&nbsp;

Additionally, the report highlights a concerning trend of domestic and external debt growing more than fivefold in the past two decades, outpacing economic growth. In contrast, global GDP has only tripled since 2002. This raises doubts&nbsp;about the sustainability of such borrowing practices and their potential long-term impacts on the global economy.

Over 30 percent of global public debt is attributed to developing countries, with China, India, and Brazil accounting for 70 percent&nbsp;of that share. Among the developing nations, fifty-nine of them possess debt-to-GDP ratios exceeding 60 percent,&nbsp;indicating worrisome levels of debt.

UN Secretary-General Antonio Guterres has expressed&nbsp;concern about the impact on people, despite current market conditions appearing unaffected. Some of the world's poorest nations are faced with a difficult choice between servicing their debts or meeting the needs of their citizens.

Moreover, the UN reports&nbsp;that the international financial architecture has made access to credit for developing nations inadequate and costly. The fact that net interest debt payments exceeds 10 percent&nbsp;of revenues in 50 emerging economies&nbsp;provides evidence of this.

The UN is recommending that multilateral lenders, such as the IMF, enhance the accessibility of financing for countries facing debt distress. Additionally, the organization advocates for the establishment of a global debt workout mechanism. However, specific details regarding the workings of such a mechanism have not yet been disclosed.

A recently-published United Nations report reveals that global public debt has reached an unprecedented milestone of $92 trillion. Governments around the world resorted to borrowing loans to tackle catastrophic events like the COVID-19 pandemic, which devastated numerous families, overwhelmed the global healthcare system, and severely disrupted the international economy.

A recently-published United Nations report reveals that global public debt has reached an unprecedented milestone of $92 trillion. Governments around the world resorted to borrowing loans to tackle catastrophic events like the COVID-19 pandemic, which devastated numerous families, overwhelmed the global healthcare system, and severely disrupted the international economy. Additionally, the report highlights a concerning trend of domestic and external debt growing more than fivefold in the past two decades, outpacing economic growth. In contrast, global GDP has only tripled since 2002. This raises doubts about the sustainability of such borrowing practices and their potential long-term impacts on the global economy. Over 30 percent of global public debt is attributed to developing countries, with China, India, and Brazil accounting for 70 percent of that share. Among the developing nations, fifty-nine of them possess debt-to-GDP ratios exceeding 60 percent, indicating worrisome levels of debt. UN Secretary-General Antonio Guterres has expressed concern about the impact on people, despite current market conditions appearing unaffected. Some of the world's poorest nations are faced with a difficult choice between servicing their debts or meeting the needs of their citizens. Moreover, the UN reports that the international financial architecture has made access to credit for developing nations inadequate and costly. The fact that net interest debt payments exceeds 10 percent of revenues in 50 emerging economies provides evidence of this. The UN is recommending that multilateral lenders, such as the IMF, enhance the accessibility of financing for countries facing debt distress. Additionally, the organization advocates for the establishment of a global debt workout mechanism. However, specific details regarding the workings of such a mechanism have not yet been disclosed.

Global public debt soars to record-high of $92 trillion, UN report reveals

Even amid signals of the Sri Lankan economy gradually coming back on track on the back of the IMF loan and strong fiscal measures, there are signals of a large number of skilled professionals leaving the country for better career opportunities and better lives for themselves and their families. The number of IT professionals, doctors, and others registering to leave the country has nearly doubled over 2021. Youth cite uncertainty on the road ahead for the country.

Sri Lanka brain drain

China after years of practising what is known as a 'debt trap' diplomacy has led to nearly 150 countries owing over 1 trillion dollars to China. The dragon country is now feeling the heat of being in debt.

China's hidden debt: a ticking time bomb

China is in default on its sovereign debt held by American bondholders. The historical context reveals that the Republic of China defaulted on its debt in 1938 during its conflict with Japan.

China's sovereign debt default raises concerns for US bondholders

Chinese banks are facing increasing risks from rising non-performing loans (NPLs) and diminishing returns, making them a lightning rod for investors' worries about the world's second-largest economy.

China's banks bear brunt of concerns around growth and debt

It's a tale of unexpected financial triumph as Ukrainian debt warrants have taken the investment world by storm, delivering staggering returns and capturing the attention of major players in the market. Held by Morgan Stanley investment management, these exotic warrants have experienced an astonishing surge in value over a short period.

Ukraine’s debt warrants outshine emerging markets

Wuhan is suffering under a financial crisis. The government is failing to recover debts from companies. Will the city recover from the spiraling economy? Molly Gambhir reports.

Gravitas: Wuhan cash-strapped, calls in debts from companies

Asian markets are reacting to the tentative US Debt deal. In Japan, the Nikkei 225 surged to 33-year record levels, jumping 2%. The broader Topix index also experienced gains, rising by 1.26%. However, the hang seng index is on a decline, defying the overall optimism in the global markets.

Asian markets rally over tentative US Debt deal

The USA claims to be an economic powerhouse, but did you know it has also amassed $31 Trillion in debt? Who does it owe this debt to? Molly Gambhir explains on Gravitas Plus.

Gravitas Plus: How America amassed $31 trillion in debt

Wall Street is pretty confident that US Will not default on its debt. But that does not mean the u.S. Economy won't face the heat in its aftermath due to the US Treasury selling t-bills worth 1 trillion dollars to raise cash to pay for its debt.

US may face debt limit deal aftershocks

US lawmakers come to a deadlock on US debt limit talks, they are yet to resolve the crisis. President Joe Biden and Republican leaders offer hopes of a deal while Democrats pitch for a clean increase, with no strings attached.

US debt crisis: Joe Biden and Republican leaders offer hopes of a deal

The United States is facing the prospect of defaulting on trillions of dollars. The nation is facing an unprecedented economic & financial storm. Without raising the debt limit, the US government will default on its bills.

What is the US debt ceiling & what happens if it isn’t raised?

U.S. stocks slouched to a higher close on Monday, and benchmark Treasury yields rose amid flickering optimism that Washington will get past partisan wrangling and reach a debt ceiling deal.

Wall Street advances, Treasury yields rise as debt-ceiling debate rolls along

Tunisia and Egypt are inching closer to a severe debt crisis that could have far-reaching implications for the volatile North Africa region.

As shortages of essential goods and financial market dysfunction plague the two countries, their wealthy West Asian neighbors, investors, and analysts are growing increasingly concerned, Reuters reported.

Egypt has historically been considered "too big to fail" due to its status as the largest economy and most populous nation in North Africa. But Tunisia's role as the birthplace of the Arab Spring complicates the economic current scenario in the region.

President Kais Saied's consolidation of power and crackdown on opponents in Tunisia have ignited a political crisis. Hopes for an International Monetary Fund (IMF) support package remain uncertain. This is largely due to concerns over&nbsp;the country's ability&nbsp;to implement the program amidst its fractured politics.

President Saied's anti-IMF statements do not help Tunisia's case either. He has openly criticized the IMF, asserting that Tunisia will not bow to its "diktats"&nbsp;on subsidy cuts and reductions in the public wage bill. He has also warned&nbsp;that such measures could trigger renewed social upheaval. The country is now at risk of a full-blown balance of payments crisis, with a fiscal deficit estimated to remain around 5 percent of GDP and dwindling foreign exchange reserves.

On the other hand, Egypt grapples with stretched finances despite securing a $3 billion IMF rescue plan in December. Its debt-to-GDP ratio is rapidly approaching 100 percent, and multiple currency devaluations have inflated interest payments on its debt. With over half of the government's revenues projected to be consumed by debt interest payments next year, the situation is becoming increasingly precarious.

A scarcity of dollars in Cairo's local currency markets is further exacerbating the economic challenges faced by the country. The Egyptian pound continues to weaken against the dollar on the streets, trading at over 40 pounds to the dollar, nearly 25 percent below the official exchange rate. Economists predict that interest rates will need to rise even further, setting the stage for a tumultuous economic narrative ahead of next year's presidential elections.

The potential debt default by Tunisia and Egypt carries significant implications for global money managers and regional stability.

Egypt's international bonds have already experienced a 20 percent slump this year, causing concern among asset managers. Reuters quoted veteran Fund Manager Carl Ross as saying that a&nbsp;default by Egypt, a country with a 110 million population, could create ripples of instability throughout the region. While the wealthy Gulf states have traditionally supported financial stability in the region, uncertainties remain about the duration and conditions under which this support will persist.

(With agency inputs)&nbsp;

Tunisia and Egypt are inching closer to a severe debt crisis that could have far-reaching implications for the volatile North Africa region. As shortages of essential goods and financial market dysfunction plague the two countries, their wealthy West Asian neighbors, investors, and analysts are growing increasingly concerned, Reuters reported.

Tunisia and Egypt are inching closer to a severe debt crisis that could have far-reaching implications for the volatile North Africa region. As shortages of essential goods and financial market dysfunction plague the two countries, their wealthy West Asian neighbors, investors, and analysts are growing increasingly concerned, Reuters reported. Egypt has historically been considered "too big to fail" due to its status as the largest economy and most populous nation in North Africa. But Tunisia's role as the birthplace of the Arab Spring complicates the economic current scenario in the region. President Kais Saied's consolidation of power and crackdown on opponents in Tunisia have ignited a political crisis. Hopes for an International Monetary Fund (IMF) support package remain uncertain. This is largely due to concerns over the country's ability to implement the program amidst its fractured politics. President Saied's anti-IMF statements do not help Tunisia's case either. He has openly criticized the IMF, asserting that Tunisia will not bow to its "diktats" on subsidy cuts and reductions in the public wage bill. He has also warned that such measures could trigger renewed social upheaval. The country is now at risk of a full-blown balance of payments crisis, with a fiscal deficit estimated to remain around 5 percent of GDP and dwindling foreign exchange reserves. On the other hand, Egypt grapples with stretched finances despite securing a $3 billion IMF rescue plan in December. Its debt-to-GDP ratio is rapidly approaching 100 percent, and multiple currency devaluations have inflated interest payments on its debt. With over half of the government's revenues projected to be consumed by debt interest payments next year, the situation is becoming increasingly precarious. A scarcity of dollars in Cairo's local currency markets is further exacerbating the economic challenges faced by the country. The Egyptian pound continues to weaken against the dollar on the streets, trading at over 40 pounds to the dollar, nearly 25 percent below the official exchange rate. Economists predict that interest rates will need to rise even further, setting the stage for a tumultuous economic narrative ahead of next year's presidential elections. The potential debt default by Tunisia and Egypt carries significant implications for global money managers and regional stability. Egypt's international bonds have already experienced a 20 percent slump this year, causing concern among asset managers. Reuters quoted veteran Fund Manager Carl Ross as saying that a default by Egypt, a country with a 110 million population, could create ripples of instability throughout the region. While the wealthy Gulf states have traditionally supported financial stability in the region, uncertainties remain about the duration and conditions under which this support will persist. (With agency inputs)

Drowning in debt: Tunisia and Egypt's battle for economic stability

Tunisia and Egypt are on the brink of major debt crises, with Tunisia facing a political crisis and uncertainty over IMF support. Egypt's debt-to-GDP ratio is reaching critical levels, compounded by currency devaluations and dwindling reserves. The countries' fiscal strains could have far-reaching consequences for the region. The involvement of gulf allies and the potential impact on global financial markets further intensify the gravity of the situation.

Drowning in debt: North Africa braces for impact

The debt limit timebomb is ticking for the Biden administration. The question looming now is: Will President Joe Biden & Republican lawmakers be able to break the deadlock? They are scheduled to meet on Tuesday, led by Speaker Kevin McCarthy.

Will the US debt limit crisis end soon?

A fight between Republicans and Democrats over the debt limit ceiling could send the US economy into a recession even if the standoff doesn't actually trigger a debt default, analysts say.

Analysts: US debt limit standoff could lead to recession

US Republican lawmakers passed a bill to raise the government's debt ceiling on Wednesday. While US debt default looms, the bill has introduced sweeping spending cuts for the next decade.

US House passes debt limit bill in a major win for Republicans

US Treasury Secretary Janet Yellen sounds the alarm bells. She warns that a failure to raise the government's debt ceiling could trigger an economic catastrophe.

Janet Yellen warns on U.S. debt default

The US Congressional Budget Office warned that the federal government would be at risk of a payment default as soon as July if politicians fail to raise the debt limit.

US likely to face debt-ceiling crisis this July, warns CBO

Sri Lanka's former president Gotabaya Rajapaksa has been questioned by police over the discovery of a large amount of cash in his office-cum-residence when he fled the country for safety as thousands of protesters stormed the place in July last year.

Ex- Sri Lanka President Rajapaksa quizzed over cash stash

Hindenburg Research said on Wednesday it held short positions in Adani Group, accusing the Indian conglomerate of improper extensive use of entities set up in offshore tax havens and expressing concern about high debt levels.&nbsp;The group, which is led by Gautam Adani, the world's third richest person according to Forbes, dismissed the U.S. short-seller's claims as baseless, saying it was timed to damage its reputation ahead of a large share offering.

The group's flagship firm, Adani Enterprises, will on Friday (January&nbsp;27) launch the country's biggest public secondary share offering, aiming to raise to&nbsp;$2.5 billion&nbsp;to fund capital expenditure and pay off some debt.

Hindenburg, known for having shorted electric truck maker Nikola Corp&nbsp;and Twitter, said it holds short positions in Adani companies through U.S.-traded bonds and non-Indian-traded derivative instruments.

Its research report questioned how the Adani Group has used offshore entities in tax havens like Mauritius and the Caribbean Islands.

It also said key listed Adani companies had "substantial debt" which has put the entire group on a "precarious financial footing", and asserted that shares in seven Adani listed companies have an 85% downside on a fundamental basis due to what it called "sky-high valuations".

Adani Group's Chief Financial Officer, Jugeshinder Singh, said in a statement the company was shocked by the report, calling it a "malicious combination of selective misinformation and stale, baseless and discredited allegations."

"The Group has always been in compliance with all laws," the company said, without addressing specific allegations made by Hindenburg.

"The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on Public Offering from Adani Enterprises," it added.

The report coincided with bidding for Adani's secondary share sale by anchor investors on Wednesday. Abu Dhabi Investment Authority and Morgan Stanley were among investors who bid for shares worth Rs 90 billion&nbsp;($1.1 billion), compared with Rs 60 billion worth of stock on offer,&nbsp;a source told Reuters.

The research report, Hindenburg said, was based on an investigation over two years that involved speaking with dozens of individuals, including former Adani Group executives as well as a review of documents.

India's capital markets regulator, the Securities and Exchange Board of India, did not immediately respond to a request for comment.

Adani has repeatedly dismissed debt concerns. Singh&nbsp;told media&nbsp;on Jan. 21, "Nobody has raised debt concerns to us. No single investor has."

Shares in Adani Ports And Special Economic Zone&nbsp;fell 6.3% while Adani Enterprises ended down 1.5%.

Hindenburg's report said five of seven key listed Adani companies have reported current ratios — a measure of liquid assets minus near-term liabilities — below 1. This, the short-seller said, suggested "a heightened short-term liquidity risk".

Adani Group's total gross debt in the financial year ended March 31, 2022, rose 40% to Rs 2.2 trillion.

Refinitiv data shows debt at Adani Group's seven key listed Adani companies exceeds equity, with debt at Adani Green Energy Ltd&nbsp;exceeding equity by more than 2,000%.

CreditSights, part of the Fitch Group, described the group last September as "overleveraged". While the report later corrected some calculation errors, CreditSights said it continued to be concerned about Adani Group's leverage.

Hindenburg also said it was concerned that a high proportion of equity held by promoters or key shareholders in Adani Group listed companies has been pledged for loans.

"Equity share pledges are an inherently unstable source of lending collateral," it said in the report.

Last year, the Adani Group bought cement firms ACC&nbsp;and Ambuja Cements&nbsp;from Switzerland's Holcim&nbsp;for $10.5 billion. Days later, it pledged shares in the two firms, worth about $12.5 billion at the time, to banks in a non-disposal agreement that prevents it from offloading the shares until lenders agree that debts are paid.

ACC and Ambuja both fell over 7% on Wednesday.

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Hindenburg Research said on Wednesday it held short positions in Adani Group, accusing the Indian conglomerate of improper extensive use of entities set up in offshore tax havens and expressing concern about high debt levels.

Hindenburg Research said on Wednesday it held short positions in Adani Group, accusing the Indian conglomerate of improper extensive use of entities set up in offshore tax havens and expressing concern about high debt levels. The group, which is led by Gautam Adani, the world's third richest person according to Forbes, dismissed the U.S. short-seller's claims as baseless, saying it was timed to damage its reputation ahead of a large share offering. The group's flagship firm, Adani Enterprises, will on Friday (January 27) launch the country's biggest public secondary share offering, aiming to raise to $2.5 billion to fund capital expenditure and pay off some debt. Hindenburg, known for having shorted electric truck maker Nikola Corp and Twitter, said it holds short positions in Adani companies through U.S.-traded bonds and non-Indian-traded derivative instruments. Its research report questioned how the Adani Group has used offshore entities in tax havens like Mauritius and the Caribbean Islands. It also said key listed Adani companies had "substantial debt" which has put the entire group on a "precarious financial footing", and asserted that shares in seven Adani listed companies have an 85% downside on a fundamental basis due to what it called "sky-high valuations". Adani Group's Chief Financial Officer, Jugeshinder Singh, said in a statement the company was shocked by the report, calling it a "malicious combination of selective misinformation and stale, baseless and discredited allegations." "The Group has always been in compliance with all laws," the company said, without addressing specific allegations made by Hindenburg. "The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on Public Offering from Adani Enterprises," it added. The report coincided with bidding for Adani's secondary share sale by anchor investors on Wednesday. Abu Dhabi Investment Authority and Morgan Stanley were among investors who bid for shares worth Rs 90 billion ($1.1 billion), compared with Rs 60 billion worth of stock on offer, a source told Reuters. The research report, Hindenburg said, was based on an investigation over two years that involved speaking with dozens of individuals, including former Adani Group executives as well as a review of documents. India's capital markets regulator, the Securities and Exchange Board of India, did not immediately respond to a request for comment. Adani has repeatedly dismissed debt concerns. Singh told media on Jan. 21, "Nobody has raised debt concerns to us. No single investor has." Shares in Adani Ports And Special Economic Zone fell 6.3% while Adani Enterprises ended down 1.5%. Hindenburg's report said five of seven key listed Adani companies have reported current ratios — a measure of liquid assets minus near-term liabilities — below 1. This, the short-seller said, suggested "a heightened short-term liquidity risk". Adani Group's total gross debt in the financial year ended March 31, 2022, rose 40% to Rs 2.2 trillion. Refinitiv data shows debt at Adani Group's seven key listed Adani companies exceeds equity, with debt at Adani Green Energy Ltd exceeding equity by more than 2,000%. CreditSights, part of the Fitch Group, described the group last September as "overleveraged". While the report later corrected some calculation errors, CreditSights said it continued to be concerned about Adani Group's leverage. Hindenburg also said it was concerned that a high proportion of equity held by promoters or key shareholders in Adani Group listed companies has been pledged for loans. "Equity share pledges are an inherently unstable source of lending collateral," it said in the report. Last year, the Adani Group bought cement firms ACC and Ambuja Cements from Switzerland's Holcim for $10.5 billion. Days later, it pledged shares in the two firms, worth about $12.5 billion at the time, to banks in a non-disposal agreement that prevents it from offloading the shares until lenders agree that debts are paid. ACC and Ambuja both fell over 7% on Wednesday. WATCH WION LIVE HERE:

Hindenburg shorts India's Adani Group, cites debt and accounting concerns

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