HK banks to ‘roll out’ support measure to small businesses

HONG KONG, Oct 16, (RTRS): Nine major banks in Hong Kong have agreed to adopt a number of measures to support small and medium enterprises in Hong Kong, the central bank said on Wednesday, as four months of anti-government protests start taking its toll on local businesses.

The banks will “proactively consider” allowing SME customers facing difficulties to extend or reschedule repayments, and will not change the terms of loans to the real estate sector even if landords offer retailers reduced rents, it said.

The Hong Kong Monetary Authority (HKMA), the city’s central bank, announced the measures after meeting the nine banks, which it did not name, under the newly established “Banking Sector SME Lending Coordination Mechanism”. Hong Kong’s largest banks include HSBC, Bank of China (Hong Kong) and Standard Chartered.

Hong Kong, which has been rocked by often huge and violent protests against what is seen as Beijing’s tightening grip on the city, is facing its first recession in a decade.

The economy shrank 0.4% in AprilJune from the previous quarter, and conditions have sharply deteriorated since then.

Retail sales in Hong Kong were the worst on record in August, down 23% from the previous year, the Hong Kong government said earlier this month.

BRUSSELS, Oct 16, (RTRS): Eurozone inflation dropped to its slowest pace in nearly three years in September, more than previously estimated, the European Union statistics agency said on Wednesday.

The drop is likely to raise new concerns on the state of the eurozone economy and may reignite a debate within the European Central Bank on how to pursue its goal of keeping inflation close to but below 2% over the medium term. Eurostat said prices in the 19-country eurozone rose 0.8%on the year, down from its earlier estimate of 0.9% and lower than the market consensus of 0.9%.

Eurostat also said the bloc’s trade surplus with the rest of the world rose to 14.7 billion euros ($16.2 billion) in August, from 11.9 billions the previous year, as imports fell more than exports. The revised inflation reading marked a more pronounced slowdown than August’s 1.0%. It was the lowest rate since November 2016, when prices rose 0.6%.

However, a narrower inflation indicator, which strips out volatile energy and unprocessed food prices and is monitored closely by the ECB, rose to 1.2% in September from 1.1% in August, in line with earlier Eurostat estimates on Oct 1.

Excluding energy, food, alcohol and tobacco, inflation grew 1.0% in September, Eurostat said, confirming earlier figures. The revision of the headline figure was caused by lower-than-expected inflation for industrial products, another worrying sign for eurozone manufacturers, who are facing drops in output and in confidence.

Prices for industrial goods, excluding energy, went up 0.2%on the year in September, Eurostat said, revising its earlier 0.3% estimate. Energy prices were confirmed falling by 1.8%. Inflation for service, the largest segment of the eurozone economy, rose1.5%, in line with previous estimates.

The trade data also released on Wednesday confirmed manufacturing’s difficulties. Exports of goods to the rest of the world fell by 2.2% on the year in August. Imports dropped even more, 4.1%, as global trade tensions seemed to take their toll. Trade among eurozone states also fell 5.6% on the year.

Despite US threats and sanctions against global partners, the latest data showed widening gaps. The EU trade surplus with the United States grew to 102.7 billion euros in the period from January to August, from 90.6 billions the year before. The EU’s trade deficit with China grew to 127.4 billion euros over the same period, from 116.3 billions a year earlier.