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Nucleus increases borrowing limit for SMEs



Nucleus Commercial Finance has increased the borrowing limits on its cash flow finance product.

The alternative finance provider has raised the upper limit from £25,000 to £200,000 in response to broker demand.

It comes after Nucleus increased the maximum term length from three to five years, which is available to those businesses looking to borrow over £75,000.

Read more: Nucleus Commercial Finance hits £1bn lending milestone

“Demand for cash flow finance is growing, and we expect this trend to continue as uncertainties around Brexit reduce and businesses start investing and planning for growth,” Chirag Shah (pictured), chief executive of Nucleus Commercial Finance, said.

“Whether it be to help even out seasonal peaks and troughs, to mitigate the impact of long payment terms, or to expand a business, this product can enable businesses to achieve their strategic goals.

“Following feedback from brokers we’ve made our offering increasingly flexible to provide more competitive solutions to our customers.

“Ultimately, it’s our duty as an alternative finance provider to help UK small – and medium-sized enterprises (SMEs) thrive by finding flexible options that suit their needs.”

Nucleus secured a £25m funding line from Paragon Bank last month which it said would boost its lending to SMEs.

Read more: Nucleus targets start-ups with new type of loan

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Coronavirus latest: China’s banks to face up to $1.1tn surge in questionable loans, S&P warns





China’s banks face up to $1.1tn surge in questionable loans, S&P warns

China’s lenders may be hit with an increase of as much as Rmb7.7tn ($1.1tn) in questionable loans as the coronavirus outbreak deals a heavy blow to China’s economy, S&P Global Ratings has warned.

The Covid-19 outbreak, which has prompted China to lock down large swaths of its sprawling economy, will cause some individuals and companies to “have difficulty with debt repayment,” S&P said in a report issued on Thursday in Hong Kong.

In a worst-case scenario in which the outbreak does not peak until April, S&P forecasts China’s economy, the second biggest in the world, will expand 4.4 per cent in 2020. That would mark a dramatic slowdown from the 6.1 per cent growth in 2019 and be the weakest pace since 1990, according to World Bank data.

S&P’s base scenario, in which the virus peaks next month, points to 2020 growth of 5 per cent, which would also be the lowest in three decades. Even in the best case in which the virus peaks in February, GDP growth is forecast at 5.5 per cent.

The “growth shock” would cause the value of non-performing loans in China’s banking sector to surge by Rmb7.7tn to Rmb10.1tn in S&P’s worst-case scenario. In the base case, the figure would jump Rmb5.4tn to Rmb7.8tn. In the best case, the NPLs would rise Rmb3.4tn to Rmb5.8tn. The ratio of NPLs to total loans would be 7.8 per cent, 6 per cent and 4.5 per cent in the worst, base and best case scenarios, respectively.

S&P said it also expects Chinese regulators to relax rules for what counts as a bad loan and potentially give certain loans to affected communities and business “special consideration” in how they are accounted for on bank balance sheets.

The ratings firm said it “may take years for domestic banks to revert to normal standards, with long-term repercussions for the creditworthiness of some institutions.”

China has already begun to take action aimed at stimulating its economy and easing conditions in its financial system. The loan prime rate, a key lending rate, was reduced on Thursday after the People’s Bank of China earlier this week reduced another important medium-term lending rate.

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What to know in markets Thursday




Thursday’s economic data earnings releases are poised to shed more light on the impact of the coronavirus to the domestic economy and some individual companies in the travel industry.

The Philadelphia Fed will release its February business activity outlook survey Thursday morning at 8:30 a.m. ET. Consensus economists expect the report will show manufacturing activity weakened slightly in the region in February versus January, with the headline index dropping to 11.0 from 17.0. February’s print had marked the highest level since May 2019.

The report comes on the heels of a much stronger than Empire State manufacturing index, which rose to the highest level in nine months, data earlier this week showed. Beneath the headline report, the new orders index registered at the best level since September 2017, and shipments were the strongest since November 2018.

That print, which captured manufacturing activity trends for the New York region, was the first since the escalation of coronavirus case, providing some respite for investors on edge over the impact of the global outbreak to domestic industrial companies.

“We acknowledge some upside risk [for the Philadelphia Fed index] after the Empire State results,” Rubeela Farooqi, chief U.S. economist for High Frequency Economics, wrote in a note Wednesday. “The export-oriented manufacturing sector was weighed down by the trade war last year. However, in the aftermath of the ‘Phase One’ deal with China, trade tensions have eased somewhat, and early indications suggest conditions for manufacturers are improving.”

The coronavirus outbreak and related disruptions to company supply chains remains a near-term risk, Farooqi added. And ongoing issues with Boeing, as its 737 Max aircraft remain grounded and production halted, have also been an overhang on the manufacturing sector.


Separately, Norwegian Cruise Lines (NCLH) is also due to release fourth-quarter results Thursday.

The cruise operator’s stock has been in focus since the start coronavirus outbreak, which has resulted in more than 2,000 deaths among more than 75,000 global cases to date. Shares of companies in the travel industry – including airlines, hotel and casino operators, in addition to cruise lines – have been especially volatile amid coronavirus developments. Shares of Norwegian have fallen 11% for the year to date through Wednesday’s close, after rising 38% in 2019.

The Norwegian Jewel cruise ship was in lock down while health authorities test a man for Coronavirus on February 14, 2020 in Sydney, Australia. The ship is docked in Sydney this morning following a 10 day tour of New Zealand. (Photo by Lisa Maree Williams/Getty Images)

Consensus analysts expect Norwegian Cruise will deliver fourth-quarter adjusted earnings of 70 cents on sales of $1.43 billion, according to Bloomberg data. These results, however, will exclude the most recent impact of the coronavirus on cruise demand, with the virus having escalated throughout late January and early February.

As a result, first-quarter and full-year guidance will be paramount, with consensus analysts expecting the company to guide toward first-quarter EPS of 61 cents. Such a result would represent a 36% decline over last year’s earnings.

Norwegian Cruise Lines’ earnings results come after peer cruise operator Royal Caribbean warned about a 25-cent impact to first-quarter EPS, and an at least 65-cent hit to full-year EPS, due to cruise cancelations and other itinerary changes amid the coronavirus. Royal Caribbean has so far canceled 18 cruises in Southeast Asia as the outbreak continues.

For Norwegian Cruise Lines, Wall Street firm Stifel said its checks suggest cancelations are running close to 10%, or “basically double the normal average.”

“However, that cancellation number is factually inaccurate, given those cancellations include cancelled itineraries. If a passenger on a canceled sailing decides to take a different itinerary that still incorporates the passenger as ‘canceled’ and a new net booking,” Stifel analyst Steven Wieczynski wrote in a note last week.

“We believe until investors get a better sense of the ultimate impact this ‘noise’ will have on the business, they will continue to tread water around these names,” he said.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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China to expel three Wall Street Journal reporters




China will expel three Wall Street Journal reporters in the coming days, marking the first time in decades that the country has cancelled the press cards of multiple foreign reporters at the same time.

Beijing said on Wednesday that the move was in retaliation for a comment piece headlined “China Is the Real Sick Man of Asia” published on February 3, which they said “smears the efforts of the Chinese government” in fighting the coronavirus outbreak.

The expulsions come a day after the US designated five Chinese media outlets as foreign diplomatic missions, saying their journalists operated as propaganda agents and required greater monitoring.

Washington said it would require Xinhua, China’s official news agency, China Radio International, China Global Television Network and the distributors of newspapers China Daily and People’s Daily — China Daily Distribution Corporation and Hai Tian Development USA — to register the names of US employees, declare any property holdings and seek approval to add any more.

“The fact of the matter is each and every one of these entities does work for the Chinese government,” a senior state department official said on Tuesday, describing them as organs of a one-party state propaganda apparatus that “take their orders directly from the top”.

The decision will, in effect, treat the five organisations as foreign embassies, although US officials said they would not restrict their work, reporting or access. They will also not be given diplomatic immunity or forced to reveal any meetings with US officials or educational and research institutions.

A Chinese foreign ministry spokesman criticised the decision, accusing Washington of “wantonly restricting and thwarting Chinese media outlets’ normal operations”. He added that Beijing would “reserve the right to take further measures in response”.

Mike Pompeo, the US secretary of state, condemned China’s decision to expel the Wall Street Journal’s journalists. “Mature, responsible countries understand that a free press reports facts and expresses opinions,” he said. “The correct response is to present counter arguments, not restrict speech.”

Two of the reporters — deputy bureau chief Josh Chin and reporter Chao Deng — are US nationals, the paper said. The third, Philip Wen, is Australian. All three have reported on Beijing’s mass surveillance policies and controversial detention of Uighur Muslims in the Xinjiang region.

China refused to renew the accreditation of another Wall Street Journal reporter in August.

Beijing said the expulsions were punishment for a February 3 comment article by Walter Russell Mead, a professor at Bard College and a Wall Street Journal columnist, who strongly criticised Chinese authorities’ response to the coronavirus outbreak.

The article sparked an angry backlash on Chinese social media, with nationalist tabloids and liberal commentators alike saying the author had crossed a line by “insulting” China during a period of national crisis.

William Lewis, publisher of the Wall Street Journal, said the company regretted that the article had “caused upset and concern among the Chinese people”. But he added that the newspaper’s news and comment sections operated separately, adding that “none of the journalists being expelled had any involvement with it”.

China’s leaders have frequently tapped into nationalist sentiment in recent years over perceived slights by foreign nations to justify harsh retaliatory measures.

But the Foreign Correspondents’ Club of China said it was the first expulsion of a foreign correspondent since 1998.

“The action taken against the WSJ correspondents is an extreme and obvious attempt by the Chinese authorities to intimidate foreign news organisations by taking retribution against their China-based correspondents,” the club said in a statement.

The US has previously designated foreign media outlets as extensions of governments in the past, including Vietnam’s news agency five years ago. During the cold war, Washington treated several Soviet media outlets as part of the Moscow government.

Jim Risch, a Republican senator who chairs the Senate foreign relations committee, described the decision as “a smart and reasonable step”.

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