|
|
|
|
Andrew Holland quits Merrill Lynch to join Ambit CapAmbit Capital has hired Andrew Holland from Merrill Lynch India as CEO Institutional Equities.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 6:57 pm Lehman, Merrill not to affect HCL Tech: Vineet NayarVineet Nayar, CEO, HCL Technologies believes that since they do not have any exposure to either Lehman or Merrill, they would not be impacted at all.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 5:58 pm Cashstrapped AIG asks Fed for $40bn lifelineThere are more signs of trouble. Cashstrapped insurer, AIG is expected to announce a restructuring plan today, reports CNBC. It will pursue a three part plan to raise USD 40 billion.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 4:47 pm Wall St extends losses, AIG falls 50 pctNEW YORK (Reuters) - U.S. stocks extended losses in early trade on Monday, with the Dow industrials and S&P both down nearly 3 percent as investors worried about the stability of the financial system after Lehman Brothers filed for bankruptcy.Source: Reuters: Money News | 15 Sep 2008 | 1:53 pm Fallout from financial crisis not over - IMF chiefCAIRO (Reuters) - Fallout from the global financial crisis is not over and more consolidation could occur in the financial sector, IMF Managing Director Dominique Strauss-Kahn said on Monday.Source: Reuters: Money News | 15 Sep 2008 | 1:49 pm China cuts benchmark interest rates to ensure steady growth - Economic Times
Source: Google News India - Business | 15 Sep 2008 | 1:47 pm Tea offerings for previous week slightly lowThe total tea offerings in the last week were slightly low at 1,11,200 packages comprising 64,465 packages of CTC, 39,552 packages of Orthodox and 7,183 packages of Darjeeling teas.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 1:35 pm Gold spurts by Rs 195 per ten gram - Economic Times
Source: Google News India - Business | 15 Sep 2008 | 1:33 pm Greater Kailash-I market open, but few shoppers aroundUndeterred by Saturday's bomb blasts, stores in the posh Greater Kailash M-Block market here reopened their doors Monday but few shoppers were seen in the area.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 1:30 pm Bharti Infratel mulls listing in 2-3 yearsNew Delhi: Bharti Infratel, the infrastructure arm of Sunil Mittal’s Bharti Airtel, is mulling listing of the company in 2-3 years to monetise the assets, a senior executive of the company said on Monday. “We will look at listing of Bharti Infratel in 2-3 years,” Bharti Enterprises MD Akhil Gupta said. Gupta has recently been elevated as the Deputy Group CEO & MD of Bharti Enterprises. He will take specific charge of the tower infrastructure business as the Vice-Chairman & MD, Bharti Infratel. Bharti Infratel has partnered Vodafone Essar Ltd and Idea Cellular to form Indus Towers Ltd, an independent tower company to provide passive infrastructure services in India. Indus Towers, with approximately 70,000 sites, will be formed by merging the passive infrastructure assets of the three companies across 16 telecom circles in India. The 16 telecom circles are Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Kolkata, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu (including Chennai), UP (East), UP (West) and West Bengal. Bharti Infratel will have to transfer approximately 30,000 towers to Indus Towers. Bharti Infratel will operate the passive infrastructure in the remaining 7 circles of Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East and Orissa. Bharti Infratel will be managed and run independently and shall offer passive infrastructure services to all telecom operators and wireless service providers on a non-discriminatory basis. It will own approximately 20,000 sites at inception. Reliance Communications has scrapped its plans for listing because of the current volatility in the stock markets. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 1:26 pm Lehman, Merrill staff eye shifting landscapeNEW YORK/SINGAPORE (Reuters) - Employees of U.S. investment banks Merrill Lynch and Lehman Brothers struggled to come to terms with the speedy redrawing of Wall Street's financial landscape after Lehman filed for bankruptcy and Merrill was sold to Bank of America.Source: Reuters: Money News | 15 Sep 2008 | 1:24 pm Will Lehman Bros\' bankruptcy hit Indian IT cos?The IT space has felt a fair bit of pressure as there was a 720% cut across most of the IT stocks. The key question is that with Lehman Brothers filing for bankruptcy and Bank of America which has taken over Merrill Lynch do these companies have significant exposure to the BFSI space and whats the impact?Source: Moneycontrol Top Headlines | 15 Sep 2008 | 1:14 pm Apple to launch iPod touch in OctoberApple Inc's iPod touch will be available to Indian customers from October 8, a top company official said.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 1:13 pm GLOBAL MARKETS - Lehman storm sparks stock market purge; Fed eyedLONDON (Reuters) - Global share prices sank on Monday after Lehman Brothers filed for bankruptcy protection, prompting a sharp exit from risk across world financial markets.Source: Reuters: Money News | 15 Sep 2008 | 1:09 pm HCL Tech to post mark-to-market losses this quarter - Economic Times
Source: Google News India - Business | 15 Sep 2008 | 1:05 pm After Singur, land tussles now hit Jharkhand industriesAfter the ongoing land dispute over global automobiles major Tata Motors' super-cheap Nano car project at Singur in neighbouring West Bengal, Indian industries planning big ticket investments in the east Indian state of Jharkhand are now facing the heat of land acquisition tussles.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 1:02 pm Equity markets recover but still end in redAfter initial panic selling throughout the morning, Indian equity markets witnessed a smart recovery but still ended in the red.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 1:02 pm UPDATE 1-Ashok Chawla appointed Economic Affairs Secretary - Reuters India
Source: Google News India - Business | 15 Sep 2008 | 1:01 pm Sophisticated ambulances just a call away in Tamil NaduTamil Nadu will have a fleet of modern and sophisticated ambulances for handling emergency situations, which can be availed dialling 108.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 1:01 pm Cable and Wireless, BSNL tie up to share expertiseTelecom operators Cable and Wireless India and the state-owned Bharat Sanchar Nigam Ltd (BSNL) have signed an agreement to offer telecom services and share networks and infrastructure, the two companies announced Monday.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 1:00 pm UK firm to help Indian car makers with designStadco Automotive India, a subsidiary of the UK-based auto component manufacturer Stadco, will help Indian vehicle manufacturers in designing their products, a top company official said here Monday.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 1:00 pm Airtel unwilling to slash messaging ratesBharti Airtel on Monday said it is unlikely to slash its messaging charges as desired by India's telecom regulator, saying rates in the country are the lowest globally.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 12:52 pm Airtel unwilling to slash messaging ratesTelecom operator, Bharti Airtel Monday said it is unlikely to slash its messaging charges as desired by India's telecom regulator, saying rates in the country are the lowest globally.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 12:32 pm Undeterred by Singur, Jai Balaji group to set up steel plantIn what should be music to the ears of West Bengal's beleaguered Left Front government, steelmakers Jai Balaji group Monday described Singur as an isolated incident, and announced its plan to start work on its proposed five million tonne integrated steel plant in the state from November.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 12:32 pm Sensex in red despite recovering 300 points from day's lowAfter panic selling throughout the morning, Indian equity markets witnessed a smart recovery but still ended in the red Monday.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 12:30 pm Rupee hits 2-yr lows as stocks fall weighsMUMBAI (Reuters) - The rupee fell past 46 per dollar for the first time in two years on Monday, knocked down by losses in stocks on worries about global financial sector problems and heavy dollar demand from importers.Source: Reuters: Money News | 15 Sep 2008 | 12:27 pm Gold up post Lehman but off highs on oil slipLONDON (Reuters) - Gold was higher on safe haven buying after Lehman Brothers filed for bankruptcy protection and as the dollar slipped, but retreated from highs after oil prices fell more than $7 a barrel.Source: Reuters: Money News | 15 Sep 2008 | 12:23 pm HCL Tech sees mark-to-market losses in this quarterMUMBAI (Reuters) - HCL Technologies Ltd expects to account for mark-to-market losses in the current quarter to September due to the depreciation of the rupee, a senior official said on Monday.Source: Reuters: Money News | 15 Sep 2008 | 12:10 pm Satyam Computer secures SAP implementation order in Oman - Business Standard
Source: Google News India - Business | 15 Sep 2008 | 12:08 pm Crude breaches $100/bbl mark - Moneycontrol.com
Source: Google News India - Business | 15 Sep 2008 | 12:07 pm Cable and Wireless, BSNL tie up to share expertise - Economic Times
Source: Google News India - Business | 15 Sep 2008 | 12:01 pm Inflation to dip to 10 pc by December: Rangarajan - Economic Times
Source: Google News India - Business | 15 Sep 2008 | 12:01 pm After Singur, land tussles hit Jharkhand industriesIndian industries planning big ticket investments in the east Indian state of Jharkhand are now facing the heat of land acquisition tussles.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 12:01 pm Will Lehman Bros' bankruptcy hit Indian IT cos? - Moneycontrol.com
Source: Google News India - Business | 15 Sep 2008 | 12:00 pm Lehman-invested Indian firms lose over Rs 2,000 croreLehman Brothers' move to file for bankruptcy wiped off more than Rs 2,000 crore from the market valuation of those Indian companies in which the US financial major has made equity investments.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 11:55 am Sugar to Climb Near 24-Year High on India, Brazil (Update2) - Bloomberg
Source: Google News India - Business | 15 Sep 2008 | 11:54 am Sensex slides, Lehman triggers outflow fearsMUMBAI (Reuters) – The Sensex fell 3.35 percent on Monday to their lowest close in two months, as jittery investors braced for more foreign withdrawals after Lehman Brothers filed for bankruptcy protection.Source: Reuters: Money News | 15 Sep 2008 | 11:51 am Morgan eyes $ 5-bn asset-base from IndiaGlobal financial services firm, Morgan Stanley, on Monday announced the launch of its private wealth management services in four Indian metros.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 11:49 am General category will get vacant quota seats: SCNew Delhi: The Supreme Court (SC) on Monday ruled that seats remaining vacant after implementation of the 27% quota under a Parliament-enacted legislation would go to students of the ‘general´category. “There is no no confusion about our judgement that seats which remain vacant after the implementation of the 27% quota will go to the general category,” a bench headed by Chief Justice K G Balakrishnan said. The bench had on 10 April upheld the validity of the Central Educational Institutions (Reservation in Admissions) Act. The anti-quota petitioners drew the attention of the bench that even after the implementation of the law - the Central Educational Institution (Reservation in admission) - the seats have remained vacant and there was confusion. “What is the confusion? Both the judgements have clearly stated that the vacant seat will go to the general category,” the bench said referring to the two judgement, one written by Justices Arijit Pasayat and C K Thakker and another written by Justice Dalveer Bhandari. “This is very clear that the intention was that not to leave the seats vacant. The intention was to give better education,” Pasayat said. The anti-quota petitioners claimed that 432 seats have remained vacant in the IITs after the implementation of the OBC quota law. Solicitor General G E Vahanvati said he will get back to the Court after seeking instructions from the Centre whether seats are vacant or not. The bench posted the matter for further hearing on 29 September. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 11:48 am Lehman-invested Indian firms lose over Rs2,000 croreMumbai: Lehman Brothers’ move to file for bankruptcy on Monday wiped off more than Rs2,000 crore from the market valuation of those Indian companies in which the US financial major has made equity investments. Lehman itself recorded a loss of more than Rs50 crore on Monday on its investments in India, which is nearly 10% of its current holding worth an estimated over Rs500 crore. The loss would have been much higher if Lehman had not started offloading its equity holding in Indian companies late last month. In a major selling spree that started on 21 August, Lehman has sold shares worth close to Rs400 crore in nearly 10 companies, including NIIT Ltd, Cranes Software, Amtek Auto, Amtek India, Fedders Llyod, Northgate, Mastek, Triveni Engg and Prajay Engg. Prior to this sell-off, Lehman’s Indian equity portfolio is estimated to have been worth more than Rs1,000 crore, which has now nearly halved to about Rs500 crore. Most of the shares offloaded by Lehman in India, including those in NIIT, Cranes, Amtek Auto, Amtek India and Northgate, has been purchased by Deutsche Bank, according to the bulk and block deal data available with the bourses. Besides the 10 companies where Lehman has offloaded its shares, Lehman had equity holding in about two dozen firms at the end of June quarter. These firms include Spice Communications, Spice Mobile, Anant Raj Industries, Edelweiss Cap, IVRCL Infra, Tulip Telecom, Consolidated Construction, PSL, Orbit Corp, Development Credit Bank, Champagne Indage, Godawari Power, KPIT Cummins, West Coast Paper, IOL Netcom, Dhampur Sugar, Prithvi Info, Golden Tobacco, Emkay Global, Vijay Shanti Builders and Pioneer Embroidery. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 11:41 am Lehman-invested Indian firms lose over Rs2,000 croreMumbai: Lehman Brothers’ move to file for bankruptcy on Monday wiped off more than Rs2,000 crore from the market valuation of those Indian companies in which the US financial major has made equity investments. Lehman itself recorded a loss of more than Rs50 crore on Monday on its investments in India, which is nearly 10% of its current holding worth an estimated over Rs500 crore. The loss would have been much higher if Lehman had not started offloading its equity holding in Indian companies late last month. In a major selling spree that started on 21 August, Lehman has sold shares worth close to Rs400 crore in nearly 10 companies, including NIIT Ltd, Cranes Software, Amtek Auto, Amtek India, Fedders Llyod, Northgate, Mastek, Triveni Engg and Prajay Engg. Prior to this sell-off, Lehman’s Indian equity portfolio is estimated to have been worth more than Rs1,000 crore, which has now nearly halved to about Rs500 crore. Most of the shares offloaded by Lehman in India, including those in NIIT, Cranes, Amtek Auto, Amtek India and Northgate, has been purchased by Deutsche Bank, according to the bulk and block deal data available with the bourses. Besides the 10 companies where Lehman has offloaded its shares, Lehman had equity holding in about two dozen firms at the end of June quarter. These firms include Spice Communications, Spice Mobile, Anant Raj Industries, Edelweiss Cap, IVRCL Infra, Tulip Telecom, Consolidated Construction, PSL, Orbit Corp, Development Credit Bank, Champagne Indage, Godawari Power, KPIT Cummins, West Coast Paper, IOL Netcom, Dhampur Sugar, Prithvi Info, Golden Tobacco, Emkay Global, Vijay Shanti Builders and Pioneer Embroidery. Source: World Business - Livemint.com | 15 Sep 2008 | 11:41 am SMC in Rs 215-cr JV deals with SA coSMC Group said that South African financial giant Sanlam Group will invest Rs 215 crore in the company for setting up wealth and asset management businesses through two joint ventures.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 11:24 am Weak global cues drag Sensex to below 14K levelClosing Mumbai: Markets on Monday partly recovered the massive early losses of over 728 points with the benchmark Sensex ending the day lower by nearly 470 points to close below 14,000 level. The Bombay Stock Exchange barometer, which had lost nearly 945 points in the past four trading sessions, dropped by another 469.54 points, or 3.35%, to close at 13,531.27 points. On frantic selling in early trade, the 30-share index tumbled to 13,150.81 points, the days lowest level. The wide-based National Stock Exchange index Nifty also lost 155.55 points, or 3.68%, at 4,072.90, after dipping below 4,000 points level at 3,955.40 and touching a high of 4,237.25 points. Marketmen said investors resorted to panic selling on reports that US investment bank Lehman Brothers, which has been reeling under mortgage losses, is filing for bankruptcy. This has strengthened the feeling the global financial crisis is far from over, they added. Bank of America’s plans to buy out Merrill Lynch also weighed against the market sentiment, they further said. The Indian rupee breaching the 46 mark during intra-day today for the first time in two years also impacted adversely the market sentiments, brokers said. Rupee’s weakness raised concerns of more capital outflows as some foreign funds remained active in reducing their portfolios. On across-the-board selling, all the sectoral indices on BSE closed in the red. Realty index was the biggest loser at 7.65%, followed by IT index at 5.51%. Teck, metal and power indices which closed in the range of above of four per cent were the other major losers. Among the elite Sensex club, Reliance Infrastructure tumbled by 9.72% to emerge as the biggest loser. IT major Satyam was a close second at 9.45%. Afternoon The BSE benchmark Sensex on Monday plunged by 790 points at 1150 hrs following bankruptcy protection filed by US investment bank Lehman Brothers and weak Asian bourses. The Singapore’s Strait Times and Taiwan Weighted Index were down by about 3 to 4% in early trade while other major markets in Asia like as Hong Kong and Japan remained closed for a public holiday. The Bombay Stock Exchange 30-share barometer tumbled by 790 points or 5.68% to rule at 13,209.19 from its last weekend’s close after banking stocks led by ICICI and HDFC Bank slipped sharply. The broader 50-share Nifty of the National Stock Exchange also dipped below 4,000-mark by falling 254 points or 6.06% to 3,973.05. A terror strike in the national capital over the weekend also had adverse impact on the market sentiment. Investors looked unwilling to make any transactions in the prevailing market situation. Brokers said the collapse of Lehman Brothers and worries of a severe economic recession in the United States virtually shook the global financial markets. Key stocks such as ICICI Bank, HDFC Bank, State Bank of India, BHEL, RIL, Bharti Airtel, DLF, HDFC, Infosys Technologies, ONGC and Reliance Infra dropped sharply due to heavy selling pressure. OPENING The Bombay Stock Exchange benchmark Sensex plunged by 728 points and fell below the 13,300 level in early trade on Monday on nervous selling by funds following serial blasts in the capital on Saturday amid depreciating rupee. The 30-share index, which had lost 323.48 points in the previous trading session, moved down by 727.95 points to 13,272.86, a level last seen on 17 July this year, after all the sectoral indices slipped into the negative zone. Similarly, the wide-based National Stock Exchange’s index Nifty plunged by 222.75, or 5.2% to 4,005.70. Stock brokers said five serial blasts in the heart of the capital on Saturday mainly triggered all-round selling by funds as well as retail investors. They said depreciating rupee, which dipped to two-year low of 46 level against the US dollar, also affected the trading sentiments. All the 30 constituents of the Sensex were down with sharp losses. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 11:22 am Oil drops to $93 on financial turmoilLondon: Oil plunged $4 to below $97 a barrel on Monday as investors fled to safer havens due to turmoil in the US financial system and on early signs Hurricane Ike spared key US energy infrastructure. Lehman Brothers filing for bankruptcy protection and Bank of America’s agreement to buy Merrill Lynch stirred concerns mounting global economic problems would slow energy demand further, sending investors out of oil and into safer havens. US crude dropped $4.28 to $96.90 barrel by 1024 GMT after touching a nearly seventh-month low of $96.31 a barrel. U.S. oil dropped below $100 briefly on Friday for the first time since early April, with trade open for a special session on Sunday due to Hurricane Ike. London Brent crude fell $3.83 to $93.75 a barrel. Energy firms rushed to offshore facilities and coastal refineries to check for damage on Sunday after Hurricane Ike’s direct hit on the Houston energy hub left a quarter of US oil and refined fuel production idled and millions without power. Early reports from emergency officials and oil companies indicated little or no severe damage to energy infrastructure -- signalling a possible quick recovery to production though near-term supply problems were expected. High fuel prices and wider economic problems have dragged down oil demand in the United States and other large consumer nations, sending crude prices from a record high over $147 a barrel in July. Surging demand from emerging economies like China launched oil on a six-year rally, with additional support coming this year as investors rushed into oil as a hedge against inflation and the weak dollar. The US dollar sank even as crude tumbled on Monday, with a broad flight from risk igniting U.S. Treasury debt, gold and the low yielding Japanese yen. Source: Home - Livemint.com | 15 Sep 2008 | 11:21 am Lehman turmoil drags Sensex to below 14K levelMumbai: Markets today partly recovered the massive early losses of over 728 points with the benchmark Sensex ending the day lower by nearly 470 points to close below 14,000 level. The Bombay Stock Exchange barometer, which had lost nearly 945 points in the past four trading sessions, dropped by another 469.54 points, or 3.35%, to close at 13,531.27 points. On frantic selling in early trade, the 30-share index tumbled to 13,150.81 points, the days lowest level. The wide-based National Stock Exchange index Nifty also lost 155.55 points, or 3.68 %, at 4,072.90, after dipping below 4,000 points level at 3,955.40 and touching a high of 4,237.25 points. Marketmen said investors resorted to panic selling on reports that US investment bank Lehman Brothers, which has been reeling under mortgage losses, is filing for bankruptcy. This has strengthened the feeling the global financial crisis is far from over, they added. Bank of America’s plans to buy out Merrill Lynch also weighed against the market sentiment, they further said. The Indian rupee breaching the 46 mark during intra-day today for the first time in two years also impacted adversely the market sentiments, brokers said. Rupee’s weakness raised concerns of more capital outflows as some foreign funds remained active in reducing their portfolios. On across-the-board selling, all the sectoral indices on BSE closed in the red. Realty index was the biggest loser at 7.65%, followed by IT index at 5.51%. Teck, metal and power indices which closed in the range of above of four per cent were the other major losers. Among the elite Sensex club, Reliance Infrastructure tumbled by 9.72% to emerge as the biggest loser. IT major Satyam was a close second at 9.45%. Source: Home - Livemint.com | 15 Sep 2008 | 11:09 am Equity markets start recovery after free fallAfter panic selling throughout Monday morning, Indian equity markets began to recover early afternoon with 'bottom fishing' or buying at the bottom by institutional investors.Source: IndiaeNews.com: Business News | 15 Sep 2008 | 11:03 am Stunned Lehman, Merrill staff eye shifting landscapeSingapore / Sydney: Employees of US banks Lehman Brothers and Merrill Lynch in Asia struggled to come to terms on Monday with the speedy redrawing of Wall Street’s financial landscape, as Lehman filed for bankruptcy and Merrill was sold to Bank of America “It’s a little surreal,” one long-time Merrill employee in Hong Kong told Reuters. “The end for Lehman was pretty ugly. They just ran out of options and time. “It’s hard to believe there will be no more Merrill Lynch. It’s just shockingly fast how it happened.” Lehman employs about 3,000 staff, excluding the India back office, in Asia and the region has proved a sweet spot for the US bank as it made inroads into new markets. The Wall Street bank had expanded aggressively in Asia in the last two years, ramping up foreign exchange and investment banking operations in Singapore, Hong Kong and Mumbai. It was also planning a bigger presence in China where it recently advised Aluminum Corp of China (Chinalco), which teamed up with Alcoa, on its $14 billion purchase of a stake in Rio Tinto. The bank has been representing buyout firm Silver Lake in its bid for a stake in the mobile handset business of Chinese telecoms gear maker Huawei Technologies, but Lehman’s downfall left the fate of its advisory mandates uncertain. “That hasn’t been thought through yet,” said an Asia-based Lehman investment banker, who did not want to be identified. “Nobody’s been down this road before.” Another Lehman banker in Asia said: “On the investment banking side, we need to take care of existing business with clients. Obviously our clients are concerned. There is an existing mandate issue across the globe.” UNCERTAINTY REIGNS For many employees, news was hard to come by as Monday was a holiday in Hong Kong and Japan -- home to Lehman’s larger Asian offices. At Lehman’s Singapore office at the downtown Suntec Tower, only a trickle of staff arrived for work, dodging reporters’ questions. At a nearby coffee bar, two Lehman staffers said they had been called at 6 a.m. (2200 GMT Sunday) to be at work at 7 a.m. Asked whether it was business as usual, a Lehman trader contacted by telephone told Reuters: “What business is there? There’s nothing to do. All I’ve heard is what’s being reported on the news.” A colleague in Hong Kong, talking by telephone and asking not to be named because of the sensitivity of the situation, said: “There are very few instructions at this point. I just need to look around and see what opportunities there are. Basically, I have to figure out something new to do. “Nothing has been relayed to employees yet. As far as I’m concerned tomorrow is supposed to be another workday. No one prepares for things like this -- you go along as things move along.” Another Lehman banker in Asia said: “At this point, we’re told to come to work, business as usual. We’re in uncharted territory here, there is no playbook.” There was more uncertainty in Australia, where Lehman entered markets last year through the acquisition of Grange Securities for about $98 million. Earlier this year, it moved in to a new office tower in Sydney’s central business district to accommodate its expanded team. “If, for example, there’s a filing for Chapter 11, where would that leave all of us ... probably we stand behind other creditors,” said one of the bank’s Sydney-based employees. The mood among Merrill staff in India was a mix of anxiety amid the uncertainty and some initial optimism over the bank’s sale to Bank of America. “Morale has actually lifted after news of Bank of America taking us over,” said one Merrill employee by phone on his way to work in Mumbai. “One, the uncertainty ends about Merrill’s survival and, two, we can actually look forward to Bank of America strengthening or expanding India. It has almost no presence here.” Looking ahead, financial market analysts queried whether this was the end of the credit crisis. “This is like Voldemort. You think he’s dead and he resurfaces time and again. It’s shadowy and refuses to die,” said Nomura Australia equity strategist Eric Betts, referring to the evil character in the Harry Potter novels. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 10:54 am Stunned Lehman, Merrill staff eye shifting landscapeSingapore / Sydney: Employees of US banks Lehman Brothers and Merrill Lynch in Asia struggled to come to terms on Monday with the speedy redrawing of Wall Street’s financial landscape, as Lehman filed for bankruptcy and Merrill was sold to Bank of America “It’s a little surreal,” one long-time Merrill employee in Hong Kong told Reuters. “The end for Lehman was pretty ugly. They just ran out of options and time. “It’s hard to believe there will be no more Merrill Lynch. It’s just shockingly fast how it happened.” Lehman employs about 3,000 staff, excluding the India back office, in Asia and the region has proved a sweet spot for the US bank as it made inroads into new markets. The Wall Street bank had expanded aggressively in Asia in the last two years, ramping up foreign exchange and investment banking operations in Singapore, Hong Kong and Mumbai. It was also planning a bigger presence in China where it recently advised Aluminum Corp of China (Chinalco), which teamed up with Alcoa, on its $14 billion purchase of a stake in Rio Tinto. The bank has been representing buyout firm Silver Lake in its bid for a stake in the mobile handset business of Chinese telecoms gear maker Huawei Technologies, but Lehman’s downfall left the fate of its advisory mandates uncertain. “That hasn’t been thought through yet,” said an Asia-based Lehman investment banker, who did not want to be identified. “Nobody’s been down this road before.” Another Lehman banker in Asia said: “On the investment banking side, we need to take care of existing business with clients. Obviously our clients are concerned. There is an existing mandate issue across the globe.” UNCERTAINTY REIGNS For many employees, news was hard to come by as Monday was a holiday in Hong Kong and Japan -- home to Lehman’s larger Asian offices. At Lehman’s Singapore office at the downtown Suntec Tower, only a trickle of staff arrived for work, dodging reporters’ questions. At a nearby coffee bar, two Lehman staffers said they had been called at 6 a.m. (2200 GMT Sunday) to be at work at 7 a.m. Asked whether it was business as usual, a Lehman trader contacted by telephone told Reuters: “What business is there? There’s nothing to do. All I’ve heard is what’s being reported on the news.” A colleague in Hong Kong, talking by telephone and asking not to be named because of the sensitivity of the situation, said: “There are very few instructions at this point. I just need to look around and see what opportunities there are. Basically, I have to figure out something new to do. “Nothing has been relayed to employees yet. As far as I’m concerned tomorrow is supposed to be another workday. No one prepares for things like this -- you go along as things move along.” Another Lehman banker in Asia said: “At this point, we’re told to come to work, business as usual. We’re in uncharted territory here, there is no playbook.” There was more uncertainty in Australia, where Lehman entered markets last year through the acquisition of Grange Securities for about $98 million. Earlier this year, it moved in to a new office tower in Sydney’s central business district to accommodate its expanded team. “If, for example, there’s a filing for Chapter 11, where would that leave all of us ... probably we stand behind other creditors,” said one of the bank’s Sydney-based employees. The mood among Merrill staff in India was a mix of anxiety amid the uncertainty and some initial optimism over the bank’s sale to Bank of America. “Morale has actually lifted after news of Bank of America taking us over,” said one Merrill employee by phone on his way to work in Mumbai. “One, the uncertainty ends about Merrill’s survival and, two, we can actually look forward to Bank of America strengthening or expanding India. It has almost no presence here.” Looking ahead, financial market analysts queried whether this was the end of the credit crisis. “This is like Voldemort. You think he’s dead and he resurfaces time and again. It’s shadowy and refuses to die,” said Nomura Australia equity strategist Eric Betts, referring to the evil character in the Harry Potter novels. Source: World Business - Livemint.com | 15 Sep 2008 | 10:54 am Reliance Cap to enter investment banking bizReliance Capital is considering to venture into investment banking as soon as market condition gets better, though global players of the segment are suffering huge losses now.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 10:54 am Sobha dvelopers recieve $10 mn for home projectMumbai: Real estate firm Sobha Developers today said it has received an additional $10 million (about Rs46 crore) of foreign investment for its residential project in Bangalore. In a filing to the Bombay Stock Exchange, Sobha Developers said it has received foreign direct investment (FDI) from Dubai-based Pan Atlantic LLC in a Special Purpose Vehicle (SPV) for its project at Hosahalli in Bangalore. Earlier in July the company had received a $10 million investment from the Dubai-based firm for the same project, totalling for a 40% stake in the company. The project is spread over 13.27 acres with total developable area of more than 17 lakh sq ft of residential township, the filing added. Shares of the company were trading at Rs239.70, down 7.95% in the late afternoon trade on the BSE. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 10:35 am ONGC resists FM’s directive on surplus fundsNew Delhi: Oil and Natural Gas Corp (ONGC) has opposed Finance Ministry’s directive asking it to stop inviting competitive bids from banks for parking surplus funds as it may lose Rs400 crore in interest revenues annually. ONGC, which has cash surplus of about Rs25,000 crore, at present asks banks on its panel to quote interest rates they would offer for short-term deposits. However, the Finance Ministry wants this practice to be stopped and business given to state-run banks on nomination basis. The card rates of banks published on their websites are not applicable for bulk deposits for which banks quote the rates on demand, a senior company official said. Prevailing card rates would be about 200 basis points lower than the rates the company obtained through competitive bidding and ONGC would thus lose about Rs400 crore annually on interest revenue in the absence of bidding process. But for competitive quotes, ONGC has no other method of knowing the best rates available, the official said. ONGC, he said, followed the guidelines laid by the Department of Public Enterprises (DPE) for investment of surplus funds. DPE following the stock market scam had laid down maximum safety, no element of speculation and proper commercial appreciation as principles for investing surplus funds. Competitive bidding ensures that human discretion is eliminated and favouritism avoided, the official said, while pointing that about 86% of deposits of ONGC were with public sector banks. The Finance Ministry guidelines apparently were aimed at helping State Bank of India which lost out on getting business from ONGC as other state-run banks quoted aggressively. ONGC Chairman and Managing Director R S Sharma recently wrote to the Petroleum Ministry saying the Finance Ministry’s directive would lead to “unethical” practices like favouritism towards a particular bank. Sharma said about 86% of the ONGC’s deposits were with public sector banks and the company strictly followed DPE guidelines for investment of surplus funds. A Joint Parliamentary Committee (JPC), which enquired into the stock market scam of early 1990s, had adversely commented on certain investment decisions made by certain state firms and had asked the government to lay down clear guidelines for investment of surplus funds to avoid recurrence. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 10:26 am World's central banks move to calm Lehman stormTOKYO/FRANKFURT (Reuters) - European and Asian central banks followed the U.S. Federal Reserve on Monday in trying to support markets wilting under the bankruptcy of Lehman Brothers and the sale of crisis-hit Merrill Lynch.Source: Reuters: Money News | 15 Sep 2008 | 10:24 am AIG, facing liquidity crisis, seeks Fed lifelineNEW YORK (Reuters) - Insurer American International Group Inc, working to stave off rating downgrades and shore up the capital of its holding company, has made an unprecedented approach to the Federal Reserve seeking $40 billion in short-term financing, the New York Times said.Source: Reuters: Money News | 15 Sep 2008 | 10:11 am Investors in IPOs lost over Rs 5,000 cr in 2008 so farNew Delhi: Primary market investors have lost more than Rs5,000 crore with shares of most of companies, which came out with initial public issue since January, trading at a discount. “Out of 34 IPOs issued this calendar year, 26 of them closed below their issue price last week. These IPOs have raised Rs16,920 crore but the current value stands at Rs11,562 crore. So they are suffering a loss of 31.67%,” said Jagannadham Thunuguntla, Equity Head, NEXGEN Capitals Limited. He said five companies which include JSW Energy, RNS Infrastructure, Ybrant Technologies, Elysium Pharma and Kamayani Patients Care, with the proposed issue of more than Rs 4,000 crore, withdrew their IPOs prior to Sebi approval. In 2008, 20 companies did not tap the primary market despite approval from Sebi due to uncertainty in the markets. Shares of eight out of ten companies which got listed on stock markets during second quarter of the current fiscal (July-September) following the IPO are trading below the issue price. According to NSE data, the shares of only Vishal Information Technologies and Austral Coke and Projects are at 100% and 30% premium respectively, while the equity of remaining companies are being traded at discount. The shares of companies (listed during second quarter) which are trading below the issue prices include Resurgere Mines and Minerals, Nu Tek India, Birla Cotsyn India, KSK Energy, Lotus Eye Care, First Winner Industries, Archidply Industries and Sejal Architectural Glass. Vishal Information Technologies closed at Rs306 week, an over 100% premium to its issue price of Rs150. It was listed on 11 August with the issue size of 27.9 lakh shares on the NSE at a discount of 13.33%. The company is a IT-enabled services and solutions firm and its IPO received subscription by 1.2 times. Similarly, Austral Coke and Projects Limited (IPO subscribed by 1.65 times on the whole), was listed on 4 September with a 5% premium to its issue price of Rs196. While, the scrip settled with a premium of 30% at Rs252 on the NSE last week. Analysts believe that these two IPOs were listed underpriced as the markets were in the bear grip since the beginning of the calendar year 2008. So after their listing, price appreciation was witnessed in these stocks. But stock speculation cannot be completely denied. “These IPOs were offered at lower prices. So, they have managed to gain the investors’ confidence as they are available at attractive valuations. But the possibility of stock manipulation cannot be ruled out,” said Prithvi Haldea, Managing Director of Prime Database. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 10:08 am Hindujas plan TV & Communication network in IndiaDubai: UK-based business conglomerate Hindujas today announced that they are starting a “world- class” TV and communication network in India. Group Chairman S P Hinduja told a meeting of shareholders of IndusInd International Holdings Ltd (IIHL) that the network would be set up by IndusInd Media and Communications Ltd (IMCL), which is among the largest Cable TV companies in India with a customer base of 5.5 million households. IIHL has an indirect investment of about $385,000 in IMCL. He also said that IndusInd Bank, another entity controlled by IIHL, was poised for a robust growth by leveraging its strong capital base. The bank expects 40-45% hike in advances during the current fiscal, against the average loan growth of 20% by most other banks. “IndusInd Bank is now poised for rapid growth as a significantly strengthened entity... (which) will overtake its peers in the next three years, as measured by the criteria of productivity, profitability and efficiency,” Hinduja said. “Its Capital Adequacy Ratio, a key indicator of stability, stands at a comfortable 11.91% as on March 31, 2008, well above the regulatory minimum of nine per cent,” he said. The ratio further improved to 13.16% at the end of the April-June quarter of the current fiscal from 12.16% in the first quarter of the previous fiscal. While most new generation private sector banks launched in the early 90s have disappeared, IndusInd Bank has remained the sole survivor with its strong fundamentals, said Hinduja, the London-based business tycoon. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 10:05 am Sun, sand and shopping await Indians in AustraliaAs other international tourists give Australia a miss, Indian tourists are being lured to this harbour city of blue skies and scenic beaches with packages tailored for the Indian market.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 9:45 am We appreciate and support WB Govt initiatives: Tata MotorsThe West Bengal Chief Minister has appealed the opposition to accept the rehabilitation package. Tata Motors released its official statement in response to the West Bengal government\'s compensation package for the displaced Singur farmers.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 9:35 am 3 day conference begins on September 17A three-day International conference on 'Semantic E-business and Enterprise Computing: From theory to Applications' (SEEC 2008) will be held here from Sept 17.Source: Daily News & Analysis: Money News | 15 Sep 2008 | 9:27 am Pakistan backing terror modules in India: AntonyNew Delhi: Charging Pakistan with supporting terror modules operating in India, Defence Minister A K Antony today said it was a “serious” matter and the country will defeat the designs of the destablising forces. “Militants are getting support from across the border and it is a fact. Already the Home Minister (Shivraj Patil)and others in the government have expressed their opinion on this. It is a matter of serious concern,” Antony told reporters here on the sidelines of a seminar by a defence thinktank. The minister was responding to a query on Pakistan’s support to terrorism in India in the wake of the serial blasts in Delhi and other parts of the country. “Pakistan is in transition to democracy again and we wish that there must be peace and stability (in that country). That is India’s wish,” Antony said. On the recent bomb blasts in Delhi, Antony said India has taken the attack seriously and the government was committed to track the forces behind “the heinous crime.” On the increased infiltration attempts by militants along the Line of Control (LOC) in Jammu and Kashmir, the minister said the recent Pakistan Army firing along the LOC was mainly to assist infiltration by militants. “Indian armed forces are vigilant. By and large, we have been able to defeat the attempts of militants. The coming few months are crucial and we have to be more alert. The armed forces have asked to be more vigilant,” he said at the event organised by thinktank CENJOWS. Army chief General Deepak Kapoor, endoring the views of the Defence Minister, said infiltration was on the rise. “Infiltration has increased in the past one-and-half months. As of now normalcy is returning to Jammu and Kashmir, and the militants are trying to destabilise it,” he said. Kapoor said army had foiled an infiltration attempt by militants at Tangdhar sector of J-K yesterday, killing two ultras. Source: LatestNews-Home - Livemint.com | 15 Sep 2008 | 9:23 am Satyam aims to strengthen presence in aviation serviceSatyam Computer Services Ltd has roped in senior officials, including retired, from Boeing, Airbus, Cadence and Bombardier to strengthen its aviation practice.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 9:00 am \'Banks should monitor operational risk internally\'Banks should depend on their own internal measures to manage operational risk instead of outsourcing or centralising the process, according to Ms Renu Challu, Managing Director, State Bank of Hyderabad.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 8:58 am Epassports for public within a year: PranabThe Ministry of External Affairs has started issuing epassports and biometric passports in the diplomatic and official categories. It has drawn up a programme for the full rollout of epassports in the ordinary passport category by September 2009.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 8:57 am Bharti Airtel to foray into ITBharti Airtel Ltd, the countrys largest private sector telecom operator, is diversifying into information technology business.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 8:56 am AIG looks to raise capital with operation reviewNorth Carolina: American International Group Inc. said on 14 September, it is reviewing its operations and discussing possible options with outside parties to improve its business after a week when its stock dropped 45% amid concerns about the company’s financial underpinnings. “A lot of meetings (are) going on. We’re looking at a lot of options. We’re talking with a lot of parties,” said spokesman Nicholas Ashooh, declining to comment further. New York Insurance Superintendent Eric Dinallo and a representative of the state’s governor’s office have spent the weekend at AIG’s offices working with the company and others to craft a solution that protects policyholders, said Dinallo’s spokesman David Neustadt in an e-mail. AIG’s chief executive, Robert Willumstad, who took the reins on the world’s largest insurer in June, may announce a turnaround plan Monday, possibly involving the disposal of major assets including its aircraft-leasing business and other holdings, the Wall Street Journal reported Sunday, citing unidentified people. The New York-based insurer previously scheduled an announcement for 25 September. Willumstad has indicated he was willing to shed some assets, saying about a month ago that a “less complex AIG would be a better competitor.” The Journal said on its Web site on Sunday that AIG was talking to several private equity firms about getting more capital and was hoping to raise more than $10 billion. The New York-based insurer has already raised $20 billion in fresh capital this year. The need for action was likely exacerbated by a 45% drop in AIG’s stock last week. The stock fell more than 30% on Friday alone, as Standard & Poor’s warned that it could cut AIG’s credit rating by one to three notches because of concerns that AIG will have difficulty accessing capital in the short term. As recently as June, AIG considered shedding ILFC, a company founded in 1973 that has a fleet of more than 900 airplanes valued at more than $50 billion. But newly appointed Willumstad said after reviewing ILFC’s business, “ILFC should be a part of the AIG portfolio.” ILFC primarily leases aircraft from Boeing and Airbus to major airlines and had net income of more than $200 million in the second quarter. Source: Home - Livemint.com | 15 Sep 2008 | 8:55 am AIG looks to raise capital with operation reviewNorth Carolina: American International Group Inc. said on 14 September, it is reviewing its operations and discussing possible options with outside parties to improve its business after a week when its stock dropped 45% amid concerns about the company’s financial underpinnings. “A lot of meetings (are) going on. We’re looking at a lot of options. We’re talking with a lot of parties,” said spokesman Nicholas Ashooh, declining to comment further. New York Insurance Superintendent Eric Dinallo and a representative of the state’s governor’s office have spent the weekend at AIG’s offices working with the company and others to craft a solution that protects policyholders, said Dinallo’s spokesman David Neustadt in an e-mail. AIG’s chief executive, Robert Willumstad, who took the reins on the world’s largest insurer in June, may announce a turnaround plan Monday, possibly involving the disposal of major assets including its aircraft-leasing business and other holdings, the Wall Street Journal reported Sunday, citing unidentified people. The New York-based insurer previously scheduled an announcement for 25 September. Willumstad has indicated he was willing to shed some assets, saying about a month ago that a “less complex AIG would be a better competitor.” The Journal said on its Web site on Sunday that AIG was talking to several private equity firms about getting more capital and was hoping to raise more than $10 billion. The New York-based insurer has already raised $20 billion in fresh capital this year. The need for action was likely exacerbated by a 45% drop in AIG’s stock last week. The stock fell more than 30% on Friday alone, as Standard & Poor’s warned that it could cut AIG’s credit rating by one to three notches because of concerns that AIG will have difficulty accessing capital in the short term. As recently as June, AIG considered shedding ILFC, a company founded in 1973 that has a fleet of more than 900 airplanes valued at more than $50 billion. But newly appointed Willumstad said after reviewing ILFC’s business, “ILFC should be a part of the AIG portfolio.” ILFC primarily leases aircraft from Boeing and Airbus to major airlines and had net income of more than $200 million in the second quarter. Source: World Business - Livemint.com | 15 Sep 2008 | 8:55 am Bank of America agrees to buy Merrill Lynch at $29/shBank of America has agreed to acquire, Merrill Lynch, the world\'s largest broker. Merrill Lynch agreed to the Bank of America sale at USD 29 per share. This represents a huge premium to its closing price on Friday of USD 17 dollars per share, after talking to several other potential acquirers, including Morgan Stanley.Source: Moneycontrol Top Headlines | 15 Sep 2008 | 8:52 am Lehman to file for bankruptcy, plans to sell unitsNew York: Lehman Brothers Holdings Inc filed for bankruptcy protection, after trying to finance too many risky assets with too little capital, making it the largest and highest-profile casualty of the global credit crisis. The Chapter 11 filing on Monday did not include its broker-dealer operations and other units, such as asset management firm Neuberger Berman. Those businesses will continue to operate, although Lehman is expected to liquidate them. It said it is in advanced talks on selling its investment management division. Lehman is one of the biggest investment banks to collapse since 1990, when Drexel Burnham Lambert filed for bankruptcy protection amid a collapse in the junk bond market. Time is of the essence as Lehman sells assets. Customers are often reluctant to trade with dealers whose parent companies are in bankruptcy, so the longer Lehman waits to sell its broker-dealer unit, for example, the less it will be worth. “Much of (Lehman’s) asset value at the end of the day is tied up in its credibility, and that takes a significant hit early in a bankruptcy case,” said Jack Williams, Resident Scholar at the American Bankruptcy Institute and a professor at Georgia State College of Law. The Chapter 11 filing represents the end of a 158-year-old company that survived world wars, the Asian financial crisis and the collapse of Long-Term Capital Management but could not survive the global credit crunch. Financial institutions globally have recorded more than $500 billion of writedowns and credit losses as the US subprime mortgage crisis has spread to other markets. Bankruptcy also represents a bad end to Chief Executive Dick Fuld’s four-decade career at Lehman. Fuld, who piloted the investment bank through prior crises with aplomb, was widely seen as too slow to recognize Lehman’s need to raise capital and shed bad assets. Lehman had $600 billion of assets financed with just $30 billion of equity as of the end of August. Having so little capital meant that a 5% decline in assets would wipe out the value of the company, which investors saw as a real risk thanks to the company’s billions of dollars of mortgage securities. Lehman listed its biggest unsecured creditors as Citigroup Inc, Bank of New York Mellon Corp, Aozora Bank, and Mizuho Financial Group Inc. Citi and Bank of New York Mellon are trustees for Lehman bonds. The investment bank, once the fourth-largest in the United States, had hoped to raise capital by selling off a stake in its investment unit, and use that capital as well as other funds to spin off some of its toxic assets to shareholders. But that plan did not satisfy investors, who pushed Lehman’s share price to just a few dollars, or rating agencies, who pressed the company to find a stronger partner. The filing comes after a weekend of heated negotiations among regulators and Wall Street firms regarding Lehman’s fate. The US government refused to backstop Lehman’s worst assets in the way it backstopped Bear Stearns Cos Inc’s sale to JPMorgan Chase. Government officials told banks to support Lehman or else be prepared for more investment banks to lose investor confidence and fail. But prospective bidders refused to buy Lehman without government support, people briefed on the matter said. In the end, Lehman was allowed to fail, and Bank of America Corp agreed to buy what was seen as the next weakest US investment bank, Merrill Lynch & Co Inc. Lehman’s end For many of Lehman’s 26,000 employees the outlook is likely to be gloomy, with job losses expected to be substantial even if significant parts of the business can be sold. At Lehman’s headquarters in midtown Manhattan on Sunday afternoon, men dressed in suits came and went, while some employees entered the building with what appeared to be empty duffel bags and then left with them full. Others emerged with accordion files, binders stuffed with papers and full valises. By Sunday night hundreds of Lehman employees were still in the office to clear their desks and pack personal belongings, according to an employee. Many even opted to say their farewells with one last office soiree. “We are having pizza and beer,” the employee said. Markets are likely to be wary of what is ahead. Bankruptcy is a long, complex process where almost everything is done out in the open, as opposed to the veil of secrecy Wall Street uses to conduct deals. Source: World Business - Livemint.com | 15 Sep 2008 | 8:43 am Lehman to file for bankruptcy, plans to sell unitsNew York: Lehman Brothers Holdings Inc filed for bankruptcy protection, after trying to finance too many risky assets with too little capital, making it the largest and highest-profile casualty of the global credit crisis. The Chapter 11 filing on Monday did not include its broker-dealer operations and other units, such as asset management firm Neuberger Berman. Those businesses will continue to operate, although Lehman is expected to liquidate them. It said it is in advanced talks on selling its investment management division. Lehman is one of the biggest investment banks to collapse since 1990, when Drexel Burnham Lambert filed for bankruptcy protection amid a collapse in the junk bond market. Time is of the essence as Lehman sells assets. Customers are often reluctant to trade with dealers whose parent companies are in bankruptcy, so the longer Lehman waits to sell its broker-dealer unit, for example, the less it will be worth. “Much of (Lehman’s) asset value at the end of the day is tied up in its credibility, and that takes a significant hit early in a bankruptcy case,” said Jack Williams, Resident Scholar at the American Bankruptcy Institute and a professor at Georgia State College of Law. The Chapter 11 filing represents the end of a 158-year-old company that survived world wars, the Asian financial crisis and the collapse of Long-Term Capital Management but could not survive the global credit crunch. Financial institutions globally have recorded more than $500 billion of writedowns and credit losses as the US subprime mortgage crisis has spread to other markets. Bankruptcy also represents a bad end to Chief Executive Dick Fuld’s four-decade career at Lehman. Fuld, who piloted the investment bank through prior crises with aplomb, was widely seen as too slow to recognize Lehman’s need to raise capital and shed bad assets. Lehman had $600 billion of assets financed with just $30 billion of equity as of the end of August. Having so little capital meant that a 5% decline in assets would wipe out the value of the company, which investors saw as a real risk thanks to the company’s billions of dollars of mortgage securities. Lehman listed its biggest unsecured creditors as Citigroup Inc, Bank of New York Mellon Corp, Aozora Bank, and Mizuho Financial Group Inc. Citi and Bank of New York Mellon are trustees for Lehman bonds. The investment bank, once the fourth-largest in the United States, had hoped to raise capital by selling off a stake in its investment unit, and use that capital as well as other funds to spin off some of its toxic assets to shareholders. But that plan did not satisfy investors, who pushed Lehman’s share price to just a few dollars, or rating agencies, who pressed the company to find a stronger partner. The filing comes after a weekend of heated negotiations among regulators and Wall Street firms regarding Lehman’s fate. The US government refused to backstop Lehman’s worst assets in the way it backstopped Bear Stearns Cos Inc’s sale to JPMorgan Chase. Government officials told banks to support Lehman or else be prepared for more investment banks to lose investor confidence and fail. But prospective bidders refused to buy Lehman without government support, people briefed on the matter said. In the end, Lehman was allowed to fail, and Bank of America Corp agreed to buy what was seen as the next weakest US investment bank, Merrill Lynch & Co Inc. Lehman’s end For many of Lehman’s 26,000 employees the outlook is likely to be gloomy, with job losses expected to be substantial even if significant parts of the business can be sold. At Lehman’s headquarters in midtown Manhattan on Sunday afternoon, men dressed in suits came and went, while some employees entered the building with what appeared to be empty duffel bags and then left with them full. Others emerged with accordion files, binders stuffed with papers and full valises. By Sunday night hundreds of Lehman employees were still in the office to clear their desks and pack personal belongings, according to an employee. Many even opted to say their farewells with one last office soiree. “We are having pizza and beer,” the employee said. Markets are likely to be wary of what is ahead. Bankruptcy is a long, complex process where almost everything is done out in the open, as opposed to the veil of secrecy Wall Street uses to conduct deals. Source: Home - Livemint.com | 15 Sep 2008 | 8:43 am Bank of America to buy Merrill Lynch for $50 bnWashington/New York: Bank of America Corp said it agreed to buy Merrill Lynch & Co Inc in an all-stock deal worth $50 billion, snagging the world’s largest retail brokerage after one of the worst-ever weekends on Wall Street. The deal came after tense negotiations over the fate of Lehman Brothers Holdings Inc, which triggered concern that market participants would lose faith in other investment banks. Lehman said early on Monday that it would file for Chapter 11 bankruptcy protection. “It catapults Bank of America into positions of strength in three businesses where they were weak,” said James Ellman, portfolio manager at hedge fund Seacliff Capital. “Now Bank of America has one of the best and largest retail brokerages in the country, one of the top investment banks in the world, and a large stake in one of the best investment managers in the world,” Ellman said. Bank of America agreed to pay 0.8595 shares of Bank of America common stock for each Merrill Lynch share. The price is 1.8 times stated tangible book value. The bank is buying about $44 billion of Merrill’s common shares, as well as $6 billion of options, convertibles, and restricted stock units. Bank of America said it expects to achieve $7 billion in pretax expense savings, fully realized by 2012, and expects the deal to be accretive to earnings by 2010. The transaction is expected to close in the first quarter of next year. The price, which comes to about $29 per share, represents a 70% premium to Merrill’s share price on Friday, although Merrill’s shares were trading at $50 in May and over $90 at the beginning of January 2007. The deal has been approved by directors of both companies. Three Merrill directors will join the Bank of America board. Stuck with some of the same toxic debt much of it mortgage-related that torpedoed Lehman’s balance sheet, Merrill has been hit hard by the credit crisis and has written down more than $40 billion over the last year. Merrill also has a stake of about 45% in the profitable asset manager BlackRock Inc, worth more than $10 billion. Risks for BoA BofA had little time to complete due diligence of Merrill’s books, a particular concern given the complexity of the company’s exposure to mortgage-related securities and other complex debt. With the brokerage and the BlackRock shares worth more than $35 billion combined, and Merrill’s market capitalization at around $26 billion on Friday, investors had been ascribing a negative value to the investment bank, implying huge potential embedded losses. But this is not the first time Bank of America has done a quick acquisition. In 2005, the bank bought credit card company MBNA after less than a week of due diligence, with Lewis saying the company was comfortable with the acquisition because it knew the people and business well. Bank of America under Lewis has in fact become renowned for large acquisitions and it has spent over $100 billion since 2004 buying other companies. Most recently it acquired troubled mortgage lender Countrywide Financial Corp and - although many were skeptical about this purchase - veteran analyst Dick Bove said last week the takeover could prove to be a master stroke by Lewis, since the government takeover of mortgage agencies Fannie Mae and Freddie Mac could fuel business for other lenders. Source: Home - Livemint.com | 15 Sep 2008 | 8:03 am Merrill, Lehman to pound already bloody job marketNew York: The likely disappearance of investment banks Lehman Brothers and Merrill Lynch presents a double-barrelled hit to an already wounded job market, and will likely depress salaries on Wall Street. With Lehman probably headed for bankruptcy and Merrill expected to head into the arms of buyer Bank of America, two of Wall Street’s four pillars could crumble overnight. Headhunters and consultants said the US financial services sector, already suffering from a glut of unemployed talent after shedding more than 100,000 jobs this year, must now brace for up to 50,000 more. “The resume flow will start on Monday like there’s no tomorrow,” said Michael Karp, chief executive at executive search and consulting firm Options Group in New York. “This is seriously going to impact compensation this year, across the Street and all over the world as well,” he said. “The golden years of compensation in the financial services industry are over, and it doesn’t help with the Bear Stearns people still looking for work.” On Sunday, eleventh-hour talks to sell Lehman were set to fail, making bankruptcy a near certainty. At the same time, Bank of America, the second-largest US bank, was wrapping up a surprise acquisition of Merrill, the world’s largest brokerage, in a deal that would save Merrill from Lehman’s fate. The takeover would make Bank of America the top US bank, and was likely to put 40%, or about 24,000 of Merrill’s 60,000 non-broker employees, out of work, said Gustavo Dolfino, president at New York-based recruiting firm WhiteRock. Beggars not choosers That, combined with Lehman’s approximately 26,000 workers, will send shockwaves through the job market. The two firms’ probable disappearance would also squeeze New York City, which relies heavily on the financial services industry. Although Wall Street is not New York’s biggest employer, it is the city’s economic anchor. Each financial-sector worker is believed to create as many as four other New York jobs, due to their high salaries. The year-long credit crunch has led to deficits in both the city and state budgets. Democratic City Comptroller William Thompson said last week he was “very concerned” about the resolution of the Lehman saga, and warned it would impact New York’s economy and tax revenues. Further tremors could hit that tax base in coming months, as Lehman’s undoing was expected to spark a drop in world stock markets that could push other wobbly financial companies to the brink. The recruiters said the job losses would drive even more talent to the buy-side and to overseas countries, despite the global economic slowdown, which was spawned by the breakdown in the US subprime mortgage market last year. Source: Home - Livemint.com | 15 Sep 2008 | 6:53 am Rupee falls to Rs46 against US dollarMumbai: The Indian rupee today dipped to a two-year low of Rs46 against the US dollar following heavy demand from importers for the greenback. The rupee fell by 25 paise to 46, a level last seen on September 29, 2006, against the US dollar in early trade. It fell by 18 paise on Friday to close at a fresh 23-month low of Rs45.75/76. Source: Home - Livemint.com | 15 Sep 2008 | 6:34 am Dollar tumbles due to Lehman woesSingapore: The US dollar tumbled in Asian trade on Monday as Lehman Brothers said it would file for bankruptcy, heightening concerns over the US financial system’s stability and sparking talk of a possible Federal Reserve rate cut. The yen seemed headed for its biggest daily gain since early 2002 as investors consider it a safe haven, though trade was thin with Japan on holiday. The dollar sank 2.3% to 105.45 yen from 107.86 late on Friday, while the euro dropped to 152.26 yen from 153.43. The euro was quoted as far as $1.4479, up 1.7% since Friday. The Federal Reserve launched a series of emergency measures on Sunday to calm financial markets and ease any trading disruptions that could arise from a collapse of Lehman. One of the biggest changes the Fed made was to accept equities as collateral for cash loans at one of its special credit facilities, the first time that the Fed has done so in its nearly 95-year history. US equity market futures sank on Monday while Treasuries climbed on the worries about Lehman after talks to rescue the Wall Street investment bank faltered and after a media report said insurer AIG was seeking emergency funding. Lehman Brothers Holdings said on Monday it would file for bankruptcy protection with a New York court. It said none of its broker-dealer subsidiaries would be included in the filing. Meanwhile, there were reports Bank of America Corp has agreed to acquire Merrill Lynch & Co Inc for $44 billion. Ten of the world’s biggest banks committed to establish a $70 billion borrowing facility to bolster worldwide liquidity and reduce volatility in what they called an “extraordinary market environment.” Bill Gross, head of bond fund Pimco, told Reuters before Lehman’s announcement that a bankruptcy filing could set off a wave of position unwinding around the globe. Analysts said uncertainty was so high that the major central banks might have to step in to soothe market nerves, noting the Federal Reserve was due to hold its policy meeting on Tuesday. The Bank of Japan said it was monitoring market developments and cooperating with the Federal Reserve and authorities from other countries. Source: Home - Livemint.com | 15 Sep 2008 | 6:31 am Spurious pesticides destroy crops worth Rs 6,000 crore a yearSpurious and substandard pesticides worth around Rs 1,200 crore are palmed off to unwary farmers every year. This results in a net loss to the farmers of crops worth about Rs 6,000 crore.Source: Business Standard | Front Page Headlines | 15 Sep 2008 | 12:04 am Tata Motors backs new Singur packageThe worlds cheapest car, the Nano, may still roll out from Singur with Tata Motors today expressing hope that the West Bengal governments new rehabilitation package will evoke a positiveSource: Business Standard | Front Page Headlines | 15 Sep 2008 | 12:01 am Day Trading GuideThe analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. The stop-loss level provided with the recommendation is important. The original view would stand negated if the stop-loss level isSource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Agro Tech Foods (Rs 142.10): BUYWe recommend a buy in Agro Tech Foods from a short-term perspective. From the charts it is apparent that Agro Tech Foods has been on a medium-term uptrend from its July low of Rs 112. In late July, the stock crossed over its 21- and 50-day movingSource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Bypass operation on the tracks!The nerve centre of a major railway junction such as New Delhi, with almost 270 trains originating/terminating or simply passing through it, is the RRI (Route Relay Interlocking) Cabin, which sets the routes and blocks any conflicting movementsSource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Ethanol-blended petrol plan likely to be deferredNew Delhi, Sept 14 With prices of molasses and rectified spirit going through the roof, the proposed 10 per cent ethanol-blended petrol programme, supposed to be effective from next month, has been practicallySource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Gold prices may remain at the mercy of $ movements, oil pricesMumbai, Sept 14Pessimism over global economic growth prospects, expectation of fall incommodity demand (mainly energy and metals) and further strengthening of the US dollar continue to affect the commodity markets. The sentiment is clearlySource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Change of guard at Mint StreetDr Y.V. Reddy has just handed over charge to an accomplished Economic Administrator, Dr D. Subbarao. Dr Subbarao combines in himself academic excellence in economics and rich experience in both State and Central finances. I have had the privilege ofSource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Bharti Airtel to foray into ITBangalore, Sept. 14 Bharti Airtel Ltd, the country’s largest private sector telecom operator, is diversifying into information technology business.Source: Business Line - Home Page | 15 Sep 2008 | 12:00 am Tata Motors welcomes Bengal initiativesMumbai, Sept. 14 Tata Motors welcomed the Bengal Government’s initiatives to placate evicted farmers with better compensation packages. “Tata Motors appreciates and supports the recent initiatives of the Government of West Bengal forSource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Shareholders may have exit option in mergersNew Delhi, Sept. 14 The revamped Company Law is likely to propose a mechanism that would protect shareholders’ value in cases where a listed entity is merged with an unlisted one andSource: Business Line - Home Page | 15 Sep 2008 | 12:00 am Give Buddhist economics a tryRecent reports suggest that the US Congress (i.e., parliament) is thinking of another stimulus Bill. That means putting money into the pockets of people so they will spend it and give a boost to the economy. The results of the previous stimulus BillSource: Business Line - Home Page | 15 Sep 2008 | 12:00 am RBI relooks floating rate costsThe Reserve Bank of India (RBI) has initiated a review of the benchmarking system for pricing floating rate loans, a move that could impact 70 to 75 per cent of banks loanSource: Business Standard | Front Page Headlines | 14 Sep 2008 | 11:59 pm Banks enhance credit flow to SMEs: RBI!The Reserve Bank of India (RBI) has asked banks to improve credit flow to the fund-starved Small and Medium Enterprises (SME) in the country, which has declined sharply in the last decade.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm Deloitte, Assocham to hold conference on international tax!It is high time that India should set up an authority to inform a foreign company upfront the kinds and rates of taxes that it has to pay if it enters the country, says an expert.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm New India Assurance expects 10% premium growth this fiscal!Country`s largest general insurer, New India Assurance is expecting 10 percent growth in its gross premium in the current financial year that will help the state-owned company retain its market share.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm DoT snubs FinMin, retains reserve price for 3G spectrum!The Department of Telecom has ignored Finance Ministry`s suggestion to raise the reserve price of spectrum for 3G mobile services to Rs 2,500 crore, saying the auction process would discover the best price.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm Yamaha to ride India specific bikes on comeback trail!Seeking to regain lost glory in India, Japanese motorcycle major Yamaha is banking on products developed specifically for this market to drive sales, as also make an impact in the low-end volumes segment.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm No clearance for ADAG, Kotak comex if interests conflict: FMC!Forward Markets Commission on Sunday said corporate like Anil Ambani-led Reliance and Kotak will have to wait before entering the commodity bourse arena, as it is still working on preventing conflict of interest that may arise from brokers turning exchange promoters.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm BSNL allows roaming to pvt telcos!Mobile subscribers are likely to enjoy seamless connectivity throughout the country soon, as state-run BSNL has decided to share its network with private telcos for roaming agreements.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm Essar Shipping to raise $1.9 bn by end of year!Essar Shipping Ports and Logistics has said it will raise USD 1.9 billion by the end of this year for its various expansion plans.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm Orient-Express bows to activist shareholders` demand!Indian conglomerate Tata group will keenly watch a special meeting of Orient-Express shareholders next month, when they would vote to cancel the powers of the promoters to veto hostile bids to takeover the hotel chain.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm MFs sitting on Rs 12,000 cr cash pile!Mutual funds are sitting on a huge cash pile of over Rs 12,000 crore, awaiting right market situation to deploy the funds and in turn protecting investors from any sharp losses due to market downturn.Source: Zee News : Business | 14 Sep 2008 | 10:56 pm How is the volatility index faring?Volatility indices, such as the India Vix of the National Stock Exchange (NSE), normally have an inverse relationship with the market. When the markets rise,  The chart alongside, with the India Vix on the one hand and NSE’s main Nifty index on the other shows that this relationship has largely been maintained this year. When the markets crashed in January, the India Vix shot up from the levels of 25 to over 50. (The chart readings are based on a seven-day moving average and the actual levels were even higher.) After the sharp fall in January, as the markets drifted gradually lower till May, the Vix fell back to the 25-level. Around the time of the crash in mid-July, volatility started increasing again, and has since drifted lower, in line with the recovery in the markets. Still, most derivatives analysts aren’t impressed with the product NSE has designed. Hardly anyone uses it as an indicator. Sometimes, the Vix reading is far removed from the implied volatility of the most liquid options in the market. Also, unlike developed markets, there seems to be a lag with which the Vix moves vis-a-vis the market. Intra-day readings are far too volatile, says an analyst, alluding that there are flaws in the calculation methodology. Although NSE doesn’t report intra-day numbers, it has revealed the way it calculates the index and one only needs access to option quotes to calculate the index on an intra-day basis. The problem lies in two areas — one, the exchange uses options that expire both in the immediate month as well as the next month for its calculation. In India, only near-month contracts are liquid enough to be used as reliable indicators. Secondly, as Yogesh Radke, quant analyst at Edelweiss Capital says, “The India Vix uses Nifty options contracts price with strike multiple of 50 points. Option strikes with 50 point multiple (for example 4,350, 4,450) lack liquidity compared with strikes with a multiple of 100. Vix does get influenced by these less-liquid contracts resulting in a skewed picture. Use of 100-multiple strikes may help in reducing the skew or volatility of Vix.” To be sure, the Top 10 Nifty option contracts on Friday were all in multiples of 100, led by the 4,400 call option and the 4,200 put option. The good thing is liquidity of Nifty options are improving, and hence the readings can only get better. If NSE makes necessary changes to the calculation methodology, the index can become much more useful. But in its current form, its use as an indicator itself is limited, leave alone launching futures and options on the index. Why the yield on government securities is falling Anoteworthy feature of the government securities market has been that of falling yields in spite of inflation remaining at high levels. The yield on the benchmark 10-year bond was 9.07% on 28 July, a day before the Reserve Bank of India’s quarterly monetary policy review in which it raised repo rates by 50 basis points and cash reserve ratio by 25 basis points. Last Friday, the yield was 8.34%. One hundred basis points make one percentage point. The 10-year bond yield has been tumbling because banks have been scrambling to buy government securities to maintain their statutory liquidity ratio (SLR). In August, while scheduled commercial banks increased their deposits by Rs42,071 crore, they increased their investments by Rs15,991 crore, which means their incremental investment to deposit ratio during the month was as high as 38%. That shows banks have been buying the so called SLR securities hand over fist, sending yields plummeting. On the other hand, the yields on bonds issued by state-run companies have gone up in the secondary market due to a lack of liquidity as buyers preferred the primary market. As a result, the spread between government bonds and corporate bonds of similar maturity have widened to around 230 basis points. Also, the fall in government bond yields hasn’t translated into lower borrowing costs for Indian companies. A recent offering by a government bank of Tier 2 bonds with a 15-year maturity, but with a call option at the end of the 10th year, was at a coupon rate of 11.5%. The fall in SLR yields has led to a rally in banking stocks. The Bombay Stock Exchange’s Bankex index is up 4% from its close on 28 July, while the benchmark Sensex is down 2.4% in the same period. Write to us at marktomarket@livemint.com Source: Home - Livemint.com | 14 Sep 2008 | 7:00 pm Rothschild peddles four Corus unitsMumbai: European investment banker NM Rothschild and Sons Ltd, on its own, appears to be actively scouting for potential buyers for four divisions of British steel maker Corus Group Ltd, owned by Tata Steel Ltd. Tata Steel, India’s largest private steel firm and fifth in the world by capacity, says it has not asked any bank to try and find buyers for any assets of that business. It is not unusual for investment bankers to try and find interested parties and then try and stitch together a deal. According to presentations made by the banker to at least two Indian steel firms, JSW Steel Ltd and Essar Steel Ltd, in August, Rothschild sought interest for Corus Engineering Steels, which makes critical components for the aerospace, automotive, energy and specialist mechanical engineering industries. It has also pitched Corus Rail, which makes a wide range of rail products, as well as Cogent Power, which makes electrical steels, and also told potential buyers that the UK steel maker could possibly sell its energy tubes business as the assets were not attractive and because Tata Steel does not make similar products with larger diameter for pipeline companies in India. The banker, in its presentation, said Tata doesn’t have strategic interest in Corus Engineering and Cogent Power Rothschild had earlier advised Tata Steel on its acquisition of Corus, now Tata Steel UK, in 2006 and early 2007. Relevant portions of Rothschild’s presentation made to the two Indian steel companies were reviewed by Mint. Rothschild executives declined comment for the story. “We have neither discussed nor mandated any investment bankers on any sale of assets for any part of the business. Any rumour on the above issue is untrue and speculative,” said Sanjay Choudhry, a spokesman for Tata Steel, in response to an email questionnaire. As per industry practice, there are two types of mandates investment bankers apply to buy or sell companies for their clients: Bankers either make their pitches on a specific brief by a company to find buyers or sellers in return for a fee, or, like Rothschild in this case, they first make a pitch without a mandate and, if they find a potential buyer or seller, approach the client company. Senior executives of JSW Steel and Essar Steel confirmed they received enquiries from bankers regarding their interest in the four Corus divisions. Both the executives were unwilling to be named. “We have received enquiries from the bankers, but (it) is premature to respond,” said a senior executive with Essar Steel, asking not to be named as he competes with Tata Steel in India. A JSW Steel official said, “We are not interested in any of the four divisions as we have to complete our projects in India. We are keen to stabilize what we have on our plate before buying companies abroad.” Rothschild, which won the best deal of 2007 award from FinanceAsia.com, a financial publishing company in Hong Kong, for advising Tata Steel on buying Corus, said in its presentation that Corus Engineering and Cogent Power have a history of underperformance. Tata Steel does not have a strategic interest in the two divisions as it does not make such products in India, it said. Corus Engineering, which has annual revenues of about £500 million, is still underperfoming despite investments made by Corus. The parent company committed at least £100 million to it recently. Corus, before it was purchased by Tata Steel, had negotiated with ThyssenKrupp Electrical Steel, or TKS, to sell Cogent Power. The technology at Cogent is not world-class, according to Rothschild. There is a possibility that Tata Steel may retain its 50% interest in Corus Cogifer and Grant Rail, and sell Corus Rail, which has plants in Workington, the UK, and Hayange in France, Rothschild told the prospective buyers, adding that ArcelorMittal would be willing to repurchase the French facility. The Hayange facility had been bought by Arcelor seven years ago, before Mittal took over the company. “Bankers see a possibility of Tata Steel selling some of its Corus assets,” said another investment banker who had advised many acquisitions for Indian steel firms. “But I don’t think Tata Steel has made any formal approach to anyone. We don’t know which business will be put on the block.” “This may not be a right time to sell steel assets,” said an executive director with another steel company. “Shares of steel companies have fallen by an average 30% in the global stock market.” Tata Steel’s Choudhry, responding to whether a possible sale of the divisions was related to raising funds for repaying bridge loans taken to buy Corus, said the company had no bridge loans outstanding related to the acquisition. The syndication of the debt on the Corus acquisition was completed in 2007, he said. Source: Home - Livemint.com | 14 Sep 2008 | 6:43 pm
|
