Fresh flight from risk hits global equities Global equities tumbled on Monday after GM and Chrysler were refused fresh US government bail-out funds and Spain launched its first banking bail-out of the current financial crisis, providing up to €9bn ($11.9bn) to savings and loan CCM. Shares in carmakers fell around the world amid fears that GM and the non-listed Chrysler could file for bankruptcy. Profit-taking was also triggered by doubts that the G20 summit in London this week would pacify investors' concerns. See this article online.
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Obama gets tough on carmakers Posted at 05:04 by Gwen Robinson The Obama administration on Monday stepped up the government's involvement in the US auto industry and raised the spectre of bankruptcy after President Barack Obama rejected the turnround plans presented by GM and Chrysler last month. He said the government would fund GM for 60 days while it draws up a new restructuring programme and gave smaller Chrysler 30 days to strike a rescue alliance with Italian carmaker Fiat. Officials said GM and Chrysler would be allowed to slide into bankruptcy if necessary to facilitate the industry's restructuring. See this article online.
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GM chief warns of bankruptcy filing Fritz Henderson, speaking on his first day as GM's chief executive following the weekend ouster of Rick Wagoner at the White House's request, warned on Monday of the likelihood that GM would file for bankruptcy. The government appears to favour a restructuring plan under which GM could file for bankruptcy protection within a month, emerging after splitting the viable parts of its business from messier obligations. Chrysler meanwhile has been told to redraft its proposed alliance with Fiat. See this article online.
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Barclays shuns insurance plan Barclays on Monday shunned a UK government insurance scheme designed to ringfence toxic assets on banks' balance sheets. The bank decided not to join the scheme following talks with investors and after an extreme stress test by City regulators last week found it did not need to raise fresh capital. The decision means Barclays remains free of government involvement, unlike rivals Lloyds Banking Group and RBS. See this article online.
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Nationwide takes on Dunfermline assets Nationwide Building Society on Monday said it expected to receive about £1.6bn of cash from the UK government as part of a deal to take over the healthiest parts of Dunfermline Building Society, its stricken rival. In a deal engineered by the Treasury and announced Monday, Nationwide has taken on about 300,000 Dunfermline savings accounts and has picked up the Scottish mutual's 34 branches and head office, as well as a £1bn portfolio of prime residential mortgages. See this article online.
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FSA faces heat over Dunfermline The UK's City watchdog was on Monday night under pressure to explain how it had monitored Dunfermline after the government unveiled a £1.6bn bail-out for the stricken Scottish building society. Alistair Darling, chancellor, ordered the FSA to produce a report on how the 12th biggest lending mutual in the UK had failed. Vince Cable, Liberal Democrat spokesman, called it a "gross failure of regulation". The FSA is already facing criticism over its regulation of banks. See this article online.
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Minmetals revises bid for Oz Minerals China Minmetals Group, the country's biggest metals trader, on Tuesday revised its offer for most of Oz Minerals' assets after Australia last week blocked an agreed bid for the company on national-security grounds, reports Bloomberg. No value was given for the new bid, which excludes a mine near a weapons-testing area. Minmetals had earlier offered A$2.6bn ($1.8bn) in cash for Oz Minerals. Australian Treasurer Wayne Swan, who blocked the earlier takeover, has said he would consider alternative proposals. See this article online.
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UK code bans use of tax havens Banks operating in Britain will be banned from using tax havens if they sign up to a draft code of practice drawn up by the government. The draft, which also gives tax authorities the final say over whether they consider a deal to be avoidance, is more radical than businesses expected when announced last month. But its stringency will add to doubts that banks will sign up to the voluntary code, fuelling suspicions it is primarily a political exercise in damage limitation. See this article online.
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Debt wait for GMAC and CIT GMAC and CIT, two of the largest US finance companies, remain unable to issue government-backed debt almost three months after they became bank holding companies to gain access to the rescue schemes. Both lenders confirmed their applications for funds guaranteed by the Federal Deposit Insurance Corporation were still pending and said the delay is constraining their ability to lend to consumers and businesses – the key aim of the US government scheme. See this article online.
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UBS falls on fear of Grübel's reforms UBS shares fell by almost 11% on Monday as the biggest European casualty of the credit crisis fell victim to renewed speculation about writedowns and job cuts. The decline came amid weakness in bank stocks across Europe, but UBS shares dropped particularly sharply on reports of fresh writedowns and job losses that could be announced as early as the start of the new quarter on Wednesday. See this article online.
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Ireland loses AAA rating Ireland was stripped of its top AAA credit ranking and downgraded to AA+ by S&P on Monday while being warned that it could drop further if Dublin fails to get its public finances under control, reports The Times. The former "Celtic Tiger" economy is the second eurozone country after Spain in January to lose its top ranking since the start of the global downturn. The downgrade will increase Ireland's borrowing costs. See this article online.
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Russian group buys 21% of Mol OMV, the Austrian energy and chemicals group, on Monday ended its two-year struggle to buy rival Mol of Hungary by selling its 21.2% stake to a Russian oil group loyal to the Kremlin. The €1.4bn ($1.8bn) sale to Surgutneftegaz – at more than double the market value – raised concern in Hungary, where Mol had fought to guard its independence, and Brussels, where European Commission officials warned it could undermine efforts to develop a united EU energy policy. See this article online.
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Kroenke buys up more of Arsenal In Categories: People Posted at 04:47 by Gwen Robinson The battle for control of Arsenal Football Club took a potentially decisive shift on Monday when one of the club's shareholders sold a third of his stake to Stan Kroenke, the US sports franchise owner, for £42.5m. Danny Fiszman, seen as a driving force on the board of the English Premier League club, sold 5,000 shares at a price of £8,500 each, taking Kroenke's stake from 12.4% to 20.5%. See this article online.
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Pension boost for B&B ex-chief In Categories: People Posted at 04:46 by Gwen Robinson Steven Crawshaw, the former chief executive of Bradford & Bingley, is receiving a pension of £105,318 a year, it emerged on Monday. Crawshaw, 47, was chief executive of B&B for four years during which he drove B&B further into specialist mortgages. He stepped down as a director in May, four months before B&B was nationalised and its savings book and branches sold to Santander. Details of the B&B pension payment come amid the bitter political row over the pension of Sir Fred Goodwin, former RBS chief executive. See this article online.
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Overnight markets: Mixed Asian stocks mostly rose on Tuesday despite steep falls in the US and Europe overnight, with the regional benchmark index set to complete its best month since 1999, as Japan prepared to unveil a new stimulus package. Futures on the S&P 500 Index gained 0.7% after the gauge slumped 3.5% on Monday as the Obama administration warned some banks will need more aid and that key carmakers have a last chance to restructure. Asian markets (Tues)
04:35 BST
Nikkei up 136.06 (1.65%) at 8,372.14
Topix up 5.62 (0.71%) at 795.16
Hang Seng up 235.20 (1.75%) at 13,691.53 US markets (Mon)
DJIA down 254.16 (-3.27%) at 7,522.02
Nasdaq down 43.40 (-2.81%) at 1,501.80
S&P500 down 28.41 (-3.48%) at 787.53 European markets (Mon)
FTSE100 down 135.94 (-3.49%) at 3,762.91
Eurofirst 300 down 28.36 (-3.85%) at 709.10 Currencies
04:38 BST
€/$ 1.3269 (1.3263)
$/¥ 98.33 (97.73)
£/$ 1.4336 (1.4261) Commodities (updated)
04:40 BST
Brent Crude (May09) up $0.86 at $48.85
Light Crude (May09) up $0.78 at $49.19
100 Oz Gold (Apr09) up $2.00 at $917.50
Copper (3M 24hr) up $35.00 at $3,960.00 10-year government bond yields (%)
US 2.73 (2.73)
UK 3.16 (3.28)
Germany 3.03 (3.14)
Japan 1.33 (1.31) Sources: FT, Reuters See this article online.
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