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Saturday, 21 February 2009

India trembles as icon stumbles

When Tata, India's oldest and largest conglomerate, bought the fabled Jaguar auto brand last year, the country celebrated the gleaming trophy as affirmation of its new role as a global superpower.

What a difference a year makes.

Today, a string of blows has left the Tata group drowning in condolence calls, not international applause. Many see Tata's woes as especially alarming because, as has been the case for over a century, where Tata goes, India goes.

Latvia PM falls victim to turmoil

Latvia’s prime minister resigned on Friday as the financial and economic turmoil sweeping central and and eastern Europe claimed its first government leader.

Ivars Godmanis quit as the European Union attempted to boost its political support for new member states in eastern Europe with the announcement of a mini-summit on March 1.

The meeting between José Manuel Barroso, the European Commission president, and east European leaders, which will precede a full EU summit, has been arranged after a week of falls in east European currencies, doubts over the access to international credit of the more vulnerable east European countries and uncertainty on possible financial support from western Europe.

Medvedev attacks Putin officials over crisis

Dmitry Medvedev, the Russian president, accused Vladimir Putin’s government on Friday of failing to act quickly to combat the economic crisis.

It was a further sign of growing friction between Russia’s two power centres.

Without naming the prime minister, Mr Medvedev said the government had spent too long enacting plans for state guarantees to back loans to strategic companies in order to ease a dearth of credit that is exacerbating steep falls in output.

Banks compete to borrow money

DUBAI // Banks have started offering short-term fixed deposits at higher interest rates to raise their deposit bases, reduce risk and lower their loans-to-deposit ratios, despite constrained liquidity and a tight lending environment.

HSBC is offering rates of 5.05 per cent, 5.75 per cent and 6 per cent for fixed deposit terms of one month, three months and six months, respectively. Standard Chartered is quoting rates of 3.85 per cent, 4.15 per cent and 3.9 per cent for the same terms.

“The banks are now trying to attract deposits to adjust their risk; they need to beef up their depository system to be more immune and less risky,” said Yazan Abdeen, a fund manager at ING Investment Management. “Reducing lending is not the only way to reduce risk.”

John Laing Homes files for bankruptcy

John Laing Homes, an American builder bought by Emaar Properties in 2006 for $1.05bn (Dh3.85bn), has filed for bankruptcy.

The firm filed for protection in the US on Thursday under Chapter 11 bankruptcy laws, which shield companies from creditors as they restructure or sell off assets to repay debts. John Laing owes roughly $977m to banks and other creditors and has assets worth $1.3bn, court papers show.

Emaar’s purchase of John Laing in June 2006 was the cornerstone of its effort to expand into the US housing market. But Emaar, the Middle East’s largest developer, made the foray as the US housing market peaked.

Mubadala’s defence on offence

Defence is not the first thing that springs to mind when it comes to Mubadala Development Company, the state-backed firm whose investments include high-profile stakes in AMD, the second-largest maker of computer processors, and Ferrari.

But the company, whose assets are estimated at US$10 billion (Dh36.7bn), is an emerging player in the defence services industry. While more widely known for its efforts in building aerospace, property and healthcare firms in the emirate, Mubadala already owns stakes in 10 firms doing work for the military in the UAE.

With names such as Yahsat, Injazat, and Horizon, Mubadala’s affiliates are straddling the intersection of the private and public sectors in Abu Dhabi, home to the Armed Forces. And after several years of supporting the military here, Mubadala is now positioning itself to seek contracts throughout the region.

Drug dealers see UAE as a transit hub

World counter-narcotics chiefs have warned that drug traffickers are increasingly exploiting the UAE as a transit hub and have urged the Government to stop them.

The 2008 report by the UN’s International Narcotics Control Board says the Emirates have become a “major exporting and trans-shipping area” for highly addictive drugs such as heroin and amphetamines.

While praising the Government’s increased efforts to tackle the drug trade, the 132-page document criticises what it sees as a failure to take “adequate measures” against criminals or collect data about the scale of drug abuse within the country.