RBI Reference rate for US dollar and euro

The Reserve Bank of India on Wednesday fixed the Reference rate for the US currency at Rs 48.87 per dollar and the single European unit at Rs 64.76 per euro from Rs 48.85 per dollar and Rs 64.51 per euro respectively on Friday.

In a press note issued in Mumbai by the apex bank, the exchange rates of Great Britain's Pound and Japanese Yen against the Rupee have been given as Rs 69.7204 per pound and Rs 54.82 per 100 yen respectively, based on the Reference rate for US dollar and middle rates of the cross currency quotes at noon.


The Reference rate is based on 12 noon rates of a few select banks in Mumbai and the SDR-Rupee rate will be based on this rate, the release added

Yahoo makes a loss as sales slip

Yahoo has reported a loss in the final three months of 2008 as the economic downturn hit sales of online ads.

Its figures showed a loss of $303.4m (£215m) compared with a profit of $205.7m a year earlier.

But analysts said the company had weathered the downturn better than expected, with the loss mainly due to one-off costs.

The results come as Carol Bartz takes over from Jerry Yang as the firm's new chief executive.

Mr Yang stepped down following his rejection of a $47.5bn takeover offer from Microsoft last year, which rankled the company's shareholders.

"The company made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves," said Ms Bartz.

Profits shrink at Sumitomo Mitsui

Japan's third largest bank, Sumitomo Mitsui, has seen third quarter net profit fall 99% to 154m yen ($1.7m; £1.19m) from 148.9bn yen a year before.

Japan's major banks have been hit hard by rising costs of bad loans and heavy losses on their stock portfolios.

The group also said net profit for the April to December period fell 74% amid the worsening global economic turmoil.

Japan's banks have stakes in their corporate clients, making them sensitive to equity market swings.

"The major problem for Japanese banks is their large equity holdings," said Kristine Li, a bank analyst at KBC Securities in Tokyo.

"If the Nikkei falls from here, the impairment losses in the fourth quarter, which is more important than the third quarter, could be even bigger.

"That could force many banks to revise down their full-year and some banks to raise new capital."

However, the Nikkei index edged 0.56% higher on Wednesday, helped by news of an expansion of a US stimulus plan and adding to the 4.9% jump recorded on Tuesday.

For the full financial year, Sumitomo Mitsui is predicting net profit of 180bn yen on revenue of 3.7 trillion yen.

The results come a day after Japanese broker Nomura reported heavy losses for the final three months of 2008, as it struggles to integrate parts of failed US bank Lehman Brothers.

Nomura made a net loss of 342.9bn yen ($3.8bn; £2.7bn), compared with a profit of 21.8bn yen a year ago.

Davos starts in very gloomy mood

A gloomy economic outlook dominates discussions as global political leaders and business people gather for the annual World Economic Forum in Davos.

Economists are warning that global recession and trade protectionism will be dire for developing countries.

A poll of business leaders suggests any recovery could take three years.

Chinese Premier Wen Jiabao and Russian PM Vladimir Putin are to speak on the first day of the summit, which is themed "shaping the post-crisis world".

Klaus Schwab, the founder of the World Economic Forum, has warned the crisis is nowhere near over yet.

Pfizer acquires Wyeth for $68bn

US drugmaker Pfizer is to buy rival Wyeth in a deal worth $68bn (£50bn), the two companies have announced.

The merger will allow Pfizer to protect itself from a drop in revenues when its popular drug Lipitor and other products lose patent protection.

It will also help Pfizer diversify its product portfolio, thanks to Wyeth's presence in biotech drugs and vaccines.

The deal could wipe out nearly 20,000 jobs, adding to the wave of job cuts announced on Monday.

Pfizer also said it planned to shut some manufacturing sites.

It also reported a 90% drop in profit to $268m in the fourth quarter, because of a $2.3bn legal settlement.

Pfizer that there would be a total staff reduction of 15% of the combined firms' workforce of 130,000 - implying a total job loss of 19,500.

Combined business

Pfizer, the world's biggest drugs firm, also makes Viagra, while Wyeth produces antidepressant Effexor XR.

Global crisis hits Nomura results

Nomura Holdings has reported heavy losses for the final three months of 2008, as it struggles to cope with the impact of global financial crisis.

The broker made a loss of 342.9bn yen ($3.8bn; £2.7bn) compared with a profit of 21.8bn yen a year ago.

Its decision to buy the Asian and European operations of collapsed US bank Lehman Brothers hit earnings hard.

"Last quarter was extraordinary for our industry and Nomura was no exception," said Nomura boss Keniche Watanabe.

Revenue for the period collapsed to 2.71bn yen, compared with 400.37bn yen for the final quarter of 2007.

Over 70,000 job cuts announced in a single day

The deepening global economic recession claimed over 70,000 jobs in a single day, with six companies, ranging from manufacturing to telecom across the US and Europe, announcing job cuts.

With the bloodbath in the job market on Monday, the tally of total jobs lost in January so far crossed two million.

Construction machinery manufacturer Caterpillar, pharma major Pfizer, telecom firm Sprint Nextel Corp, home improvement retailer Home Depot were among the six major firms that announced massive job cuts.

A total of 207,120 jobs have been lost so far this year. Nearly 2.6 million people were rendered unemployed through 2008, the highest yearly job-loss total since 1945.

Caterpillar said it would cut 20,000 jobs amid a "very challenging global business environment".

The company had already planned to lay off 15,000 workers since the fourth quarter of 2008.



It added another 5,000, bringing the total to 20,000. Pfizer would be cutting 10 percent of its 81,900-strong staff and close five of its manufacturing plants.

Further, about 15 percent of the workforce would be laid off in a second round, from the combined Pfizer/Wyeth staff of 120,000, taking the total to 26,000 jobs lost. The company already cut 4,700 jobs in 2008.

Sprint Nextel would cut about 8,000 jobs by 31st March, it said in a release, adding, it plans to reduce internal and external labour costs by about 1.2 billion dollar annually.

The world's largest home improvement retailer Home Depot announced it would eliminate its EXPO design centre business and cut 7,000 jobs, or two percent of its total workforce.



It said lack of demand for big ticket design and decor projects hit its sales.



Texas Instruments said it would slash its workforce by 3,400 employees to deal with weak demand.



More than half of those cuts would be layoffs while "voluntary retirements and departures" would make up the rest.

Dutch financial group ING also announced about 7,000 job cuts. ING employs around 1,30,000 people across 50 countries.

Deere & Co, the world's leading farm-equipment maker plans to cut nearly 700 jobs between factories in Brazil and Iowa.



Last week, 40,000 cuts were announced across multiple industries. BHP Billiton, Clear Channel Communications, Intel, Rohm and Haas Co, UAL Corp and Williams-Sonoma announced job cuts totaling over 27,000 positions.

Time Warner Inc's Warner Bros Entertainment said it would cut about 800 jobs, or 10 percent, of its worldwide staff in the upcoming weeks, while Microsoft announced its plan to cut up to 5,000 jobs -- 5.5 percent of its global workforce.

McDonald's to open 1,000 stores

US fast-food chain McDonald's says it plans to open 1,000 new restaurants this year.

The world's largest hamburger chain also said fourth-quarter net income fell 23% to $985.3m (£710m), from $1.27bn a year before.

Revenue fell to $5.57bn from $5.75bn, even though global same-store sales rose 7.2%, as the firm was hit by the strong dollar.

In the US, the firm raised the price of its Double Cheeseburger in November.

Announcing the results, chief executive Jim Skinner said: "For 2009 we plan to invest $2.1bn in capital to open about 1,000 new restaurants and reinvest in our existing locations."

Despite beef, cheese, and other ingredients rising in price, the company reported an 8% fall in total operating costs and expenses.

McDonald's has seen sales rise in the economic downturn, helped by its low prices and ubiquity of its outlets.

In the quarter, its same-store sales in the US rose 5% on the year before.

International same-store sales were also ahead, rising 7.6% in Europe and 10% in the Asia-Pacific, Middle East and Africa division.

RBI keeps key rates intact; lowers GDP forecast to 7%

The Reserve Bank of India has lowered the economic growth forecast to 7 per cent, saying the global economic crisis has hit Indian shores, but kept key policy rates and ratio unchanged.

The bank also lowered inflation estimates to 3 per cent by March end.

In its quarterly review of the annual monetary policy, the apex bank extended special refinance facilities to banks up to 30th September for providing liquidity support to meet the funding requirements of mutual funds, non-banking finance companies and housing finance companies by relaxing the maintenance of SLR up to 1.5 percent.

Likewise, special refinance facility for scheduled commercial banks up to one percent to each banks liabilities, has been extended to 30th September.



Both these facilities were earlier available up to 30th June 2009.

These measures have been taken to provide banks continued flexibility in their liquidity management operations in the current market conditions.



Given the uncertain outlook on the global crisis, the RBI said it was difficult to precisely anticipate every development.

"The Reserve Bank will continue to maintain vigil, monitor domestic and global developments and take swift and effective action to minimise the impact of the crisis," the apex bank said in a statement.

The central bank will also attempt to restore the economy to its potential growth path with price stability, it said.

The response to the Reserve Bank's policy actions over the last several months is still unfolding.



As demonstrated in the recent past, the Reserve Bank will act swiftly and decisively as and when evolving external and domestic conditions so warrant, the RBI said.

The bank has injected over Rs 3,00,000 crore liquidity into the financial system through several changes in policy rates since October 2008.



Justifying its policy stance of not changing key rates, RBI said that the monetary policy easing done by it in the last few months allowed considerable room for banks to respond more actively to the policy cues.

In the last three months, the repo rate, at which the apex bank lends short term funds to banks, has been reduced from 9 percent to 5.5 percent and the reverse repo, at which the RBI accepts funds from banks, has been lowered from 6 percent to 4 percent.

Asserting that RBI has acted aggressively and pre- emptively in the last few months to bring about interest rate cuts, it said the signal has been effective in the money and government security market.

However, the transmission in the credit market has so far been subdued, it said, adding that most banks have reduced lending and deposit rates to some extent, but a few are yet to do so.



Warning that the global crisis will dent India's growth, as investments and exports were slowing, RBI said: "Clearly there is a period of painful adjustment ahead of us. However, once the global economy begins to recover, India's turnaround will be sharper and swifter."

The turnaround will be backed by strong fundamentals and untapped growth potentials and the challenge for Government and RBI is to manage the adjustment with as little pain as possible, the central bank said.

Keeping in view the slowdown in industry and services and with the assumption of normal agriculture production, RBI lowered GDP growth projection to 7 percent with a downward bias for 2008-09.

In the last monetary policy in October, the apex bank had projected 7.5-8 percent growth.



Since then, the outlook has been affected further and downside risks to growth have amplified due to economic slowdown.

On inflation, Reserve Bank said pressures on commodity prices have abated markedly around the world, reflecting slump in global demand.



The sharp decline in crude oil prices together with the slide in prices of metals, food grains and cement has influenced inflation expectations.

With commodity prices falling sharply and taking in to consideration, the domestic demand-supply balance, the inflation is now projected to fall below 3 percent by this fiscal-end.

It is recognised that headline WPI inflation could fall well below 3 percent in the short-run, it said, adding that the monetary policy continue to condition and contain inflation rate at 4-4.5 percent so that an inflation rate of around 3 percent becomes medium-term objective.

Treasury chief Geithner sworn in

Timothy Geithner has been sworn in as US Treasury Secretary within hours of the Senate approving his nomination.

The confirmation by 60 votes to 34 was delayed due to concerns Mr Geithner had failed to pay previous taxes on time.

President Obama's nominee will have one of the toughest jobs in the new administration, as the US tries to get its economy back in shape.

After he was sworn in by Vice President Joe Biden, Mr Geithner vowed to move quickly to aid the distressed economy.

"We are at a moment of maximum challenge for our economy and our country," he said.

"Our agenda is to move quickly to help you do what the country asked you to do," he told Mr Obama, who was standing at his side.

China warning

Mr Obama has described Mr Geithner as the most qualified person to oversee his plans to revive the struggling US economy.

At the Washington swearing-in ceremony, the president said he had full confidence in his new Treasury secretary to help bring the US out of its economic malaise.

"At this moment of challenge and crisis, Tim's work and the work of the entire Treasury department must begin at once," said Mr Obama.

"We cannot lose a day because every day the economic picture is darkening - here and across the globe… It will take a secretary of the Treasury who understands this challenge and all its complexities to help lead us forward."

Mr Geithner was formerly head of the New York Federal Reserve Bank, and worked as a Treasury undersecretary during the Clinton administration.

He was considered by many to be an ideal candidate for the job because he has already been deeply involved in government efforts to prop up financial institutions and markets.

Strong dollar

On Thursday, a panel cleared the way for Mr Geithner's full nomination despite concern he failed to pay his taxes on time some years ago.

Massive layoffs as gloom deepens

Workers around the world face losing their jobs as several big corporations announced more than 70,000 layoffs in one single day.

The biggest cuts came in the US where construction equipment maker Caterpillar said it would cut around 20,000 jobs.

In Europe, electronics group Philips, financial firm ING and UK steelmaker Corus announced cuts.

The announcements underscore the depth of the global downturn.

"Without a doubt, 2009 will be a very tough year," said Caterpillar chief executive Jim Owens.

Many of the companies making layoffs unveiled poor financial results and issued gloomy outlooks for 2009.

Caterpillar said its fourth-quarter net profit fell 32% from a year ago to $661m (£482m).

Stimulus plan urged

US President Barack Obama cited the layoff announcements as he urged Congress to approve an $825bn economic stimulus package of tax cuts, emergency benefits and public spending projects.

"Those are not just numbers," he said, but more working men and women "whose families have been disrupted and whose dreams have been put on hold".

Nikkei soars on government plan

Japanese shares have soared after the government said it would use public funds to help companies struggling to cope with the economic downturn.

Confirmation of the capital injection sent the main Nikkei share index up 378.93 points, or 4.93%, to 8,061.07.

Aid will only be provided to companies that are facing difficulties raising funds because of the credit crunch.

Shares were also helped by a weaker yen, which helps to make Japanese exports more competitive overseas.

Improving profitability

"We want to support companies that we think are important for Japan and for regional economies, regardless of their size," said Economy, Trade and Industry Minister Toshihiro Nikai.

"We're not specifying any sectors," added a ministry official.

Japan's trade ministry said companies receiving funds would need to draw up plans to improve profitability within three years.

"Bankruptcies have been increasing, and not only among financial firms. There have been reports that funding has been tight at many large corporations," said Soichiro Monji at Daiwa SB Investments.

Despite the boost to share prices, some analysts are unsure what impact the stimulus package will have on the wider economy.

"I think we might see some speculative moves to buy shares and sell the yen, but it is unclear just how much such an injection of public funds would support the economy," said Tohru Sasaki at JP Morgan Chase.

IBM bucks gloom with rosy outlook

IBM believes it can benefit as cash-strapped companies seek its help to cut costs and improve IT infrastructure.

The firm has also been able to cut its own costs sharply.

IBM's net profit in the fourth quarter rose 12% from a year earlier to $4.4bn. IBM boss Samuel Palmisano said it had been an "outstanding year".

IBM said it expected to earn $9.20 per share in 2009 - significantly more than analysts had expected.

"To be honest, I didn't believe they could show something like this - I think the results they posted were stellar," said Peter Misek, an analyst with Canaccord Adams.

"They just executed really well - really, really, really well."

IBM's profit margin was 47.9%, up three percentage points from a year earlier.

The news boosted IBM's share price. In after-hours trading in New York, it climbed 4.5% to $85.64.

Other technology firms have fared less well.

Intel reported a sharp 90% profit drop in the final quarter of 2008, while Bloomberg said it could report its first loss for more than two decades in the current quarter.

Pound at lowest level since 1985

Sterling's slide has continued, with the pound touching $1.3622, as concerns about the UK economy and the banking sector intensified.

Sterling fell to its weakest level against the dollar since September 1985, before rising to $1.4015.

The pound remains weak against the euro, with the single currency now worth more than 93.3 pence.

Shares in Barclays took a further hit on Wednesday, sliding more than 9% in London trade.

But HSBC and Lloyds Banking Group finished ahead, up 30.5p to 515.5p, and 0.3p to 45.1p, respectively. And RBS shares were ahead by 21%, or 2.2p, at 12.5p.

Pound at 1985 levels against the dollar

However concern remains about the health of the global banking system.

Pounding

Last summer the pound was trading at more than $2.

The pound's slide this week followed RBS signalling it would make a record loss in 2008 and further government measures to encourage UK banks to lend.

"Fresh concerns about the key banking sector have fed through into broader concerns about the outlook for the economy," said Simon Derrick, a currency strategist at Bank of New York Mellon.

Economic data released on Wednesday exacerbated these fears.

UK mortgage lending fell by 30% in 2008 to the lowest level since 2002, while unemployment rose by 131,000 to 1.92 million between September and November.

Sony sees first loss in 14 years

Electronics giant Sony has said it is going make its first annual loss in 14 years as the global economic slowdown hits demand for its products.

For the financial year ending in March, Sony said it expected to make a net loss of 150bn yen ($1.7bn, £1.2bn).

The company also blamed a strong yen for making its exports more expensive.

Sony had forecast as recently as October that it would make a profit this year. The expected loss was much bigger than analysts had anticipated.

Last year, Sony made a profit of 369.4bn yen, but its fortunes have changed as the global downturn has hit home.

In October, it cut its profit forecast in half and shortly after announced it would lay off 8,000 employees and shut some manufacturing plants.

Sony is particularly sensitive to currency fluctuations since about 80% of its sales come from overseas.

The yen is at a 13-and-a-half-year high against the dollar, which has eroded Sony's foreign earnings.

Apple posts best quarterly profit

Apple has posted strong quarterly results that beat analysts' expectations and proved the company's resilience to the economic downturn.

The technology giant made a record net profit of $1.61bn (£1.15bn) and posted record revenue of $10.7bn for the quarter to the end of December.

Apple sold more than 22 million iPods and more than four million iPhones.

But the company warned that revenue could fall significantly in the first three months of 2009.

For the same quarter the previous year, Apple's profit was $1.58bn and its revenue was $9.6bn.

"Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history - surpassing the $10bn in quarterly revenue for the first time ever," said Apple boss Steve Jobs.

Increased sales

The company saw sales increase right across its main product ranges.

It sold 2,524,000 Macintosh computers during the three months, up 9% on the last three months of 2007.

It also sold 22,727,000 iPods, 3% up on the previous year's quarter.

Finally, it sold 4,363,000 iPhones, 88% more than in the final quarter of 2007.

However, Apple expects revenue to fall significantly over the next three months.

"Looking forward... we expect revenue in the range of about $7.6bn to $8bn," said Peter Oppenheimer, Apple's chief financial officer.

"It was a great quarter and better than most people expected," said Yair Reiner, analyst at Oppenheimer.

The results come after reports that Apple faces a review by the US Securities and Exchange Commission to check that its recent disclosures about Steve Jobs's health did not mislead investors.

China's economic growth slows

China's economic growth slowed to 9% last year, performing particularly badly towards the end of the year.

The world's third-largest economy was hit hard by the global financial crisis that led to a fall in orders for Chinese exports.

But the official who announced the figures said the economy had still done relatively well in trying times.

He said the outlook for this year was good, although millions of migrant workers have already lost their jobs.

China's economy grew by 13% in 2007, according to revised figures released recently. But it did not do quite so well last year.

At a press conference to announce last year's figures, Ma Jiantang, head of the national bureau of statistics, said: "In 2008, we saw an eventful and extraordinary year."

He said China's economy had been affected by a series of natural disasters, such as the earthquake in May, and by the financial crisis.

Millions left jobless

It is this last event that has hit the Chinese economy hardest - and the crisis is getting worse, said Mr Ma.

The figures show China's economic growth slowed rapidly towards the end of the year.

Growth in the first quarter of last year was 10.6%, but that had slowed to just 6.8% in the last three months of 2008 - after the financial crisis had struck.

That crisis has led to less demand for Chinese products across the world.

Mr Ma revealed that millions of migrant workers - villagers who travel to cities to work in factories - had already lost their jobs.

He did not give an absolute figure for the number of migrants who are now jobless, but he said a survey showed about 5% had lost their jobs.

China's Academy of Social Sciences recently said that there were about 200 million migrant workers - meaning about 10 million migrants are now unemployed.

Independent Chinese economist Andy Xie said the number of migrant workers without jobs could rise to more than 20 million.

"A lot of factories are not going to reopen after the Chinese New Year. The workers will be told not to come back," he said.

China worries that these unemployed people will cause an increase in social unrest if they are unable to find new jobs.

Mr Ma acknowledged that this was a problem. "[We] take this issue of migrant workers very seriously," he said.

To reinforce the point, he reminded those listening that China's communist leaders were improving ordinary people's living standards.

"Despite all economic difficulties, the incomes of both urban and rural households continue to climb," he said.

Oil edges up above $41 but eyes weak stocks, demand

Oil edged up above $41 a barrel on Wednesday as the March U.S. futures contract took over as front month, but fears about a deep recession and weak demand continued to keep prices in check.

Asian stock markets opened lower, with Japan's Nikkei down around 2 percent after global stocks and bond prices fell in the previous session with benchmark S&P 500 and Nasdaq market both losing more than 5 percent.



U.S. light crude for March delivery rose 26 cents to $41.10 a barrel after falling $1.73 the previous day.



The February contract, which expired on Tuesday, settled up $2.23, or about 6 percent at $38.74 a barrel on short-covering.



London Brent crude settled down 88 cents at $43.62 and was trading up 18 cent at $43.80.



''Weakness in oil consumption continues to weigh on the oil price,'' the Commonwealth Bank of Australia said in its daily commodity report.



The International Energy Agency, a leading energy watchdog, last week joined the ranks of forecasters predicting a fall in global oil demand this year and cut its estimate for 2009 demand by 940,000 barrels per day to 85.3 million bpd, a fall of about 500,000 year-on-year.



Oil has plunged from record highs above $147 a barrel in July as a global economic slowdown has slashed oil consumption, prompting the Organization of Petroleum Exporting Countries (OPEC) to agree to a series of output cuts aimed at balancing the market and supporting prices.



OPEC is fully enforcing its deepest ever oil supply curbs, whichh should be enough to boost prices, the group's president, Angolan oil minister Botelho de Vasconcelos, told Reuters on Tuesday.



But demand has yet to respond to the cuts. China, one engine in the six-year commodity price rally that started in 2002, was expected to release fourth-quarter GDP data this week that economists say will show 7.0 percent growth, the slowest pace of expansion in nearly a decade for the world's third-biggest economy.



A Reuters poll of analysts forecast that crude oil stocks in the United States, the world's biggest consumer, rose by 1.4 million barrels last week, with distillate stocks seen down 1.4 million barrels due to cold winter weather.



Gasoline stocks would be up 2.1 million barrels, up 5.1 millionFRbarrels from a year ago.

Rupee rises; up by 21 paise to 48.90 a dollar

The Indian rupee appreciated 21 paise against the US currency on Thursday in early trade on dollar selling by banks and exporters amid hopes of firm opening on the domestic stock markets in line with better trends on other Asian bourses.

At the Interbank Foreign Exchange (Forex) market, the domestic currency traded higher at 48.90 against the US

currency, a rise of 21 paise over the previous close of 49.11/12 a dollar.



On Wednesday, the rupee gained 9 paise to close at 49.11/12 a dollar.



Forex dealers said dollar selling by banks, recovery on the Asian equity markets and hopes of Indian stock markets opening higher, helped the rupee to strengthen.



The dollar's weakness against some other Asian currencies also supported the rupee, they said.



Among Asian markets, Hong Kong's Hang Seng rose 1.23 per cent, while Japan's Nikkei remained almost flat in early trade on Thursday.

Satyam Board begin crucial two-day meet today

The six-member board of Satyam Computer Services is holding the crucial two-day meeting in Hyderabad on Thursday, to discuss among other things issues concerning mobilisation of finances and a strategy to hold major clients.

The third meeting in a row, the board will also consider appointment of chief executive officer and chief financial

officer the two key posts needed to revive the company.



The government had appointed Tarun Das, T N Manoharan and S Balkrishna Mainak, on Satyam's board, which already had Deepak Parekh, Kiran Karnik and C Achuthan.



After its last meeting on 17th January, the board of troubled Satyam had said that it was looking for funds, for

which it had opened a dialogue with lenders, to ensure salaries to employees and normal business operations, even as the search for a new CEO and CFO continued.



Representatives of a few lenders, including Citibank and ICICI Bank, had visited the Satyam headquarters, presumably for discussions with the new leadership of the IT company.



The second board meeting also constituted an audit panel and had appointed legal advisors Amarchand & Mangaldas, Suresh A Shroff & Co to the board, and internal auditors Brahmayya & Co.

Oil in narrow trading range in Asia

Oil traded in a narrow price range in Asia on Monday, with the market affected by weak global demand and worries over OPEC production cuts, analysts said.

New York's main contract, light sweet crude for February delivery, fell 31 cents to USD 36.20 a barrel on the New York Mercantile Exchange.



Brent North Sea crude for March delivery was down 47 cents to 46.10.



Underlying weak global demand for crude "remains a dominant factor" affecting the market, said David Moore, a commodity strategist for the Commonwealth Bank of Australia in

Sydney.



He said New York's February contract was trading in a "very narrow range" ahead of its expiry later this week, and March contract prices of above USD 42 were more indicative of the market's current situation.



Last week both the Organisation of the Petroleum Exporting Countries (OPEC) cartel and the International Energy Agency, energy policy adviser to major industrialised countries, lowered their demand forecasts for this year.



OPEC will consider further cuts to oil production if prices continue to fall, Algerian Energy Minister Chakib

Khelil said Saturday.



Another cartel member, Venezuela, said at the weekend that it is prepared to reduce its oil production in a bid to boost prices.

Sensex opens marginally higher on firm Asian trendSensex opens marginally higher on firm Asian trend

The Bombay Stock Exchange benchmark Sensex opened marginally higher by adding 58 points in early trade on Monday on investors buying in line with firming trends in Asian markets.

The 30-share index, which had gained 276.85 points in the previous session, added 58.19 points at 9,381.78 in the first five minutes of trading.



Similarly, the wide-based National Stock Exchange's Nifty rose by 15.90 points to 2,844.35.



Marketmen said buying activity was supported by reports of Hong Kong share prices opening 1.8 per cent higher on Monday, with sentiment driven by Wall Street's end-of-week gains and optimism ahead of Barack Obama's resuming office.

New set of measures to help banks New set of measures to help banks

The government has announced a second package of measures to support the banking system.

The long list of measures includes a scheme to offer insurance against banks losing more money from the toxic debt that started the credit crunch.

The banks will have to pay for the insurance, but the government says it does not expect to be paid in shares.

Prime Minister Gordon Brown condemned the banks that had made losses from "irresponsible" lending.

Risky assets

Under the insurance scheme, banks will agree with the government the amount they expect to lose from particular debt.

The Treasury will then sell insurance against about 90% of the institutions' additional losses from the debt. The government has announced a second package of measures to support the banking system.

The long list of measures includes a scheme to offer insurance against banks losing more money from the toxic debt that started the credit crunch.

The banks will have to pay for the insurance, but the government says it does not expect to be paid in shares.

Prime Minister Gordon Brown condemned the banks that had made losses from "irresponsible" lending.

Risky assets

Under the insurance scheme, banks will agree with the government the amount they expect to lose from particular debt.

The Treasury will then sell insurance against about 90% of the institutions' additional losses from the debt. The government has announced a second package of measures to support the banking system.

The long list of measures includes a scheme to offer insurance against banks losing more money from the toxic debt that started the credit crunch.

The banks will have to pay for the insurance, but the government says it does not expect to be paid in shares.

Prime Minister Gordon Brown condemned the banks that had made losses from "irresponsible" lending.

Risky assets

Under the insurance scheme, banks will agree with the government the amount they expect to lose from particular debt.

The Treasury will then sell insurance against about 90% of the institutions' additional losses from the debt.
The government describes the assets involved as being those "most affected by the current economic conditions".

Most of the debt involved is very difficult to value because the market in it has collapsed.

The questionable value of the assets has meant that banks do not know how much money they are in a position to lend.

The government hopes that by insuring them against additional losses, it will encourage the banks to resume normal lending to businesses and individuals.

Chancellor Alistair Darling told the BBC that banks taking out the insurance would have to make "very specific legally binding agreements to lend more money".

Previous rescues

There have also been changes to the terms of previous bank rescues.

Northern Rock has said that it is to be given longer to repay its loans from the government.

Bank of America bail-out agreed

Bank of America will receive $20bn (£13.4bn) in fresh US government aid and $118bn worth of guarantees against bad assets.

The emergency funding will help the troubled bank - the US's largest - absorb the losses it incurred when it bought Merrill Lynch.

In return for the money, the US Treasury will take a stake in the bank.

Just hours after the aid package was announced, Merrill Lynch posted a fourth-quarter 2008 loss of $15.31bn.

Bank of America reported a loss of $1.7bn, compared with a profit of $268m for the same period a year earlier.

Bank of America had been seen as one of the strongest US banks, at least until its decision to take over Merrill.

"They were probably one of the best banks out there, balance sheet-wise, until they did the Merrill deal," said Cassandra Toroian at Bell Rock Capital.

Financial stability

The government stepped in after fears that the deteriorating capital base threatened the viability of the bank and could have posed a threat to the financial sector and the wider economy.

India's economy to grow by 7-7.5 pc in 08-09: Finmin

A key finance Ministry official projected India's growth rate at 7-7.5 per cent in the current fiscal, lower than projected by the Reserve Bank as well as the growth recorded in the first half of this fiscal.

"India, after remaining in high growth trajectory continuously for the last four years is now projected to grow between 7 and 7.5 per cent during the current financial year," Economic Affairs Secretary Ashok Chawla said at the Third India China Financial Dialogue in New Delhi on Friday.


Indian economy grew at the rate of 7.8 per cent in the first half of the current fiscal compared with 9.3 per cent in the same period last fiscal.


However, growth is expected to lower much after the first half, as industrial growth turned negative in October and stood at just 2.4 per cent in November.


The RBI has estimated Indian economy to grow at 7.5-8 per cent, but it may also lower its growth forecasts.


RBI Governor D Subbarao had recently indicated that the central bank may revise down the GDP projections at its third quarterly review of the credit policy, slated for 27th January.


Chawla said India has taken a number of steps to inject liquidity into the financial system, recapitalised banks and other systemically important institutions to tide over the crisis.


He identified banking sectors and capital markets as areas where the expert teams of India and China would jointly work and evolve a time-bound strategy for closer engagement.


The Economic Affairs Secretary said that both India and China have to work together to ensure that reform initiatives ushered in tangible results for developing nations.

Crunch 'cost Arabs $2.5 trillion'

The global economic crisis has cost Arab countries $2,500bn (£1,690bn) in the last four months alone, according to Kuwait's foreign minister.

Sheikh Mohammed al-Sabah told reporters in Kuwait City that oil-rich Gulf Arab states had postponed or cancelled 60% of development projects.

He did not give details for his figures, which were released days before an Arab Economic Summit.

Stock market falls and a low oil price have contributed to the losses.

The biggest loss was an estimated 40% drop in the value of Arab investments abroad, which had previously totalled around $2.5tn, AFP news agency reports.

"The Arab world has lost $2.5 trillion in the past four months," Mr Sabah said after meeting fellow foreign and finance ministers.

Kuwait City is due to open a two-day Arab Economic Summit on Monday, the first of its kind.

Arab League Secretary General Amr Moussa earlier described the meeting of 22 heads of state as "the largest and most important" Arab event of 2009.

Microsoft is accused by EU again

The European Commission has accused Microsoft of harming competition by bundling its Explorer web browser with its Windows operating system.

The commission said it had reached the preliminary view that the US software giant had undermined consumer choice and infringed EU rules.

Microsoft and the European Union have engaged in legal battles over competition issues for years.

Last year, the EU fined Microsoft 899m euros ($1.4bn; £680.9m).

Browser battle

In its statement on Friday the Commission said: "Microsoft's tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice."

Microsoft that it was studying the commission's preliminary finding, and did not rule out requesting a formal hearing.

It has been given eight weeks to reply.

The US software firm controls the majority of the web-browsing market through its Explorer browser.

Analysts say the company has diversified enormously and is now no longer so reliant on its Windows operating system, with revenue coming from Xbox sales and server software.

In February 2008, the EU fined Microsoft 899m euros for defying sanctions imposed on it for anti-competitive behaviour.

The penalty - which was then one of the largest imposed by the European Commission - came after Microsoft failed to comply with an earlier 2004 ruling that it had abused its market position.

Citigroup to split as losses grow

Struggling US banking giant Citigroup has announced plans to split the firm in two, as it reported a quarterly loss of $8.29bn (£5.6bn).

It said it would realign into two new firms, Citicorp and Citi Holdings.

Citicorp will handle the company's traditional banking work, while Citi Holdings will take on the firm's riskiest investment assets.

Last autumn, Citigroup had to be rescued by the US government in a bail-out deal totalling $45bn.

The government also agreed to guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books.

'Ongoing efforts'

"Given the economic and market environment, we have decided to accelerate the implementation of our strategy to focus on our core businesses," said Citigroup chief executive Vikram Pandit.

"This will help in our ongoing efforts to reduce our balance sheet and simplify our organisation.

"We are setting out a clear roadmap to restore profitability."

Citigroup's net loss for the last three months of 2008 works out at $1.72 per share, worse than analyst expectations of $1.31.

Its quarterly revenues were down 13% to $5.6bn, which Citigroup said reflected "the impact of a difficult economic environment and weak capital markets".

"I think people knew it was going to be bad, but I'm surprised it's this bad," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati.

Good and bad

Analysts say the split essentially puts Citigroup's solid and profitable consumer banking interests in the hands of the new Citicorp, while the bad investment debts that forced it to seek government help go into Citi Holdings.

This will enable Citicorp to return to profitability much quicker than would have been possible for Citigroup as a single firm.

Oil prices fall in Asian trade

World oil prices fell in Asian trade on Thursday on worries of a supply glut amid weak demand after the latest US data showed a rise in the country's energy stocks, analysts said.

New York's main contract, light sweet crude for February delivery shed 38 cents to USD 36.90 a barrel on the New York Mercantile Exchange.



Brent North Sea crude for February delivery dropped 28 cents to USD 44.80.



"Weak demand is still overpowering supply in the oil markets," said Jonathan Kornafel, a Singapore-based director with Hudson Capital Energy trading firm.



He was referring to the latest energy data released on Wednesday by the US government which showed crude reserves rising 1.2 million barrels in the week ending on 9th January.



Distillates, which include heating fuel and diesel, increased by 6.4 million barrels.



"This week's stats clearly go to the bears," said Morgan Stanley Research, adding the data highlighted "the tension in the market between bulls looking to OPEC cuts and bears pointing to collapsing demand."



Since September, the Organisation of the Petroleum Exporting Countries has cut a total of 4.2 million barrels per day from its production to address the fall in crude oil prices.

Inflation eases to 5.24 pc

Inflation declined for the tenth consecutive week on Thursday to 5.24 per cent for the week ended 3rd January, primarily due to decline in prices of food articles.

Inflation, measured by movements in wholesale prices, dipped by 0.67 percentage points from 5.91 per cent in the previous week. It stood at 4.26 per cent a year ago.



The index of the food articles group declined by 0.6 per cent as prices of fruit and vegetables fell by three per cent, and gram, barley, condiments and spices by one per cent each.



However, the index of manufactured goods declined one per cent. Among manufactured items, paper and paper products declined by 0.4 per cent, and chemicals and chemical products fell by 1.2 per cent.



The index of fuel declined by 0.2 per cent due to lower prices of aviation turbine fuel (8 per cent) and light diesel oil (3 per cent).



However, naphtha became expensive by three per cent, and among food items jowar, tea, urad moong and rice moved up by one per cent each, and masoor by two per cent.



Inflation has been declining after it touched a peak of 12.91 per cent in August last year.

Govt rules out any bailout package for Satyam

The government has ruled out any bailout package for crisis-ridden Satyam Computer, but assured to do everything required to save jobs under the framework of its responsibilities.

"This is a decision that the new board of Satyam would take. This government is not going to directly or indirectly subsidise wrong doing and fraud in Satyam," Minister of State for Industry Ashwani Kumar told reporters on the sidelines of a Petrotech-2009 conference on Thursday.



When asked, is government not in favour of bailout package for Satyam as such, Kumar said that the new Satyam board "... are the ones to decide. The government would try and support within the framework of its responsibilities and do whatever it can to preserve and save jobs and to protect the good name of India in corporate sector".



He said, "The government will try to ensure to the extent possible that the brand equity of the country and Stayam in terms of its intellectual capital is preserved and the jobs are secured to the extent possible".



The minister said, "I do believe that Satyam aberration should not in any way take away from the great success story of India in the IT sector."


Earlier speculation was rife that the government is considering a package of up to Rs 2,000 crore to bail out Satyam Computer. But shortly after the Prime Minister Manmohan Singh's review meeting on Satyam on Tuesday, there was media speculation that government would be considering a financial assistance ranging between Rs 500 crore and Rs 2,000 crore but the PMO office declined to comment on it.

Judge rejects Madoff jail appeal

A US judge has rejected an appeal from prosecutors that Bernard Madoff should be sent to jail while they continue to probe his alleged $50bn (£33bn) fraud.

Prosecutors had lost an argument earlier this week that his bail should be revoked because he violated a court order freezing his assets.

Mr Madoff will remain on bail after a judge confirmed that decision.

Mr Madoff posted more than $1m-worth of jewellery and valuables to relatives and friends before Christmas.

But his lawyer has maintained that his client had not realised this violated the freezing of his assets.

Judge Lawrence McKenna said prosecutors had been unable to make a compelling argument that Mr Madoff was a danger to the community or was at risk of leaving the country - which are the two main requirements for bail decisions.

Complicated

Mr Madoff, 70, a former chairman of the Nasdaq stock market, was arrested and charged on 11 December in what would be Wall Street's biggest Ponzi scheme, one in which early investors are paid-off with the money of new clients.

If convicted, he faces up to 20 years in prison and millions of dollars in fines.

The investment adviser has not appeared in court to formally answer the charge and an 11 February deadline to indict him meaning that he will remain free for at least another four weeks, provided he does not breach the terms of his bail.

Fraud experts have said the purported scheme was too complicated and went on too long to have been carried out by Mr Madoff alone.

The investment adviser, who has been a Wall Street figure for more than 40 years, is the only person accused in the scandal surrounding his firm, Bernard L Madoff Investment Securities.

Motorola to cut 4,000 more jobs

Mobile phone giant Motorola has said it is to cut 4,000 jobs, roughly 6% of its workforce, in the face of the economic downturn and waning demand.

It also warned it would make a fourth-quarter loss as sales of mobile phones were weaker than expected.

The firm had cut 6,700 jobs in 2008. Its latest cuts includes about 3,000 posts in the mobile-devices business and 1,000 jobs from other units.

Motorola said the move brought planned cost savings in 2009 to $1.5bn (£1bn).

That figure includes $700m of new savings on top of a previously announced plan to cut $800m in expenses.

'Faring worse'

Motorola said it sold about 19 million handsets in the fourth quarter of 2008, down from 40.9 million in the fourth quarter of 2007. It put the poor handset sales down to weakness in consumer demand.

The firm had dropped to fourth place in the global handset market in the third quarter with sales of 25.4 million.

Avian Securities analyst Matthew Thornton said: "I'm sure they're faring a bit worse than some of the other tier-one manufacturers.

"It's not going to get any easier in the next couple of quarters."

Euro inflation hits 26-month low

Eurozone inflation fell to a 26-month low in December, thanks to a big decline in the price of energy bills, official figures have shown.

Inflation in the 15 countries that were using the euro in December - before Slovakia joined this month - fell to an annual rate of 1.6%.

This compares with 2.1% in November, and came after energy bills, including the price of petrol, fell 3.7%.

The data comes as the European Central Bank is expected to cut interest rates.

Widely tipped

The ECB is widely tipped to trim rates by at least half a percentage point from the current 2.5% when it announces its January decision later.

Analysts said the latest fall in inflation was expected, giving the ECB room to cut rates further and help lift the economy without fear of lifting prices.

"The ECB will do 50 basis points today and we think rates will go down to 1% in the second quarter," said Stephane Deo of UBS Bank.

Excluding energy and food bills, core eurozone inflation declined to 1.8% in December from 1.9% in November.

Airbus takes top planemaking spot

European planemaker Airbus took top spot in global jet plane deliveries and orders during 2008.

Airbus saw a 7% rise in deliveries to a record 483 planes. US rival Boeing - hit by a machinists' strike - saw its deliveries fall by 15% to 375 planes.

It also outsold Boeing, with orders for 777 jets, down 42% from the previous year. Last week, Boeing said it sold 662 aircraft in 2008, down 53% on 2007.

Airbus is restructuring to cope with currency volatility and other issues.

It said its Power8 cost-cutting programme had saved 1.3bn euros ($1.7bn; £1.2bn).

'Challenging 2009'

The pan-European firm sold planes worth $100bn (£68bn) in 2008, giving it a market share of 54%.

And it said it had a backlog of 3,715 jets, which it is estimated it would take six years to clear, although this could be reduced to four years with cancellations.

Last year, Airbus sold a net total of 472 single-aisle aircraft and 310 wide-body models, including nine A380 superjumbos.

Boeing's 2008 production was hit by a 58-day machinists' strike.

Meanwhile, Airbus has cut its A380 delivery forecast for 2009 to 18 planes. In 2008 it delivered 12 of the aircraft.

"We all know that 2009 will be a very challenging year for the aeronautics industry," said Airbus chief Tom Enders.

"At Airbus we are well prepared and confident."

Medical leave for Apple boss Jobs

Apple chief executive Steve Jobs is to take medical leave until the end of June, saying his health issues were more complex than he first thought.

Mr Jobs revealed last week he was being treated for a "hormone imbalance" but was staying on as the firm's head.

Chief operating officer Tim Cook will again stand in while Mr Jobs is away.

Diagnosed with pancreatic cancer in 2004, Mr Jobs had appeared increasingly gaunt at recent public appearances, sparking rumours about his health.

Speculation about his health had intensified since December, after Apple said Mr Jobs would not be making his annual keynote address at the Macworld conference in San Francisco.

Directors' support

In an e-mail to employees on Wednesday, Mr Jobs said: "Unfortunately the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well."

"In order to take myself out of the limelight and focus on my health... I have decided to take a medical leave of absence until the end of June."

As CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan."

In last week's statement, Mr Jobs said doctors thought they had found the cause for his weight loss: "A hormone imbalance that has been robbing me of the proteins my body needs to be healthy."

Apple's board said it was giving him "complete and unwavering support".

Apple's share price fell 7% in late trading on Wall Street following the announcement, showing how closely the company's fortunes are still identified with the person who helped create it, says the BBC's Greg Wood in New York.

Professor Gerard Tellis of Marshall Business School at University of Southern California, said Mr Jobs had a "sense of what the market really wants and that's a rare talent".

"In the case of iPod, iTunes, the iPhone, as well as the iMac, he seems to have got it right."

"In each case, the company made a big decision based on his tastes and they seem to have got it right, because those products have turned out very well," he said.

Jobs' leadership

Apple's shares have risen and fallen over the last year in step with rumours or news about Mr Jobs' health.

While the top executive's health would be an issue for investors in any company, at Apple the level of concern has been heightened, because Mr Jobs is involved in everything from ideas for new products to the way they are marketed.

"Steve Jobs is the Ronald McDonald of Apple, he is the face," said Rob Enderle of the Enderle Group in Silicon Valley.

"They either need to redefine the company so his role is divided among different people or they need to find somebody that can clone Steve Jobs."

But other analysts disagreed.

"Everyone is going to speculate he is on his deathbed, like it usually goes. The company will do just fine with Steve taking a leave of absence," said Van Baker at information technology research firm Gartner.

"Apple is not going to collapse without him there."

Mr Jobs co-founded Apple with Steve Wozniak in 1976 at the beginning of the personal computer revolution. He left the firm in 1985 but returned in 1997 and became full-time chief executive once again in 2000.

Since then, Apple has churned out a string of sleek gadgets, from the iMac and the iPod to a new line of aluminum-covered Macbooks and the iPhone.

Many investors fear that without him, Apple would not be able to sustain its growth.

Mr Jobs said he was passing day-to-day management to Tim Cook, who filled in for Mr Jobs in 2004 when the Apple chief took leave to battle his cancer.

Rupee weak at 48.57 a dlr in early trade

The Indian rupee depreciated, in tandem with weakness in local stocks, and was quoted 25 paise lower at 48.55/57 against the greenback in early trade on Monday on some dollar demand from importers.

In lacklustre activity at the Interbank Foreign Exchange (forex) market, the domestic currency resumed weak at 48.53/55 a dollar from its last close of 48.28/29 a dollar and was steady at 48.55/57 a dollar in late morning deals.



Forex dealers said the rupee continued to remain under pressure as the Satyam accounts' scandal triggered fears of more capital outflows from the country despite some leading fund managers ruling out possibility of any capital outflow because of the Satyam fiasco.



They said oil refiners bought dollars as the global oil prices fell to around USD 40 a barrel level in Asian trade on Monday morning.



The Indian benchmark Sensex was down 268 points at 1030 hours after some foreign brokerages pointed to disappointing third quarter earnings likely to be affected by high input costs and the current liquidity crisis.

Obama plan 'could create 4m jobs'

US President-elect Barack Obama says urgent action is needed on the economy, and his $775bn (£509bn) stimulus plan could create up to four million jobs.

Mr Obama, who takes office in two weeks, wants to cut taxes and create jobs through increased government spending on public works projects.

"It's not too late to change course, but only if we take immediate and drastic action," he said.

The US unemployment rate is 7.2%, after 524,000 jobs were lost in December.

Recession fears

The number of job losses last year was 2.6 million, the largest since World War II.

The figures, released on Friday, heightened fears that the US is entering a long period of recession.

The president-elect published a detailed analysis of his recovery plan by his economic advisers, who said it could create up to four million jobs by the end of 2010.

The analysts estimated that the unemployment rate at the end of 2010 would be 1.8 percentage points lower if the plan was enacted.

"If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits.

"They warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world," he said in his weekly YouTube address.

Margins of error

The report estimates how many jobs each part of the plan would create.

More than 40% of the new jobs should go to women and 90% of them should be in the private sector.

It concedes that the estimates are "subject to significant margins of error". This is because the assumptions on which it is based may prove wrong and the package may change as it goes through Congress.

Senior Democratic senators have expressed scepticism that tax cuts will lead to growth and job creation.

They want more money spent on infrastructure and energy projects.

Satyam rebounds on rescue hopes

Shares in Indian software firm Satyam have jumped 51% on hopes of a rescue plan for the scandal-hit firm.

On Sunday, the Indian government appointed three leading businessmen to the company's board.

The board is meeting to draw up a rescue plan for the firm that has been at the centre of a scandal over the falsifying of accounts.

Meanwhile, the World Bank revealed that Satyam and two other Indian IT firms are on a business blacklist.

The Satyam scandal has undermined investors' confidence in India's booming outsourcing industry.

Deepak Parekh, a senior banker and one of the firm's new bosses, is due to hold a news conference at 5 pm local time - about 1130 GMT.

Satyam shares were up 51% at 36.05 rupees after the stock lost 87% last week.

World Bank

India's IT sector was dealt a further blow after the World Bank said that three Indian firms, including Satyam, were on a list of- companies that are banned from doing business with the bank.


Satyam's office in Bangalore
Satyam employs more than 50,000 people

Shares in Indian software firm Satyam have jumped 51% on hopes of a rescue plan for the scandal-hit firm.

On Sunday, the Indian government appointed three leading businessmen to the company's board.

The board is meeting to draw up a rescue plan for the firm that has been at the centre of a scandal over the falsifying of accounts.

Meanwhile, the World Bank revealed that Satyam and two other Indian IT firms are on a business blacklist.

The Satyam scandal has undermined investors' confidence in India's booming outsourcing industry.

Deepak Parekh, a senior banker and one of the firm's new bosses, is due to hold a news conference at 5 pm local time - about 1130 GMT.

Satyam shares were up 51% at 36.05 rupees after the stock lost 87% last week.

World Bank

India's IT sector was dealt a further blow after the World Bank said that three Indian firms, including Satyam, were on a list of- companies that are banned from doing business with the bank.


WORLD BANK BLACKLIST
Satyam barred for 8 years
Wipro barred for 4 years
Megasoft barred for 4 years
Source: World Bank

This was the first time the World Bank had disclosed the list of companies barred from receiving direct contracts under its corporate procurement program.

Satyam was banned in September 2008 for eight years and Wipro Technologies was blacklisted for four years from June 2007 for providing improper benefits to World Bank staff.

Wipro said it was banned for offering World Bank employees shares in its stock offer in the US in 2000.

Megasoft Consultants was banned for 4 years from December 2007 for taking part in a joint venture with World Bank staff while also conducting business with the Bank.

Shares in Wipro and Megasoft fell sharply on the news.

Arrests

The entire board of Satyam, a private company, had been sacked after its founder and former chairman had been arrested.

Ramalinga Raju and his brother Rama, also a former Satyam director, were arrested on charges including criminal conspiracy and forgery.

Mr Raju admitted last week that the firm had been falsifying its accounts.

He said the company had exaggerated its cash reserves by some $1bn (£661m).

The other new directors are Kiran Karnik, the former boss of technology trade group Nasscom, and C Achuthan, a former member of the Securities and Exchange Board of India.

The company, which employs 53,000 people and enjoyed a turnover of $40bn last year, is now fighting for its life.

Its clients include Nestle, General Electric and Ford.

The Raju brothers have also been charged with criminal breach of trust and falsifying documents.

They have been remanded in custody until 23 January, and could face life in prison.

Indian police have also now detained Vadlamani Srinivas, Satyam's chief financial officer, for questioning.

Iceland buys 51 Woolworths stores

Frozen food retailer Iceland has bought 51 former Woolworths stores, and said it plans to create 2,500 new jobs.

The announcement comes just three days after the final 200 Woolworths stores closed their doors for the last time.

"We are confident we can help to support the local community in these towns who have lost a major High Street retailer in Woolworths," said Iceland.

Woolworths went into administration in November, but was unable to find a buyer to take on the company.

Previous bid

Iceland first made an offer to buy all of Woolworths' 815 stores last August, but Woolworths rejected the bid, for an unconfirmed amount, calling it "unacceptable".

Around three quarters of the 51 Woolies stores Iceland has bought are in the south of England, including 10 in London.

Iceland currently has 682 outlets.

Founded in 1970, the firm was bought in 2005 by a consortium led by Icelandic investment group Baugur.

Lloyds pays $350m to end US case

UK-based bank Lloyds TSB has agreed to pay a $350m penalty to US authorities over financial transfers that violated US sanctions.

The US Justice Department said Lloyds TSB had acknowledged "criminal conduct" and agreed to forfeit the funds in return for an end to its investigation.

Prosecutors said the bank faked records so clients in Iran, Libya and Sudan could do business with US institutions.

Lloyds TSB said that it had cooperated fully with the probe.

"We are committed to running our business with the highest levels of integrity and regulatory compliance across all of our operations, and have undertaken a range of significant steps to further enhance our compliance programmes," it said in a statement.

Wire transfers

US prosecutors said that the bank's misconduct took place between 1995 and 2007.

"For more than 12 years, Lloyds facilitated the anonymous movement of hundreds of millions of dollars from US-sanctioned nations through our financial system," Assistant Attorney General Matthew Friedrich said.

According to court documents, Lloyds removed information such as customer names, bank names and addresses so that wire transfers would pass undetected through filters at US banks.

This process - known as stripping - meant that more than $350m (£230m at current exchange rates) that might otherwise have been blocked was processed by US institutions.

Lloyds TSB had agreed to forfeit half the money to the US and half to New York County.

In return, the Justice Department would recommend that charges against the bank be dismissed in two years, it said.

Lloyds said it had set aside £180m last year against a possible settlement - before sterling weakened against the US dollar - and it did "not anticipate any further enforcement actions".

The US prohibits certain countries, institutions and individuals from accessing the US banking system, based on its foreign policy and national security goals.

It lifted sanctions on Libya in 2004, but measures remain in place against Iran and Sudan.

Accord signed in Russia gas row

Russian, Ukrainian and European Union officials have signed a deal which should pave the way for the re-opening of gas supplies to Europe.

The deal was signed by Ukrainian PM Yulia Tymoshenko, Russian PM Vladimir Putin and Czech PM Mirek Topolanek.

The deal is aimed at enabling a resumption of Russian gas deliveries to European countries through Ukraine.

Hundreds of thousands of European homes have no heating after gas shipments via Ukraine were halted on Wednesday.

Although both Ukraine and Russia had guaranteed that transit routes to Europe would be unaffected, mutual accusations between Kiev and Moscow resulted in supplies being cut.

Mr Topolanek, who has been in Ukraine for talks with Ms Tymoshenko, said the signing of the deal cleared the way for the resumption of Russian natural gas supplies to Europe.

"Nothing prevents Russia now from resuming gas supplies," he said.

'Calming Russian fears'

The Russian deal followed five hours of talks between Russian Deputy Prime Minister Igor Sechin and officials from the European Union.

Under the deal, EU, Ukrainian and Russian observers will monitor supplies, in order to calm Russian fears that Ukraine is siphoning off gas for its own use. Ukraine has denied this allegation.

After signing the deal, Ms Tymoshenko said Ukraine's agreement signified its "goodwill" and role as an "honest transit country", the Associated Press reported.

Mr Putin is quoted on Interfax, the Russian news agency, as saying that the "transit of gas through Ukraine will start again as soon as the (transit) control mechanism starts to work".

EU monitors are in Kiev and are expected to head to the pumping and measuring stations on Ukraine's eastern and western borders early on Sunday, a spokesman for Naftogaz, the Ukrainian state energy company, told the BBC.

If things go to plan and once those monitors are in place, says the BBC's Gabriel Gatehouse in Kiev, Russia should turn on the taps.

Ukraine and Russia's bitter contractual dispute over gas prices and transit fees has affected several countries which are unlikely to have supply resumed before Monday at the earliest, despite the signing of this deal.

Normal service in affected countries such as Bulgaria, Slovakia, Bosnia-Hercegovina and Serbia will be delayed as it takes around 36 hours from the moment of turning on the taps for the gas to reach consumers, our correspondent adds.