Weekly Round Up 14th to 21st September 2008

1. Lehman Brothers Holdings Inc has filed for bankruptcy protection, making it the largest casualty of the global credit crisis, and given its assets at the time of filing, Lehman surpassed WorldCom as the biggest US Bankruptcy filing.

 

2. The boards of Bank of America Corp and Merrill Lynch & Co. struck a deal last Sunday in which the former would sell itself to Bank of America Corp for roughly $50 billion.

A combination of the two is expected to create a global financial service behemoth involved in everything from fixed-income trading to stock underwriting to credit cards.

 

3. Tata AIG Life, an insurance venture between Tata Sons and American International Group, has sought to re-assure its policyholders that the Wall Street turmoil would not have any "immediate material impact" on the company.

AIG got a $85-billion lifeline from US Federal Reserve to help it come out of its financial mess. The Tatas and AIG have two insurance ventures in India - Tata AIG Life and Tata AIG General. In both these entities, Tata Sons holds 74 per cent and AIG has 26 per cent.

 

4. Reliance Industries Ltd has been able to flow crude oil for the first time from its offshore asset in Krishna-Godavari Basin, on schedule.

Sources said the company has started crude oil production off the Andhra Pradesh coast and an announcement is expected to be made by the company's Chairman and Managing Director, Mr Mukesh D Ambani, on Sunday.

 

5. State Bank of Saurashtra formally merged with State Bank of India. Announcing the merger the Chairman of State Bank Group, Mr O.P. Bhatt, said there were no plans for the merger of the other six associates with the bank in the immediate future.

 

6. The Government has allowed Indian editions of foreign news and current affairs magazines stipulating a 26-per cent foreign direct investment ceiling.

Magazines such as Time and Newsweek will now be able to publish Indian editions, as long as they follow the FDI ownership cap and rope in an Indian partner.

 

7. Tata Motors said last Thursday the Karnataka Government was willing to offer 1,000 acres of land and other incentives to the company if it had plans to relocate the Nano small car project to the State.

The Tata Motors Managing Director, Mr Ravi Kant, said the company was actively looking at alternative sites and needs around 1000 acres of land for an integrated plant.

 

8. The turbulence in the global equity markets echoed not only in the domestic equity markets, but also in the currency market, with the rupee crashing to an intra-week low of 46.97/98. The rupee opened last Monday at 45.52/54 and fell to a low of 46.97/98 on Wednesday, a level last seen in July 2006. It closed at 45.83 on Friday, netting a loss of 31 paise during the week.

 

9. In a blow to Ranbaxy Pharmaceuticals Ltd, the US Food and Drug Administration has blacklisted about 30 generic drugs being manufactured by the company at its Dewas and Paonta Sahib plants in India. The US drug regulator said that it had taken the decision after the two units owned by Ranbaxy failed to meet the standards specified under the current Good Manufacturing Practice requirements of the US Government.

While the FDA has not imposed a ban on the drugs or sought a withdrawal of the medicines from US drugstores, it has issued an Import Alert, under which US officials may detain any products manufactured at its two facilities.