4th UPDATE: National Australia Bank Tops AMP Bid For AXA APH

MELBOURNE (Dow Jones)--National Australia Bank Ltd. (NAB), the country's third-largest by market capitalization, Thursday unveiled a surprise US$11.9 billion (A$13.3 billion) bid for AXA Asia Pacific Holdings Ltd. (AXA.AU), upstaging a rival offer from Australia's second-largest funds manager, AMP Ltd. (AMP.AU).

After securing the support of AXA APH's independent directors, NAB must now convince AXA SA (AXA), which owns 53.9% of AXA Asia Pacific, to switch its support from AMP's proposal.

The acquisition of AXA APH would propel either AMP or NAB into clear market leading positions in the Australasian life insurance and wealth management sectors, and give them the largest network of financial advisers in Australia.

If NAB's offer is successful, the deal could encourage further consolidation in the industry with AMP likely to become a target along with other asset managers such as Challenger Financial Services Group Ltd. (CGF.AU) and IOOF Holdings Ltd. (IFL.AU), analysts say.

AXA APH Chairman Rick Allert said at a media briefing that other undisclosed parties had also expressed interest in the business since AMP's first proposal nearly six weeks ago, indicating that the battle for AXA APH may not be over.

"I'm not going to enter into discussions about how many, but I am saying there were others," said Allert.

Under both proposals, AXA SA would acquire the Asian operations of AXA APH for A$9.13 billion, helping it build its operations in the region, but only under the NAB proposal would all minority shareholders have the chance to take a full cash payment in return for their shares.

NAB's deal also values AXA APH's Australian and New Zealand wealth management businesses at A$4.61 billion, against the A$4.41 billion AMP is willing to pay under Monday's sweetened bid.

Allert said he is confident the greater value and certainty afforded under NAB's proposal would see it supported by at least the 75% of minority shareholders needed to approve the scheme.

"I've been in touch with...most of our major shareholders this week and that gives me confidence that this will go through," said Allert.

NAB is offering A$6.43 cash or a combination of 0.1745 NAB shares and A$1.59 cash for each share in AXA APH not owned by the French parent.

AMP and AXA SA Monday increased their rejected November offer for AXA APH to A$12.85 billion, offering 0.6896 AMP shares for each AXA APH share alongside an increased A$1.92 per share in cash. Based on Wednesday's closing AMP price, this offer valued AXA Asia Pacific shares at around A$6.13 each.

"The independent board committee has unanimously concluded that the NAB proposal is in the best interests of AXA APH minority shareholders and superior to the rejected AMP, AXA SA revised proposal, in both its value and terms," Allert said in a statement.

NAB Chief Executive Cameron Clyne said the acquisition of AXA APH is in line with the group's strategy of boosting exposure to the Australia and New Zealand wealth management sectors. In September, NAB completed its purchase of Aviva PLC's Australian wealth management operations and it also recently bought Goldman Sachs JBWere's private wealth business.

AXA SA has agreed to work exclusively with AMP on the AXA APH deal until Feb. 6. Only if AMP walks away from the deal would AXA be able to start working with NAB on a separate proposal before then. NAB is yet to hold any talks with AXA SA, Clyne said.

AMP, which said Monday its revised proposal was its "best and final", appears unlikely to easily roll over. In a statement, AMP said its exclusivity agreement with AXA SA gives it "time to carefully consider its position".

NAB says its offer stands until Feb. 16 or six weeks after any decision by AMP to end the exclusivity period.

"We need to carefully consider the announcement and will discuss it with AMP before we make any public statement," said a spokesman for AXA SA.

AXA APH is the only Australian financial-services firm with the majority of its business in Asia and has exposure to eight regional markets, which account for two-thirds of its earnings.

Prior to NAB making public its proposal, a number of investors in AXA APH had said they wanted AXA APH to accept AMP's bid and so are likely to back NAB's bid.

"With a full price on offer and Board support secured, NAB has done its homework and this proposal is highly likely to succeed," said the Royal Bank of Scotland's Sydney-based credit strategist, John Manning.

AMP's disciplined approach to acquisitions in recent years meant it was unlikely to try and raise its bid, he said.

"I would be surprised if AMP were to engage in a bidding war with NAB, whose pockets are exponentially deeper, particularly as NAB appears determined on this one," said Manning.

NAB said it would raise around A$1.5 billion through a rights issue to help fund the deal, once it completes formal due diligence on AXA APH and has the backing of AXA SA.

Daiwa Securities analyst Johan Vanderlugt said the deal makes long-term strategic sense to NAB but falls short in terms of shareholder value creation and synergy benefits.

"The deal would only be earnings per share accretive in year three and bring in full synergies of A$260 million by year five," he said. "Moreover, we see substantial integration risks and revenue attrition."

The pre-tax cost savings forecast by NAB compare with AMP's estimate of annual savings of A$120 million after tax under its proposal.

At 0445 GMT, AXA APH shares were up 13% at A$6.35 while AMP shares rallied 4.6% to A$6.37 amid some speculation it could become a target.

NAB said it doesn't expect the AXA APH deal would worry competition regulators but said the bank would discuss the proposal with the Australian Competition and Consumer Commission and with the government.

The competition watchdog said in a statement posted on its website Thursday that it is "monitoring" NAB's proposed acquisition of AXA APH. The proposal has not yet progressed to the ACCC's review stage.

A spokesman for Treasurer Wayne Swan wouldn't comment on the deal.

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Dubai is given $10bn bailout by Abu Dhabi

ABU DHABI cheered markets yesterday by extending a $10 billion bailout to Dubai, enabling its fellow emirate to avoid an embarrassing slide into default by troubled state-owned property developer Nakheel.

And in Europe, Greek prime minister George Papandreou last night pledged “radical” action to tackle the country’s budget deficit a week after ratings agency Fitch withdrew its A rating from the country sovereign debt.

News of the Dubai bailout sent international stock markets higher yesterday, led by banks. However, there was little reaction on the Dublin market.

The move by the oil-rich capital of the United Arab Emirates ended three weeks of market turmoil following Dubai’s request to freeze payments on $26 billion in debt held by state-owned conglomerate Dubai World, Nakheel’s parent.

The Dubai government said it would use the funds to settle a $4.1 billion Nakheel sukuk – Islamic bond – due yesterday and for interest payments and working capital while Dubai World negotiated a debt restructuring.

However, analysts warned that concerns remained about the conglomerate’s restructuring and other parts of the emirate’s commercial empire.

In Greece, as officials struggle to convince investors they can get to grips with public finances, Mr Papandreou said in a speech in Athens: “In the next three months we will take those decisions which weren’t taken for decades.”

The prime minister, who came to power in October, said many choices would be “painful”, although he pledged to protect poorer and middle-income Greeks.

Greece urgently needs to restore its international credibility following a downgrade last week by Fitch to BBB plus, and a warning by Standard Poor’s of a possible downgrade.

Moody’s will visit Athens this week, raising fears that Greece will suffer another downgrade as it gears up to borrow another €50 billion on top of a record €60 billion this year.

The public debt is set to rise next year from 113 per cent to 124 per cent of GDP, the highest in the euro zone.

Europe’s economic and monetary affairs commissioner Joaquin Almunia yesterday warned Greece not to rely on the euro zone to come to its rescue.

“It does not appear that he has provided much insight into how he will reduce Greece’s heavy debt burden,” Brown Brothers analysts led by New York-based Marc Chandler wrote in a research note. “The most important take-away point is that key decisions will be made over the next three months and the pain will be distributed.”

Mr Papandreou, who said he would forge a “new national” agreement, yesterday pledged to cut the deficit, currently 12.7 per cent, below the EU’s 3 per cent limit by 2013. “Today our biggest deficit is that of credibility,” he said. “In the last years Greece lost all traces of credibility, which is why international institutions, partners want to see actions.”

In Dubai, analysts said Dubai’s reputation as a business haven also remained in question and the emirate still faced a tough task to reschedule the remaining $22 billion of Dubai World’s debts.

“Markets hate uncertainty, but they loathe unpredictability. In terms of rebuilding reputations, this process is far from over,” said Philipp Lotter of Moody’s.

Abu Dhabi’s move appeared to restore what had been perceived as an implicit state guarantee of Dubai World’s debts. Its intervention came after the Dubai debt crisis caused its own borrowing costs to rise alongside those of other Gulf states. – (Copyright The Financial Times Limited 2009)

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Apple acquires digital streaming service ahead of an expected revamp

Apple is expected to launch a new way of selling music on its iTunes online music store after acquiring Lala, a digital streaming service. The company is thought likely to integrate the technology behind Lala, a Silicon Valley start-up, into iTunes over the next year, offering consumers the chance to listen to tracks via the web.

ITunes customers buy tracks and store them on their computers for access by an iPod or iPhone. This download-to-own business model revolutionised the music industry and turned iTunes into the world’s biggest music retailer, with estimated revenue of $2 billion (£1.2 billion) this year.

Lala.com lets users buy and listen to music through a web browser, allowing its customers to access their purchased tracks from anywhere with an internet connection. Music streaming services have been gaining popularity because of the flexibility they offer consumers. Last.fm, News Corporation’s MySpace Music, Spotify and “internet radio station” Pandora have crowded into the sector, winning millions of users.

Lala recently signed deals with Google to offer music tracks to buy through search results and linked up with Facebook to become the social network’s music-streaming service.

Apple confirmed it had purchased Lala but declined to give more details. The Wall Street Journal reported, however, that Lala executives had been given key positions shaping music strategy for the iTunes Store.

The Lala service allows users to stream from the internet any tune in its catalogue of more than 8 million songs once for free and then sells unlimited streams for 10 cents a track. The 10-cent “web songs” stay in an online locker, accessible through any device with an internet connection.

The song quality is lower than that offered by iTunes but tracks can be played in seconds and cost much less than the songs on iTunes, which generally are priced at 69 cents to $1.29 each in the US.

Mark Mulligan, vice-president and research director of Forrester Research, said that Lala gave Apple a shortcut into streaming and social networking around music. He wrote in a blog post: “This is where the momentum of digital music has shifted and where Apple needs to be if it is going to remain relevant in the digital music landscape, even if revenue hasn’t yet shifted there.”

Music publishers have been pushing for music subscription services as a way of boosting revenue but with limited success. Spotify, an advertsupported free streaming service available in Europe, charges users a premium subscription of £9.99 a month to listen to songs on their phone and to access tracks on their computer without adverts. Only about 10 per cent of users pay up.

Going gaga for Lala

Lala, which is based in Palo Alto, California, was launched in 2006 with $35 million of venture capital from Bain Capital LLC, Ignition Partners and Warner Music Group Corp It began as an online CD-trading site but relaunched in October 2008 as a music retailer Lala has about 100,000 customers — far fewer than other digital music services such as Imeem, which has just been bought by MySpace for integration into its MySpace Music service Founder Bill Nguyen said in October that his company's revenues totalled less than $10 million Apple is thought to have paid as much $85 million for Lala, although some reports have put the price at as low as $17 million

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Erickson Retirement Communities Files for Bankruptcy, Company to be Sold

Erickson Retirement Communities, the Catonsville, MD-based national manager and developer of continuing care retirement communities, has signed a definitive agreement to be acquired by Redwood Capital Investments LLC, an investment company controlled by Baltimore businessman Jim Davis. To complete the sale of the company to Redwood, Erickson filed a voluntary petition for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Dallas, TX on Monday.

According to company spokesman Mel Tansill, Erickson Retirement Communities has two core businesses: its management arm, which provides services, care and amenities for community residents, and continues to operate successfully; and its commercial real estate development arm, which acquires land for future campus growth, and has been significantly impacted by the recession.

Erickson expects the transaction with Redwood, which is subject to approval of the Court, to be approved and consummated in the first quarter of 2010. Erickson's Communities are in the states of Colorado, Illinois, Kansas, Maryland, Massachusetts, Michigan, New Jersey/New York, Texas and Virginia.

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Tenants have upper hand in lease deals

With the lease winding down on his law firm's Universal City offices last year, Ray Hamrick figured that he was going to have to move because his rent would be rising beyond what he could reasonably pay.

Reluctantly, he started looking for space in buildings that weren't as desirable as the sleek, 35-story high-rise on Universal Hollywood Drive that his firm had called home since the 1980s. Then the global recession took hold, and his building, the tallest in the San Fernando Valley, went into foreclosure. The lenders who got it back immediately wanted to deal.

Rents in the building had been as high as $4.50 per square foot a month, but after a few rounds of negotiations earlier this year, Hamrick & Evans got a five-year lease at $3 a foot plus 12 months of free rent and other concessions that brought the net price down to about $2.40 a month, said Hamrick's broker, Jake Bobek of real estate brokerage Cushman & Wakefield.

"They were pushing really hard to keep me there," Hamrick said. "It made me able to stay here where I wanted to be. I feel fortunate."

Hamrick's deal may have been better than most, but it reflects the state of the commercial real estate rental market, which markedly favors tenants. Unfortunately for landlords, their willingness to deal often comes to naught. Many tenants are too overwhelmed or too uncertain to make a commitment to expand, and competing landlords are going all out to keep business.

"It's certainly a tall order to get a tenant to move today," landlord David Binswanger said wistfully.

Binswanger knows what he's talking about. After agreeing last year to move into new buildings Binswanger's company built at the Playa Vista development near Marina del Rey, Fox Interactive Media got cold feet at the last minute.

The Fox division, which includes the social networking website MySpace, faced layoffs in June and no longer wanted the nearly half-million square feet of offices it had promised to rent from Binswanger's firm, Lincoln Property Co., for about $350 million over 12 years.

Fox still has to make rent payments, but it is trying to sublet its unoccupied offices and get some of its money back. Lincoln, meanwhile, kept building more office space at Playa Vista because it thought it had filled up the first phase of its development with Fox's lease. Put simply, Fox is now competing for tenants against its own landlord and other office building owners on the Westside.

Fox's emergency swerve away from Playa Vista was another blow to the commercial real estate rental business, which has been in decline for almost two years. The slump affects more than landlords; when space doesn't rent, development of new buildings soon stops and that drains energy from the local economy as well-paying construction jobs disappear.

"Los Angeles has always been a real estate development game, either residential or commercial," said Jack Kyser, founding economist of the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp.

"It looks like residential may be starting to breathe again," Kyser said, "but when you put a the mirror under the nose of commercial, there is no sign of life."

With overall office vacancy in Southern California rising to more than 17% at the end of the third quarter from 13% a year earlier, the power has clearly shifted to tenants when it comes to negotiating leases. Some markets are tighter than others -- buildings in Pasadena are just over 10% vacant on average -- but for the most part it's a tenant's world.

Although a few landlords have buildings so desirable because of their stature and location that they can still command top-tier rents, most owners have been forced to lower their prices to get leasing business. Overall asking rents in Southern California have dropped 7% in the last year, according to Cushman & Wakefield, but that's only a slice of the incentives landlords are bringing to the negotiating table with tenants.

Loath to set lower rent benchmarks because they reduce a building's value, landlords look for other ways to cut tenants' costs and perhaps stroke their egos.

Want us to wrap the building in a giant nylon "supergraphic" announcing your arrival for a few months? We'll make it happen, some landlords say. Want us to promise we'll never put an advertising supergraphic on the building because you think they're tacky? Glad to, other landlords respond.

Most landlords and tenants agree not to talk about the terms of their leases to preserve their financial secrets, but tenant broker Jonathan Larsen of Transwestern confirmed that he recently negotiated a promotional supergraphic for a new tenant in the South Bay.

Larsen has also been exploring new fronts for what might be called "naming rights," similar to university facilities named after donors or parts of entertainment venues named after paying sponsors, such as Club Nokia at LA Live.

Putting the largest tenant's name at the top of a building has long been an established practice for landlords who want to fill large blocks of space. The former Library Tower in downtown Los Angeles, the tallest building in the West at 72 stories, has been renamed twice, first as First Interstate World Center and now as US Bank Tower.

Larsen is taking a further step for smaller tenants that don't rate building-top signage by asking for other parts of the property to be named after the tenants. An outdoor garden area might get a sign proclaiming it the Acme Insurance Courtyard, for instance. Larsen is negotiating such a deal now, he said, but can't reveal the names of the parties yet. On occasion, tenants successfully demand what is referred to as "Proposition 13 protection," said industrial broker Walt Chenoweth of CB Richard Ellis.

Some leases require tenants to pay a portion of a building's property taxes. Under California's Proposition 13 rules, buildings are reassessed at their new values when they are sold, potentially raising property taxes substantially. If tenants negotiate protection, they are shielded from paying more taxes and may even get a tax reduction if the landlord gets the building reassessed at a lower value.

Other extra sweeteners might include free memberships in an on-site gym or dining club, but those perks usually don't make financial sense for landlords unless they own the facilities and don't have to pay a third party for the privileges.

Besides, people usually don't place much value on free stuff, said Peter Johnston, who is in charge of leasing for one of the region's largest landlords, Maguire Properties Inc.

"If you give them a free gym membership, they won't use it," Johnston said. "If you charge $5, they might."

The primary landlord concessions that put new tenants in empty space or inspire existing tenants to stick around when their leases expire are old standbys: periods of free rent and subsidized improvements to the rented space such as carpeting and paint.

With many landlords suffering cash problems in the down economy and with lenders reluctant to give them loans, available funds for tenant improvements often are restricted. That leaves rent concessions as the biggest carrot they have to offer.

"Gimmicks are nice, but at the end of the day it's rent and parking" concessions that seal a deal, Johnston said.

Free rent can take many forms. Tenants might be allowed to move in before the official lease begins, even if improvements such as building individual offices and painting are still taking place.

More commonly, landlords agree to offer a certain number of months of occupancy free in exchange for a tenant's commitment to stay in the building for several years. For example, a tenant might get four to six months free for signing a five-year lease.

Parking is another category in which cash-strapped landlords have room to deal. Although free parking is common in Orange County and the Inland Empire, parking can be a substantial expense for companies and their employees in Los Angeles County.

In Maguire's downtown buildings, parking fees start at $240 a month and run as high as $580 a month for a reserved spot at US Bank Tower.

Landlords like to keep confidential the level of discounting they agree to, but brokers and landlords agree that the perk usually is reserved for tenants with the best credit who are least likely to default on their leases.

Discounts and breaks won't last forever, of course, but the rental market is still expected to get softer before it gets better for landlords. At least vacancy is now rising at a slower rate, according to a third-quarter analysis by CBRE Econometric Advisors.

"Like with job losses, the worst period of vacancy increases is behind us," said Jon Southard, CBRE director of forecasting. "Still, this is of little comfort when 'less bad' only adds to record high vacancy rates in many markets and property types."

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Toyota formally recalls 3.8 million vehicles

WASHINGTON

Toyota Motor Corp. officially recalled 3.8 million vehicles in the United States on Monday to address problems with floor mats that could cause the gas pedal to stick and cause a crash.

The automaker formally informed the federal government of the recall in a letter Monday. It will be Toyota's largest U.S. recall and the country's sixth-largest recall, according to the National Highway Traffic Safety Administration.

The recall includes 2007-2010 model year Toyota Camry, 2005-2010 Toyota Avalon, 2004-2009 Toyota Prius, 2005-2010 Tacoma, 2007-2010 Toyota Tundra, 2007-2010 Lexus ES350 and 2006-2010 Lexus IS250/IS350.

Chris Santucci, Toyota's assistant manager for technical and regulatory affairs, wrote in the letter to NHTSA that there are 3.8 million vehicles involved but "this estimate is subject to change as Toyota refines the number of affected vehicles by model."

Toyota told the government it has not determined that the vehicles "contain a 'safety-related defect' within the meaning of the federal safety laws" but would notify owners of the safety campaign.

Santucci wrote "there is a potential for an accelerator pedal to get stuck in the wide open position due to an unsecured or incompatible driver's floor mat. A stuck open accelerator pedal may result in very high vehicle speeds and make it difficult to stop the vehicle, which could cause a crash, serious injury or death."

Toyota announced last week it would recall the vehicles and warned owners to remove the driver's side floor mats and not replace them until the company determined a way to fix the problem.

The massive recall was prompted by a high-speed crash in August involving a 2009 Lexus ES350. California Highway Patrol Officer Mark Saylor, 45, and three members of his family were killed when their vehicle hit speeds exceeding 120 mph (193 kph), struck a sport utility vehicle, launched off an embankment, rolled several times and burst into flames.

Family members made a frantic 911 call from the Lexus and said the accelerator was stuck and they couldn't stop the vehicle.

In Japan, Toyota President Akio Toyoda said last week that the fatal crash was "extremely regrettable" and offered his "deepest condolences."

Toyota said in the letter it would tell owners of the affected vehicles to take out the driver's floor mat and not replace it with another floor mat until model-specific remedies are developed. Toyota said it expects to begin notifying customers by first class mail in late October and complete its mailing in December.

When it figures out a fix for the problem, Toyota will notify owners "about the availability of a free remedy." The automaker told the government it did not have a firm schedule for the second notification but would provide the government a schedule as soon as possible.

If a vehicle accelerator pedal becomes caught on the floor mat, Toyota recommends the following steps:

-- Reach down and pull the mat back from the accelerator. Then pull over and stop your vehicle. If you can't dislodge the pedal or it seems unsafe to do so, press on the brake with both feet. Then shift the vehicle into neutral, which will disengage the transmission. Continue braking until you come to a stop.

A driver can also try shutting off the engine or turning the key to the "ACC" position on the ignition. You won't lose control of steering or the brakes. But once the vehicle is turned off the driver won't have the benefit of power brakes or power steering.

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Govt eyes partial lifting of state of calamity

The government is eyeing the partial lifting of the nationwide state of calamity that was declared last week in connection with the devastation caused by tropical storm "Ondoy" in Metro Manila and nearby provinces.

Executive Secretary Eduardo Ermita on Wednesday said Defense Secretary Gilberto Teodoro Jr., concurrent head of the National Disaster Coordinating Council (NDCC), would recommend within 24 hours whether or not the declaration would be lifted entirely or partially.

“We shall await the recommendation of the chairman of NDCC… either to lift all together all over the country or lift it in some places that are obviously not anymore threatened by any forthcoming typhoon," Ermita said during his weekly press briefing in Malacañang.

Ermita was allaying fears that the state of calamity, declared last week by President Gloria Macapagal Arroyo through Proclamation 1898, may last for a year.

Proclamation 1898 enables the government through the Department of Trade and Industry (DTI) to control the prices of basic commodities. It also allows local officials to tap their respective calamity funds.

According to Ermita, Teodoro would make the recommendation after consulting with the weather bureau on the effects of weather disturbances in the country. He said the declaration may be lifted first in the Visayas and Mindanao.

He assured that Malacañang would follow Teodoro’s recommendation.

Justice Secretary Agnes Devanadera said the state of calamity could be lifted depending on the extent of damage to a certain area. She said some areas battered by Ondoy make take a year to fully recover.

"The concern here is that the [local government units] and the national government for that matter must be able to complete the rehabilitation," said Devanadera, a former mayor.

Mrs. Arroyo issued Proclamation 1898 last October 2 while the country was dealing with the aftermath of Ondoy, which unleashed last Sept. 26 a record rainfall in Metro Manila and nearby provinces, leaving close to 300 people dead and thousands affected.

Damages to agriculture and infrastructure caused by Ondoy have reached billions, prompting the country to seek help from the international community.

Ermita said the proclamation does not state that the state of calamity would last for a year.

“I prepared the proclamation but I didn't mention one year. There was none of that in the [proclamation]," he said.

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SC rules TRO for 10 Legacy banks wrong

THE Supreme Court (SC) has overruled a judge of  a Regional Trial Court (RTC) in Manila City who ordered the Bangko Sentral ng Pilipinas (BSP) not to compel 10 rural banks in the bankrupt Legacy Group of Companies to infuse additional capital.

The Court said Judge Nina Antonio-Valenzuela’s writ of preliminary injunction is a grave abuse of discretion, being an “unwarranted interference” with the powers of the Monetary Board (MB). The decision was written by Associate Justice Presbitero Velasco of the Court’s Third Division.

The Court thus declared null and void the June 4, 2008, writ issued by the judge and affirmed by the Court of Appeals.

The 10 banks included the Rural Bank of Parañaque Inc., Rural Bank of San Jose (Batangas) Inc., Rural Bank of Carmen (Cebu) Inc., Pilipino Rural Bank Inc., Philippine Countryside Rural Bank Inc., Rural Bank of Calatagan Inc. now Dynamic Rural Bank (Batangas), Rural Bank of DARBCI Inc., Rural Bank of Kananga Inc. now First Interstate Rural Bank (Leyte), Rural Bank of Bisayas Minglanilla now Bank of East Asia, and San Pablo City Development Bank Inc.

“No invasion of the rights of respondent banks has been shown, nor is their right to copies of the ROEs [report of examinations] clear and unmistakable. There is also no necessity for the writ to prevent serious damage. . .In the absence of a clear legal right, the issuance of an injunctive writ constitutes grave abuse of discretion,” the SC said.

The trial court had held that the banks’ right to due process would be violated by the submission of the ROE made by the BSP-Supervision Examination Department (SED) to the Monetary Board before the respondent banks get a copy.

BSP-SED officer in charge Chuchi Fonacier had examined the books of the banks in 2007 and discovered some deficiencies and ordered them to take remedial measures, including the infusion of additional capital.

Though the banks claimed they complied with the order, BSP-SED still sent separate letters to the board of directors of each bank, informing them that it found that they have yet to carry out the required remedial measures.

In response, the banks sought more time to obtain BSP approval to amend their Articles of Incorporation; and asked for a copy of the ROE and a meeting with the BSP audit teams to reconcile figures.

Fonacier insisted, however, that the banks comply with the BSP’s order, prompting them to elevate the case to the trial court.

The SC, in a resolution dated November 24, 2008, issued a temporary restraining order enjoining the Manila RTC and the CA from implementing the writ of preliminary injunction enabling the BSP-SED to submit their ROEs to the MB, which, in turn, prohibited the banks from transacting business and placed them under receivership.

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Turkey anti-IMF protest dispersed

Police in Turkey have used tear gas and water cannon to break up protests against a meeting of the World Bank and the International Monetary Fund.

Several hundred protesters shattered the windows of banks and a fast-food restaurant in Istanbul, reports say.

Dozens of arrests were made, and many shops in the city centre remain closed.

Delegates of the two organisations are holding their annual meetings, with co-operation in international finance reportedly high on the agenda.

"Long live freedom," chanted crowds of protesters, some of whom covered their faces with red scarves. "IMF get out of our city."

Shoe-thrower arrested

Shield-wielding riot police wearing gas masks erected barriers around the convention centre where finance ministers, central bankers and economists were meeting.

The protests were organised by several Turkish trade unions

Police helicopters hovered above the protests, which were organised by several Turkish trade unions.

A student was arrested last week for throwing a shoe at Dominique Strauss-Kahn, the IMF managing director, during a speech he gave at an Istanbul university.

The IMF is urgently discussing ways to make itself more representative of the new world order where developing countries make up nearly half of the world economy, but only have about one-third of the votes in the IMF.

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DTI penalizes 18 stores for over-pricing

At least 18 establishments have been charged of overpricing basic goods and are facing maximum penalties under the law for taking undue advantage during this time of calamity, the Department of Trade and Industry (DTI) said.

DTI Secretary Peter B. Favila said the price monitoring team composed of DTI, Food and Drug Administration, the Departments of Health and of Agriculture, served a notice of violation to 18 establishments on the grounds of overpricing and violation of the price tag law.

Favila himself went around various wet markets, supermarkets and drugstores in Metro Manila on Wednesday to check adherence to the price freeze imposed on basic necessities.

With this, Favila warned that the government will not hesitate to close down shops and press charges against manufacturers, suppliers, distributors, and retailers who will be found selling above the prices published in various newspapers,” Favila warned.

“Violators of the price ceiling set face stiff sanctions which include an administrative fine of not more than one million pesos and imprisonment of not more than ten (10) years,” Favila said.

He also announced that the DTI is deputizing market masters / administrators to enforce the provisions of the Price Act, thus, help price monitoring teams deployed in different public markets in Metro Manila and the provinces.

He added that the DTI will fully support the LGUs in going after and filing appropriate charges against those who will be found in violating fair trade laws, which include overpricing, price tag/ price list violation, among others.

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BSP approves relief measures to help banks' customers amid typhoons

The Bangko Sentral ng Pilipinas (BSP) is implementing six regulatory relief measures to banks affected by the last typhoon “Ondoy” to extend the same reprieve to their own customers.

In a statement, the BSP said the Monetary Board on Saturday approved a package of relief measures to “enable (banks) to similarly assist and ease the financial burdens of bank customers adversely affected by tropical storm Ondoy.”

These relief measures which were also implemented after the past typhoons “Milenyo,” “Cosme,” and “Frank” are extended to all banks.

The Monetary Board, in its meeting Friday, also suspended all penalties for reserve deficiencies due to calamity-related conditions. In the meantime penalties related to the payments due to ongoing rehabilitation programs, and allowances for probable losses from credit exposures to individuals and business units directly affected by Ondoy will be allowed to be spread out over a maximum of five years, the BSP stated. “These measures will be in effect for a defined period and covered by additional specific and other prudential conditions.”

The six regulatory relief measures are:
(1) Excluding existing loans of borrowers in affected areas from the computation of past due ratios provided these are restructured or given relief;
(2) Reducing the 5 percent general loan loss provision to 1 percent for restructured loans of borrowers in the affected areas;
(3) Suspension of penalties for delays in the submission of supervisory reports;
(4) Allowing banks to provide financial assistance to their officers and employees who were affected by the calamity including those assistance
that may not be within the scope of the existing BSP-approved Fringe Benefit Program;
(5) Granting of a 60-day grace period to settle the outstanding rediscounting obligations as of 28 September 2009 with the BSP of all rediscounting banks in the affected areas;
(6) Allowing banks to restructure with the BSP, on a case-to-case basis, the outstanding rediscounted loans of borrowers affected by the calamity.

BSP clarified that those eligible for relief measures are banks in areas declared under a state of calamity by the National Disaster Coordinating Council.

These areas have been identified as Mt. Province, Ifugao, Benguet, Pangasinan, La Union, Ilocos Sur, Isabela, Quirino, and Nueva Vizcaya. Also declared in need of emergency relief are Aurora, Nueva Ecija, Zambales, Pampanga, Bulacan, Tarlac, Bataan, Cavite, Laguna, Batangas, Rizal, Quezon, Mindoro (Occidental and Oriental) Marinduque, Catanduanes, Camarines Norte, and Camarines Sur.

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Manufacturing, employment reports pound US stocks

NEW YORK – Stocks began the fourth quarter with their worst drop in three months after reports on the job market and manufacturing reawakened investors' pessimism about the economy.

The Dow Jones industrial average tumbled 203 points Thursday, while all the major indexes fell between 2 percent and 3 percent. The slide intensified in the final minutes of the day, signaling that traders were growing nervous ahead of the government's key September jobs report due before the opening bell Friday.

Bond prices jumped as investors sought a safer place for their money.

It was the sixth drop in seven days for stocks and another reminder of how fragile the market's seven-month rally has become. The economic reports overshadowed a more upbeat assessment on housing and added urgency to questions about how strong the recovery really is.

"Fear is still very, very fresh in people's minds and the magnitude of the potential disaster that we had last September through March, I think still has investors pretty skittish," said Darell Krasnoff, managing director of Bel Air Investment Advisors in Los Angeles. "So our sense is that some bad news can shift sentiment pretty quickly."

The latest worries erupted when the Labor Department said new claims for jobless benefits rose last week to 551,000. Economists had expecting claims would be essentially unchanged at 535,000, according to a survey by Thomson Reuters.

The mood on Wall Street darkened when the Institute for Supply Management said its index of manufacturing activity in September fell rather than rose as analysts had expected.

The employment figures rattled investors already worried about the job market. Economists predict that unemployment, which stands at a 26-year high of 9.7 percent, will rise to 9.8 percent for September. Most analysts expect the rate to top 10 percent by early next year. Economists are hoping the pace of job cuts will slow, however. Employers are expected to have cut 180,000 jobs in September compared with 216,000 in August.

The monthly report carries more weight with investors because it is less volatile than the weekly readings.

Christian Bendixen, director of technical research at Bay Crest Partners LLC in New York, said recent economic numbers have reminded investors that a recovery will be a difficult process rather than an unbroken improvement.

"For the first time in a while they're coming in a little bit lower than expectations and I think that's scaring a few investors," he said.

The Dow fell 203.00, or 2.1 percent, to 9,509.28, its lowest close since Sept. 8. The drop was the biggest since July 2, when the index fell 223 points, or 2.6 percent, after the government said unemployment had risen.

The Dow shed 50 points in the final 10 minutes of trading. The late-day slide was reminiscent of the harrowing drops that buffeted the market a year ago as a freeze in the credit markets choked the economy.

Even with the drop, the Dow is still up 45.3 percent from a 12-year low of 6,547 in early March.

The broader Standard & Poor's 500 index fell 27.23, or 2.6 percent, to 1,029.85, and the Nasdaq composite index dropped 64.94, or 3.1 percent, to 2,057.48.

The Russell 2000 index of smaller companies fell 20.53, or 3.4 percent, to 583.75.

Five stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 6 billion shares compared with 6.4 billion Wednesday.

Bond prices jumped as investors sought safety, sending the yield on the 10-year Treasury note down to 3.18 percent — its lowest since May — from 3.31 percent late Wednesday.

Several economic reports this week have raised doubts about the strength of the recovery and whether the market rally should continue. Reports on consumer confidence and Midwestern manufacturing fell short of expectations.

The bad start to October came a day after stocks wrapped up a stellar third quarter. Both the Dow and the S&P 500 index gained 15 percent. It was the Dow's best quarter in nearly 11 years.

In other economic news Thursday, the Commerce Department said consumer spending surged by the largest amount in nearly eight years in August, even as personal income growth lags. However, with part of the advance in spending due to the government's Cash for Clunkers program, analysts were doubting it could be sustained.

Meanwhile, the National Association of Realtors said pending home sales in August rose 6.4 percent from July to 103.8. Economists surveyed by Thomson Reuters expected the index would rise to 98.6.

Marc Harris, co-head of global research for RBC Capital Markets in New York, said caution among many investors could prevent the market from getting overheated. He pointed to a recent RBC survey of more than 700 financial executives that found more than half expected a gradual economic recovery while far fewer called for a steep rebound. That pessimism is keeping some investors from rushing into the market.

"Not everybody has jumped into the pool yet," he said.

Harris predicts trading will be volatile as questions about the pace of the recovery dog investors.

"We've forgotten the world that we were living through not long ago," he said. "People thought we were heading to zero on the S&P. I'll take a 1,029 any day."

The dollar mostly rose against other major currencies, while gold slid.

Light, sweet crude rose 21 cents to settle at $70.82 a barrel on the New York Mercantile Exchange.

Overseas, Britain's FTSE 100 fell 1.7 percent, Germany's DAX index slid 2.1 percent, and France's CAC-40 lost 2 percent. Japan's Nikkei stock average fell 1.5 percent.

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(Update) Globe cuts voice call rates a week after storm disrupts service

Customers of Globe Telecommunications Inc. will enjoy reduced voice call rates starting Saturday, October 3, until Sunday, October 4, a week after its service was disrupted by a storm.

Voice call rates made on the company’s mobile network will be cut to three pesos a minute during the two-day period, the company said, confirming an earlier radio report.

The reduction will be implemented starting 12:01 a.m. of October 3 until 11:59 p.m. of October 4, a dzBB radio report said.

The discount covers voice calls made on its network (i.e., Globe to Globe, Globe to Touch Mobile, and Touch Mobile to Touch Mobile).

“No special dialing procedure will be required to avail of the three peso per minute rate," Globe’s corporate communications head Menchie Cruz said in a text message. “Subscribers can just dial directly when making a regular mobile voice call."

The discount was offered after thousands of residents of Metro Manila and the Calabarzon provinces temporarily lost their signals or were unable to make calls or send and/or receive text messages at the height of storm Ondoy.

Its technical teams have been working round the clock to fully restore its services, the text message added.

“As of three o’ clock of Friday afternoon, 99 percent of affected facilities are back online," Cruz’s message added. “The company expects 100 percent restoration very soon."

The weather disturbance, the 15th that hit the country this year, has affected 629,000 families, including 293 fatalities, based on the latest report from the National Disaster Coordinating Council

Globe shareholder donates P1 million to Ondoy victims

In a related development, a total of P2 million have been donated by Singapore Telecommunications Ltd. – one of Globe’s biggest shareholders – and Globe.

Each entity has donated P1 million for relief efforts to help victims of Tropical Storm Ketsana, the company said in a separate statement.

“The fund will be used to distribute 10,000 relief packs containing essential items including food and water, to families in various affected communities. This contribution will help Globe reach families in far-flung affected areas such as Marikina and Rizal areas," the company said.

Earlier, the Philippines’ second-largest mobile phone company donated P3 million to the GMA Kapuso Foundation, the affected communities of Gawad Kalinga, and the ABS-CBN Foundation’s Sagip Kapamilya.

Globe has opened its business centers in several areas in Metro Manila to facilitate the acceptance and distribution of relief goods to the typhoon victims.

Globe has also opened the relief operation to the public by partnering with the Philippine National Red Cross for the Donate-A-Load service.

Donors in the Philippines may text RED5/25/50/100/300 to 2899. Ex. Txt RED 50 to 2899. The transaction is free of charge. Globe’s GCASH is also extending its help to overseas Filipinos families and beneficiaries by offering free remittance services via its GCASH REMIT from 30 September to 5 October 2009.

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CIMB Bank Appoints New Executive Director

KUALA LUMPUR, Oct 1 - CIMB Bank on Thursday annnounced the appointment of Sulaiman Mohd Tahir as its Executive Director with immediate effect.

He is succeeds Tunku Datuk Ahmad Burhanuddin who left the bank, after 25 years, to join Khazanah Nasional Bhd.

CIMB Group Chief Executive Officer Datuk Seri Nazir Razak was quoted as saying in a statement," Sulaiman brings with him a wealth of experience from the various positions he has held in the bank.

" He has demonstrated exemplary leadership qualities by transforming our Consumer Sales and Distribution division, a key factor in our overall consumer bank turnaround".

Sulaiman will continue to helm the division and oversee the operations and sales performance of the bank's 367 branches, 22 business centres and 20 mobile sales centres.

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Pacific Mutual Declares Income Distributions For 5 Funds

KUALA LUMPUR, Oct 1 - Pacific Mutual Fund Bhd today announced income distributions totalling RM16.24 million for five of its funds for the financial year ended Sept 30, 2009.

The funds are the Pacific Premier Fund at four sen per unit, Pacific Income Fund at 3.3 sen per unit, Pacific Focus18 Fund at three sen per unit, Pacific Cash Fund at 0.38 sen per unit and Pacific Protected Islamic Cash Fund at 0.10 sen per unit.

The equity funds -- the Pacific Premier Fund and Pacific Focus18 Fund -- achieved a total return of 24.7 percent and 11.91 percent respectively for the one-year period, a decent achievement given the volatile market conditions both locally and abroad, Pacific Mutual Fund said in a statement.

Its maiden fund, the Pacific Premier, which has gone through three major economic downturns, still achieved a total return of 130.74 percent since its inception in 1995, the company said.

Pacific Mutual Fund's general manager, business development and marketing, Gary Gan, said consistent and stable performance over time made the regular income payouts possible, hence benefiting the investors.

The company currently manages 21 funds, totalling RM1.83 billion as at end of September.

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Wind Energy Is Being Explored As Energy Option

LUMUT, Oct 1 -- The Ministry of Energy, Green Technology and Water is exploring the potential of using wind as a source of renewable energy in Malaysia.

Its minister, Datuk Peter Chin, said the Ministry of Science, Technolgy and Innovation was undertaking tests in several parts of Malaysia to access its viability.

In terms of nuclear energy option in Malaysia, Chin said wind energy has the potential to be developed as a source of electricity in 15 to 20 years.

" We will visit Korea to obtain first hand information on nuclear electricity power generation development there," he said during a visit to IMPSA (Malaysia) Sdn Bhd manufacturing facilities in Lumut, Perak.

On electricity tariffs, Chin said there would be another round of review in December and it would not necessarily mean an increase in tariffs.

In the previous tariff revision in June, the government decided not to increase electricity tariffs in view of the country's economic situation.

On the Bakun hydroelectric dam, Chin said the government was committed to ensuring the successful roll-out of the project expected to be fully commissioned by 2012.

Chin disclosed that IMPSA, one of the largest manufacturerers of hydropower plant components in Malaysia, was fabricating equipment for the Bakun dam project at its factory in Lumut.

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Kerala Ready For Massive Rally To Oppose Asean-India FTA

NEW DELHI, Oct 1 -- The Communist Party of India-Marxist (CPM) in Kerala is marshalling about 300,000 of its cadres to form a 500-kilometre human chain tomorrow to protest the recently concluded Asean-India Free Trade Agreement (FTA), claiming it will destroy farmers' livelihoods.

The CPM leaders in the southern state have been raking up the issue since India and the 10-member Southeast Asian nations signed the trade pact last August, after negotiating for almost six years.

Party cadres, including fishermen, farmers, coconut planters and rubber tappers, are planning to form the human chain from Thiruvananthapuram, Kerala's capital, to Kasargode district, protesting along the national highway at about 4pm Friday.

"We are apprehensive about the agreement with Asean. This agreement is not going to protect Kerala farmers. Majority of our farmers survive on small scale farming and they can't compete when the markets open up," Kerala's Agriculture Minister Mullakkara Ratnakaran told Bernama in a telephone interview Thursday.

"The trading practices would not be beneficial to our small farmers and it will only make their life tough," he said.

Thousands of farmers in Kerala rely on cash crops such as cashewnuts, rubber, pepper and cardamoms, and local leaders fear that the opening of the market would allow cheaper farm produces from neighbouring countries, which could eventually harm domestic industries.

The CPM, which has a powerful base in Kerala, is strongly opposing the trade agreement signed by the United Progressive Alliance (UPA) party, led by Prime Minister Manmohan Singh.

On its part, the UPA government had mounted a newspaper advertisement campaign to explain to local residents that the trade pact would not harm their livelihoods and not to listen to CPM's false propaganda.

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Crystal Producer Upbeat About Malaysian Market

KUALA LUMPUR, Oct 1 -- Austria based-Swarovski is upbeat of Malaysia market's potential for loose cut crystal components as demand among business partners and the general public remains intact despite the recession.

Swarovski comprises two major businesses, one producing and selling loose crystal components and the other creating design driven finished products.

" Besides, with the rising Malaysian population that loves glam and sparkles, we are confident of the market share here," said Country Manager for South East Asia, Crystal Components Business, Anna Hoetzeneder in an interview with Bernama here Thursday.

She said the Malaysian market had the biggest potential and was the strongest market among the South East Asia region for its product brand, the Crystallized-Swarovski Elements.

The crystals provide a palette of inspiration for designers in the world of fashion, jewellery, accessories and interior designs.

" The purchasing power for luxury products among Malaysians is increasing. Demand is increasing from our local and international partners in Malaysia, particulary from top designers that carry our Swarovski elements in their own products," she added.

The product brand is used, among others, by luxury footwear designers Lewre Premiere and Jimmy Chia Luxury, fashion designers Melinda Looi and Eric Choong and electronic company Sony Malaysia.

Anna added that Swarovski was expecting more partners to emerge from among the textile and accessories industry in Malaysia.

She said the business potential for the product brand is growing as the brand is making waves in the region.

" We see positive developments despite the challenging times faced and in the last three years customers from various segments are inspired to use the components.

" South East Asia is an emerging market for Swarovski. With growth and demand both recording double digit growth per annum over the last three years, it certainly opens more business angles for Swarovski," Anna added.

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Airlines' Losses Get Worse In Q2, Says IATA

KUALA LUMPUR, Oct 1 - Losses for the airlines industry as a whole got worse in the second quarter, with 68 major airlines reporting net losses of US$2.3 billion following US$4 billion in the first quarter, the International Air Transport Association (IATA) said.

" The European Union and Asian airlines had the worst first half, accounting for around US$5 billion of industry losses; US losses were moderated by much larger capacity cuts," it said in its Airline Financial Monitor release for August-September.

IATA, however, said airlines stocks got a boost in September due to favourable interest from investors as signs emerged of an upturn in this highly cyclical sector.

It has resulted in airlines raising a further US$3 billion debt and US$500 million equity to cash cushion.

" So far this year US$18 billion cash has been raised from capital markets, a sign of caution not optimism," it said.

The third quarter results are expected to be released this month.

-- BERNAMA

IATA said the improvement in both passenger numbers and freight volumes from the first quarter lows accelerated in the first two months of the third quarter, with seasonally adjusted levels for passenger kilometres flown up three per cent on the second quarter and freight volumes up six per cent.

" This upturn has been driven by the recent rise in the economic growth following massive government and central bank stimulus packages," it said.

IATA said forecasters are getting more positive on the fourth quarter but it is still not clear whether economic recovery would continue to strengthen or fizzle out in 2010.

On capacity, it said in the next few months year-on-year numbers would turn positive just because of the comparison with cuts last year.

" If announced winter cuts go through, growth should be limited, but there are upside risks due to low utilisation," it said.

Airlines may not have been able to quickly resize except in the US domestic markets, but having kept capacity flat so far this year, the improvement in passenger demand has fed straight though to improved load factors, it added.

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YouTube stars as U.S. video viewers soar

Industry tracker comScore on Monday reported that U.S. online video viewing hit a record high in August with YouTube luring a commanding share of the audience.

An unprecedented 161 million people in the United States tuned into online videos during the month, with the total number of Internet videos watched topping 25 billion for the first time ever, according to comScore.

Google websites served up more than 10 billion of the online videos viewed by U.S. Internet users in August, with YouTube accounting for 99 percent of that count, comScore reported.

Google attracted 121.4 million viewers, each watching an average of 82 videos.

Websites operated by Google rival Microsoft placed a distant second with 547 million videos played by nearly 55 million U.S. Internet users in August, according to the tracking firm.

Approximately 539 million videos were viewed online at Viacom Digital and another 488 million videos were delivered by Hulu, comScore reported.

Nearly 82 percent of all U.S. Internet users watched videos online in August, with an average viewing time amounting to 9.7 hours, according to comScore. The duration of a typical video was slightly less than four minutes.

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