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Tue, Apr 21, 2009 - Page 10 News List

World Business Quick Take

AGENCIES

■FINANCE

Banks acting ‘too slowly’

Governments the world over are acting too slowly when it comes to cleaning up their banks’ balance sheets, IMF chief Dominique Strauss-Kahn was quoted as saying on Sunday. “In Germany, other European countries or in the US, everywhere, we are being too slow to deal with this topic,” Strauss-Kahn said in an interview with business daily Handelsblatt’s edition yesterday. It was more important to find a way of helping banks rid themselves of their toxic assets, he said, than pumping money into the economy through economic stimulus packages. German Chancellor Angela Merkel was to hold a crunch meeting today to thrash out a plan to remove toxic assets from banks — an issue that has become a political hot potato in Europe’s largest economy with an election looming. Strauss-Kahn said he saw no pick-up in the global economy until the second half of next year and played down the risk of inflation in the wake of massive stimulus packages being implemented by almost all major economies.

■ENERGY

Oil futures prices slide

Oil prices fell in Asian trade yesterday because of sluggish energy demand in the recession-hit US, analysts said. New York’s main futures contract, light sweet crude for next month delivery, fell US$0.87 to US$49.46 a barrel. Brent North Sea crude for June delivery tumbled US$0.78 cents to US$52.57. Traders said the market was taking notice of a large build-up in US energy stockpiles, which suggests demand remains weak in the world’s biggest economy. Yesterday’s fall in prices was “probably a delayed reaction to the inventory data that came out last week, which was really, really bearish,” said Tony Nunan, a risk management manager at Mitsubishi Corp in Tokyo. The US Department of Energy said last Wednesday that crude stocks surged 5.6 million barrels in the week ending April 10 to reach 366.7 million barrels — the highest level since September 1990. “Fundamentally we have a demand problem in the world, including the US,” said BMO Capital Markets analyst Bart Melek.

■BEVERAGES

PepsiCo to buy bottlers

PepsiCo Inc will acquire two of its largest anchor bottlers, The Pepsi Bottling Group at a value of US$29.50 per share and PepsiAmericas for US$23.27 per share. The deal is valued at about US$6 billion. Meanwhile, the beverage company said its first-quarter earnings per share rose to US$0.72 from US$0.70 a year earlier and reaffirmed its guidance for the current year in a PR Newswire release.

■BANKING

UBS AG sells business

Troubled banking giant UBS AG sold its Brazilian business yesterday for about US$2.5 billion to BTG Investments in an effort to reduce risk and streamline its operations. Switzerland’s largest bank, which is cutting thousands of jobs as a result of billions in losses over the past two years through bad investments, said the transaction would result in a “small loss” when quarterly results are published next month. The sale of UBS Pactual is still subject to regulatory approval and will combine cash and the assumption of debt, the bank said. It is expected to be completed in the middle of the year. “The sale of the Brazilian business is consistent with UBS’s policy to continue to reduce its risk profile, strengthen its balance sheet and sharpen its business focus,” UBS said. “UBS expects no disruption to its other businesses as a result of the transaction.”

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