business headlines
Stocks in Asia slide
Markets in Asia resumed their declines on Monday, even after Friday's 6.3 per cent rise in the Standard & Poor's 500 Index on Wall Street, with financial stocks particularly hard-hit as investors worried about earnings in the region. In Australia Suncorp-Metway, the country's third-largest insurer, fell three per cent after increasing its bad loan estimates, while Standard Chartered dropped 6.4 per cent in Hong Kong after it announced a rights issue. The MSCI Asia Pacific excluding Japan Index – Tokyo was closed for a holiday – fell 0.6 per cent, while in London the FTSE 100 opened nearly two per cent higher.
After the credit crunch, what next for the world? 
Citigroup gets government aid
Citigroup is to have $306bn of "troubled" mortgages and other assets guaranteed by the US government, and will receive a $20bn injection of funds, reported Bloomberg.com. Yesterday's decision by the US Treasury is designed to placate investors concerned about the lender's future, after its shares fell 60 per cent last week. The bank, which has $2 trillion of assets, will receive another $20bn of government cash, to add to the $25bn it got last month under the TARP programme and will assign $27bn of preferred shares to the government in return.
America braced for the next mortgage crisis
Chancellor to cut VAT, raise taxes
Alistair Darling is preparing a stimulus package including a temporary VAT cut from 17.5 per cent to 15 per cent, and will raise the top rate of tax to 45 per cent to pay for it, reported the Financial Times. He is set to announce the new rate at around the £150,000 level, to fund the £12.5bn VAT cut, designed to help the UK "shop its way out of recession". The new tax would be introduced after the next election and would aim to raise several billion pounds a year, marking a change of direction for new Labour's treatment of the wealthy.
The Mole: Brown prepares to tear up Blair's promise on tax
Corporate exodus to be halted
The chancellor's pre-Budget report is also expected to contain details of a plan to halt the exodus overseas by UK companies, with the announcement of tax exemptions on foreign dividends, reported the Daily Telegraph. He is expected to reverse an earlier decision to tax dividends paid to UK companies by foreign subsidiaries, after companies like Shire and WPP said they were planning to move offshore as a result. The U-turn could be worth over £300m to British industry and is likely to receive a welcome from the business world.
New Labour is in thrall to the super rich
DSG to announce half-year loss
DSG International, owner of Currys and PC World, is set to announce its first six-monthly loss for two decades this week, reported the Times. The "slump" in sales of big-ticket items at the chain is the latest indication of how the high street has been "hit hard" by the decline in the economy. To make matters worse, America's biggest electricals retailer, Best Buy, is about to increase competition when it enters the UK market. DSG is expected to report a loss of between £25m and £35m this Thursday.
Bank of Ireland gets bail-out
The Irish government has agreed a 3bn euro bail-out for the Bank of Ireland, which will also include private equity involvement, reported the Times. In a deal marking the “first state aid” for the Irish banking industry a number of private-equity groups will propose different deals to BoI, under which they will be “locked in” for a set period so that they don’t sell out quickly for short-term gains. Investors already linked with the plan include Texas Pacific Group and JC Flowers, however analysts say shareholders could be getting a raw deal.
...in brief..................
Standard Chartered issues shares and Barclays to face the music
Standard Chartered, the third-biggest bank in the UK, plans a £1.8bn rights issue to "bolster" its financial position as the global situation worsens, said Bloomberg.com. The bank is to offer 30 new shares for every 91 already held at 390p, a 48.7 per cent discount to the Friday’s close…………
Jaguar has "strongly backed" attempts by the UK auto industry to gain government support for the sector, said the Financial Times. Jaguar Land Rover, owned by India's Tata Motors, said it agreed with state intervention amid reports that it is seeking £1bn in government aid…………
Restructuring specialists are "circling" Ineos Group, the UK's largest private company said the Independent. As the chemicals-maker struggles to finance its £6.1bn of debt, chairman Jim Ratcliffe has called in PricewaterhouseCoopers to come up with a restructuring plan…………
Struggling retailer Woolworths has "just days" to complete a deal to sell its retail chain to restructuring specialist Hilco, or it will have to declare itself bankrupt, said the Daily Telegraph. Sources close to the company have said that slow sales cannot fund the group’s £385 of debt…………
Global house prices fell for the first time on record during the last quarter, “underlining” the extent of the housing crash, said the Guardian. The UK was among the worst performers, with a fall of 4.6 per cent, along with Latvia’s 6.2 percent and Canada’s 4.9 per cent…………
The Barclays board is to face "tough talk" at its shareholder meeting today, as investors vote on its "controversial" capital-raising plans, said the Times. Investos are expected to be critical of chief executive John Varley and chairman Marcus Agius, who have agreed a deal with Middle-Eastern investors…………
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