A round-up of today's other business news in brief
Germans reviewed Depfa unit
A Bundesbank review of Hypo Real Estate Holding's Irish Depfa unit listed "everything we viewed critically" three months before the property lender's near collapse, a Bundesbank official was quoted as telling German lawmakers.
Rainer Englisch, a Bundesbank auditor, was responding to a parliamentary probe in Berlin yesterday that questioned the German central bank’s oversight and asked whether the Bundesbank could have prevented Hypo Real’s problems and its need for a government bailout, the parliamentary press service said in a faxed statement.
The Bundesbank “intensively reviewed” Dublin-based Depfa Bank, and “I don’t know what we could have done differently” Mr Englisch was cited as saying. A June report to Germany’s BaFin bank regulator said everything was viewed critically.
Munich-based Hypo Real Estate almost collapsed in September after Depfa failed to secure short-term funding amid the credit crunch. Hypo has received a total of €102 billion in debt guarantees and credit lines.
Mr Englisch’s comments came as the panel, set up at the request of opposition parties, heard the first witness testimony. Its mandate includes examining whether Chancellor Angela Merkel’s government could have done more to prevent the bailout. Ms Merkel’s government is aiming to take control of Hypo Real Estate through the Soffin bank-rescue fund. Soffin said last week it raised its stake in Hypo to 47.3 per cent, paving the way to squeeze out minority shareholders including US investor J. Christopher Flowers. – (Bloomberg)
Wal-Mart profits meet expectations
Wal-Mart Stores reported a flat quarterly profit that met Wall Street expectations yesterday as the stronger US dollar offset increased sales from shoppers seeking deals in its stores amid a global economic slowdown.
For the current quarter, the world’s biggest retailer forecast results roughly in line with analysts’ expectations as it faces tough comparisons with a year ago when it got a boost from customers spending tax rebate cash in its stores. – (Reuters)
Opec resolve on oil cuts ‘weakening’
The Opec oil cartel’s resolve to cut production to boost prices is fraying, says the International Energy Agency, the developed countries’ watchdog.
The cartel, which produces more than a third of the world’s oil, last month raised its output by 270,000 barrels a day, ending a seven-month run of ever steeper cutbacks, the IEA said. The move is important because the rise in production together with weak global oil demand could increase inventories and depress prices.
The IEA yesterday revised downward its demand outlook for 2009. This year demand would contract by 2.56 million barrels a day, the sharpest annual fall since 1981. That is a drop of 160,000 barrels a day on the figure the IEA had expected in the report it published last month.
Analysts say the cartel’s resolve may be fraying in part because of its success in boosting oil prices back to about $60 a barrel yesterday, up from the $32-low they hit in February. As prices rose, so did the temptation to cheat, the analysts said. – (Copyright The Financial Times Limited 2009)
Chrysler to eliminate 789 showrooms
Chrysler notified all US dealers yesterday about plans to eliminate 25 per cent of its retail showrooms and is seeking permission from a US bankruptcy court to terminate franchise agreements.
The automaker sought approval in a bankruptcy court filing to terminate franchise agreements with 789 of 3,181 dealerships as of June 9th.
Chrysler said 5O per cent of its US dealers account for 90 per cent of overall sales, according to court documents. The US automaker said it would not repurchase any new vehicles, tools or parts inventory from terminated dealers but will assist in finding buyers for stock. – (Reuters)
