US Offers $6 Billion to Support Auto Lender GMAC

The Bush administration on Monday expanded its bailout of the U.S. auto industry, saying it was buying $5 billion in equity in auto and mortgage finance company GMAC and increasing a loan to General Motors by $1 billion.
CNBC.com
The action was the latest in a lengthy series of emergency government moves aimed at easing the worst credit crisis since the 1930s and limiting the severity of a year-long recession.
The Treasury Department said it would buy $5 billion in senior preferred equity with an 8 percent dividend from GMAC as part of an effort to ensure the solvency of a company considered crucial to GM's survival.
It also said it would lend up to $1 billion to fund GM's purchase of equity in support of GMAC's reorganization as a bank holding company. That loan would come on top of assistance extended to the No. 1 U.S. automaker earlier this month. Sales Decline
The government agreed on Dec. 19 to rescue GM and Chrysler LLC with up to $17.4 billion in loans to stave off a collapse that would have cost hundreds of thousands of jobs and dealt a severe blow to an economy already in recession. Of that amount, $13.4 billion was earmarked for GM.
President George W. Bush said at the time that it would be irresponsible to let the automakers die. The White House moved on its own after Republicans in the Democratic-controlled Congress blocked a deal to provide emergency funds.
U.S. auto sales have plunged to 25-year lows in recent months and are not expected to recover substantially until after 2009 under the most optimistic of outlooks. The recent steep drop in sales, which automakers and analysts have linked to the credit crisis that took hold in September, has pushed both GM and its smaller rival Chrysler to the brink of collapse.
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The Treasury said it was dipping into a $700 billion financial bailout fund approved by Congress in early October to buy the equity in GMAC and extend the loan to GM.
GMAC won Federal Reserve approval to become a bank holding company last week, a move intended to give it freer access to emergency government funds and help it avoid bankruptcy. GMAC has had to raise additional capital to achieve bank holding company status.
The company, co-owned by GM
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and private equity firm Cerberus, has lost $7.9 billion over the last five quarters as the credit crunch raised its borrowing costs sharply and the value of many of its assets plunged. Dividend Restrictions
GMAC agreed to restrictions on dividend payments and executive pay as part of the equity injection. The bonus pool available to the top 25 executives was cut by 40 percent from 2007 levels, a Treasury official told reporters on a conference call.
GMAC said in a statement that GM and a Cerberus management affiliate have agreed to buy $1.25 billion in new GMAC shares. Previously announced separate exchange and cash tender offers have been satisfied, it said.
Representatives of GM and Cerberus could not be reached for comment.

Indian economy remains 2nd fastest growing in the world

The Indian economy continues to remain the second-fastest growing economy in the world.

``India`s economic fundamentals are quite robust and its economy remains the second-fastest growing one in the world``, said Suresh Tendulkar, chairman, prime minister`s economic advisory council`s (PMEAC).

India is not experiencing a recession as other advanced economies and its economy would not be affected to the same extent as some other emerging Asian economies, he said.

On micro, small and medium enterprises (MSMEs), Tendulkar said that the present economic slowdown would test the strength of the sector.

``Rising interest rates in the recent past has further accentuated the credit crunch for MSME entrepreneurs`` he added.

According to him, the financial meltdown in advanced economies has been very serious.

He described the foreign exchange reserve position in the country as `comfortable` despite foreign institutional investors (FII) outflows triggering some depletion.

The current account deficit would be well within limits, but it might be wider than in the earlier years, he said.

Thanks to http://www.myiris.com

Markets may remain volatile on F and O expiry

Alex Mathew, head - research centre, Geojit Financial Services, commenting on the market performance said, ``The markets opened weak on the back of weak cues from the global arena and traded weak all through the day amid volatility and closed for the day in red. The markets made many intraday recovery on the back of news that the Central Bank may reduce the interest rate further but could not sustain at higher levels. The US index futures were trading lower lending literally no support to the market. In the afternoon the markets slipped further to close near to the days low. The rollover figures were not so encouraging and it was around 48% showing less interest shown by the investors to rollover their positions to next month.``

He said, ``The major sectorial losers of the day on BSE were Consumer Durable down 5.81%, Realty down 4.84%, Bankex down 3.76%, Capital Goods down 3.61% and Metal down 3.07% leaving no one on the gainers side. The gainers on Nifty were RCOM, Ambuja Cement, HeroHonda, ONGC and BPCL while the losers of the day were Satyam, Unitech, Tata Motors, HCLTech, Sterlite, SAIL and GAIL.``

``Outlook for the market remains volatile as tomorrow is the December F&O contract expiry with Nifty having support at 2,950 and 2,900 while the resistance at 3,036 and 3075``, he added.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

Thanks to http://www.myiris.com/newsCentre/storyShownew_opt.php?fileR=20081223173834043&dir=2008/12/23

Infotech Enterprises allots equity shares

The committee of Infotech Enterprises has allotted 27,24,000 equity shares of Rs 5 each at a premium of Rs 355 per share toGA Global Investments, upon exercise of the option to convert 27,24,000 compulsorily convertible preference shares into a equal number of equity shares.

The company made this announcement after nthe tradig hours on 09 December 2008.

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Thanks to http://www.sharekhan.com

Indian Stock Market Commentary

Topic :- Opening Note

Weekly newsletter updated.For today market to remain volatile.Higher levels should be used as an opportunity to exit. For today Nifty spot above if manages to
trade and sustain above 2740 then market can see some recovery in initial trade. Nifty spot below 2700 can see some profit booking in initial trade.
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Topic :- Time:10.10 A.M

Nifty support is at 2815 (spot) level.If Nifty breaks this level and does not above these levels then we can see some profit booking in the market which can take Nifty to 2790-2760 levels. If Nifty Sustain above 2815 level then we can see some recovery in the market till 2830-2850-2870 levels soon.

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Topic :- Time:11.12 A.M

Nifty spot below 2788 can see some more profit booking.Recovery expected only above 2800 level.
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Topic :- Time:11.55 A.M

Market to remain volatile. For now Nifty spot below 2790 can see some more profit booking and Nifty spot above 2805 can see some recovery.Dont expect any major movement in the market right now.

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Topic :- Time:-12:55 Pm

Update:

Tomorrow the capital market will be Remain closed for trading on Tuesday 09th December, 2008 on Account of BAKRI-ID.

www.ShareTipsInfo.com
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Topic :- Time:1.10 P.M

Nifty spot above 2822 can see some more recovery.Nifty spot below 2810 can see some profit booking.One should wait and watch until market take clear direction.

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Read more.................http://www.sharetipsinfo.com

Asian stock settles positive

Asian stocks climbed for the third day, as investors predicted stimulus packages from the governments will drive growth of the global economy and earnings.

Japanese benchmark index Nikkei gained 66.82 points, or 66.82%, to end at 8,395.87. Hong Kong`s Hang Seng index declined 291.65 points, or 291.65%, to settle at 14,753.22. China`s Shanghai Composite slipped 53.03 points, or 53.03%, to close at 2,037.74.

Taiwan`s Taiex index advanced 54.33 points, or 54.33%, to settle at 4,472.66. South Korea`s Kospi index climbed 0.79 points, or 0.79%, to end at 1,105.84. Singapore`s Straits Times increased 95.41 points, or 95.41%, to close at 1,754.58.

Thanks to http://www.myiris.com