Citi gets Mideast cash infusion
The state-owned Abu Dhabi Investment Authority is injecting $7.5 billion into Citigroup, helping the largest U.S. bank shore up its capital levels after record mortgage-related losses. (The Wall Street Journal) The cash infusion will give Abu Dhabi up to 4.9 percent of Citigroup, making it the bank’s largest shareholder, overtaking Saudi Prince Alwaleed bin Talal. The news boosted Citi shares early today. “Citi is big, it’s widely followed, and when people see confidence in it, it should mean something,” said analyst Bo Brownstein at Cambiar Investors. (Reuters) Yesterday, Dubai’s International Capital equity fund bought a “substantial stake” in Sony. (Bloomberg)
The Google backup plan
Google is preparing a service that will essentially let people back up their entire hard drive on Google servers, and access the drive from any Internet-connected computer, The Wall Street Journal reported. Some of the storage is expected to be free, with additional space available for a fee. (Reuters) The service could roll out in a few months. Similar virtual-storage services have either not caught on or are niche business products. But Google’s offering, if it boosted Web-based computing, could have the biggest impact on Microsoft. Microsoft, which is testing its own service, says that privacy concerns will keep users from storing files online. (The Wall Street Journal)
Markets brighten after ‘correction’
Banking gains helped pare early losses in European and Asian markets, as the cash infusion at Citigroup and a stable earnings outlook from Britain’s Barclays eased credit concerns. (MarketWatch) U.S. markets were also buoyed by the Citigroup news. “Following all the bad news we’ve had from banks and the likes of Citigroup, the fact that Abu Dhabi sees value in a stake will help ease the nervousness,” said Francisco Salvador at Venture Finanzas in Madrid. (Bloomberg) Yesterday’s steep declines, with major U.S. indexes down 10 percent from their 52-week highs, marks the first market “correction” since 2003. (Reuters)
India’s Tata takes the lead
India’s Tata Motors has emerged as the surprise frontrunner in the auction for Ford’ Jaguar and Land Rover brands. Tata is best known for making the world’s cheapest car, a $2,500 four-seater set to hit Indian markets in January. But its bid for the British luxury brands is reportedly up to $1 billion above the competition—Indian tractor maker Mahindra & Mahindra and U.S. private equity firm One Equity Partners. The race is far from over, but Tata has advantages beyond its cash stockpile. “It’s the only car company bidding, and Jaguar and Land Rover are too small to survive on their own,” says University of Cardiff economist Garel Rhys. (