Moody's warns U.S. not to back off automatic deficit cuts

The credit rating agency said in the statement it will not immediately lower the nation's rating on long-term debt after a special congressional panel failed this week to reach agreement on alternative cuts to the deficit.

The impasse triggered the automatic cuts, which are scheduled to begin in 2013. Moody's said any effort to reduce those cuts could force the agency to downgrade its rating. Some Republicans are vowing to block the cuts slated to occur in defense programs, which amount to about half of the total.

The agency said it had decided to take no action based on the failure of a special congressional panel to come up with a plan because the automatic cuts will result in the same level of deficit reduction.

Moody's did not say when it would conduct its next review of the U.S. credit rating. Fitch, another rating agency, also has a triple-A rating on U.S. debt but said in August that a failure of the congressional panel to produce a plan could lead to a reassessment of that rating.

On Monday, after the announcement of the 12-member congressional panel's impasse, Standard & Poor's said it would not downgrade the U.S. credit rating. Like Moody's, it warned that its present rating was based on the expectation that the automatic cuts will not be reduced.

Exchange Board Of India

                                       

The Cabinet is also likely to take up the new Companies Bill after differences over market regulator Securities and Exchange Board of India’s jurisdictions in case of regulatory overlaps have been ironed out between the Finance and Corporate Affairs Ministries

At present, India allows 100 per cent FDI in cash-and-carry wholesale trade that is business-to-business. It permits 51 per cent in single-brand retail such as Louis Vuitton, Jimmy Choo or Fendi. However, FDI is not allowed in multibrand retailing like Walmart, Carrefour and Tesco. The Cabinet will tomorrow be taking for approval both the proposals of increasing the FDI limit in single-brand retail and permitting 51 per cent in multi-brand retail together, a senior official from the Ministry of Commerce and Industry told Business Standard.

Last week, the Department of Industrial Policy and Promotion (DIPP) had sent the final note to the Cabinet, suggesting both the measures after thorough inter-ministerial consultations.

IPIC Pays $3.75 Billion in Loans Before Due Date at Abu Dhabi

International Petroleum Investment Co. said it repaid $3.75 billion in borrowings before their 2013 maturities as the Abu Dhabi government-owned investor uses proceeds from a bond sale this year to retire short-term debt.
IPIC, as the company with an indirect holding in carmaker Daimler AG is known, paid on Nov. 21 two separate loan facilities taken out in 2010, according to a statement e-mailed today. The company last month sold three debt tranches for $3.75 billion with maturities of as long as 30 years.
“ IPIC is prudently managing its liabilities,” Managing Director Khadem Al-Qubaisi said in the statement. The company will continue its debt management policy through a “recycling of capital and its subsequent maturity extension,” he said.
Middle Eastern oil producers fund investment companies like IPIC to help diversify their revenue beyond income from oil sales. IPIC owns Spanish refiner Compania Espanola de Petroleos, is the second-largest holder behind the Austria government in oil and gas producer OMV AG and owns stakes in petrochemical producers. Its unit Aabar Investments PJSC holds stakes in non- oil related companies like Daimler.

Gold steady below $1,720

Gold prices held steady below $1,720 on Wednesday, as rekindled worries about Greece's debt crisis.

FUNDAMENTALS

• Spot gold edged down 0.1 percent to $1,716.79 an ounce by 0020 GMT.
• U.S. gold gained 0.4 percent to $1,718.90.
• Markets falldown on Tuesday. The Greece's Prime Minister George Papandreou shocked the world by announcing plans to hold a bailout plan throwing hopes on solving Greece's debt crisis into trouble.
• French President Nicolas Sarkozy and German Chancellor Angela Merkel will hold an emergency meeting with Greece on Wednesday to push for a quick implementation of Athens' bailout deal, the "only solution" to its debt crisis, Sarkozy said on Tuesday.
• A news conference by the U.S. Federal Reserve chief Ben Bernanke later in the day after a two-day policy meeting. The Fed looks set to take a breather from economic stimulus measures on Wednesday, even if financial market unstable heightens the chances of action later.
• Manufacturing surveys on Tuesday from North America to debt-crisis-hit Europe to Asia painted a portrait of softening global demand, but analysts do not see a world recession in the cards.
• MF Global -Holding Ltd failed to keep customer accounts, said a top U.S. exchange regulator, shock for commodity markets to run the brokerage's bankruptcy.