U.S. Offers to Help India Investigate Mumbai Terrorist Attacks

By Bibhudatta Pradhan

Nov. 29 (Bloomberg) -- The U.S. offered to assist Indian authorities in the investigation of the terrorist attacks in Mumbai that killed almost 200 people, including six U.S. citizens.

“President Bush has directed us to offer cooperation to Indian authorities,” David C. Mulford, U.S. ambassador to India told reporters in New Delhi today.

To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net.



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European Stocks Post Biggest Weekly Gain Since 1987; BHP Soars

By Sarah Jones

Nov. 29 (Bloomberg) -- European stocks had their best week since January 1987, led by commodity producers and financial companies, as investors speculated efforts by governments worldwide will help shore up the economy and stabilize markets.

BHP Billiton Ltd. climbed by almost half in value after the world’s largest mining company withdrew its $66 billion hostile takeover for Rio Tinto Group on Nov. 25. Royal Dutch Shell Plc and Total SA rallied more than 10 percent as crude oil posted its first weekly advance in a month. Allianz AV and Deutsche Bank AG surged more than 30 percent, leading gains among banks and insurers.

The Dow Jones Stoxx 600 Index rallied 13 percent, the steepest weekly advance since January 1987, paring the benchmark’s drop this month to 7.1 percent. Stocks worldwide rose after China cut interest rates, the U.S. government guaranteed $306 billion of troubled Citigroup Inc. assets, and Democratic lawmakers pledged a stimulus package for the world’s largest economy.

“What we are getting is a huge collective response from policy makers,” said Mike Lenhoff, who helps oversee about $36.4 billion as chief strategist at Brewin Dolphin Securities Ltd. in London. “This has got to provide some degree of confidence.”

National benchmark indexes rose in all 18 western European markets. Germany’s DAX Index, France’s CAC 40 and the U.K.’s FTSE 100 all rallied 13 percent.

Monthly Drop

Even so, the Stoxx 600 is still down 7.1 percent in November as concern deepened that a worsening economy is stifling profits. Analysts have slashed earnings estimates this year as the credit turmoil spread. Profit for companies in the Stoxx 600 will slide 12 percent on average in 2008, compared with 11 percent growth forecast at the start of the year, according to data compiled by Bloomberg.

BHP shares soared 49 percent after the company abandoned its yearlong pursuit of Rio Tinto, blaming the rout in commodity prices and the credit-market squeeze for derailing the offer. Rio Tinto dropped 23 percent.

Shell led energy companies higher as crude oil advanced 3.1 percent to $51.46 a barrel, climbing for the first week in four.

Europe’s largest oil company jumped 19 percent, while Total, the region’s third-largest, gained 12 percent.

Allianz, Europe’s largest insurer and owner of Dresdner Bank, climbed 40 percent. Commerzbank AG, Germany’s second- biggest lender, said it will accelerate its takeover of Dresdner by as much as a year in a revised deal valued at 5.1 billion euros ($6.6 billion).

Deutsche Bank

Deutsche Bank rallied 49 percent, while Commerzbank increased 33 percent.

Irish Life & Permanent Plc, the country’s largest mortgage lender, soared 53 percent in Dublin trading after the Irish Association of Investment Managers, whose 12 members manage about 260 billion euros, proposed jointly investing with the government in the nation’s biggest banks.

Bank of Ireland Plc, the country’s biggest bank by assets, increased 15 percent, while Allied Irish Banks Plc rose 26 percent.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

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Sarkozy Denies EU Is Planning to Block French Bank Rescue Plan

By Sandrine Rastello and Ladka Bauerova

Nov. 29 (Bloomberg) -- French President Nicolas Sarkozy denied that the European Commission plans to block France’s 10.5 billion-euro ($13 billion) bank rescue plan, saying the two sides are still in negotiations.

The EU is “absolutely not” blocking France’s effort to inject funds into its six main banks, Sarkozy told reporters during a visit to Doha, Qatar today. “I don’t think there is such a will from any commissioner,” he said.

The president was responding to a Financial Times report, published yesterday, which said the Brussels-based European Commission would veto France’s rescue plan unless the banks reduced lending. The French government is pushing the banks to boost loans by 3 to 4 percent in exchange for the aid.

“The world has changed,” Sarkozy said. “We must move fast” to bolster the economy, he added.

A spokesman for the European Commission said the two sides are in close contact and are seeking to reach an agreement as soon as possible.

French government officials are scheduled to meet the European Commission on Dec. 4. The two sides are “in constant contact” and will continue to fine-tune the proposal until the last moment, French Finance Ministry spokesman Bruno Silvestre said today when reached by telephone.

To contact the reporter on this story: Ladka Bauerova in Paris at lbauerova@bloomberg.net. Sandrine Rastello in Qatar at srastello@bloomberg.net.

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London Luxury-Home Values Slide for Eighth Month in November

By Simon Packard

Nov. 29 (Bloomberg) -- Luxury-home values in central London, the world’s most expensive location for prime real estate after Monaco, fell for an eighth month in November as fewer sellers held out over prices.

The estimated average value of a house or apartment in the city’s nine most expensive neighborhoods fell 3.6 percent from October, according to an index compiled by Knight Frank LLP. It was the second-largest drop since the index started in 1976. Property values declined 14 percent from a year earlier, the broker said today. The index covers homes mostly valued at more than 1 million pounds ($1.54 million).

“The last few months have seen vendors gradually accepting that prices need to be cut if a sale is to be achieved,” said Liam Bailey, Knight Frank’s head of residential research. “Further price falls are to come.”

Prime central London real estate has taken longer to register declines seen elsewhere in London because of a standoff between sellers and buyers over price. That ended in September, when the bankruptcy of Lehman Brothers Holdings Inc. caused demand to collapse from those employed in financial services, traditionally the mainstay of demand for expensive homes.

The worst banking crisis since World War I has translated into job cuts and reduced bonuses. October’s 3.9 percent monthly decline in the index set a record.

Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG and the failed investment bank Lehman Brothers are among the companies shedding staff. Job vacancies in London financial services fell 48 percent in October from a year earlier, recruitment firm Morgan McKinley said earlier this month.

Million-Pound Homes

As many as 62,000 finance-related jobs may be lost in London by the end of next year, according to the Centre for Economics & Business Research.

Least affected by the slide in values are properties worth more than 5 million pounds, which dropped 1.9 percent in value from October, Knight Frank said. Their depreciation, coupled with the British pound’s 23 percent slide against the dollar this year, may attract wealthy overseas buyers.

“Many prime properties are unique and only occasionally come up for sale,” Bailey said. For a buyer with dollars, a 15 percent property valuation drop equates to a 35 percent slide when exchange rates are taken into consideration, he said.

London and southeastern England accounted for more than three quarters of sales of million-pound homes last year, according to an index compiled from government data by HBOS Plc. Million-pound homes represented 0.6 percent of the 1.38 million U.K. property transactions last year.

Knight Frank compiles its monthly index from appraised values of properties in the Mayfair, St John’s Wood, Regent’s Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and the South Bank neighborhoods of London.

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net.

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European Bonds Post Best Month Since 1986 as Price-Growth Slows

By Lukanyo Mnyanda

Nov. 29 (Bloomberg) -- European government bonds posted their best month in at least 22 years as a report showing inflation decelerated to the slowest pace in more than a year added to signs the region’s economic slump is deepening.

The bonds handed investors a 3.7 percent return in November, according to Merrill Lynch & Co.’s EMU Direct Government index. That’s the most since at least 1986, when Merrill started compiling the data. Ten-year bunds climbed this month as the region slipped into a recession for the first time since the euro’s debut in 1999. A European Union estimate yesterday showed the inflation rate fell by the most in almost two decades.

“Based on the economic outlook, the sentiment remains positive for bonds,” said Karsten Linowsky, a fixed-income strategist in Zurich at Credit Suisse Group AG, Switzerland’s second-largest bank. “This bullish sentiment could prevail for some time.”

The yield on the 10-year bund, Europe’s benchmark government security, fell five basis points to 3.25 percent yesterday, taking its drop in November to 65 basis points. That’s the most since February 1989, when Bloomberg started compiling the data. The 3.75 percent security due January 2019 rose 0.38, or 3.8 euros per 1,000-euro ($1,272) face amount, to 104.23.

The yield on the two-year note slipped eight basis points to 2.15 percent, leaving it 39 basis points lower this month. The yield didn’t drop for five straight months since October 2001. Yields move inversely to bond prices.

Investors should favor 10-year bunds amid speculation inflation will slow, Linowsky said. The German bund yield may drop to 3 percent and the two-year note may yield between 2 percent and 2.1 percent by March, he predicted. That’s more bullish than the median forecasts of 3.57 percent and 2.24 percent, according to analysts’ predictions compiled by Bloomberg.

Stock Losses

Bonds surged this year as the U.S. housing slump pushed up the cost of credit globally and caused stock markets to tumble, prompting central banks around the world to cut interest rates. The world’s biggest financial companies have incurred almost $1 trillion in writedowns and losses since the start of last year. The Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, dropped about 20 percent since the end of September.

Inflation in the 15-nation economy slowed to 2.1 percent this month, from 3.2 percent in October, the EU’s statistics office in Luxembourg said yesterday. The drop is the biggest since at least 1991.

Two-year yields fell to within about 12 basis points of a record low on Nov. 20 as investors bet the contracting economy will check consumer-price growth and give the European Central Bank room to lower borrowing costs next month.

Noyer’s View

The ECB wouldn’t rule out the chance of further interest- rate cuts as price pressures ease, policy maker Christian Noyer told Nikkei newspaper. Inflation in the region will stay below 2 percent throughout 2009 because of falling commodity prices and slowing growth, Noyer was cited as saying Nov. 27.

The difference in yield between German and French 10-year bonds was within three basis points of the widest since the euro’s introduction in 1999 as investors sought the safest assets. It was at 42 basis points yesterday, from 45 basis points on Nov. 24, which was the most since 1999.

Policy makers lowered their main refinancing rate by 100 basis points since Oct. 8, to 3.25 percent, and will cut it again by at least 50 basis points on Dec. 4, according to a Credit Suisse Group AG index based on overnight index-swap rates. The Frankfurt-based central bank has a 2 percent inflation ceiling.

Treasury, Gilt Returns

Bonds in the U.S. and the U.K. returned about 5 percent in November as the specter of a recession and falling stock markets pushed investors to fixed-income government debt, Merrill’s Treasury Master and gilt indexes showed.

Investors should buy U.K. inflation-protected bonds because the “unprecedented” policy response to the looming recession will revive the economy by 2010, rekindling consumer-price increases, HSBC Holdings Plc analysts said. The Bank of England cut its main interest rate by 150 basis points to 3 percent on Nov. 6 to limit the fallout from the financial crisis.

The U.K. breakeven rate, a gauge of inflation expectations as measured by the difference in yield between five-year regular bonds and index-linked debt, has been negative for more than a month, suggesting investors are betting the economic slump will lead to deflation.

The five-year French breakeven rate, considered the benchmark for Europe, was at 45 basis points today, compared with 37 basis points on Nov. 26, which was the lowest since at least 2004. The so-called breakeven rate reflects inflation rate traders expect over the life of the security.

To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

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Sarkozy Denies EU Is Planning to Block French Bank Rescue Plan

By Sandrine Rastello and Ladka Bauerova

Nov. 29 (Bloomberg) -- French President Nicolas Sarkozy denied that the European Commission plans to block France’s 10.5 billion-euro ($13 billion) bank rescue plan, saying the two sides are still in negotiations.

The EU is “absolutely not” blocking France’s effort to inject funds into its six main banks, Sarkozy told reporters during a visit to Doha, Qatar today. “I don’t think there is such a will from any commissioner,” he said.

The president was responding to a Financial Times report, published yesterday, which said the Brussels-based European Commission would veto France’s rescue plan unless the banks reduced lending. The French government is pushing the banks to boost loans by 3 to 4 percent in exchange for the aid.

“The world has changed,” Sarkozy said. “We must move fast” to bolster the economy, he added.

A spokesman for the European Commission said the two sides are in close contact and are seeking to reach an agreement as soon as possible.

French government officials are scheduled to meet the European Commission on Dec. 4. The two sides are “in constant contact” and will continue to fine-tune the proposal until the last moment, French Finance Ministry spokesman Bruno Silvestre said today when reached by telephone.

To contact the reporter on this story: Ladka Bauerova in Paris at lbauerova@bloomberg.net. Sandrine Rastello in Qatar at srastello@bloomberg.net.

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European Stocks Post Biggest Weekly Gain Since 1987; BHP Soars

By Sarah Jones

Nov. 29 (Bloomberg) -- European stocks had their best week since January 1987, led by commodity producers and financial companies, as investors speculated efforts by governments worldwide will help shore up the economy and stabilize markets.

BHP Billiton Ltd. climbed by almost half in value after the world’s largest mining company withdrew its $66 billion hostile takeover for Rio Tinto Group on Nov. 25. Royal Dutch Shell Plc and Total SA rallied more than 10 percent as crude oil posted its first weekly advance in a month. Allianz AV and Deutsche Bank AG surged more than 30 percent, leading gains among banks and insurers.

The Dow Jones Stoxx 600 Index rallied 13 percent, the steepest weekly advance since January 1987, paring the benchmark’s drop this month to 7.1 percent. Stocks worldwide rose after China cut interest rates, the U.S. government guaranteed $306 billion of troubled Citigroup Inc. assets, and Democratic lawmakers pledged a stimulus package for the world’s largest economy.

“What we are getting is a huge collective response from policy makers,” said Mike Lenhoff, who helps oversee about $36.4 billion as chief strategist at Brewin Dolphin Securities Ltd. in London. “This has got to provide some degree of confidence.”

National benchmark indexes rose in all 18 western European markets. Germany’s DAX Index, France’s CAC 40 and the U.K.’s FTSE 100 all rallied 13 percent.

Monthly Drop

Even so, the Stoxx 600 is still down 7.1 percent in November as concern deepened that a worsening economy is stifling profits. Analysts have slashed earnings estimates this year as the credit turmoil spread. Profit for companies in the Stoxx 600 will slide 12 percent on average in 2008, compared with 11 percent growth forecast at the start of the year, according to data compiled by Bloomberg.

BHP shares soared 49 percent after the company abandoned its yearlong pursuit of Rio Tinto, blaming the rout in commodity prices and the credit-market squeeze for derailing the offer. Rio Tinto dropped 23 percent.

Shell led energy companies higher as crude oil advanced 3.1 percent to $51.46 a barrel, climbing for the first week in four.

Europe’s largest oil company jumped 19 percent, while Total, the region’s third-largest, gained 12 percent.

Allianz, Europe’s largest insurer and owner of Dresdner Bank, climbed 40 percent. Commerzbank AG, Germany’s second- biggest lender, said it will accelerate its takeover of Dresdner by as much as a year in a revised deal valued at 5.1 billion euros ($6.6 billion).

Deutsche Bank

Deutsche Bank rallied 49 percent, while Commerzbank increased 33 percent.

Irish Life & Permanent Plc, the country’s largest mortgage lender, soared 53 percent in Dublin trading after the Irish Association of Investment Managers, whose 12 members manage about 260 billion euros, proposed jointly investing with the government in the nation’s biggest banks.

Bank of Ireland Plc, the country’s biggest bank by assets, increased 15 percent, while Allied Irish Banks Plc rose 26 percent.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

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East European Currencies: Zloty Falls; Lira Gains on IMF Talks

By Yon Pulkrabek and Ewa Krukowska

Nov. 29 (Bloomberg) -- The Polish zloty posted a fourth monthly decline against the euro after the economy grew at the slowest pace in almost three years. The Turkish lira advanced this week versus the dollar as the country moved closer to a loan agreement with the International Monetary Fund.

Polish gross domestic product rose 4.8 percent in the third quarter, the least since December 2005, compared with 5.8 percent in the previous three months. The global credit crisis is causing growth to slow across eastern Europe, reducing the allure of its assets.

“It’s definitely slowing and the moves in the currency reflect the market’s views on the region in general,” said Nigel Rendell, senior emerging-markets currency strategist at RBC Capital Markets, the investment-banking arm of Royal Bank of Canada. “I’d be a seller of the zloty.”

Poland’s currency fell 0.2 percent to 3.7681 per euro yesterday in Warsaw, paring a weekly gain to 2.5 percent. It dropped 6.2 percent this month. The zloty will decline to 3.85 per euro by the end of 2009, Rendell said.

“While the headline GDP was quite good, the speed of the decline in investment is worrying and shows our 2009 growth forecast of 3 percent might be at risk, underscoring the need for lower interest rates,” Mateusz Szczurek, chief economist at ING in Warsaw, wrote in a client note yesterday.

In other trading, the lira was at 1.5750 per dollar yesterday in Istanbul, from 1.5725 on Nov. 27. The weekly advance pared a monthly loss to 2.3 percent. Earlier yesterday, the currency rose to the highest level in more than two weeks, buoyed by speculation an agreement with the International Monetary Fund on an 18-month loan was imminent.

IMF Progress

Talks with the IMF on a new loan have made good progress and an agreement can be expected in December, the Istanbul-based Referans newspaper reported yesterday, citing unidentified officials.

Economy Minister Mehmet Simsek said Nov. 27 talks with the fund are at an “advanced stage.” The IMF is demanding “significant fiscal adjustments” from Turkey and agreement will depend on whether the country can “persuade” the fund in some areas, he said.

“An IMF stand-by program backed by a solid financing arrangement could help improve sentiment and provide support to asset prices,” Ahmet Akarli, an economist at Goldman Sachs Group Inc. in London, wrote in a research note e-mailed yesterday.

The Romanian leu strengthened 1.1 percent to 3.7898 per euro, reducing its monthly decline to about 3.2 percent, as the country prepares for parliamentary elections on Nov. 30.

Romanian Election

The Romanian Social Democrats, led by former communists, may win the most votes in the election by promising increased social benefits as the global financial crisis threatens job losses and economic stagnation, opinion polls show.

The Czech koruna fell 0.7 percent to 25.389 per euro, retreating 5.4 percent since the end of October.

Goldman Sachs lowered its economic-growth and interest-rate forecasts for Poland and the Czech Republic, citing weakening demand for their exports and tightening credit markets, according to its research note.

The Hungarian forint advanced 0.3 percent to 259.72 per euro, paring a monthly drop to 1.4 percent.

To contact the reporters on this story: Yon Pulkrabek in Prague at ypulkrabek@bloomberg.net; Ewa Krukowska in Warsaw at ekrukowska@bloomberg.net

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OPEC to Delay Production Decision to Next Month

By Maher Chmaytelli and Ayesha Daya

Nov. 29 (Bloomberg) -- OPEC members, who agree oil supply is exceeding demand, will delay a decision on whether to cut production again until next month, giving them time to assess previous attempts to halt a plunge in prices.

A meeting in Cairo today will prepare the ground for the Dec. 17 summit in Oran, Algeria, said Ali al-Naimi, oil minister of Saudi Arabia, the world’s largest exporter and de facto OPEC leader. “We will decide on a firm measure when we meet in Oran.” Asked if the producer group would seek to lower output then, he replied: “A cut is possible, we will have to see.”

Crude oil prices have slumped 62 percent from July’s record of $147.27 a barrel as the global recession cuts fuel demand. Prices continued to slide even after the Organization of Petroleum Exporting Countries, the producer of more than 40 percent of the world’s oil, decided on Oct. 24 to reduce production quotas by 1.5 million barrels from this month.

Al-Naimi said there was a “good logic” for oil at $75 a barrel, backing earlier comments from Saudi King Abdullah who told Kuwaiti newspaper Al-Seyassah that this represents a “fair price.” Crude oil for January delivery traded at $54.43 a barrel in New York yesterday.

Oil industry inventories should ideally be equal to about 52 days worth of demand, al-Naimi said. Stockpiles exceeded that level in the third quarter, reaching about 55 days of forward demand. Today’s meeting in Cairo started at 1 p.m. London time.

Bloomberg Survey

OPEC will likely lower supplies before the end of the year, according to 18 of 21 analysts surveyed by Bloomberg. Twelve predicted the reduction will be at least 1 million barrels a day, more than is pumped by Qatar.

Chakib Khelil, the group’s president who is also the oil minister of Algeria, said some supply needs to be removed from the market because members can’t find buyers for all their oil.

“Some countries are unable to sell their crude,” he told reporters in Cairo. “Crude should be taken off the market. The market is oversupplied.”

OPEC called a “consultative” meeting of ministers for today rather than wait until its next scheduled December conference in Algeria, as the slowing world economy reduced global consumption faster than expected. In September, the group urged greater compliance with existing output limits.

Earn Less

Oil producers and drillers from Exxon Mobil Corp. to BP Plc are already suffering from falling prices. OPEC’s oil export revenue will be $979 billion in 2008, 9.6 percent less than expected a month ago, because of sinking crude prices, the U.S. Energy Department forecasts.

The Cairo meeting, originally intended just for ministers from Arab nations, was expanded into a full OPEC meeting, including countries like Venezuela, Iran and Angola.

The 11 OPEC states subject to output quotas will produce 27.8 million barrels a day in November, according to Geneva- based consultant PetroLogistics Ltd., in excess of their official limit of 27.3 million barrels a day.

OPEC members have a delicate act to balance as they strive to boost prices without overreacting in terms of production cuts and being blamed for exacerbating the economic slowdown.

Demand for oil may fall for the first time since 1983 next year, Merrill Lynch & Co. said, as the U.S., Europe and Japan face their first simultaneous recession since World War II.

Eleven years ago, OPEC members bickered over quotas as oil prices slid 28 percent in 10 months amid the onset of the Asian financial crisis. At a meeting in Jakarta in November 1997, they raised quotas, even as economic turmoil in Asia was slowing demand and prices fell another 44 percent by December 1998 to a low of $10.35 in New York.

The other OPEC nations are the U.A.E., Qatar, Kuwait, Nigeria, Iraq, Indonesia, and Ecuador.

To contact the reporter on this story: Maher Chmaytelli in Cairo at mchmaytelli@bloomberg.netAyesha Daya in Cairo at adaya1@bloomberg.net

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Taiwan Semiconductor Plans to Cut Spending Amid Economic Slump

By Janet Ong

Nov. 29 (Bloomberg) -- Taiwan Semiconductor Manufacturing Co., the world’s largest custom-chip maker, plans to cut costs next year as a global economic slump crimps demand for chips used in consumer electronics.

“We are reducing costs to come out stronger from the economic downturn,” J.H. Tzeng, a spokesman for the Hsinchu, Taiwan-based chipmaker, said by phone today. “We have plans to cut costs for everything, but we haven’t made a decision yet,” he said, declining to comment if the reductions would include salary or job cuts.

The Semiconductor Industry Association expects global chip sales will drop 5.6 percent next year. STMicroelectronics NV, Europe’s largest semiconductor maker, yesterday said fourth- quarter revenue would be below the company’s forecasts because of a slowdown in orders.

Consumer electronics companies ranging from Nokia Oyj to Panasonic Corp. have slashed forecasts this month as consumers buy fewer mobile phones, flat-panel televisions and computers.

Taiwan Semiconductor, plans to cut capital expenditure in 2009, although the final budget is still being decided, Tzeng said. The company on Oct. 30 said it is considering a 20 percent cut in spending, according to Tzeng. The company will announce details at an investors briefing to be held at the end of January, he said.

The chipmaker, which employs about 23,000 people, has also imposed a hiring freeze, and would consider hiring only if there are special needs, Tzeng said.

Unpaid Leave

Smaller rival United Microelectronics Corp may ask workers to take unpaid leave in 2009 to cut costs, the Economic Daily News reported today, citing unidentified company executives. The firm has already trimmed its workforce so it doesn’t plan to cut wages or ask staff to take unpaid leave this year, the Chinese- language newspaper said. Alex Hinnawi, a spokesman at United Microelectronics declined to comment on the report.

Taiwan’s jobless rate rose to its highest in more than three years in October after the economy contracted. Taiwan’s economy will follow Asian neighbors Japan, Singapore and Hong Kong into a recession this quarter after shrinking in the three months through September, the government aid on Nov. 20.

To contact the reporter on this story: Janet Ong in Taipei at jong3@bloomberg.net

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Rand Logs Biggest Weekly Gain in a Month as Stock Markets Rally

By Garth Theunissen

Nov. 29 (Bloomberg) -- South Africa’s rand posted its biggest weekly gain against the dollar in a month as stocks rallied around the world on speculation government efforts to shore up the economy may avert the worst of the credit crunch.

The rand gained with higher-yielding assets as the U.S., Europe and China this week announced financing plans worth a combined $1 trillion to prevent a global recession. It strengthened after the nation’s stock market logged its first five-day advance this month as record inflation in Africa’s biggest economy eased.

“Global factors are still the dominant factor for the rand,” said Ulrich Leuchtmann, head of foreign-exchange research in Frankfurt at Commerzbank AG, Germany’s second-biggest lender. “The rand is highly correlated with global risk sentiment, which has abated from extremely high levels partly due to measures aimed at stabilizing the global banking crisis.”

The rand advanced 3.8 percent this past week to 10.0800 per dollar by 5:30 p.m. in Johannesburg yesterday. It climbed 3.4 percent to 12.8007 per euro. In the month it fell 2.8 percent versus the dollar and 2.7 percent against the euro.

South Africa’s benchmark FTSE/JSE Africa All Share Index of stocks rallied more than 17 percent in the past week, the biggest five-day increase since 1995 and the first this month. Europe’s Dow Jones Stoxx 600 Index climbed 12 percent in the week.

Economic Packages

The rand strengthened with emerging-market currencies including the Brazilian real and the Turkish lira after China’s central bank cut interest rates by the most in 11 years on Nov. 16, three weeks after the government announced a $586 billion plan to boost growth in the world’s fourth-biggest economy.

The Federal Reserve also committed $800 billion to unfreeze credit markets and arranged a $306 billion government rescue of Citigroup Inc., while the European Union proposed a 200 billion- euro ($258 billion) spending package.

The rand also gained after inflation slowed for a second month in October, boosting speculation the South African Reserve Bank may cut its main interest rate from 12 percent, the highest level in more than five years, on Dec. 11.

Consumer-price growth eased to 12.4 percent from 13 percent in September, Pretoria-based Statistics South Africa said on Nov. 26. Producer-price inflation slowed to 14.5 percent in October, the weakest pace in six months, the national statistics body said Nov. 27.

Government bonds were mixed. The yield on the benchmark 13.5 percent security due September 2015 rose four basis points in the week to 8.30 percent. The yield on the 13 percent note maturing in August 2010, which is more sensitive to interest-rate expectations, slipped 14 basis points to 8.28 percent. Yields move inversely to bond prices.

To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net

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Hu: stable, fast growth tops economic agenda

Updated: 2008-11-29

(Xinhua) BEIJING - Chinese President Hu Jintao said Friday the top priority of the country's 2009 agenda on economic development is to maintain a "stable and relatively fast growth", amid the grim global economic downturn.

"We will ensure a quality and fast growth of the national economy next year," Hu said while sitting down with personages outside the ruling Communist Party of China (CPC) to seek their advice on the country's economic development.
He said the country would pursue an "all-rounded and sustainable" growth that stresses both quality and efficiency.

The world's fastest growing economy saw its growth slow sharply to nine percent year on year in the third quarter, the slowest pace in five years, as a result of slower export and investment growth.

The president said the country would continue to practice "active" fiscal and "moderately loose" monetary policies next year, and would in the meantime strengthen and improve macro controls according to changing conditions.

Such proactive policies is a transition made earlier this month against adverse global economic conditions from the earlier "prudent" fiscal and "tight" monetary policies aimed at curbing inflation and averting overheating.

He stressed the importance of boosting domestic demands, saying the country would bring consumption to play a bigger role in driving the economic growth, and the expansion of consumer spending would receive more prominent emphasis.

China would also increase its investment in rural areas, agriculture, and farmers "by a large extent" to guarantee the development of the agricultural sector and ensure the output of grain and other farm produce, according to the president.

Hu said the country would continue to promote economic restructuring. China has been working to reduce its heavy reliance on exports and investment over the past years.

"The country needs to take the challenges of the ongoing global financial crisis as opportunities to accelerate industrial restructuring to create new growth and foster other competitive edges," he said.

China would continue with its reform and opening up, Hu said. "The country will lose no chance to introduce reforms that can promote the development at the right time, and will take note of bringing the market into full play in allocating resources."

The country would actively develop the export-oriented sector and step up the diversification of exporting markets, Hu added.

He also said the country would stick to improving people's living conditions and building a stable society. The country would adopt "more active" employment polices next year, Hu said.

He pledged to improve urban and rural social security systems and vowed intensified efforts in supervision and inspection of food, drug and work safety.

"The country has great potential in economic development and has also accumulated strong capabilities to withstand risks over the past 30 years of reform and opening up," Hu told the non-Communist people.

The non-CPC personages said they endorsed the CPC and government's judgement on current situation as well as plans on next year's economic development. They also offered suggestions on economic issues such as the fight against the financial turmoil, and macro control measures.


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Pound Posts Biggest Weekly Gain Versus Dollar in Almost 3 Years

By Anchalee Worrachate

Nov. 29 (Bloomberg) -- The pound had its biggest weekly advance against the dollar in almost three years as a rebound in stocks rekindled appetite for higher-yielding currencies.

The U.K. currency also rose for a second straight week against the euro as the FTSE 100 Index advanced the most this week in nearly a month. The pound lost 3.4 percent against the dollar and 3.5 percent against the euro in November on speculation that a recession in Britain will deepen, forcing the Bank of England to cut interest rates at a faster pace than the Federal Reserve and European Central Bank.

“The rebound in equity markets provided some support for sterling in the near term and I wouldn’t rule out it pressing higher in coming days,” said Ian Stannard, a foreign-exchange strategist at BNP Paribas SA in London. “Longer term though, I still believe sterling is vulnerable. We expect its recent rally to run out of steam in the middle of next week. The economic outlook will continue to weigh on the currency.”

The pound dropped to $1.5333 yesterday in London, from $1.5406 on Nov. 27. It rose 2.6 percent in the past week, the most since Jan. 6, 2006. The currency strengthened 1.9 percent from the previous week to 82.83 pence per euro. The pound will fall to $1.41 by year-end, BNP Paribas said.

The pound has a correlation of 0.72 with the MSCI World Index in the past 12 months, according to Bloomberg data. A value of 1 would mean the two move in lockstep.

The seizure in credit markets and an approaching recession sapped consumer demand in Europe’s second-largest economy, prompting the Bank of England to cut its key interest rate four times this year from 5.50 percent. Policy makers this month reduced the key interest rate by 150 basis points to 3 percent, the lowest since 1955. The pound dropped 4.5 percent against both the dollar and 4.3 percent versus the euro in November.

Gilts Rise

U.K. gilts rose yesterday as investors sought the relative safety of government bonds, with two-year notes snapping four days of losses.

The gains pushed the yield 15 basis points lower to 2.19 percent. The 4.75 percent due June 2010 climbed 0.21, or 2.1 pounds per 1,000-pound ($1,536) face amount, to 103.81. The yield on the 10-year note dropped one basis point to 3.77 percent. The yield dropped 11 basis points this week. Yields move inversely to bond prices.

The “big issue” for the British economy is to get banks to lend again, Timothy Besley, a member of the Bank of England’s Monetary Policy Committee, said Nov. 27. The central bank’s next interest-rate decision is due Dec. 4.

Policy makers will cut the main interest rate at least another 75 basis points to 2.25 percent next week, according to a Credit Suisse Group AG index of probability based on overnight index-swap rates.

Gilts Versus Bunds

“If that’s the market consensus, then the two-year yield at the current level is a steal,” said Jason Simpson, a fixed- income strategist at Royal Bank of Scotland Group Plc in London. “The market is expecting aggressive rate cuts ahead and that should support the front end of the market.”

Gilts beat their European counterparts this past month, handing investors a 5 percent return, compared with a gain of 3.8 percent on German bonds, according to Merrill Lynch & Co. U.K. Gilts and German Federal Governments indexes.

The looming recession in the U.K. caused investors to raise bets on deflation in the past month. The five-year breakeven rate, a gauge of inflation expectations as measured by the difference in yield between regular bonds and index-linked debt, was minus 91 basis points yesterday, compared with a positive 105 basis points at the start of November.

The economic pessimism is “overdone,” leaving the securities at “attractive levels,” Steve Major, HSBC Holdings Plc’s head of fixed-income strategy in London, wrote in a note to clients received by e-mail Nov. 27. “At some stage, the market will look beyond the deflation discounted for 2009 and to the risks of rising inflation by 2010-11.”

To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net

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Lehman’s Neuberger Division Sale May Be Scuttled By S&P Drop

By Christopher Scinta

Nov. 29 (Bloomberg) -- Lehman Brothers Holdings Inc. may not get to close a $2.15 billion sale of its investment- management business to Bain Capital LLC and Hellman & Friedman LLC as a result of a provision tying the deal’s completion to the value of the Standard & Poor’s 500 Index.

The purchase by Bain and Hellman of the division, which includes the Neuberger Berman unit, is conditioned on an S&P 500 average closing price of more than 902 for the 10 trading days before the sale closes. The average for the last 10 days has been about 844, after the index reached its 52-week intraday low of 741.02 on Nov. 21. When the parties signed the deal Oct. 3, the S&P closed at 1099.23.

“The buyer gets the comfort of knowing that a certain market decline does create an out on the deal that is clean,” said Owen Pell, a commercial and securities litigation lawyer at White & Case, about tying the deal to the market. He isn’t involved in the Lehman transaction.

By setting a floor for the S&P 500’s value as a closing condition, rather than relying on the material adverse event clause in the agreement, the buyers may avoid potentially difficult and expensive litigation, Pell said. The buyers may also choose to waive the condition.

Carlyle Group, the second-largest private-equity firm, said in court papers that Bain and Hellman may get Lehman’s investment management business for as little as $900 million.

Another Bidder

Another bidder may top the Bain-Hellman offer by Dec. 1, spurring a court-supervised auction Dec. 3. Carlyle has said it is interested in bidding on the Lehman business and is working with former Neuberger executive Jeffrey Lane. Sales of assets in bankruptcy are often subject to higher offers.

Bain Capital spokesman Alex Stanton and Hellman spokesman Pen Pendleton declined to comment. Carlyle lawyer Philip Mindlin of Wachtell Lipton Rosen & Katz didn’t return a call for comment.

A hearing before U.S. Bankruptcy Judge James Peck in New York to approve a sale to the winning bidder is set for Dec. 22. The deal may close shortly thereafter.

A worst case scenario for Lehman would be if there were no other bids, the S&P 500 wouldn’t reach the closing average required in the Bain and Hellman offer and the private equity firms would choose not to waive the condition and walk away.

Fourth-Largest

Lehman was the fourth-largest investment bank before it filed the biggest bankruptcy in history Sept. 15 with $613 billion in debt. Peck approved New York-based Lehman’s plan to auction its investment management business in October. His approval came only after the bank reduced the breakup fee and expense reimbursement to be paid to Bain and Hellman if they are outbid, making it easier for rivals to submit bids.

The breakup fee was cut to $52.5 million from $70 million. The lead bidders must now document any expenses they seek to have reimbursed. Previously, the bidders were allowed as much as $35 million for expenses without itemizing them, according to court filings.

Competing bidders may submit offers that exceed that of Bain and Hellman by only $25 million, rather than the $50 million overbid originally proposed. The modified rules don’t prohibit joint bids and management buyouts.

Lehman bought Neuberger Berman in 2003 for $3.2 billion to expand its wealth-management business and later consolidated its asset-management operations into a single division.

Bain and Hellman agreed Sept. 29 to buy most of the asset- management business from bankrupt Lehman for $2.15 billion, minus $400 million for executive bonuses.

Peck said he was hopeful the looser rules would encourage other bidders, though he added, “this transaction appears to be a private sale masquerading as a public one.”

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Christopher Scinta in New York bankruptcy court at cscinta@bloomberg.net.

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Ireland Considers Bank Aid in ‘Certain Circumstances’

By Dara Doyle

Nov. 29 (Bloomberg) -- Ireland’s government said it may invest with other parties in the nation’s banking system as the country’s lenders seek to shore up capital depleted by the global financial crisis and the end of a decade-long property boom.

“In certain circumstances it would be appropriate for the state, through the National Pensions Reserve Fund or otherwise, to consider supplementing private investment,” Finance Minister Brian Lenihan said in an e-mailed statement late yesterday.

Lenihan, speaking after meeting executives from the country’s six biggest lenders in Dublin, said he hadn’t made any proposals on mergers between the lenders.

The Irish Association of Investment Managers, whose 12 members manage about 260 billion euros ($331 billion), said this week it had approached Lenihan on behalf of a “number of investment institutions” considering injecting money into four publicly traded lenders. The Dublin-based association hasn’t identified the institutions.

Ireland’s banks are facing rising losses on property loans and falling profit amid the seizure in global credit markets. While the government has guaranteed the deposits and borrowings of its six biggest lenders, it has so far stopped short of following other European states and investing in the banks.

Lenihan “welcomes the views of a number of institutions that they are open to raising additional capital,” he said in the statement. “For certain institutions the need for additional capital may be very modest, whereas for others the need may be greater.”

The banks will work with investors and the government to “develop matters” by the end of the year, he said.

Dublin-based Bank of Ireland Plc, the country’s biggest bank by assets, said on Nov. 24 it had received “unsolicited approaches” from bidders looking to buy stakes. Buyout firms including J.C. Flowers & Co., the Carlyle Group and Irish hedge fund Cardinal Asset Management approached the Irish government about investing in the Dublin-based bank, the Irish Times has reported.

The government may draw on a national pension fund which was valued at 18.7 billion euros ($23.8 billion) at the end of the third quarter. Created in 2001 to finance future pension payments, the fund began by investing in stocks and bonds, and has diversified into property, private equity and commodities.

To contact the reporter on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net

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Louis Vuitton Cuts Prices in Japan to Boost Sales, Nikkei Says

By Stuart Biggs

Nov. 29 (Bloomberg) -- LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, lowered retail prices for its Louis Vuitton brand in Japan by 7 percent yesterday to boost sales, Nikkei English News reported.

The price cuts apply to nearly all items sold, including bags, watches, apparel and shoes, at the company’s 56 stores in Japan, Nikkei cited the company as saying.

The price reductions reflect the yen’s strength against the euro with most Louis Vuitton products imported from France, the report said. Louis Vuitton sales fell 7 percent in Japan in the first nine months of the year, the report said.

To contact the reporter on this story: Stuart Biggs in Tokyo at sbiggs3@bloomberg.net.

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Holiday Sales Kick Off With Discounts to Lure U.S. Customers

By Beth Jinks and Allison Abell Schwartz

Nov. 29 (Bloomberg) -- U.S. retailers that lowered prices as much as 70 percent on the day after Thanksgiving may see sales eroded by steeper price cuts in what may be the worst holiday shopping season in six years.

Bargains such as Best Buy Co.’s Toshiba Corp. satellite laptop computer for $379.99, a $270 discount, and Gap Inc.’s buy-one-get-one free holiday sweater offer may leave retailers with slowing sales even as they entice more people to visit stores during the holidays.

Retailers are looking for year-end demand to make up for stagnating sales and waning consumer confidence. The holiday months might account for a third or more of stores’ annual profit, and consumer spending makes up more than two-thirds of the U.S. economy, which is falling deeper into a recession.

“The consumer is scared out of their wits and they’re just going to spend less,” Howard Davidowitz, chairman of retail consultant Davidowitz & Associates in New York, said yesterday. “The consumer is now saying ‘Unless something sells at a certain price, I’m done.’”

Individuals may spend an average of $616 on holiday gifts this year, down 29 percent from a year earlier, according to a Gallup Inc. poll.

Retailers promoted “doorbuster” deals to attract customers on the Friday after Thanksgiving, said to be when retailers started to make their annual profit.

One Dead

A worker was trampled by customers and killed yesterday at a Wal-Mart Stores Inc. location in Long Island, New York, according to local police and the company. At least four shoppers were hurt at the store in Valley Stream, located about 13 miles (20 kilometers) from New York City, Nassau County Police said in a statement.

November and December sales at stores open at least a year may rise 1 percent, the smallest gain since 2002, according to the International Council of Shopping Centers, a New York-based trade group.

Retailers used lower prices at earlier hours to win customers that were starting their holiday shopping with less than four weeks before Christmas.

Kohl’s Corp., the fourth-largest U.S. department store, opened at 4 a.m. Wal-Mart and Macy’s Inc. had a 5 a.m. start. Gap opened some locations on Thanksgiving Day.

Wal-Mart, based in Bentonville, Arkansas, has bucked the trend, with its emphasis on low prices winning customers during the economic slump. The retailer is the only Dow Jones Industrial Average company to have risen this year. It’s gained 18 percent, while the 30-member index has tumbled 33 percent.

Black Friday

Discounts on the Friday after Thanksgiving, called Black Friday, pulled in consumers who felt the pinch of the economic slump and higher fuel prices earlier this year.

Crowds at the Woodfield Mall in Schaumburg, Illinois, today “gives me optimism that that the 2 percent growth I’m forecasting can be reached” during the holiday period, Jay McIntosh, president of Consumer Foresight LLC, a Chicago-based consulting firm, said today in a Bloomberg Television interview.

Under-30 adults, who may not have been hurt as much as older consumers by stock-market declines, were out shopping, McIntosh said.

“Virtually every store I walked by was crowded,” McIntosh said. “The small specialty retail stores were crowded. Last year, they weren’t.”

Malls operated by Taubman Centers Inc. saw a similar presence of young shoppers, spokeswoman Karen Mac Donald said.

The Fairlane Town Center mall in Dearborn, Michigan, had more early and younger shoppers this year, Mac Donald said in an e- mail. About 75 lined up at the Aeropostale location by 4:30 a.m.

Richard Simmons

Fitness personality Richard Simmons, wearing red-and-white- striped very short shorts, sneakers and a red muscle shirt with fluffy white Santa trim, bounced around the outside of Macy’s in New York’s Herald Square early yesterday morning, where crowds mobbed every entrance in advance of its opening.

Richard Feijoo, 21, and his twin brother Jesus from Brooklyn were waiting at the front of the line at Herald Square and were shopping for themselves.

“It’s low prices, a good store and it’s Black Friday, so we’re here early,” Richard said. “Jeans, Levi’s, only clothes. I go shopping at Macy’s in Brooklyn so I know exactly what I’m looking for.

There were 5,000 people waiting to get in, Macy’s Chief Executive Officer Terry Lundgren said in a Bloomberg Television interview.

“A lot of folks are walking out with bags,” Lundgren said. “We got them in with great values, and what I really hoped is that they will spend more of whatever they’re going to spend at Macy’s, even if it’s less than last year.”

Less Spending

Americans cut spending by 1 percent last month, the biggest decline since the 2001 recession. After adjusting for inflation, spending was down for the fifth straight month, the longest streak since 1990-1991, according to Commerce Department data.

Toys “R” Us Inc., the largest U.S. toy-store chain, is putting “very aggressive” promotions in place to draw in shoppers, Chief Executive Officer Gerald Storch said in an interview.

“We know that value is very important in this economic situation and we’re determined to be aggressive throughout the holiday season in offering that value,” Storch said in a telephone interview.

To contact the reporter on this story: Amy Eagleburger in New York aeagleburger@bloomberg.net; Beth Jinks in New York at bjinks1@bloomberg.net

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Skylark Sells $419 Million in New Shares to Nomura, Nikkei Says

By Stuart Biggs

Nov. 29 (Bloomberg) -- Skylark Co., a Japanese restaurant chain, will sell more than 40 billion yen ($419 million) of new shares in a private placement to major shareholder Nomura Holdings Inc., Nikkei English News reported today.

Skylark will also shut outlets and sell two subsidiaries to help the company restructure and reduce debt, Nikkei reported, without saying where it obtained the information. Skylark expects the two subsidiaries to fetch 10 billion yen, the report said.

Nomura Principal Finance Co., the securities firm’s investment arm, holds 62 percent of Skylark, Nikkei said. The group’s total investment in the chain will reach 140 billion yen when it buys the new shares, according to the report.

Skylark posted losses for two consecutive years through fiscal 2007 as sales at family restaurants in Japan fell for 11 years in a row, the report said. Nomura and British private equity fund CVC Capital Partners Ltd. own a combined stake of more than 97 percent in Skylark, the report said.

To contact the reporter on this story: Stuart Biggs in Tokyo at sbiggs3@bloomberg.net.

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Japan Car Sales May Fall to 34-Year Low in 2008, Nikkei Reports

By Stuart Biggs

Nov. 29 (Bloomberg) -- Sales of new cars in Japan may fall to their lowest in 34 years in 2008 as consumers hit by stock market declines cut back on spending, Nikkei English News reported today, without saying how it got the information.

November sales may reach 200,000 units, down by a third from a year earlier, after declines of 5 percent and 13 percent in September and October, Nikkei said. Sales are expected to total about 3.25 million units this year, the lowest since 1974, the report said.

October output by the country’s 12 automakers fell 6.8 percent from a year earlier, the biggest drop for the month since 1999, to 1.01 million vehicles, the Japan Automobile Manufacturers Association said in a statement yesterday.

To contact the reporter on this story: Stuart Biggs in Tokyo at sbiggs3@bloomberg.net.

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India Extends Refinance Facility for Banks to June 30

By Sumit Sharma

Nov. 28 (Bloomberg) -- India’s central bank today extended the refinance facility for banks to June 30, 2009, to increase liquidity in the banking system, the Reserve Bank of India said in a statement e-mailed from Mumbai.

The central bank also permitted commercial banks to lend to housing finance companies under a plan that allows mutual funds to borrow to meet redemptions. The measure is valid until June 30, the Reserve Bank said.

Post-shipment credit at concessional rate given to exporters has been extended to 180 days from 90 days, the central bank said.

The measures were announced after Governor Duvvuri Subbarao met with bank chief executives in Mumbai today.

To contact the reporters on this story: Sumit Sharma in Mumbai at sumitsharma@bloomberg.net

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Mumbai Jewish Center Hit by Terror Is Part of Program

By Peter S. Green

Nov. 29 (Bloomberg) -- The Mumbai Jewish center where suspected Islamic terrorists killed a rabbi and his wife is part of a global program run by a Brooklyn-based orthodox group to spread their faith among Jews living and traveling abroad.

The Chabad-Lubavitch movement has about 4,000 rabbis who serve with their wives in more than 3,300 centers in 72 countries and in U.S. cities and college campuses. Gavriel Holtzberg, the 29-year-old rabbi who ran the Chabad mission in Mumbai and his wife Rivka, 28, were among five people killed after gunmen raided the five-story Chabad House synagogue and cultural center Nov. 26 in the city’s Colaba market district.

The Holtzbergs’ two-year-old son escaped from the carnage with his nanny, his trousers stained with blood, Chabad said on its Web site. Two gunmen also died in the attack, which ended yesterday evening in Mumbai when Indian commandos breached a wall of the house with explosives and stormed inside.

“Their toddler son Moishele, who was heroically rescued from the hell by his nanny Sandra, will mark his second birthday tomorrow,” Rabbi Yehuda Krinsky, chairman of the Chabad- Lubavitch movement’s social and cultural arm, said yesterday at a news conference in New York.

Rabbi Leibish Teitelbaum, a Brooklyn native, was also killed, New York City Mayor Michael Bloomberg said in a statement yesterday.

Jewish Texts

The Holtzbergs arrived in Mumbai in 2003 to teach Torah, the study of the key Jewish texts also known as the Old Testament, and run outreach programs, including a drug rehabilitation program, for the many young Israelis who travel through India after completing their obligatory service in the Israeli army.

India has an indigenous Jewish community of about 4,500 people, mostly in Mumbai and Calcutta, according to the American Jewish Joint Distribution Committee, an aid group based in New York.

The Committee runs social and welfare programs for Mumbai’s aging and impoverished Jews, including an old-age home, a secular school open to non-Jews and a meals-on-wheels program for the elderly and infirm unable to leave their homes.

“There is a very active Jewish life in India, especially in Mumbai,” said Judy Amit, the group’s chief operating officer and a former director of its programs in India.

Rabbi Holtzberg helped minister to the Mumbai Jews, although the bulk of those visiting the Chabad house were non- Indians living or traveling in the country, according to both Chabad and Amit.

The Chabad movement, which grew out of the 17th-Century mystical orthodox Hasidic tradition in eastern Europe, aims to increase observance by Jews, not to convert others to Judaism.

‘Goodness and Godliness’

“We are trying to bring more goodness and Godliness to the world to lead to the coming of the Moschiach,” Rabbi Menachim Schmidt, a Chabad rabbi at the University of Pennsylvania, said in an interview. “The more mitzvahs that a person does, the closer it brings the world to Moshiach.” A mitzvah is the Hebrew term for a good deed, and Moshiach is Hebrew for the Messiah.

Jews first arrived in India some 2,000 years ago, according to their oral tradition, possibly by boat from cities in what is now Israel, Amit said. Others, called Baghdadis, came from across the Middle East to British-ruled India and were known as traders and philanthropists, she said.

India’s Jews numbered about 40,000 when the country gained independence from the U.K. in 1947. Since then, most Indian Jews have emigrated to Israel, Britain, Canada and the U.S., Amit said in an interview. The largest remaining community is in Mumbai, which today has eight functioning synagogues.

“There has been virtually no anti-Semitism in India and quite frankly, the fact that a Jewish home was targeted is a matter of concern,” Amit said.

Fedora Hats

The Chabad rabbis are distinguished by their dark suits and wide-brimmed black felt fedora hats, inspired by the clothing once worn by Orthodox Jews and Polish noblemen in some parts of Eastern Europe.

The modern Chabad movement was guided by Rabbi Menachem Schneerson, who died in 1994 and was thought by some of his followers to be the Messiah.

Last week some 4,000 Chabad rabbis from around the world gathered in Crown Heights, Brooklyn, where the movement is based, for the annual meeting of the Shluchim, a Yiddish word meaning emissaries, as the group’s rabbis around the world refer to themselves.

Gavriel Holtzberg was born in Israel and raised in Crown Heights. Rivka Rosenberg Holtzberg was a native of Afula, Israel, according to Chabad.

“Gabi and Rivky Holtzberg made the ultimate sacrifice,” said Rabbi Moshe Kotlarsky, vice-chairman of Chabad’s educational arm. “As emissaries to Mumbai, Gabi and Rivky gave up the comforts of the West in order to spread Jewish pride in a corner of the world that was a frequent stop for throngs of Israeli tourists. Their selfless love will live on with all the people they touched. We will continue the work they started.”

To contact the reporters on this story: Peter S. Green in New York at pagreen@bloomberg.net.

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Pakistan Won’t Send Intelligence Chief to India, CNN-IBN Says

By Debarati Roy

Nov. 29 (Bloomberg) -- Pakistan’s government turned down India’s request to send the chief of the military intelligence agency to investigate the Mumbai terror attacks, CNN-IBN television reported, without saying where it got the information.

Officials of Pakistan’s Inter-Services Intelligence, or ISI, will instead be sent to India, the news channel reported.

Lashkar-i-Taiba or Jaish-i-Muhammad, two Muslim extremist terrorist groups from Pakistan, may be involved in the Mumbai attack, MSNBC reported on its Web site, unidentified analysts and counterterrorism officials.

To contact the reporters on this story: Debarati Roy in Mumbai at droy5@bloomberg.net.

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Singaporean Hostage Killed in Mumbai Terror Attacks

By Chen Shiyin

Nov. 29 (Bloomberg) -- A Singaporean woman who had been held hostage by militants in Mumbai became the first person from the city-state to die in a terrorist attack, the government said.

The body of Lo Hwei Yen was identified by her husband last night, Singapore’s foreign affairs ministry said in an e-mailed statement released late yesterday. The 28-year-old Singapore lawyer was among 24 hostages found dead at the Oberoi-Trident hotel complex, the Straits Times newspaper reported.

The death toll from the attacks on 10 sites in Mumbai reached 160, with 11 militants killed, CNN reported. The Indian government said at least 370 were injured in more than 48 hours of violence as terrorists moved through India’s financial hub, targeting a Jewish center, the Oberoi, the Taj Mahal Palace and Tower hotel, a railroad station and a restaurant.

“Terrorism is a threat that knows no boundaries,” Prime Minister Lee Hsien Loong said in a letter to the victim’s husband that was released by e-mail today. “This is the first time a Singaporean has been a victim of a terrorist attack.”

Government officials are currently providing assistance to the victim’s family and will ensure the return of the body when permitted by Indian authorities, the foreign affairs ministry said in the statement.

“This tragic event underscores the imperative for all of us to be constantly vigilant and the need for the international community to band together to combat this threat,” S. Jayakumar, the island’s acting prime minister, said in a separate e-mailed statement yesterday.

To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net.

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Indian Forces Comb Taj Mahal After Deadliest Attack Since 1993

By Vipin Nair and Stephen Foxwell

Nov. 29 (Bloomberg) -- Indian forces combed the luxury Taj Mahal hotel in Mumbai looking for survivors of the nation's deadliest attack in at least 15 years after commandos killed the remaining terrorists to end a 60-hour siege.

At least 195 people were killed in the attacks on the Taj Mahal Palace and Tower and Oberoi-Trident hotels, a Jewish center, railway station and restaurant, S Jadhav, an official at the city's disaster management unit said.

Two blasts were heard inside the Taj Mahal Hotel after the National Security Guard said in a public announcement it would set off controlled explosions. Firemen who were putting out a blaze that started shortly after daybreak pulled back from the building. Ratan Tata, Chairman of Tata Group, which owns the Taj Hotel, visited the site with officials from the group.

Busloads of commandoes moved in earlier to do a room-by-room search after gunshots and blasts that had rocked the building in the early hours of today subsided. The siege on the hotel is over, Press Trust of India said in a news flash.

The NSG wasn't declaring an end to the crisis until all rooms at the Taj Mahal hotel were searched, J.K. Dutt, director general of NSG commando unit, said at a briefing, adding some guests may still be in the complex.

Foreigners Killed

More than 295 people were injured as the attackers moved through India's financial hub, Jadhav said.

Most of those who died were Indians and a final death toll hasn't been officially released. Five Americans died in the attacks, the U.S. State Department said in a statement. More U.S. citizens are missing. A German, two Australians, two Frenchmen, a Briton, a Japanese, a Canadian, a Singaporean and an Italian were among the dead, the Associated Press said yesterday.

Two rabbis from New York were among five hostages and two attackers who died at the Jewish Chabad-Lubavitch Center in Mumbai when it was stormed by Indian commandos.

The attack is the deadliest in India since a series of bomb blasts rocked Mumbai's commercial landmarks, including the Bombay Stock Exchange building, killing more than 250 people in 1993.

The 1993 blasts were blamed by the police on members of the Mumbai underworld, belonging to Dawood Ibrahim's gang. India says Ibrahim is hiding in Pakistan, a charge the neighboring country denies.

A little-known Islamist group, the Deccan Mujahedeen, claimed responsibility for the shootings and explosions across the western coastal city that started late on Nov. 26, Indian Home Ministry official M.L. Kumawat said.

The attackers began planning their assaults six months ago, India's NDTV reported, citing an account from a captured terrorist. A seized global positioning system showed some of the group left Karachi, Pakistan, as early as Nov. 12, NDTV said.

Advance Surveys

Lashkar-i-Taiba or Jaish-i-Muhammad, two Muslim extremist terrorist groups from Pakistan that have attacked India in the past, may be involved, MSNBC reported on its Web site, citing unidentified analysts and counterterrorism officials. The groups are linked to violence in Kashmir, a region over which India and Pakistan have fought.

The attackers were familiar with their targets and had probably done surveys in advance, a leader of Indian commandos said yesterday in a video on the Times of India Web site.

``We came up against highly motivated terrorists,'' Vice- Admiral J.S. Bedi, whose commandos led the assault against the militants, said in televised comments. He showed pictures of recovered hand grenades, tear-gas shells and AK-47 ammunition.

Multiple Attacks

Multiple attacks have hit cities in India, which is mostly Hindu, with bombs planted in markets, theaters and near mosques this year, leaving more than 300 people dead.

India will ``go after'' individuals and organizations behind the attacks, which were ``well-planned with external linkages,'' Prime Minister Manmohan Singh said in a televised address, without identifying nations.

Pakistan's government turned down India's request to send the chief of the military intelligence agency to investigate the Mumbai terror attacks, CNN-IBN television reported today.

Pakistani President Asif Ali Zardari said earlier he will send the intelligence head to India for the first time to counter claims that the attackers are linked to his country.

Pakistan's ``government will cooperate with India in exposing and apprehending the culprits and the masterminds behind'' the Mumbai terrorist attacks, according to a statement by the president's office, citing Zardari's phone conversation yesterday with Singh.

The attacks in Mumbai show a militant movement among Indian- born followers of Islam is aligning its campaign with those from majority-Muslim countries, while seeking to hit economic interests, B. Raman, the former counterterrorism director of India's intelligence agency, said in a telephone interview yesterday.

To contact the reporters on this story: Vipin V. Nair in Mumbai at vnair12@bloomberg.net; Stephen Foxwell in Mumbai at sfoxwell@bloomberg.net.

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