In Short

A round-up of other stories in brief

HSBC moves to absorb troubled SIVs

Europe's biggest bank HSBC has moved two structured investment vehicles - complex financial units used to raise money in the debt markets - onto its balance sheet to avoid a forced sales of their underlying assets.

The bank said it hoped that by absorbing the troubled SIVs - Cullinan and Asscher - onto its balance sheet, it would restore confidence to the sector whose access to short-term funding has been severely limited since the credit crunch hit in August.

Goldman Sachs downgraded HSBC shares to "sell", saying HSBC would probably need to set aside a further $12 billion against losses on US mortgage debt in addition to providing up to $35 billion in backing for the investment vehicles.

Republic's credit ratings affirmed

Standard & Poor's Ratings Services yesterday affirmed its AAA long-term and A-1+ short-term sovereign credit ratings for the Republic's debt, but warned that the ratings could come under pressure if the contraction in the housing and construction sectors were more severe than expected.

The ratings agency acknowledged that significant fiscal spending and a slowing of the construction sector would create a budget deficit beyond 2007, but said the positive ratings were supported by the State's diversified, resilient and flexible economy, its fiscal prudence and favourable demographic structure.

Corvil wins €500,000 contract

Dublin-based Corvil has won a contract worth more than €500,000 for Deutsche Börse to use its technology for its new Eurex market data service to be launched this month.

Donal O'Sullivan, Corvil's head of product management and marketing, described it as a very significant deal. Corvil, whose technology makes trading electronically on an exchange more efficient and secure, recently signed a similar deal with the London Stock Exchange.

Rio Tinto fights takeover bid

Rio Tinto, the mining group, yesterday sought to bolster its defences against a proposed $64 billion takeover by Australian based rival BHP Billiton, promising to sell up to $30 billion of non-core assets and raise its dividend by 30 per cent.

Tom Albanese, Rio Tinto chief executive, said commodity prices would stay strong for the foreseeable future because of growing demand from China and India, and played down the impact of a slowdown in the US. - (Financial Times service)

BA drops plans to bid for Iberia

British Airways, Europe's third-largest airline, has dropped plans to bid for Spanish carrier Iberia. The London-based company, which owns 10 per cent of Iberia, won't exercise pre-emption rights to acquire shares being sold by local investors to Caja Madrid, it said in a statement.

That will allow the Spanish bank to build a 24 per cent stake. - (Bloomberg)

Citigroup reviews ways to cut costs

Citigroup, the largest US bank, is reviewing ways to cut costs as it seeks a new chief executive officer and grapples with mortgage writedowns that may lead to the first quarterly loss since at least 1998. Executives at the bank "are planning ways in which we can be more efficient and cost-effective" a spokeswoman said.

Citigroup may cut as many as 45,000 jobs in the next two months, CNBC reported. - (Bloomberg)