ourt approves ABN's LaSalle sale

The sale of LaSalle was frozen by the Commercial Court in MayABN Amro's $21bn (£11.5bn) sale of its LaSalle unit to Bank of America was lawful, the Dutch Supreme Court says.
Some shareholders had tried to have the sale stopped on the grounds that ABN had not sought their approval first.
The ruling is good news for Barclays Bank, which made an offer for ABN dependent on LaSalle being sold.
Meanwhile a consortium led by RBS said it would go ahead with a revised offer for ABN Amro "on materially superior terms to Barclays' proposed offer".
RBS also said its new offer would "ot be conditional upon LaSalle remaining part of the ABN AMRO group".
Some ABN shareholders had been claiming to the court that the LaSalle sale was intended to block an offer from the RBS-led consortium, which also includes Santander and Fortis.
'No obligation'
Shares in ABN Amro, Barclays and RBS, the three main protagonists in Europe's largest banking tussle, all rose after the ruling was announced.
Analysts said this reflected the fact that although the judgment was positive for Barclays, it was by no means certain that it would prevail in the bid battle.
ABN has backed Barclays' 62.8bn euro ($85.3bn; £42.5bn) offer.
But Dutch group VEB, which represents small shareholders in ABN, argued LaSalle's planned sale to Bank of America effectively blocked a higher 71bn-euro bid from RBS and its partners, Spain's Santander and Belgium's Fortis, as their offer hinges on LaSalle not being sold.
The Dutch Commercial Court initially ruled in favour of the shareholders' group, preventing the LaSalle transaction.

The ruling boosts Barclays boss John Varley in the battle for ABN
But the advocate general, in his advice to the Supreme Court last month, disagreed and the Supreme Court upheld his view.
"The fact that the shareholders aim at selling their shares at the highest possible price involves no obligation for the board of directors of ABN Amro to obtain the shareholders' approval for the sale of LaSalle," the ruling stated.
"There should not be any unnecessary uncertainty about the carrying out of this agreement, into which the directors of ABN Amro were entitled to enter," it added.
'One battle'
Bank of America said it was "satisfied" with the ruling and would now look to complete the deal as soon as possible.
Far from admitting defeat, VEB said it believed it would ultimately succeed in forcing ABN Amro to consider the two bids on their financial merits.
"They may have won this battle but they will lose the war," said its director Peter Paul de Vries.
"I don't think the Barclays bid will be interesting for many shareholders because it is billions of euros lower than the alternative."
Analysts believe the RBS consortium could return with a fresh offer for ABN Amro, excluding the LaSalle business.
Whichever of Barclays or the RBS consortium eventually wins control of ABN, the deal will create one of the world's largest banking groups.

US retail sales fall unexpectedly

US retail sales unexpectedly dropped by 0.9% in June, a report from the US Commerce Department says - their biggest decline in almost two years.Sales were down 0.4% even without the effect of a slump in the car market, the cause of much of the fall.The month before, retail sales had risen by a revised figure of 1.5%.The problems in the housing market were reflected by a 3% fall in furniture sales and a 2.3% fall in sales of building materials and garden supplies.The figures are likely to add to fears about the prospects for the US economy, currently assailed by the problems with sub-prime mortgages and the risk of a knock-on effect on investment and lending.If retail sales stay weak, that could impact economic growth, since consumer spending accounts for two thirds of economic activity.Figures out on Thursday had led economists to expect better retail sales figures.The world's biggest retailer Wal-Mart reported better-than-expected 2.4% growth in June sales at US stores open for at least a year.The International Council of Shopping Centers said US chain store sales had also grown 2.4% in June.Christopher Low, chief economist at FTN Financial in June, warned against setting too much store by monthly figures, preferring the quarterly numbers."There was absolutely gangbusters growth in the first quarter," he said."The sales pace in the second is moderately strong, certainly not weak," he added.A poll by Reuters had predicted that retail sales would rise 0.2% in June.

Hull in interest rate firing line

Many places in the UK, including flood-ravaged Hull, are beginning to feel the effects of recent UK interest rate rises, a credit agency has said.Experian looked at UK towns and cities to see which would be hardest hit by five rate rises since last August.It analysed income, borrowing and spending patterns of residents to see which places lose from rate rises.Slough, Corby and Stevenage were also cited as places where consumers may be struggling from higher borrowing costs.The places where a major proportion of the population are in debt are particularly vulnerable to higher rates, the study said."Hull is joined by a number of areas of the UK that contain higher proportions of people with large mortgages, lower gross incomes, significant levels of unsecured borrowing and fewer savings," said Neil Blake, chief economist at Experian.On the flip side, locations where residents had few debts but high levels of savings were winners.Experian named East Dorset, North Norfolk and East Sussex as areas with large number of savers who could benefit from rate increases.

Giuliani Raised $17.5 Million in Second-Quarter

ABC News' Jan Simmonds Reports: The Rudy Giuliani campaign confirmed Friday it raised $17.5-million in the second quarter, $14.9 of which can be used during the primaries. Giuliani's fundraising totals became official after the campaign filed with the Federal Election Commission on Friday. The former New York City mayor is the first '08 candidate to submit detailed finances to the FEC; the deadline is midnight Sunday.Giuliani's strong showing was expected based on financial information the candidates disclosed to media earlier this month. Giuliani is expected to be the fundraising leader among the Republican presidential candidates for the second quarter -- which covers April to July.Giuliani may also have the most cash on hand of any '08 GOP candidate, with $18.3 million in the bank, $3.7 million of that dedicated to the general election.His filing shows that the vast amount of his contributions came from his home state of New York, California, Florida and Texas totaling $9.1-million. Giuliani is popular among Republicans in the fundraising meccas of California, New York, and Florida, and he has a wide network of contacts in Texas where he is a partner in a Houston-based law firm.Among those contributing to Giuliani's campaign, Wall Street lead the way. He collected $142,850 from Ernst and Young employees, another $75,800 from Highland Capital, a financial investment firm, and over $200,000 from employees of other firms.Critics say the Giuliani campaign got off to a slow start, but the campaign appears to have increased its infrastructure. The campaign's payroll almost doubled in the second quarter, with $2.5-million including taxes going out, compared to $1.3-million in the first three months of the campaign. The filings also show the Giuliani campaign now has headquarters or office space in nine states.

Dow Shatters Record, up 280 Points in One Day

Wall Street soared Thursday, propelling the Standard & Poor's 500 index and Dow Jones industrials into record territory as bright spots among generally sluggish retail sales allowed investors to toss aside concerns about the health of the economy.A new bid for aluminum maker Alcan Inc. added to the upbeat mood of the session, which saw stocks put up their biggest gains of the year. The rise marked a sharp contrast to the start of the week, when stocks fell sharply amid concerns that some hedge funds could buckle under ill-placed bets on the housing sector.Though retail sales generally appeared to be crimped last month by higher gasoline prices and a tepid housing market, and the outlook for the coming months was difficult to ascertain, the overall reading wasn't as dour as some investors expected. Several reports beat Street expectations notably that of Wal-Mart Stores Inc., the world's largest retailer, which posted a better-than-expected 2.4 percent jump in sales at stores open at least a year."It's relief that things weren't as bad as people expected," said Bill Schultz, chief investment officer at McQueen, Ball & Associates, referring to the retailers' reports and the economy at large. "We're maybe getting slower growth but not the fall-of-the-cliff economic scenarios," he said of investors' reading of the economy.But, Schultz said, "I think it is, over the near-term, a little bit over done, certainly on a two-day basis," he added, referring to the rally.In late afternoon trading, the S&P 500 rose 21.96, or 1.45 percent, to 1,540.72, above its record close of 1,539.18, set June 4. The Dow rose 232.73, or 1.71 percent, to 13,810.60; its record close is 13,676.32, also set June 4.The Nasdaq composite index rose 39.53, or 1.49 percent, to 2,691.32.The report from Wal-Mart, one of the 30 companies that make up the Dow, helped ease some investors' worries about the health of the consumer ahead of the Commerce Department's Friday report on U.S. retail sales.

Asian Financial Crisis: Ten Years On

Next week marks the tenth anniversary of the devalutation of the Thai baht, widely cited as the trigger that initiated the Asian financial crisis. But the seeds of the catastrophic collapse of the “Asian miracle” (as Asia’s years of stellar growth performance was dubbed pre‑1997) were sown well beforehand, in the rapid buildup of short-term foreign currency debt in weak banking systems which left the countries vulnerable to a sudden change in sentiment.That sudden change came about when, on 2 July 1997, Thailand abandoned its costly policy of pegging the baht to the U.S. dollar, allowing the currency to depreciate in an effort to shore up its faltering economy. Shaking confidence in the region's stability, that set off a chain reaction that turned Asia’s investment boom into a bust, sent bad debts soaring and sparked a stampede by foreign investors rushing to pull money out.The crisis worsened as foreign-exchange reserves proved insufficient to maintain other regional currencies, which had been propped up through fixed exchange-rate regimes. Thailand, South Korea, Malaysia, Indonesia and the Philippines each saw half or more of their respective currencies’ value wiped off. Companies collapsed under ballooning foreign debt obligations, stock markets crashed and economies imploded. Other regional economies such as Hong Kong, China, Singapore and Taiwan also suffered, and the crisis eventually spread to South America and Russia.While the economies have slowly regained their footing and many improvements have been achieved, the effects of the crisis linger. The affected countries have improved their regulatory transparency and supervisory oversight, corporate governance, risk management and the quality of economic data. Central banks are more independent, government debt has declined and financial systems are stronger.Current-account balances are generally in surplus, foreign currency reserves are at record highs, and external debt levels are significantly lower and have improved maturity profiles. Inflation has generally been contained, despite recent higher oil prices. More flexible exchange rate regimes are also in place, creating the potential for more efficient adjustments to external shocksBut rectifying the problems that precipitated the crisis has generated another set of potential threats.Trade and foreign reserves

Blackstone to Buy Hilton Hotels for $20B

Hilton Hotels Corp. has agreed to an all-cash buyout from The Blackstone Group LP in a $20.1 billion deal that would instantly make Blackstone the world's largest hotel owner.The private equity group said it would combine cash from its real estate and corporate private equity funds to buy all outstanding Hilton shares for $47.50 each, a 32 percent premium over Tuesday's closing stock price.The companies valued the deal at $26 billion including debt.Hilton's board approved the terms Tuesday. The company said the deal would close in the fourth quarter pending shareholder approval."Our board of directors concluded that this transaction provides compelling value for our shareholders with a significant premium," Stephen F. Bollenbach, Hilton's co-chairman and chief executive, said in a statement.The acquisition would take Beverly Hills-based Hilton Hotels private and boost Blackstone's portfolio of lodging properties. Blackstone owns more than 100,000 hotel rooms in the United States and Europe, including La Quinta Inns and Suites as well as LXR Luxury Resorts and Hotels.Hilton Hotels owns or operates 2,800 hotels and 480,000 rooms in 76 countries and territories and includes such brands as Doubletree, Embassy Suites and Hampton Inn.Among Hilton's premier hotels is the Waldorf-Astoria in New York.Blackstone said it intends to invest heavily in Hilton and does not foresee any significant divestitures. Blackstone noted that it had invested nearly $1 billion in its LXR properties over the last three years and has grown the La Quinta brand by approximately 45 percent since buying it in January 2006."It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels," said Jonathan Gray, senior managing director at Blackstone. "We are committed to investing in the company and working with Hilton's outstanding owners and franchisees to continue to grow and enhance the business."Hilton recently announced that Matthew J. Hart, the company's president and chief operating officer, would succeed Bollenbach as president and CEO effective Jan. 1, 2008. It was unclear whether Hart would remain with the company after the acquisition.

Barclays credit card goes eco-friendly

A new Barclays credit card is offering consumers the chance to display their environmentally friendly credentials.Launched yesterday (July 2nd), customers who take on the Barclaycard Breathe option will be guaranteed a low interest rate of 5.9 per cent.A large range of discounts will also be offered with the group's retail partners, including up to £50 off a British Gas loft and cavity insulation installation and £25 off bills with Ecotricity.Customers will also be afforded peace of mind by the news that Barclaycard Breathe will donate half of all its profits to carbon reduction projects both at home and abroad.Among the first will be Solar4Schools, a project aiming to supply and install solar panels in schools around the country, while a project in Brazil will promote the use of sustainable wood sources for fuel, replacing energy from diesel generators.Amer Sajed, commenting on the launch of Barclaycard Breathe, said: "Barclaycard has a long history of innovation as the first UK credit card provider and I'm delighted to launch another UK first.""This card helps customers do their bit in the fight against climate change,'" he added.

Sluggish response to interest rate rises leaves Bank's decision finely balanced

City economists said that the latest economic data left the Bank of England's Monetary Policy Committee decision on interest rates finely balanced, although the majority are forecasting a quarter-point rise to 5.75 per cent at noon today.A slew of data about house prices, service sector inflation and equity withdrawal, as the Committee began its proceedings, pointed to an economy that is not responding quite as rapidly and unequivocally as expected to the four interest rate increases - amounting to 1 percentage point - imposed by the Bank since last August. Only the British Retail Consortium's shop price survey suggested signs of diminishing inflationary pressure; prices were 0.5 per cent higher than at the same time a year ago and shop prices rose by only 0.2 per cent between May and June.The Halifax house price survey, by contrast, suggested that inflation in the property market, although moderating, remained in double digits in June: houses were up by 0.4 per cent, taking the annualised rate to 10.7 per cent. The picture was confirmed by Savills, which said "demand for prime commercial property across Europe remained strong in the first half of 2007".Prices in the service sector also accelerated last month, with little sign that companies were losing "pricing power" - a key factor for Bank officials. The CIPS activity index - covering businesses from hotels to financial services - rose to 57.7 from 57.2 in May. That was the highest since January. There was a rise in both input and output price inflation. George Buckley, an economist at Deutsche Bank, said: "This survey adds further justification to tomorrow's expected rate hike and a continuation of growth and price pressures at these levels could support further action ahead."Figures from the Bank of England itself also showed Britons are continuing to cash in on the rising value of their homes, though how much of this goes into immediate spending, as opposed to funding retirement plans, for example, is unclear. Housing equity withdrawal totalled £13.2bn in the first three months of 2007, only slightly less than £13.3bn in the last quarter of last year.Malcolm Barr, an economist at JP Morgan, said: "Nothing in the set of data released this morning looks likely to dissuade the MPC from the widely anticipated rate hike."The Monetary Policy Committee was split five to four to hold interest rates steady last month, with the Governor, Mervyn King, and other "hawks" in the minority. The presumption is that at least one "dove" will defect. KPMG's chief economist, Andrew Smith explained: "A rate rise is very much on the cards, with a high probability that at least one of the five MPC members who voted for no change last month will switch sides as the four hawks hold firm. While the uncertainty surrounding the economy - cited in June as a reason to wait - remains high, other arguments for keeping rates on hold no longer apply. The risk that back-to-back hikes might unduly alarm the markets has obviously passed; and, similarly, a rise would hardly come as a surprise this time: the majority of economists now expect a quarter-point increase, which is also fully discounted by the markets. The May Inflation Report suggested that, without one, inflation would overshoot the target in the medium-term."On a typical £110,000 repayment mortgage, a further quarter-point rise would mean an increase of £16.52 per month, on top of the £80 or so it has risen in the last year. More serious still will be the impact on the 2.3 million people whose cheap fixed-rate deals expire later this year, an issue that the new Chancellor, Alistair Darling, identified as one of his immediate concerns.

Chrysler Recalls 2007 Jeep Wrangler, Dodge Nitro SUVs

Chrysler said Tuesday it was recalling more than 80,000 2007 Jeep Wrangler and Dodge Nitro sport utility vehicles in the United States to correct a problem that could make the engine stall.Chrysler Group, a unit of DaimlerChrysler AG, said the recall would allow dealers to reprogram a power module to remove the potential for a brief interruption of electrical power to the instrument panel and the engine. The automaker said the power interruption could lead to a short engine stall, but said the engine would immediately restart if the vehicle was in motion.The National Highway Traffic Safety Administration opened an investigation into the Wrangler in May after receiving reports of engine stalling. Chrysler said the agency has received about 180 complaints of engine stalling in Wrangler and Nitro vehicles.There has been one accident linked to the issue, the company said, but no injuries have been reported. Chrysler will notify owners about the recall later this week and the work will be completed at no cost to consumers.