Issue link: https://maltatoday.uberflip.com/i/620988
maltatoday, WEDNESDAY, 30 DECEMBER 2015 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Takata airbag fault claims eighth victim in the US The US National Highway Traf- fi c Safety Administration (NHT- SA) has linked an eighth US death to a faulty airbag infl ator made by Japan's Takata. The NHTSA said a teenager was killed in July after an airbag in a 2001 Honda Accord ruptured. A total of 19 million cars, containing 23 million airbag inflators, made by 12 car companies have been recalled. In November, Takata agreed to pay a $70m fine for safety violations and may face deferred penalties of up to $130m. The airbag fault has claimed nine lives globally. The airbag inflators explode with too much force and spray metal shrapnel into the car. All nine deaths, eight in the US and one in Malaysia, have all been in Honda cars. More than 100 people have been injured. Honda said that the car involved in the crash had been included in a February 2010 national safety recall campaign and claimed that it had made "numerous attempts" to contact the previous owner of the vehicle. It said it sent a new recall notice to the current owner of the car on 21 July this year, one day before the crash. A spokesman for the NHTSA said that Honda, as well as Subaru and Mazda, have added a "few hundred thousand" more cars to the recall in the US, adding that other car companies may follow suit. The NHTSA said about a quarter of affected cars have been fixed, the majority of which are in areas of high humidity which can react adversely to ammonium nitrate, a chemical compound which is used to deploy the airbags. In a statement, Takata said: "Our heartfelt condolences go out to the driver's family. "We are working in close collaboration with Honda and NHTSA to determine the facts and circumstances surrounding this tragic situation. Takata's number one priority is the safety of the driving public." Shares in Takata closed down nearly 5%. Audi trims investment after Volkswagen emissions scandal Volkwagen's flagship Audi divi- sion has reined in its spending plans for 2016 in the wake of the scandal over rigging emissions tests. The German car giant also said on Monday it would be delaying the construction of a new wind tunnel. Audi, which made a higher operating profit than the overall VW group in the first nine months of 2015, said it would be investing more than €3billion on plants and equipment next year. The plan foresaw spending of €3.3billion for 2016, Reuters reported. Under its previous budget drawn up a year ago, Audi had announced investments of €17bn over the 2015-19 period, or an annual average of €3.4 billion. "With the current investment programme, we obviously want to enhance the brand's strong position, but at the same time we aim to achieve additional financial scope by means of further process and cost optimisation," said Audi finance chief Axel Strotbek yesterday . The move comes after VW, Europe's biggest automotive group, cut €1 billion from its 2016 investment plan in November as the emissions-cheating scandal expanded to include tens of thousands more vehicles in the United States. Audi vowed not to save at the expense of future growth but rather to examine every investment decision individually. "The board of management has therefore decided to postpone the construction of a new wind tunnel for one year," it said yesterday. The company did not comment on investment plans beyond 2016. J P Morgan to raise deposit rates after Fed decision on interest rates J.P. Morgan Chase & Co. will raise deposit rates for some of its biggest clients in January, according to a per- son familiar with the mat- ter, following the Federal Reserve's decision to raise interest rates this month. The move by J.P. Morgan, the largest U.S. bank by assets, makes it an early mover among its American rivals, the Wall Street Journal reports. Hours after the Fed's decision on Dec. 16, the largest U.S. banks announced increases in the prime rate, a reference rate for a variety of loans including credit-card debt. But most banks didn't make any corresponding increases to the interest they pay to depositors. The moves signaled that most banks hoped to pocket the gains from the Fed's move, at least for now. The deposit-rate increase by J.P. Morgan will affect most institutional clients, and the size of the increases will vary, the person said. They will apply to "operating" deposits, which are less likely to be withdrawn in a crisis. The move won't affect deposits of retail clients. Representatives for Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. said there has been no change to deposit rates at the banks. Representatives for Goldman Sachs Group Inc. and Morgan Stanley declined to comment. The Fed's decision to lift its benchmark interest rate by a quarter percentage point marked the end of an era that had pinched banks' lending profits. Lenders anticipate that higher rates will provide an immediate boost to lending income, while also possibly helping loan demand. In a rising rate environment, deposit- rate increases typically lag behind increases in loan rates, which is why banks can make more money when rates go up. While most U.S. banks are holding firm on deposit rates, some large Canadian banks have in recent weeks increased deposit rates on U.S. dollar- denominated accounts in Canada. Toronto-Dominion Bank, Bank of Nova Scotia and Canadian Imperial Bank of Commerce are among the Canadian banks that have increased deposit rates for certain U.S. dollar- denominated corporate accounts, according to representatives for the banks. Canadian lenders are tapping the U.S. market for growth. Low interest rates and slumping oil prices coupled with a sluggish domestic economy are clouding the outlook for Canada's banks, which generate the bulk of their profits in their home market. As a result, Canada's biggest banks are seizing more growth opportunities south of the border, including in corporate banking, private banking and wealth management. Money Market Report for the week ending December 25, 2015 ECB Monetary Operations On Monday, December 21, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The operation was conducted on Tuesday, December 22, and attracted bids from euro area eligible counterparties of €72.91 billion, €4.34 billion higher than the bid amount of the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.05%, in accordance with current ECB policy. Domestic Treasury Bill Market In the domestic primary market for Treasury bills, the Treasury invited tenders for 182-day and 364- day bills maturing on June 23 and December 22, 2016, respectively. Bids of €50.00 million were submitted for the 182-day bills, with the Treasury accepting €20.00 million, while bids of €60.00 million were submitted for the 364-day bills, with the Treasury accepting €8.00 million. Since €35.00 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €7.00 million, to stand at €237.05 million. The yield from the 182-day bill auction was -0.098%, up by 0.2 basis point from bids with a similar tenor issued on December 10, 2015, representing a bid price of 100.0496 per 100 nominal. The yield from the 364-day bill auction was -0.121%, down by 171.9 basis points from bids with a similar tenor issued on October 5, 2012, representing a bid price of 100.1225 per 100 nominal. During the week under review, there was no trading on the Malta Stock Exchange. On Tuesday the Treasury invited tenders for 92-day and 273-day bills maturing on April 1 and September 29, 2016, respectively.