Stake-builder Porsche sends VW shares racing

Volkswagen shares leapt by up to 200 per cent on the Frankfurt stock exchange after Porsche said that it had increased its stake in Europe's biggest car maker. Shares hit €634.99 before closing up 147 per cent at €520. On Sunday, Porsche said that it controlled 74.1 per cent of Volkswagen shares through a 42.6 per cent direct equity stake and options giving it another 31.5 per cent. Porsche said that it aimed to increase its direct equity stake to more than 50 per cent by the end of the year and that it wanted to increase this to 75 per cent in 2009. (Chris Johnston)

Australia acts to stiffen currency

The Reserve Bank of Australia bought Australian dollars again to limit the currency's plunge. The central bank also “acted to provide liquidity to the market” on Friday. The dollar closed at 61 US cents.

ColonialFirstStateGlobalAsset Management, Australia's largest fund manager, stopped withdrawals from its mortgage funds, which have A$3.3billion (£1.29 billion) in assets. (Chris Johnston)

Belgians bail out struggling KBC

KBC is the latest Belgian bank to be shored up by its Government, which pumped €3.5billion (£2.7 billion) into the group. Didier Reynders, the Belgian Finance Minister, said that the move was a preventive measure rather than an emergency bailout. (AFP)

Kremlin steps in to bolster rouble

Russia has pledged to keep the rouble steady and to support the retail, construction and banking sectors. It is to spend up to 100 billion roubles (£2.34 billion) buying new apartments from construction companies. (Reuters)

Brokers asked to take pay cut

CLSA Asia-Pacific Markets, a brokerage owned by Crédit Agricole, asked 500 senior employees, or one-third of its workforce, to consider a voluntary pay cut of up to 25 per cent to avoid job cuts. (Reuters)

Unexpected increase in US new home sales

New homes sales in the United States in September rose unexpectedly as sales gains in the West more than offset record low sales in the Northeast, the Commerce Department said. Sales rose by 2.7 per cent to a seasonally adjusted annual rate of 464,000, well above the 450,000 expected by analysts. Over the past 12 months, the number of new home sales in the US has fallen by 33.1 per cent.

Further ECB rate cut?

The European Central Bank (ECB) could cut interest rates for the second time in less than a month when it meets on November 6, Jean-Claude Trichet, its president, said. “It is not a certainty, it is a possibility,” he said in Madrid. Analysts expect a repeat of the 0.5 per cent cut made on October 8.

Wal-Mart reins in

Wal-Mart, the American retailer that owns Asda, plans to reduce the number of US store openings next year to 191, down from 218 this year. Eduardo Castro-Wright, the chief executive, said that US capital expenditure this year would be between $5.8 billion (£3.7 billion) and $6.4 billion, down from $9.1 billion last year.

US aid for carmakers

The US Treasury is considering how best to provide financial aid to help a possible merger between General Motors and Chrysler, a source said. It is understood the Treasury is considering at least $5 billion aid, which could include capital injections and government purchases of car loans. A decision could come as early as this week.

Bahrain £6m taxi deal

Manganese Bronze’s London Taxis International will supply 200 TX4 cabs to the Bahrain Economic Development Board in time for Bahrain’s Formula One Grand Prix in April. The model has been hit by a spate of underbonnet fires. It is the company’s biggest overseas order and worth an estimated £6 million.

BG’s Australian deal

BG Group, the British gas producer, agreed to buy Australia’s Queensland Gas Company in a deal valuing QGC at A$5.6 billion (£2.2 billion), the companies confirmed in a joint statement last night. The deal will give BG a leading role in the development of Australia’s coal bed methane reserves.

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