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Asian markets opened to learn that the US Federal Reserve would extend an 85-billion-US-dollar loan to the American International Group in exchange for a nearly 80-per-cent stake in the company on Wednesday. This is the US Fed rescue plan for insurance giant AIG. This move restored confidence in the global financial system for now. After the US Fed rescue, worldwide market responded on a positive note and rebounded. Market sentiment still remains cautious.  

The latest breakthrough came as agreement to create a giant US government-sponsored vehicle to take on toxic assets in the financial system looked possible on Thursday night. A deal could be in sight to create a vehicle loosely modelled on the Resolution Trust Corporation used to clean up the mess after the Savings and Loan crisis of the 1980s fuelled a late surge in stocks on Thursday, with the US S&P 500 index closing up 4.3 per cent, the biggest gain in nearly six years.

In Europe, the FTSE 100 surged more than 6 per cent as financial stocks were also helped by the financial regulator’s ban on short selling. Asian markets were also higher. The Nikkei 225 rose nearly 4 per cent and the Hang Seng surged 9 per cent in late trading. The STI closed on Friday with a  6% increase.

However, the market is still weighed heavily with persistent concerns over the global financial system and a worldwide economic slowdown

More information can be obtained from www.channelnewsasia.com.sg and www.ft.com

Morgan Stanley: US' no. 2 investment bank.

Its share price crashed 24 per cent on Wednesday - its biggest one day drop ever. Chinese financial conglomerate Citic is rumoured to be in talks to take a stake. US regional bank Wachovia is also said to be in talks with Morgan.

Washington Mutual: The largest savings bank in the US.

Put itself up for sale on Wednesday. Wells Fargo, JP Morgan Chase, Citigroup and HSBC are all said to be interested.

Macquarie Group (Australia).

Shares skidded 23 per cent yesterday to their lowest level in five years.

From: Your Friendly Research Team =)

With the economy now at a huge uncertainty, with banks announcing a crisis of their own, we have decided to summary some of the mega bank deals that have occured for the month of September.

The list is updated till 19th Sept

7th Sept:

The US government agreed to invest up to US$100 billion to bail out the country's two mortgage giants Fannie Mae and Freddie Mac.

14th Sept:

US Investment banking icon Merrill Lynch saved after Bank of America agreed to acquire it in a US$50 billion deal.

15th Sept:

Another Wall Street giant, Lemann Brothers sought bankruptcy protection. US assets bought by Britain's Barclays. Ongoing talks over the rest of its assets.

16th Sept:

World's largest insurer American International Group (AIG) rescued from the brink of collapse in US$85billion bailout by the US Federal Reserve.

17th Sept:

HBOS: Britain's biggest mortgage lender, reeling from bad debt, scrambled to finalise a lightning fast deal to merge with rival Lloyds TSB, in an all-share deal valuing HBOS at 12.2 billion pounds.

From: Your Friendly Research Team =)