CORPORATE FINANCE

The following corporate finance-related stories involving U.S. and European companies were reported by media on Thursday:

** The Government Investment Corp of Singapore, a sovereign wealth fund of the city state, is to be the lead investor in a $6 billion fund set up by private equity firm TPG [TPG.UL] to invest in troubled financial firms, the Financial Times reported.

** Over a third of London's City staff received higher bonus payments than last year, and 70 percent said payouts exceeded or matched expectations, the Financial Times cited a study by Morgan McKinley.

London Asia Capital PLC said it has appointed Diana Chen as corporate finance director to be based in its new office in the finance district of Beijing, China.

The Asia focused merchant banking group said it has shifted its China business model away from investment of funds into 'an already highly liquid' Chinese market, to providing advisory services, primarily within the clean technology sector.Covidien International directly owns all of the operating subsidiaries of Bermuda-based Covidien Ltd (NYSE:COV) and is the primary debt-issuing entity within the Covidien corporate family and performs treasury operations.

The ratings agency also affirmed the 'A-' corporate credit rating and stable outlook on healthcare products firm Covidien Ltd, formerly known as Tyco Healthcare (NYSE:TYC) , a unit of Bermuda-based manufacturing conglomerate Tyco International Ltd.

S&P said the ratings on Covidien reflect a satisfactory business profile, as evidenced by a diverse portfolio of medical products, stable positions within the company's healthcare segments, and the large contribution of disposable products to its revenue base.

However, these strengths are somewhat offset by the commodity-like nature of certain products and by competitive pressures, the ratings agency said.

CORPORATE FINANCE

US FINANCE

For good policy, and good governance, it is necessary to provide full independence to the RBI.

Budget 2008 will be here in two weeks and pink newspapers and news channels are looking forward in anticipation of — higher profits from more ads. It is likely that the Budget this year, in a process that started a few years back, will be of little consequence to the economy, or the stock market. Policy is no longer made exclusively on the 28th of February and that is a good thing. In that context, can any investor or pink journalist point to any major country in the world where Budget day is a tamasha day?

Does this mean India does not need any more economic reforms? God knows that is patently untrue. Worse, the sector most in need of reforms is assumed to be, again especially by the pink journalists, to be least in need. I am talking about the financial sector.

The two most important economic variables in any economy on Planet Earth are the interest rate and the exchange rate. Both are set by the Reserve Bank of India with more than an occasional input from the finance ministry. That is a major problem. Apart from the fact that the emerging policy is a hodge-podge of different interests and analysis, this fraternal approach leads to the undesirable situation of zero accountability — when the economy is good, both sides claim credit and when bad, each blames the other. With this match-up, the politician (the finance minister) is the ultimate loser, because she has to face the public in periodic elections. The FM, and her party, can be booted out, on grounds of non-performance. But the person occupying the RBI chair cannot, and should not (on grounds of technocratic independence), face any such consequence. FOR a new Chancellor, the first Budget is always daunting. But for Alistair Darling, the prospect of the Budget, now less than a month away on March 12, must seem akin to trial by fire. Rarely has there been a time in the past 20 years when the country needs a credible, authoritative and reassuring Chancellor at the helm. But less a year into the job and Darling has been dogged by ill fortune and charges of incompetence. To his critics he has managed to combine in this short period the finesse of Geoffrey Howe and all the luck of Norman Lamont. The economy looks set for its worst slowdown since 1991-92. The public finances look on course to break his predecessor's 'Golden Rule'. He has been forced to backtrack on two proposals announced in the Pre-Budget Report – Capital Gains Tax and the treatment of 'non-doms'. His claim to be "a safe pair of hands" has been severely tested by the debacle of Northern Rock. And overshadowing his every move is his predecessor and now Prime Minister, Gordon Brown, who gives the impression of having taken most of the job with him when he formally moved into No 10. Indeed, there is even a sense of a macabre calculus by the Prime Minister that it is better to leave the carcass of his successor twisting in the wind as a foil than to risk cutting him down – and drawing the bullets to himself.