Business news for Mon, 17 Dec 2007 & with word plc. 7 news.

LONDON led the biggest drop in United Kingdom home values for at least five years this month as higher mortgage costs and the prospect of further declines in prices kept away buyers, a report by Rightmove Plc showed. The average UK asking price fell 3.2 percent to 232,396 pounds (US$473,437) from November, the largest decline since the survey of real-estate agents' listings began in 2002, Britain's most-used property Website said yesterday. London home costs dropped 6.8 percent, also the most recorded by Rightmove. "The market is tough out there," Miles Shipside, the company's commercial director, said in an interview with Bloomberg News. "We see a flat outlook for next year, with no price rises, as we work our way through this liquidity crisis." The Bank of England this month cut the benchmark interest rate for the first time in two years, citing the threat of an economic slowdown. Confidence among British real-estate agents has slumped as pricier mortgages

INDUSTRIAL Bank Co closed its first collateralized loan obligation yesterday, the biggest in China's securitization market this year, Standard Chartered Plc, which arranged the transaction, said in a statement. The CLO raised 5.24 billion yuan (US$710 million). The senior portion of 4.87 billion yuan was sold to funds in China's interbank bond market while the subordinated portion was kept by the Chinese bank.

HSBC Holdings Plc, Europe's biggest bank by value, aims to start three new funds on the Chinese mainland next year as it taps into the country's rising demand for investment products. "We will see a strong growth and I would be surprised if we didn't see at least US$2 billion of new funds flowing in," Rudolf Apenbrink, chief executive officer of HSBC Investments Hong Kong Ltd, said in an interview with Bloomberg News. HSBC already manages three funds worth US$1.5 billion on the mainland under the joint venture HSBC Jintrust Fund Management Co. It expects to receive regulatory approval for its fourth fund soon and will apply for the qualified domestic institutional investment, or QDII, quota in May, Apenbrink said. Financial companies, including banks, fund managers and insurers, invest abroad using QDII quotas. To cope with managing more funds, HSBC Jintrust plans to recruit as many as 20 new employees next year, Apenbrink said. The company has about 100 employees.

ASIAN stocks fell the most in four months, led by Samsung Electronics Co and HSBC Holdings Plc, on concern accelerating inflation will limit interest-rate cuts, threatening global growth. Samsung declined the most in three weeks. HSBC and Cheung Kong (Holdings) Ltd paced losses in Hong Kong, where interest rates track those set by the Federal Reserve, after United States consumer prices rose the most since 2005. Centro Properties Group plummeted 76 percent in Sydney after the owner of US shopping malls said it was struggling to refinance debt. "Sentiment in the region is getting worse," said David Ng, who helps manage US$954 million at Hwang-DBS Asset Management Sdn in Kuala Lumpur. "First we had slowing US growth; now add on inflation fears. That makes for a bad combination." The MSCI Asia Pacific Index lost 2.9 percent to 152.28 as of 6:49pm in Tokyo, its sharpest decline since August 17, Bloomberg News said. The benchmark is set for its lowest annual gain

BRITISH insurance company Norwich Union was fined 1.26 million pounds (US$2.54 million) yesterday for a data-protection failure that allowed criminals to cash dozens of policies held by customers. Fraudsters gained access to the company's databases and cashed 74 policies worth 3.3 million pounds, the Financial Services Authority said. "Norwich Union Life let down its customers by not taking reasonable steps to keep their personal and financial information safe and secure," said Margaret Cole, the enforcement director of the Financial Services Authority. Norwich Union, a unit of Aviva PLC, said all of the canceled policies had been fully reinstated, and 11 people had been arrested on suspicion of carrying out the fraud. Anti-fraud measures have been updated following an independent review of the company's operations, it said. "Whilst the number of customers affected is very small, any breach in customer confidentiality is clearly unacceptable," said Mark

EUROPE'S manufacturing and service industries grew at the slowest pace in more than two years this month because of increases in energy and food prices and borrowing costs. Royal Bank of Scotland Group Plc said yesterday a preliminary estimate of its composite index fell to 53.3 from 54.1 in November. That's the lowest since August 2005 and lagged behind the 53.7 median of 15 forecasts in a Bloomberg News survey. A reading above 50 indicates growth. Europe's economy is heading for its slowest growth in three years in 2008 due to a near-record level for the euro, a 50 percent increase in crude oil prices, and higher lending costs. While the European Central Bank this month cut its forecast for economic growth next year, it's held off reducing interest rates as the inflation rate reached a six-year high. "The index is consistent with below-trend growth in the euro zone and this will continue until at least the second quarter 2008," Marco Valli, an economist at

First Reserve Corp., the biggest private-equity investor specializing in the energy industry, agreed to buy Scottish oil drilling services company Abbot Group Plc for $1.8 billion.