UBS shares seen down 3 pct after exec indictment

ZURICH (Reuters) - Shares in UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) were expected to fall 3 percent at the open on Thursday after U.S. authorities charged the Swiss bank's wealth management chief with conspiring to help wealthy Americans to hide $20 billion from the taxman.

Coming barely a month after the Swiss state rushed to shore up UBS in the subprime crisis, the indictment of Raoul Weil, who is also a board member, is the most serious blow the United States has yet inflicted on the world's No. 1 bank to the rich.

The high-profile indictment, which was unsealed on Wednesday, is part of a wide-ranging tax probe against UBS and also poses a threat to Switzerland's treasured bank secrecy. [nN12293112]

It risks further denting the already tainted reputation at UBS at a time when the Swiss banking icon is struggling to recover from the subprime crisis and is seeing wealthy clients taking money away from the bank.

Shares in UBS were indicated to down 3.0 percent by 0738 GMT, according to data from bank Clariden Leu [CLPRE2].

A disastrous foray into U.S. risky assets has forced UBS to make more writedowns than any other bank in Europe and its stock has lost two thirds of its value since the start of 2008.

Domestic rival Credit Suisse's (CSGN.VX: Quote, Profile, Research, Stock Buzz) shares were indicated to open down 4.4 percent.

Credit Suisse has suffered less than UBS in the initial phase of the crisis but posted a large loss in the third quarter and is expected to fare poorly also this quarter.

The U.S. indictment said Weil had been charged with concealing the assets of about 17,000 U.S. clients from the Internal Revenue Service.

An attorney for Weil, who has since stepped down, said on Wednesday he was innocent and called the charge against him "totally unjustified."

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Britain seeks block on EU imports from Israeli settlements

The move is intended to put pressure on Israel to halt the expansion of the settlements through Palestinian land on the West Bank.

A note circulated to the EU has called for more stringent labelling for settlement-produced goods, which often appear in UK shops either designated falsely as being from Israel, or labelled as coming from the West Bank suggesting Palestinian origin.

The note also warns such goods may have been illegally exempted from tariffs, violating the Israel-EU trade agreement.

The move, reported by The Indepedent, is a signal of growing frustration over continued expansion of Jewish settlements on the West Bank despite Israeli promises to halt construction as part of the "road map" to peace with the Palestinians.

Though Israel has taken moves to dismantle wildcat outposts set up by radical settlers, it has permitted what is termed "natural growth" in some settlements as well as new building in Jewish neighbourhoods of East Jerusalem, which the Palestinians claim as capital of a future state.

Israel's settlements in the Jordan Valley are major producers of fruit, vegetables, flowers and fresh herbs, while other settlements run wineries and greenhouse operations, and produce plastics and other household goods in light industrial zones. The well-known Ahava cosmetics, made with Dead Sea minerals, are produced in the settlement of Mitzpe Shalem.

"We are aware of it and there is a dialogue between us and the British authorities," said the Israeli foreign ministry spokesman Yigal Palmor. "Our position in the past has been that labelling is out of the question and that products could be identified according to the zip code."

The move follows consumer protests in The Netherlands last year which extracted promises from a major importer of organic produce, Udea, to refrain from dealing in settlement-produced items. Earlier this autumn the Dutch company Heineken, which has a partial ownership of Barkan Wineries, moved the last of the winery's operations out of a West Bank industrial zone, under pressure from consumer groups and the Dutch government.

UK supermarkets have acknowledged importing food including organic herbs grown on settlements but say by designating them as from the West Bank they are complying with EU requirements. However Marks and Spencer has stopped stocking goods from the West Bank.

On Sunday the Israeli government said it had decided to end all forms of support for "wildcat" settler outposts on the West Bank, which usually take the form of makeshift caravans camps.

telegraph.co.uk

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Petraeus visits Pakistan as it fights "for survival"

ISLAMABAD, Nov 3 (Reuters) - The U.S. commander running the wars in Iraq and Afghanistan, General David Petraeus, held talks on Monday with Pakistani defence officials who told him Pakistan was fighting a war for its survival against militancy.

His visit to Pakistan, apparently his first stop on a foreign tour since taking charge of U.S. Central Command on Friday, highlights U.S. concern about a country seen as crucial to stability in Afghanistan and to defeating al Qaeda.

U.S. analysts say Pakistan is facing a major threat from Islamist militants at a time when the nuclear-armed nation and its new civilian government are engulfed in extraordinarily difficult economic problems.

Petraeus was being accompanied by Assistant U.S. Secretary of State Richard Boucher.

Their visit comes as relations between the United States and Pakistan have been strained by a series of cross-border strikes by U.S. forces on militant targets in Pakistan.

The two Americans met Defence Minister Chaudhry Ahmed Mukhtar on Monday and were due to meet military and other government leaders, including President Asif Ali Zardari, later in the day.

"We discussed the problems we are facing and they were very receptive ... They believe in our government because previously there was more rhetoric than action but now there is more action than rhetoric," Mukhtar later told Reuters.

"They appreciate that we take it as war against Pakistan. It's our war ... we are fighting for our survival," Mukhtar said, referring to Pakistani military offensives in the northwest and a wave of militant bomb attacks.

The most pressing problems for Petraeus include rising insurgent violence in Afghanistan and sanctuaries for Taliban and al Qaeda militants across the border in Pakistan's ethnic Pashtun tribal lands.

The United States and NATO are losing ground against an escalating Taliban insurgency in Afghanistan, despite the presence of 64,000 Western troops, while al Qaeda has regained strength in Pakistan's tribal region.

BAD BLOOD

Petraeus has been hailed as an outstanding military leader for helping pull Iraq back from the brink of civil war with a strategy that brought a "surge" of 30,000 extra U.S. troops.

Both U.S. presidential candidates, Barack Obama and John McCain, have said they would put more focus on defeating the Taliban insurgency in Afghanistan and eradicating al Qaeda from Pakistan's borderlands.

Both candidates have said they would boost U.S. troop strength in Afghanistan from the 33,000 there now.

Mukhtar said they had also discussed cross-border strikes by U.S. forces that have infuriated Pakistan.

Pakistan strongly objects to the U.S. strikes within its territory, saying they are a violation of its sovereignty and undermine efforts to isolate the militants and rally public opinion behind the unpopular campaign against militancy.

"We agreed that this creates bad blood," Mukhtar said of the strikes. "We said that if information is provided to us we will also be able to do that."

The United States has shrugged off Pakistan's complaints over the attacks. It says the attacks are needed to protect U.S. troops in Afghanistan and kill Taliban and al Qaeda militants who threaten them.

About 20 people, including militants, were killed in the latest U.S. missile strikes on two violence-plagued border regions, North and South Waziristan, on Friday. (Writing by Robert Birsel; Editing by Alex Richardson)

reuters.com

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