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The U.S. Agriculture Department said
private U.S. exporters reported 200,000 tonnes of corn
previously to unknown destinations have been switched to the
Soviet Union.
The corn is for delivery during the 1986/87 marketing year
and under the fourth year of the U.S.-USSR Long Term Grain
Supply Agreement.
The marketing year for began September 1.
Sales of corn to the USSR for delivery during the fourth
year of the agreement -- which began October 1, 1986 -- now
total 2,600,000 tonnes, it said.
In the third agreement year sales totaled 6,960,700 tonnes
-- 152,600 tonnes of wheat and 6,808,100 tonnes of corn.
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Shr loss 57 cts vs loss 30 cts
Net loss 5.9 mln vs loss 3.2 mln
Revs 5.6 mln vs 16.3 mln
Year
Shr loss 2.11 dlrs vs loss 95 cts
Net loss 22.0 mln vs loss 9.9 mln
Revs 29.3 mln vs 66.3 mln
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<Sundor Group Inc> said it
purchased DWG Corp's Texun Inc's line of regional juice
products.
The purchase terms were not disclosed, the company said.
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Shr 72 cts vs 57 cts
Net 4.5 mln vs 3.6 mln
Revs 25.1 mln vs 21.9 mln
Year
Shr 2.47 dlrs vs 1.87 dlr
Net 15.6 mln vs 11.8 mln
Revs 89.1 mln vs 73.3 mln
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Hayes-Albion Corp said its shareholders
approved a plan to merge with and become a wholly onwed
subsidiary of privately held Harvard Industries Inc.
St. Louis-based Harvard Industries, a manufacturer and
distributor of automobile supplies, held 80 pct of Hayes
following completion of a 13 dlrs a share cash tender offer in
December.
Under the merger agreement, remaining shareholders of
Hayes, a Jackson, Mich.-based maker of auto supplies, will
receive 13 dlrs cash for their shares.
Trading in Hayes common will cease at the close of business
today, the company said.
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Oper shr loss one ct vs loss four cts
Oper net loss 336,000 vs profit 2,631,000
Revs 237.2 mln vs 382.3 mln
Avg shrs 47.4 mln vs 16.5 mln
Year
Oper shr profit 21 cts vs profit 12 cts
Oper profit 9,922,000 vs profit 15.1 mln
Revs 1.1 billion vs 1.6 billion
Avg shrs 47.4 mln vs 16.5 mln
NOTE: 1986 4th qtr and year oper net excludes a gain of
28.6 mln dlrs and 28.5 mln dlrs or 60 cts per share,
respectively, for discontinued operations.
1986 4th qtr and year oper net excludes a gain of 90.5 mln
dlrs or 1.91 dlr per share and 114.8 mln dlrs or 2.42 dlrs per
share, respectively, mainly for settlement of dioxin-related
claims in reorganization proceedings.
1985 4th qtr and year oper net excludes a loss of 41.2 mln
dlrs or 2.51 dlrs per share and a loss of 36.3 mln dlrs or 2.21
dlrs per share, respectively, for discontinued operations.
1985 4th qtr and year oper net excludes a gain of 25.6 mln
dlrs or 1.56 dlr per share and 29.4 mln dlrs or 1.79 dlrs per
share for settlement of claims and utilization of tax loss
carryforward.
1985 year oper net also excludes a loss of seven mln dlrs
for change in inventory evaluation method.
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Shr loss seven cts vs profit five cts
Net loss 149,421 vs profit 103,120
Sales 1,698,345 vs 1,920,010
Six Mths
Shr loss five cts vs profit nine cts
Net loss 100,472 vs profit 191,614
Sales 3,836,794 vs 3,650,322
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Commerce Secretary Malcolm Baldrige
said he supported efforts to persuade newly-industrialized
countries (NICS) to revalue currencies that are tied to the
dollar in order to help the United States cut its massive trade
deficit.
"We do need to do something with those currencies or we
will be substituting Japanese products for Taiwanese products,"
or those of other nations with currencies tied to the dollar,
Baldrige told a House banking subcommittee.
The U.S. dollar has declined in value against the Yen and
European currencies, but has changed very little against the
currencies of some developing countries such as South Korea and
Taiwan because they are linked to the value of the dollar.
As a result, efforts to reduce the value of the dollar over
the past year and a half have done little to improve the trade
deficits with those countries.
Baldrige told a House Banking subcommittee that the
Treasury Department was attempting to persuade those countries
to reach agreement with the United States on exchange rates.
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Treasury balances at the Federal
Reserve rose on March 23 to 3.332 billion dlrs from 3.062
billion dlrs on the previous business day, the Treasury said in
its latest budget statement.
Balances in tax and loan note accounts fell to 15.513
billion dlrs from 17.257 billion dlrs on the same respective
days.
The Treasury's operating cash balance totaled 18.845
billion dlrs on March 23 compared with 20.318 billion dlrs on
March 20.
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William Bywater, president of the
International Union of Electronic Workers, called on President
Reagan to retaliate against Japan for unfair practices in
semiconductor trade.
He said in a statement a crash program was needed in the
semiconductor industry to prevent the United States from
becoming "one of the world's industrial lightweights."
Bywater's remarks came as the White House Economic Policy
Council prepared for a Thursday meeting to decide what
sanctions if any should be taken against Japan for alleged
violations of a U.S.-Japanese semiconductors agreement.
The pact, agreed to last July, called for Tokyo to end
selling semiconductors at below cost and to open its home
market to U.S. goods. In return, Washington agreed to forego
antidumping duties on Japanese semiconductors.
But U.S. officials have said that while Japan has stopped
dumping in the U.S. market, it has not ended third country
dumping; nor has it opened its market to U.S. semiconductors.
Japan yesterday, in an effort to ward off U.S. action,
ordered a cutback in semiconductors production as a way to
force prices up and end the dumping.
Bywater, in his statement, said he backed a Defense Science
Board task force proposal to set up a consortium to develop new
electronic products and manufacturing processes and make the
U.S. industory more competitive.
But he added the industry could not wait for legislation to
pass and that action was required now to help the depressed
electronic industry.
Bywater said, "I urge the Reagan Administration to take full
and severe action immediately against Japan by invoking the
retaliatory steps that are permitted under U.S. law and GATT
(General Agreement on Tariffs and Trade)."
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Zaire has been authorized to
purchase about 30,000 tonnes of U.S. rice under an existing PL
480 agreement, the U.S. Agriculture Department said.
It may buy the rice, valued at 5.5 mln dlrs, between March
31 and August 31, 1987, and ship it from U.S. ports by
September 30, the department said.
The purchase authorization covers the entire quantity of
rice provided under the agreement.
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<Midivest Inc> said it acquired
all the assets of <Business Aviation Inc> of Sioux Falls, S.D.,
for an undisclosed amount of stock.
Midivest said it expects to sell 10 to 20 of the renovated
Beechcraft planes next year. It said management will also lease
these airborne intensive care units to hospitals and government
subdivisions through Metropolitan Leasing, a wholly-owned
subsidiary of Midivest.
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The Commodity Credit Corporation
(CCC) has switched 25.0 mln dlrs in wheat credit guarantees to
Jordan under the Export Credit Guarantee Program to the
Intermediate Export Credit Guarantee Program, the U.S.
Agriculture Department said.
The switch reduces the total value of GSM-102 guarantees
for the current fiscal year to 30.0 mln dlrs.
The credit terms extended for export sales under the
Intermediate Export Credit Guarantee Program (GSM-103) must be
in excess of three years but not more than seven years.
All sales must be registered and exports completed by
September 30, 1987, the department said.
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Central bank intervention in the
foreign exchange markets succeeded in staunching the dollar's
losses today, but senior dealers here believe the U.S. currency
is headed for a further retreat.
Although the intervention was widespread, dealers perceive
that the six major industrial nations have differing levels of
commitment to their recent accord to stabilize currencies.
Moreover, hard economic realities hold greater sway over
the currency market than central bank intervention and these
argue for a further dollar decline, dealers said.
"The market can be bigger than the central banks. And
economic fundamentals will always come to the fore," said a
dealer at one major U.S. bank.
As the dollar dropped to post-World War II lows against the
yen today foreign exchange traders said the Bank of Japan,
Federal Reserve Board and Bank of England intervened in the
markets on behalf of the U.S. currency.
Reports of the authorities' actions helped the dollar
recover to about 149.45 yen in New York this afternoon from
the post-war low of 148.20 yen in the Far East. But it still
failed to regain Monday's U.S. closing level of 150.00/05 yen.
Tokyo dealers said the Bank of Japan bought one to 1.5
billion dlrs in Tokyo today and may also have purchased dollars
yesterday in the U.S. via the Federal Reserve.
Meanwhile, there were strong rumors in New York that the
Fed also bought a modest amount of dollars around 148.50 yen
today. Talk also circulated that the Bank of England purchased
a small amount of dollars for yen.
The Fed's last confirmed intervention was on January 28
when it bought 50 mln dlrs in coordination with the Bank of
Japan. But on March 11 the Fed also was rumored to have
signalled displeasure with a dollar surge above 1.87 marks.
The authorities' actions appeared to back up the February
22 Paris pact between the U.S., Japan, West Germany, Britain,
France and Canada under which the nations agreed to cooperate
to foster exchange rate stability around prevailing levels.
But foreign exchange dealers were not overly impressed by
the authorities' intervention which they said can only soften
extreme moves in the market.
For one thing, some dealers believed that the Fed's
purchases were done on behalf of the Bank of Japan rather than
for the U.S. central bank's own account, suggesting a rather
watered-down American commitment to the currency accord.
The Bank of England's action also was thought to be
completed on behalf of the Japanese central bank, reinforcing
the market's view that Japan is the most resolute of the six
nations in its support of the currency pact.
"No-one doubts the Bank of Japan is serious. But the other
two central banks seem to be making more token gestures than
anything else," said Chris Bourdain of BankAmerica Corp.
"I'm not convinced the intervention was concerted," said
Earl Johnson of Harris Trust and Savings Bank in Chicago.
"It's a yen problem more than anything else."
Some dealers said a rising wave of trade protectionist
sentiment in the U.S. limits the extent to which the American
authorities can endorse a stronger dollar against the yen.
"The dollar's break below the key 150 yen level ties the
Treasury's hands behind its back. The U.S. cannot intervene on
its own account because of the strength of protectionism here,"
said Albert Soria of Swiss Bank Corp.
Such comments reflect the view that the currency markets
are becoming increasingly politicized. Despite official
denials, some traders still feel the U.S. would countenance a
lower dollar to help trim the nation's trade deficit.
The majority of the 170 billion dlr merchandise trade
deficit in 1986 was with Japan.
Indeed U.S. Treasury secretary James Baker's comment on
Sunday that the February currency pact had not established
dollar targets was read by the market as a signal to sell the
U.S. currency and kicked off the latest retreat.
"The dollar still has more room on the downside against the
yen based on the frictions in trade and financial services. The
currency market is becoming very political," said Natsuo Okada
of Sumitomo Bank Ltd.
Okada expects the dollar to trade between 148 and 150 yen
this week but sees the chance of a drop to 140 yen by the end
of April or early May.
Even if West Germany and Japan succeed in stimulating their
economies, it may not be enough to solve structural economic
imbalances in the near future, dealers said.
"Even if Japan and West Germany do expand this year, it
won't be enough to help the trade situation much," said
Bourdain of BankAmerica, who also expects the dollar to drop to
148 yen in the next couple of days.
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Eastman Kodak Co said it plans
to sell its 2.3 pct holding in ICN Pharmaceuticals <ICN> and
part of its nine pct holdings in Viratek <VIRA>.
It said the purpose of the investments had been to lay the
groundwork for the creation of its Nucleic Acid Research
Institute.
Since that has been achieved, there is no longer any reason
to maintain the equity positions, Kodak said.
Kodak holds 470,000 sahres of ICN, currently trading at
about 18-3/4 and 700,000 of Viratek, trading at 44.
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Montreal-based Noverco Inc told the
Securities and Exchange Commission it reduced its stake in
Sceptre Resources Ltd to 1,232,200 shares or 4.8 pct of the
total outstanding.
Noverco said it sold off 400,500 shares "to reduce the
investment of Noverco in Sceptre."
"Additional common shares of Sceptre may be sold or
purchased by Noverco, depending upon market conditions," Noverco
said.
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Shr three cts vs 11 cts
Net 126,000 vs 434,000
Revs 84.0 mln vs 80.2 mln
Avg shrs 4,948,731 vs 3,870,511
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Bull and Bear Group A said it lowered
its monthly dividends on three of its funds.
It said it lowered its Tax Free Income Fund <BLTFX> to 10.3
cts from 10.6 cts; its U.S. Government Guaranteed Securities
Fund <BBUSX> to 11.5 cts from 11.8 cts; and its High Yield Fund
<BULHX> to 14 cts from 14.2 cts.
All dividends are payable March 31 to shareholders of
record March 25, the company said.
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Caltex Petroleum Corp said it will
raise
posted prices for naphtha and several grades of residual fuel
in Bahrain, effective March 25.
Caltex, a joint venture of Chevron Corp <CHV> and Texaco
INC <TX>, said its naphtha posting is up four cts a gallon to
43 cts. It said it is raising its marine diesel oil posting by
30 cts a barrel to 20.24 dlrs a barrel.
Light, medium, and heavy fuel oil postings are up 1.50 dlrs
a barrel, the company said. This will bring the light fuel oil
price to 16.90 dlrs, medium to 15.50 dlrs, and heavy to 14.60
dlrs, the company said.
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Nashua Corp said it signed a
letter of intent to purchase <Lin Data Corp>, a private
manufacturer of high-capacity rigid discs for storage of
computer data.
Under the terms of the letter, Nashua said it will acquire
all classes of Lin stock for 24 mln dlrs. In addition, it said
it will loan Lin 1,200,000 dlrs to support its operations.
The closing of the sale is set for the second quarter of
1987, the company said.
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Shr loss 56 cts vs loss five cts
Net loss 1.9 mln vs loss 164,000
revs 6.9 mln vs 5.4 mln
Year
Shr loss 1.15 dlrs vs profit 52 cts
Net loss 3.8 mln vs profit 1.7 mln
Revs 25.6 mln vs 29.8 mln
NOTE: 1987 net loss includes loss 6.5 mln dlrs for
nonrecurring reserve for closing costs of facility, writeoffs
and sales of real estate.
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GenCorp Inc said it withdrew from
consideration at its annual meeting on March 31 proposals aimed
at providing for a stock split and an increased dividend so
that it could focus its energies on responding to the takeover
offer made last week by a partnership of AFG Industries Inc
<AFG> and Wagner and Brown.
In addition to proposing an increase in the number of its
outstanding common shares, GenCorp had suggested the adoption
of a classified or "staggered" board and the elimination of
cumulative voting.
GenCorp said these proposals could "distract energy and
attention from the real task at hand -- to respond to the
tender offer in a manner which is in the best interests of the
company, its shareholders and its other constituencies."
GenCorp said the proposal to increase its outstanding
shares was made with the aim of declaring a stock split and a
dividend increase.
The other proposals, it said, would provide for greater
long-term stability and cohesiveness for the GenCorp board.
The company did not indicate when it might resubmit the
proposals for approval by its shareholders.
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Vermont Financial Services
Corp said its board approved a regular 20 cts per share cash
dividend payable April 25 to shareholders of record March 26.
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Qtly div 10 cts vs 10 cts prior
Payable May one
Record April 15
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Gartner Group Inc said it
acquired sole ownership of the COMTEC Market Research Program.
Gartner said its wholly-owned subsidiary purchased the
interests of its former partners for an aggregate price of
1,125,000 plus a percentage of net sales proceeds on future
sales of certain products.
Prior to the acquisition, Gartner Group owned one-third in
the COMTEC partnership, it said.
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Resorts International Inc
said it received a proposal from <KSZ Co Inc> under which
holders of Resorts class B stock would receive 140 dlrs a share
in cash and one share of common stock in a new company to be
formed through the takeover.
Under the offer, Resorts said holders of its class A shares
would receive 15 dlrs a share in cash and three shares of
common stock in the new company.
Resorts said the offer from KSZ calls for a merger of
Resorts with RI Acquisition Co Inc, a newly formed Delaware
corporation.
Resorts said that prior to the merger, RI Acquisition would
be capitalized with about 100 mln dlrs of debt and about 220
mln dlrs of equity.
It said 200 mln dlrs of the equity would be in the form of
special preferred stock.
The KSZ offer, Resorts said, indicates that KSZ has a
commitment from <M. Davies Cos> to buy all of the special
preferred stock.
Resorts said the offer will expire at 1700 EST on March 27.
It said it asked its investment advisor, Bear, Stearns and Co,
to advise its board on the offer.
Earlier this month, the estate of James M. Crosby and
certian members of his family agreed to sell their class B
shares to New York real estate tycoon Donald Trump for 135 dlrs
a share. The estate and family members hold 78 pct of the
752,297 class B shares outstanding.
Trump also agreed to pay 135 dlrs a share for the remaining
class B shares outstanding.
Resorts also has about 5,680,000 shares of outstanding
class A stock. These shares carry one one-hundredth the voting
power of the class B shares.
Trump's offer beat out a rival bid of 135 dlrs a share made
by Pratt Hotel Corp <PRAT>.
Resorts said that under the proposal made by KSZ, existing
class A and class B shareholders would control about 96 pct of
the outstanding common of the new company formed to acquire
Resorts.
Resorts said the new company, upon completion of the
merger, would hold the 220 mln dlrs of debt and that the
special preferred stock would immediately be converted into
exchangeable participating preferred of the new company.
This preferred, Resorts said, would pay a dividend based on
the net cash flows from the new company's Paradise Island
operations.
A Resorts spokesman said the KSZ offer was made in a
two-page letter and that Resorts could not comment on it
because it did not contain enough information. Resorts has
asked Bear, Sterns to obtain complete data, he said.
The spokesman said Resorts is not familiar with KSZ but
that it believes the company is controlled by Marvin Davis, the
Denver oilman.
Calls to Davis were referred to Lee Solters, who handles
public relations for Davis. Solters, said to be travelling, was
not immediately available for comment.
Donald Trump was also unavailable for comment, as was a
spokesman for the Crosby estate.
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Citicorp expects net income in its
individual banking sector to top one billion dlrs by 1993,
compared with 462 mln dlrs in 1986, said Richard Braddock, head
of Citicorp's individual banking division.
"We can double our earnings over the next five to seven
years," he told a banking analysts meeting, adding that this
forecast may be on the conservative side.
He said that bank card operations and the New York branch
system would continue to turn in hefty profits but also picked
out other developing areas, such as U.S. mortgage and
international consumer, as major potential earners.
Braddock and his sector heads made the following more
specific predictions:
- Cost of funds and net credit loss levels in the U.S.
bankcard unit will taper off in coming years from 1986's
relatively inflated levels.
- Customer net revenue in the mortgage banking area will
rise to 464.7 mln dlrs in 1987 from 374.3 mln in 1986.
- The international consumer business will show 22 pct
compound annual growth in earnings between 1986 and 1992.
- Private banking earnings will hit 100 mln dlrs in 1987
and top 200 mln dlrs in 1992.
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Shr 35 cts vs 40 cts
Net 2,642,000 vs 3,017,000
Sales 19.1 mln vs 18.9 mln
Six Mths
Shr 69 cts vs 70 cts
Net 5,178,000 vs 5,299,000
Sales 35.6 mln vs 33.8 mln
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Brazilian Science and Technology
Minister Renato Archer said Brazil will keep its computer
market closed to foreign goods in order to give its own infant
industry time to develop.
"Every country establishes laws to protect its interests.
The United States closed their borders at a certain stage to
some foreign goods and therefore protected its industrial
development. Now it is time for Brazil to do likewise," Archer
said at the opening of a national software conference.
After several meetings, Brazil and the U.S. Have made no
major progress in their computer row, which they have been
trying to resolve for the past 18 months.
The Reagan administration has objected to Brazil protecting
its computer industry from imports.
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Northern Indiana Public Service
Company said it again omitted its quarterly common stock
dividend which would have been payable in May.
NIPSCO said it has not paid a qtly dividend since December
1985 following an adverse decision by the Indiana Supreme Court
denying amortization of about 191 mln dlrs NIPSCO invested in
its Bailly N-1 project.
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The chairman of the Federal Reserve
Board, Paul Volcker, has written to the chairman of the House
Banking Committee to raise concerns about legislative proposals
scheduled for consideration Wednesday.
Volcker told committee chairman Fernand St. Germain a
proposal to deny primary dealer status to firms from countries
that do not grant U.S. firms equal access to their government
debt markets might invite retaliation against U.S. firms
abroad.
He added, "even Japan, against whom this proposal seems to
be particularly directed," has started opening its markets.
In his letter, made available at the Treasury, Volcker also
said a proposal to ease debt problems of developing countries
by setting up a public facility to buy their debts owed to
commercial banks, was a problem.
"I believe that the prospect of debt relief would undermine
the difficult internal efforts of the borrowing countries to
achieve the structural reform that is needed regardless of the
policies that are followed on servicing external debt," Volcker
said.
It might also cause private lenders to become reluctant to
extend more credit to the borrowing countries, he said.
Volcker said he endorsed comments by Treasury Secretary
James Baker "about the inappropriateness of using public
resources for purchasing private commercial bank debt, which we
both see as an inherent aspect of the proposed international
debt facility."
He also said a proposal for establishing formal procedures
for international negotiations on currency exchange rates "is
unrealistic and could well have damaging effects."
"For example, the bill's directive to intitiate negotiations
in order to achieve a competitive exchange rate for the dollar
-- a matter upon which there can be considerable difference
among analysts -- runs the risk of building up potentially
destabilizing market expectations," Volcker said.
He recommended "we should not lock ourselves into formalized
procedures for international negotiations" on exchange rates but
instead use other, more flexible means like the recent mmeting
in Paris between U.S. treasury and central bank representatives
and those of major trade allies.
Reuter
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Qtly div five cts vs five cts prior
Pay June 15
Record May 18
Reuter
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U.S. corn acreage this year is
likely to drop to the lowest level since the unsurpassed
acreage reductions of the 1983 PIK year and could rank as one
of the lowest corn plantings in the United States in sixty
years, Agriculture Department officials said.
USDA releases its official plantings report on March 31.
Agriculture Department analysts said next week's figures will
likely show a sharp drop in acreage to as low as 65 mln acres,
down 22 pct from last year's plantings of 83.3 mln acres.
Assuming an 18 mln acre drop in plantings, U.S. corn
production will also decrease significantly. Analysts said 1987
corn production could drop by over one billion bushels to
around seven billion bushels.
Expected signup of up to 90 pct in the 1987 feed grains
program, along with 1.9 mln acres enrolled in the conservation
program, will cause acreage to plummet, Department feedgrain
analysts said.
"There's no question that there will be a sharp decrease in
corn acreage," one said. "It's difficult for any farmer to not
go along with the program this year."
Soybean acreage is also expected to decline this year but
at a much slower rate of around four pct, USDA analysts said.
Soybean plantings could drop to 59 mln acres or below, they
said, compared to last year's level of 61.5 mln acres.
If analysts' unofficial estimates prove correct then the
drop in u.s. corn acreage will be the largest since 1983 when
farmers idled 22 mln acres in the Payment-In-Kind program.
Farmers planted only around 60 mln acres of corn in 1983. A
severe drought that summer in major producing states caused
yields to tumble and final crop production to total only 4.2
billion bushels.
Given normal weather conditions this year, USDA analysts
said the 1987 corn crop could end up around seven billion
bushels, down from last year's crop of 8.3 billion bushels.
"This kind of acreage reduction will mean a significant
reduction in production," an analyst said.
A crop of seven billion bushels is close to the annual U.S.
corn usage, so surplus stocks, while not decreasing, would not
increase significantly, a specialist said.
High producing corn belt states are expected to show the
greatest acreage reductions, based upon historical
participation in government programs, analysts said.
In contrast, soybean acreage is likely to be cut the most
in marginal producing areas of the southeast and the western
corn belt, a USDA soybean analyst said.
"Soybean acreage in the eastern corn belt will not budge,"
he said. Neither does he expect any significant acreage cuts in
higher-producing delta areas.
Soybean production could drop fractionally from last year's
2.0 billion bushels to 1.8 to 1.9 billion, he said.
U.S. soybean acreage, after soaring to 71.4 mln acres in
1979 from only 52 mln acres five years prior to that, has
steadily declined in the 1980's.
U.S. corn acreage, with the exception of 1983, has been in
the low to mid 80-mln acre range for the past 10 years. The
highest corn plantings reported in the 60 years that USDA has
kept such records was in 1932 when farmers planted 113 mln
acres and obtained average yields of 26.5 bushels per acre.
Last year U.S. farmers obtained record corn yields
averaging 119.3 bushels per acre.
"We have absolutely no trouble producing an eight billion
bushel crop on only 80 mln acres or so," an analyst said.
Corn acreage will probably level at around 65 mln acres as
long as government program provisions remain the same, analysts
said.
Currently farmers enrolling in the program are required to
set aside 20 pct of their base acreage and then are eligible
for payments of two dlrs per bushel by idling an additional 15
pct of their acreage.
"To get to the PIK level of 60 mln acres, we would have to
provide more incentives," an analyst said.
Reuter
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Kirschner Medical corp said it
completed the acquisition of Minnesota Mining and
Manufacturing's <MMM> orthopedic metal implant line division.
The acquisition price is 12.0 mln dlrs in cash, a six mln
dlr three year note and 100,000 shares of Kirschner common
stock.
The division had sales of 11.3 mln dlrs in 1986.
Reuter
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Leading U.S. farm state senators are
seeking to insert into the Senate's omnibus trade bill a
provision that would broaden eligibility requirements under the
U.S. Agriculture Department's export enhancement program, EEP,
to include traditional buyers of U.S. farm products, including
the Soviet Union, Senate staff said.
Under existing criteria, USDA can offer EEP subsidies to
recoup export markets lost to competing nations' unfair trading
practices.
Senate Agriculture Committee Chairman Patrick Leahy (D-Vt.)
is leading a group of farm state senators in an effort to
broaden the criteria in such a way as to enable Moscow to be
eligible for the subsidies, sources said.
The senators -- including Senate Finance Committee Chairman
Lloyd Bentsen (D-Tex.), Max Baucus (D-Mont.), David Pryor
(D-Ark.), John Melcher (D-Mont.) and Thad Cochran (R-Miss.) --
also may fold into the trade bill a measure to shield pork
producers and processors from Canadian imports.
The measure, sponsored by Sen. Charles Grassley (R-Iowa),
would clarify the definition of "industry" in determining whether
or not imports were causing injury to U.S. producers.
Grassley's bill stems from a 1985 decision by the
International Trade Commission that imports from Canada of live
swine -- but not fresh, chilled and frozen pork -- were harming
U.S. producers.
The bill's proponents have argued Canada has simply
replaced shipments of live hogs with fresh pork.
Reuter
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Federal Reserve Board Vice Chairman
Manuel Johnson said the dollar has stabilized against other
currencies after action taken by the Fed.
"We have taken the appropriate action and the dollar has
stabilized," Johnson said after testifying to a House Banking
subcommittee.
He did not elaborate on the nature of the action nor when
it was taken, but said that it was in the spirit of the
agreement reached by six industrial nations in Paris recently.
Johnson said the dollar's decline against other currencies
such as the Japanese yen has been gradual.
Since the accord by the United States, Britain, West
Germany, Japan, France and Canada, foreign exchange markets
have been closely watching for indications of intervention by
central banks to determine the committment by those nations to
their agreement.
The nations agreed that currency exchange rates were at
about the correct levels when the pact was signed earlier this
year.
Reuter
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Maryland National Corp, the parent of
Maryland National Bank which earlier this month merged with
American Security Bank, said its shareholders will vote on a
new name for the regional bank holding company at its April 29
annual meeting.
It said MNC Financial Inc is the proposed new name for the
parent company. The banks merged on March 16, and have combined
assets of about 14 billion dlrs.
Maryland said the new name only will be used for the parent
and it does not plan to change the names of Maryland National
Bank, American Security Bank or non-bank affiliates.
Reuter
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Petroleos de Venezuela S.A will
announce within two weeks the name of a foreign consortium it
has chosen to help exploit the coal deposits at Guasare in
western Zulia state, PDVSA president Juan Chacin Guzman said.
Chacin told reporters the foreign partner will provide
capital as well as technical and marketing expertise to the
Carbozulia project, which the state oil company will manage.
PDVSA officials said that among those who bid for the
partnership is a consortium between Agip Carbone, a subsidiary
of Italy's Ente Nazionale Idrocarburi (ENI), and Atlantic
Richfield <ARC> of the United States.
Minister of Energy and Mines Arturo Hernandez Grisanti said
discussions are currently taking place to finalize the terms of
the contract with the foreign partner.
PDVSA vice-president Pablo Reimpell said last week the
first shipment of coal from the Carbozulia project should be
made during the final quarter of 1987, and would measure
between 100-150,000 metric tons.
Plans call for production to eventually reach 500,000 mt
annually. Reimpell said the original investment in the project
will be approximately 8 billion bolivars.
Reuter
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Shr 37 cts vs 50 cts
Net 2,776,000 vs 2,756,000
Sales 46.9 mln vs 38.8 mln
Avg shrs 7,508,000 vs 5,550,000
Year
Shr 58 cts vs 55 cts
Net 4,021,000 vs 3,005,000
Sales 125.9 mln vs 112.8 mln
Avg shrs 7,090,000 vs 5,500,000
Reuter
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|
California Microwave Inc said
it will take non-recurring charges of 9.7 mln dlrs to pre-tax
earnings in the third quarter ended March 31.
The company said earnings from operations in the second
half, ending June 30, 1987, excluding the charges, are expected
to be in the break-even range.
In the second half of 1986 net earnings were 2,297,000
dlrs, or 29 cts per share.
The company said the charges relate to its
telecommunications products area and three other areas.
California Microwave previously estimated the write-downs
in the six to eight-mln-dlr range. It said it will add to that
a reserve for investment losses in Argo Communications Corp.
Also to be included in the write-down are charges against
its advances to an Arizona-based communications electronics
firm the company has an option to acquire, it said.
In addition, accruals are being made for costs associated
with the company's reduction in its Sunnyvale work force.
California Microwave said the write-downs should have a
nominal cash impact, as the company already has paid for the
assets being written down.
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|
Shr 22 cts vs 22 cts prior qtr
Pay June one
Record May 12
Reuter
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Borg-Warner Corp said it has had
discussions with Irwin Jacobs on his interest in the
possibility of Minstar Inc <MNST>, a Jacobs controlled company,
being given access to certain non-public information about
Borg-Warner.
In late February, an investor group headed by Jacobs
offered 44 dlrs a share, or 3.29 billion dlrs, to take over
Borg-Warner.
Borg-Warner said it advised Jacobs that before its board
would give Minstar access to company records Minstar would have
to provide satisfactory evidence that sufficient financing was
committed to carry out whatever transaction was proposed.
A Borg-Warner spokesperson said the discussions with Jacobs
and other Minstar officials focused on terms and conditions
under which the company would consider granting Minstar access
to the information it was seeking.
The Borg-Warner spokesperson said the company has not been
able to reach an agreement with Minstar, and Borg-Warner has
not granted Minstar access to any records.
There can be no assurance that there will be further
discussions with Jacobs or that any agreement will be reached,
the company added.
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External Affairs Minister Joe Clark
today vowed to do everything possible to fight the U.S. action
against Canadian potash exports, but also warned against
raising the alarm too early in the dispute.
In the latest flashpoint in Canadian-U.S. trade relations,
the U.S. International Trade Commission ruled unanimously
Monday that Canadian potash shipments valued at 270 million
U.S. dlrs last year were injuring the U.S. industry.
"We certainly intend to do everything we can to insure that
Canadian interests are well protected," Clark told the House of
Commons in the daily question period.
But he said the opposition parties should be careful "not
to raise false alarms too early."
The case now goes before the U.S. Commerce Department's
trade division to determine if a duty should be imposed. Potash
producers from New Mexico, claiming unfair government
subsidies, are seeking a 43 pct tariff on Canada's shipments.
Canada, the world's largest potash producer, exported 9.8
mln metric tonnes of potash last year, with nearly a third
going to the U.S.
Most of the potash, used in the production of fertilizer,
comes from provincially owned mines in Saskatchewan.
In the Commons, Liberal member Lloyd Axworthy branded the
ruling as just another "trade harrassment" from the U.S. and
criticized Clark's assurances the country's interests would be
protected.
"We received exactly the same kind of assurances in the
softwood lumber case that was totally fumbled and bumbled,"
Axworthy said.
Canada's Progressive Conservative government agreed to
impose a 15 pct duty on its softwood lumber exports earlier
this year to end a long and bitter bilateral trade dispute with
the U.S.
Axworthy urged the government to present Canada's case to
world trade authorities under the General Agreement on Tariffs
and Trade.
But Clark maintained the potash dispute was another example
of why Canada needs to find a new way to settle bilateral
irritants in the free trade negotiations under way with the
U.S.
"What we are seeking to do is put in place a better
system," Clark said.
Meanwhile, Saskatchewan Trade Minister Bob Andrew expressed
confidence Canada would win its case, claiming the problem
stems from low international commodity prices and not
government subsidies.
"The reality of the problem and the injury is caused
worldwide," he said. "It's caused by a downturn in the
commodity price for fertilizer, whether it's potash fertilizer,
nitrogen fertilizer or whatever."
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Federal Reserve Board Chairman Paul
Volcker said that the dollar's slide in currency markets has
been enough, a Fed spokesman said.
The spokesman confirmed that Volcker, who spoke to a group
of financial analysts, said in answer to a question about the
dollar's recent slide that "enough is enough."
Volcker has often expressed concern about the dollar
falling too rapidly in currency markets.
Reuter
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RB Industries Inc said it completed
the sale of its W and J SLoane Division to Laurence Crink Jr
and a group of investors.
The definitive agreement provides for a closing on April 1,
1987. The division consists of four W and J Sloane furniture
store in Los Angeles and Orange counties.
RB Industries also said it recently secured a five-year
8.573 pct secured 9.9-mln-dlr loan on its Irvine property from
a major institution. Proceeds will be used to retire existing
bank debt, for working capital and to retire a portion of its
outstanding 12 pct debentures.
Reuter
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The investor group seeking to acquire
GenCorp Inc said it agreed to cancel a court hearing after
GenCorp withdrew three proposals that, if approved, would have
made it more costly and difficult to acquire the Akron,
Ohio-based company.
Earlier today GenCorp said it will not ask shareholders to
approve an increase in the number of its outstanding shares,
the election of a staggered board of directors and the
elimination of cumulative voting.
However, the group said it will continue to try to block
GenCorp's poison-pill provision.
The group, a partnership of AFG Industries Inc <AFG> and
<Wagner and Brown>, was to go to court on March 27 to block
GenCorp for having the three proposals voted on by shareholders
at its annual meeting.
GenCorp said it withdrew the proposals so that it could
focus its attention on the takeover offer.
The takeover partnership said it has asked to meet with
GenCorp to negotiate a repeal of the company's poison pill
plan.
Reuter
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Gencorp Inc said that because it is
continuing to evaluate General Acquisition Inc's tender offer
it has fixed April 3, subject to further extension, as the date
the rights to purchase preferred shares will trade separately
from the common stock as a result of the tender offer.
This extension of the expiration date is conditioned on no
person acquiring beneficial ownership of 20 pct or more of
Gencorp's common stock prior to April 3, it said.
Gencorp said it could distribute the rights certificates to
shareholders 10 to 30 days after the March 18 acquisition offer
was made.
However, rather than leaving the expiration date in a
range, the board decided to set April 3 as the day it will
distribute the preferred share purchase rights.
Reuter
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American International Group Inc said
it sold its South African subsidiary, American International
Insurance Co Ltd, to Johannesburg Insurance Holdings Ltd, a
holding company owned by a consortium of shareholders led by
Rand Merchant Bank.
Terms were not disclosed and company officials were
unavailable for comment.
With the conclusion of the sale, American International has
entirely divested itself of its holdings in South Africa.
Reuter
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Shr 25 cts vs 21 cts
Net 2.8 mln vs 2.3 mln
Revs 135.0 mln vs 119.0 mln
Nine months
Shr 80 cts vs 70 cts
Net 8.9 mln vs 7.7 mln
Revs 407.7 mln vs 403.7 mln
Reuter
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Portugal may have purchased a 30,000
tonne cargo at its tender today for up to 43,000 tonnes of
number two yellow corn (14.5 pct maximum moisture) for arrival
by April 30, shipment via Gulf ports, U.S. exporters said.
Reuter
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Taiwan will tender Thursday, March 26,
for a total of 356,000 tonnes of U.S. number two yellow corn
(14.5 pct moisture) for various Sept/Dec shipments via Gulf or
Pacific Northwest ports, U.S. exporters said.
Reuter
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Sri lanka will tender overnight for
52,500 tonnes of U.S., Canadian and/or Australian wheats for
April 8/16 shipment, under the Export Enhancement Program if
U.S. origin, U.S. exporters said.
Reuter
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Oper shr loss one ct vs loss seven cts
Oper net loss 80,640 vs loss 787,738
Revs 933,183 vs 3,346,627
Avg shrs 6,122,378 vs 8,451,578
Year
Oper shr loss 75 cts vs loss 1.10 dlrs
Oper net loss 5,120,206 vs loss 9,288,996
Revs 5,846,962 vs 18,679,090
Avg shrs 6,805,951 vs 8,387,802
NOTE: Earnings exclude losses from discontinued operations
of 178,437 dlrs, or three cts a share vs 154,767 dlrs, or two
cts a share in the quarter and losses of 706,984 dlrs, or 10
cts a share vs 572,100 dlrs, or seven cts a share for the year
1986 year earnings exclude gain from early extinguishment
of debt of 11,318,289 dlrs, or 1.66 dlrs a share
Reuter
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Bayou Resources Inc said it reached an
definite agreement to be acquired by Patrick Petroleum Co
through a stock and cash transaction valued at six dlrs per
Bayou share.
Bayou also reported net loss of three cts or 23,024 dlrs
for the fourth quarter compared with a net income of 10,128
dlrs or one cts a year. Revenues fell to 532,807 dlrs from
769,465 dlrs a year ago.
For the year, Bayou reported a net loss of 14 cts or
116,793 dlrs compared to a net income of 23 cts or 203,372
dlrs. Revenues fell to 2.4 mln dlrs from 3.3 mln dlrs.
Reuter
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Shr loss 44 cts vs loss 20 cts
Net loss 2.4 mln vs loss 880,000
Revs 2.4 mln vs 2.6 mln
Year
Shr loss 87 cts vs loss 11 cts
Net loss 4.3 mln vs loss 494,000
Revs 9.0 mln vs 12.0 mln
NOTE:1986 includes restructuring charges of 2.1 mln dlrs
and loss of foreign affiliates of 2.0 mln dlrs. 1985 includes
loss from foreign affiliates of 173,000 dlrs.
Reuter
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<Fleet Aerospace Corp>
said it agreed in principle to acquire the assets and
operations of the Engineered Magnetics division of Gulton
Industries Inc, a unit of Mark IV Industries Inc.
Terms were undisclosed.
Los Angeles-based Engineered Magnetics designs and produces
custom power conversion systems mainly for use in the defense
and aerospace industries. Its revenues for the year ended
February 28 totaled about 20 mln Canadian dlrs.
Reuter
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Shr three cts vs four cts
Net 30,969 vs 18,230
Revs 956,971 vs 702,994
Reuter
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PS Group Inc said it and
USAir Group agreed to move up the completion date of USAir's
acquisition of Pacific Southwest Airlines to April 30 from
September 30 originally.
If the acquisition does not take place by April 30, either
party may terminate the agreement, the company said.
The deadline has been moved up because the Department of
Transportation and PS Group shareholders have already approved
the transaction, the company said.
A Teamsters Union agreement to certain labor contract
conditions remains to be resolved under the pact.
Reuter
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Automobile dealerships have become
large, multi-store operations, and the largest sell more than 1
billion dlrs a year worth of vehicles a year.
Around the auto industry there is talk of mergers and
buyouts among dealerships, and there are rumors that the
largest are considering offering shares to the public, analysts
say.
Retail car sales "are at a point of transition. There's not
much that's off the table in terms of creative thinking" about
ways to sell cars, says David Cole, analyst with the University
of Michigan's Transportation Research Institute.
The retail car market is "much more freeform now" than it
was in 1956, the year things began to change, says Detroit
analyst Arvid Jauppi of Arvid Jauppi and Associates.
Thirty years ago, in 1956, the situation was different.
Dealerships sold one kind of car--a "Chevy" or a Ford or a
Studebaker. The average dealer had 17 employees and sold
738,000 dlrs worth of vehicles, according to the National
Automobile Dealers Association.
That year a tiny car from overseas--Germany's Volkswagen
Beatle--began to gain popularity. The "Bug" caused "a
rebellion" among dealers, who demanded greater freedom from
restrictions placed on them by the major American automakers,
says Jauppi.
One of the most visible changes in retail car sales has
been in the size of dealerships, auto analysts say. Last year,
the average dealership had 11.2 mln dlrs in sales--a 15-fold
increase from 1956--and employed 34 workers.
"I had one of these guys tell me he makes six, seven mln
dlrs a year and didn't know what to do with all his money,"
says Cole.
"There's a whole lot more rich guys who sell cars than that
make cars," he says.
With the increase in size, large dealers have been buying
up other dealerships, and auto analysts see few signs the trend
will let up.
Donald Keithley, vice president, dealer services, for J.D.
Power, a California-based market research firm, says that, by
1990, 12,000 people will own dealerships compared to 16,800
principal owners today.
Many dealers are experimenting with owning several
franchises, some of which might compete against each other. "It
used to be a Chevrolet dealer was a Chevrolet dealer. Now a
Chevrolet dealer might handle several lines," Jauppi says.
As dealers get bigger, industry officials are talking about
the possibility that some of them might become publicly-owned
or open international operations.
Offering shares to the public is an option large dealers,
"are obviously thinking of very seriously," says Cole.
Although some say the franchise system might get in the way
of a public offering, Jauppi says there are few obstacles to
trading in car dealer shares.
"Dealers are large enough now to go public. The only thing
the manufacturer cares about is that the dealer sells those
cars. It could happen any time," Jauppi says.
"If you look at the whole merger mania, and look at the
scale some of these dealers, it's going to be very hard to
resist taking them public," said another analyst.
And Jauppi says that dealerships can be expected to become
international.
"We're going to have international dealers--dealer networks
that are worldwide," he says. U.S. dealers will be attracted
particularly to Europe, where the market will expand faster
than the U.S., he says.
"It's not totally off the wall," says Cole.
Reuter
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Qtr ended Feb 28
Shr 17 cts vs 22 cts
Net 2,041,000 vs 3,329,000
Revs 46.6 mln vs 48.9 mln
Nine mths
Shr 65 cts vs 82 cts
Net 9,290,000 vs 12.7 mln
Revs 142.7 mln vs 139.8 mln
Reuter
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Chapman Energy INc said it is launching
a major restructuring which, if not approved, it will have no
alternative but to seek protection under Chapter 11.
Under the plan, Chapman will exchange securities and cash
for all outstanding 12 pct senior subordinated debentures due
2000 and will sell a controlling interest to Troon Partners
Ltd.
The agreement with Troon requires Troon to advance 6.5 mln
dlrs partially secured by a first mortgage lien on the
company's interest in its natural gas pipeline partnership and
Troon to tender 100,000 principal amount of debentures to
Chapman.
Proceeds of the loan will be used for the cash portion of
the restructuring. Troon will acquire a majority stock interest
and control of the board.
In addition, Chapman and Troon will establish a 10 mln dlrs
acquisition joint ventures, it said.
The plan also contemplates establishing a restructured loan
providing for one master credit agreement having an aggregate
balance of 22.4 mln dlrs.
The plan also contemplates the recapitalization of
preferred stock whereby each share will be converted into three
shares of common stock.
Chapman also said it also plans to negotiate settelment and
discharge of a substantial portion of its accounts payable and
settlement of certain litigation.
If approved by various creditors and shareholders, the
company expects the plan to be completed by May 29.
Chapman also repoted a loss of 43.4 mln dlrs for the year,
including asset writedowns of 35.5 mln dlrs, compared to
December 31, compared to a net income of 177,243 in 1985.
The 1986 loss resulted in shareholders' deficiency of 15
mln dlrs compared to shareholder's equity of 28.9 mln last
year.
Total assets decreased to 35.6 mln dlrs from 81.8 mln dlrs.
Reuter
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Shr loss 98 cts vs loss 1.11 dlrs
Net loss 3,863,000 vs loss 3,483,000
Revs 1,081,000 vs 799,000
Note: 4th qtr data not given.
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Shr 1.13 dlrs vs 87 cts
Net 1,064,489 ca 780,712
Assets 106.8 mln vs 102.5 mln
Note: 4th qtr data not given.
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Qtly div 15 cts vs 15 cts prior
Payable May one
Record April 10
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Qtly div 12 cts vs 12 cts
Pay July 1
Record June 12
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The Bank of Japan bought a modest amount
of dollars this morning, possibly around 200 to 300 mln,
dealers said.
One dealer said the central bank bought about 200 mln dlrs
through brokers and the rest through banks. The buying began
when the dollar was at about 149.60 yen, and helped drive the
U.S. Currency up to around 150, he said.
Another said the central bank seemed to be trying to push
the dollar up above 150 yen. But heavy selling at around that
level quickly pushed the dollar back down towards 149 yen,
dealers said.
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Shr 16.7 cents vs 29.4
Final div nil vs same making nil vs same
Pre-tax profit 21.31 mln dlrs vs 26.42 mln
Net 10.84 mln vs 19.15 mln
Turnover 17.17 mln vs 25.94 mln
Other income 101.99 mln vs 125.18 mln
Shrs 65.13 mln vs same.
NOTE - Net is after tax 10.47 mln vs 7.27 mln, interest
2.58 mln vs 9.55 mln, depreciation 5.06 mln vs 7.61 mln and
minorities nil vs same. Other income: 72.39 mln from sale of
investments (103.04 mln 1985), interest 25.75 mln (21.49 mln),
and dividends 1.64 mln (nil). Co is 93.7 pct owned by <Bell
Resources Ltd>.
Note - All figures in U.S. Dollars as the company is
registered in Bermuda.
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The Bank of Japan is continuing to
intervene in the Tokyo market, buying small amounts of dollars
to hold the unit above 149 yen, brokers said.
They said the Bank is coming in when the dollar is around
149.05/10 yen, the same levels as New York's close yesterday
and the midday close in Tokyo today.
Dealers said the Bank of Japan is intervening in the market
through both banks and brokers this afternoon.
The central bank is checking selling orders through banks
and placing matching buy orders, they said.
The central bank started to intervene shortly after the
market opened here in the afternoon, the dealers said.
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Bank of Japan governor Satoshi Sumita
said that current exchange rates are almost within the levels
agreed to by six major nations last month in Paris.
Asked whether a dollar/yen rate of 148 or 149 reflected
economic fundamentals, he said current rates almost reflect
fundamentals.
Sumita told reporters major nations have cooperated to
bring about currency stability in line with the Paris
agreement, which stipulated that they would closely cooperate
to that end. He repeated the central bank will intervene if
necessary, adding he did not think a dollar free-fall was
likely.
But Sumita said he could not say exactly what currency
levels would be considered in line with underlying economic
fundamentals.
In Paris on February 22, Britain, Canada, France, Japan,
the U.S. And West Germany agreed to cooperate to hold
currencies around their then current levels.
Sumita said he could not find any specific reasons behind
the fall of the dollar to a record low against the yen
yesterday. But he said the market rushed to sell dollars as it
nervously reacted to statements abroad and to developments
surrounding trade tensions.
U.S. Treasury Secretary James Baker said over the weekend
that the Paris pact did not encompass fixed tragets for the
dollar. U.S. Trade Representative Clayton Yeutter called
U.S/Japan relations on certain key trade issues very strained.
The market reacted nervously because the dollar has been
moving narrowly against the yen since mid-January, Sumita said.
He added he does not expect the yen/dollar exchange rate to
remain unstable because the market is concerned about a sharp
rise of the yen.
The Bank of Japan will keep a close watch on exchange rates
in line with the Paris accord, he added.
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Preliminary trade figures for
February show an excess of exports over imports of 119.1 mln
N.Z. Dlrs, a Statistics Department statement said.
This compares with a 3.3 mln dlr deficit (revised from 1.7
mln) in January and a 36.1 mln dlr deficit in February 1986.
Exports rose to 998.4 mln dlrs, from 889.2 mln (revised
from 889.5) in January and 903.2 in February 1986. Imports
dropped to an estimated 879.4 mln dlrs from 892.5 (revised from
891.2) in January and 939.3 in February 1986. The deficit for
the eight months to the end of February was 15.3 mln dlrs, as
against 1.057 billion dlrs in the same period a year ago.
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Bank of Japan governor Satoshi Sumita
said the central bank has no intention of cutting its discount
rate again as a way of preventing the yen's rise.
He told a press conference that the growth of Japanese
money supply remains high.
The bank will have to watch closely various developments
resulting from its already eased monetary stance, such as the
sharp rise in real estate and stock prices, he said.
Although the yen's rise will have a greater deflationary
impact on the economy, the economy is not likely to slow down
much further, Sumita said.
"I don't think we should change our economic outlook at the
moment," Sumita said.
Sumita has said in the past that he expects the economy to
show a gradual upturn in the second half of the year.
The governor said the six major industrial nations are
expected to review last month's pact on currency stability when
they meet next in April.
Dealers said they expect the six - Britain, Canada, France,
Japan, the U.S. Amd West Germany - to meet just before the
IMF/World Bank interim committee meeting in Washington starting
on April 9.
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A strong performance by its retail
businesses and affiliates will enable Jardine Matheson Holdings
Ltd <JARD.HKG> to report on Friday a big leap in net profit in
1986, stock analysts said.
They told Reuters they expect the firm to show earnings of
between 420 mln and 450 mln H.K. Dlrs last year against 157 mln
in 1985.
The analysts also said they expect Jardine Matheson to pay
a total dividend of 15 to 20 cents a share against 10 cents a
share in 1985.
James Capel (Far East) Ltd estimates Jardine Matheson's
1986 profits at 450 mln dlrs and attributes most of the income
to retail sales.
Analysts said the group's 7-Eleven retail stores and its
franchises, among them Canon cameras, Christian Dior luxury
goods and Mercedes Benz cars, produced a strong cash flow.
Alan Hargreaves of Hoare Govett Asia Ltd also put Jardine
Matheson's 1986 net profits at 450 mln dlrs and said he
estimates pre-tax earnings from retail operations at about 465
mln dlrs against 339 mln in 1985.
But Hargreaves said Jardine Matheson's earnings from its 35
pct stake in Hong Kong Land Co Ltd <HKLD.HKG> will fall to
about 230 mln dlrs from 281 mln dlrs in 1985.
The reduced contribution reflects the spin-off from Hong
Kong Land of <Dairy Farm International Ltd> last September.
Jardine gained a direct holding of 35 pct of Dairy Farm as
a result of the spin-off. Analysts said Jardine will book
revenues from its Dairy Farm stake for the final months of the
year as part of its retail business, which will increase its
overall retail income figures.
Analysts said Jardine Matheson will also enjoy sharply
increased revenues from financial services, mainly its 50 pct
share of <Jardine Fleming Holdings Ltd>.
Jardine Fleming yesterday reported record profits for 1986
of 209.5 mln dlrs against 104.7 mln in 1985.
Analysts said Jardine Matheson made net interest payments
of about 200 mln dlrs last year, slightly below the 213 mln
dlrs of 1985, while the company's term debt remained at about
the 1985 level of 2.7 billion dlrs.
But Jardine was also subject to increased taxes of 340 mln
dlrs last year against 292 mln in 1985, they said.
Jardine Matheson is undergoing a series of reorganisations
that will in effect turn it into a holding company for its
diverse interests.
It previously announced a plan to sell its stakes in both
Hong Kong Land and Dairy Farm to newly created <Jardine
Strategic Holdings Ltd> in which it has a 41 pct interest.
A company statement issued last month said the firm will
use the proceeds to repay all debt, leaving it with an
additional 500 mln dlrs in cash on hand.
Though Jardine Matheson will be deprived of a direct stake
in the high-yield Hong Kong Land and Dairy Farm units, it is
likely to develop its own business, analysts said.
"The future of the stock will depend on the firm's ability
to creatively structure some new acquisitions," said Hargreaves
of Hoare Govett.
He noted the firm has suggested financial services as a key
sector, and he said it may add some insurance firms to its
existing business.
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China's first joint venture bank, Xiamen
International Bank (XIB), reported a group net profit of about
14 mln Hong Kong dlrs in 1986, the bank's first full year of
operation.
General manager Liu Shuxun declined to give a 1987 profit
forecast, saying targets were under study.
Assistant general manager Wang Hongshan said the group's
outstanding loans at end-1986 totalled 620 mln Hong Kong dlrs,
up from 530 mln at end-1985. Deposits and interbank borrowings
rose to 680 mln dlrs from 550 mln, he told Reuters.
Liu said most of the group's profit came from the parent
company rather than its two wholly-owned subsidiaries <Xiamen
International Finance Co Ltd> in Hong Kong and <Luso
International Bank Ltd> in Macao.
The joint venture bank began operating in September 1985
but did not officially open until March 1986.
Liu said the share in the joint venture of the foreign
partner, Hong Kong-listed <Panin Holdings Ltd>, had been cut
last year to 49 pct from 60 pct. This was done because foreign
banks felt the XIB's reputation would be improved if the three
Chinese partners collectively held a majority stake, he said.
Liu said news reports about problems concerning Panin were
unfounded, but he did not elaborate. Panin Holdings reported a
loss of 1.99 mln Hong Kong dlrs in 1986 after a net profit of
268,000 dlrs in 1985.
The Chinese partners are Industrial and Commercial Bank of
China, Fujian branch, whose share rose to 23.5 pct from 15,
Fujian Investment and Enterprise Corporation 17.5 pct (15) and
Xiamen Construction and Development Corporation 10 pct (10).
One foreign banker said Xiamen International Bank faced the
same problems as foreign bank branches in trying to compete on
unequal terms with state-owned banks.
The foreign banking market in Xiamen is thin and almost
saturated, he added.
Officials of the joint venture bank said they benefitted
from contacts made through its three Chinese partners. But the
foreign banker, who asked not to be named, said it faced
internal competition from the Industrial and Commercial Bank.
Apart from Xiamen International Bank and the International
Agricultural Development Bank planned by the World Bank and the
state-owned Agricultural Bank of China, Xiamen has eight
foreign bank branches or representative offices, mostly of Hong
Kong or overseas Chinese banks.
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Bangladesh recorded an overall balance of
payments deficit of 8.3 mln U.S. Dlrs in October against a
10.33 mln deficit in September and a 6.67 mln surplus in
October 1985, Central Bank officials said.
The country's current account deficit narrowed to 10.69 mln
dlrs in October from 79 mln in September and 11.75 mln in
October 1985.
The October trade deficit narrowed to 36.36 mln dlrs from
160 mln in September and 83.79 mln in October 1985.
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<Kokusan Kinzoku Kogyo Co Ltd> (KKK), a
Japanese autoparts maker owned 25 pct by Nissan Motor Co Ltd
<NSAN.T>, has exchanged a memorandum to acquire over 50 pct of
U.S. Autoparts firm <Master-Cast Co> to avoid losses on U.S.
Sales caused by the yen's rise against the dollar, a KKK
spokesman said.
The final agreement should be signed this year when KKK
forms the new company <Alfa K Technology>, he said.
The new firm should supply all the U.S. Major car makers,
including Ford Motor Co <F>, General Motor Corp <GM> and
Chrysler Corp <C>, he said.
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The yen could rise to 140 yen to the
dollar, a leading Japanese businessman said.
Bumpei Otsuki, president of the influential Japan
Federation of Employers' Associations, (Nikkeiren), told
reporters: "The yen might rise as far as 140 (to the dollar).
The U.S. Economy is not good, and as long as the U.S. Economy
is not good, the U.S. Will put various pressures (on Japan)."
"The yen's level depends on the condition of the U.S.
Economy rather than Japan's economy, and as long as the
American situation is bad, the yen will continue to rise," he
said.
To cope with the negative impact of the strong yen,
Japanese enterprises must strive to cut costs by all means,
including holding down wages as much as possible, Otsuki said.
He rejected recent calls from some government quarters for
wage increases this year as a means of raising private
consumption and thus boosting domestic demand.
"We have to keep wages as low as possible," he said.
He also said the yen's large and rapid rise is depressing
the outlook for the Japanese economy, noting that in addition
to hurting exporters it is also damaging domestic market
manufacturers through cheap imports.
Parts of the service sector are also threatened, Otsuki
said.
Tertiary industries provide services to manufacturers and a
downturn in manufacturing profits will adversely affect service
industries, he said.
It is also doubtful whether the tertiary sector can fully
employ those put out of work in the manufacturing sector, he
said.
Profits of service sector companies are likely to fall in
the business year ending in March 1988, leading to a possible
recession in the Japanese economy, he said.
Otsuki said economic growth is unlikely to pick up beyond
levels experienced in 1986.
The government's Economic Planning Agency said last week
the economy grew at 2.5 pct in 1986, the worst performance
since 1974 when the economy shrank 1.4 pct due to the first oil
price crisis.
In order to stimulate domestic demand and boost the
economy, tax reforms aimed at bringing down the cost of land
and reforming the nation's housing stock are needed, along with
steps to bring down the high cost of commodities, he said.
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Madagascar extended its oil
exploration agreement with the U.S. Firm Amoco Corp <AN> for 17
months to allow for further studies of the Morondava basin on
the southwest coast, a government statement said.
It said the existing five-year agreement, due to expire
this July 24, was extended until the end of 1988 to allow for
additional geological and geophysical studies.
Amoco has so far laid 7,100 km of seismic lines and sunk
five exploration wells in the Morondava basin. It may drill a
further three wells before the end of the extended exploration
period, the statement said.
Madagascar has signed oil exploration agreements with four
foreign oil companies since 1981. But despite promising
indications of large reserves, no commercial production plans
have yet been announced.
The foreign firms - Amoco, Occidental Petroleum Corp <OXY>,
Mobil Corp <MOB> and a unit of <Ente Nazionale Idrocarburi> -
are working in partnership with the National Military Office
for Strategic Industries (OMNIS).
Roland Ratsimandresy, the director general of OMNIS, said
at a ceremenony to sign the extension of the Amoco agreement
that his department would intensify oil exploration with its
existing partners and would soon offer a new round of
exploration licences.
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The Ferruzzi Group's holding company
Agricola Finanziara SpA will pay 630 mln dlrs for the European
corn wet milling business of CPC International Inc under the
agreement reached in principle between the two companies, a
statement by Ferruzzi released by its Brussels office said.
When CPC announced the agreement yesterday in New York, it
said only that the price would be in excess of 600 mln dlrs.
Ferruzzi said the deal is subject to agreement on several
clauses of the contract and needs government authorisations.
It said the deal would involve 13 starch factories
employing about 5,000 people in eight European Community
countries plus facilities and commercial operations in other EC
states.
The factories have a capacity to produce the equivalent of
1.6 mln tonnes of starch in starch and by-products a year, or
about one third of EC production, from about 2.7 mln tonnes of
cereals.
Ferruzzi said the acquisition of these assets would extend
its presence in the European agro-industrial industry both
geographically and in terms of products.
It said it is already the principal EC producer of sugar
and of soya oil and cake, and the major cereal trader.
It noted that EC output of isoglucose is subject to maximum
quotas, of which CPC currently holds a 25 pct share, and said
it foresaw an increase in other industrial uses of starch in
the future, notably in the production of ethanol for fuel.
Raul Gardini, president of the Ferruzzi Group, said the
present management of the CPC milling business will be asked to
remain in their posts.
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Shr "A" 138.9 H.K. Cents vs 97.4 (adjusted)
Shr "B" 27.8 cents vs 19.5
Final div "A" 44 cents vs 32.3, making 62 vs 47 (adjusted)
Final div "B" 8.8 cents vs 6.5, making 12.4 vs 9.4
Net 1.78 billion dlrs vs 1.23 billion
Turnover 16.6 billion vs 13.7 billion
Note - Net profits excluded extraordinary gains of 1.38
billion dlrs vs 59.1 mln. The non-recurrent earnings mainly
derived from the firm's sale of a 15.75 pct stake in Cathay
Pacific Airways Ltd <CAPH.HKG> in April.
Note - Earnings per share and dividends have been adjusted
for the firm's two-for-one bonus issue made in April.
Note - Bonus issue one-for-five for both "A" and "B" shares
against two-for-one.
Note - Dividends payable June 2, books close April 16 to
24.
Note - Net asset value per "A" share 6.94 dlrs vs 4.81 and
per "B" share 1.39 dlrs vs 0.96.
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Shr 53.51p vs 45.72p
Div 8.8p vs 7.35p making 14.3p vs 12.1p
Turnover 19.17 billion stg vs 17.05 billion
Operating profit 1.48 billion vs 1.29 billion
Pretax profit 1.39 billion vs 1.17 billion
Tax 524 mln vs 430 mln
NOTE - The company said shareholders would be given the
option of receiving dividend in cash, ordinary shares or
combination of the two.
Operating profit includes -
Commercial activities 1.08 billion vs 988 mln
Financial services 263 mln vs 135 mln
Share of associated companies 139 mln vs 163 mln
Investment income 150 mln vs 166 mln
Interest paid 238 mln vs 286 mln
Minorities 76 mln vs 63 mln
Extraordinary credit 75 mln vs 34 mln debit
Transfer to revaluation reserve 85 mln vs 106 mln
Profit attributable 793 mln vs 673 mln
Required inflation retention 77 mln vs 147 mln
Trading profit 1.51 billion vs 1.29 billion
Trading profit includes -
Tobacco 764 mln vs 738 mln
Retailing 211 mln vs 186 mln
Paper 217 mln vs 168 mln
Financial services 282 mln vs 135 mln
REUTER
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Swire Pacific Ltd <SWPC.HKG> said it
plans for a one-for-five bonus issue for both its "A" and "B"
shares following an earlier report of a 44.7 pct jump in 1986
net profits to 1.78 billion H.K. Dlrs.
The company also announced final dividends of 44 cents per
"A" share and 8.8 cents per "B" share against 32.3 and 6.5 cents a
year ago.
It recorded extraordinary gains of 1.38 billion dlrs which
mainly derived from the sale in April of a 15.75 pct stake in
Cathay Pacific Airways Ltd <CAPH.HKG> in line with the
floatation of the airline.
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The Dutch Central Bank said it
allocated 4.183 billion guilders at tender for the new 5.3 pct,
nine-day special advances.
Bids were fully met for the first 200 mln guilders and for
40 pct above.
The new advances for the period March 25 to April 4,
replace current 5.3 pct, five day advances totalling 4.003
billion guilders which expire today.
Money brokers said yesterday they expected the Bank to
allocate about 3.5 billion guilders.
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The Ministry of International Trade and
Industry (MITI) has asked about 30 Japanese trading houses and
exporters to refrain from excessive dollar selling, trading
house officials said.
The officials told Reuters MITI asked them to moderate
their foreign exchange trading because the excessive rise in
the yen will have unfavourable effects on the economy. It made
the request by telephone.
A MITI official said the ministry has conducted a survey of
foreign exchange trading by trade houses and exporters. But he
said it was not aimed at moderating dollar selling.
The trading house officials said MITI had asked them to
undertake foreign exchange transactions with due consideration
to the adverse effects excessive exchange rate movements would
have on the economy.
The MITI official said MITI undertakes such surveys when
exchange rates fluctuate widely. A similiar survey was made
when the currency fell to the previous record low of 149.98 on
January 19. It hit a new record low of 148.20 yen yesterday.
He said the survey showed currency transactions by trade
houses and exporters contributed little to the dollar fall.
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Middle East currency dealers meet in
Abu Dhabi this weekend at a time of fundamental change in their
business, which has seen a growing volume of trade shift from
the Arab world to London.
The 14th congress of the Inter-Arab Cambiste Association
also comes at a time when the prospect of a unified Gulf
currency system is more real that at any time this decade.
Foreign exchange traders and bank treasurers said these
issues, and the slide of the Lebanese pound, can be expected to
be major talking points.
About 250 traders and treasurers from some 115 banks --
including some in London and other major non-Arab financial
centres -- are expected to attend the conference which begins
on on Saturday.
Bankers said it is hard to avoid the impression that a
growing proportion of transactions in the Saudi riyal market,
by far the largest in the region, is being carried out in
London.
The market had been dominated by Saudi Arabia's 11 banks,
foreign exchange houses in the Kingdom and offshore banks in
Bahrain. But bankers said more and more Saudi and Bahrain-based
banks are boosting their treasury operations in London.
As recession hit the Middle East and the need for trade
finance in the region declined, many offshore banks in Bahrain
ran down their currency operations. None of the four major U.K.
Clearing banks now has a dealing room on the island.
The two major Bahrain-based international banks, <Arab
Banking Corp> and <Gulf International Bank BSC> have increased
their presence in London and Saudi banks are busy upgrading
representative offices to branch status to allow dealing.
One economist said: "It is cheaper to run a riyal book in
London than staff an expensive offshore operation in Bahrain...
There is now the nucleus of a two-way market in London."
Jeddah-based <Riyad Bank> set up as a licensed deposit
taker in London in 1984, while its main rival in Saudi Arabia,
<National Commercial Bank> (NCB) won a licence in November
1986.
The major market maker has traditionally been London-based
consortium bank <Saudi International Bank> but the kingdom
joint-venture <Saudi American Bank> (SAMBA) also upgraded its
London operation to deposit taker status in mid-February.
One senior currency trader in Riyadh said: "Inevitably the
volume of business in London has gained pace with the two new
licences for NCB and SAMBA, but there is no question that most
of the liquidity still rests in Saudi Arabia."
Currency traders said the shift to London in the Saudi
riyal market is difficult to quantify.
Bahrain Monetary Agency figures show regional currency
deposits held by offshore banks, most in Saudi riyals, dropped
to the equivalent of 12.2 billion dlrs at end-September 1986
from 13.4 billion at end-1985 and a 1983 peak of 15.0 billion.
The shift has prompted changes in dealing habits. Riyal
trading in the Gulf on Saturdays and Sundays has become very
quiet with London closed while some Saudi and Bahrain banks now
staff offices on Friday, the Gulf weekend. Traders also expect
<Arab National Bank> to step up London operations.
Traders say it is difficult to foresee the riyal market
moving completely out of the region, partly because of local
demand and partly because of what is seen as the Saudi Arabian
Monetary Agency's (SAMA) desire to moderate
internationalisation of the riyal and protect it from undue
speculation.
There have been far fewer signs of the Kuwaiti dinar market
shifting from its natural base of Kuwait and trading in Bahrain
and London is still limited.
But for the first time since the formation of the six
nation Gulf Cooperation Council (GCC) in 1981 there are signs
that a much mooted currency union could come into force soon.
Currency traders said it remains unclear what form a final
currency union would take for the six states -- Saudi Arabia,
Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates.
But plans to link the six currencies in a European Monetary
System style with a common peg have been discussed at high
level and could be a topic on the GCC's annual summit expected
to be held in Saudi Arabia late in the year.
One dealer said: "A lot of exposure is being given to
discussions and plans appear to be quite advanced. But in the
end a political decision has to be taken to give the go-ahead."
One open question is that of a common peg for currencies.
The idea of linking the six currencies has been debated
since the start of the GCC. The Kuwaiti dinar is currently
linked to a basket of currencies while the other five
currencies are either officially or in practice linked to the
U.S. Dollar.
Some traders said a currency union could mean speculation
against the Saudi riyal rubbing off on other Gulf currencies,
but plans call for a permitted divergence in the system of
7-1/4 pct, large enough to avoid sudden strains.
Another topic for debate is expected to be the continued
slide of the Lebanese pound against the dollar and the
undermining of the effective capital base of Lebanese banks.
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The Belgo-Luxembourg Economic Union
recorded a provisional trade deficit of 9.45 billion francs in
January after a December surplus of 15.32 billion francs,
revised upwards from a provisional surplus of 11.94 billion,
the National Statistics Office said.
In January 1986, the union recorded a deficit of 23.31
billion francs.
January imports fell to a provisional 228.86 billion francs
from 240.24 billion in December and 281.65 billion a year
earlier, but exports were also lower, at 219.41 billion francs
against 255.56 billion and 258.34 billion respectively.
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