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Data Architects inc said it intends to make a public offering of 850000 shares of its common stock of which 672000 shares will be sold by the company and 178000 by certain shareholders. Proceeds will be used for general corporate purposes. Reuter | DATA ARCHITECTS <DRCH> TO MAKE OFFERING |
<Terrapet Energy Corp> said five directors resigned because they could not obtain directors and officers liability insurance. It said the directors are Dean R. Fellows Frederick B. Hegi Jr W.D. Masterson Thomas Sturgess and John C. Thomas. Reuter | FIVE DIRECTORS OF TERRAPET ENERGY RESIGN |
Goldman Sachs and Co responding to the indictment earlier today of Robert M. Freeman who remains head of its risk arbitrage unit said it believes the 44-year-old executive did not violate insider trading laws. Based on all we now know we continue to believe in him and to believe that he did not act illegally the company said in a statement. Freeman was indicated by a federal grand jury along with two other top Wall Street executives Richard Wigton and Timothy Tabor for allegedly swapping insider information in a scheme that produced millions in illegal profits. The company said it based in belief in Freemans innocence on an investigation conducted by its independent outside counsel after Freeman was arrested in February. Reuter | GOLDMAN, SACHS COMMENTS ON FREEMAN INDICTMENT |
The World Bank said it approved a 25 mln dlr structural adjustment loan for Mauritius to aid that countrys industrial sector. The Bank said the 17-year loan will support policy reforms designed to help increase the efficiency of the countrys manufacturing sector develop export enterprises and encourage efficient use of resources. It added The increased availability of foreign exchange for imports is expected to help the expansion of industrial output and exports. Reuter | MAURITIUS GETS 25 MLN DLR WORLD BANK LOAN |
Torontos financial district the business heart of Canada slowed to a near halt this afternoon after being struck by a power blackout utility and business officials said. The blackout occurred around 1515 EDT in about an eight-square-block section of the citys downtown core home to most of the citys skyscrapers containing the headquarters of many of Canadas major corporations and financial institutions. Ontario Hydro spokeswoman Christina Warren told Reuters the blackout occurred when a transformer cable went down during routine maintenance at a downtown hydroelectricity station. Power was restored after 10 minutes. The power loss halted floor trading for 15 minutes on the Toronto Stock Exchange Canadas largest equity market although computerized trading - accounting for about 20 per cent of the Exchanges normal volume - continued Toronto Stock Exchange official John Kolosky said. Bank operations were also affected. The headquarters or major offices of Canadas six major banks line a small section of Bay Street the Wall Street of Canada. Bank of Montreal spokesman Brian Smith told Reuters the blackout shut down electronic banking machines and caused a minor slowdown in money trading operations although all in all we were not seriously affected. Officials at various downtown skyscrapers said the blackout also briefly shut down elevators and disrupted business in the downtown cores extensive network of underground shopping malls. Workers at some of the buildings said several people were briefly trapped on elevators but police and firefighters reported no serious problems. Reuter | TORONTO FINANCIAL DISTRICT HIT BY POWER OUTAGE |
The Administrations 15 billion dlr plan to recapitalize the Federal Savings and Loan Insurance Corporation is needed to ensure the future profitablity of the U.S. thrift industry according to a top industry regulator. Today thrifts in overwhelming numbers are profitable Shannon Fairbanks executive chief of staff of the Federal Home Loan Bank Board told a thrift industry conference. But every thrift is paying a market tax for the inabliity of regulators to deal with problems carried forward from the past she said referring to the premium that thrifts have to pay in the marketplace to entice deposits away from banks. The industry wants to see a five billion dlr plan passed now and then to wait and see what happens Fairbanks said. Theyre saying we dont want to pay more right away. The argument is that its a drain on the industry. But the dollars paid out can be recaptured in the reduction in the market tax differential she said. The cost of recapitalization to the industry would be recaptured in bottom line profitability. Fairbanks said that the publics confidence in thrift instititutions eroded with the financial difficulties of savings and loan associations in Ohio and Maryland in 1985. As thrift institutions in economically distressed areas like Texas have continued to fall on hard times this has increased depositors demand for a higher premium on deposits in savings and loans compared with premiums paid on deposits in commercial banks she said. Before 1983 thrift institutions paid a 25 basis point yield differential on savings deposits over that offered by commercial banks as mandated by U.S. financial regulations. With the elimination in 1983 of regulations that had drawn strict lines between savings and loans and commercial banks the gap widened to as much as 50 to 75 basis points as wary depositors demanded a higher premium to place their funds in thrift institutions Fairbanks said. The market tax paid by todays thrift industry is the most significant impediment to future profits she said. Depositor confidence is also eroded by the existence of thrifts that are failing but manage to stay in business by paying deposit rates well above prevailing market rates. Presently the FHLBB cannot afford to close failing institiutions because we cant afford it with the current FSLIC fund she said. Fairbanks estimated that the high market tax differential paid by thrifts will drop by at least 10 to 20 basis points with an adequate recapitalization of FSLIC because it will help restore this lost confidence. Reuter | U.S. THRIFT OFFICIAL URGES MORE LENDER INSURANCE |
New Zealands trading bank seasonally adjusted deposit growth rose 2.1 pct in February compared with a 2.6 pct rise in January the Reserve Bank said. Year-on-year total deposits rose 28.9 pct compared with a 30.6 pct rise in January and 34.4 pct rise in February a year ago period the bank said in its weekly statistical release. Total deposits rose to 17.55 billion N.Z. Dlrs in February compared with 17.18 billion in January and 13.61 billion in February 1986. Reuter | N.Z. TRADING BANK DEPOSIT GROWTH EASES SLIGHTLY |
The Senate approved a 433 mln dlr bill to aid thousands of homeless people sleeping on streets around the country. The legislation was approved on an 85 to 12 vote but must be reconciled with a similar House-passed bill differing in some details. The bill passed after Senate leaders managed on a 68 to 29 vote to break a filibuster that had blocked final action. The filibuster was led by Republican Senator Gordon Humphrey of New Hampshire who was trying to force an amendment to reverse a 12100 dlr pay raise Congress approved earlier this year that boosted the lawmakers salaries to 89500 dlrs annually. Reuter | SENATE PASSES HOMELESS AID BILL |
The International Development Association said it approved a 18.6 mln dlr credit to Sri Lanka to help that country strengthen its agricultural research and development. IDA the World Bank arm that makes interest free loans to the poorest nations said the credit will support changes designed to raise farm income by boosting production developing better crop varieties and improving farm systems. It said these goals will be accomplished through the establishment of a Council of Agricultural Research which will formulate and institute an agricultural research strategy. Reuter | IDA GRANTS SRI LANKA 18.6 MLN DLR CREDIT |
BANK OF JAPAN INTERVENES TO BUY DOLLARS AROUND 143.70 YEN - DEALERS |
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DOLLAR OPENS AT RECORD TOKYO LOW 143.75 YEN (PREVIOUS RECORD 144.70) - DEALERS |
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The dollar opened at a record Tokyo low of 143.75 yen despite aggressive Bank of Japan intervention dealers said. The previous record low was 144.70 yen set on March 30. The opening compares with 143.90/144.00 yen at the close in New York. The central bank bought dollars through Tokyo brokers just before and after the market opening the dealers said. The intervention took place when the dollar fell to 143.20 yen one dealer said. The dollar opened at 1.8155/60 marks against 1.8187/97 in New York. The dollar fell as low as 142.90 yen despite central bank intervention at 143.00 yen dealers said. Selling pressure was strong from securities houses and institutional investors in hectic and nervous trading on underlying bearish sentiment for the dollar they said. Most dealers were surpised by the dollars sharp fall against the yen in New York although many had expected such a drop to happen eventually. Institutional investors are expected to sell the dollar aggressively if it rises to around 143.50 yen dealers said. The U.S. Currency steadied well above 143.00 yen after Bank of Japan intervention and scattered short-covering they said. The dollar opened at 1.5120/30 Swiss francs against 1.5085/00 at the New York close. Sterling started at 1.6190/00 dlrs against 1.6195/05. REUTER | DOLLAR OPENS AT TOKYO RECORD LOW OF 143.75 YEN |
The dollar fell below 143 yen in hectic early Tokyo trading despite aggressive Bank of Japan intervention dealers said. After opening at a Tokyo low of 143.75 yen the dollar fell as low as 142.90 yen on heavy selling led by securities firms and institutional investors they said. REUTER | DOLLAR FALLS BELOW 143 YEN IN TOKYO |
Share prices plunged in early trade as an opening foreign exchange record low of 143.75 yen to the dollar and a weak stockmarket in New York withered investors confidence brokers said. After 32 minutes trade the average plummetted 313.00 to 22609.20. Yesterday the market gained 9.21 to a record close. Brokers said the dollars fall against the yen prompted a large selloff of export-related shares. But fears had spread throughout the market depressing almost all issues. REUTER | STOCKS PLUNGE IN EARLY TOKYO TRADE |
The Argentine grain market was quiet in the week to Wednesday with prices rising slightly on increased interest in wheat millet and birdseed. Wheat for domestic consumption rose six Australs per tonne to 118. For export it rose eight to 108 per tonne from Bahia Blanca increased 0.50 to 104 at Necochea and was unchanged at Rosario at 108.30. Maize increased one to 90 per tonne at Buenos Aires was unchanged at 82 in Bahia Blanca increased 0.50 to 85 at Necochea and fell one to 88 at Parana River ports. Sorghum from Bahia Blanca increased 0.50 Australs to 76.50 per tonne and dropped one to 75 at Rosario. It was quoted at 75 at Villa Constitucion San Nicolas and Puerto Alvear. Oats were unchanged at 168 per tonne at Buenos Aires. Millet from Buenos Aires and Rosario rose five per tonne to 140 and birdseed rose 15 to 205 at Buenos Aires. REUTER | ARGENTINE GRAIN MARKET REVIEW |
Todays turmoil in the U.S. Financial markets with bond and stock prices tumbling in the dollars wake is evidence of a major shift in investor psychology that is likely to spell more turbulence ahead economists said. For two years the markets had hailed the dollars decline as the cure-all for the U.S. Trade deficit. Interest rates fell sharply and Wall Street became a one-way street up. But that confidence is now cracking as the financial markets suddenly believe Fed chairman Paul Volckers often-repeated warnings about the risks of a dollar collapse. Volckers been saying for a long time that a dollar freefall would be extremely dangerous - now hes got it said David Jones economist at Aubrey G. Lanston and Co Inc. The dollar fell below 144 yen today for the first time in 40 years as the Group of Seven finance ministers in Washington failed to convince the foreign exchange market that they have a credible strategy for redressing global trade imbalances short of further depreciation of the dollar. Bonds suffered their biggest one-day drop in months amid worries that the dollars slide will rekindle inflation scare away foreign investors and force the Fed to tighten credit. The inflationary fears boosted gold bullion by more than 12 dlrs to a 1987 high of 432.20/70 dlrs an ounce while the spike in interest rates pulled the Dow Jones Industrial Average down by 33 points to 2339. Norman Robertson Mellon Bank chief economist called the markets instability frightening. He believes economic fundamentals do not justify the bearishness but said that once you start the ball rolling its difficult to stop. Theres a stark possibility that you could get a destabilizing drop in the dollar that forces up interest rates and drives us into recession. The markets are in a panic. Stephen Marris of the Institute for International Economics in Washington has been warning for a long time that the controlled decline of the dollar since peaks of 3.47 marks and 264 yen in February 1985 could turn into a nightmare. Were still more or less on track for a hard landing... But the agony may be fairly drawn out Marris told Reuters. Marris does not expect the crisis to peak until later this year but he warned that the situation is so fragile that it would take very little to touch off what he calls the second phase of the hard landing whereby a loss of confidence in the dollar pushes up interest rates and leads to a recession. The stock markets reaction today and its sharp drop on March 30 shows how the loss of confidence could come about. The fact that it has not happened yet is consistent with historical experience which teaches that domestic markets are not affected until a currency is in the final stages of its decline Marris said. He has forecast a drop to about 125 yen. Marris felt that a major impetus for the dollars latest weakness was the loss of credibility that central banks suffered when they failed to prevent the dollar from falling below 150 yen the floor that the market believes was set as part of the G-7 Paris agreement in February. Robertson at Mellon by contrast said the loss of confidence was triggered last week when Washington announced plans to slap 300 mln dlrs of tariffs on Japanese electronic imports raising the specter of a debilitating trade war. Many economists believe that long-run stability will not return to the markets until the root cause of the trade gap is addressed - excessive consumption in the U.S. Reflected in the massive budget deficit. But in the short term given the failure of the G-7 and of central bank intervention some feel that the Fed will have no choice but to tighten credit to restore faith in the dollar. The only thing that will stop the dollar falling is a substantial increase in the discount rate and a corresponding cut abroad at least by Japan said Lanstons Jones. Marris expects the Fed to act quickly to raise interest rates even at the risk of increasing the debt burden for American farmers Latin American governments and others. But Robert Giordano chief economist at Goldman Sachs and Co scoffed at the notion. Its ridiculous to think the Federal Reserve will raise interest rates when the dollar is weak against just one currency. This is yen strength not dollar weakness he said. Giordano said the market was ignoring the progress being made toward reducing the U.S. Budget deficit. Were going to have one of the biggest reductions in the budget deficit relative to GNP in history this year and nobody cares he said noting that only the deficit cut in 1968-69 will have been greater. He said he does not expect the dollar to collapse and thinks interest rates are likely to fall back later this year. But for now market psychology has changed so abruptly that a further drop in the bond market cannot be ruled out. Put on your helmets Giordano said. REUTER | U.S. MARKETS OFFER GLIMPSE OF VOLCKER NIGHTMARE |
Finance Minister Kiichi Miyazawa is expected to hold a press conference later today after returning from Washington a ministry spokesman told Reuters. Miyazawa is scheduled to arrive at 4.15 P.M. (0715 GMT) in Tokyo. The earliest time for the press conference would be 6.30 P.M. (0930 GMT). The minister attended a meeting of the Group of Seven (G-7) and other international monetary conferences in Washington. The G-7 -- Britain Canada France Italy Japan the U.S. And West Germany -- reaffirmed that current exchange rates are in line with economic fundamentals. REUTER | MIYAZAWA TO HOLD PRESS CONFERENCE LATER TODAY |
Average interest rates on yen certificates of deposit (CD) fell to 4.13 pct in the week ended April 8 from 4.33 pct the previous week the Bank of Japan said. New rates (previous in brackets) - Average CD rates all banks 4.13 pct (4.33) Money Market Certificate (MMC) ceiling rates for week starting from April 13 - 3.38 pct (3.58) Average CD rates of city trust and long-term banks - Less than 60 days 4.15 pct (4.41) 60-90 days 4.14 pct (4.29) Average CD rates of city trust and long-term banks - 90-120 days 4.12 pct (4.25) 120-150 days 4.12 pct (4.23) 150-180 days unquoted (4.03) 180-270 days 4.05 pct (4.05) Over 270 days 4.05 pct (unqtd) Average yen bankers acceptance rates of city trust and long-term banks - 30 to less than 60 days 3.98 pct (4.20) 60-90 days 4.03 pct (3.97) 90-120 days unquoted (unqtd) REUTER | AVERAGE YEN CD RATES FALL IN LATEST WEEK |
Bank of Japan sources said the bank has no plans to cut its discount rate. They told reporters that there was no pressure on Japan during the Group of Seven (G-7) meeting here yesterday to lower its discount rate. They added that they themselves do not feel any need for a cut at all. Chancellor of the Exchequer Nigel Lawson told reporters earlier today that some countries - those with strong currencies - might have to cut interest rates. The Bank of Japan sources also said that it was too soon to call the G-7 pact a failure. The central bank sources were commenting on the dollars renewed tumble in New York and Tokyo which was sparked by remarks by U.S. Treasury Secretary James Baker that the dollars fall had been orderly. They said the market must have misinterpreted Bakers comments because he was referring to the dollars fall since the Plaza agreement in September 1985 over a long-time span not the currencys recent movements. They added that the foreign exchange markest seem to seize on anything to use as an excuse to drive the dollar one way or the other. The Bank of Japan sources said the U.S. Is putting more weight on the dollar/yen rate in terms of judging market stability than on other currencies. Throughout the G-7 meeting Japan pointed to the dangers that would arise from a further dollar fall because it would reduce the flow of Japanese capital to the U.S. Hurting the U.S. And world economies they said. In February and in March of this year Japanese investors reduced their purchases of U.S. Treasury bonds the sources said. Each country in the G-7 - Britain Canada France Italy Japan the U.S. And West Germany - has a different view about currency stability the Bank of Japan sources said. This is because the overall foreign exchange market is a triangle of dollar/yen European currencies/yen and dollar/European currencies. At the time of the Louvre agreement European countries did not want the yen to weaken against their currencies so they did not object to the yen strengthening they said. REUTER | JAPAN HAS NO PLANS TO CUT DISCOUNT RATE |
Union and New South Wales government officials have reached a compromise in a dispute over workers compensation averting increased industrial action in the state union sources said. But some unions including those of building and mining workers said they were dissatisfied with the deal and would continue their strikes for a few more days. State officials said the government had agreed to revise its proposals to cut compensation and would allow slightly higher cash benefits for injured workers. Under the original proposal which sparked strikes and other industrial action in the state on April 7 workers compensation would have been cut by one third. Full details of the compromise package are not yet known. The Labour Council affiliated to the Australian Council of Trade Unions (ACTU) had threatened to paralyse New South Wales unless the government modified its pending legislation on the issue. State officials said the only sectors affected in the past three days were some government building projects railway freight movement and cargo handling in Sydneys ports. REUTER | AUSTRALIAN UNIONS AND NSW GOVERNMENT REACH DEAL |
Ecuador is due to resume limited crude oil output on May 8 when a new 43 km pipeline to neighbouring Colombia should be finished an energy ministry spokesman said. Oil output was halted on March 5 by an earthquake which damaged 50 km of the main pipeline linking jungle oilfields at Lago Agrio to the Ecuadorean port of Balao on the Pacific. About 13 km of the new link capable of carrying some 50000 barrels per day (bpd) has been built he said. Ecuador pumped 245000 to 250000 bpd before the earthquake. The new link will connect Lago Agrio to Puerto Colon in Colombia the starting point of Columbias pipeline to the Pacific ocean port of Temuco. The government estimates it will take about four more months to repair the Lago Agrio to Balao pipeline and return output to normal levels the spokesman said. REUTER | ECUADOR CRUDE OIL OUTPUT TO RESUME NEXT MONTH |
Sumitomo Corp <SUMT.T> and <Nippon Sharyo Ltd> have won a joint order for 54 railway cars worth 69.60 mln dlrs from Californias Los Angeles County Transportation Commission a Nippon Sharyo spokesman said. He told Reuters components totalling 20 pct of the value of the articulated light rail vehicles will be U.S.-made and that delivery is due between early 1989 and early 1990. The cars will be used for a Long Beach to Los Angeles service due to start in May 1989. REUTER | JAPANESE GROUP WINS LOS ANGELES RAIL CAR ORDER |
Thailand exported 56652 tonnes of rice in the week ended April 7 down from 75160 tonnes the previous week the Commerce Ministry said. It said the government and private exporters shipped 41607 and 15045 tonnes respectively. Private exporters concluded advance weekly sales for 48062 tonnes against 22086 tonnes the previous week. Thailand exported 1.29 mln tonnes of rice so far in 1987 down from 1.39 mln tonnes a year ago. It has commitments to export a further 353045 tonnes this year. REUTER | THAI RICE EXPORTS FALL IN WEEK TO APRIL 7 |
The Agriculture Ministry estimates Japans edible oil demand will rise 1.5 pct in calendar 1987 to 1.68 mln tonnes from 1.65 mln in 1986. Domestic consumption will rise to 1.66 mln tonnes in 1987 from 1.64 mln in 1986 while imports will rise to 77000 tonnes from 70000 and exports will be unchanged at 14000. Edible oil supplies will total 1.75 mln tonnes in 1987 against 1.73 mln last year including domestic output of 1.60 mln against 1.55 mln. Domestic supplies will comprise 725000 of soybean oil (706000 in 1986) 638000 of rapeseed oil (609000) and 235000 of other origin oils (231000). REUTER | JAPAN SEES MARGINAL RISE IN EDIBLE OIL DEMAND |
The French parliament has approved a substantial increase in defence spending to modernise the countrys nuclear and conventional forces. The bill provides 474 billion francs for defence expenditure over a five-year period starting next year with 32 pct allocated to modernise the countrys nuclear weapons systems. The budget represents a six pct annual increase starting next year well above the 3.5 pct NATO recommends for members of its military command. France is a member of NATO but does not belong to its integrated military command. The budget will help finance three new types of nuclear weapons a military reconnaissance satellite a nuclear powered aircraft carrier the AMX Leclerc tank and the possible development of chemical weapons. The program also includes funds for design work on nuclear missile submarines and the M-5 submarine-launched missile. REUTER | FRANCE APPROVES LARGE DEFENCE SPENDING INCREASE |
Countries meeting at the International Monetary Fund (IMF) this week are looking at a variety of new ways to resolve the problem of third world debt Swiss National Bank president Pierre Languetin said. Languetin said meetings of the Group of 10 and the IMF Interim Committee today reached a consensus that a rescheduling like that of Mexicos debt must be the last of its kind. The Mexico rescheduling has still not been finally resolved six months after it started. Various members suggested other options to break the deadlock between debtor countries and their creditors he said. Languetin said no recommendations were agreed but he listed some of the suggestions. One involved individual banking systems each resolving the problem of small banks which refused to participate in reschedulings. It was this problem that had prevented completion of the Mexican rescheduling he said. Debt-equity swaps could be expanded as could on-lending which some banks had proposed for Argentine debt. On-lending allows banks to select customers for rescheduled amounts. Small banks which did not wish to reschedule might be forced to sign exit bonds prohibiting them from lending to that country again he said. Languetin said none of these represented a general view. But he added People are trying to get out of the corset. REUTER | SWISS BANKER SAYS COUNTRIES SEEK NEW DEBT ANSWERS |
Swiss National Bank President Pierre Languetin said a wider interest rate differential between the dollar and stronger currencies was needed to brake the dollars fall. At a news conference he said Japan and West Germany could try to stimulate their economies further by expanding money supply but he added Im not so sure it would be desirable if monetary policy became more expansive. But what would be useful is a greater differential in interest rates he said. REUTER | INTEREST RATE DIFFERENTIALS TOO SMALL, BANKER SAYS |
Thirty South African coal miners have been killed in an underground explosion at a colliery east of Johannesburg mine owners said. reuter^M | THIRTY MINERS KILLED IN SOUTH AFRICA, MINE OWNERS |
Pacific Dunlop Ltd said it will make a one-for-ten bonus issue from its asset revaluation reserve to shareholders registered June 15. The bonus involves the issue of about 45 mln shares the diversified rubber and plastics group said in a statement. The new shares will not rank for the deferred annual dividend of not less than 12.5 cts that Pacific Dunlop will pay in August but will rank pari passu thereafter it said. As previously reported it did not pay an interim dividend for the first half to December 31 pending a review of the new dividend imputation legislation. REUTER | PACIFIC DUNLOP <PACA.ME> SETS ONE-FOR-TEN ISSUE |
Wholly-owned Mobil Corp <MOB> unit <Mobil Oil Australia Ltd> reported a 38.63 mln dlr net loss in 1986 a turnaround from its 37.25 mln profit in 1985. The loss reflected a combination of strikes plus scheduled and unscheduled refinery shutdowns for maintenance and inventory losses caused by government controls on both crude and product prices Mobil said in a statement. However equity-accounting of associates profits reduced the loss to 24 mln dlrs against a 37 mln profit in 1985. Mobil said it was confident 1987 would see a return to profit as it built further on its 1985 company restructuring. REUTER | MOBIL AUSTRALIA REPORTS 38.6 MLN DLR 1986 LOSS |
Texaco Inc in documents filed with a Texas state appeals court said a ruling forcing it to post a bond of more than one billion dlrs as security for a 10.53 billion dlr judgment would halt its credit agreements and force the company into bankruptcy. A hearing is scheduled Monday on Texacos motion to reduce the amount of bond required by Texas state law to secure a 1985 judgment in favour of Pennzoil Co <PZL> in a dispute over the acquisition of Getty Oil. Pennzoil today said it proposed to the court that Texaco secure its bond with assets valued at about 50 pct of the bond. It said this would not force Texaco into bankruptcy. Richard Brinkman Texacos chief financial officer said in a newly filed affidavit that the company was willing to use its 65 mln shares of <Texaco Canada Inc> as collateral for a letter of credit or loan to provide security to Pennzoil. The Canadian units stock valued at about 1.8 billion dlrs was returned to Texaco earlier this week after being held as security by a federal district court in New York while Texaco awaited a ruling by the U.S. Supreme Court. Brinkman estimated that Texaco could borrow no more than one billion dlrs using its Canadian subsidiary stock as collateral for a loan. Texaco he said was unwilling to pledge the stock of its other foreign subsidiary corporations as security because the stock is not widely traded and its market value was unclear. Brinkman also said the company had already lost access to a four billion dlr revolving credit line since the initial jury verdict against Texaco. Texaco had been able to raise working capital by selling about 700 mln dlrs in receivables to a group of banks since the judgment he said. The banks earlier this week notified Texaco that they would not purchase any additional receivables because of the companys uncertain status Brinkman said. Four other credit agreements for 1.15 billion dlrs would also be cut off if a judgment of more than four billion dlrs is outstanding against the company and it is unable to obtain a stay Brinkman said. Since the Supreme Court decision on April 6 many other suppliers to Texaco have notified Texaco that their dealings with it are under review and a number have demanded cash payment or terminated their dealings with Texaco he said. The Supreme Court overturned a lower federal court decision to cut Texacos bond to one billion dlrs saying the issue should first be considered in Texas courts. In a separate affidavit <Morgan Stanley & Co> Managing Director Donald Brennan also said Texaco would be forced into bankruptcy if the company were forced to provide Pennzoil with security exceeding one billion dlrs. REUTER | COR TEXACO <TX> SAYS IT CAN'T POST MORE THAN 1 BILLION |
Japan warned the United States it may take retaliatory measures if the United States imposes its planned trade sanctions on April 17 a senior government official said. Shinji Fukukawa Vice Minister of the International Trade and Industry Ministry said in a statement Japan would consider measures under the General Agreement on Tariffs and Trade and other actions if the United States imposes 100 pct tariffs on some Japanese exports as planned next week. However Fukukawa said Japan was ready to continue trade talks with the United States despite its failure to convince America to call off the threatened tariffs during two days of emergency talks which ended in Washington yesterday. Last month President Reagan announced the sanctions in retaliation for what he called Japans failure to honour a July 1986 agreement to stop dumping computer microchips in markets outside the United States and to open its home market to American goods. Fukukawa said the United States had regrettably not listened to Japans explanation of its efforts to live up the pact and said Washington had not given any detailed explanation of why it planned to impose the tariffs. REUTER | JAPAN WARNS U.S. IT MAY RETALIATE IN TRADE DISPUTE |
A judge ruled that questions of liability in the 1985 crash of a Japan Air Lines Boeing 747 which killed 520 people near Tokyo will be decided in Seattle. But he left open the possibility that monetary damages could be awarded in a Japanese court. The ruling by King County Superior Court Judge Gary Rittle came in a hearing on lawsuits in which survivors of 77 of the victims are seeking millions of dollars in compensation. Rittle said after the liability problems are settled he will examine the question of where damages will be decided. Lawyers for both the airline and the Seattle-based Boeing Co (BA.N> argued that the suits should be handled in a Japanese court saying it would be more costly and time-consuming to hear them in an American court. But lawyers for the victims survivors said the two companies were trying to evade the liability question and reduce the amount of compensation they may have to pay. Court officials said the case was likely to go to trial here in eight to 10 months. A draft report by a Japanese Transport Ministry investigation team said faulty repairs in 1978 by Boeing and inadequate inspection by ministry inspectors had contributed to the cause of the disaster. The report obtained by Reuters this week is expected to be made public next month. Boeing has said it will probably not comment on the report until it is officially released. REUTER | JUDGE KEEPS JAL <JAPN.T> CRASH SUIT ALIVE IN U.S. |
Two Utah financial institutions the Bank of Iron County and Summit Savings and Loan Association have failed official spokesmen said. The board of directors of the Federal Deposit Insurance Corporation (FDIC) has approved the assumption of the deposit liabilities of Bank of Iron County Parowan Utah by Dixie State Bank St George Utah an FDIC spokesman said. The bank which had total assets of 20.1 mln dlrs was the first bank in Utah to fail this year and the 59th nationwide. Its three offices will reopen Monday as branches of Dixie State Bank and its depositors will automatically become depositors of the assuming bank. Dixie State Bank will assume about 19.9 mln dlrs in 6300 deposit accounts and will purchase all of the failed banks assets at a discount of 3.575 mln dlrs. The Federal Home Loan Bank Board closed Summit Savings and Loan Association Park City Utah and directed the Federal Savings and Loan Insurance Corporation (FSLIC) to transfer an estimated 116.9 mln dlrs in insured deposits to United Savings and Loan Association Ogden Utah an FSLIC spokesman said. Summit a 120.8 mln dlr institution was insolvent the spokesman said. The bank board appointed the FSLIC as conservator for the association on April 14 1986. Summit has since operated as part of the bank boards Management Consignment Program. United Savings has 205 mln dlrs in assets and nine offices in Utah and one in Idaho. REUTER | TWO UTAH FINANCIAL INSTITUTIONS FAIL |
The Kuwait Investment Office (KIO) has increased its stake in <Sime Darby Bhd> to 63.72 mln shares representing 6.88 pct of Sime Darbys paid-up capital from 60.7 mln shares Malayan Banking Bhd <MBKM.SI> said. Since last November KIO has been aggressively in the open market buying shares in Sime Darby a major corporation with interests in insurance property development plantations and manufacturing. The shares will be registered in the name of Malayan Banking subsidiary Mayban (Nominees) Sdn Bhd with KIO as the beneficial owner. REUTER | KUWAIT INCREASES STAKE IN SIME DARBY |
A committee of the International Monetary Fund (IMF) and World Bank said protectionist agricultural policies of industrial countries were a major cause of depressed global commodity prices. The joint Development Committee in a communique released following day-long discussions said an improved environment for commodities was extremely important to the long-term viability of developing countries. The committee also criticised the slow-down in lending to debtor nations. Poorer countries which rely primarily on raw commodity sales to industrial nations to pay their debts have been highly critical of protectionist agricultural policies in the United States Western Europe and Japan. Ministers identified protectionist agricultural policies as a major cause of distortions including depressed commodity prices on world markets of surplus production and of budgetary drain the communique said. The communique delayed because of disputes over specific language was the final statement by the IMF and the bank after week-long semi-annual meetings of the two lending agencies. Earlier the IMFs powerful Interim Committee added its voice to growing criticism of delays by commercial banks on critically needed loan packages for debt-laden developing countries. The committee said it welcomed the exploration of new procedures and financing techniques that will help mobilise new financial support for indebted countries. On Thursday U.S. Treasury Secretary James Baker in a statement to the policy-making committee said commercial bank lending to debtor nations last year was disappointing and more flexibility in loan programs was needed. Doubts about financing can clearly undermine the resolve to carry out needed reforms Baker said. The Development Committee also joined in the criticism noting that there had been a declining flow of capital to the developing countries that has been particularly significant in the case of flows from commercial banks. A number of bank negotiations are bogged down over details including financial packages for Mexico Nigeria and Argentina. The banks acknowledging it has been difficult to complete deals say part of the blame goes to the developing countries for not making sufficient reform to make them good credit risks. REUTER | IMF, WORLD BANK CRITICAL OF AGRICULTURE PROTECTION |
A sugar mill which was this nations second largest employer closed its doors yesterday saying it had been run out of business by sugar smuggled from Miami and the neighbouring Dominican Republic. The closure of the Haitian American Sugar Company (HASCO) will idle 3500 employees and affect as many as 30000 to 40000 small sugar cane planters in regions around the capital the company said. Because of unprecedented and ever-growing smuggling HASCO regrets ... It cannot continue to accept delivery of sugar cane after April 10 the mill warned planters earlier this week. Since President Jean-Claude Duvalier fled Haiti fourteen months ago widescale smuggling of basic goods such as cooking oil flour rice sugar and canned milk has lowered consumer prices but bankrupted several local manufacturers throwing hundreds of thousands of Haitians out of work. At the HASCO compound where grim-faced workers lined up to receive their last pay Spokesman Georges D. Rigaud showed a warehouse stocked with an estimated 445000 unsold 100-pound (45-kg) bags of sugar. We are closing because of our huge stock of unsold sugar. We have no money left to continue operations Rigaud said. He said the company owed 7.6 mln dlrs and had borrowed an additional 1.5 mln dlrs in order to pay off workers. Rigaud blamed the mills problems on an order by Duvalier two years ago forbidding HASCO from refining sugar. He said the government then began importing refined sugar at world market prices and reselling it at a huge profit and the provisional military-civilian government that replaced Duvalier last year continued the policy. But now with all the smuggling even the state cant compete with smuggled Dominican refined sugar Rigaud said. HASCO workers earned 4.20 dlrs daily considerably above the usual minimum wage of three dlrs. It is generally estimated that every employed Haitian supports at least six people. Rigaud said HASCOs closing at a minimum would affect 280000 to 300000 people. Laid-off workers were bitter about the closure. Were dead and its the government thats causing us to die declared Lucien Felix 34 who has five dependents. REUTER | SMUGGLING BLAMED FOR CLOSURE OF HAITIAN SUGAR FIRM |
Taiwan announced plans for another round of import tariff cuts on 862 foreign goods shortly before trade talks with Washington which officials described as a move to help balance trade with the United States. Wang Der-Hwa Deputy Director of the Finance Ministrys Customs Administration Department told reporters the list of products included 60 items asked by Washington. The move is part of our government efforts to encourage imports from our trading partners particularly from the United States he said. He said the ministry sent a proposal today to the cabinet that the tariffs on such products as cosmetics bicycles apples radios garments soybeans and television sets be cut by between five and 50 pct. The cabinet was expected to give its approval next Thursday and the new tariff cuts would be implemented possibly starting on April 20 he added. Taiwan introduced a sweeping tariff cut on some 1700 foreign products last January aimed at helping reduce its growing trade surplus with the United States the islands largest trading partner. Washington however was not satisfied with the cuts and pressed for more reductions as a way of cutting its huge trade deficit with Taipei. Washingtons deficit with Taipei rose to a record 13.6 billion U.S. Dlrs last year from 10.2 billion in 1985. It widened to 3.61 billion in the first quarter of 1987 from 2.78 billion a year earlier Taiwans official figures show. Todays announcement came before a departure later today of a 15-member Taiwan delegation for Washington for a series of trade talks with U.S. Officials. The delegations leader Vincent Siew told reporters last night he was leaving with a heavy heart meaning that he would face tough talks in Washington because of rising protectionist sentiments in the U.S. Congress. Taiwans 1986 trade surplus with Washington was the third largest after Japan and Canada. Siew said the talks starting on April 14 would cover U.S. Calls for Taiwan to open its market to American products purchases of major U.S. Machinery and power plant equipment import tariff cuts and protection of intellectual property. I am afraid this time we have to give more than take from our talks with the U.S. he said without elaborating. REUTER | TAIWAN ANNOUNCES NEW ROUND OF IMPORT TARIFF CUTS |
A British minister said he had given the Japanese government a clear warning of sanctions against Japanese companies if Tokyo did not allow more access to its internal markets and it was clearly understood. Corporate Affairs Minister Michael Howard said on his return from a visit to Japan he thought the Japanese were beginning to appreciate the need to be fair and open about access to their own markets. At an airport news conference Howard denied opposition charges that his trip had been a failure because he had returned empty-handed. I did what I set out to do. I was sent to deliver a clear message to the Japanese government and I delivered it very clearly and it has been clearly understood. Howard said that under the Financial Services Act the govenment had considerable flexibility in taking sanctions against Japanese companies and finance houses operating in Britain. It is not simply a question of withdrawing or refusing operating licences. We can ban firms from certain countries from carrying out certain kinds of business while allowing them to carry out other kinds. I hope we dont have to use these powers but I made it clear in Japan that if our timetable isnt met we shall use them. He said it would be unfortunate if Britain and Japan became involved in a tit-for-tat exchange adding that Japan gained more than anyone else from an open trading relationship. I think they are beginning to appreciate that if this relationship is to continue it is very important for them to be fair and open about access to their own markets. On the question of the British firm Cable and Wireless Plc <CAWL.L> which is trying to win a significant share of telecommunications contracts in Japan Howard said he had told the Japanese this was being widely regarded as a test case. He said there were signs of movement on the case. Cable and Wireless was due to take part in talks in Japan next Tuesday he said. Earlier this week British Prime Minister Margaret Thatcher said Britain could not go it alone on sanctions against Japan but would have to coordinate action with its European Community partners. Community sources said after a meeting of trade officials yesterday that the group might impose steep new tariffs on a range of Japanese goods to prevent diversion from United States markets if Washington imposes trade sanctions against Tokyo as it has threatened. REUTER | BRITISH MINISTER SAYS HE WARNED TOKYO OF SANCTIONS |
The yield on 30-day Bankers Security Deposit Accounts issued this week by the Saudi Arabian Monetary Agency (SAMA) rose by more than 1/8 point to 5.95913 pct from 5.79348 a week ago bankers said. SAMA decreased the offer price on the 900 mln riyal issue to 99.50586 from 99.51953 last Saturday. Like-dated interbank deposits were quoted today at 6-3/8 1/8 pct -- 1/8 point higher than last Saturday. SAMA offers a total of 1.9 billion riyals in 30 91 and 180-day paper to banks in the kingdom each week. REUTER | YIELD RISES ON 30-DAY SAMA DEPOSITS |
Ugandas Coffee Marketing Board (CMB) has stopped offering coffee on the international market because it is unhappy with current prices coffee trade sources said. The board suspended offerings last week but because of its urgent need for cash it was not immediately clear how long it could sustain the sources added. Hundreds of Ugandan coffee farmers and processors have been waiting several months for payment from the CMB which has had trouble finding enough railway wagons to move the coffee to the Kenyan port of Mombasa. Foreign banks have contributed to the cash crisis by holding up remittance of Ugandas hard currency earnings from coffee exports the government newspaper New Vision said. The banks are holding up to seven mln dlrs in coffee money and President Yoweri Museveni is thinking of imposing a penalty for such delays it added. Banking sources said a third factor in the crisis was that commercial banks have lent the board only 77 billion shillings -- the equivalent of 55 mln dlrs -- for crop finance in the current coffee year while the government had asked for 100 billion. The CMB has 455000 60-kg bags of coffee about 15 pct of annual production stockpiled in Kampala awaiting shipment. The crop accounts for over 90 pct of Ugandas export earnings and the recent slide in prices to four-year lows is likely to more than offset an expected increase in production. CMB officials have forecast that because the government has restored law and order in important growing areas Uganda will produce over three mln bags of coffee in the year ending September 30 about 25 pct more than in 1985/6. REUTER | UGANDA PULLS OUT OF COFFEE MARKET - TRADE SOURCES |
The West German cocoa grind rose 2.9 pct to 55190 tonnes in the first quarter of 1987 from 53643 tonnes in the same quarter of of 1986 the Bonn-based Confectionery Industry Association said in a statement. REUTER TAW | W.GERMAN COCOA GRIND UP 2.9 PCT IN FIRST QUARTER |
A prolonged dry spell has damaged 111350 hectares of rice and corn plantations in 10 provinces in the central and southern Philippines agriculture officials said. They said some 71070 tonnes of agricultural produce estimated at about 250 mln pesos was lost to the lack of rainfall. They warned of a severe drought if the prevailing conditions continued until next month. Agriculture Secretary Carlos Dominguez said he hoped the losses would be offset by the expected increase in output in other normally more productive areas not affected by the dry spell. Affected were 14030 hectares of palay (unmilled rice) representing a production loss of 22250 tonnes valued at 77.8 mln pesos Department of Agriculture reports said. About 48820 tonnes of corn from 97320 hectares valued at 170.8 mln pesos have also been lost they said. Officials said the hectarage planted to palay that has been hit by the drought accounted for only one pct of national total thus the damage is considered negligible. In the case of corn they said the loss can be filled by production from non-traditional corn farms which diversified into the cash crop from sugar two years ago. The Philippine Coconut Authority said coconut production in the major producing region of Bicol might drop by 25 pct to 320000 tonnes if the dry spell continued. There were no reports of actual damage. REUTER | DRY SPELL IN PHILIPPINES DAMAGES AGRICULTURE CROPS |
Spains registered unemployment fell by 10465 people to 2.97 mln or 21.4 pct of the workforce in March Labour Ministry figures show. Registered unemployment in February was 2.98 mln people or 21.5 pct of the workforce. The figures were nonetheless higher than those for March 1986 -- 2.8 mln people and 21 pct of the workforce. REUTER | SPANISH UNEMPLOYMENT FALLS SLIGHTLY IN MARCH |
Mitsubishi Electric Corp <MIET.T> said it is nearing an agreement with Unisys Corp <UIS> of the U.S. To supply central processing units for a medium-sized Unisys mainframe computer planned to succeed the System 80. A Mitsubishi Electric official declined to say how many processors would be involved but said there are no plans to market the new Unisys computer in Japan. REUTER | MITSUBISHI ELECTRIC TO SUPPLY PROCESSORS TO UNISYS |
Canon Inc <CANN.T> and Intel Corp <INTC> of the U.S. Agreed to the joint development production and import of very large scale integrated circuits a Canon spokesman said. He told Reuters Intel will make the chips and Canon will import them for use in for use in photocopiers printers and facsimiles to be made and sold in Japan. Canon which last week made a similar pact with National Semiconductor Corp <NSM> plans to raise its ratio of microchip imports this year to 28 pct from 24 pct last year to take advantage of the yens rise and help quell mounting trade friction he said. REUTER | CANON, INTEL AGREE ON MICROCHIP TIE-UP |
Hungary has announced sharp price increases for a range of food and consumer products as part of its efforts to curb a soaring budget deficit. The official MTI news agency said the government decided consumer price subsidies had to be cut to reduce state spending. From today the price of meat will rise by an average 18 pct and that of beer and spirits by 10 pct MTI said. MTI said consumer goods will also become more expensive with the price of refrigerators rising some five pct. It also announced a number of measures to ease hardship including higher pensions and family allowances. Statistics indicate the budget deficit tripled in 1986 to 47 billion forints. Central banker Janos Fekete has said the Finance Ministry is trying to cut the 1987 shortfall to between 30 and 35 billion from a planned 43.8 billion. A major tax reform including the introduction of a Western-style valued added tax is planned for January 1988 in an effort to cure problems in state spending. But diplomats said the latest announcement shows the authorities were forced to act quickly to keep this years deficit under control. The measures are also aimed at cooling an overheated economy and could help dampen Hungarians appetite for imported Western goods which consume increasingly expensive hard currency the diplomats said. The diplomats also said however that they did not expect the kind of social unrest that followed sharp price rises in other East Bloc states notably Poland. REUTER | HUNGARY RAISES PRICES IN EFFORT TO CURB DEFICIT |
TOKYO STOCKMARKET INDEX PLUNGES 427.48 TO 22,789.11 AT 1343 LOCAL TIME - BROKERS |
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Tokyos stockmarket index plunged sharply at the start of afternoon trade as investors took profits from last weeks four straight record closes brokers said. The market index fell 427.48 points to 22789.11 only 13 minutes after afternoon trading began at 13:30 local time. Brokers said concern over weekend announcements of mounting trade tension with Europe and the U.S. Sparked the heavy selloff. The average had risen 630.48 points in the last four trading sessions of last week. REUTER | TOKYO STOCKS PLUNGE IN MIDDAY TRADE |
BANK OF JAPAN ACTIVELY BUYING DOLLARS AT AROUND 142.20 YEN IN TOKYO - DEALERS |
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China is negotiating with Pakistan to buy 5000 tonnes of cotton this year after importing the same amount last year under a barter agreement Chinese consulate sources said. Chinese ambassador Tian Ding told a meeting of Pakistani industrialists on Thursday that China intended to increase imports from Pakistan to reduce a trade imbalance. Pakistani officials estimate the countrys cotton output from the current crop at a record 7.6 mln bales (375 pounds each). Last years output totalled 7.2 mln bales and domestic consumption was just below three mln bales they said. REUTER | CHINA WANTS TO BUY 5,000 TONNES PAKISTANI COTTON |
The government must announce harsh cuts in spending in its May 14 economic statement if it is to give an adequate response to Australias economic problems the ANZ Banking Group Ltd <ANZA.S> said. Cuts of two billion dlrs would be insufficient against the backdrop of a 12 billion dlr government deficit and a 14 billion dlr current account deficit it said in its monthly Business Indicators publication. For the past two years the government has struggled with an economic reality that demands measures beyond those which it sees as politically practicable it said. The political climate meant there would be a continued over-reliance on monetary policy to hold the exchange rate and maintain confidence in economic management ANZ said. The cost of this approach is that the much-needed revival of business investment will be further postponed it said. The economy was now on a modest growth upswing boosted by export and import-replacement industries which had created a false suggestion that the worst adjustments to the balance of payments crisis were past. Unfortunately successful adjustment to Australias deep-seated economic problems remains a long-term process it said. In its economic forecasts ANZ said it expected moderate overall economic growth with gross domestic product (GDP) rising 2.7 pct this year and 2.4 pct in 1988. The current account deficit would narrow to five pct of GDP this year and 4.3 pct in 1988 and net foreign debt would grow strongly from 81 billion at the end of 1986 to 97.2 billion at end-1987 and 110.3 billion a year later. Inflation would fall to 8.5 pct in 1987 and 7.5 pct in 1988 from 8.9 pct in 1986 and further falls in real wages were expected ANZ said. REUTER | AUSTRALIAN GOVERNMENT MUST CUT SPENDING, ANZ SAYS |
Bell Resources Ltd <BLLA.S> said it will raise about 50.8 mln dlrs by issuing 135.6 mln warrants at 37.5 cents each entitling the holder to take up shares in BHP Gold Mines Ltd <BHPG.ME> at 1.60 dlrs each on or before December 15 1987. The non-renounceable entitlement will be on the basis of one-for-three to holders of Bell Resources fully-paid shares and convertible preference shares registered on May 6 the company said in a statement. Other ratios will be one-for-five for partly paid Series A shares one-for-eight for partly-paid Series B and C shares and one-for-10 for 1987 options. Bell said the security is similar in concept to the warrants on the shares of BHP Gold Mines parent company The Broken Hill Pty Co Ltd <BRKN.ME> (BHP) launched by Bell about one year ago. BHP is currently floating BHP Gold Mines the vehicle for its gold interests in Australia and other countries. The Bell Group Ltd will not take up its entitlement to the BHP Gold Mines warrants but the family companies of its chairman Robert Holmes a Court will Bell said. The warrants will be listed and stockbroker McCaughan Dyson and Co Ltd is underwriting the issue. REUTER | BELL RESOURCES TO ISSUE WARRANTS ON BHP GOLD MINES |
The Electrolytic Refining and Smelting Co of Australia Pty Ltd said it lowered its ex-works Port Kembla Refinery Copper Price by 20 dlrs to 2160 dlrs a tonne effective today. REUTER | ELECTROLYTIC REFINING LOWERS COPPER PRICE |
The Bank of Japan actively bought dollars here in early afternoon trade at around 142.20 yen dealers said. The central bank had placed buy orders at that level and prevented the dollar from falling when it came under heavy selling pressure from investment trusts and trading houses they said. However the intervention failed to boost the U.S. Currency significantly from the 142.20 yen level they added. The dollar was trading around its midday rate of 142.30 yen. It had opened here at 141.85 yen. REUTER | JAPAN CENTRAL BANK ACTIVELY BUYS DOLLARS IN TOKYO |
Texaco Inc <TX> said its decision to file for protection under Chapter 11 of the U.S. Bankruptcy code will not affect the majority of its businesses. It said its subsidiaries which account for 96 pct of its 32.6 billion dlrs in revenues and 79 pct of its net property plant and equipment were free of the action. Only parent holding company Texaco Inc and operating subsidiaries Texaco Capital Inc and Texaco Capital N.V are affected it said. But the company said it was likely to suspend its 75 cents per share quarterly common stock dividend and halt repayments on debts of some 6.8 billion dlrs. Texaco said it filed for Chaper 11 because suppliers were demanding cash payments and banks were withholding loans as a result of a legal dispute with Pennzoil Co <PZL>. Texaco is fighting a Texas law requiring it to post a bond of more than 10 billion dlrs before it can appeal a 1985 judgment that ruled it illegally interfered with Pennzoils 1984 acquisition of Getty Petroleum Corp <GTY>. The bond almost matches the damages awarded against Texaco. Should Texaco fail to place the bond Pennzoil could begin to attach its assets to secure the judgment. Last Monday the Supreme Court overturned a decision to cut Texacos bond to one billion dlrs and sent the issue back to the Texas courts. Analysts said the bankruptcy filing effectively froze all Texacos obligations while it continued to appeal the merits of the Pennzoil lawsuit. Attempts last week to win a compromise on both the bond issue and the larger dispute failed James Kinnear Texacos president and chief executive officer told reporters. Kinnear said Pennzoils disclosure in court papers on Friday that it wanted to extend the bond issue hearing until the end of April pushed Texaco further towards Chapter 11. Pennzoil had asked Texaco to post a 5.6 billion dlr cash bond and to reduce its dividend to not more than 50 pct of earnings. Pennzoil also wanted assurances that Texaco would not sell any assets Kinnear said. Texaco offered to put up one billion dlrs in a letter of credit and agreed not to let the value of its assets fall under 11.1 billion dlrs he added. Joseph Jamail a Houston attorney for Pennzoil said the company had made its latest settlement offer to Texaco on Saturday and was taken by surprise when Texaco filed for bankruptcy. He declined to reveal the amount of the proposal citing a confidentiality agreement between the two companies. Texaco told us they would get back to us but instead they chose to go to bankruptcy court Jamail said. Attorneys for Pennzoil said they believed the company would prevail in court appeals adding that Texacos assets were ample ultimately to pay the Pennzoil judgment in full. REUTER | TEXACO SEES BUSINESS LITTLE HIT BY BANKRUPTCY MOVE |
The United Auto Workers union (UAW) vowed to fight wage and job cuts in a round of labour talks starting in July that cover nearly 500000 workers at General Motors Corp <GM> and Ford Motor Co <F>. The UAW doesnt go around picking fights but we dont run away from them when theyre forced on us ... We want peace but peace comes at a price union president Owen Bieber said. And if its war the UAW will be ready for it he said in an address to 3000 union leaders at the start of a four-day special convention. He said the Detroit carmakers had turned their backs on America by the increasing use of imports that cost U.S. Jobs. He said the union was ready to strike for job and income guarantees bans on shifting production to foreign and other non-union sources and increases in pay and profit-sharing. GM under pressure from declining sales and profits has said this years talks will be difficult because it wants to limit wage rises and shed parts-manufacturing operations considered uncompetitive. Contracts at both companies expire at midnight on September 14. REUTER | U.S. AUTO UNION WILL FIGHT TO STOP JOB/WAGE CUTS |
Finance Minister Roger Douglas said eight bond tenders of 250 mln dlrs each are planned for the year ending March 1988. Douglas said in a statement the June quarter borrowing program will not include a May tender but a 250 mln dlr tender will be held on June 11. Overfunding in 1986/87 has removed the need for a May tender he said. Preliminary estimates put net public sector injections for 1987/88 year at 2.1 billion dlrs. The fiscal deficit for 1987/88 is forecast at 2.2 billion dlrs compared with a forecast of 2.45 billion for 1986/87 and 1.87 billion a year earlier. However Douglas said the 1987/88 estimate is subject to uncertainties over the results of pre-budget spending reviews and tax forecasts and over the effect the program of corporatising certain government departments will have on liquidity. Douglas said whatever the outcome of these influences the net public sector injections will continue to be fully funded on a fiscal year basis. REUTER | N.Z. PLANS EIGHT 250 MLN DLR 1987/88 BOND TENDERS |
U.S. roastings of green coffee in the week ended April 4 were about 275000 (60-kilo) bags including that used for soluble production compared with 215000 bags in the corresponding week of last year and about 320000 bags in the week ended March 28 George Gordon Paton and Co Inc reported. It said cumulative roastings for calendar 1987 now total 4440000 bags compared with 4540000 bags by this time last year. Reuter | PATON REPORTS U.S. GREEN COFFEE ROASTINGS HIGHER |
Australian share markets closed at record levels for the seventh consecutive session as strong overseas interest in gold stocks pushed the market higher brokers said. They said heavy trading in gold stocks in London on Friday night provided the impetus for the local market. At the close of trading the all ordinaries index was 11.6 points higher above Fridays previous record close at 1799.0 while the gold index had risen 176.8 points or 5.2 pct to a record 3562.1. The all resources index added 23.9 points to 1164.3 but the all industrials index dropped 4.8 points to 2631.9. National turnover was a high 228 mln shares worth 525 mln dlrs with rises outnumbering falls by four to three. Western Mining continued its run jumping 1.04 dlrs to a record 10.30. Poseidon gained 3.00 to 16.00 Sons of Gwalia 90 cents to 16.50 and Kidston 50 to 9.00. Placer Pacific rose 25 cents to 3.95 dlrs Elders Resources 17 to 3.20 CRA 36 to 8.70 and MIM 19 to 3.35. Market turnover was boosted substantially by the inclusion of about 180 mln dlrs in Australian Consolidated Minerals shares understood to represent the sale of Western Minings holding brokers said. ACM shares finished 30 cents down at 8.40 dlrs. Resources leader BHP closed 15 down at 11.40 in quiet trading while Bell Resources rose eight to 5.70. Elders IXL lost 10 to 4.75. With most investors concentrating on mining stocks industrial stocks took a back seat. TNT dropped 10 cents to 4.75 dlrs and News Corp recovered to be steady at 23.00 after being down most of the day. ANZ Bank dropped 10 to 5.60 and National four to 5.46. In the oil and gas sector Santos dropped 26 to 5.00 and Bridge eight to 1.40 but Genoa gained 25 to 3.05. June share price index futures staged a late rally and finished 24.0 points higher at 1824.0. REUTER | AUSTRALIAN STOCKS CLOSE AT RECORD LEVELS |
Western Mining Corp Holdings Ltd <WMNG.S> (WMC) said it sold its entire holding of 22.13 mln shares in the gold mining company <Australian Consolidated Minerals Ltd> (ACM). WMC gave no details but stockbrokers said the sale was made at eight dlrs a share on Friday to a number of U.S. European and Australian investors through WMCs usual brokers. The company purchased the 19.9 pct parcel in early March from Amax Inc <AMX.N> at 6.32 dlrs a share ahead of a one-for-three bonus issue when Amax sold its entire 47 pct stake in ACM to a number of local companies. REUTER | WESTERN MINING SELLS ACM STAKE |
National Bank economic data for 1986 shows that Yugoslavias trade deficit grew the inflation rate rose wages were sharply higher the money supply expanded and the value of the dinar fell. The trade deficit for 1986 was 2.012 billion dlrs 25.7 pct higher than in 1985. The trend continued in the first three months of this year as exports dropped by 17.8 pct in hard currency terms to 2.124 billion dlrs. Yugoslavia this year started quoting trade figures in dinars based on current exchange rates instead of dollars based on a fixed exchange rate of 264.53 dinars per dollar. Yugoslavias balance of payments surplus with the convertible currency area fell to 245 mln dlrs in 1986 from 344 mln in 1985. The National Bank said the drop was due to a deterioration in trade. Exports to the convertible currency area rose 11.6 pct from 1985 while imports rose 17.8 pct. Retail prices rose an average of 88.1 pct in 1986 while industrial producer prices rose by 70.6 pct the banks data showed. The cost of living rose by 89.1 pct. Personal incomes rose by 109 pct in 1986. Prime Minister Branko Mikulic warned in February that wages were too high given the level of productivity. Mikulic introduced a law cutting wages to the level of the last quarter of 1986 and tying future rises to productivity. Bank statistics show the overall 1986 rise in M-1 money supply was 109.1 pct with a year-end position of 3895.9 billion dinars. Yugoslavs have 9.8 billion dlrs worth of foreign currency savings in the country and 20 billion dlrs abroad mostly owned by workers employed in western Europe. The dinar fell by 73.1 pct against a basket of hard currencies in 1986. The highest depreciation was against the Swiss franc 85.3 pct and the lowest against the U.S. Dollar 46.2 pct. REUTER | YUGOSLAV ECONOMY WORSENED IN 1986, BANK DATA SHOWS |
Australia and New Zealand Banking Group Ltd <ANZA.S> said it will make a one-for-two bonus issue from its asset revaluation reserve to shareholders registered June 2. The proposed bonus and an increase in authorised capital to one billion one-dlr par shares from 600 mln will be put to shareholders for approval at an extraordinary general meeting on May 26 the ANZ said in a statement. The issue will absorb about 230 mln dlrs of the 260.9 mln standing in the asset revaluation reserve it said. The bank said that by lowering the dividend rate it expects to maintain the value of dividend payout on the enlarged capital at about the level of its last full year ended September 30. The group paid 31 cents a share and 133.1 mln dlrs in all for that year. Shareholders will also be asked to approve changes in the banks articles of association to allow it to offer shares in lieu of the interim dividend at a discount of five pct to the market price. The group is the latest to announce a tax-free bonus issue ahead of dividend imputation effective July 1. REUTER | ANZ BANK SETS ONE-FOR-TWO BONUS ISSUE |
Yields on certificates of deposit (CD) offered by the United Arab Emirates Central Bank were higher than last Mondays offering the bank said. The one-month CD rose 1/4 point to 6-3/8 pct while the two three and six-month maturities rose 5/16 point each to 6-7/16 6-1/2 and 6-5/8 pct respectively. REUTER | UAE CENTRAL BANK CD YIELDS RISE |
A tourist hotel in Suzhou Jiangsu province is raising a 21 mln U.S. Dlr loan to cover its construction cost lead manager <DnC Ltd> said. The loan for the Suzhou Aster Hotel will mature in 10 years and is guaranteed by the provincial investment arm <Jiangsu International Trust and Investment Corp>. The terms were not revealed. The loan to be signed by the end of the month will be provided by a number of banks on a club basis. The hotel is being developed on a contractual joint venture basis between an unnamed Hong Kong Chinese investor and Suzhou municipal entities. REUTER | CHINESE HOTEL RAISES 21 MLN DLR LOAN |
Chinas largest sulphur-iron mine has started trial production at Yunfu in the southern province of Guangdong the China Daily said. It said the mine has an annual output capacity of three mln tonnes of sulphur-iron ore which can be used without processing because of its high quality. REUTER | CHINA SULPHUR-IRON MINE STARTS PRODUCTION |
Chinas state-owned Beijing Non-Ferrous Metals Industrial Corp and <Wrought Copper Ltd> of Chile signed a contract to jointly build a copper tube plant on the outskirts of Peking the China Daily said. The Beijing-Santiago Copper Tube Co involves an investment of 9.93 mln dlrs and will on completion have a production capacity of 5000 tonnes of copper tubes a year it said. It said Chile will supply copper at preferential rates to the venture whose equipment comes from <Wednesbury Tube Co> of U.K. The agreement calls for joint Sino-Chilean management of the venture for 15 years the paper said. It said the venture is the first economic cooperation project between China and Chile but gave no more details. China is a major copper importer. Customs figures show it imported 171118 tonnes of copper and alloy in calendar 1986 down from 355652 tonnes in 1985. REUTER | CHINA, CHILE TO BUILD COPPER TUBE PLANT IN CHINA |
The <Scandinavian Airlines System>s SAS International Hotels unit and Skanska AB <SKBS.ST> of Sweden are raising a 37 mln U.S. Dlr loan for their joint venture hotel in China loan lead manager DnC Ltd said. It said the loan will finance part of the cost of the 46 mln dlr SAS Grand Hotel Beijing in the Chinese capital. The three other lead managers are DnCs parent company Den norske Creditbank Scandinavian Far East Ltd and its parent Skandinaviska Enskilda Banken. Terms of the loan are being finalised and syndication is expected to begin in about one month DnC Ltd said. The recipient of the loan will be SAS Grand Hotel Beijing Joint Venture Co Ltd which is owned 50 pct by the China International Exhibition Centre and 50 pct by the two Swedish firms. Skanska will be responsible for the construction and SAS International Hotels for the management of the hotel which is part of the International Exhibition Centre complex. Construction of the 400-room hotel will start after the loan is signed. It is due to be opened in late 1989. REUTER | SAS UNIT, SKANSKA IN CHINA HOTEL JOINT VENTURE |
Singapores external trade grew 8.8 pct in first quarter 1987 against a 12.4 pct decline in the same period last year and two pct growth in the previous quarter the Trade Development Board said. It said exports over the period rose by 8.7 pct to 12.38 billion dlrs and imports by 8.9 pct to 14.64 billion for a trade deficit of 2.26 billion against a 2.06 billion deficit in the same 1986 period and 1.78 billion deficit previously. The growth was attributed to the strength of non-oil trade especially computers and computer parts electronic components and garments it said. REUTER | SINGAPORE EXTERNAL TRADE GAINS 8.8 PCT IN QUARTER |
Malaysias manufacturing exports rose by 24.5 pct to 15.1 billion ringgit in 1986 chairman of the Export Promotion Council Ahmad Sarji Abdul Hamind said. The improved export performance was led by electrical and electronic products textiles footwear clothing processed food timber chemical and rubber products he told a news conference. However total gross exports for the year declined by 5.6 pct to 35.9 billion ringgit from 38 billion in 1985 due to a fall in major commodity exports and weak prices he said. REUTER | MALAYSIA'S 1986 MANUFACTURING EXPORTS RISE 24 PCT |
Rates for five billion pesos worth of Philippine Treasury bills eased slightly at Fridays auction with tenders totaling 13.94 billion the Central Bank said. It said 1.3 billion pesos of 91-day bills averaged 11.249 pct down from 11.743 pct the previous week 1.6 billion of 182-day bills averaged 12.473 pct against 12.847 pct and 2.1 billion of 364-day bills averaged 14.029 pct against 14.233. The bank said there would be no auction this week because of the Easter holiday. It also said T-bills and three-year T-note auctions totaled 61.1 billion pesos in the first quarter of 1987. REUTER | SLIGHT DROP IN PHILIPPINE TREASURY BILL RATES |
West Germanys capital market liberalization program has stalled and bankers are worried it may take years for further reforms to be completed. Liberalization got underway in May 1985 when foreign banks received Bundesbank permission to lead-manage mark eurobonds. Further moves included introduction of mark-denominated certificates of deposit last year. But other changes including revisions in the domestic options market and introduction of futures contracts need lengthy statutory changes and this may take years bankers and dealers say. Deutsche Bank AG co-chairman F. Wilhelm Christians called last week for an enlargement of current capital market instruments to include instruments already standard abroad. He said these are needed especially when prices fall citing declines in West German share prices in the first two months of this year when stock indices fell about 20 pct. Others are more blunt. Securities dealers say the lack of viable hedging instruments for shares and bonds makes trading in domestic markets too risky. We need a stock index futures contract and a futures contract for recent government bonds one dealer said. West Germany now has options contracts on about five pct of shares and bonds traded on exchanges here covering only about 30 pct of the average traded volume stock market sources said. Options can only be written on the original 14 bonds selected when bond options were introduced last April. The most recent bond on the list was issued in 1985. There are no futures exchanges in West Germany. German banks may participate in futures exchanges through branches abroad but these are at least outwardly subject to stringent West German rules requiring that every contract be secured on a one-by-one basis with a separate hedge to prevent speculation. Another problem is a lack of liquidity in the existing markets owing to lack of private investor participation. Private individuals and corporations do not engage in options trading now due to West Germanys civil and exchange laws which define losses made in futures and options business as gambling losses which investors need not pay back. Options business has been hurt by lack of liquidity from pension funds which currently are forbidden to invest in these instruments. But they are to be allowed to enter the business soon as the European Community begins to harmonize rules governing funds. Manfred Laux general secretary of the West German mutual funds association in Frankfurt said harmonized rules are to be adopted by October 1 1989 at the latest. The push to adopt new instruments has not been great in the past owing to wide-spread belief they are speculative which gives them a bad name in West Germany. But pressure for their introduction here is growing. The start-up of a Swiss futures exchange has some bankers considering if a similar exchange would be useful in West Germany. They say that without innovations some business could drift to London which the Bundesbank vehemently opposes. An official at the London International Financial Futures Exchange (LIFFE) said the exchange currently has no plans to introduce more mark-denominated contracts beyond the existing mark-dollar contract. But he said the exchange is studying the feasibility of other contracts including one for three-month mark interest rates and possibly a government bond contract. A Bundesbank capital markets expert said the Bundesbank has no objections to hedging through futures but any liberalization in that sector is still in the early planning stages after earlier talks ended two years ago. Considerations about the futures business have been drawn out because of the large number of participants involved in talks. They include parliament the Bundesbank the Federal Banking Supervisory Board eight West German stock exchanges and their governing states and the four West German banking associations. Beyond options and futures other changes being suggested include replacing the federal governments current bond consortium with an auction procedure similar to one being considered in the U.K. And already in practice in the U.S. This would upset the existing market order providing German and foreign banks in the consortium with fixed quotas but it would eliminate the misallocations some bankers say presently arise within the fixed consortium quota system. In addition some bankers would like the method of bond trading on the West German stock exchange changed to a system of continuous price-setting from the current system in which every bond price is fixed once a day. This would make trading more transparent if it reduced the proportion of off-floor interbank bond trading now some 90 pct of the volume of bond transactions here the bankers say. REUTER | GERMAN CAPITAL MARKET LIBERALIZATION STALLS |
The central bank Bank Negara said yields on the 91-day Malaysian treasury bills rate rose slightly to 2.032 pct at this weeks tender from 2.020 pct last week. Accepted bids ranged between 1.951 and 2.060 pct compared with 1.874 and 2.048 pct previously. Applications totalled 440 mln ringgit for the 100 mln of bills on offer. The bank said it will offer 100 mln ringgit of 91-day bills and 150 mln of 182-days at a tender closing on April 20. REUTER | MALAYSIAN TREASURY BILL RISES AT LATEST TENDER |
A 3.22 billion dlr offer for Dome Petroleum Ltd <DMP.MO> by TransCanada Pipelines Ltd <TRP.TO> may short-circuit Domes restructuring plan and open the door for more takeover bids oil analysts said. Dome is trying to get approval for a plan to refinance debt of more than 4.5 billion dlrs by July 1 1987 when an interim debt plan that allowed the Canadian oil and gas firm to defer substantial payments to creditors will expire. Analysts said TransCanadas bid signals Domes debtholders that an alternative exists to Domes debt plan. Dome announced its plan to 56 major creditors as well as public noteholders in March after several months of delicate negotiations. TransCanadas proposal amounts to a quasi debt restructuring oil analyst Doug Gowland of Brown Baldwin Nisker Ltd said from Toronto. Calgary-based Domes restructuring plan would allow creditors to convert debt to common shares under a formula yet to be negotiated. Payments on remaining debt would be linked to cash flow generated by assets pledged against the debt. The weakness of the whole debt-refinancing proposal is that even with approval of creditors there is no assurance that Dome will in fact be able to repay all of its debt obligations said Wilf Gobert an oil analyst for Peters and Co Ltd in Calgary. TransCanadas announcement came as a surprise since Dome was waiting for responses from creditors on its proposed refinancing packages Gobert said. The TransCanada proposal could open the bidding for Dome since other potential buyers were probably waiting for lenders to agree to a restructuring he added. I would think that the debtholders would want to entertain any and all offers (for Dome) Gobert said. Dome spokesman David Annesley said in New York that TransCanadas announcement could be seen as an attempt to fix the bidding price for Dome and an effort to preclude other possible buyers from making an offer. By drawing attention to us in our discussions it means that others may be a little reluctant to come forward he said. Dome does not consider TransCanadas proposal a formal offer because the pipeline utilitys announcement breached a confidential agreement between the two companies he said. Dome responded to the statement by suspending discussions with TransCanada in order to pursue talks with other unidentified parties. However Dome said its management and financial advisers would evaluate all proposals including TransCanadas. Gowland said TransCanadas offer is probably a fair price for the companys 36.1 mln acres of oil and gas land holdings. However he said not enough financial details are known about Domes debt restructuring to compare the value of TransCanadas proposed offer. REUTER | OFFER FOR DOME MAY SHORT-CIRCUIT ITS DEBT TALKS |
Prime Ministers Zhao Ziyang of China and Anibal Cavaco Silva of Portugal signed an agreement to end more than four centuries of Portuguese rule over the territory of Macao and return it to Chinese control in 1999. Macao will become a special administrative region on December 20 1999 retaining a high degree of autonomy except in foreign affairs and defence. Its capitalist system is to remain intact for 50 years under an arrangement similar to the one that will return Hong Kong to China from Britain in 1997. China hopes to win back the Nationalist-ruled island of Taiwan under the same one country two systems formula. The successful settlement of the question of Macao has proven and will continue to prove that the concept of one country two systems is realistic and therefore definitely viable Zhao said. Macaos population of 300000 includes more than 40000 Portuguese passport holders. Peking has said Chinese nationals in this category will be able to use their Portuguese passports after 1999 but will not be entitled to Portuguese consular protection in Macao or elsewhere in China. REUTER | CHINA AND PORTUGAL SIGN MACAO DEAL |
Eurobonds for Texaco Inc subsidiaries were unquoted this morning as traders assessed the implications of the companys shock weekend decision to file for bankruptcy under Chapter 11 of U.S. Bankruptcy laws eurobond dealers said. The decision to file for bankruptcy follows a court decision that it had to post an 11 billion dlr bond to continue its court battles with Pennzoil Co <PZL>. One head trader at a U.S. Securities house said I dont want to be obstructive but there genuinely is no market in Texaco bonds at the moment. Everyone is stunned by the decision (to file for bankruptcy) and cant really believe it. One dealer noted that Texaco subsidiaries have outstanding eurobonds totalling over three billion dlrs out of total borrowings of some 6.8 billion dlrs. He added that many of the fixed interest eurobonds - dollar straights - had been trading basis only for some time prior to this weekends news. This means traders could quote a two way price for the bonds but would not be bound to trade them. Any trades would be negotiated. He said that recently there appeared to have been some speculative buying of the bonds from the U.S. But that European investors had been overall sellers. Dealers noted that under the Chapter 11 filing noteholders will receive no interest payments. Texaco also has eurobonds outstanding which are convertible into Texaco Inc common stock - known as convertibles. Trading did not open in these issues either. One convertible dealer said Were waiting to see the result of todays court hearing. Texaco is applying today in the Texas courts for relief from having to post the court bond. Texaco shares were being indicated by over the counter share dealers here at around 26 to 28 dlrs compared with Fridays close in New York of 31-7/8 dlrs. Pennzoil shares were indicated at 85 to 87 dlrs compared with Fridays New York finish of 92-1/4 dlrs. REUTER | TEXACO <TX> EUROBONDS UNQUOTED AT MARKET OPENING |
The Bank of England said it forecast a shortage of around 400 mln stg in the money market today. Among the main factors affecting liquidity bills maturing in official hands and the take-up of treasury bills will drain some 1.085 billion stg. Partly offsetting these outflows a fall in note circulation will add some 340 mln stg exchequer transactions around 300 mln and bankers balances above target about 50 mln. REUTER | U.K. MONEY MARKET DEFICIT FORECAST AT 400 MLN STG |
Bangladeshs cost of living index fell 1.09 pct in January to 479 after a 1.6 pct decline to 484.28 in December (1973-74 base 100) the Bureau of Statistics said. The cost of living index fell 0.14 pct to 434.49 in January 1986. In the year to January inflation ran at 10.24 pct after an 11.3 pct rate a month earlier and 9.72 pct a year earlier. REUTER | BANGLADESH COST OF LIVING INDEX FALLS IN JANUARY |
Deutsche Bank Finance NV Curacao is issuing a 100 mln Australian dlr eurobond due May 14 1990 paying 14-1/8 pct and priced at 101-1/4 pct lead manager Deutsche Bank Capital Markets Ltd said. The bond guaranteed by parent Deutsche Bank AG is available in denominations of 1000 and 10000 dlrs and will be listed in Luxembourg. Fees total 1-1/2 pct comprising one pct selling concession and 1/2 pct management and underwriting combined. REUTER | DEUTSCHE BANK FINANCE UNIT HAS AUSTRALIAN DLR BOND |
<Rothmans Holdings (Tobacco) Ltd> said in a sttement there was no foundation to press speculation that it would sell its stake in Rothmans International Plc <ROT.L> to Philip Morris Inc <MO.N> or that it would buy Morris stake. In the 1986 report Rothmans International said RHT which is controlled by <Rupert Foundation SA> owned 18.25 mln ordinary and 64.37 mln B ordinary shares or 99.9 pct and 26.1 pct respectively. Morris owns 79.8 mln B ordinary shares or 32.4 pct. Rothmans B shares which firmed on the speculation to close at 273p from 241p on Friday eased to 245.5p at 0838 GMT. REUTER | ROTHMANS DENIES SHARE SALE SPECULATION |
Japanese Prime Minister Yasuhiro Nakasones unpopular plan to introduce a sales tax caused an electoral setback for his ruling Liberal Democratic Party (LDP) in Sundays local elections political analysts said. The LDP retained its 11 prefectural governorships but failed to restore a governorship in Fukuoka it had placed much importance on winning. In the prefectural assembly elections to fill 2670 seats the LDP has so far lost 92 of its previously held 1487 seats to the socialists and communists. Full election results should be available later today. Discussing the election results with reporters Nakasone said I wouldnt say the proposed five pct sales tax had no effect at all but there were other factors such as a low turnout and unusually cold weather. The Home Affairs Ministry said the average turnout for the 13 gubernatorial elections was a record low 59.78 pct while the prefectural assembly polls drew an average of 66.66 pct also a record low. Noboru Goto president of the Japan Chamber of Commerce and Industry and a longtime friend of Nakasone told reporters the impact of the sales tax on the LDPs setback was obvious. The government should take action (on the sales tax) in regard to the peoples wishes Goto said. Nakasone and other LDP leaders have already hinted at a delay in the implementation of the tax which had been scheduled for next January and a possible cut in the rate. The most important thing now is to get parliamentary approval of the budget as soon as possible to arrest a rapid appreciation of the yen Nakasone said. We must implement measures to prop up the economy. Opposition parties said the elections were a referendum on the tax and they will continue to demand its retraction. REUTER | NAKASONE'S PARTY SUFFERS SETBACKS IN LOCAL POLLS |
Union Bank of Switzerland NV is issuing a 15 billion yen eurobond due June 1 1992 paying 4-3/8 pct and priced at 101-3/8 pct lead manager Union Bank of Switzerland (Securities) Ltd said. The issue has a call option and put option after four years at par and is guaranteed by Union Bank of Switzerland. The selling concession is one pct while management and underwriting combined pays 5/8 pct. The issue is available in denominations of one mln yen and will be listed in Luxembourg. The payment date is June 1. REUTER | UBS UNIT ISSUES 15 BILLION YEN EUROBOND |
Member states of the European Community are starting to run out of patience with Japan which they believe has repeatedly promised major initiatives to open its market to imports but as often made only minor moves. Diplomatic sources here said several recent actions by EC countries bear witness to a new disillusionment with the willingness or at least the ability of the Japanese government to reduce its massive trade surplus with the EC. However they said an all-out trade war may be far off as EC states know they would suffer almost as much as Japan. Senior EC diplomats gave a generally favourable reaction to an EC executive commission proposal under which the EC could raise tariffs on a range of Japanese products if the U.S. Carries out a threat to make a similar move on April 17. The EC tariffs which would involve renouncing obligations entered into with the world trade body GATT would be designed to stop a diversion of exports to the EC market from that of the U.S. The diplomats were meeting as Tokyo announced that the ECs trade deficit with Japan reached a record 2.13 billion dlrs in March up from 1.94 billion in February. In 1986 Japanese exports to the EC totalled 30.67 billion dlrs up 4.5 pct from 1985 while EC exports to Japan fell one pct to 12.43 billion dlrs. In Paris trade minister Michel Noir said France has decided to give Japan a taste of its own medicine. Burgeoning imports of microwave ovens and of frozen Coquilles St Jacques will be restricted by a strict application of French quality standards -- something EC states say often happens to their own exports entering Japan. Britain has threatened to withdraw the licences of Japanese banks and insurance companies to operate in the City of London because the British Cable and Wireless company lost out in competition for a Japanese telecommucations contract. However British officials in London have said that the government may have gone too far in implying that it would take immediate drastic action unless the contract was reopened. By contrast West Germany with the ECs most successful economy has never threatened Tokyo with sanctions preferring to rely on firm diplomacy and encouragement of its own industries to surmount obstacles to export to Japan. The EC Commission itself has switched its tactics in recent years substituting general calls for action by Japan to open its market with specific demands for moves in key areas. At present it is for instance pressuring Japan to end allegedly discriminatory taxation of imported wines and spirits to ensure EC companies have a chance to win contracts for the building of a new international airport and to simplify certification and safety checks on imported cars. EC officials say these tactics yield some benefits but often the Japanese announce modifications of their non-tariff barriers which open the door to imports by only a token amount. They stress however that any action must be taken by the EC as a whole to stop beggar-my-neighbour action. One of the problems Britain could face if it were to withdraw licences for Japanese banks would be that the bankers would be welcomed with open arms in Frankfurt or Amsterdam they point out. REUTER | TRADE ISSUES STRAINING EC'S PATIENCE WITH JAPAN |
Morgan Crucible Co Plc <MGCR.L> said the prospects for 1987 were encouraging with orders and sales significantly up on last year in all divisions. It said there were good opportunities for growth in both existing and recently acquired businesses as well as for growth by acquisition in related areas. It earlier announced a 6.1 mln stg rise in pre-tax profit to 24.8 mln stg for the year to December 28. Turnover rose to 242.1 mln from 211.5 mln. Most of its companies performed well despite a slowdown in the U.S. U.K. And Australian economies in the first half. Currency fluctuations reduced pretax profit by around one mln stg it noted. Morgan said although profits in the electronics sector improved to 1.0 mln stg from 100000 stg previously results were nonetheless disappointing. Sales were lower than expected due mainly to delayed defence orders and cancellations. However it said it had taken the necessary remedial action obtained new business and was now proceeding with the delivery of major delayed orders. Morgan shares firmed two pence to 318p at 0905 GMT from 316p at Fridays close. REUTER | MORGAN CRUCIBLE SAYS PROSPECTS ARE ENCOURAGING |
Year to December 28 1986 Shr 20.1p vs 17.6p Div 5.0p vs 4.6p making 9.2p vs 8.5p Turnover 242.1 mln stg vs 211.5 mln Pretax profit 24.8 mln vs 18.7 mln Tax 6.7 mln vs 5.8 mln Operating profit 28.3 mln vs 21.3 mln Investment income 1.0 mln vs 0.7 mln Net finance charges 4.5 mln vs 3.3 mln Company full name is Morgan Crucible Co Plc <MGCR.L> Minorities and provisions for preference dividends 0.7 mln vs 1.2 mln Extraordinary debit - 0.9 mln vs 1.3 mln credit Operating profit includes - Carbon 8.3 mln vs 7.0 mln Technical ceramics 7.0 mln vs 5.6 mln Thermal ceramics 7.6 mln vs 4.6 mln Speciality chemicals 4.4 mln vs 4.0 mln Electronics 1.0 mln vs 0.1 mln REUTER^M | MORGAN CRUCIBLE PRETAX PROFIT RISES 6.1 MLN STG |
Swedish industrial production rose 2.6 pct in February after a 1.8 pct fall in January showing a 4.4 pct rise over February 1986 and reaching its highest level ever the Central Bureau of Statistics said. The rise reflected recovery in almost all sectors after an exceptionally cold spell in January the Bureau said adding that the highest rises were seen in the forest chemical and metal industries. REUTER | SWEDISH INDUSTRIAL PRODUCTION RISES SHARPLY |
Kenya devalued the shilling by 0.6 pct against the special drawing right (SDR) in response to the decline of the dollar last last week bankers said. The Central Bank of Kenya set the shilling at 20.7449 to the SDR compared with the 20.6226 rate in force since the last devaluation on March 31. The Kenyan shilling has lost 5.6 pct of its value against the SDR this year in a series of devaluations designed to keep the value of the dollar above 16 shillings. REUTER | KENYA DEVALUES SHILLING BY 0.6 PCT AGAINST SDR |
Australia could lose valuable wheat markets through lack of availability if plantings for the coming 1987/88 season are significantly reduced Australian Wheat Board (AWB) chairman Clinton Condon said. If predictions of a 30 pct decrease in plantings prove true Australia may not be able to supply wheat to some of its valuable markets he said in a statement. Condon did not say who had made the predictions but an AWB spokesman said there was a general industry feeling that farmers hard hit by low prices and rising costs could cut back plantings sharply. Wheat sowing normally begins in May. However Condon said he did not believe plantings would be cut by as much as 30 pct although he realised many farmers were facing enormous financial pressures. He said the AWB expects the area sown to be about 10.7 mln hectares down from 11.3 mln in 1986/87 when the crop was about 16 mln tonnes. Final crop estimates for 1986/87 and planting intentions for 1987/88 are not yet available. If the AWB is unable because of a short-term cut in plantings to meet the needs of the markets it has developed with much time and effort it may have great difficulty selling wheat to those markets in the future Condon said. Markets which rely on a steady supply of Australian wheat understand a decrease in production due to drought but they will have difficulty understanding a deliberate decision to decrease production Condon said. If Australia wants wheat to continue as a major export income earner governments and government authorities will need to closely examine ways of contributing to the continuing viability of the wheat industry he added. Australias leading wheat markets include China Egypt Iran Iraq the Soviet Union and Japan. REUTER | AWB CHAIRMAN URGES FARMERS NOT TO CUT PLANTINGS |
<Williams Holdings Plc> said that it had received acceptances for its offer for Norcros Plc <NCRO.L> from the holders of 233448 Norcros ordinary shares or 0.18 pct and 180240 preference shares or 8.19 pct. Before the 568 mln stg contested bid was launched last month Williams held 850000 ordinary shares or 0.67 pct and since then it had acquired options to buy a further 1.99 mln or 1.58 pct. The offer has been extended to April 15. Norcros shares eased 26p to 410p on the announcement while Williams fell to 767p from 785p. REUTER | WILLIAMS DETAILS ACCEPTANCES OF NORCROS OFFER |
A major animal feed producer Cehave NV Veghel (CHV) has begun legal proceedings against the application of the European Community grain co-responsibility levy with the full backing of the Dutch animal grain and feed trade association Het Comite association chief executive Peter Pex told Reuters. Oral proceedings were held in the Hague on Friday and the court said it would give its verdict within six weeks. However that is the normal wording and we expect the Hague court to refer questions on the interpretation and application of the levy to the European Court of Justice in Luxembourg Pex added. Het Comite claims the way the levy is applied does not take account of currency cross-rates of exchange and can mean a compounder in one country being asked to pay a higher levy in its own national currency than it received down the chain from the original producer of the grain. We would like the Business Administration Court in the Hague to ask the Luxembourg Court of Justice not only whether the Dutch Grain Commodity Board the levy collection agency has interpreted the levy regulations correctly but also whether the regulations themselves may contravene European law Pex said. It is only with great regret that we have taken this route but we have had no political help and therefore have no option even though it could take years Pex added. Het Comite asked CHV to act as a test case against the grain levy because the bill the company received from the commodity board included grain from a wide variety of origins and was therefore considered to be the best general basis for a legal challenge to the levy Pex noted. Het Comites actions will run in tandem with questions on the levy already posed to the Luxembourg Court in a case brought by the Association of European Animal Feed Manufacturers FEFAC. REUTER | DUTCH FEED COMPOUNDER STARTS CASE AGAINST EC LEVY |
China has raised the state purchase prices of corn rice cottonseed and shelled peanuts from April 1 to encourage farmers to grow them the official China Commercial Daily said. The paper said the price paid for corn from 14 northern provinces cities and regions has increased by one yuan per 50 kg. A foreign agricultural expert said the rise will take the price to 17 fen per jin (0.5 kg) from 16 fen. The paper said the price for long-grained rice from 10 southern provinces and cities was raised by 1.5 yuan per 50 kg. The paper said the price for round-grained rice from 11 provinces regions and cities in central east and northwest China has been increased by 1.75 yuan per 50 kg. It gave no more price details. It said local authorities must inform farmers of the price increases before farmers begin planting to encourage production of grains and oilseeds. Chinese officials have said farmers are unwilling to grow grain because they can earn more from other crops. REUTER | CHINA RAISES GRAIN PURCHASE PRICES |
West German first quarter cocoa grindings which rose 2.9 pct from the same 1986 quarter were within expectations trade sources said. They described the results announced Saturday as normal and unspectacular considering that the grind in the fourth quarter was rather high and some was carried over into the first quarter. Grindings rose to 55190 tonnes from 53643 in the first 1986 quarter. A spokesman for the Confectionery Industry Association said that West German grindings are expected to stay relatively high in comparison to other West European countries. REUTER | WEST GERMAN COCOA GRINDINGS WITHIN EXPECTATIONS |
St.Gobain Netherlands guaranteed by Cie de St.Gobain is issuing a 75 mln ECU bond with gold warrants attached due May 6 1992 carrying a 4-1/2 pct coupon and priced at par lead manager Salomon Brothers International Ltd said. Fees comprise 1-1/4 pct selling concession with 5/8 pct for management and underwriting combined. Listing is in Luxembourg. Each 1000 ECU bond carries one gold warrant exercisable from May 6 1987 until May 6 1990 entitling the holder to purchase one ounce at an exercise price of 490 dlrs. REUTER | ST.GOBAIN UNIT ISSUES ECU BOND WITH GOLD WARRANTS |
The Commonwealth Bank of Australia said it will lower its prime lending rate to 17.5 pct from 18.25 effective April 15. The banks new rate will be the lowest of Australias current prime rates. They now range from 17.75 pct to 18.5 after a recent series of reductions since late March following an easier trend in short term money market rates. Two of the three other major trading banks now have prime rates of 18 pct and one of 18.25. The Commonwealths move reverses an increase from 17.5 pct in early February. REUTER | COMMONWEALTH BANK CUTS AUSTRALIA PRIME TO 17.5 PCT |
Bond Corp Holdings Ltd <BONA.S> plans to use its 1.05 billion dlr acquisition of Kerry Packers television and radio holdings as the springboard to a global media group chairman Alan Bond said. Bond Corps broadcasting float <Bond Media Ltd> was geared for international expansion as a company specialising in the electronic media he told a news conference here after a presentation on the new company to shareholders and analysts. Its intended that we will be a global media company in the fullness of time Bond said. Bond Media will bring together Bonds existing broadcasting interests and those recently acquired from Packers <Consolidated Press Holdings Ltd>. Bond Corp shareholders are being offered 50 pct of the new company at 1.55 dlrs a share on a three-for-four basis. A presentation by underwriters A C Goode and Co Ltd and Rivkin James Capel Ltd forecast Bond Medias net profit at 41 mln dlrs in 1987/88 ending June 30 rising to 72 mln in 1989/90. REUTER | BOND SAYS HE IS AIMING FOR GLOBAL MEDIA GROUP |
Hepworth Ceramic Holdings Plc <HEPC.L> said it had agreed to sell its <Western Plastics Corp> unit to <Globe Machine Manufacturing Co> for 16.25 mln dlrs cash. Western which makes polystyrene foam and container products has net assets of 19.3 mln dlrs and reported a 1986 pre-tax profit of 0.9 mln. The proceeds of the sale would be used to reduce borrowings and develop activities in the U.K. Hepworth shares eased 0.5p on the announcement to 227.5p. REUTER | HEPWORTH SELLS U.S. UNIT TO GLOBE MACHINE |
U.S. Legislators called on Japan to open its financial markets to more foreign participation and boost its efforts to head off growing U.S. Protectionism a Foreign Ministry spokesman said. We have come to seek the opening of Japans financial and banking markets Jake Garn ranking Republican on the Senate Banking Committee told Prime Minister Yasuhiro Nakasone. Japans financial and banking market is very large and increasingly sophisticated but there is not yet true reciprocity between Japan and the United States in this market the ministry official quoted Garn as saying. Nakasone replied that some problems exist over providing more seats on the Tokyo Stock Exchange for foreign firms one of the main steps urged by the U.S. Delegation. But I promise to make Tokyos markets as open as those of New York he told Garn and three other legislators. In separate talks with Finance Minister Kiichi Miyazawa the U.S. Group also urged Japan to give U.S. Financial institutions a bigger role in the underwriting of long-term Japanese government bonds a Finance Ministry spokesman said. REUTER | U.S. LAWMAKERS URGE JAPAN TO OPEN FINANCIAL MARKET |
Euro-medium term notes a recent phenomenon in the international capital markets are hardly attracting a flood of issuers but investment bankers are doing their best to breath life into the market. Medium term notes (MTNs) have met with staggering success in the U.S. Market where total outstandings have grown to around 50 billion dlrs since 1983 the year they took hold as a new financing vehicle to bridge the gap between commercial paper and longer term bonds. Convinced they are here to stay investment bankers are attempting to adapt MTNs for the euromarket. Ralph Bunche a vice president of Morgan Stanley International predicted at a recent Euromoney conference on MTNs here that they will become the predominant instrument for raising funds in the late 1980s and 1990s. It (the MTN market) will even surpass the bond market he said. Other bankers took exception with the degree to which MTNs will grow. But they generally agreed that these instruments provide the borrower with greater flexibility and lower costs than a traditional bond. The trick is in convincing European borrowers it is worth arranging a program and having accomplished that to persaude European investors -- whose preferences differ from their U.S. Counterparts -- to buy the securities. Discussions with bankers proved one thing. No one is exactly sure how to proceed with structuring and marketing these issues. To date only 13 Euro-MTN programs have been announced but only a few have been activated such as those for a unit of PepsiCo Inc and another for AB Electrolux. Several firms have devised different structures for Euro-MTNs and defend their structures adamantly. The PepsiCo notes for example are sold on a continuously offered basis. This involves a small amount of new notes with similar maturities constantly on offer at current market rates. The Electrolux program uses multi-tranche tap notes devised by Merrill Lynch. Under this structure an initial tranche of a minimum 50 mln dlrs has a fixed rate of interest and maturity. The borrower then issues additional notes in this category up to a pre-determined maximum. Those who defend the continuously offered method such as Wendy Dietze a Salomon Brothers Inc vice president point to the flexibility they offer in interest rate and maturity. Furthermore she believes this structure offers the European investor greater confidence in market liquidity -- a major concern for these buyers. Merrill Lynch Europe Ltds Kevin Regan defends the medium-tranche tap notes concept saying it offers comparable liquidity. But he also said that this structure may not be the right option for all borrowers. Peter Mortimer a partner in the law firm Milbank Tweed Hadley and McCloy noted that legal requirements could well determine which structure is chosen. He noted that the tap system allows a more clearly defined lock-up period as each tranche has a specific maturity. In the case of notes issued by U.S. Borrowers the lock-up period is the 90 days after the completion of a series during which time a security cannot be sold back to the U.S. Or to U.S. Investors. However he said that the Securities and Exchange Commission is reviewing its current regulations on the ownership of foreign securities by U.S. Citizens and that some softening in the rules could come in the not too distant future. For their part borrowers say they feel a bit like guinea pigs. Petter Skouen executive vice president of the Nordic Investment Bank (NIB) noted that a few weeks ago NIB would have said it was disappointed with its Euro-MTN program but that the success of a recent issue changed their minds. He conceded that in retrospect it would have been wiser to establish separate programs for the euromarket and the U.S. Domestic market rather than try to extend the U.S. Issue globally. Under NIBs 200 mln dlr program 100 mln has been sold in the U.S. And 25 mln in Europe. REUTER | EURO-MEDIUM TERM NOTES POISED FOR GROWTH |
Bond Corp Holdings Ltd <BONA.S> said it has agreed to acquire an 80 pct stake in <Merlin International Petroleum Corp> from <Crowley Maritime Corp> for 90.8 mln U.S. Dlrs. Of this total 7.8 mln dlrs is due on exchange of contracts on April 30 and 69 mln on July 7 subject to any regulatory approvals being obtained Bond said in a statement. The balance of 14 mln dlrs will be paid as required by Merlin for its exploration and production commitments it said. Bond said Merlin has a 6.25 pct working interest plus a 2.5 pct reversionary interest in the Papua New Guinea permit PPL-17 the site of the Iagifu oil discovery. Merlin also has a 12.5 pct stake in the adjacent Papuan Basin permit PPL-18 which contains the Juha gas and condensate discovery. In addition to Papua New Guinea Merlin has petroleum exploration and production interests in the U.S. Bond added. REUTER | BOND CORP TO ACQUIRE 80 PCT OF MERLIN PETE |
Kyushu Electric Power Co Inc will issue a seven-year 20 billion Euroyen bond on April 22 a company spokesman said. The straight bond to be priced at 101.625 will carry a 4.75 pct coupon to yield 4.445 pct. Lead manager is Nomura International Inc. Issue cost including fees will be 4.8 pct or 0.9 percentage point below the March issue rates for Japanese electric power company bonds. These are normally between the rates on 10-year government bonds and private corporate bonds. REUTER | KYUSHU ELECTRIC TO ISSUE 20 BILLION YEN BOND |
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