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The Bank of Japan does not intend to ease credit policy further bank officials told Reuters. They were responding to rumours in the Japanese bond market that the central bank was planning to cut its 2.5 pct discount rate soon possibly before Prime Minister Yasuhiro Nakasone leaves for Washington on April 29. Bank of Japan governor Satoshi Sumita will be in Osaka western Japan on April 27 and 28 for the annual meeting of the Asian Development Bank making a rate cut announcement early next week a virtual impossibility they said. April 29 is a holiday here. REUTER | JAPAN DOES NOT INTEND TO EASE CREDIT - OFFICIALS |
National Mutual Royal Bank Ltd said it would cut its prime rate to 17.75 pct from 18.25 effective April 27. The cut follows a trend toward lower rates started last month and accelerated by Westpac Banking Corp which yesterday cut its prime to 17.50 pct from 18.25 pct. Westpacs 17.50 pct is the lowest prevailing rate. REUTER | NATIONAL MUTUAL CUTS AUSTRALIAN PRIME TO 17.75 PCT |
Elders IXL Ltd <ELXA.S> said the Canadian government approved its bid for <Carling OKeefe Ltd>. Elders earlier announced it was buying 10.9 mln shares or 50.1 pct of Carling from the Canadian subsidiary of Rothmans International Plc <ROT.L> for 18 Canadian dlrs each. Elders chairman John Elliott said in a statement when the offer for the ordinary shares closed on April 23 that acceptances representing over 93 pct of outstanding shares had been received. <IXL Holdings> would proceed to acquire the rest compulsorily he said. REUTER | ELDERS PURCHASE OF CANADIAN BREWER APPROVED |
Ecuador will use a new pipeline link with Colombia to export crude oil for the next five years Colombian mines and energy minister Guillermo Perry said. The link will be inaugurated on May 8. It was built to allow Ecuador to resume exports of crude oil halted on March 5 by earthquake damage to its Lago Agrio to Balao pipeline Once that pipeline is repaired Ecuador will exceed its OPEC quota in order to offset lost income and pay debts contracted with Venezuela and Nigeria since the quake Ecuador mines and energy minister Javier Espinosa said. The two ministers were speaking at a news conference after signing an agreement for joint oil exploration and exploitation of the jungle border zone between the two nations. Drilling will begin in September. The agreement to transport Ecuadorean crude oil is not only for this emergency period but for the next five years with possibility of an extension. Between 20000 and 50000 barrels per day (bpd) will be pumped along it Perry said. Espinosa said Ecuador planned to pump 35 mln barrels through the link in the next five years at a cost of 75 cents per barrel during the first year. The 43-km link with a maximum capacity of 50000 bpd will run from Lago Agrio the centre of of Ecuadors jungle oilfields to an existing Colombian pipeline that runs to the Pacific port of Tumaco. Espinosa said the 32-km stretch of the link built on the Ecuadorean side cost 10.5 mln dlrs. Perry gave no figures for Colombias 11 km segment but said it was insignificant compared with what we are going to earn. OPEC member Ecuador was pumping around 250000 bpd before the quake. Lost exports of 185000 bpd are costing it 90 mln dlrs per month Espinosa said. REUTER | ECUADOR TO USE COLOMBIA OIL LINK FOR FIVE YEARS |
President Suhartos ruling Golkar party appears to have made substantial gains with over 75 pct of the votes counted in Indonesias national elections. Figures released by the election commission showed Golkar on target to take 70 pct of the vote. Provisional figures indicate that with results of 68.9 mln ballots announced Golkar had won 50.29 mln the Moslem-based United Development Party 10.93 mln and the nationalist Democratic Party 7.69 mln. The total electorate is 94 mln and officials said they thought about 90 pct of the votes had been counted. | SUHARTO PARTY SET FOR EASY WIN IN INDONESIA POLLS |
A subsidiary of the Japanese construction group Kumagai Gumi Co Ltd <KUMT.TOK> is seeking to float its shares on the Hong Kong Stock Exchange merchant banking sources said. They said <Kumagai Gumi (Hong Kong) Ltd> has appointed <Canadian Eastern Finance Ltd> <Sun Hung Kai International Ltd> and <Wardley Ltd> as arrangers for the flotation. But they declined disclosure of any further details. A spokesman of Cheung Kong (Holdings) Ltd <CKGH.HKG> told Reuters the groups chairman Li Ka-shing also will take a 10-15 pct stake in Kumagai Gumi (Hong Kong). He said the privately held <Li Ka-shing Foundations Ltd> will receive a certain number of shares in Kumagai Gumi (Hong Kong) for injection into the company and up to 50 pct interest in a 520 mln H.K. Dlr worth property project at Hong Kongs New Territories. But he added the Cheung Kong group will have no interest in the construction firm. REUTER | KUMAGAI GUMI'S UNIT SEEKS LISTING IN HONG KONG |
Hospital Corp of America said it received financing commitments of about 1.9 billion dlrs to pay for its previously announced reorganization which was approved by the companys board of directors today. Under the reorganization Hospital Corp will spin off over 100 hospitals to a new independent firm for 1.8 billion dlrs in cash and preferred stock and warrants in the new company which will be owned by an employee stock ownership plan ESOP. Hospital Corp said that Drexel Burnham Lambert Inc has agreed to provide bridge financing or to find buyers for debt of the new company for an amount of up to 956 mln dlrs. This financing will comprise 270 mln dlrs of senior unsecured ESOP debt and 686 mln dlrs of unsecured subordinated financing for the new company Hospital Corp said. Wells Fargo Bank NA has agreed to syndicate up to 940 mln dlrs of secured bank financing comprising a 400 mln dlr revolving credit a separate 540 mln dlr term loan. Wells Fargo has committed itself to fund an aggregate 400 mln dlrs of these loans. Hospital Corp said it will not guarantee any of the debt. The transaction will cut the number of hospitals the company owns to about 125 from more than 230. It is expected to be completed in the third quarter of the year. REUTER | HOSPITAL CORP <HCA> GETS FUNDS FOR RESTRUCTURING |
Iranian foreign minister Ali Akbar Velayati warned that Iran would combat any superpower intervention in the Gulf. Iran which is the most powerful (country) in the Gulf... Will not allow the superpowers or any other foreign forces to interfere in the region he said. Velayati visiting the United Arab Emirates on the first leg of a Gulf tour told reporters Iran had the capabilities and means to prevent any interference. President Reagan has pledged to keep the Gulf sealanes open and to protect Kuwaiti tankers from possible Iranian attack. REUTER | IRAN SAYS IT WILL COMBAT GULF INTERVENTION |
The Central Bank said it will offer offer 250 mln rupees worth of three-month treasury bills in a tender closing on June 4. REUTER | SRI LANKA OFFERS 250 MLN RUPEES IN T-BILLS |
Companies offering variable life insurance policies introduced in Japan in October look set to report sparkling results when they report on fund performance later this month fund managers at major insurance companies said. The managers told Reuters some insurers showed variable life returns topping 50 pct on an annual basis in the five months to March 31. Industry sources said all 17 Japanese and U.S. Insurers offering variable life policies here have earned returns of more than 10 pct on their investments. Returns on variable life policies which are paid when policies are surrendered depend on the performance of funds run by insurers. Managers said strong results are due to the loading of funds into the buoyant Tokyo stock market and into convertible bonds and attractive short-term instruments such as large yen time deposits. Japanese share prices rose 30 pct in absolute terms between November 1 and March 31. Key bond yields fell to around four pct from five pct in the same period. Variable life avails itself of the times and clients are likely to be attracted after the impressive results to be made public in early June Ichirou Hayashi general manager of Nippon Life Insurance Co Ltds fund management office said. The Finance Ministry does not allow disclosure of insurance company figures for the year ended March 31 until early June. Nippon Life the largest Japanese insurer had about 50000 investors in variable life by end-March while the three U.S. Firms which offer variable life here have a total of some 7550 investors fund managers said. Equitable Life Insurance Co Ltd American Life Insurance Co Ltd and Sony Prudential Life Insurance Co which is a joint venture between Sony Corp and Prudential Life Assurance of the U.S. Are the three U.S. Insurers offering variable life here. Although (variable life) appears to be a short-term financial instrument with death benefit its first priority is to raise as much cash value as it can over the long period said Ichiro Kono managing director and chief actuary of Sony Prudential. Variable life guarantees a fixed death benefit. Variables are also attractive to executives of companies who wish to receive them as retirement funds with options for settlement in annuities Kono said. Nippon Lifes Hayashi said sales of variable life were shaping up well as interest rate consciousness grows. Insurance managers said they expect variables to survive any credit market collapse since the funds should be able to react to interest rate fluctuations more quickly than huge general insurance accounts assuming fund managers grow more sophisticated in global fund and risk management. Japanese life insurers have cut dividends paid to holders of regular insurance by as much as 0.45 of a percentage point since April 1 due to declining domestic interest rates. Fund managers said regular insurance funds are invested more conservatively with decisions based on long-term strategies. Major life insurers are expected to report huge exchange losses estimated at over 2000 billion yen on foreign investment for 1986/87 they said. Asset mix is more of a concept for larger funds not for our variables especially after the huge currency losses made in the last fiscal year Hayashi of Nippon Life said. Industry analysts said shifts of funds ahead of tax changes due in October are helping boost the demand for variable life. The government is expected to impose a 20 pct withholding tax on interest from certain instruments including single premium endowment insurance much of which is maturing now but variable life will be free of such a tax. But Sony Prudentials Kono said A large shift of funds from single premium endowment to variable life is unlikely because investors in the former are more short-term return-minded while the latter doesnt guarantee short-term cash value. Sony Prudential and Equitable Life each have three separate variable life accounts. Equitables funds specialise in Japanese stocks U.S. Stocks and money market instruments while Sonys covers bonds stocks and general investment. Japanese insurers have only one variable account each. The Finance Ministry allowed sales of variable life endowment with terms over 10-years and whole life insurance from October 1 last year but allowed single premiums only on the latter. REUTER | JAPAN VARIABLE LIFE INSURANCE EARNS HIGH RETURNS |
Toshiba group net 34.18 billion yen (59.44 billion) year to March 31 |
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Group shr 11.86 yen vs 19.24 Net 34.18 billion vs 59.44 billion Pretax 78.02 billion vs 130.52 billion Operating 51.58 billion vs 121.50 billion Sales 3308 billion vs 3373 billion REUTER | TOSHIBA CORP <TSBA.T> YEAR ENDED MARCH 31 |
Singapore oil companies can set their own petrol and diesel prices at the pump from today subject to ceilings determined by their individual wholesale prices The Ministry of Trade and Industry said. The ministry previously revised pump prices and announced the changes for the oil companies. Lead content of petrol is further cut to 0.15 gm/litre from 0.4 gm from today. Pump prices of the lower lead petrol grades are expected to be announced soon by the oil companies which have said wholesale prices are between 1.3 cents/litre to 3.2 cents higher than previous grades. REUTER | SINGAPORE OIL COMPANIES TO SET OWN PUMP PRICES |
Perus consumer price index rose 5.9 pct in May to 15706.5 (base 1979) compared to 6.6 pct in April and 3.3 pct in May 1986 the National Statistics Institute said. It said accumulated inflation for the first five months of this year was 33.8 pct against 24.1 pct for the same period in 1986. Inflation for the year ending May 1987 was 75.7 pct compared to 76.8 pct for the year ending May 1986. REUTER | PERU CONSUMER PRICES RISE 5.9 PCT IN MAY |
The south China province of Guangdong is importing millions of tonnes of grain a year from overseas and other parts of China because farmers have switched from grain to more profitable crops the Peking Review magazine said. The official magazine said the provinces grain area fell to 4.33 mln hectares in 1985 from 5.7 mln in 1978 out of a total farmland area of 7.4 mln hectares. Farmers have switched to cash crops such as sugarcane bananas oranges papaya and freshwater fish-farming in part to supply major consumer markets in Hong Kong and Macao the magazine said. It gave no 1986 area figures. The magazine said China aims to keep 80 pct of national farmland under grain 10 pct under cash crops and 10 pct under other crops although the ratio will vary from place to place. It said primitive cultivation methods labour-intensity and low productivity make grain the least profitable farm commodity. Farmers in one central region of China can from 0.1 hectare earn 2250 yuan a year from vegetables 375-450 yuan from cotton or 225 yuan from grain it added. It said consumer prices for foodgrain can be adjusted only gradually as part of a reform of the entire pricing system. REUTER | CHINA PROVINCE BECOMES GRAIN IMPORTER |
The European Commission should make urgent and concrete proposals to break the deadlock over moves to cut sky-high European airfares an independent report said. The report by the Institute of Economic Affairs (IEA) said costs fares and profits on international services within Europe are the highest in the world although European airlines are less efficient and not perceptibly safer than their cheaper U.S. Equivalents. The European airlines protect their position through the secrecy they maintain over the costs and profits of any group of services the report said. The airlines also protect themselves through the ferocity with which (they) resist any relaxation of the monopolistic practices which protect their profits the report said. Britain a strong advocate of deregulation has been trying to push measures to introduce greater competition among Europes airlines but negotiations foundered at the end of 1986 over discount and deep discount fares. The IEA report said European governments and the Commission the EC executive authority had been extraordinarily lax about the airlines secretiveness showing a lack of concern for the interests of the traveller. REUTER | EC URGED TO ACT QUICKLY ON EUROPEAN AIRFARE CUTS |
Bundesbank's Schlesinger says no plan to cut discount rate-Nihon Keizai newspaper |
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Singapore Petroleum Co Pte Ltd will revise pump prices of petrol from June 2 an official said. Grade 97 octane with 0.15 gm/lead will be 96.8 cents/litre against 94 cents previously for 0.4 gm lead. Grade 92 octane will be 90.6 cents against 87.6 previously. SPCs price revision follows the Ministry of Trade and Industrys move to liberalise petrol pricing by allowing oil companies to set their own pump prices. New grades of petrol with lower lead content are sold in Singapore from today in line with the Ministry of Environments regulations. REUTER | SINGAPORE PETROLEUM CO REVISES PETROL PUMP PRICES |
Korea Electric Power Corp plans to issue its first euroyen bond a 7.5 billion yen issue with six-year maturity carrying a coupon of less than five pct company officials said. They said the bond would be launched in London later this month with Daiwa Securities Co Ltd as lead manager. The officials gave no further details. REUTER | KOREA ELECTRIC POWER PLANS FIRST EUROYEN BOND |
Bundesbank Deputy President Helmut Schlesinger said the West German central bank had no plan to cut its three pct discount rate Nihon Keizai newspaper reported. The financial daily quoted Schlesinger as saying in an interview that the bank would try to maintain current interest rate levels for the time being. He also told the newspaper he saw no need for large-scale intervention in the foreign exchange market because exchange rates are stable. Earlier Schlesinger told a press conference that the Bundesbank would continue its policy of maintaining short-term interest rates at a low level for currency stability. He also said he was satisfied with the current dollar/mark exchange rate but added that he was not certain if it was ideal for the West German economy. REUTER | BUNDESBANK REPORTED TO HAVE NO PLAN FOR RATE CUT |
South Korea will cut import taxes on 50 items including construction equipment photographic film cigarettes and pipe tobacco to help reduce its trade surplus with the United States the finance ministry said. The tariff cuts of between five and 30 percentage points take effect on July 1. This brings to 157 the number of goods on which import taxes have been cut this year a ministry official said. The 157 are among about 290 items on which Washington has asked Seoul to lower tariffs he added. Todays announcement follows Saturdays removal of import curbs on 170 products. For 46 of those products the U.S. Had had sought free access to the South Korean market. This is in line with the governments policy to limit our trade surplus with the United States to help reduce trade friction between the two countries the official said. South Koreas trade surplus with the U.S. Rose to 7.3 billion dlrs in 1986 from 4.3 billion in 1985. Officials said the surplus was expected to widen further in 1987 but Seoul would try to hold it below eight billion dlrs. The finance ministry said tariffs would be cut later this month on a further 53 items including acrylic yarn and ethylene by an average 7.7 percentage points in order to check inflation. The officials said the tariff cuts would contribute to holding wholesale and consumer price rises at less than three pct this year. REUTER | SEOUL ANNOUNCES MORE TARIFF CUTS FOR U.S. |
Rising interest rates and protectionist trade policies had prompted a new push by Latin American nations to win debt relief regional foreign and finance ministry officials said here. Officials of the Cartagena group of 11 debtor nations met here this week to draw up new proposals in reaction to what they called a deteriorating world panorama and Citicorps decision to create reserves against third world loans. (SEE ECRA FOR SPOTLIGHT HEADLINES) We are looking at trade interest rates and financial flows.....In order to put forward a basis for some permanent solutions Mexicos public credit director Angel Gurria said. Recent developments have led to moves for a summit of Latin American presidents and debate on new solutions. Ideas include schemes to link debt payments to trade and proposals for stable interest rates. The latter was proposed in a letter this week from Cartagena to G-7 leaders who are due to attend a summit in Venice this month. Another idea is to include debt under Gatt negotiations but Cartegena ministers have yet to endorse any proposals. Speaking earlier in New York Uruguays Foreign Minister and Cartagena group chairman Enrique Iglesias said Citicorps decision could discourage new lending. But it might help Cartagenas bid to have old and new debt treated separately. The Cartagena group which has not met at ministerial level for over a year wants to repay debt contracted before the debt crisis at the low interest rates prevailing in the 1970s. It would pay new loans at current market rates. Many countries fear that what they have gained in months of arduous debt negotiations they can lose at a stroke with a one point rise in interest rates one official here said. The new increase in interest rates has come precisely when we thought they had still not come down enough Iglesias said. Latin American officials are also concerned that varying interest spreads granted to different debtor nations could generate discord as with the Philippines recent protest at being given less favourable terms than Argentina. There has been speculation Venezuela would demand a cut in its 7/8 pct spread but public finances director Jorge Marcano said here there were no plans to renegotiate terms. This weeks meeting came after three Latin American presidents meeting in Montevideo called for stable interest rates on the regions 380 billion dlr foreign debt. It was called to review developments since the last ministerial meeting in February 1986 and to think up new ideas. Since the last ministerial meeting there have been some advances such as Mexicos growth-oriented 77 billion dlr loan and refinancing package agreed last September. But there have also been setbacks like Brazils payments moratorium. The loans expected in the Baker plan have not materialized and debtors have been forced to browbeat reluctant banks. We have clearly stretched the restructuring process to its limits and and the question is now where do we go from here? a senior Mexican foreign ministry official said. Existing debt strategy has been based on nursing debtor economies back to a position where they can again service their debts and qualify for new loans. But after five years of economic adjustment Latin American debtors are currently unable to raise voluntary credits with the exception of Colombia. Only Venezuela is paying back principal. Most countries have no prospect of paying their debts in the foreseeable future. Citicorp has made clear its decision to move three billion dlrs to reserves does not mean it is writing-off the loans. Latin American officials here said Citicorps move would probably boost trading of discounted third world debt in the secondary market implicitly downvaluing the amount owed. But they said it might make new lending even more remote. Discounted debt can be bought by foreign investors through debt-equity schemes that generate new resources for debtor economies. Chile and Mexico are currently front-runners in this field but most Latin American officials see these schemes as limited and no panacea for the overall problem. Most Latin officials set greater store on building up export income than on debt-equity schemes. Exports hit 97.7 billion dlrs in 1984 cutting the regions debt service ratio to 36 pct but they fell to 78.3 billion last year. So even though interest rates had dropped the ratio hardly changed. The Cartagena group has called for the debt-trade link to be recognized before but has not made detailed proposals. Officials said initiatives discussed here would be submitted to foreign and finance ministers of the 11 nations before IMF and World Bank annual meetings later this year. REUTER | LATIN DEBTORS MAKE NEW PUSH FOR DEBT RELIEF |
TOKYO STOCK INDEX RISES 91.19 POINTS TO RECORD CLOSING 24,992.78 - BROKERS |
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The use of tariffs and quotas to reduce the flow of foreign goods into the United States will do little to cut the nations swelling trade deficit a government study said. In fact the Federal Trade Commission (FTC) report said such protectionist policies could make U.S. Products less competitive in the world marketplace by raising the cost of imported products that are re-exported in different forms. Such policies are much more likely to hurt rather than help the productive capabilities of the U.S. Economy it said. The 218-page report written by FTC economists John Hilke and Philip Nelson blamed the rising trade shortfall which climbed to a record 166.3 billion dlrs last year on shifting currency exchange rates and growing U.S consumer demand. Other factors commonly blamed for the deficit such as foreign trade practices deteriorating U.S. Industrial competitiveness high labour costs and government restrictions on mergers added little to the problem it said. Although each industrys competitiveness affects the level of imports and exports in that industry in general we find that there have been no significant industry-specific changes affecting competitiveness that would explain the increase in the overall trade deficit the study said. To the extent any government action is needed to deal with the trade deficits policies should focus on economy-wide phenomena such as exchange rates and relative economic growth the FTC study said. Supporting its conclusion that broad-based economic shifts were the cause of the increase in the trade deficit the report said it found that nearly all U.S. Industries lost some domestic market share to foreign competitors in the 1980s. It also said it found a fairly direct relationship between the increased trade deficit and the influence of shifting currency exchange rates U.S. Economic growth and domestic demand for goods and services which has outpaced foreign consumer demand. The study examined seven factors which have been commonly blamed for the trade deficit: foreign government subsidies and trade barriers to protect foreign industries a lack of investment in U.S. Industry declining research and development in U.S. Industry high labour costs union work rules the oil prices rises of the 1970s and U.S. Antitrust regulations. In each case the study found little or no evidence that the factor had any impact on the trade deficit. REUTER | U.S. STUDY SAYS TARIFFS AND QUOTAS COULD BACKFIRE |
A senior Toshiba Corp <TSBA.T> executive said he hoped the alleged illegal export of high technology equipment to the Soviet Union by a Toshiba subsidiary would not hurt the parent companys exports to the U.S. Toshibas 50-pct subsidiary <Toshiba Machine Co Ltd> is a completely independent company with independent management Toshiba Corp senior vice-president Osamu Iemura told a press conference. We want to have that fact understood overseas he said. Iemura said he had no information to suggest the U.S. Defence Department had broken off talks with Toshiba on the possible procurement of lap top computers because of the illegal exports by Toshiba Machine. Kyodo News Agency quoting the weekly magazine U.S. News and World Report said on Saturday the U.S. Air Force had decided to cancel an agreement to buy 100 mln dlrs worth of computers because of Toshiba Machines illegal exports. We have no contract. The U.S. Defence Department has been negotiating for procurement with several companies including Toshiba Iemura said. Last week police said they had arrested two Toshiba Machine employees on suspicion of illegally exporting high technology equipment to the Soviet Union. The Japanese government has already banned further shipments of goods to Communist states by Toshiba Machine for one year and by its export agency C. Itoh and Co Ltd <CITT.T> for three months. REUTER | TOSHIBA HOPES EXPORTS TO U.S. NOT HURT |
Israels central bank said in its annual report the country made striking gains in 1986 under an austerity program but warned a national election campaign could harm the economy. Elections are due by November 1988 but tension within the government over a Middle East peace conference has led many political analysts to predict the government may fall earlier. Bank of Israel governor Michael Bruno told a news conference the austerity since July 1985 had balanced the national budget for the first time in 15 years and pushed inflation from 400 pct a year to just below 20 pct in 1986. But Bruno warned that if politicians followed their past practice of lifting customs duties and increasing government subsidies on basic goods in order to curry public favour during elections the gains of the program could be lost. The great success of the national unity government in executing the economic programme ... Depends on its ability to show proper judgement towards economic issues also when elections are on the horizon Bruno said. He blamed a 12 pct rise in real wages in 1986 for a sharp increase in private consumption and said higher pay was harming attempts to push inflation to under 10 pct a year. The lowering of inflation was one of the striking successes of 1986 Bruno said. It is important to note that in this area of economic stability we still have to tread a delicate path to reach an annualised inflation rate of 10 pct in the second half of this year he said. He added that this was achievable. The Banks report said Israels gross domestic product grew by 2.2 pct in 1986. The business GDP which most economists view as a better indicator of economic growth rose by 3.7 pct. REUTER | ISRAELI BANK SAYS ELECTION COULD HARM ECONOMY |
The Tokyo Commodity Exchange for Industry (TOCOM) said it will allow five more members to become precious metal brokers taking the total to 54 and four more members to broke rubber for a total of 39. An exchange official told Reuters the Ministry of International Trade and Industry is expected to approve the the new brokers by mid-June. The move has been under study since early May in response to requests by non-broker members of the exchange. REUTER | TOKYO EXCHANGE ALLOWS MORE GOLD AND RUBBER BROKERS |
West Germanys eurobond market may revive in June after two months relative dormancy before dozing off for the summer bond market sources said. Syndicate managers said many borrowers anticipating lower West German interest rates cancelled mandates during the last two-week calendar hoping borrowing costs would decline. Borrowers are likely to return as domestic interest rates lose downward momentum syndicate managers said. A supranational issue via Westdeutsche Landesbank Girozcentrale is likely today and Dresdner Bank AG could lead a new bond. New issue volume is likely to be helped by a recent domestic legal change which indirectly lowered costs for European Community state-backed borrowers the sources said. A statutory change to the West German Exchange Admissions Act which went into effect on May 1 allows such borrowers to file for bourse listing without a prospectus and without an underwriting group. This saves them the 1/2 point listing fee formerly paid to banks. The two most recent issues for Electricite de France led by Deutsche Bank AG and Bank of Greece led by Commerzbank AG were brought to market under the new law managers said. Deutsche Bank confirmed that its bond was brought out in conformance with the new law. Commerzbank had no comment. The success of Commerzbanks Bank of Greece deal especially for the shorter of the two tranches of five and eight years has also encouraged syndicate managers to bring out new issues during the new calendar period. Many borrowers might also seek to get their bonds in before the market enters its quiet summer phase referred to by German bond dealers as the summer hole. But syndicate managers said there are also some factors standing in the way of new issues. One negative factor is that current swap conditions for marks into dollars are not favourable. Syndicate managers said the yield spread between domestic Schuldschein notes and mark eurobonds is now too low to make swaps profitable for eurobond borrowers. Low yields on domestic notes comparable to mark eurobonds mean German banks can now borrow cheaply at domestic rates. They would charge a high premium to borrowers taking up euromarks for swaps as banks have little incentive to take on more expensive euromark liabilities at present. However some foreign borrowers might anyway borrow in marks out of a genuine need for the currency managers said. Another factor which might dampen the primary market is uncertainty about the dollar. Its rise last week over 1.80 marks helped send West German government bonds lower by nearly one pfennig over the week. If the dollar looks poised to stabilize or rise further foreign investors in mark eurobonds could switch out of them on the belief that gains from the marks appreciation were ending dealers said. The dollar is expected to remain stable this week before the seven leading nations begin their economic summit in Venice on June 8. In May a total of 1.1 billion marks of new mark eurobonds were launched compared with 1.0 billion in April. This compared with a relatively active March when 2.3 billion marks of eurobonds were launched and a very strong February when issues totalled nearly 5.0 billion. REUTER | GERMAN PRIMARY BOND MARKET SEEN REVIVING IN JUNE |
Renison Goldfields Consolidated Ltd <RGFJ.S> (RGC) and explorer <City Resources Ltd> have agreed in principle on a joint venture to re-examine the Bulolo alluvial gold field in Papua New Guinea City Resources said. City Resources would progressively earn up to 66.66 pct of RGCs Prospecting Authority 585 which covers all the field by spending a total of 6.5 mln kina it said in a statement. It said it believed Bulolo was not fully exploited in the past noting the literature refers to heavy gold losses in tailings during dredging from 1931 to 1967 which produced a total of 2.1 mln ounces. City Resources also said previous dredging was only carried out to a depth of 36 metres and high grade gold values are reported to at least 60 metres in the central part of the Bulolo Valley and possibly as deep as 90 metres. In its productive life recovered average grade at Bulolo was 0.3 rpt 0.3 grams a tonne from some 207 mln cubic metres of gravel it said. City Resources will act as operator. The Bulolo field in Morobe Province was the first successful gold mining operation of <Placer Development Ltd> after it was floated in Canada in 1926. It operated the field until dredging ceased in 1967. REUTER | RENISON GC AND CITY RESOURCES SET PNG GOLD VENTURE |
Venezuela has no plans to try to renegotiate the debt rescheduling agreement it worked out with creditor banks in February public finance director Jorge Marcano told Reuters. Speaking here after a meeting of the 11-nation Cartagena group Marcano said he was aware of political pressure at home to reduce debt payments but did not think such a move would benefit Venezuela. We have no intention of revising the terms of the accord he said. There would be little to gain and in fact it would probably be detrimental. Venezuela agreed with its bank advisory committee on a 14.5 year rescheduling of 20.3 billion dlrs in public sector foreign debt with an interest rate 7/8 pct over Libor. The previous agreement reached a year before but never implemented was for 12-1/2 years with a 1-1/8 pct spread. In Caracas there have recently been calls to invoke the agreements contingency clause which the government used last year to amend the original terms after a 40 pct drop in oil income. But Marcano said the bulk of payments to be made this year are on private debts and non-rescheduled public debts. Marcano said Venezuela which has reduced its debt by six billion dlrs since 1983 should have no problems in repaying restructured debt this year or next. Asked whether the government felt badly treated with its 7/8 pct spread when Mexico and Argentina have won a 13/16 pct margin Marcano said he still felt Venezuela had a good deal. Venezuela has restructured its debt so that most of it is being repaid at 7/8 pct which I think is better than the other countries he said. The rescheduling accord covers some 90 pct of Venezuelas commercial bank debt which accounts for more than 90 pct of the total public sector external debt. Venezuela has almost no debt outstanding to multilateral agencies. Marcano said attempting to revise the rescheduling accord a second time would probably hurt Venezuelas bid to restore it credit rating and raise new loans. He said Venezuela now obtains trade credit lines without a government guarantee something that Argentina and others are just starting to try to negotiate in their restructuring packages. Venezuela is currently seeking loans in Japan and West Germany to finance steel and aluminium expansion. According to finance minister Manuel Azpurua a 100 mln mark credit has been lined up for the Venalum aluminium plant. Marcano said no mandate has yet been given for a planned 100 mln dlr bond issue although he confirmed that talks were continuing with Morgan Guaranty and other banks. Banking sources said one option was to privately place the bonds through the Caracas-based Banco de Venezuela which would underwrite the issue but Marcano said no decision has yet been made. REUTER | VENEZUELA HAS NO PLANS TO SEEK REVISED DEBT ACCORD |
Japan May external reserves hit record 68.94 billion dlrs (April 68.62 billion) |
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Toshiba Corp <TSBA.T> expects to report a group net profit of 38 billion yen for the year ending March 31 1988 up 11.2 pct from a year earlier assuming an exchange rate of 140 yen to the dollar a company official said. Osamu Iemura a senior vice president told a news conference sales are forecast at 3500 billion yen up 5.8 pct. The forecasts are based on expectations of improved sales of office automation equipment a recovery in semiconductor market prices and an increase in plant exports. Toshiba said earlier that 1986/87 group net profit fell 42.5 pct from a year earlier to 34.18 billion yen the second consecutive year-on-year drop. Sales fell 1.9 pct to 3308 billion yen the first year-on-year sales drop in 21 years. Iemura said the results reflected trade friction over semiconductor exports to the U.S. The yens sharp rise against the dollar and a drop in exports to China. The 1986/87 foreign exchange loss totalled 145 billion yen including parent company losses of 120 billion. The average value of the yen against the dollar rose to 161 from 221 a year earlier he added. Weaker prices for semiconductors and office automation equipment cut total sales 245 billion yen Iemura said. Group sales of telecommunication and electronic devices accounting for 36 pct of the total rose five pct to 1183 billion yen in 1987/88 from a year earlier helped by good sales of word processors workstations medical equipment point-of-sales systems and exports of personal computers. Semiconductor sales rose to 410 billion yen from 360 billion a year earlier but fell short of an expected 430 billion. Sales are expected to be 460 billion in 1987/88. Office automation equipment sales rose to 650 billion yen in 1986/87 from 600 billion a year earlier Iemura said. Sales in 1987/88 are expected to be 695 billion yen mainly due to good sales of computers in Europe and to expectations the U.S. Will remove its 100 pct import duty on computers. Sales of heavy electric goods accounting for 26 pct of sales rose 0.2 pct from a year earlier to 868.14 billion yen. Home electronics sales fell 10 pct to 940.64 billion yen mainly due to the yens appreciation against the dollar and a drop in colour television exports to China Iemura said. Overall 1986/87 overseas sales totalled 1021 billion yen down three pct from a year earlier Iemura said. Overseas sales of telecommunication and electronic devices rose nine pct from a year earlier to 493.90 billion yen helped by a 80 pct year-on-year rise in computer and computer-related equipment sales. Home appliance sales abroad fell 24 pct to 312.10 billion mainly due to the yens appreciation lower sales to China and increased competition with newly-industrialised countries. Toshiba reduced the number of divisions to three from four in reaction to market changes effective April 1. Group sales of telecommunication and electronic devices are estimated at 1520 billion yen in 1987/88 Iemura said. Home appliance sales are estimated at 1260 billion yen and heavy electric goods sales at 720 billion. Iemura said group exports to China are expected to rise to 90 billion yen in 1987/88 from 30 billion in 1986/87 due to an increase in sales of generators. Sales to China were down from 70 billion yen in 1985/86 due to a sharp drop in home appliance exports he said. Group capital spending in 1987/88 will fall to 197 billion yen from 213.30 billion in 1986/87 Iemura said. Of total capital spending investment in semiconductors will fall to 65 billion from 68 billion. Research and development spending will rise to 217 billion yen from 201.10 billion he said. REUTER | TOSHIBA FORECASTS 11 PCT RISE IN 1987/88 GROUP NET |
A public opinion poll showed Prime Minister Margaret Thatchers Conservatives maintaining their lead over the opposition Labour party as Britains June 11 general election campaign entered its third week. The poll conducted for TV-AM breakfast television by the Harris organisation put the Tories on 43 pct Labour on 35 and the centrist Social Democrat-Liberal Alliance on 20 pct. If translated into parliamentary seats in a general election Thatcher would enjoy an overall majority of 50. Since the general elections were announced on May 11 Thatchers Tories have maintained the lead. A survey of marginal seats for The Times of London carried out by the MORI organisation showed that Thatcher would sweep back in with an overall majority of l40 seats the same margin she enjoyed in the 1983 general elections. The Times poll of marginal seats where Labour is challenging a Conservative incumbent -- and which it must win in order to dislodge the Tories -- showed the Conservatives with 42 pct Labour with 34 and the Alliance on 23. If the result were repeated on polling day Labour would win only a handful of the marginal seats giving Thatcher a landslide. REUTER | TORIES MAINTAIN LEAD 10 DAYS BEFORE U.K. ELECTION |
Any Iranian attack on Soviet ships in the Gulf will bring a forceful and violent response a Soviet foreign ministry official said in an interview published here. Alexander Ivanov head of the Gulf desk at the Soviet Foreign Ministry told Al-Rai al-Aam newspaper Moscow will answer back with force and violence if Iran attempts to attack any Soviet ship or tanker in the Gulf. A Soviet tanker hit a mine in the Gulf last month. Ivanov also accused the United States of stepping up the regional crisis and of failing to exert genuine efforts to end the Iran-Iraq war. REUTER | MOSCOW SAYS WILL RETALIATE AGAINST GULF ATTACKS |
Mobil Oil Singapore Pte Lte will raise pump prices of petrol from June 2 a spokeswoman said. Grade 97 octane with 0.15 gm lead will be 96.8 cents/litre against 94 cents previously for 0.4 gm lead. Grade 92 octane will be 90.2 cents against 87.6 previously. SPC earlier announced its pump prices of 96.8 cents and 90.6 cents for 97 and 92 octane respectively for 0.15 gm lead petrol which is being sold in Singapore from today in line with the Ministry of Environments regulations. REUTER | MOBIL RAISES SINGAPORE PETROL PUMP PRICES |
Lebanon Prime Minister Karami dies of injuries, after helicopter attacked -official sources |
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The Industrial Bank of Japan <IBJT.T> (IBJ) amortized 68 billion yen worth of loans including the write-off of an unspecified amount of loans to the <Japan Line Ltd> group in the year ended March 31 an IBJ spokesman said. He declined to comment on a report in the economic daily Nihon Keizai Shimbun that it had written off loans worth 15 billion yen to Japan Line one of the worlds largest tanker operators. Japan Lines current liabilities amounted to 68.98 billion yen at the end of September. In December Japan Line asked its creditor banks to shelve repayment of 124 billion yen of outstanding loans and about 153 billion in loans to its subsidiaries following the yens steep rise and the world recession in shipping. REUTER | IBJ AMORTIZES LOANS TO JAPAN LINE |
RBC Finance BV a wholly-owned subsidiary of the Royal Bank of Canada is to raise 300 mln Luxembourg francs through a six-year 7-3/8 pct private placement lead manager Banque Paribas (Luxembourg) SA said. The non-callable bullet issue is priced at par. Payment date is June 16 and coupon date is June 17. The issue is co-managed by Banque Generale du Luxembourg SA Banque Internationale a Luxembourg SA Kredietbank SA Luxembourgeoise and Credit Europeen SA. REUTER | RBC FINANCE RAISING 300 MLN LUXEMBOURG FRANCS |
Lebanons Prime Minister Rashid Karami died from injuries after a bomb exploded in a helicopter flying him to Beirut to the northern port of Tripoli official sources said. They said Karami 66 died at a hospital in the Christian town of Byblos north of Beirut. The bomb which exploded under Karamis seat also injured Interior Minister Abdallah al-Rassi and the pilot who made a forced landing. REUTER | LEBANESE PRIME MINISTER KILLED BY HELICOPTER BOMB |
Japan has extended a 24 billion yen loan to Bangladesh Finance Ministry officials said. The loan to be disbursed over two years from next July is for chemicals cement steel and machinery imports and for setting up a power plant in eastern Sylhet district they said. Terms were not disclosed. The credit brings total Japanese loans and grants to Bangladesh to 441.25 billion yen since 1972 they said. REUTER | JAPAN EXTENDS 24 BILLION YEN LOAN TO BANGLADESH |
Poor returns by oil refiners and utilities will drag down average current profits of major Japanese firms in the year ending March 31 Wako Research Institute said. Current profits will drop an average 13.5 pct after a 7.3 pct drop in 1986/87 it said. Oil refiners and utilities face a sharp profit fall after two years of high profits due to the yens strength lower world oil prices and reduced interest rates it said. Sales of all firms are expected to rise 2.3 pct from the previous year when they fell 11.9 pct from a year earlier. The independent institute surveyed 436 firms listed in the first section of the Tokyo Stock Exchange excluding banks and insurance firms. Excluding the oil refiners and utilities Wako forecasts that current profits will rise 3.7 pct after a 22.3 pct drop in 1986/87 and a 19.5 pct drop in 1985/86. Electric power firms and gas companies are likely to see 42.5 and 31.6 pct falls in current profits respectively in 1987/88 due to cuts in utility prices to recycle windfall profits made during the yens rise against the dollar and due to the recent recovery in world oil prices the institute said. Current profits of manufacturing industries will rise an average seven pct after a 29.7 pct drop in 1986/87 and a 25.0 pct drop in 1985/86 Wako said. An increase in overseas production and an expected increase in domestic demand will cause the recovery in manufacturing sector profits it said. REUTER | POORER CURRENT PROFITS SEEN FOR JAPAN FIRMS |
The Kuwait Central Bank kept its window for funds to the domestic interbank deposit market shut as banks returned from a four day holiday dealers said. The move drove short-term interest rates sharply higher with overnight and tomorrow-next funds more than doubling from last Wednesday and hitting 20 pct. There were few offers in a tight market and traders scrambled for any available funds. One-month to one-year deposits were indicated one point higher at eight seven pct but there was little activity at the longer end of the market. Bankers see the suspension of central bank aid as a deliberate move to drive up Kuwaiti dinar interest rates and stem a flow of funds out of the country where market nervousness is increasing over the growing tension in the Gulf. The central banks move has been combined with a steady cut in the dinar exchange rate. Todays rate was reduced to 0.27939/73 to the dollar from 0.27758/92 on Wednesday before the four day bank holiday that celebrated the end of the fasting month of Ramadan. REUTER | WINDOW FOR BANK AID IN KUWAIT REMAINS SHUT |
Skylark Co Ltd <SKLK.T> said it will issue a 20 billion yen nine-year unsecured convertible bond in the domestic capital market through public placement with Nomura Securities Co Ltd as lead manager. Coupon and conversion price for par-priced bond maturing June 28 1996 will be set at its board meeting to be held in mid-June and payment is due on July 1 the company said in a statement. Skylarks share price fell 10 yen to 2880 on the Tokyo Stock Exchange today. REUTER | SKYLARK TO ISSUE 20 BILLION YEN CONVERTIBLE BOND |
Shell Eastern Pte Ltd will revise pump prices of petrol from 2300 hours local while Caltex Asia Ltd and BP Singapore Pte Ltd will revise theirs at midnight tonight company officials said. Caltex and Shell will set prices of 0.15 gm lead at 96.8 cents/litre for 97 octane and 90.2 cents for 92 octane. BP will set prices at 96.8 cents/litre and 90.6 cents respectively. Previous industry pump prices for 0.4 gm lead were 94 cents for 97 octane and 87.6 cents for 92 octane. REUTER | SHELL, CALTEX, BP REVISE SINGAPORE PETROL PRICES |
Bangladesh will import 60000 tons of high speed diesel oil from the Soviet Union under a barter agreement signed here last week Bangladesh petroleum Corporation officials said. The oil worth about 10 mln U.S. Dlrs will be shipped by December this year they added but did not say what Bangladesh would sell in return to the Soviet Union. REUTER | BANGLADESH TO IMPORT 60,000 TONS OF DIESEL FROM USSR |
The West German car industry celebrated its 100th birthday with a record-breaking 1986 performance at home and is due to turn in another set of solid results in 1987. But share market analysts warn it faces continued problems from the strong German mark and predict increasingly aggressive competition in Europe from the Japanese. On the plus side for the industry which is West Germanys biggest foreign exchange earner the analysts are confident the technical superiority and innovative qualities of the luxury producers will help them maintain a strong market profile. Most analysts thought Daimler-Benz AG <DAIG.F> would do best this year but expected Dr. Ing. H.C.F. Porsche AG <PSHG.F> to continue its slide because of the weak U.S. Dollar. They were generally optimistic for Bayerische Motoren Werke AG <BMWG.F> (BMW) but some were sceptical it could match record 1986 profits. Views were mixed on Volkswagen AG <VOWG.F> but some analysts took comfort from the fact that Europes leading car maker had apparently put a major currency scandal behind it. VW could be vulnerable as Japanese exporters suffering from the strength of the yen against the dollar switched their sales offensive from the U.S. To Europe they said. Analyst Joseph Rooney with brokers James Capel in London noted the Japanese drive was coming at a time when the whole European market was expected to contract slightly. But analysts saw most German manufacturers meeting the challenge even though the Japanese were now starting to focus on the up-market sector. BMWs chairman Eberhard von Kuenheim shrugged off the Japanese drive in an interview with Wirtschaftswoche magazine.I view the move by the Japanese into the top class with a certain equanimity. Not only are we playing on home turf we also have technical superiority he said. The car industry benefitted last year from clarification of domestic rules on low-pollution cars which meant orders put off in 1985 were carried out the following year. Tax cuts generally boosted domestic demand especially for cars. Domestic registrations leapt by nearly 19 pct to a record 2.8 mln cars. The VDA industry association says this might ease to 2.7 mln in 1987 but predicts another good year. Looking to the future Daimler has designated 16 billion marks for car sector spending in the next five years. Chairman Werner Breitschwerdt says spending is not aimed at quantity but improving high quality technology and accessories. Analyst Stephen Reitman with Phillips and Drew in London said Daimler had the best earnings profile of West German producers with group profits per share rising to 80 marks from 78.8 in 1986. Analysts were more cautious about VW. Reinhard Fischer with Bank in Liechtenstein (BiL) in Frankfurt saw VWs group earnings per share falling to 35 marks in 1987 from 42 in 1986. A recent report from his bank said last years currency losses were a sign of mismanagement. It stressed heavy losses from VWs Brazilian operations and its Spanish unit SEAT. VWs first quarter figures also highlighted problems in both the U.S. And Brazil analysts said. VW reported flat first quarter earnings except for a 39.2 pct fall in U.S. Sales and Brazilian sales which dived 46.5 pct. Reitman was more optimistic than BiL about VWs 1987 group earnings and predicting an improvement in both Spain and Brazil he saw an unchanged 42 marks per share He also said that VW now stood to benefit from not hedging against foreign exchange fluctuations. In a May 1 study he wrote: One point in VWs favour is that its extraordinary policy of not hedging forward has meant that it will have less far to go in adjusting to current DM/Dollar rates than the other German manufacturers who were to a lesser or greater extent protected up to 1986. Reitman was also reassured by the apparent end of the currency scandal where allegedly faked forward contracts were not acknowledged by VWs banks. VW fixed final losses from the fraud at 473 mln marks for which provisions were made in 1986. VWs new Audi 80 a sporty model which German media reports say was designed to jazz up Audis staid Grandpa image contributed significantly to VWs first quarter performance. The 80 doubled its sales against the year-ago level. But the Audi range as a whole has suffered a huge setback in the U.S. Because of an image problem linked to claims of unintentional acceleration. Von Kuenheim wont be pinned down on BMWs 1987 profits but at a news conference he emphasised 1986 earnings were a record high. Without referring to 1987 he added: If profits are less in one year or the other they will still be good. Rooney said group profits per share which BMW does not publish would rise to 62.5 marks this year. Some analysts put the 1986 group profit at 60 marks a figure BMW does not deny. But Reitman was more pessimistic predicting 50 marks per share in 1987 and a return to 60 next year. He said: BMW will be the story of 1988 when it plans to launch an updated version of its Five series. BMW also has a big investment programme under way and Bils Fischer said depreciations could affect earnings. Other analysts pointed to possible hedging problems and Reitman noted a 2.10 marks to the dollar hedge expired this September. Reitman said the outlook for Porsche was bearish for the year to end-July 1987. Porsches 1985/86 group profits at 84 marks per share fell 30 pct from the record 120 marks in 1984/85 and Reitman saw 60 marks in 1986/87. With the U.S. Currently accounting for 63 pct of unit sales (this is expected to fall to 60 pct in the full year 1986/87) Porsches earnings remain uncomfortably exposed to the DM/dollar relationship he said. REUTER | GERMAN CAR FIRMS SEEN PRODUCING SOLID 1987 RESULTS |
<British Airport Services Ltd> (BAS) has concluded an 18 mln yen contract with the <Kansai International Airport Co Ltd> for consulting work on the terminal at a new airport to be built in western Japan the airport company said in a statement. The contract is the first to be awarded to a British company and follows the award of a 200000 dlr consultancy contract to a division of the U.S-based <Bechtel International Corp> in consortium with six Japanese companies a company spokesman told Reuters. BAS is a subsidiary of <BAA Plc> the former British Airports Authority. The six-billion dlr project to build the airport has been a major source of friction with the U.S. And the European Community who have put pressure on Japan to allow foreign companies to compete with domestic firms in building it. REUTER | BAA PLC UNIT WINS KANSAI AIRPORT CONTRACT |
Goodman Fielder U.K. Plc is issuing a 75 mln stg convertible eurobond due July 4 1997 with an indicated coupon of five to 5-1/4 pct and par pricing lead manager Credit Suisse First Boston Ltd said. The issue is guaranteed by Goodman Fielder Ltd and final terms will be set on or before June 5. The issue is callable at 106 pct declining by one pct per annum to par thereafter but is not callable until 1992 unless the share price exceeds 130 pct of the conversion price. The selling concession is 1-1/2 pct while management and underwriting each pay 1/2 pct. The issue has an investor put option in 1992 which will be priced to give a yield of approximately 8-3/4 pct. The expected conversion premium is 20 to 24 pct. The issue is available in denominations of 1000 stg and will be listed in London. The payment date is June 24 and there will be a long first coupon period. The conversion period is from July 4 1987 until June 26 1997. Over the weekend Goodman Fielder announced in Sydney that it had signed for a 100 mln U.S. Dollar composite revolving euronote issuance facility to be launched in Hong Kong. REUTER | GOODMAN FIELDER UNIT ISSUES 75 MLN STG CONVERTIBLE |
Philippine Coconut Authority (PCA) chairman Jose Romero said he would visit Brussels later this month to lobby against a proposed 100 pct European Community (EC) levy on vegetable oil imports. I intend to visit Brussels and talk to whoever is putting up this devilish scheme to impoverish third world countries like the Philippines Romero said in an interview. He said he did not know how much support the levy had within the EC but he said he believed those originally opposed to the tax were under pressure to change their position. Romero said a group of EC members led by West Germany the Netherlands Denmark and Norway were opposed to the tax. But there was a danger some of them would be persuaded to change sides and if that happened opposition could crumble. Romero said another threat to exports lay in an EC warning that copra meal cake used in livestock feeds contained dangerous levels of aflatoxin a carcinogenic chemical. He said the EC standard of 0.02 parts of aflatoxin per million parts of meal which EC countries had been asked to apply by October 1988 was too rigid. He said Philippine copra cake contained much higher levels of aflatoxin. Aflatoxin comes from moulds which develop in copra when it is not properly dried or ground. Romero said he would tell big buyers of copra meal in London that the Philippines was doing its best to meet EC standards. It was also trying to eliminate aflatoxin totally but this was likely to take several years of research. Copra meal exports were 817641 tonnes or 35 pct of total coconut exports in 1986. The meal was worth 73.5 mln dlrs. Romero said he would also visit Oxford Universitys department of agricultural economics to discuss ways of avoiding the copra process altogether. There are ways of producing coconut products outside of copra Romero said. We can process fresh coconut without drying the meat in the sun. Through the wet process we can process coconuts into other food or non-food products or we can go to the chemical root. He said there was a tendency for agricultural countries to become more protectionist and he expected export prices of coconut products to drop. In the long term we will be getting less and less for more and more production and Im not comfortable with that he said. With countries like Indonesia and Malaysia stepping up production of palm oil a coconut oil substitute palm oil output had risen nearly 70 pct since 1971 Romero said. To add to that the U.S. Soybean Association is spending billions of dollars to discredit palm oil and coconut oil by saying that they are polysaturated fats and bad for the heart he said. Romero said he expected coconut product export prices to stay up for the rest of the year. They would probably touch a high of 20 cents/pound from the current level of 18.59 cents and a sharp rise from year-ago levels of 10.50 cents. Romero said the Philippines was at the end of a five-year coconut production cycle which showed production tended to fall after two successive years of good harvests. He said 1985 and 1986 were good harvests and this year to add to the production fall drought had affected output. Traders are stocking up and when they have overbought the prices will start declining again. The only sure way to keep prices stable is by processing adding more value he said. Coconut farmers were being encouraged to intercrop by planting other cash crops between coconut trees he said. A typical farm may have from 100 to 150 trees sitting on 10000 square metres of land. Thats a lot of space Romero said. He said the governments proposed land reform program would exclude about 75 pct of the coconut farmers because they had less than the proposed seven-hectares of land. If the idea of land reform is to increase income levels production and employment then it wont happen he said. PCA figures show about one-third of the countrys population is dependent on the coconut industry. Coconuts are planted on about 3.2 mln hectares or one-fourth of total agricultural land. REUTER | PHILIPPINE COCONUT CHIEF TO LOBBY AGAINST EC TAX |
Crude oil prices could remain around 18 dlrs a barrel until the end of the year but OPECs decision on output at its next meeting would be the critical factor an official of Mexicos state oil company Petroleos Mexicanos (Pemex) told a group of Japanese businessmen. Adrian Lajous Pemex executive vice president of international trade said current OPEC output already appeared to be very near the 16.6 mln barrel per day level it set itself for the third quarter. Production is surging ahead of what was originally planned while demand is growing more slowly than envisaged a few months ago he said. He said OPEC had to look very carefully at what level of production in the third quarter would effectively sustain the 18 dlrs price and that an increase to what had originally been envisaged might soften price levels. The 13-member cartel is scheduled to meet on June 25 in Vienna to review its December accord on prices and output. I hope OPEC will follow a very conservative attitude in terms of volume decisions Lajous said. A repetition of what happened last year when OPEC boosted output and sent oil prices tumbling down below 10 dlrs is always there as a possibility he said. I hope never again to go through the trauma of 1986. I expect other oil exporters have learned their lessons and discipline will be maintained he said. Lajous said there was still excess supply and as long as this remains there will be a tendency to instability in oil markets but prices should remain around 18 to 19 dlrs during 1987 if output remains under control. He said Saudi King Fahds remarks last month that increased production was not so important as long as incomes would not be affected by the output were very relevant and welcome from such a powerful producer. REUTER | PEMEX OFFICIAL SAYS OPEC OUTPUT CRITICAL TO PRICE |
An investor group led by Coniston Partners said it plans to continue its effort to gain control of Allegis Corp despite the defensive maneuvers Allegis announced last week. Allegis said then that it would borrow three billion dlrs and pay shareholders a dividend of 60 dlrs per share lowering the companys net worth. The Coniston group which owns 13 pct of Allegis stock has said that it would seek shareholder consents to remove 13 of the 16 Allegis directors. The group had said it would consider breaking up Allegis into its airline hotel and vehicle rental components if it succeeded. The Coniston group said it expects to make a further announcement today on its plans for Allegis. Wall Street analysts and traders had not expected Coniston to abandon its pursuit of Allegis as a result of the Allegis defensive measures. Allegis officials were unavailable for comment. Reuter | CONISTON GROUP TO CONTINUE BID FOR ALLEGIS <AEG> |
Three United Steelworkers of America locals on strike at Cominco Ltd rejected a tentative three-year contract a union representative said. The vote was 1229 or 54.5 pct against and 1028 or 45.5 pct for the contract. Eighty-one pct of the membership voted he said. The union representative said that the pact offered cost of living increases designed to keep pace with inflation but contained no wage increase. The locals bargaining committees are expected to meet and prepare for the reopening of negotiations with Cominco he said. The three locals cover about 2600 production and maintenance workers at Comincos Trail smelter and Kimberley B.C. lead-zinc mine. Output at both sites has been shut down since the production and maintenance workers along with about 600 office and technical workers went on strike May 9. The two Steelworkers locals representing the office and technical workers have not negotiated since May 21. The strike caused Cominco to declare force majeure which means the company may not be able to honor contracts for products from the smelter and mine. Each of the five locals have separate contracts all of which expired April 30 but the main issues are similar. The union had requested a three pct wage increase in each year of a two-year contract. Cominco had pressed for a three-year contract and some loosening of the rules on job classifications. The Trail smelter about 400 miles east of Vancouver produced 240000 long tons of zinc and 110000 long tons of lead last year. The Sullivan mine at Kimberley about 450 miles east of Vancouver produced 2.2 mln long tons of ore last year most for processing at the Trail smelter. The smelter also produced cadmium bismuth and indium. Revenues from the Trail smelter totalled 356 mln Canadian dlrs in 1986. Reuter | COMINCO LEAD/ZINC UNION REJECTS CONTRACT |
SPECTRA-PHYSICS REJECTS CIBA-GEIGY TENDER OFFER |
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Compaq Computer Corp said it has cut prices on its PORTABLE II models 2 and 4 to 2699 dlrs from 2999 dlrs and to 3999 dlrs from 4499 dlrs respectively. reuter | COMPAQ COMPUTER <CPQ> CUTS PORTABLE II PRICES |
Kaypro Corp said it has cut prices on its Kaypro 386 Models A and E supermicrocomputers and Extra! Extra! desktop pulbishing system by 500 dlrs. The Kaypro 386 Model A will retail for 4495 dlrs and the Kaypro 386 Models E-40 and E-130 will sell for 5795 dlrs and 8095 dlrs respectively the company said. The Kaypro 386 Model E is available with eithe a 40 or 130 MB hard disk the company said. In addition the Kaypro Extra! Extra! will be reduced to 7995 dlrs and the Kaypro 16E a transportable IBM PC-compatible computer now retails for 1595 dlrs and the dual floppy Kaypro 162E is 1395 dlrs Kaypro said. Reuter | KAYPRO <KPRO.O> CUTS PRICES ON COMPUTERS |
FIRST CITY INDUSTRIES SELLS YALE AND NUTONE UNITS FOR 400 MLN DLRS AND SECURITIES |
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RS Bank Sparebanken Rogaland of Stavanger Norway is launching a 40 mln Swiss franc seven year bond with a 4-7/8 pct coupon and par issue price lead manager Banque Gutzwiller Kurz Bungener Ltd said. Subscription is from June 11 until June 17 with closing and pay-out on July 7. It can be called at 101 in 1992 and at 100-1/2 in 1993. REUTER | NORWAY'S RS BANK ISSUES 40 MLN SWISS FRANC BOND |
Three United Steelworkers of America locals on strike at Cominco Ltd rejected a tentative three-year contract a union representative said. The vote was 1229 or 54.5 pct against and 1028 or 45.5 pct for the contract. Eighty-one pct of the membership voted he said. The union representative said that the pact offered cost of living increases designed to keep pace with inflation but contained no wage increase. The locals bargaining committees are expected to meet and prepare for the reopening of negotiations with Cominco he said. The three locals cover about 2600 production and maintenance workers at Comincos Trail smelter and Kimberley B.C. lead-zinc mine. Output at both sites has been shut down since the production and maintenance workers along with about 600 office and technical workers went on strike May nine. The two Steelworkers locals representing the office and technical workers have not negotiated since May 21. The strike caused Cominco to declare force majeire which means the company may not be able to honor contracts for products from the smelter and mine. Each of the five locals have separate contracts all of which expired April 30 but the main issues are similar. The union had requested a three pct wage increase in each year of a two-year contract. Cominco had pressed for a three-year contract and some loosening of the rules on job classifications. The Trail smelter about 400 miles east of Vancouver produced 240000 long tons of zinc and 110000 long tons of lead last year. The Sullivan mine at Kimberley about 450 miles east of Vancouver produced 2.2 mln long tons of ore last year most for processing at the Trail smelter. The smelter also produced cadmium bismuth and indium. Revenues from the Trail smelter totalled 356 mln Canadian dlrs in 1986. Reuter | COMINCO <CLT.TO> UNION REJECTS CONTRACT |
BOEING CO TO ACQUIRE ARGOSYSTEMS FOR 37 DLRS A SHARE |
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First City Industries Inc said it has reached a definitive agreement to sell its Nuton and Yale security subsidiaries to Valor PLC for 400 mln dlrs and warrants to purchase two mln Valor ordinary shares. In addition the company said it will recieve a special dividend of 60 mln dlrs from Nutone and Yale and it has agreed to buy 35 mln dlrs of Valor convertible preference shares. First City said it is seeking to increase shareholder values by improving and realizing the values inherent in its operating subsidiaries. The company said the transaction is subject to approval by shareholders of Valor and is expected to be completed within 40 days. It said Valor has arranged financing through an issue of ordinary and convertible preference shares underwritten by Hoare Govette Ltd and Barclays de Zoete Wedd Ltd. Nutone makes built-in electric products for the housing market and Yale makes door locks and electronic security products. Valor makes home products. Reuter | FIRST CITY <FCY> SELLS YALE, NUTONE UNITS |
Shr 23 cts vs seven cts Net 911000 vs 293000 Sales 88.1 mln vs 74.8 mln Reuter | GENOVESE DRUG STORES INC <GDXA.O> 1ST QTR MAY 22 |
U.S. corporate treasurers are expected to race to market this week propelled by hopes that the recent recoveries of the Treasury market and the dollar will whet investors appetities for new issues underwriters said. Underwriters expect to price about 2.3 billion dlrs of new debt issues this week including an asset-backed debt deal. Treasurers have been sitting on the sidelines for weeks waiting to pounce said an underwriter with a large Wall Street house. They will hit the market at a fast pace as long as the dollar remains stable. The financing calendar is the heaviest it has been in weeks said a trader with a small securities firm. And there are billions of dollars on the SEC shelf that can come to market at any time he said referring to company debt filings with the Securities and Exchange Commission. Investment bankers said last week signaled a surge in financings. New debt offerings rose to nearly 2.8 billion dlrs during the holiday-shortened week from 2.09 billion dlrs in the previous week they calculated. And most of (last weeks) issues were not even on the calendar an underwriter remarked. Analysts noted that in the past few months the fixed-income markets became virtually obsessed with the dollar. The currencys sharp drop ignited fears that foreign investors would shun dollar-denominated debt vehicles. Also many participants believed inflation would gather momentum because of the dollars fall. Inflation is the number one enemy of fixed-rate investments analysts explained. But the dollars recovery last week calmed worries in the Treasury and corporate bond markets over foreign investor demand and inflation. The resulting decline in yields should bring company treasurers to market traders said. Underwriters are slated to bid competitively tomorrow for 250 mln dlrs of first mortgage bonds due 2017 of Georgia Power Co a unit of Southern Co <SO>. The issue is rated Baa-1 by Moodys Investors and BBB-plus by Standard and Poors. This would be Georgia Powers first bond issue in the U.S. since August 1986 when it sold 250 mln dlrs of same-rated same-maturity 10 pct bonds yielding 250 basis points more than comparable Treasury securities. Tomorrow will see another competitive. Syndicates will bid for 100 mln dlrs of 30-year bonds rated A-1/A-plus of Virginia Electric and Power Co a unit of Dominion Resources Inc <D>. Virginia Electric last visited the domestic debt market in October 1986 when the utility issued 100 mln dlrs of same-rated same-maturity 9-1/4 pct bonds. The bonds were priced to yield 9.27 pct or 141 basis points over Treasuries. The biggest investment grade deal tentatively scheduled for pricing this week is 600 mln dlrs of securities due 1992 backed by the automobile loan receivables of Marine Midland Banks <MM>. Salomon Brothers Inc will head the syndicate. The Marine Midland issue follows last weeks offering of 230 mln dlrs of car loan backed debt by RepublicBank Dallas NA a unit of RepublicBank Corp <RPT> underwriters noted. Goldman Sachs and Co led the group for the RepublicBank deal. First Boston Corp and Salomon Brothers the most active underwriters of asset-backed securities were co-managers. First Boston has dominated the asset-backed market since introducing the concept of selling these securities in March 1985. It has a commanding 86.1 pct share of the 12.5 billion dlr market according to figures tabluated by First Boston. Salomon Brothers is in second place with a market share of 8.8 pct followed by Drexel Burnham Lambert Incs share of 3.5 pct of the market. Goldman Sachs is next with a 1.6 pct market share that was calculated before the RepublicBank Dallas deal. Indeed investment bankers say that banks will be the most frequent issuers of asset-backed securities this year. The finance arms of the U.S. automakers accounted for the bulk of last years offerings with General Motors Corps <GM> General Motors Acceptance Corp taking the lions share of that. The Marine Midland cars deal is rated a top-flight AAA by both Moodys and Standard and Poors because it is backed by a letter of credit by Union Bank of Switzerland. Recently Imperial Savings and Loan Association of San Diego filed a registration statement with the SEC covering 100 mln dlrs of credit card backed debt underwriters noted. Reuter | U.S. CORPORATE FINANCE - FINANCING SURGE SEEN |
National Security Insurance Co said a group of investors has acquired 226243 common shares or a 22.2 pct interest for 27.50 dlrs per share. The company said the acquisition of the portion of the shares over a five pct interest is subject to approval by the Alabama Department of Insurance. It said the sellers included Atlantic American Corp <AAME.O> Bankers Fidelity Life Insurance Co and Georgia Casualty Insurance Co. Reuter | NATIONAL SECURITY <NSIC.O> STAKE ACQUIRED |
The Panamanian liquified gas carrier Nyhammer 48772 dwt was attacked by an Iranian gunboat on May 24 Lloyds Shipping Intelligence said. One rocket was fired but missed. The vessel subsequently arrived at its destination of Ras Tanura on May 25 and left this morning. REUTER | GAS CARRIER ESCAPED GULF ATTACK LAST WEEK - LLOYDS |
COMPUTER ASSOCIATES TO ACQUIRE UCCEL CORP FOR ABOUT 800 MLN DLRS |
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Thousands of tea workers of Indian origin went on strike today to press demands for citizenship and voting rights in Sri Lanka a union statement said. The Ceylon Workers Congress (CWC) said its 400000 members launched a prayer campaign at temples and other places in a non-violent protest to get the authorities to expedite citizenship procedures. A CWC spokesman said a three-day campaign was suspended after a Cabinet committee promised to speed up procedures under a new set of regulations. Trade sources said the strike did not affect production or todays Colombo auction. Reuter | SRI LANKAN TEA WORKERS LAUNCH ONE-DAY PROTEST |
Genetech Inc said it still remains confident that it will be able to work with the U.S. Food and Drug Adminstration to obtain approval of its tissue plasminogen activator Activase for use in treating heart attack victims. On Friday an advisory committee of the FDA recommended that the blood clot dissolving drug not be approved until additional mortality data be developed. Genetech said it will provide the additional data and believes that much if not all of it is already being developed. Reuter | GENETECH <GENE.O> SEES FDA APPROVAL OF DRUG |
WHITTAKER CORP 2nd QTR SHR PROFIT 37 CTS VS LOSS 35 CTS |
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The supercomputer industry is getting crowded as a handful of startup companies and some huge Japanese manufacturers compete for the right to apply the label worlds fastest machine to their products. Currently there are only about 250 supercomputers installed around the world but many believe that situation is about to change dramatically as these highly specialized and extremely expensive machines move out of the research laboratories where most of them are found today and into commerical applications. It is commercial supercomputing... that holds the most promise for this young industrys handful of vendors said Gary Smaby supercomputer analyst for Piper Jaffray and Hopwood. These commercial applications he said could propel annual sales of supercomputers from 850 mln dlrs in 1986 to 2.4 billion by 1990. For years two companies Cray Research Inc <CYR> and Control Data Corp <CDA> were virtually the only options for customers seeking to buy supercomputers. But in the last three years a number of new companies have announced supercomputers using some innovative technologies and the industry finally expanded enough to hold its first World Supercomputer Exhibition in Santa Clara last month. Also in the last month two small companies ETA Systems Inc (a subsidiary of Control Data) and Thinking Machines Corp both laid claim to having the worlds fastest computer and a joint venture of Honeywell Inc <HON> and Japans NEC Corp <NIPN.T> Honeywell-NEC Supercomputers Inc announced its entrance into the U.S. market. All three are aiming at industry leader Cray Research Inc which holds more than 60 pct of the market. This week Cray plans to make a joint announcement with Digital Equipment Corp <DEC> already the worlds largest minicomputer maker of some products that will work on both companies computers expanding the market opportunities for both supers and minis even further. Supercomputers were initially designed only for the most complex of applications such as predicting worldwide weather patterns fusion energy research or military defense and weapons design. They are built for speed not for standard business functions such as payroll processing. The fastest supercomputers can perform more than a billion calculations per second greater than the combined power of 100000 personal computers. They also carry stratospheric price tags of between one mln to 20 mln dlrs each which is why Crays revenues could reach 600 mln dlrs last year even though it only shipped 36 new and 10 used supercomputers a level that would spell starvation for any standard computer company. But speakers at the supercomputer exhibition emphasized that a host of new applications should increase total industry shipments to 150 systems a year by the end of the decade. Most commercial customers of supercomputers now use the machines to simulate a physical process such as the flow of air over an aircraft wing in design and testing work. But financial institutions particularly Wall Street brokerage houses are considered the next major buyers of supercomputers as they try to recognize changes in stock trading patterns faster than any of their competitors. Two firms Goldman Sachs and Co and Morgan Stanley and Co are now using superminicomputers hybrid machines that are faster than a minicomputer but cheaper than a super to create financial models of the stock and bond markets. Analysts said it is only a matter of time before actual supercomputers are found on Wall Street. One reason for the shift to commercial applications is that supercomputers are coming down in price as new technologies provide greater speed at lower costs than the Cray and Control Data behemoths. Both the ETA and Thinking Machines Systems use a technology called parallel processing in which a number of internal processors work together to solve a problem. With such systems a problem is broken up and different segments are assigned to different processors. By contrast standard computers solve a problem one instruction at a time or sequentially. The ETA system the ETA 10 will eventually use as many as eight parallel processors capable of processing up to 8.32 billion operations per second. However the first ETA 10 installed at Florida State University has only two processors later to be expanded to four. ETA president Lloyd Thorndyke said the ETA 10 represents a drastic change in architecture from parent company Control Datas Cyber system. Priced from 5.5 mln to 22 mln dlrs the ETA 10 contains about 240 chips in each of its processing units built onto a board about the size of a standard newspaper section. Each of these boards contains the equivalent of 1.5 miles of embedded wiring. It took ETA about 3-1/2 years to develop its supercomputer but Thorndyke said he expects much faster development time frames in the futre from both ETA and its competitors. Were in a leapfrog business and we just took the last leap he said. Thinking Machines also claims to have the worlds fastest computer and in some ways this is true. Its Connection Machine Model CM-2 can process 2.5 billion instructions per second but it is a very specialized architecture only meant for certain very specific applications. The one mln to five mln dlr Connection Machine uses a technology called massive parallism. It contains 64000 processors crammed into a five foot cube. The processors all work on a problem at once breaking it down into minute bits. It is an ideal tool for applications with many unpredicatble variables according to Brian Boyle analyst for Novon Research Group. The more unpredictable things are the more the Thinking Machine will be appropriate he said. Reuter | TECHNOLOGY/SUPERCOMPUTER MARKET GETTING CROWDED |
FLUOR RETAINS SHEARSON TO ASSESS VALUE OF GOLD OPERATIONS |
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Dutch cocoa processors are unhappy with the intermittent buying activities of the International Cocoa Organizations buffer stock manager industry sources told Reuters. The way he is operating at the moment is doing almost nothing to support the market. In fact he could be said to be actively depressing it one company spokesman said. Including the 3000 tonnes he acquired on Friday the total amount of cocoa bought by the buffer stock manager since he recently began support operations totals 21000 tonnes. Despite this buying the price of cocoa is well under the 1600 Special Drawing Rights SDRs a tonne level below which the bsm is obliged to buy cocoa off the market. Even before he started operations traders estimated the manager would need to buy at least up to his 75000 tonnes maximum before prices moved up to or above the 1600 SDR level and yet he appears reluctant to do so one manufacturer said. We all hoped the manager would move into the market to buy up to 75000 tonnes in a fairly short period and then simply step back he added. The way the manager is only nibbling at the edge of the market at the moment is actually depressing sentiment and the market because everyone is holding back from both buying and selling waiting to see what the manager will do next one processor said. As long as his buying tactics remain the same the market is likely to stay in the doldrums and I see no indication he is about to alter his methods he added. Processors and chocolate manufacturers said consumer prices for cocoa products were unlikely to be affected by buffer stock buying for some time to come. Reuter | DUTCH COCOA PROCESSORS UNHAPPY WITH ICCO BUFFER |
Aristech Chemical Corp said a judgment was entered against it in Texas State Court for nine mln dlrs plus prejudgment interest of 6500000 dlrs and legals fees of three mln dlrs. It said the judgment arose from a suit filed by Union Pacific Corp <UNP> against USX Corp <X> Aristechs former parent in 1983 claiming damages for an alleged 1980 breach of a cumene purchasing contract by Aristechs predecessor the USS Chemicals division of USX which was then known as U.S. Steel Corp. The company said it considers the judgment unjustified and it will seek to have it overturned. Reuter | JUDGEMENT ENTERED AGAINST ARISTECH <ARS> |
ENTERTAINMENT MARKETING SEEKS TO BUY CRAZY EDDIE FOR EIGHT DLRS A SHARE |
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Spectra-Physics Inc said its board rejected a 32 dlrs per share unsolicited tender offer for the companys stock from Ciba-Geigy Ltd <CIGZ.Z> which already holds 18.8 pct of the stock. Spectra-Physics said it also filed a lawsuit in Delaware federal court this morning seeking to enjoin the offer and alleging among other things that the offer vilates federal securities laws certain agreements between Ciba-Geigy and Spectra-Physics and Ciba-Geigys fiduciary duties. Spectra-Physics said the two Ciba-Geigy designess to its board were not present at yesterdays special meeting which voted to reject the offer as financially inadequate unfair and not in the best interests of Spectra-Physics or its stockholders. The company said the board also authorized a special committee of outside directors to take whatever steps it deems necessary to protect the interests of Spectra-Physics and its stockholders and to investigate all alternatives to maximize the value of the stock including talks with third parties. Spectra-Physics said a letter communicating the boards recommendation and reasons therefore is being mailed to stockholders. It said Robert Bruce Reliance Group Holdings Incs <REL> designee on Spectra-Physics board resigned his position on May 29. His letter of resignation said the action was to alleviate Ciba-Geigys stated justification for making the unsolicited offer that it had not contemplated another significant investor having representation on the board when its Spectra-Physics investment was made. Reuter | SPECTRA-PHYSICS <SPY> BOARD REJECTS TENDER OFFER |
The U.S. Department of Agricultures forecast that French end-of-season soft wheat stocks will almost double in 1987/88 is premature but would not be surprising according to French cereal organisation officials. The Cereals Intervention Board ONIC Wheat Producers Association and the National Union of Agricultural and Cereal Cooperatives have not yet forecast 1987/88 exports or end-of-season stocks. However the officials said the USDAs figure of end 1987/88 stocks at 5.03 mln tonnes against 1986/87s 2.87 mln was not surprising given a record high yield forecast in April. The French Feed Cereals Research Institute ITCF forecast in mid-April an average yield of 6.58 tonnes per hectare for soft wheat in 1987/88 compared with 5.6 tonnes in 1986/87 and the record high yield of 6.5/6.6 tonnes in 1984. This would result in a French soft wheat harvest of around 31 mln tonnes against 25.5 mln in 1986/87 given a Ministry of Agriculture estimate of area planted of 4.66 mln hectares against 4.61 mln in 1986/87. ONICs first preliminary forecast of the 1987/88 campaign will be released at the beginning of September an ONIC official said. Soft wheat exports in 1987/88 were extremely difficult to estimate at this stage both within the European Community and to non-EC countries an ONIC official said. He said however that among countries to which France could increase its wheat exports were Egypt and the Maghreb countries (Morocco Algeria and Tunisia) he said. The USDAs forecast of an 11.65 mln tonne maize crop in 1987/88 against 11.48 mln in 1986/87 while again premature was not out of line with estimates of the French Maize Producers Association AGPM an AGPM official said. Maize plantings would be down in 1987/88 but yields were expected to be higher the AGPM official said. It estimated 1987/88 maize plantings of 1.73 mln hectares down seven pct from the 1.87 mln hectares planted in 1986/87. Reuter | FRENCH SAY WHEAT STOCKS FORECAST NO SURPRISE |
 U.S. STOCKS EX-DIVIDEND - Jun 1 NYSE STOCKS... ags 2-for-1 stock split ctb 11 cts aln 14 cts dis 08 cts at 3-for-2 stock split eec 17 cts acb 55 cts fnb 37-1/2 cts aig 06-1/4 cts fpc 60 cts avt 12-1/2 cts gec 34 cts bkp 47 cts gps 12-1/2 cts bni 50 cts gsx 45 cts ciw 01 cts gr 39 cts cne 42 cts g 33 cts cic 65 cts hpc 44 cts cnk 2-for-1 stock split log 25 cts dny 2-for-1 stock split lce 47-1/2 cts pop 2-for-1 stock split mm 51 cts sbo 2-for-1 stock split mcd 58 cts hlt 45 cts mmr 18 cts efh 22 cts mrs 20 cts jml 15 cts ncb 21 cts klt 41-1/2 cts npk 39 cts kmg 27-1/2 cts oec 49 cts kmb 36 cts pin 75 cts lrt .0935 cts see 13 cts U.S. STOCKS EX-DIVIDEND =3 - Jun 1 NYSE STOCKS CONDt... slm 09 cts AMEX STOCKS... sns 45 cts ai 10 cts mip 09 cts tlr 12 cts cvr30 cts wre 32 cts tii 17 cts cgf 37-1/2 cts tka 02 cts cfk 06-1/4 cts wbo 30 cts dpc 08 cts trx 75 cts mpi 03 cts nyt pr a 09 cts wlc 12-1/2 cts rbc 3-for-2 stock split Reuter  | |
The Italian Treasury said the public sector borrowing requirement in the first four months totalled a provisional 40100 billion lire compared with 40380 billion in the comparable 1986 period. The Treasury said revenues in the first four months totalled a provisional 64151 billion lire while spending was a provisional 108439 billion lire. Treasury management operations showed a positive balance of 4188 billion lire. The borrowing requirement was financed through medium and long term bond and loan issues on the domestic market totalling 36721 billion lire through foreign borrowing of 60 billion lire and through a 3319 billion lire increase in other treasury debts. REUTER | ITALIAN TREASURY DETAILS BORROWING REQUIREMENT |
Boeing Co and ARGOSystems Inc <ARGI.O> said they reached an agreement for Boeing to acquire the Sunnyvale Calif. defense electronics firm for about 275 mln dlrs. The boards of both companies have approved the merger which will be accomplished through a tender offer by a Boeing subsidiary of 37 dlrs a share cash for all of ARGOSystems shares the companies said. Under the agreement the Boeing subsidiary TBC Holdings Corp will begin the tender offer promptly. If at least 90 pct of the shares are not tendered the offer will be prorated to 49 pct the companies said. ARGOSystems has granted Boeing an option to buy 1238311 shares or 18.5 pct of the outstanding stock for 37 dlrs a share they said. Also Bill May chairman of ARGOSystems and three other officers have granted Boeing an option to buy their shares another 8.9 pct of the outstanding stock for 37 dlrs a share. ARGOSystems makes equipment to monitor and analyze military communications signals electronic warfare equipment to monitor and jam radar signals and signal processing systems. For the nine months ended March 31 1987 ARGOSystems reported earnings more than doubled to 6.3 mln dlrs or 95 cts a share from 3.1 mln dlrs or 46 cts. The year-ago period included a 2.2 mln dlr charge from a writedown of securities. Sales rose 23.5 pct to 70.9 mln dlrs. Sales are expected to exceed 100 mln dlrs for the fiscal year ending June 30 the companies said in a joint statement. The companys backlog is currently more than 180 mln dlrs they said. It has about 1200 employees. About 30 pct of ARGOSystems business comes from international customers. ARGOSystems is a clear leader in its field. This association will expand our overall activities and significantly enhance our ability to compete in the defense electronics area Boeing president Frank Shrontz said in a statement. ARGOSystems will operate as a wholly owned subsidiary of Boeing Co. The merger following the tender offer will be subject to approval by ARGOSystems shareholders the companies said. The tender offer and merger are subject to customary conditions and expiration of the Hart-Scott-Rodino notification waiting period they said. Reuter | BOEING <BA> TO ACQUIRE DEFENSE ELECTRONICS FIRM |
Computer Associates International Inc and UCCEL Corp <UCE> said they have signed a definitive merger agreement under which Computer Associates will pay about 800 mln dlrs in stock for all outstanding UCCEL shares. The companies said under the terms of the agreement all UCCEL shareholders will receive about 1.69 shares of Computer common stock for each of the approximately 17 mln UCCEL shares outstanding. According to the companies this would amount to about 47.50 dlrs per UCCEL share based on May 29 New York Stock Exchange closing prices. Closing of the transaction is anticipated in August the companies said. The companies said the resulting company wil retain the name Computer Associates International Inc. Additionally the companies said Charles Wang currently Computer Associates chairman and chief executive will continue as chairman of the new company. Reuter | COMPUTER ASSOCIATES <CA>, UCCEL SET MERGER |
American motorists bought 16524000 used cars last year at an average cost of 5833 dlrs each for a total market of 96.4 billion dlrs according to a yearly study by the Hertz Corp. The study also showed an increase in used car sales of about 600000 units over 1985 volumes while the average price rose about 400 dlrs. But the survey said the typical used car that changed hands in 1986 was slightly newer at 4.5 years old and 41140 miles than in the prior year when such a car had run 45270 miles and was 4.6 years old. The sample shows that retail sales volume for used cars turned up after two years of decline said Leigh Smith a Hertz Corp. spokesman. And while costs of ownership went up to 25.5 cents a mile for used cars from 25.05 cents in 1985 they remain 47 pct under the estimated 48.5 cents a mile cost to own and operate a new car. The increase in activity appeared to be linked to the record market for new cars which passed 11.4 mln domestic and imported models last year because of the unprecedented cut-rate loan incentive packages offered by the Detroit-based automakers and changes in U.S. tax laws. The incentive campaigns were largely sparked by General Motors Corp <GM> in an attempt to reverse its slipping share of the American car market. Reuter | U.S. BOUGHT 16.5 MLN USED CARS, STUDY SAYS |
The Zambian government today announced minor price cuts for essential commodities as part of its new economic strategy while police and troops patrolled the northern Copperbelt to prevent any outbreaks of rioting. However staple foods such as bread sugar and maize meal were not affected by the cuts and many people said this could provoke trouble from disgruntled elements who had expected more sweeping reductions. Observers in the capital expressed disillusionment with the small extent of the price cuts which ranged up to 10 pct on items such as blankets soap detergents and baby food. Residents in the Copperbelt contacted by telephone said government forces had set up roadblocks around the main towns. In Lusaka business went on as usual and there was no sign of troops or police reinforcements on the streets. President Kaunda had ordered the price reductions to take account of lower import costs following the revaluation of the kwacha to a fixed rate of eight per dlr from 21 on May 1. The revaluation formed part of a new go-it-alone economic strategy which Kaunda adopted to replace Zambias IMF austerity program. Labour leaders in the Copperbelt said last week gangs of unemployed youths were being formed in the politically volatile region to take action against shops that did not reduce their prices after todays deadline. Fifteen people were killed in the Copperbelt during food riots last December after the government tried to lift maize subsidies. Reuter | ZAMBIA CUTS PRICES AS TROOPS PATROL COPPERBELT |
Canada Southern Petroleum Ltd said its board has authorized an offering of about three mln shares of limited voting stock to shareholders of record on June 23. The company said the rights offering will expire August Three. The rights are nontransferable. It said shareholders will be entitled to buy one new share for every three held at one dlr U.S. or 1.34 dlrs Canadian. Shareholders subscribing for their entire allotments will have the option of subscribing for shares not bought by others on a contingent allotment basis in any amount up to 100 pct of their original allotments. Reuter | CANADA SOUTHERN <CSW.TO> TO OFFER SHARES |
South Korea will cut import taxes on 50 goods including construction equipment cigarettes and tobacco to help reduce its trade surplus with the United States the Finance Ministry said today. The tariff cuts of between five and 30 pct will take effect on July 1. South Korea ran a trade surplus of 7.3 billion dlrs with Washington in 1986 sharply up from 4.3 billion in 1985. Todays announcement brings to 157 the number of goods for which similar measures were taken this year a ministry official said. The 157 are among about 290 items on which Washington has asked Seoul to lower tariffs. This is in line with the governments policy to limit our trade surplus with the United States to help reduce trade friction between the two countries said the official. Reuter | SEOUL ANNOUNCES MORE TARIFF CUTS FOR U.S. |
Chicago Mercantile Exchange floor traders and commission house representatives are guesstimating todays hog slaughter at about 275000 to 285000 head versus 12000 week ago and 276000 a year ago. Cattle slaughter is guesstimated at about 126000 to 132000 head versus 6000 week ago and 133000 a year ago. Note: week ago figures reduced by Memorial Day holiday. Reuter | HOG AND CATTLE SLAUGHTER GUESSTIMATES |
Entertainment Marketing Inc <EM> said it has made an offer to the board of Crazy Eddie Inc to acquire all outstanding shares of Crazy Eddie Inc for eight dlrs a share in cash. Entertainment said the offer would be conducted through a negotiated merger with a new corporation to be formed by Entertainment Marketing. Entertaiment said it has requested an early meeting with Crazy Eddie Incs board and that it has committed 50 mln dlrs toward the purchase of the shares including those already purchased. The company also said it has retained Dean Witter Reynolds Inc to assist in raising the balance of the financing. According to Entertainment its company and its chairman own about 4.3 pct of Crazy Eddies currently outstanding shares. Additionally the company said it is willing to negotiate all aspects of its offer and is willing to consider a transaction which would be tax free to Crazy Eddies shareholders. Reuter | ENTERTAINMENT MAKES BUYOUT OFFER TO CRAZY EDDIE |
SmithKline Beckman Corp said it and <Boehringer Mannheim GmbH> signed a final agreement to develop and market new cardiovascular medicines discovered by Boehringer. Under the agreement SmithKline said it will have responsibility for developing the products in the U.S. Both partners will market the products in the U.S. and abroad. Initially SmithKline said the companies will concentrate on the clinical development and marketing of carvedilol which is a compound to treat mild to moderate hypertension and angina. An application for marketing approval of carvedilol was submitted in West Germany last December SmithKline said. Applications expected in other European markets this year and submission to the U.S. Food and Drug Administration is projected for 1990. It said work also underway on thromboxane receptor antagonists compounds which could be useful in accelerating disolution of blood clots and preventing blod clots from occuring in a heart attack as well as in other arterial diseases. The company said two of these compounds are in clinical evaluation in Europe and the U.S. Reuter | SMITHKLINE <SKB>, BOEHRINGER FINALIZE PACT |
Occidental Petroleum Corp said the previously reported retirement of nine series of Natural Gas Pipeline Co of America debt will occur on July two. Retirement of the subsidiarys was announced by Occidental last week. It said notices of redeemptions and pre-payments will be mailed shortly to all registered holders. Reuter | OCCIDENTAL <OXY> SETS DEBT RETIREMENT DATE |
Indias state-owned Oil and Natural Gas Commission (ONGC) plans to drill more wells in the Bombay offshore area where a well spudded in February this year gave both oil and gas an ONGC spokesman said. The exploratory well spudded at a depth of 2140 metres yielded 2000 barrels of oil and 180000 cubic metres of gas per day he said. The well one of the four structures drilled in the area 80 km north-west of Bombay indicates good prospects of both oil and gas. Weve decided to drill at least three more wells in there before starting production on a commercial scale. Production of Bombay High part of the Bombay offshore field has stabilised at around 500000 barrels per day for the last two years. ONGC produced 27.85 mln tonnes of crude in 1986/87 ending March up from 27.51 the previous year. Bombay High accounted for 20.61 mln tonnes marginally up from 20.10 the year before. Indias total oil output is around 30 mln tonnes. ONGC has been exploring the Bombay offshore area developed since the late 1970s for more oil as production from Bombay High has reached a plateau. REUTER | INDIA PLANS MORE BOMBAY OFFSHORE OIL WELLS |
Town and Country Jewelry Manufacturing Corp said effective today its NASDAQ ticker symbol has been changed to <TCJCA.O> from <TJCA.O> Reuter | TOWN AND COUNTRY CHANGES NASDAQ SYMBOL |
Society for Savings Bancorp Inc said it has completed its previously announced plan of acquisition making a new Delaware-chartered bank holding company the parent of Conneticut chartered Society for Savings. Reuter | SOCIETY FOR SAVINGS <SOCS.O> FORMS PARENT |
Saudi Arabias renegotiation of its collective agreement with Aramco to purchase oil for the latters ex-partners is moving along and should lead to a fundamental structural change in the contract oil industry sources said. Petroleum Intelligence Weekly in this Mondays edition said negotiations are moving along for adjustment of the 1.34 mln bpd joint long term agreement at official prices and volumes and other terms may be rearranged. The agreement signed in January for the months from February to June is up for renegotiation. Under the January contract Aramco was to purchase 1.34 mln bpd for the four partners allocated among them as Exxon Corp <XON> 440000 bpd Texaco Inc <TX> 350000 bpd Mobil Corp <MOB> and Chevron Corp <CHV> 550000 bpd between them. But an overlifting by Texaco Inc in the first quarter allowed other companies like Exxon Corp to underlift its obligations under the contract PIW said that that one alternative under consideration is to revert to four individual contracts rather than a collective agrement. John Lichtblau director of the Petroleum Industry Research Foundation Inc said that renegotiation of the pact was more of a formality as the Saudis have each company on a separate schedule although separate agreements with the companies would favor one on one negotiations and ensure that contracted liftings occur . The companies will probably follow the Saudi wants within limits as they do not want to antagonize them for the long haul he said. Lichtblau said that the renegotiations would most likely concentrate on volume rather than price. Saudi displeasure with the agreement has long been noted and in April industry publications said that renegotiation were being sought a fact later confirmed by Reuters with Aramco. Aramco Corp was formerly owned by Chevron Corp <CHV> Exxon Corp <XON> Mobil Corp <MOB> and Texaco Inc <TX> but is now owned by Saudi Arabia which bought its assets although the ex-partners have various agreements with Saudi Arabia. Reuter | SAUDI RENEGOTIATION OF ARAMCO DEAL MOVING ALONG |
Schering-Plough Corp said its Elocon topical steroid for inflammatory skin disorders has been approved for marketing by the U.S. Food and Drug Administration in cream and ointment forms for once-daily applications. The company said overseas health agency registrations for Elocon are scheduled to be submitted in a number of major markets this year and in other areas in 1988. Reuter | SCHERING-PLOUGH <SGP> GETS FDA APPROVAL |
Residents of central Oklahoma returned to their homes over the weekend after a week of heavy rains and severe flooding that left two dead and caused more than 20 mln dlrs in damage officials said. Some 900 people were evacuated from their homes during the rains and flooding last week civil defense officials said. Many of the shelters set up throughout the state in areas threatened by flooding except those near the Washita and Red Rivers closed as residents returned to their damaged homes. Farmers who had expected a near-record wheat crop now say this year will see one of the largest losses in decades. Gov. Henry Bellmon who on Thursday declared a flooding emergency for central Oklahoma was expected to ask President Reagan for federal disaster relief for the area. In northern Texas officials reported several tornadoes on Friday. A twister in Lubbock yesterday damaged six mobile homes and two houses. No injuries were reported. Reuter | OKLAHOMA CLEANING UP AFTER WEEK OF FLOODS, RAINS |
The Chicago Board of Trade (CBT) has asked federal regulators for authority to trade a futures contract in long-term Japanese government bonds. The Commodity Futures Trading Commission (CFTC) said it has received an application from CBT for a contract comprised of yen bonds with a face value at maturity of 100 mln yen. The price of the proposed contract would be quoted in points per 100 yen par value with one point equal to one mln yen. The minimum price fluctuation would be 10000 yen per contract and the contract would have no daily price limits. CFTC has requested public comment on the proposal. Reuter | CBT PROPOSES JAPANESE GOVERNMENT BOND FUTURES |
The Bank of England said it provided the money market with late assistance of around 25 mln stg. This takes the Banks total help today to some 137 mln stg and compares with its latest forecast of a 150 mln stg shortage. REUTER | U.K. MONEY MARKET GIVEN 25 MLN STG LATE ASSISTANCE |
Pega Capital Resources Ltd <PGA.TO> said it agreed in principle to acquire a 50 pct undivided interest in all rights and patents to a tamper resistant and tamper-evident packaging process for 1250000 dlrs. The company said the purchase price is payable in 1250000 common shares priced at one dlr each. The shares will be paid under an escrow agreement where Pega may terminate the purchase agreement and cancel the shares up to October 31 1987. It said the process results in readily visible breakage if packaging material is pierced by a sharp object. Reuter | PEGA TO BUY STAKE IN TAMPER-PROOF PACKAGING |
U.S. APRIL CONSTRUCTION SPENDING ROSE 0.4 PCT AFTER REVISED 1.1 PCT MARCH DROP |
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Bausch and Lomb said it plans to launch a new line of soft contact lens care products in the United States. The company said the line will be marketed under the ReNu tradename and will involve fomulations which will enhance the convenience of contact lens cleaning and disinfecting. Bausch and Lomb said the two products which are scheduled for shipment in late July are ReNu Multi-Action Disinfecting Solution and ReNu Sterile Preserved Saline. According to the company the ReNu disinfecting solution is a single-step product for cold disinfection and the ReNu saline solution contains a new preservative with very low potential for eye irritation. The company said another product in this line ReNu Enzymatic Tablets was introduced in December. Additionally the company said patents are currently pending on all three ReNu products and that other solutions will be added to the ReNu line following Food and Drug Administration approval. Reuter | BAUSCH AND LOMB <BOL> ANNOUNCES NEW PRODUCTS |
U.S. construction spending rose 1.7 billion dlrs or 0.4 pct in April to a seasonally adjusted rate of 384.1 billion dlrs the Commerce Department said. Spending in March fell a revised 4.4 billion dlrs or 1.1 pct to 382.4 billion dlrs the department said. Previously it said spending fell 1.3 pct in March. April construction spending was 10.2 billion dlrs or 2.7 pct above the April 1986 level of 373.9 billion dlrs. Private construction spending rose to 307.9 billion dlrs in April from 306.0 billion dlrs the previous month and included a gain in single-family homes the department said. Spending on one-unit home construction rose to 113.1 billion dlrs from 111.5 billion dlrs while multi-unit spending edged down to 28.3 billion dlrs from 28.6 billion dlrs. Spending on nonresidential construction rose to 88.0 billion dlrs from 87.1 billion dlrs but outlays on office construction fell to 24.5 billion dlrs from 25.6 billion dlrs in March the department said. Reuter | U.S. CONSTRUCTION SPENDING ROSE 0.4 PCT IN APRIL |
Texaco Inc <QTX> said it will support the efforts of a Texas legislature joint committee which will study and propose remedies for problems with the procedural bond and lien rules of the Texas judiciary. The rules which require a defendant in a civil case to post a bond in the full amount of the judgment plus interest in order to exercise its right to appeal the judgment directly led to Texaco to file for protection under Chapter 11 of the Federal Bankruptcy Code Texaco said. Texaco said it was unfortunate that it took its bankruptcy to illustrate the need for reform. Texaco also said Pennzoil Cos <PZL> obstructive tactics prevented similar legislation earlier in the legislatures session which would have provided the trial judge in Texas flexibility to set the bond at a level appropriate to secure the interest of the judgment creditor based on the circumstances of the case. Under current law Texaco said it would have had to post the full 11.1 billion dlrs to exercise its right to appeal the judgment. Reuter | TEXACO <QTX> SUPPOPTS BOND AND LIEN RULES STUDY |
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