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LTV Corps LTV Steel Corp said it agreed to resume negotiations with the United Steelworkers of America at the local plant levels to discuss those provisions of its proposal that require local implementation. The local steelworker union narrowly rejected a tentative agreement with the company on May 14 it said. LTV also said it agreed to reopen its offer contained in the tentative agreement reached with the unions negotiating committee as part of a plan to resolve problems through local discussions. Reuter | LTV <QLTV> TO NEGOTIATE WITH STEELWORKERS |
Moodys Investors Service Inc said it affirmed about four billion dlrs of long-term debt of Middle South Utilities and nearly all of its units. Moodys cited the U.S. Supreme Courts stay of an adverse Misssissippi Supreme Court ruling for a Middle South unit Mississippi Power and Light Co. The approval of the stay may enhance Mississippi Powers prospects for a favorable judgment Moodys added. But Moodys said it will watch the situation closely because the stay depends on a bond posting that is satisfactory to the Mississippi Supreme Court. On May 26 the Mississippi Public Service Commission ordered Mississippi Power to stop collecting about 12 mln dlrs in monthly revenues from its Grand Gulf power plant Moodys pointed out. The Commission also wants Mississippi Power to submit a plan for refunding 190 mln dlrs of previously collected funds Moodys said. The first mortgage bonds and secured pollution control bonds of Mississippi Power Arkansas Power and Louisiana Power and Light Co were affirmed at Baa-1. Their preferred stock was affirmed at Baa-2. In addition Moodys affirmed Mississippi Powers Baa-2 unsecured pollution control debt. Reuter | MOODY'S AFFIRMS MIDDLE SOUTH <MSU> AND UNITS |
General Motors Corp said its May North American car production fell 26.3 pct to 328221 units from 445440 a year ago. The company said its May production of commercial vehicles (trucks and buses) rose 5.1 pct to 158444 from 150752 a year ago. Reuter | GM <GM> MAY CAR OUTPUT FALLS 26.3 PCT |
Ford Motor Co said its May North American car production rose 2.2 pct to 213790 from 209109 last year. The company said its May truck production eased 4.7 pct to 140696 from 147638 a year ago. Reuter | FORD <F> MAY CAR OUTPUT UP 2.2 PCT |
Westport Bank Corp Inc aid its board has declared a 2-for-1 stock split of Westports common and an increase in its quarterly cash dividend. The company said the split will be effective in the form of a 100 pct stock dividend on Westports outstanding common with a distribution date of July six to shareholders of record on June 12. The company said the pre-split quarterly cash dividend is 26 cts per share up from 25 cts the previous year to paid on July one to shareholders of record on June 12. Westport Bank said a quarterly dividend of 13 cts a share will be paid on shares outstanding after the 2-for-1 split. Reuter | WESTPORT BANK <WBT.O> SETS 2-FOR-1 SPLIT |
Shr 11 cts vs 21 cts Net 563000 vs 86300 Revs 28.8 mln vs 32.5 mln Avg shrs 5.0 mln vs 3.3 mln Reuter | CHARTER POWER SYSTEMS INC <CHP> 1ST QTR |
Financial Security Savings and Loan Association said it signed a letter of intent for a controlling interest to be acquired by an investor group led by South Florida developer William Landa. Terms were not disclosed. Reuter | FINANCIAL SECURITY <FSSLA.O> TO BE ACQUIRED |
E-Systems said it expects earnings for the second quarter will likely be below prior expectations due to a reduction in investment income and higher than expected costs on several power amplifier programs. The company said it does not expect to match the 52 cts a share net income reported for the second quarter last year. Reuter | E-SYSTEMS <ESY> SEES REDUCED SECOND QUARTER |
New York investor Asher Edelman and Dominion Textile Inc <DTX.T> who are currently seeking to acquire Burlington Industries Inc in a hostile tender offer said they lowered their stake in the company. In a filing with the Secruties and Exchange Commission the Edelman/Dominion group known as Samjens Acqusition Corp said it sold options to buy 258800 Burlington common shares reducing its stake in the company to 3408813 shares or 12.33 pct from 3667313 shares or 13.3 pct. The group said the sale which represented all the Burlington options it owned was made May 28 for 8.7 mln dlrs. The Edelman/Dominion group last week sweetened its hostile tender offer to 77 dlrs a share after Burlington agreed to a leveraged buyout by a Morgan Stanley and Co-backed group for 76 dlrs a share. But the Edelman/Dominion group which has litigation pending against Burlington also said it has held talks with Morgan Stanley about the possibility of settlement of outstanding matters among it Morgan Stanley and Burlington. Reuter | EDELMAN GROUP CUTS BURLINGTON <BUR> STAKE |
General Motors Corp said its May North American car production fell 26.3 pct to 328221 units from 445440 a year ago. The company said its May production of commercial vehicles (trucks and buses) rose 5.1 pct to 158444 from 150752 a year ago. Reuter | GM MAY CAR OUTPUT FALLS 26.3 PCT |
A quickly growing Texas-based distributor of electronics products offered 240 mln dlrs for Crazy Eddie Inc <crzy> the leading New York City electronics retailer or one dlr per share more than its founder has bid. The 8-dlr-a-share offer by Entertainment Marketing Inc <em> for Crazy Eddie comes less than two weeks after founder Eddie Antar and a firm controlled by the Belzbergs of Canada announced a bid to take the 32-store Crazy Eddie chain private. Analysts said Entertainment Marketing whose revenues and profits quadrupled in 1986 may be looking to break into the highly competitive New York City retail market for consumer electronics the nations biggest at a time the fortunes of electronics retailers have sagged. The analysts questioned whether Houston-based Entertainment Marketing founded by a former electronics retailer but whose present buinesses are primarily as wholesale distributors had the management expertise for retailing or was merely trying to drive up the price of the Crazy Eddie shares it already owns. I have mixed feelings said analyst Dennis Telzrow of Eppler Geurin and Turner a Dallas brokerage. On the one hand its probably a cheap price. On the other hand does Entertainment Marketing have the management talent to run it and will the Crazy Eddie people leave? Its a risky strategy for Entertainment Marketing said analyst Eliot Laurence of Wessels Arnold and Henderson a Minneapolis brokerage. Electronics retailing is very management concentrated; theyd want to keep Crazy Eddies management in place. Laurence said that since Entertainment Marketing already owns 4.3 percent of Crazy Eddies 31.3 million shares it may be trying to get the Antar-Belzberg group to increase its 7-dlr-a-share offer. Shares of Crazy Eddie which have jumped from the high 4-dlr range to above 7 dlrs since the Antar-Belzberg bid was announced May 20 rose another 50 cents Monday to 8.375 a share in over-the- counter trading. Antar the reclusive founder of the chain in the New York City Philadelphia and Connecticut areas said last month that his group controlled 14 percent of Crazy Eddies shares. A Crazy Eddie spokesman said the companys board has taken no decision on the Antar-Belzberg offer worth some 187 mln dlrs since they own more shares than Entertainment Marketing. He would not comment on the new offer. Entertainment Marketing sells computer products such as disk drives and other often discounted electronics goods to retailers primarily in the southwest and directly to consumers by cable television. In fiscal 1986 ending last January its revenues rose to 87.9 mln dlrs from 21.3 mln dlrs the previous year. Net profit went to 3.2 mln dlrs from 750000 dlrs in 1985. Entertainment Marketing whose chief executive officer Elias Zinn once ran an electronics retailing business said in a statement it had committed 50 mln dlrs toward the purchase of Crazy Eddie and had retained Dean Witter Reynolds Inc to assist in financing the balance. Analyst Telzerow estimated that the company would have to borrow about 100 mln dlrs to complete the proposed buyout since Crazy Eddie has cash and other assets worth about the same amount. Shares of Entertainment Marketing were up 12.5 cents Monday to 9.50. Reuter | ENTERTAINMENT MARKETING TOPS CRAZY EDDIE OFFER |
SECURITY PACIFIC TO ADD 500 MLN DLRS TO RESERVE FOR CREDIT LOSSES |
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The U.S. Defense Department said it has awarded contracts totaling 176.7 mln dlrs to Grumman Aerospace Corp <GQ> GEC Avionics Ltd General Dynamics Corp <GD> and Refinery Associates. The Pentagon said it has awarded Grumman Aerospace Corp a 50.9 mln dlr addition to an existing contract for 18 F-14A Tomcat fighter aircraft. It also said it has awarded General Dynamics Corp 50.1 mln dlrs for three contracts. General Dynamics Fort Worth Division was awarded a 41.3 mln dlrs in increase to existing contracts for foreign military sales of the F-16. General Dynamics Corps Electric Boat Division has been awarded an 8.8 mln dlr contract to provide logistics and training support requirements for the Trident Refit facility the Defense Department said. GEC Avionics Limited of Rochester England has been awarded a 35.4 mln dlr increase to an existing contract for 564 air data computer kits and 920 mounting hardware kits for aircraft the department said. Refinery Associates Inc has been awarded 40.3 mln dlr contract for 93.2 mln gallons of various fuel oils it said. Reuter | PENTAGON AWARDS 176.7 MLN DLRS IN CONTRACTS |
SECURITY PACIFIC EXPECTS 175 MLN DLR LOSS IN QTR AS RESULT OF LOSS PROVISION |
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The Home Insurance Co a unit of the Home Group Inc said it is not affected by a May 29 California court ruling that says 20 insurance companies must bear the costs of asbestos-injury claims. The company said it had reached a settlement agreement with five former asbestos manufacturers that it had insured prior to the Superior Court ruling that said insurers and not asbestos makers would have to pay the claims from the thousands of victims of asbestos-related illnesses. Home Insurance did not disclose the terms of the settlement. Home Insurance said it had provided excess coverage to Manville Corp <QMAN> Armstrong World Industries <ACK> <Fibreboard Inc> GAF Corp <GAF> and <Nicolet Inc>. Home Insurance said it had been negotiating for the past two years to reach a settlement with the five former asbestos manufacturers to establish the amount of coverage that Home Insurance would provide in the claims. The company said the settlement does not impact current or future earnings of the Home Insurance or its parent Home Group and that it will no longer offer insurance for asbestos-related incidents. Reuter | HOME <HME> SAYS IT IS NOT AFFECTED BY RULING |
President Amin Gemayel named Sunni Moslem Education Minister Selim Hoss as acting prime minister following the assassination of Premier Rashid Karami a presidential palace statement said. After consultations by President Amin Gemayel with political and religious leaders the president decided to name Selim Hoss as acting prime minister said the statement broadcast on local radio stations. Moslem leaders proposed Hoss a former premier as acting prime minister after Karami died of injuries from a bomb that exploded aboard his helicopter. Reuter | GEMAYEL NAMES ACTING PREMIER |
S/P AFFIRMS RATINGS ON SECURITY PACIFIC |
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Security Pacific Corp said it intends to add 500 mln dlrs to its provision for credit losses during the second quarter a move that will result in a loss for the period of about 175 mln dlrs. The company added however that it now expects to post a profit for the full year of about 150 mln dlrs. Security Pacific said the reserve is specifically related to its loans to the developing world. Security Pacific which has assets of about 64 billion dlrs reported 1986 net income of 385.9 mln dlrs. Last year it posted second quarter net income of 93.5 mln. In making the announcement Security Pacific said the extra 500 mln dlrs will raise its reserve for credit losses to about 1.3 billion dlrs or 2.8 pct of total loans and leases outstanding. It said the amount of reserves allocated to Lesser Developed Country (LDC) debt represents about one-third of the companys total LDC debt portfolio. A spokesman said the company currently has LDC debt exposure of about 1.8 billion dlrs. The companys total loan portfolio at March 31 stood at 44.4 billion dlrs. The Security Pacific move follows similar provisions by several other money center banks. Last month Citicorp <CCI> led the move by annoucing a three billion dlr addition to its reserve to help bolster its protection against uncertainties in the economic world. Chase Manhattan Corp <CMB> followed with a 1.6 billion dlr addition to its credit loss reserve. While our LDC debt exposure is relatively small we think that the LDC debt environment has been altered significantly given the recent actions of other major financial institutions Security Pacific chairman Richard Flamson said in a statement. Following its 500 mln dlr addition to the credit loss reserve its primary capital ratio at the end of the second quarter will be about 7.4 pct Security Pacific said. The company further stated that it anticipates continuing its current dividend payment at an annual rate of 1.80 dlrs per share. The company also stressed that it is not writing off loans to the developing world but rather adding to its reserves will allow greater flexibility when dealing with these credits in the future. Security Pacific also said it intends to play a continuing role in meeting the needs of those countries. Security Pacific is the nations sixth largest bank holding company. Reuter | SECURITY PACIFIC <SPC> ADDS 500 MLN TO RESERVE |
First Union Corp said it completed the acquisition of two Florida-based banks North Port Bank based in North Port and City Commerical Bank based in Sarasota. Reuter | FIRST UNION <FUNC.O> COMPLETES ACQUISITIONS |
4th qtr ended March 31. Shr loss 24 cts vs loss 19 cts Net loss 751900 vs loss 569000 Revs 497500 vs 811400 Year Shr loss 1.13 dlrs vs loss 70 cts Net loss 3472700 vs 1990300 Revs 2484100 vs 2498300 Reuter | CROP GENETICS INTERNATIONAL <CROP.O> 4TH QTR |
The investor group that has agreed to buy <Computerland Corp> will likely take the leading personal computer retailer public or sell it to other investors industry analysts said. Nows a good time said Joe Levy of International Data Corp. The personal computer industry has bottomed out and is on the way up again he said. Earlier today closely held Computerland the largest PC retailing chain in the country said it agreed to be bought by an investor group led by E.M. Warburg Pincus and Co New York. Neither Computerland which is 96 pct owned by its founder William H. Millard nor E.M. Warburg a money management and venture capital firm would disclose the value of the transaction. Analysts estimated that Computerland whose 800 stores generated 1.4 billion dlrs in sales last year would fetch 150 mln dlrs to 250 mln dlrs. Computerland franchise owners pay royalties averaging 5.9 pct to the parent company. Officials for E.M. Warburg referred all questions to Computerland. Computerland officials could not immediately be reached for comment. E.M. Warburg currently manages 1.5 billion dlrs in venture capital funds and its past investments have included Mattel Inc <MAT> and the Ingersoll newspaper chain. It is also a money manager with 3.5 billion dlrs under management. Although the PC retailers are benefitting from the strong upturn in PC sales analysts said Computerland must make key changes if it is to fend off advances from rivals like Businessland Inc <BUSL.O> and Tandy Corps <TAN> Radio Shack stores. The name of the game now is outbound sales forces customer service and customer support said Levy of International Data. Relations between Computerland and its franchise owners have mellowed recently after Millard was forced to give up managment control of the company in 1985. Ed Faber who took over as chairman and chief executive officer revamped the companys royalty plan which help quell much of the franchisee dissent. Reuter | INVESTORS MAY TAKE COMPUTERLAND PUBLIC |
Standard and Poors Corp said it affirmed Security Pacific Corps 4.5 billion dlrs of debt. S and P said that although the banks decision today to increase its reserve against developing country debt by 500 mln dlrs will result in a loss in the second quarter the firm still expects to report a profit for the year. Affirmed were Security Pacifics AA senior debt AA-minus subordinated debt and preferred stock and A-1-plus commercial paper. Also uninsured certificates of deposit of Security Pacific National Bank and Arizona Bank of Phoenix were affirmed at AA/A-1-plus. Reuter | S/P AFFIRMS RATINGS ON SECURITY PACIFIC <SPC> |
Digital Communications Associates Inc said it introduced four new personal computer communications products including equipment designed for the recently anounced International Business Machines Corp <IBM> personal system/2 and Apple Computer Incs <APPL.O> s Macintosh II and Macintosh SE computers. Reuter | DIGITAL COMMUNICATIONS <DCAI> INTRODUCES ITEMS |
United Park City Mines Co said it had a full and complete subscription to all of the 5400731 shares ot its common stock offered in connection with its recent rights offering. It said it will issue 4892153 shares of its common under the basic subscription right and 508578 shares of its common under the oversubscription privilege. It said it will also receive 2.7 mln dlrs in proceeds from the offering. Reuter | UNITED PARK <RPK> HAS FULL SUBSCRIPTION |
Ladd Furniture Incs Clayton-Marcus Furniture subsidiary said it completed the previously announced purchase of privately-held Colony House Furniture Inc for an undisclosed amount of cash and notes. Reuter | LADD <LADD.O> UNIT COMPLETES ACQUISITION |
Hycor Biomedical Inc said it was forming a unit Hycor Instruments Inc to distribute a line of chemistry analyzers made by <JEOL Ltd> of Japan. The product called a clinalyzer is an automated blood analyzer capable of providing diagnostic and other tests for hospitals and clinics the company said. The company also said it has discussed distributing other products made by JEOL. Reuter | HYCOR BIO <HYBD.O> FORMS UNIT TO SELL PRODUCT |
General Motors of Canada Ltd said it will close its Montreal truck centre August 31 due to low sales volume putting most of the centres 131 employees out of work. The sales volume at the centre has been insufficient to support the operation the company said in a statement. With the recently announced joint venture with Volvo to supply the heavy-duty truck market customer requirements for the GM line of light and medium duty trucks will be better satisfied by GM dealers located throughout Quebec the company said. General Motors Canada said it will provide 52 weeks of layoff benefits for most employees and up to 104 weeks for some senior employees. Reuter | GENERAL MOTORS (GM) CANADA TO CLOSE TRUCK CENTRE |
International Thomson Organization Ltd said it planned an issue in all of Canada except Quebec of two mln 1.85 dlr cumulative redeemable retractable series one preferred shares. It said that underwriters McLeod Young Weir Ltd and Wood Gundy Inc agreed to acquire the issue at 25.568 dlrs a share with yield to retraction on October 15 1991 of 7-1/8 pct a year. The company said it also agreed to sell to the two underwriters two mln 1.84375 dlr series four cumulative redeemable retractable preferred shares which will be resold privately. Reuter | INTL THOMSON <ITO.TO> PLANS PREFERRED ISSUE |
CIS Technologies Inc said that it and the Swiss Reinsurance Co of Zurich Switzerland agreed to a second extension of two dates for the final part of their share purchase agreement. It said the June one election date has been extended to June 15 and the June 30 closing date has been changed to July 31. Reuter | CIS <CISIF.O> AGREES TO SECOND EXTENSION |
Elsinore Corp said it deposited five mln dlrs to cover accrued and unpaid interest through June 30 of the 15-1/2 pct senior mortgage bonds of 1999 of its unit Elsinore Finance Corp. Elsinore has guaranteed the payment of its units bonds. The parent deposited the five mln dlrs with Elsinore Finances trustee Manufacturers Hanover Trust Co it said. Reuter | ELSINORE <ELS> MAKES DEPOSIT TO COVER BONDS |
The Palo Verde Unit 1 nuclear power plant returned to service today following an automatic shutdown early Saturday morning the Arizona Nuclear Power Project said. The shutdown came during a weekly test of feedwater pumps leading to the steam generators on the non-nuclear side of the plant a Power Project spokesman said. A defective electrical relay caused a feedwater pump to stop operating leading to an automatic shutdown of the plant he said. Palo Verde Unit 1 was restarted Sunday following repairs and surveillance testing. Unit 1 was operating at 40 pct power Monday and is expected to return to full power about 1300 megawatts Tuesday the spokesman said. Palo Verde Unit 2 continues to operate at full power generating 1347 gross megawatts he said. The Arizona Nuclear Power Project is a consortium including AZP Groups <AZP> Arizona Public Service El Paso Electric <ELPA> Public Service of New Mexico <PNM> and Southern California Edison <SCE>. Reuter | ARIZONA NUCLEAR PLANT RESTARTED AFTER SHUTDOWN |
Waste Management Inc said its directors approved a May 10 accord with Modulaire Industries <MODX.O> under which Waste Management would acquire Modulaire. Under the agreement Modulaire stockholders would receive 16 dlrs in Waste Management stock for each Modulaire share. Modulaire has scheduled a special shareholders meeting for July 15 to vote on the merger. Waste Management said it has received proxies from holders of 49.6 pct of Modulaires common stock that could be voted in favor of the merger. The Hart-Scott-Roding waiting period on the takeover will expire June 17. Reuter | WASTE MANAGEMENT <WMX> BOARD OKAYS MODULAIRE BUY |
Security Pacific Corp said it intends to add 500 mln dlrs to its provision for credit losses during the second quarter a move that will result in a loss for the period of about 175 mln dlrs. The company added however that it now expects to post a profit for the full year of about 150 mln dlrs. Security Pacific said the reserve is specifically related to its loans to the developing world. Security Pacific which has assets of about 64 billion dlrs reported 1986 net income of 385.9 mln dlrs. Last year it posted second quarter net income of 93.5 mln. In making the announcement Security Pacific said the extra 500 mln dlrs will raise its reserve for credit losses to about 1.3 billion dlrs or 2.8 pct of total loans and leases outstanding. It said the amount of reserves allocated to Lesser Developed Country (LDC) debt represents about one-third of the companys total LDC debt portfolio. Reuter | SECURITY PACIFIC <SPC> ADDS 500 MLN TO RESERVE |
Boeing Co is attempting to recreate money-losing de Havilland Aircraft of Canada Ltd in its own image. But it is a process that will be complex and because the company was in worse shape than expected time-consuming according to de Havilland president Ron Woodard. Yet Woodard a former Boeing executive believes the makeover is absolutely essential to revitalize the historic company Boeing bought from the Canadian government a year ago. These are very complex deep problems that you dont change overnight Woodard told Reuters in an interview as he outlined his vision of transforming de Havilland into a diversified manufacturer and an important cog in Boeings worldwide operations. Weve got to get our house in order. Weve got to get lots of Boeing (sub-contract) work in here and weve got to get Boeings systems in here and just get to be part of the worldwide support system. But based on de Havillands turbulent flight path in recent years the task will also not be easy. Formed in 1928 as an offshoot of the British operation started by Geoffrey de Havilland the company has turned out a variety of small aircraft. During World War II it produced the unique wooden Mosquito bomber for the Allied Command. In the postwar years that de Havilland became renowned internationally for its rugged bush planes. Canadas Liberal government interested in developing de Havillands STOL (Short Take Off and Landing) technology acquired the firm in 1974 and poured 830 mln Canadian dlrs into it over a dozen years helping to develop the 50-seat Dash 7 and 39-seat Dash 8 commuter aircraft. Amid accusations of a sellout the pro-business Conservative government sold the company to Boeing in 1986 for 90 mln Canadian dlrs or less than the price of one of Boeings 747s. Woodard believes de Havilland which has not made a profit since 1982 suffered from neglect under government control. It was also in worse condition than anticipated and the company has approached Ottawa for compensation for what it believes were unexpected shortcomings at the plant. We found to our shock to our surprise last August we had very serious health and safety regulation violations said Woodard. Although he would not divulge how much is being sought Woodard said it would be in excess of the 10 mln Canadian dlrs already spent on replacing the plants outmoded ventilation system. Yet Woodard is optimistic that once Boeings manufacturing systems are in place the company can begin delivering planes on time and at a profit -- possibly within a year and a half. Weve got a great product and if we can get everyone heading the same way were just going to eat the rest of the world Woodard predicted. Company officials said production of the 6-mln-U.S.-dlr Dash 8 has been doubled to four a month and they hope to reach six a month by year end. Some 63 Dash 8s are on order and there are options for the purchase of another 27. For the brand new stretch or extended version of the plane 23 have been ordered and 11 are under option. Woodard said that while de Havilland has a commanding grip on the North American commuter market which has been booming under airline deregulation the company has only a 30 pct market share worldwide. Id like to see us make some overseas penetrations. There are a lot of places now where people are starting to deregulate. I think the next big big growth area is probably Europe he said. De Havilland now has 5500 employees up from 4300 when Boeing bought the company. All manufacturing is located at its Downsview Airport site in Toronto. Reuter | BOEING <BA> RESHAPING DE HAVILLAND IN OWN IMAGE |
U.S. District Court Judge Eugene A. Gordon said he plans to issue a decision tomorrow on Burlington Industries Incs request for an injunction to stop Samjens Acquisition Corps takeover bid for the company. Wall Street sources have said the outcome of the case could be pivotal in determining the winner in the fierce takeover battle for Burlington the largest u.s. textile maker. Gordon presided over six hours of argument today by lawyers for Burlington and Samjens a partnership formed by Dominion Textile Inc and New York investor Asher Edelman. Hearings are scheduled to continue tomorrow. A preliminary injunction would hold up Samjens 2.47 billion dlr offer until the case is decided. Burlington had previously agreed to a 2.44 billion dlr buyout from Morgan Stanley Group Inc <MS> one dlr per share lower than a sweetened 77 dlr per share bid made by Samjens last week. Burlington has not responded to the new Samjens offer. Burlington has alleged in its lawsuit that Edelman and Dominion used illegally obtained confidential information about the company in making their takeover attempt. That information Burlington said was provided by James Ammeen a former Burlington executive through PaineWebber Group Inc <PWJ>. Ammeen who had worked for Burlington for 23 years had as many as 12 divisions with 50 pct of Burlingtons sales reporting to him. When he left Burlington in November 1985 Burlington said he signed a contract promising never to divulge inside information about the company. Burlington lawyers said shortly after he left he began working with a PaineWebber employee on a hostile plan to takeover the company dismember the company and displace its management Burlington lawyer Hubert Humphrey said. Samjens lawyers acknowledged it received information from PaineWebber but argued the information was public information and could be obtained either from texitle industry analysts or Burlingtons public financial statements. Burlington lawyers said PaineWebber and Ammeen met with Edelman and Dominion in November and continued to meet with them until a couple of days before Edelman and Dominion went public April 24 with their intention to take over the company. Burlington lawyers claim Dominions board decided to attempt a takeover of Burlington after Ammeen met with the board in February. Burlington lawyers said Edelman and Dominion held discussions with PaineWebber and Ammeen about acting as financial advisers to Samjens. But they allege talks broke off because Painewebber and Ammeen could not satisfy Edelman and dominion with a written statement that they did not provide inside information. Lawyers for Samjens contended that Painewebber and Ammeen withdrew as potential advisers because Burlington chairman Frank Greenberg had called a PaineWebber executive and threatened legal action if PaineWebber got involved in an effort to takeover Burlilgnton. The ultimate question is not the price per share or the profit but rather the permissable standards of conduct for those who would takeover an American company said burlington lawyer Humphrey. Burlington lawyers also contended that Burlington as the largest manufacturer of denim in the United States would be in violation of anti-trust laws if it acquired Dominion Canadas largest textile maker. Dominion has denim manufacturing plants in Georgia which would reduce competition in the denim market the lawyers said. Samjens lawyers discounted the concern. They said the market for denim is more fragmented than Burlington contends and that Burlington has the ability to switch between light weight and heavy weight denim production as demand and price dictate. Samjens lawyers also pointed to a lawsuit filed by Burlington in Canada in which it said it was considering a bid for Dominion. Surely what would have been sauce for the goose would have been sauce for the gander said Sidney Rosdeitcher a Samjens lawyer. Reuter | BURLINGTON <BUR> HEARING TO CONTINUE TOMORROW |
A tender offer of Asher Edelman and Dominion Textile Ltd <DTX.TO> for Burlington Idustries Inc is not affected by the investors sale of options to buy Burlington stock according to an associate of Edelman. Noting that our tender offer is definitely in place the aide said the investors are prohibited by Securities and Exchange Commission regulations from exercising options as long as a tender offer is open. The options are due to expire at the end of June. He said the May 28 sale of options to buy 258800 Burlington shares was thus a non-event. Reuter | EDELMAN DETAILS BURLINGTON <BUR> OPTIONS SALE |
Business leaders confidence in the U.S. economy has improved slightly but many top executives express concern about prospects for the second half of this year the Conference Board said. The boards measure of business confidence closed at 55 in the 1987 first quarter up from 51 in the 1986 fourth quarter. However the Board said virtually all of the gain reflected optimism about current conditions rather than prospects for the last half of 1987. The survey covers over 1000 chief executives and other top-level executives representing a wide cross section of business. Reuter | CONFERENCE BOARD FINDS US BUSINESS CONFIDENCE UP |
Continental Materials Corp said its directors decided not to give further consideration to business combination proposed by a stockholder group that holds 5.2 pct of Continental Materials stock. Continental Materials said the offer had been received from Continental Associates a group of St. Louis businessmen. According to Continental Materials the group said May 11 it might boost its stake in Continental Materials. But the group also said in a letter last week to the company that the group had no financing. The board did not consider it an official offer a Continental Materials spokeswoman said. Reuter | CONT'L MATERIALS <CUO> ENDS CONSIDERATION OF BID |
Ameribanc Investors Group and Cardinal Savings and Loan Association jointly announced that the proposed acquisition of Cardinal by Ameribanc has been terminated by mutual agreement. Reuter | AMERIBANC <AINV.O>, CARDINAL END ACQUISITION |
Darius Keaton 63 former director of Santa Fe International Corp was sentenced to two months in jail and fined 11000 dlrs for trading the companys stock on insider knowledge of its 1981 two-billion-dlr takeover. Keaton who was sentenced in Manhattan Federal Court pleaded guilty to wire fraud and failing to report to the Securities and Exchange Commission that he used his inside knowledge of a takeover by Kuwait Petroleum to buy shares of Santa Fes stock before the takeover was disclosed. Keaton must also serve 1000 hours of community service after which he will be placed on probation for five years. Reuter | FORMER SANTA FE DIRECTOR SENTENCED AND FINED |
Presidential Airways Inc said its load factor for April was 43.8 pct compared with 44.6 pct in the year-ago period. The airline also said its revenue passenger miles were 53.2 mln compared with 30.9 mln in April 1986 and available seat miles increased to 119.3 mln compared to 70.7 mln. Presidential also reported that for the first quarter it had a loss of 72 cts a share compared with a loss of 98 cts a share in the year-ago quarter. Revenues were 20.6 mln dlrs compared with 11.8 mln dlrs in the year-ago period. Reuter | PRESIDENTIAL <PAIR.O> APRIL LOAD FACTOR DROPS |
Venezuela has obtained more than 300 mln dlrs in financing for industrial projects and increased its lines of credit for import financing finance minister Manuel Azpurua said. We can say that we are achieving the recuperation of credit but that cannot be done overnight Azpurua said in a television interview. He said a credit agreement for 100 mln marks will be signed this week with the German state bank Kreditanstalt fur Wiederaufbau (KFW) to finance an expansion of the state aluminum company Venalum. The credit will be divided into two separate agreements one for 85 mln marks with an interest rate of 6.13 pct and another for 15 mln marks at 6.20 pct. Azpurua said financing has also been obtained for expansion of Alcasa another state aluminum company and for projects in the state steel and petrochemical industries. Yesterday he said Venezuela obtained two new credits of 5.0 mln dlrs each for export financing one from Credit du Nord of France and the other from Britains Midland Bank. The Venezuelan government has been criticised at home for failing to obtain new credits despite its insistence on repaying foreign debt according to the terms of a rescheduling accord reached last February. Azpurua recently visited Tokyo hoping to acquire new credits for industrial expansions but clinched no agreements. Japanese officials refused to allow a new issue of Venezuelan bonds until the country regains its Triple A credit rating. Reuter | VENEZUELA GETS 300 MLN DLRS CREDIT FOR ALUMINUM |
The dollars recent signs of stability have raised hopes that its 27-month decline may be nearly over but most currency analysts refuse to commit themselves until after the June 12 release of U.S. trade data for April. The trade data will be a deciding factor to see if the dollar has bottomed out said Jim McGroarty of Discount Corp. Since February 1985 the dollar has nearly halved its value against the yen and the mark as part of an officially orchestrated campaign to make U.S. goods more competitive on world markets and redress gaping world trade imbalances. On April 27 the dollar fell to a 40-year low of 137.25 yen but has enjoyed a modest recovery over the last few weeks topping 145 yen today for the first time in nearly two months. Many economists now believe that the dollar has fallen far enough to ease the trade deficits drag on the U.S. economy. The U.S. trade gap narrowed to 13.6 billion dlrs in March from 15.1 billion in February and is expected to show continued improvement in April in volume if not in real terms. Keiichi Udagawa of Bank of Tokyo in New York said that if further progress is reported the dollar would head back up towards 150 yen. There is growing consensus that the dollar has bottomed out for the medium term added Tom Campbell of First National Bank of Chicago. Other factors supporting this bullish view were growing expectations that Federal Reserve Chairman Paul Volcker would be reappointed for a third four-year term in August Japans larger-than-expected economic stimulus package last week and more favorably technical chart signals analysts said. The dollar was also aided by Japans moves to dampen speculative selling in Tokyo and by reports of active central bank intervention to support the dollar. The Federal Reserve Bank of New York said last week that the U.S. monetary authorities bought more than four billion dlrs during the February-April period -- the largest amount since the dollar crisis of the late 1970s. Discount Corps McGroarty described the Feds intervention volume as impressive. James ONeill of Marine Midland Bank was not so positive however: the dollar has not yet bottomed out. After the trade data are released the dollar could fall towards 1.77 marks and 140 yen. Similarly Natsuo Okada of Sumitomo Bank in New York warned I dont think the dollar has bottomed out yet. Although the dollar could rise as high as 146.50 yen Okada said market impatience about the painstakingly slow decline of the U.S. trade deficit may lead to renewed pressure. Currency analysts also warned about an unfavorable reaction to the seven-nation economic Summit on June 8 to 10 in Venice which is likely to focus on the implementation of previous commitments rather than yield any fresh initiatives. President Reagan said today economic policy decisions made last year in Tokyo and at this years meetings of Group of Seven finance ministers in Paris and Washington cannot be ignored or forgotten. The commitments made at these meetings need to be translated into action he added in a speech celebrating the 40th anniversary of the Marshall aid plan for Europe. Now that Tokyo has unveiled its fiscal stimulus package analysts expected Bonn and the dollar/mark rate to bear the brunt of U.S. calls for further action. Marine Midlands ONeill said pressure will build up on Germany to take stimulative action like Japan. Some Japanese bank dealers warned that although the dollar could hold above 145 yen for some months it could also come under attack again if it seems the latest economic package is not having much impact on Japans economy and its trade surplus. Reflecting a longer-term uncertainty some some trust banks and Japanese insurers are keeping their short dollar positons hedged against exchange losses in their foreign portfolios while some others have started covering those short positions Japanese bank dealers said. Reuter | U.S. TRADE DATA SEEN AS KEY TO DOLLAR TREND |
Bank Building and Equipment Corp of America said the Delaware Chancery Court denied a stockholders request for a preliminary injunction against an offer for Bank Building stock made by the company and its employee stock ownership plan and trust. Bank Building said the joint offer is for 780300 shares of Bank Building stock at 14 dlrs a share. The offer is scheduled to expire midnight (EDT) on June 2. Bank Building also said its board set July 30 as the date of the companys annual meeting with a record date of July six. Reuter | COURT UPHOLDS BANK BUILDING <BB> SELF-TENDER |
Holders of convertible subordinated debentures of Harcourt Brace Jovanovich Inc threatened to sue the company if they do not get more information about how their investment will be affected by the companys proposed recapitalization plan. The holders none of whom was willing to be identified said although Harcourt has urged that they convert their shares to common stock by the June eight record date for a special dividend they were unable to determine if it might be better for them to continue holding the debentures. There are rumors that various houses will bring litigation if we dont get answers said a Wall Street source. Officials of Harcourt declined to comment citing a suit brought by British publisher Robert Maxwell whose has been trying to acquire Harcourt. Executives of First Boston Inc Harcourts financial adviser did not return a telephone call seeking comment. When it announced its recapitalization May 26 Harcourt advised holders of the 6-3/8 pct convertible subordinated debentures due 2011 to convert into common by the June eight record date for the companys special dividend. Harcourts special dividend pays 40 dlrs per share in cash plus a security worth 10 dlrs. Holders would also retain stock in the recapitalized firm. The debentures had been convertible at 34 dlrs per share. Harcourts May 26 announcement said the conversion price would be adjusted according to the indenture covering the securities. Arbitrageurs said the conversion formula yielded a negative number and thus they needed further information from the company. Reuter | HARCOURT <HBJ> DEBENTURES MAY TRIGGER SUIT |
venezuela has obtained more than 300 mln dlrs in financing for industrial projects and has also increased its lines of credit for import financing finance minister manuel azpurua said. we can say that we are achieving the recuperation of credit but that cannot be done overnight azpurua said in a television interview. Azpurua said a credit agreement for 100 mln marks will be signed this week with the german state bank kreditanstalt fur wiederaufbau (kfw) to finance an expansion of the state aluminum company venalum. The credit will be divided into two separate agreements one for 85 mln marks with an interest rate of 6.13 pct and another for 15 mln marks at 6.20 pct. Azpurua said financing had also been obtained for the expansion of alcasa another state aluminum company as well as for projects in the state steel and petrochemical industries. He did not provide details. Yesterday after a meeting of leaders of the ruling accion democratica party azpurua said venezuela had obtained two new credits of five mln dlrs each for export financing one from credit du nord of france and the other from the midland bank of great britain. The finance ministers statements came as the government is under sharp criticism for failing to obtain new credits despite its insistence on repaying the foreign debt according to the terms of a rescheduling accord reached last february. Azpurua and other senior economic officals returned from a trip to tokyo last week in which they hoped to acquire new credits for industrial expansions but no agreements were reached. Japanese officials also refused to allow a new issue of venezuelan debt bonds because until the country regains its triple a credit classification. Reuter | VENEZUELA OBTAINED 300 MILLION DLRS IN CREDITS |
South Korea has increased its duty on crude oil imports to 4.29 dlrs a barrel from 3.29 dlrs effective today the energy ministry said. The duty to raise funds for special energy projects was adjusted after average crude import prices rose to 16.85 dlrs a barrel in April from 16.65 dlrs in March and 13.08 dlrs in April 1986 ministry officials said. A separate 24.5 pct import tax on crude oil is unchanged. REUTER | SOUTH KOREA INCREASES DUTY ON CRUDE IMPORTS |
<Equiticorp Tasman Ltd> (ETL) said it will offer 4.15 dlrs a share cash for all the issued capital of Monier Ltd <MNRA.S> currently the subject of a 3.80 dlrs a share bid by CSR Ltd <CSRA.S>. Alternatively ETL will offer three shares plus 82 cents cash for each Monier share it said in a statement. As previously reported ETL moved into the market for Monier shares last week taking its stake to 13.7 pct by Friday. It now holds 14.99 pct the maximum allowed without Foreign Investment Review Board (FIRB) approval. ETL is classified as foreign because of its New Zealand base. The ETL cash offer values Moniers issued capital of 156.28 mln shares at 649 mln dlrs against 593 mln for the CSR bid. Based on the current price of ETL shares of 1.05 dlrs the alternative is worth 3.97 dlrs per share but ETL said the value placed on its shares for the offer aproximates to the diluted asset backing of ETL as at March 31. ETL said the offer will have no minimum acceptance conditions and will be subject to Australian foreign investment and U.S. Hart-Scott-Rodino anti-trust clearances. ETL chairman Allan Hawkins said in the statement that the shareholding in Monier was a long term investment. ETL and its <Feltex International Ltd> associate have targetted the building products sector as an area of expansion and Monier fits well with this aim he added. Monier chairman Bill Locke said in a separate statement that the independent directors of Monier intend to recommend acceptance of the ETL bid in the absence of a higher bid. He also said Monier will not now proceed with the one-for-two bonus issue announced with its interim results on March 19 in view of the proposed takeover bids. As previously reported the CSR offer involves a complex put and call option deal with Moniers major shareholder Redland Plc <RDLD.L> which gives Redland the choice of accepting the CSR offer for its 49.8 pct stake or moving to 50.1 pct within six months of the bid closing. CSR officials have made it clear that they see Redland taking the second option resulting in the two companies running Monier as a joint venture. CSR officials have also said they had no intention of raising the companys bid for Monier after ETLs intervention became public last week. REUTER | EQUITICORP TASMAN TO BID FOR MONIER LTD |
Venezuelas central bank has ordered Venezuelan banks and exchange houses to cease foreign exchange operations with brokers based outside the country according to a copy of a central bank telex made available to Reuters. The measure confirmed by a brokerage firm here has effectively cut off all foreign participation in Venezuelas volatile currency market. The telex issued on May 19 was signed by Carlos Hernandez Delfino manager of the banks department of international operations. The telex said the restriction on business with foreign brokers is in line with an earlier measure prohibiting foreign exchange houses from selling dollars or other foreign currencies to anyone living outside Venezuela. In recent weeks the Venezuelan government has denied rumours that it intends to impose foreign exchange controls to prop up the weakening bolivar. But brokers said the central banks move is seen as a de facto currency control. It is definitely a control in the sense that theres no longer complete freedom to operate one broker here said. Gradually theyre imposing restrictions and the direction is towards complete control the broker said. The broker who requested anonymity said virtually all his Venezuelan customers had stopped doing business with him since the central bank issued the telex and followed it up with telephone calls. He said that before the restriction was imposed the volume of his firms transactions with Venezuela was about 10 mln dlrs a day. It was a frenetic market it was really quite active he said. The broker said he saw no logical explanation for the prohibition because his firm only acted act as an intermediary between Venezuelan brokers exchange houses and banks. We werent buying dollars from Venezuelans thats ridiculous he said. Theyve been on a rampage against foreigners. The broker noted that two months ago Venezuelas central bank quietly announced that banks doing foreign exchange business outside Venezuela would have to respect a new 200 pct reserve requirement. In February the central bank also prohibited trading in bolivar futures the broker said. We used to have a forward market he said. For a small currency it was miraculous. He said the bolivar which averaged 20.29 to the U.S. Dollar in 1986 would continue to slip from its current range of 28.35 to 28.50 because the central bank was rapidly running out of foreign reserves to support the currency on the free market. REUTER | VENEZUELA TIGHTENS FOREIGN EXCHANGE RESTRICTIONS |
Esso Singapore Pte Ltd said it raised pump prices of petrol from today. New prices for 0.15 gm lead grades are 97.0 cents/litre for 97 octane and 90.8 cents for 95 octane. Other Singapore oil companies announced yesterday that they would revise their pump prices effective today. Shell Eastern Petroleum Pte Ltd Mobil Oil Singapore Pte Ltd Caltex Asia Ltd Singapore Petroleum Co Pte Ltd and BP Singapore Pte Ltd are pricing 97 octane at 96.8 cents. Shell Mobil and Caltex are pricing 92 octane at 90.2 cents and SPC and BP at 90.6 cents. REUTER | ESSO RAISES SINGAPORE PETROL PUMP PRICES |
Forest fires in north-east China had flared again threatening settlements and virgin forests so far untouched by the blaze the official press said. The New China News Agency said eight new fires had been discovered in the Inner Mongolia region and were rapidly spreading north and west. It said rain forecast for the region was expected to help contain them. The China Daily said fires near the town of Tahe to the east had re-kindled and were moving towards nearby logging camps. Soldiers have been called in to fight the blaze. The fires which began on May 6 have killed 191 people. REUTER | CHINA FOREST FIRES FLARE AGAIN |
South Korea raised its pre-tax ex-factory naphtha price to 104.21 won per litre from 103.97 won effective today energy ministry officials said. REUTER | SOUTH KOREA RAISES NAPHTHA PRICE |
Tokyo - Bundesbank's Schlesinger sees no reason to lower interest rates |
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Tokyo-West German economy contracted 1/2 to one pct in 1st qtr - Schlesinger |
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Bundesbank vice president Helmut Schlesinger said he saw no reason to lower interest rates now. With money supply growth showing no sign of slowing down in May and the dollar stable or even rising against the mark Schlesinger told Reuters that he was not convinced that a further cut in interest rates was needed. The economy is picking up after contracting by a seasonally adjusted 1/2 to one pct in the first quarter from the fourth he added. We may have an increase in gnp starting in the second quarter he said in an interview. Concerned by the first quarter downturn the U.S. Has been pressing West Germany to pump up its economy and boost its imports either through fiscal or monetary policy. Schlesinger said the contraction in the first quarter was mainly due to adverse weather conditions just as occured in 1986. Year-on-year growth was thus about two pct. He estimated that economic growth for the year as a whole would probably be between one and two pct. It is not a question of monetary conditions if domestic demand does not grow strongly he said noting that interest rates are at historically low levels and funds are ample. Schlesinger said he saw no signs that central bank money stock growth was slowing down from its recent year-on-year pace of 7-1/2 to eight pct well above the Bundesbanks three to six pct target. He said the target could still be achieved but much will depend on the direction of long-term capital flows. Heavy inflows particularly in January around the time of the EMS revaluation boosted domestic money supply. There is still a certain hope that the net inflow of foreign money can be diminished or can even be a little bit reversed Schlesinger said. A major reason for the inflows was the markets conviction that the mark was headed higher. As we can see from the market expectations for a further revaluation of the deutschemark have diminished Schlesinger said. The recent widening of interest rate differentials the fact that the dollar has fallen sharply in a very short period and an improvement in real trade balances have all combined towards stabilizing the dollar he said. Asked if central banks might act to prevent a sharp dollar rise as the U.S. Did in March when the dollar rose above 1.87 marks he said this would depend on the circumstances. At midday here the dollar stood at 1.8340/45 marks. Central banks are always in contact about these fluctuations but I cannot give any answer how they would react Schelsinger said. One has to look at how it (the market) is moving he said adding It is not only our own case it is also the American case. He said that the West German export industry has been hit hard by the dollars sharp fall and would probably like to see some correction now. But it wouldnt be good to have short-term fluctuations he said. Let us wait and see. It is mainly the strength of the (dollar) fall in a very short period which was a little bit of a shock than the level (of rates) as such Schlesinger said. The sharp rise of the mark coupled with weak prices of such key commodities as oil had a favourable impact on West German inflation down year. Although there have recently been signs of inflation picking up he said that this was due to changes in key commodity prices. The underlying inflation rate this year would be unchanged at about one to 1-1/2 pct he said. Schlesinger said the problem of rapid money supply growth was longer term in that the economy was building up the potential for a possible eventual resurgence of inflation. The above-target growth of money supply over the past 16 months had prompted some discussion of the usefulness of targets themselves a matter which might be taken up at the mid-year meeting of the Bundesbanks council Schlesigner said. But he added: I dont see any great pressure to go away from it. REUTER | NO REASON TO CUT RATES - BUNDESBANK'S SCHLESINGER |
Nixdorf Computer AG <NIXG.F> plans a sharp expansion of its activities in the United States deputy management board chairman Arno Bohn said. He told a news conference that in the medium term Nixdorf wanted to raise its U.S. Turnover to one billion marks from a current 300 mln and aimed to employ some 5000 people in its U.S. Operations compared with 1300 now. Nixdorfs world group turnover was 4.50 billion marks in 1986. Bohn said a major order last year from a U.S. Retailer was a decisive element behind current plans for expansion. Retail chain Montgomery Ward and Co Inc a unit of Mobil Corp <MOB> awarded a 100 mln dlr order to Nixdorf in July last year for point-of-sales computer terminals. Bohn said that by 1990 there should be a total 15000 cash terminals and 500 computer terminals in place in all of the 290 stores of Montgomery Ward. Nixdorf has said previously that more important than the supply of the hardware for these systems is the fact that Nixdorf is also providing the relevant software. REUTER | NIXDORF PLANS TO EXPAND U.S. BUSINESS |
Fujitsu Ltd group net profit 21.61 billion yen vs 38.93 billion (year to Mar 31) |
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Deregulation of Japans oil industry could mean hardship for smaller firms and lead to their merging into bigger refining and marketing groups industry sources said. They said the relaxation of controls was now under review by the Petroleum Council an advisory panel to the Ministry of International Trade and Industry (MITI). A spokesman for a major firm said Deregulation would bring about a reorganization. If its a by-product of freer competition we have no choice but to accept it. The Council is due to close its discussions on June 12. The sources said the Council was likely to tell MITI it should end its 50 year-old protection of the industry. It should cut capacity to 3.8 mln barrels per day about 75 pct of current capacity. Quotas should end for crude throughput and gasoline output and oil tariffs should be abolished. They said deregulation was vital to promote more competition and efficiency and most saw it as inevitable. Deregulation is taking place everywhere. Now its our turn to see if we can survive cut-throat competition said a source at one major Japanese oil company. A spokesman for a smaller refiner said Well have a hard time surviving but thats something we must go through. In addition to our streamlining and efficiency programs for the oil division we will exert efforts towards branching out further into other lines such as real estate and travel agencies he said. Larger companies are also streamlining. Nippon Oil Co Ltd which had the largest share of refined products sales in the Japanese market in fiscal 1985 cut nine pct of its refining capacity in fiscal 1986. Cosmo Oil Co Ltd the third largest seller of oil products in 1985 cut its workforce by some 20 pct last year a spokesman for the company said. Between 1984 and 1986 on the recommendation of the Council 13 oil companies were integrated into 11 companies within seven refining and marketing groups to improve the efficiency of the industry. Oil industry sources said this structure was now likely to be streamlined further into five refining groups. MITI means business. It will urge the major seven groups to merge into five to build up their muscles a source said. A MITI official told Reuters he did not rule out the possibility of further mergers within the Japanese oil industry in the event of the relaxation of oil controls. He declined to officially confirm or deny that the Petroleum Council had recommended deregulatory measures but said that in principal MITI would encourage a move towards deregulation. REUTER | JAPAN OIL INDUSTRY DECONTROL MAY LEAD TO MERGERS |
Group shr - 13.56 yen vs 27.06 Net - 21.61 billion vs 38.93 billion Current - 37.66 billion vs 46.70 billion Operating - 57.37 billion vs 79.91 billion Sales - 1789 billion vs 1692 billion REUTER | FUJITSU LTD <ITSU.T> GROUP YEAR ENDED MARCH 31 |
Japan was ready to use diplomacy to help maintain the security of the Gulf Prime Minister Yasuhiro Nakasone said. But he told reporters Japan should not cut its lines of communication with Iran and Iraq because its policy was to take a broad political stance. Officials of the foreign ministry said Japan had maintained good relations with both Iran and Iraq which have been at war since September 1980. Last week Nakasone ruled out Japanese military or financial help to patrol the waters of the Gulf. About 60 pct of Japans crude oil passes through the waterway. President Reagan said yesterday the threat to oil routes in the Gulf from attacks by Iran and Iraq was high on the agenda for next weeks G-7 summit in Venice. Reagan has approved plans for the United States to step up its naval presence in the Gulf despite congressional expressions of concern and he has called on U.S. Allies to help maintain freedom of navigation. Japans constitution prevents its armed forces from being deployed overseas. Nakasone has said that Washington understands this problem. REUTER | JAPAN READY TO USE DIPLOMACY FOR GULF SECURITY |
Fujitsu Ltd <ITSU.T> has forecast that group net profits will rise 75.9 pct in the current year to 38 billion yen and current profits will rise 72.6 pct to 65 billion the company said in its earnings statement. Sales are expected to rise 14 pct to 2040 billion yen in the same period it said. REUTER | FUJITSU GROUP FORECASTS 75 PCT RISE IN NET PROFITS |
Western bickering over food surpluses is obscuring the fact that starvation is now a bigger problem than ever before a senior World Food Council official said. Alain Vidal Naquet head of external relations for the council told a news conference that a meeting organised by the United Nations body in Peking next week would try to force governments to take a more serious attitude to the food crisis. The world is facing two crises -- poverty in developing countries and paradoxically an overflow of food surpluses in the northern part of the world Naquet said. This is affecting dangerously the balance of the international economy Naquet said. He said it was ironic that the leaders of the western world would discuss food over-production during the summit in Venice next week at the same time as the Peking meeting would be discussing food shortages. Hunger is not a problem kept in mind by governments. The urgency of the problem is hidden by the (food surplus and trade) problems of the rich countries he said. There are more people today in the world lacking enough food than there were in 1974 (the year of the World Food Conference in Rome). Progress has been made in some parts of the world especially Asia but Naquet said that increasing food production and aid from the developed world were not in themselves the answer to the world food problem. He said developing countries should not rely entirely on aid from developed countries and should increase cooperation amongst themselves to increase local food production and improve distribution of existing food stocks. More than 30 government ministers are expected to attend the Peking meeting including delegations from Third World countries the U.S. The Soviet Union and Europe. REUTER | FOOD SURPLUSES OBSCURE CONTINUING STARVATION |
Singapores government securities market had performed well in volume terms since its launch on May 7 but there were constraints to further growth bankers and dealers said. Lawrence Yeo director of securities trading and distribution for Citicorp Investment Bank (Singapore) Ltd told Reuters there was a shortage of non-professional corporate institutional and private investors trading in fixed income securities especially those with long term funds. The market trades treasury bills and bonds. Available liquid funds were still moving into traditional investments because share prices were rising and returns were low on fixed income securities Yeo said. He said the lack of market information and investment education for potential investors were limiting factors. Referring to the securitisation of corporate debt he said If the saving between a traditional bank loan and a public offering is not great investors prefer to take the loan because it does not require the public disclosure of information. William K.K. Wong managing director of Indosuez Asia (Singapore) Ltd said institutional investors this year had focussed on the equity market rather than bonds. Bankers and analysts said the new market would pave the way for the development of corporate bond issues. The bankers said development of an active fixed income securities market would encourage more private and public companies to issue debt instruments. They said they hoped the risk-free government bond yield curve would provide a benchmark for corporate bonds and other debt instruments. Economists and bankers said the recent share offer by Sembawang Maritime Ltd which was oversubscribed 92.3 times and which raked in a record 6.80 billion dlrs showed the flow of liquidity into the share market. The previous record of 1.96 billion dlrs was set in April by Avimo Singapore Ltd. Wong said total average daily turnover of the government securities market had fallen sharply due to share issues. He said there were at most seven active participants mainly banks. Other financial institutions were on the sidelines because the securities market concept was new. Wong said the recent revision of the minimum liquid asset ratio to 18 pct allows banks to restructure liquid assets and inject more long term funds into the securities market. One of the primary dealers United Overseas Bank Ltd has an average daily turnover of over 100 mln dlrs but this could rise to 300 mln on active option days deputy manager Ho Kian Fah told Reuters. Ho said major participants besides the primary and registered dealers were mainly U.S. And U.K. Banks which showed a willingness to quote prices. Loh Hoon Sun general manager of the Overseas Union Bank Ltd said he forsees active trading and bidding of new offerings in pre-issued business. Loh estimated OUBs average turnover to be around 50 mln to 100 mln dlrs on active days. Dealers said a significant factor was that the t-bill and money market rate yield gap had narrowed making rates for bills more competitive with those in the money market. Tan Mong Tong executive director of National Discount Co Ltd told reporters the new securities market would enable banks statutory bodies insurance companies to manage their funds more flexibly. The Monetary Authority of Singapore (MAS) plans to issue eight to 10.5 billion dlrs of taxable instruments in the first year and a gross issue of 35 billion dlrs over five years. The first issue of 300 mln dlrs worth of T-bills by the MAS was 1.9 times subscribed while the first issue of 500 mln dlrs worth of five-year bonds was three times oversubscribed. The recent issue of 300 mln dlrs of two-year bonds received 1.17 billion dlrs in applications. The new securities market operated by MAS on an electronic book entry system will provide new investment outlets intended to develop Singapores capital market bankers said. But the market is new and long term success and expansion will depend on how the MAS and the primary and registered dealers stimulate activity the bankers and analysts said. They said it was necessary to promote liquidity because investors did not negotiate frequently enough and tended to hold on to their investments. They advocated the establishment of a market makers association to help investors understand the market and its instruments as a lack of speculative activity limits market turnover and supply. REUTER | SINGAPORE GOVERNMENT SECURITIES MARKET STARTS WELL |
Oman has granted term crude oil customers retroactive discounts from official prices of 30 to 38 cents per barrel on liftings made during February March and April the weekly newsletter Middle East Economic Survey (MEES) said. MEES said the price adjustments arrived at through negotiations between the Omani oil ministry and companies concerned are designed to compensate for the difference between market-related prices and the official price of 17.63 dlrs per barrel adopted by non-OPEC Oman since February. REUTER | MEES NEWSLETTER SAYS OMAN OFFERS OIL DISCOUNTS |
British Prime Minister Margaret Thatchers Conservatives lead the opposition Labour party by seven percentage points in the June 11 election campaign according to a public opinion poll today. The Harris poll on the TV-AM breakfast television show gave Thatchers Conservative Party 42 pct Labour 35 pct and the centrist Alliance 21 pct. This was a one point drop for the Conservatives and one point rise for the Alliance since the same organisations survey yesterday. However a Marplan poll in the Today newspaper had the Conservatives 11 points ahead. It gave them 44 pct Labour 33 pct and the Alliance 21 pct. All poll results since the campaign began have shown the Conservatives in the lead. An aggregate of recent surveys showed they held a nine to 10 point lead over Labour enough for a comfortable election victory. REUTER | UK CONSERVATIVES LEAD LABOUR BY SEVEN POINTS, POLL |
Malaysian rubber production should return to normal levels this month after a hard wintering season the Malaysian Rubber Exchange and Licensing Board said in its latest review. As packers and remillers expect production to recover to normal levels in June sellers will remain reserved in the near future the review dated May 14 said. Many consumers are holding off waiting for the best time to buy. The market is mindful of approaching summer holidays in industrial countries and there is an air of uncertainty beyond July it said. It gave no figures for the output drop. REUTER | MALAYSIAN RUBBER OUTPUT RECOVERS FROM WINTERING |
Government tax revenues for the 1986/87 year ended March 31 were more than 600 billion yen higher than forecast and could be used to help fund the economic package announced last week Finance Ministry sources said. The final figure for 1986/87 will not be available until next month but some local newspapers speculated that the carryover could be as much as 1000 billion yen. The government is due to introduce a supplementary budget during an extarordinary parliamentary session expected to start in July. The budget will be used to finance the central government share of last Fridays emergency economic package. That package totalled more than 6000 billion yen including more than 1000 billion in tax cuts. Government officials including Finance Minister Kiichi Miyazawa have previously said possible revenue sources for tax cuts include the tax revenue carryover from 1986/87 and proceeds from the sale of shares in the privatized Nippon Telegraph and Telephone Corp. The sale of 1.95 mln NTT shares in 1986/87 left about 450 billion yen available for use as a revenue source for tax cuts the sources said. Another 1.95 mln are expected to be sold in the current fiscal year. REUTER | JAPAN TO USE TAX CARRY-OVER TO HELP FUND PACKAGE |
The Philippines first quarter growth figures released yesterday indicated the government was likely to achieve its 1987 targets Central Bank governor Jose Fernandez said in an interview. The National Economic Development Authority (NEDA) announced yesterday gross domestic product (GDP) grew 5.78 pct and gross national product (GNP) 5.53 pct in the first quarter from a year earlier. I dont see anything on the horizon that should cut it (growth) short Fernandez said. NEDA said GNP had grown 3.56 pct and GDP 3.25 pct in the fourth quarter of 1986 from a year earlier. Last years GNP growth put earlier at 0.13 pct was revised to 1.51 pct. Certainly I do not see any shortage in external resources and if GNP growth continues at this level I would assume that domestic resources on the fiscal side would be generated and would not be a stumbling block Fernandez said. I think even before the figures came out simply looking at key indicators such as consumption of fuel oil and power showed that the economy was on a different track from last year he said. Fernandez said consumption tended to be heavier in the first and second quarters because of the dry weather and it could drop off in the third quarter. He said the most significant sign of recovery lay in the manufacturing sector which grew by 9.64 pct after declines in 1985 and a slow turnaround in the second half of 1986. That is not a seasonal thing it is secular he said. He said the government had met all monetary targets set for the first quarter in consultation with the International Monetary Fund (IMF). It expected to draw down the fourth tranche from its 198 mln SDR stand-by arrangement soon. The Philippines has so far drawn three tranches totalling 58 mln SDRs from the arrangement expiring on April 23 1988. Fernandez said an IMF mission would visit here in July or August to review performance in the January-June period. He said IMF repayments were projected to total 1.56 billion dlrs over the 1987-92 period and drawings only 236 mln dlrs. Repayments were inevitable and many countries would find their net repayments to the IMF rising in the next few years. It means that since there will be a net drain on ODA (official development assistance) accounts the commercial banking system will be requested to hold the line he said. It is an internal constraint that exists because the IMF debt cannot be rescheduled Fernandez said. The Philippines rescheduled 10.3 billion dlrs of its 28 billion dlr foreign commercial debt in March. Fernandez said Central Bank bills introduced in March 1984 to mop up excess liquidity had peaked at 43.1 billion pesos in April 1986. But their unwinding on maturity dates started in October last year had almost been completed. He said auctions of treasury bills whose outstanding level touched 95.44 billion pesos on May 20 were going well. Treasury bills will remain a basic monetary tool he said. Commenting on the countrys foreign debt Fernandez said I think the Philippine debt stock looms large because our own receipts from exports have not taken the same kind of leap forward as might have been suitable. The foreign debt is projected by the Central Bank to reach 29.04 billion dlrs by the end of 1987. NEDA said exports totalled 1.2 billion dlrs in the first quarter while imports were 1.4 billion dlrs. Fernandez said the government had targeted GNP growth of between six and 6.5 pct this year. He cautioned that while growth so far was high the targets had not yet been achieved. Fernandez said he saw no merit in arguments by some economists that the peso currently pegged at 20.50 to the dollar ought to be devalued to make the countrys exports more competitive. By being pegged to the dollar on a basket basis the peso has already substantially devalued against all of the countrys trading partners he said. On the proposed Omnibus Investment Code he said he was opposed to a clause which would allow the unrestricted repatriation abroad of investments made during the first two years after the imposition of the Code. The imposition of the Code scheduled for last January has been delayed by objections from some business groups. I think any central bank certainly this one after the events of the past two or two and a half years has to be prudent. This is not the time to throw all caution to the winds and Im not about to do that Fernandez said. It would be ideal if we reach a point where movement of capital and earnings can be free he said. We have had one year of reasonably good results. Certainly we continue to have a fairly heavy drain on our external availabilities simply by servicing our debts. REUTER | CENTRAL BANK HEAD SAYS PHILIPPINE GROWTH ON TARGET |
Belgian industrial production excluding construction and adjusted for seasonal and calendar influences was provisionally 0.6 pct lower in February than a year earlier the National Statistics Office said. Output in February was however 5.9 pct higher than in January. A spokeswoman for the office said the production index base 1980 rose to a provisional 108.8 in February from a provisional 102.7 in January slightly revised from the 102.8 originally estimated. In February last year the index stood at 109.5. REUTER | BELGIAN FEBRUARY INDUSTRY OUTPUT DOWN ON YEAR AGO |
Bundesbank sets 28-day securities repurchase tender at minimum 3.50 pct |
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The Bundesbank set a new tender for a 28-day securities repurchase agreement offering banks liquidity aid at a minimum bid rate of 3.50 pct a central bank spokesman said. Banks must make their bids by 1400 GMT today and funds allocated will be credited to accounts tomorrow. Banks must repurchase securities pledged on July 1. REUTER | BUNDESBANK SETS NEW REPURCHASE TENDER |
53 weeks to April 4 1987 Share - basic 22.2p vs 21.6p - fully-diluted 21.6p vs 19.9p Final dividend 6.3p vs 5.7p making 8.6p vs 7.7p Pretax profits 129.2 mln stg vs 116.0 mln Turnover 1088.1 mln stg vs 968.4 mln Profit from retail operations 133.3 mln stg vs 115.6 mln Tax 40.1 mln stg vs 36.5 mln Profit after tax 89.1 mln stg vs 79.5 mln Extraordinary items debit 0.7 mln stg vs debit 24 mln NOTE - full name is Storehouse Plc <STHL.L> REUTER | STOREHOUSE REPORTS HIGHER PROFITS IN 1986/87 |
Year to March 31 Shr 28.0p vs 21.4p Final dividend 9p vs 6.5p making 12p vs 9.3p Pretax profit 53.16 mln stg vs 45.12 mln Turnover 641.1 mln stg vs 639.7 mln Group operating profit 57.63 mln stg vs 49.06 mln Share of associates profits 1.33 mln stg vs 3.87 mln Investment income 1.59 mln stg vs 2.19 mln Interest payable 7.38 mln stg vs 10.01 mln Tax 16.48 mln stg vs 17.60 mln Leaving 36.68 mln vs 27.51 Minorities debit 1.58 mln stg vs debit 1.39 mln Extraordinary items credit 2.95 mln stg vs debit 8.12 mln Operating profits breakdown by class of business - building materials manufacture 23.7 mln stg vs 20.9 mln - distribution 10.1 mln stg vs 7.5 mln - specialist print and pack 12.6 mln stg vs 9.6 mln - international 6.0 mln stg vs 5.6 mln - head office and property 4.6 mln stg vs 3.6 mln - discontinued sold businesses 589000 stg vs 2.4 mln Operating profits geographic breakdown: - Britain 51.4 mln stg vs 43.3 mln - Africa 3.3 mln stg vs 3.4 mln - Australasia 1.4 mln stg vs 854000 stg - North America 1.5 mln stg vs 1.6 mln NOTE - full name is Norcros Plc <NCRO.L>. REUTER | NORCROS PROFITS ADVANCE IN 1986/87 |
The Cyprus Bank Employees Union called off a threatened strike following a meeting last night of the unions executive committee the Commercial Bankers Association and Labour Minister Andreas Moushouttas. Bank sources said union members were expected to approve an agreement reached at the meeting. Union demands included an annual 3.5 pct pay increase for the next two years and a five-day working week. REUTER | CYPRUS BANK STRIKE AVERTED |
South Korean firms affected by a government order to cut bank loan exposures fear the move may make their exports less competitive company officials said. Last month the government ordered 82 companies to repay 10 pct of their bank borrowings by December 31. It told them to replace the amount with new share issues or money raised through convertible bonds offered on the local capital market. Company officials said they backed the move in principle but were worried it would raise financing costs at a time when the won was rising steadily against the dollar. We plan to export 100000 cars this year and 200000 next year and with our present production facilities we cannot produce this amount an official from Daewoo Motor Co Ltd who requested anonymity told Reuters. We must invest in production facilities to meet our target which means we need a lot of money from banks or elsewhere. But if we should pay back bank loans within this year we will face mounting financial difficulties and have less money to invest on a new production line which will eventually discourage our exports he added. The 82 companies each have bank loans exceeding 50 billion won representing a combined exposure of 10052 billion won or about 20 pct of all loans extended by South Korean banks finance ministry officials said. The companies must raise 1005.2 billion won by the December deadline the officials said. Of this total the 82 firms would raise some 646.5 billion won from selling part of their existing Seoul stock market portfolios they said. Another 74.1 billion would be raised by new share offerings and 284.6 billion by convertible bond issues. Most of the firms affected by the repayment scheme are affiliates of large conglomerates or chaebols. Thirteen of the 82 are affiliates of Samsung Co Ltd 10 are Hyundai Corp associates seven are part of the Lucky-Goldstar Group six are part of Daewoo Corp four are Sunkyong Ltd affiliates and four are part of Ssangyong Corp. Finance ministry officials said the order was part of government efforts to absorb excessive money supply triggered by the growing current account surplus and to increase the supply of shares on the stock market. We want to mop up the excess liquidity by making companies issue new shares and bonds and to give banks more funds to lend to small-sized firms one official said. The targeted 1005.2 billion won represents three pct of the M-2 money supply of 33871 billion won at the end of 1986. The M-2 at end-April was up 18.2 pct from a year earlier compared with the governments 18 pct growth target for the whole of this year officials figures showed. The current account swung to a surplus of 2.5 billion dlrs in the first four months of this year from a deficit of 294 mln in the same period last year. We expect the measure will help companies improve their financial structure by lowering the ratio of liability the ministry official said. A Hyundai Motor Co official who asked not to be identified said We basically see the measure as positive for we can raise money in the capital market by issuing new shares or convertible bonds which will eventually improve our financial structure. But as far as the finance cost is concerned issuing new shares is more expensive than borrowing from banks and we have to pay back the loans (soon) he added. South Korean bank loans attract an average interest rate of 11.5 pct. We are also concerned over the wons gradual appreciation against the dollar which is emerging as a threatening factor to export-oriented firms another company official said. We will come under mounting financial pressure if the won continues to go up he added. The won has risen more than 4.5 pct against the dollar this year after gaining 3.34 pct in 1986. Many firms prefer to borrow from banks rather than boost capital by issuing shares so that they can evade new dividend pressure a bank official said. A firms owners hate to see their holding ratio lowered by issuing shares. But their dependency on the banks should be corrected because their financial structure is already poor he said. (See Monitor page ECRA for spotlight index) REUTER | SOUTH KOREAN FIRMS FEAR LOAN CUTS MAY HURT EXPORTS |
Fujitsu Ltd <ITSU.T> and International Business Machines Corp <IBM.N> (IBM) had resolved some issues in a longstanding dispute over software copyright protection Fujitsu said in a prospectus for a warrant bond recently issued in London. The dispute involved questions of contractual interpretation arising from a 1983 agreement between the companies the prospectus said. Under question was how much software information the firms were obliged to disclose to each other. The case had been before the American Arbitration Association (AAA) since 1985. By subsequent agreements the parties have resolved some of the issues and have established procedures to resolve presently outstanding disputes with the involvement of the members of the panel of arbitrators the prospectus said. The Company is not in a position to predict with certainty the outcome of this process and its effect on the future results or operations financial or otherwise of the Group it said. A Fujitsu spokeswoman declined to comment on the prospectus noting the dispute remained under arbitration by the AAA. An IBM spokesman here also declined comment. Last November the AAA ordered both companies to maintain the confidentiality of the arbitration proceedings and said that both Fujitsu and IBM had agreed that no additional comment on the subject be made. Late last year IBM and Hitachi Ltd <HIT.T> said they had agreed to revise a separate 1983 agreement which arose out of software disputes similar to those between Fujitsu and IBM. REUTER | FUJITSU SAYS SOME ISSUES RESOLVED IN IBM DISPUTE |
The five year equity warrant eurobond for Daiwa House Industry Co Ltd <DHOU.T> has been increased to 400 mln dlrs from the initial 300 mln dlrs lead manager Nomura International Ltd said. The coupon has been set at 1-1/4 pct compared with the indicated level of 1-5/8 pct. Bond market sources noted that this equals the lowest ever coupon seen in this sector. The exercise price was set at 2604 yen per share representing a premium of 2.52 pct over todays closing price of 2540 yen. The foreign exchange rate was set at 146.20 yen to the dollar. REUTER | DAIWA HOUSE EQUITY WARRANT INCREASED, FIXED |
Figures for first quarter 1987 West German GNP will be published on June 11 after they were provisionally scheduled for June 4 an official at the Federal Statistics Office said. The official said there had been a delay in gathering information for the data which are expected to show that the West German economy contracted in the period. A spokesman for the Economics Ministry in Bonn said there was no political motivation behind publishing the figures on June 11 the day after the Venice economic summit ends. There is no political motivation. It is a purely technical matter he added. The West German government is expected to come under pressure in Venice from both the U.S. And its European partners to stimulate domestic demand as a way of reducing international trade imbalances and contributing to world economic growth. However government officials have ruled out any further tax reduction packages to supplement a major program of stimulatory fiscal measures already underway. Helmut Schlesinger vice-president of the West German central bank the Bundesbank said in Tokyo today that GNP the widest measure of a countrys economic activity fell in real terms by a seasonally adjusted 1/2 to one pct in the first quarter compared with the fourth 1986 period. The government has confirmed that growth was negative in the first 1987 quarter. But year-on-year growth is expected to be about two pct. Schlesinger today repeated the Bundesbanks reluctance to cut its official interest rates further. Its key discount rate at three pct is just above historical lows. West German officials are likely to emphasise at the Venice summit that domestic demand which draws in goods from abroad is already outstripping export performance which has suffered from an 80 pct rise of the mark against the dollar in just over two years. The government has pointed out that depressed exports are the main reason for the current weakness in the economy but says that later in the year stronger domestic demand will compensate for this setback. It expects GNP growth for the whole of 1987 of just under two pct after a 2.4 pct rise in 1986. REUTER | GERMAN GNP FIGURES PUBLICATION DELAYED |
Dutch insurer Stad Rotterdam Anno 1720 N.V. <ASRN.AS> said from July 1 it will own 20 pct of the shares of <Europeesche Verzekering Maatschappij N.V.> a fully-owned unit of Swiss insurer <Union Rueckversicherungs-Gesellschaft>. Stad Rotterdam chairman Lucas van Leeuwen told Reuters it may raise its stake to a majority interest if the two companies are found to be sufficiently compatible. Van Leeuwen said that due partly to the fact Europeesche made losses in 1985 and 1986 the 20 pct stake was obtained at below the shares intrinsic value. He gave no precise sum. The Europeesche which specialises in travel and recreation insurance had a premium income of 150 mln guilders in 1986. Stad Rotterdams premium income in 1986 was 1.17 billion guilders making it the fifth largest Dutch insurer. Europeesche made a loss of nine mln guilders in 1985 which narrowed to 4.5 mln guilders in 1986 van Leeuwen said. He said the company was on course for independent recovery and was expected to reduce its losses further in 1987. REUTER | STAD ROTTERDAM TAKES STAKE IN SWISS-OWNED INSURER |
Nabisco Brands Inc or one of its units is expected to issue shortly a dollar straight eurobond probably totalling 100 mln dlrs bond market sources said. They said they expect the issue will have a seven year maturity but to have an investor put option after four years at par. The coupon is expected to be 8-3/4 pct while pricing will be at 101-3/8 pct. REUTER | NABISCO EXPECTED TO ISSUE DOLLAR STRAIGHT |
The coupon on the 17 mln dlr five year equity warrant eurobond for Eagle Industry Co Ltd has been set at the indicated level of 1-7/8 pct lead manager Nomura International Ltd said. The exercise price was set at 729 yen a share representing a premium of 2.53 pct over todays closing price of 711 yen. The foreign exchange rate was set at 146.20 yen to the dollar. REUTER | FINAL TERMS SET ON EAGLE INDUSTRY WARRANT BOND |
The Finance Ministry would raise lending limits on local non-life insurance firms to meet the increasing need for efficient fund management a ministry spokesman said. He said the allowable non-collateral lending limits would be increased to 30 pct of each insurers total assets from 25 pct and that overseas subsidiaries will be made eligible as borrowers. The lending limit for non-life insurers which do not satisfy criteria for making non-collateral loans would be expanded to three pct of total assets from one pct. The upper limit of lending of securities by non-life insurance companies now set at five pct of each insurers total assets would be abolished the official said. This will enable such lending by non-life insurers to be included in the separate category of money lending which is limited to 55 pct of the total assets of each insurer. Approvals for the changes which must be given to each insurer on application were expected to begin soon possibly as early as next week. REUTER | JAPAN RAISES LIMITS ON NON-LIFE INSURERS' LENDING |
French industrial gas group <Duffour et Igon> has decided to back the takeover bid by Swedish industrial gases group Aga AB <AGA.ST> ending a lengthy battle between rival bidders from France Spain and West Germany Duffour et Igon Chairman Jean Igon said. The board agreed late last night to back the Aga bid and advise its shareholders to accept the Swedish groups latest offer of 4410 francs per share he told Reuters. The other main bidders were Union Carbide Corps <UK.> French subsidiary <Union Carbide France> and West Germanys Linde AG <LING.F>. Aga topped rival bids for the gases distribution group in May by raising its offer to 4410 francs from 4000 francs. This was accepted by Spains <Carburos Metalicos SA> which sold Aga six pct of Duffour et Igons stock and the right of first refusal on the remaining nine pct of stock it holds. It also won over the French Midi-Pyrenees development authority which agreed to sell Aga its 20 pct stake in Duffour et Igon. Under Agas offer shareholders can either accept a cash bid or exchange one share in Duffour et Igon for one bond of a nominal value of 4410 francs with a 10 pct coupon issue by Aga France SA. The bond issue is guaranteed by the parent Aga AB. The takeover battle for the Toulouse-based company which controls eight pct of the French industrial gas distribution market began on April 2 with an offer of 2100 francs per share from Union Carbide France <UK>. Agas offer which puts a price of 587 mln francs on the company closes on June 24 and the results will be announced on July 21. Duffour et Igon shares were quoted yesterday at 4410 francs with no buyers after a series of suspensions during the takeover tussle. They traded at 856 francs on January 9 before the first suspension. REUTER | DUFFOUR IGON GIVES BACKING TO AGA TAKEOVER BID |
The Ministry of International Trade and Industry (MITI) said it would issue guidelines later this month for microchip production during the third quarter. A MITI official said it was too early to say if the guidelines would call for reductions following similar government requests in the first two quarters of 1987. This is not a matter which should be decided on a political basis alone the official told Reuters. MITI asked that production of 256 kilobit dynamic random access memory chips and erasable programmable read only memory chips be cut by 11 pct during the April/June quarter. Production was cut back 10 pct in the first quarter and industry analysts said the reductions have boosted prices. U.S. And Japanese officials met in Washington last week to discuss the removal of U.S. Sanctions against some Japanese exports but both sides agreed not to reveal the outcome of the talks the MITI official added. Washington imposed the sanctions in April saying Tokyo had failed to abide by a 1986 pact on microchip trade. REUTER | JAPAN TO SET MICROCHIP PRODUCTION GUIDELINES |
Santos Ltd <STOS.S> said it would buy <Total Exploration Australia Pty Ltd> from <Total Holdings (Australia) Pty Ltd a wholly-owned subsidiary of Total-Cie Francaise des Petroles <TPN.PA>. Total Exploration had interests ranging from 18.75 to 25 pct in four blocks in permit ATP259P in south-west Queensland Santos said in a statement. The Santos group stakes will rise to between 52.5 and 70 pct of the four ATP259P blocks as a result of the purchase. The price was not disclosed. Santos said a number of oil and gas fields have been discovered in the Total Exploration areas and that it regards them as having very good prospects for further discoveries. Totals reserves amount to 75 billion cubic feet of gas and 5.5 mln barrels of oil and condensate it said. It said it will promote a vigorous exploration program in the areas for the rest of 1987 and in the future. The acquisition is the latest in a series by Santos as part of a program to expand from its origins in the South Australian Cooper Basin. REUTER | SANTOS TO ACQUIRE TOTAL EXPLORATION AUSTRALIA |
Belgiums public debt rose in April by a nominal 38.5 billion francs to 5719.4 billion francs. This follows a rise of 89.8 billion in March and a rise of 11.2 billion in April 1986 Finance Minister Mark Eyskens said. He said in his monthly statement that after taking account of foreign exchange variations and other factors the figure corresponding to the governments net financing requirement in April was 34.9 billion francs against 24 billion in April 1986. In the first four months of this year public debt rose 301.1 billion francs against 269.7 billion in the same period of 1986 the statement said. Between January and April the figure corresponding to the net financing requirement was 286.3 billion francs compared with 293.1 billion in the same period in 1986. The government has started an austerity programme designed to cut spending this year by 195 billion francs and to cut the net financing requirement to below 420 billion francs compared with 561 billion in 1986. REUTER | BELGIAN PUBLIC DEBT RISES IN APRIL |
For currency dealers Karl Otto Poehl is the scourge of speculators for bankers he is the man who has played a key role in shaping the worlds financial destiny for the last seven years and for Germans he is the guardian of the mark. President of the powerful and independent West German central bank the Bundesbank Poehl is likely to have his contract renewed for another eight years when it expires at the end of this year government officials say. (Index of economic spotlights see page ECRA) But no official announcement has yet been made raising eyebrows in West Germanys business community. The ebullient Poehl spent seven years in Bonn in top ministerial posts under the Social Democrats now in opposition before he moved to the Bundesbank. There has been speculation that Chancellor Helmut Kohl would try to replace Poehl with a man closer to his own Christian Democrats. But officials noted that Poehl has worked closely and successfully with Finance Minister Gerhard Stoltenberg since Kohls government took office in 1982. Poehl the most senior central banker apart from Paul Volcker of the United States enjoys a strong international reputation which it would take a newcomer years to build up. Given these circumstances Kohl will probably overlook Poehls past as an adviser to former Social Democrat Chancellor Willy Brandt and top aide to Helmut Schmidt when he was Finance Minister bankers said. It was Schmidt who as Chancellor appointed Poehl to his present job in 1980. In recent months with the marks strong rise against the dollar Poehl has made exchange rates the central concern of the Bundesbanks council a highly conservative institution which has doggedly pursued monetary policies to prevent inflation catching hold. Older Germans can remember two bouts of galloping inflation this century. But with consumer prices falling for much of 1986 and inflation negligible so far this year Poehl thinks it is safe to relax the monetary reins a little and concentrate on the dangers to the German economy of a bloated exchange rate. I am of the opinion that efforts to stabilise the dollar/mark rate have reached a high priority also for the Bundesbank because a further massive revaluation of the mark would endanger the economy in West Germany he told business journalists in Frankfurt recently. Ute Geipel head of research at Citibank AG says that Poehls reappointment would guarantee flexible monetary policy. Poehls policy has always been a policy which does not focus so rigidly on domestic factors but also on the external economy she said. An economist at a German bank who declined to be identified said If Poehl is confirmed in his post it will certainly be a plus for the pragmatic course which is not so rigidly oriented towards money supply. One of Poehls great struggles recently has been to persuade the United States to stop talking down the dollar. For Poehl the significance of the February Louvre Accord was that the United States agreed to join efforts to stabilise currencies. The Louvre Accord was greeted with scepticism by currency dealers who said they would soon put it to the test. But in fact the dollar has been relatively stable since the pact. This is because the markets know - or perhaps because they dont know - what the central banks can do Poehl says of intervention in currency markets which can quickly turn rates round making a speculators position worthless. Poehl was born in 1929 and worked as a financial journalist in the 1960s before starting his ministerial career. A relaxed sun-tanned figure who enjoys cracking jokes over a glass of beer he is hardly a stereotype central banker. He is also a keen sportsman who likes to watch football and play golf. Poehl says currency market intervention cannot substitute for correct economic policies if exchange rates are imbalanced. But you can achieve an enormous effect with a small amount if you strike at the right moment he said. Bundesbank dealers are very professional and skilled. Theyve burnt the fingers of many people he said. And unlike the speculators Poehl notes the Bundesbank dealers usually make a profit. REUTER | POEHL LOOKS SET FOR EIGHT MORE YEARS AT BUNDESBANK |
Finlands current account balance of payments showed a deficit of 2.5 billion markka in first quarter 1987 against a deficit of 3.2 billion in the same period last year the Bank of Finland said in a statement. REUTER | FINLAND'S CURRENT ACCOUNT IN DEFICIT IN 1ST QTR |
RJR Nabisco Inc is issuing a 100 mln dlr eurobond due June 30 1994 paying 8-3/4 pct and priced at 101-3/8 pct lead manager of Bank of America International Ltd said. This confirms an earlier report by bond market sources. The issue has an investor put option after four years at par but is non-callable. The selling concession is 1-1/8 pct while management and underwriting combined pays 1/2 pct. The issue is available in denominations of 1000 and 10000 dlrs and listing will be in Luxembourg. The payment date is June 30. REUTER | RJR NABISCO INC ISSUES 100 MLN DLR EUROBOND |
Hidroelectrica Iberica Iberduero S.A. (Iberduero) of Bilbao Spain is issuing a 150 mln Swiss franc eight year bond with a five pct coupon and 100-1/4 issue price lead manager Union Bank of Switzerland said. The bond is on sale until June 26 with payment due on July 9. It can be called at 101-1/2 in 1991 and for tax reasons only at 102 in 1988. REUTER | IBERDUERO ISSUES 150 MLN SWISS FRANC BOND |
Japan Highway Public Corp planned to issue a seven-year government-guaranteed 120 mln European currency unit (ecu) bond with coupon at 7.375 pct late this month a corporation spokeman told Reuters. Issue price would be 101.125 pct to yield 7.165 pct. Lead manager was Bank of Tokyo Capital Market Ltd a subsidiary of the Bank of Tokyo in Britain and co-lead manager Credit Commercial de France he added. He declined to give other details. REUTER | JAPAN HIGHWAY CORP PLANS TO ISSUE ECU BOND |
Japan planned to buy a three billion yen supercomputer as part of a policy of importing more U.S. Goods a spokesman for the private business group Kansai Economic Federation told Reuters by telephone from Osaka. The supercomputer would be bought from Cray Research Inc <CYR.N> of the U.S. The spokesman said. He said the supercomputer would not necessarily be bought this year but eventually it would be installed at the Advanced Telecommunications Research Institute International. The Institute conducts telecommunications research and was formed in 1986 with government and private funds. The United States has been pressing Japan to open its public sector market to sales of U.S. Supercomputers. Ministry of International Trade and Industry officials concerned with the supercomputer issue were unavailable for comment. REUTER | JAPAN TO BUY THREE BILLION YEN U.S. SUPERCOMPUTER |
Nationale-Nederlanden NV <NTNN.AS> the largest Dutch insurance company reported a four-pct rise in first quarter profits. The announcement represented a break with the companys past practice of giving annual results only. The company said it expects its 1987 net profit will at least equal the 1986 figure of 635.5 guilders. Nationale-Nederlanden said the lower exchange rates for the U.S. Dollar Australian dollar and sterling had brought the increase in the quarters net profit down from 6.3 pct. Premium income from damage and life insurances pushed turnover in the Netherlands up by eight pct. reuter | NATIONALE-NEDERLANDEN EXPECTS TO MATCH 1986 PROFIT |
Year ended March 31 1987 Fin div 9.25p making 12p vs 10.74p Shr 28.3p vs 27.5p Pretax profit 55.63 mln stg vs 49.36 mln Net 38.80 mln vs 33.64 mln Turnover 444.10 mln vs 309.85 mln Net interest payable 3.50 mln vs 3.79 mln Profit share of related companies 7.62 mln vs 9.64 mln Note - The De La Rue Co. Plc <DLAR.L> proposes to offer ordinary shareholders the opportunity to receive their dividends in the form of new shares as an alternative to cash. REUTER | DE LA RUE RAISES ANNUAL PROFITS BY 12.7 PCT |
China will not increase sugar imports substantially this year because of foreign exchange constraints and large stocks despite falling production and rising domestic demand traders and the official press said. Despite rapid increases in domestic production over the last 30 years imbalances between supply and demand continue to be extremely serious the Farmers Daily said. It said 1986 plantings fell due to removal of crop incentives because farmers could earn more from other crops and because technical and seed improvements had not been widely disseminated. The official press had estimated the 1986/87 sugar crop (November/March) at 4.82 mln tonnes down from 5.2 mln a year earlier and domestic consumption at six mln tonnes a year. The Yunnan 1986/87 sugar harvest was a record 521500 tonnes the provincial daily said. It gave no year-earlier figure. Output in Guangxi was 1.04 mln tonnes the New China News Agency said without giving a year-earlier figure. The Nanfang Daily said production in Guangdong province fell to estimated 1.92 mln tonnes from 1.96 mln and that the area under sugar was dropping. Supply of cane (in Guangdong) is inadequate the newspaper said. Processing costs are rising and the economic situation of nearly all the mills is not good. To guarantee supply of cane is a major problem. A Western diplomat said sugar output also fell n Fujian south Chinas fourth major producer where there was a drop in area planted. He said the rural sectors in Guangdong and Fujian were wel developed enabling farmers to choose crops according to the maximum return meaning that many had avoided sugar. The Farmers Daily said a peasant in the ortheast province of Heilongjiang could gross 108 yuan from one mu (0.0667 hectares) of soybeans and 112 yuan from one mu of corn but only 70 from one mu of sugarbeet. The paper said the profit margin of mills in China fell to 4.7 pct last year from 11.87 pct in 1980. Mills lacked the capital to modernise and they competed with each other for raw materialsX it added. This resulted in falling utilisation rates at big mode{nised mills. The price of sugar had not changed in 20 years the official press has said. Customs figures showed China imported 1.18 mln tonnes of sugar in calendar 1986 down from 1.9 mln in 1985. The diplomat said stocks at end-August 1986 were 2.37 mln tonnes up from 1.92 a year earlier. A foreign trader here said China accumulated large stocks in 1982-85 when provincial authorities were allowed to import sugar on their own authority. This practice was stopped in 1986 when the central government resumed control of imports. As China lacked storage much of these imports was stored in Qinghai Inner Mongolia and other inland areas the diplomat said. The trader said transporting stocks from these areas to consumers in east and south China was a problem particularly as coal had priority. How quickly they can move the sugar is one factor determining import levels he said. Another factor was the quality of the harvest in Cuba Chinas major supplier through barter trade he said. China bought two distress cargoes last week for about 152/153 dlrs a tonne he added. China is not a desperate buyer now. But if the Cuban harvest is bad it will have to go into the open market. A Japanese trader said Pekings major concern regarding imports was price. While the foreign trade situation has improved this year foreign exchange restraints persist he said. The diplomat said domestic demand was rising by about five pct a year but a communist government is in a much better position to regulate demand than a capitalist one if the foreign exchange situation demands it. REUTER | CHINA SEEN UNLIKELY TO RAISE SUGAR IMPORTS |
The United Arab Emirates recorded a 1986 trade surplus of 12.2 billion dirhams narrowing from 30.2 billion in 1985 the central banks latest bulletin shows. The central bank said the lower surplus was mainly due to the decline in the value of exports and re-exports to 37.2 billion dirhams from 54.2 billion in 1985. This reflected the decline in oil prices last year and difficulties in marketing UAE oil the central bank added. The surplus on the current account narrowed to 6.8 billion dirhams from 25.5 billion in 1985. The overall balance showed a surplus of 4.8 billion after 2.6 billion in 1985. REUTER | UAE TRADE, CURRENT ACCOUNT SURPLUSES NARROW |
Kuwait a target of Iranian anger over the emirates backing for Iraq in the Gulf war today rejected charges that fishing vessels seized recently by Iran were spy boats. There are no bases of truth to the contents of the Iranian accusation on the nature of the operations of the vessels recently taken into custody by Iran. These vessels were out fishing the Foreign Ministry said in a statement. It said Iranian Charge dAffaires Mohammad Baqeri was summoned by the Ministry yesterday to confer with Foreign Undersecretary Suleiman Majed al-Shaheen. The Iranian News Agency IRNA said on Sunday Iran had seized seven Kuwaiti speed boats and detained their crew who confessed to spying for Iraq under the cover of fishing. It said the boats were intercepted in the Khur Abdullah waterway which separates Kuwait and Iraqs Faw peninsula at the head of the Gulf captured by Iran last year. The Kuwaiti response came as Iranian envoys toured Gulf Arab states saying responsibility for security and stability in the waterway was a regional matter. A U.S. Senate team was scheduled today to meet Kuwaits Crown Prince and Prime Minister Sheikh Saad al-Abdulla al-Sabah and the defence and oil ministers. Todays Foreign Ministry statement carried by the Kuwait News Agency KUNA said the recent detention of Kuwaiti fishing vessels by Iran was not the first. Tehran in the past had held back a number of vessels Kuwait had sought to release through diplomatic contacts it said. However Kuwait is perplexed that this time the Iranian charges are accompanied by accusations that the vessels were undertaking espionage activities it said. Shaheen condemned the detentions and accusations and asked Tehran to free all fishing boats and sailors held by Iran the statement said. REUTER | KUWAIT REJECTS IRANIAN SPY BOAT CHARGES |
The United Arab Emirates (UAE) recorded a 1986 trade surplus of 12.2 billion dirhams narrowing from 30.2 billion in 1985 the central banks latest bulletin shows. The central bank said the lower surplus was mainly due to the decline in the value of exports and reexports to 37.2 billion dirhams from 54.2 billion in 1985. This reflected the decline in oil prices last year and difficulties in marketing UAE oil the central bank added. The surplus on the current account narrowed to 6.8 billion dirhams from 25.5 billion in 1985. The overall balance showed a surplus of 4.8 billion after 2.6 billion in 1985. REUTER | UAE TRADE, CURRENT ACCOUNT SURPLUSES NARROW |
British Petroleum LP Gas International said it cut its North Sea LPG (Liquified Petroleum Gas) posted price for propane to 95 dlrs from 110 dlrs a tonne effective June 1. The move follows a similar cut to 92 from 108 dlrs a tonne announced by Shell U.K. Ltd Friday also fob North Sea terminals and effective June 1 until further notice. Both companies left their butane prices unchanged at 123 dlrs a tonne. A BP statement said its cut came as a result of a price review occasioned by substantial changes in the LPG market. BP last lowered its posted propane price from 175 dlrs a tonne on March 1 and Shell U.K.s last change was from 113 dlrs May 1. REUTER | BP CUTS NORTH SEA PROPANE PRICE, BUTANE UNCHANGED |
Omans central bank is expected to announce shortly the go-ahead for a weekly offering of treasury bills to the sultanates 22 local and foreign banks banking sources in Muscat said. The central banks board is due to approve the scheme at its next meeting on June 7 and it is likely to be explained to banks at a meeting with general managers scheduled for June 14 the sources said. The decision to issue short-term government paper will come as a relief to banks in Oman which have been awash with liquidity but have few outlets for investment. Omans banks are allowed to swap only 40 pct of capital and reserves into foreign currencies effectively preventing them from investing excess funds in eurodollar deposits where yields are much higher than in the domestic interbank market. A treasury bill system would go some way to meeting banks complaints on this score bankers in Muscat said. Their dissatisfaction is expected to be voiced at the June 14 meeting if the treasury bill scheme is not launched. Bahrain introduced a weekly treasury bill tender last December offering local banks two mln dinars in 91-day bills by tender each Tuesday. Other nations in the Gulf also offer banks short-term paper with the United Arab Emirates issuing certificates of deposit each week while Saudi Arabia offers bankers security deposit accounts. Both the Bahrain treasury bills and Saudi Arabian deposit accounts can be used by banks in repurchase agreements to obtain short-term money market aid. Bankers in Muscat said the format of Omans treasury bill offering is not yet clear. Some expect a maturity of 91-days similar to Bahrain. REUTER | OMAN CENTRAL BANK TO ISSUE TREASURY BILLS |
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