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Saudi Arabias Oil Minister Hisham Nazer said Riyadh would not agree to a cut in oil prices and would not accept a mad increase that would drive consumers away. He told al-Riyadh newspaper Saudi Arabia follows a balanced petroleum policy. It does not approve of a decrease in prices from current levels and it also does not accept a mad increase that would drive consumers away and make them try and find alternative sources (for energy). OPEC agreed last December to cut production after world prices hit new lows in 1986. They agreed on a pricing system aimed to stabilise the market around 18 dlrs a barrel. OPEC is scheduled to meet in Vienna on June 25 where it will review its current oil price and production policy. Saudi Arabias King Fahd said last month that he wanted oil prices to remain stable for the next two years. Saudi Arabia is the architect of the current pricing and production pact which is backed by Kuwait and the UAE. The current pact set a production ceiling for first half 1987 of 15.8 mln bpd and implemented fixed prices based on an 18 dlrs a barrel average. REUTER | SAUDI ARABIA WILL NOT AGREE "MAD" OIL PRICE RISE |
Taiwans central bank announced that as from today the overseas foreign exchange borrowings of local and foreign banks would be frozen at the level they reached at the end of May. The central banks statement added that the measure would be effective until the end of July. Bankers said the measure is designed to curb the inflow of foreign exchange and slow the growth of money supply. They added that the move which sparked a record single day plunge of the local stock market would limit their ability to lend foreign exchange to importers and exporters. Foreign exchange borrowings by local and foreign banks reached almost 12 billion U.S. Dlrs by the end of April according to official statistics. Last week the central bank said that from today it would reduce its purchase of forward U.S. Dollars from banks to 40 pct from 90 pct of the value of the contract. It said the move was needed because of distortions in the foreign exchange market. Exporters nervous about the appreciating Taiwan dollar have been heavily selling forward U.S. Dollars on the interbank market to avoid exchange rate losses. Official figures show that forward U.S. Dollar sales in May reached a record of almost six billion U.S. Dlrs against 5.9 billion in April. All Taiwans foreign exchange earnings must be converted into local dollars boosting money supply at a time of booming exports. Money supply rose a seasonally adjusted 51.86 pct in the year to end-April raising fears of higher inflation. In March the central bank clamped tight restrictions on remittances of foreign exchange by companies and individuals to Taiwan in a move to curb inflows of speculative money. Economists and bankers estimate that the rising value of the local dollar has attracted about ten billion U.S. Dlrs of speculative money into Taiwan since early last year. It has flowed in mainly from Hong Kong Japan and the U.S.. Since September 1985 the Taiwan dollar has risen by about 22 pct against the U.S. Dollar. Bankers said the governments efforts to stabilise the foreign exchange market were a prelude to lifting all curbs on capital outflows. The central bank has said the controls will be dropped by the end of July or early August. Foreign exchange dealers said todays announcement caused jitters in the market with foreign and local banks making heavy purchases of U.S. Dollars. They said the central bank sold about 30 mln U.S. Dlrs. Taiwans stock market plunged a record 75.53 points to close at 1803.08. REUTER | TAIWAN CURBS INFLOWS OF FOREIGN EXCHANGE |
Companhia Nacional de Petroquimica EP (CNP) the Portugese state-owned oil refinery and petrochemicals company has awarded a mandate to Bank of America International Ltd and Manufacturers Hanover Ltd to arrange a 250 mln dlr loan banking sources said. The loan will be for eight years and proceeds will be used to refinance existing debt. Interest will be at 12.5 basis points above the London Interbank Offered Rate (Libor) for the first four years with the margin rising to 15 basis points in the last four years. No other fees were immediately available. Bankers noted that CNP has faced significant financial problems over the past year as a result of investments in areas which proved to be unprofitable. Portugal is attempting to maintain its position in the petrochemical industry and is undertaking a restructuring of CNP which involves the divestment of certain unprofitable assets. Partly because of these problems the new loan carries a letter of support and assumption under which the Republic would assume the obligations of CNP should it be unable to meet any payments or cease to exist. Furthermore bankers noted that this financing covers all of CNPs existing debt some of which was state-guaranteed but some of which was not. The existing loans had maturities of about seven to 10 years and carried interest margins of between 3/8 and 5/8 pct. By consolidating the loans and covering them with the Republics support the borrower was able to obtain a reduction in the margins on the new loan bankers said. REUTER | CNP OF PORTUGAL MANDATES 250 MLN DLR LOAN |
U.K. RESERVES RISE UNDERLYING 4.8 BILLION DLRS IN MAY, (2.9 BILLION APRIL) - OFFICIAL |
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Britains gold and currency reserves rose a record underlying 4.76 billion dlrs in May following Aprils 2.9 billion dlrs increase the Treasury said. The underlying trend indicates the level of recent Bank of England intervention on currency markets to curb sterlings strength. It was above market expectations which had been for a rise of between one billion and three billion dlrs. The Treasury declined comment on the figures. Actual reserves rose 4.87 billion dlrs in May compared with Aprils 2.8 billion increase to a total value of 34.68 billion dlrs compared with 29.81 billion at the end of April. Borrowings under the exchange cover scheme were 238 mln dlrs against Aprils 66 mln. Repayments under the scheme were 85 mln dlrs after 90 mln previously with capital repayments of eight mln after three mln last month. Repayments of government debt amounted to 33 mln dlrs. The underlying reserves increase is net of borrowings and repayments. It was larger than the previous record 3.04 billion dlrs rise seen in October 1977. The May increase represents the seventh monthly rise with reserves up 9.947 billion dlrs in that period and up 9.816 billion since the start of 1987. REUTER | U.K. RESERVES SHOW RECORD UNDERLYING RISE IN MAY |
China had postponed wide-ranging plans to reform its economy because of financial difficulties and pressure from powerful conservatives within the ruling Communist Party western diplomats said. But they said that although the conservatives were critical of aspects of the current open-door policy they had no alternative economic program. That meant that the strategy begun by top leader Deng Xiaoping in 1978 was likely to go on but at a slower pace they said. Deng has led Chinas overhaul of the Stalinist economy built during the rule of Chairman Mao. Since Mao died in 1976 living standards have risen sharply and China has become a net exporter of grain for the first time. A western diplomat said Chinas leaders had been sufficiently encouraged by their success last year to order the drawing up of plans for more reforms for 1987. These included changes to the countrys price system. But he said the biggest reforms had been shelved since economic problems appeared in late 1986 and the resignation of Communist Party chief Hu Yaobang in January. The diplomat said the most ambitious reforms would not be on the agenda for a major party meeting later this year. The main economic reform proceeding in 1987 is a system under which factories sign contracts with the government. They can keep any profit over and above the contract amount. This is a modest reform a repeat of what China did in the early 1980s the diplomat said. It is regarded as second best by the reformers who drew up the more ambitious plans. But these are impractical in the current political and economic climate he said. A Chinese source said that a month ago Premier Zhao Ziyang decided the media was giving too much coverage to the drive against bourgeois liberalism and not enough to explaining the proposed reforms. Some of these reforms like price increases were very unpopular. Zhao ordered the media to give more coverage to the reforms and why they were necessary the source said. One of Chinas top economists wrote in the Peoples Daily last week Failure to answer peoples questions about the new prices has caused great anxiety. In March China announced budget deficits for 1986 and 1987. It has had two years of trade deficits and capital spending and wages are rising fast. On the political front the conservatives in the Party have been on the offensive since January when Hu resigned. He allegedly failed to fight the growth of western democratic ideas which the Party has called bourgeois liberalism. A nationwide drive against bourgeois liberalism has been under way since January in the Party and the media. The latter has given wide coverage to those in the leadership who have warned against the errors of all-out westernisation. The economist said Although reform in any country inevitably causes anxiety and is often risky it has been proved that where reform is more daring commodities are more abundant and peoples living standards higher. But in the countries that are more rigid the market is stagnant goods are in short supply and rationing is common he said. The diplomat said the reformers wanted to complete their unfinished overhaul of Chinas pricing system. The diplomat said the reformers wanted to make factories independent of the government which would use taxes credit supply and other indirect means to regulate them instead of administrative diktat as in the past. But to enact such far-reaching measures they need a stable economy contented workers and surpluses to give them manoeuvring room. These conditions do not exist now he said. Another diplomat said that conservatives within the leadership though critical of some results of the reforms had no alternative economic strategy. The last eight years of opening to the outside world has shown everyone how poor China is and how it has fallen behind other countries the diplomat said. Everyone is agreed on the objective that China become a major world power by the early 21st century he said. For this it needs a strong and modernised economy. Where there is disagreement is over the pace of the reforms and the details of some of them. The Chinese source said the debate over the pace and extent of reforms was still going on. (See ECRA for spotlight index) REUTER | CHINA DELAYS REFORM BECAUSE OF POLITICS, ECONOMICS |
China took a serious view of a Multi-Fibre Agreement (MFA) protocol which it said infringed principles of the General Agreement on Tariffs and Trade (GATT) the Peoples Daily overseas edition said. It quoted a spokesman of the Ministry of Foreign Economic Relations and Trade as saying the protocol signed on July 31 last year and which extended the MFA for five years would affect international textile trade by broadening curbs in it. Fifty major textile trading countries adopted the new MFA last July in Geneva limiting Third World exports of textiles to industrialised countries. The newspaper said China signed the protocol on May 31 10 months after it was signed by other nations. A U.S. Diplomat said the U.S. And China had had months of talks on the issue with the U.S. Saying that it would have to introduce unilateral restraints if China did not sign. He said that the new MFA pact extended controls to silk and ramie in addition to existing ones on cotton and man-made fibres. China the worlds biggest producer of ramie and a major silk producer had flooded the U.S. Market the previous two years with goods made from both and from linen because these three categories were not under quota the diplomat said. It had become the biggest supplier by volume though not by value of textiles to the U.S. With exports in the first five months of this year up by 24 pct from the same 1986 period. He estimated total 1987 textile exports would be 15 pct up on the 1986 level. Chinese customs figures show exports of textile yarn fabrics made-up articles and related products to the U.S. In calendar 1986 as being worth 1.314 billion yuan up from 870 mln in 1985. The diplomat said China and the U.S. Had held two rounds of talks on drawing up a new three to five-year textile pact to replace the present one due to expire at the end of 1987. They involved discussion of overshipment of Chinese textiles this year to the U.S. Due to counterfeit licences a problem the Ministry of Foreign Economic Relations and Trade admitted to last week he said but gave no more details. REUTER | CHINA TAKES SERIOUS VIEW OF MFA EXTENSION |
Canada is issuing an 80 billion yen eurobond due June 25 1992 paying 4-3/8 pct and priced at 101-1/2 pct lead manager Nomura International Ltd said. The non-callable bond is available in denominations of one mln and 10 mln yen and will be listed in Luxembourg. The selling concession is 1-1/4 pct while management and underwriting combined pays 5/8 pct. Payment date is June 25. REUTER | CANADA ISSUES 80 BILLION YEN EUROBOND |
Hoechst AG <HFAG.F> parent company turnover fell in the first five months of 1987 with domestic business losing seven pct and exports dropping eight pct from the same period last year management board chairman Wolfgang Hilger told the annual meeting. In volume terms however turnover was somewhat improved he said. Domestic sales by volume were steady in the first five months and export volume rose two pct. He gave no figures for turnover or sales volume. As already reported parent company sales fell to 3.44 billion marks in the first quarter of 1987 7.6 pct below the first 1986 quarter. Domestic sales lost 6.6 pct and export business fell by 8.5 pct compared with the 1986 quarter. First quarter group pre-tax profits rose to 686 mln marks from 649 mln in the same period last year. Hilger said Hoechsts aim this year was to make prices competitive internationally but also to cover costs. The compmany has already taken measures to reduce costs internally he said. Hoechst expects to post another good profit in 1987 Hilger said. REUTER | HOECHST SALES FALL IN FIRST FIVE MONTHS |
The two largest U.K. Building societies the Halifax and Abbey National said they have joined the banks centralised clearing system. The move is intended to cut the current four or five days delay in clearing credits and attract the direct payment of customers salaries into building societies rather than into banks spokesmen for the two societies said. It is the first time non-banking organisations have entered the clearing system and emphasises the growing competition between building societies and banks industry sources said. The two societies yesterday joined the Bankers Automated Clearing Services (BACS) which settles small automated payments and the Association of Payment Clearing Systems (APACS) which sets policy for Britains payment systems. The Halifax had previously settled small payments through Barclays bank and Abbey National through Lloyds bank the spokesmen said. REUTER | U.K. BUILDING SOCIETIES JOIN BANK CLEARING SYSTEM |
Nakasone, Sumita agree discount rate cut not appropriate now - central bank sources |
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The World Banks policies prevent it from lending money for the transfer of land from landowners to the landless but it can help finance development of the Philippines proposed land reform program a bank official said. The World Bank by its established policies cannot use its resources to finance the transfer of assets from one group to another. Our mandate is to finance investment-related activities Rolando Arrivillaga the banks resident representative in the Philippines told Reuters in an interview. Arrivillaga said he wanted to clarify part of a report by a World Bank mission that came in March to review the land reform program and which said the bank would not be able to finance compensation payments for the transfer of land. He said the Philippine government had never asked the bank to finance land transfers and the banks position should not be taken to mean that it ruled out any lending for the program. Clearly in the case of land reform the question of land transfer by definition is transferring assets from the landed to the landless Arrivillaga said. However the bank as an institution can finance the development aspects of the program. We will deal with the part of the program that deals with how to put the land to effective use once it has been transferred and how to make the on-farm investments that are needed to attain the goal of improving the income level of the beneficiaries Arrivillaga said. I wouldnt be surprised if other multilateral institutions are faced with similar constraints he said. President Corazon Aquinos spokesman said last week that she was committed to launching the program which limits land holdings to seven hectares by using her sweeping powers of rule by decree before a new Congress convenes in July. Presidential spokesman Teodoro Benigno said the land reform program estimated to cost about 44 billion pesos would be implemented in four phases and benefit 2.64 mln farmers. Benigno said the first two phases would complete the transfer of rice and corn lands and abandoned farmland as well as the transfer of land sequestered expropriated or foreclosed by the government and would cover 1.15 mln hectares. But Aquino would not decree the redistribution of large sugar banana and coconut plantations leaving it to the Congress to work out the details Benigno said. Arrivillaga said bilateral aid donors who form part of a consultative group led by the World Bank might be prepared to finance the land transfers. I dont think there are fast and easy rules as to how international sources of finance would behave in a situation like this because land reform by its very nature requires rich financing to be able to carry out the reform in a way equitable to both the landowner and the beneficiary he said. Arrivillaga said the first priority for the government would be to tap domestic sources of financing for the land transfer but external assistance could be brought in if there were gaps. In such a fundamental reform the test of the willingness of the government is how it confronts the domestic resource requirement Arrivillaga said. Multilateral agencies by their very nature are lenders of last resort. It means they have to be convinced that the government prioritises the program. He said the World Bank had financed developmental costs under an earlier land reform program launched by former President Ferdinand Marcos in 1972 and such aid had been channelled through the Land Bank of the Philippines (LBP). The LBP is the main implementing agency under Aquinos program. If asked to do so again and the program is designed to improve the standard of living of the poor then we would certainly be prepared to consider (lending) Arrivillaga said. He said the tendency in such programs was to exaggerate the costs by presenting ten-year perspectives in a one-year context. Arrivillaga said the government could solve most of its financing problems by devising effective instruments to compensate landowners. Finance Secretary Jaime Ongpin has said landowners are likely to be paid 10 pct in cash and the rest in 10-year bonds with 10 pct of their face value redeemable each year. Arrivillaga said any instruments used to compensate landowners had to be freely tradable at near face value and added: The challenge is to devise a system of deferred payments that is as good as cash. He said the international financing community was watching the Philippine experiment with great interest. They are going to be an interesting model for many other countries because they opened a dialogue on the reforms to every sector of the population and even international institutions he said. I think theyll be on a very solid base when they make the decision to launch the reforms. REUTER | WORLD BANK CAN AID PHILIPPINES' LAND DEVELOPMENT |
Mitsubishi Chemical Industries Ltd <MCIT.T> is issuing a 200 mln dlr equity warrant eurobond due June 30 1992 with an indicated coupon of 1-1/2 pct and par pricing lead manager Yamaichi International (Europe) Ltd said. Final terms for the issue will be set on June 10. The selling concession is 1-1/2 pct while management and underwriting each pay 3/8 pct. The issue is available in denominations of 5000 dlrs and will be listed in Luxembourg. The payment date is June 30 and the warrants are exercisable from July 15 1987 until June 16 1992. REUTER | MITSUBISHI CHEMICAL ISSUES EQUITY WARRANT BOND |
The International Primary Market Associations new rules for lead managers of fixed rate dollar bonds will take effect on June 15 an IPMA official said. The new IPMA rules require a lead manager to quote firm prices at which it will buy and sell newly issued bonds for 12 months after the launch. The rules were first proposed March 27. Christopher Sibson secretary general of IPMA said the rules are not expected to have a noticeable impact on the market because they only apply to dollar denominated bonds which have been scarce recently. This year euroyen issuance has outstripped dollar bonds. Sibson said that the rules are intended to provide greater liquidity in the new issues market where underwriters sometimes step away from deals they have managed if the market moves away from them. However he noted that the IPMA rules are voluntary and the organization has no authority to enforce them. Sibson said that similar rules for new issues denominated in other currencies will be put into effect later following consultation with the Association of International Bond Dealers another trade organization. REUTER | NEW PRIMARY MARKET RULES TO TAKE EFFECT JUNE 15 |
Prime Minister Yasuhiro Nakasone today agreed with Bank of Japan governor Satoshi Sumita that a further cut in the discount rate was not appropriate at present central bank sources said. They told Reuters the two discussed the subject at a routine meeting. Sumita told Nakasone he did not feel a rate cut was appropriate and Nakasone expressed his understanding the sources said. Currency dealers have speculated that Japan and West Germany might come under pressure at next weeks Venice summit to cut interest rates to boost their economies. Nakasone but not Sumita is due to attend the summit. REUTER | NAKASONE, SUMITA AGREE RATE CUT NOT APPROPRIATE |
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 |
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 |
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 |
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 |
Japan is disappointed at the recent threats of trade retaliation from the European Community (EC) just as the trade situation between the two is improving Japanese Trade and Industry Minister Hajime Tamura said. I am deeply concerned that the EC has moved to take a harsher line toward Japan despite this tangible improvement he said in a speech prepared for delivery at the opening of a new centre designed to improve understanding between the two sides. Last week foreign ministers of the 12 EC nations agreed to impose tariffs on a range of unspecified Japanese electrical goods unless Tokyo opened its markets more to EC exports. Tamura referred to a 55 pct rise in Japanese imports of EC manufactured goods in the year ended March 31. I feel this is a strong step on the road to balance through expansion. While I do not deny the existence of the trade deficit between Japan and the EC I believe it should be rectified not by reducing trade through import restrictions or export restraints but by expanding the (overall) trade Tamura said. REUTER | JAPAN CONCERNED AT EC TRADE THREATS - MINISTER |
Intel Corp <INTC> of Santa Clara Calif. And Matra-Harris-Semiconducteurs (MHS) said their Cimatel joint venture design facility was dissolved as from June 1. Intel makes logic and memory components. MHS is a joint venture of the Matra group <MATR.PA> and Harris Corp <HRS>. Cimatel was formed in 1982 to design standard VLSI devices for the telecommunications and computer graphics markets. MHS said in a statement that changing market conditions had led Intel to reassess its marketing policy. It had concluded that without common marketing goals a common design centre was impractical. REUTER | INTEL, MATRA-HARRIS DISSOLVE CIMATEL PARTNERSHIP |
Glynwed International Plc <GLYN.L> said it had bought all the issued shares of two companies belonging to Gallaher Ltd a subsidiary of American Brands Inc <AMB> in a deal worth around 14 mln stg. The full names of the companies purchased from Gallaher are <Formatura Iniezione Polimeri Spa> Genoa and <FIP U.K. Ltd> Weybridge. Consideration for the purchases which will be based on the net asset values per share of the companies has yet to be finalised but some nine mln stg of the total represents debt assumed by Glynwed. FIP is a manufacturer of valves and other pressure pipe fittings in thermoplastics. Its products are complementary to those of Glynwed subsidiaries Durapipe U.K. And Philmac. The acquisitions appreciably develop and strengthen Glynweds strategic position in the thermoplastic pipework systems market. The sale by Gallaher reflects a decision to dispose of more peripheral businesses. Proceeds of the sale will be used in the continuing expansion of the Gallaher group. Glynwed shares were up 5p to 494 after the announcement. Gallaher is not quoted on the London Stock Exchange. REUTER | GLYNWED BUYS GALLAHER UNITS FOR AROUND 14 MLN STG |
Italys Ministry of State Participation said it formally approved the telecommunications joint venture between STET a subsidiary of the state holding company <Istituto per la Ricostruzione Industriale> (IRI) and Fiat Spa <FIAT.MI>. A ministry spokesman said Minister Clelio Darida passed the joint venture <Telit - Telecommunicazioni Italiane Spa> this morning. Daridas approval was needed for the venture. STET and Fiat each hold 48 pct of Telits capital with the remaining stake held by state merchant bank Mediobanca Spa <MDBI.MI>. The spokesman said Daridas approval includes a provision that if the government eventually reduces its majority stake in Mediobanca the banks four pct Telit shareholding will be transferred to another public financial institution. As reported Telit will group the operations of Fiats subsidiary Telettra Spa and STETs Italtel - Societa Italiana Telecommunicazioni Spa. REUTER | ITALIAN MINISTER APPROVES TELECOMMUNICATIONS FIRM |
Interest rates on Kuwaiti dinar deposits held firm in scattered trading despite a Central Bank decision to revive limited funding lines dealers said. The Central Bank which last Tuesday shut a daily aid window through which it lent funds of up to one year reopened the facility for three month money which was available at seven pct they said. It offered one month funds at seven pct through swap facilities dealers said. Todays Central Bank action combined with sales of dollars by some banks helped ease a recent credit squeeze engineered by the monetary authority to stem a rush for the U.S. Currency arising from attractive U.S. Interest rates and Gulf tension dealers said. However as one dealer noted: The market is still unsettled. Overnight funds bid at 20 pct at the outset of business traded up to 30 pct before easing as liquidity dragged offers down to 10 pct by the close. Tomorrow-next for which buy/sell quotes started at 30 20 pct ended at 14 eight. Spot-next was indicated at 8-1/2 seven after opening bids of 10. Dealers quoted one-week at eight seven against an early 9-1/2 7-1/2. One month rates were at the same level after trade at eight then 8-1/2. Dealers quoted three months at seven 6-3/4 pct and six-month to one year funds at seven six pct. They reported offshore offers of overnight at 10 tomorrow-next at eight and one year at 6-1/2 pct towards the close. The Central Bank fixed its dinar exchange rate steady at 0.27933/67 to the dollar against yesterdays 0.27939/73. The spot dinar was 0.27930/40. REUTER | KUWAITI DINAR RATES FIRM, AID WINDOW OPEN |
The Venice summit on June 8-10 is likely to disappoint those hoping for new policies to whip up flagging world growth according to officials from summit countries. Worries over protectionist threats and the Third World debt crisis are also unlikely to be assuaged they added. The talks may yield agreed statements on the military situation in the Gulf co-operation in the fight against the killer disease AIDS or on East-West relations they said. But most summit participants have made it clear that major new initiatives on economic issues must not be expected. West German Chancellor Helmut Kohl said in a recent interview that the translation of previous announcements into policy is more important than new declarations and commitments. The main goal at the summit would be to strengthen existing agreements to secure steady medium term growth and avoid the danger of a further devaluation of the dollar via close co-operation on economic and financial policies Kohl added. Critics challenged this view. They pointed to the worrying background of slower growth especially in Japan and Germany amid fears about a pickup in inflation in the U.S. Which could lead to higher interest rates and exacerbate the debt crisis. The marginal impact that the major shifts in dollar yen and mark exchange rates have had on the Japanese and German trade surpluses and U.S. Trade and fiscal deficits since the September 1985 Plaza agreement was also a cause for concern. Economists said the recent rise in the dollar was likely to be quickly reversed in the absence of new commitments in Venice. But government officials do not expect summit delegations - from the U.S. Japan Germany Britain France Italy Canada and the European Community - to go much beyond restating policy goals enshrined in the February Louvre agreement of Group of Seven finance ministers and central bankers. Under the agreement aimed at halting the dollars 20-month decline and at fostering balanced growth Japan and West Germany would work to eliminate their trade and payments surpluses in return for a U.S. Pledge to reduce fiscal deficits. A 6000 billion yen package announced by Prime Minister Yasuhiro Nakasone last week went some way towards that goal and appeared to have saved Japan from a widely anticipated summit attack on its economic policies officials said. The package featuring government spending and tax cuts to stimulate demand drew a cautious welcome in European capitals but its reception in the U.S. Was much more enthusiastic. Treasury Secretary James Baker commented Of course implementation is the key but this is clearly forward movement toward fulfillment by Japan of its commitments. With Japan signalling its willingness to boost domestic demand rather than rely on exports for growth the U.S. And other summit countries were now set to shift their attention to West Germany and press Kohl for similar action officials said. U.S. Assistant treasury secretary David Mulford said there was worldwide concern that German economic growth has flagged and the U.S. Would demand that Kohl confirm a commitment that policies would be reviewed if growth continued sluggish. But West German officials said Kohl would fiercely resist any such pressure. One senior Bonn official said There is just no room for manoeuvre for any economic moves. Finance minister Gerhard Stoltenberg has problems finding cash to finance tax cuts promised for 1990 and is reluctantly letting government borrowing rise Bonn officials said. Citing fierce opposition by West Germany and Britain European officials also ruled out progress on U.S. Plans for a more formal strategy for coordinating economic policies based on a series of economic indicators. The U.S. Wants other Group of Seven countries to agree to high level consultations when the indicators including trade growth interest and exchange rates inflation and fiscal deficits show members are not living up to economic commitments. But Germany and Britain fear the plan would undermine economic sovereignty and Britain also feels the proposals are too complicated and too rigid officials said. Recent developments on Third World debt including moves by two of the largest U.S. Banks to set aside billions of dollars to cover bad loans will feature prominently in the talks. U.S. And Japanese officials said they would seek to reactivate the Baker initiative at the summit and renew a call to commercial banks to come up with a menu of alternatives to restore some new bank lending to debtor countries. Officials said there was also scope for agreement on a Franco-British plan aimed at alleviating the burden for the worlds poorest debtor countries through concessional rescheduling of their sovereign debt at the Paris Club. The talks would also include plans to dismantle runaway farm subsidies all summit nations pay to guarantee the income of their farmers and secure a share of world markets they said. The 24 members of the Organisation for Economic Cooperation and Development (OECD) last month supported a gradual decoupling of farm production subsidies from income support for farmers. The U.S. Canada and Britain in particular are keen to move quickly after the OECD breakthrough officials said. What we want is not for treasuries to compete as they do now. We want to see to it that our farmers will be able to compete in international markets Canadian Prime Minister Brian Mulroney said. The U.S. Intends to table specific proposals on the issue at GATT the world trade body immediately after the summit to signal that it wants negotiations on farm trade to take precedence over the other trade issues included in the new GATT round of talks launched last year in Punta del Este Uruguay. We wont have much tolerance for delay U.S. Agriculture Secretary Richard Lyng said. But European officials said they would resist such moves making an agreement at the summit unlikely. France and other EC countries insist that farm trade disputes be resolved as part of a wider trade settlement within GATT they said. REUTER | FEW EXPECT NEW ECONOMIC INITIATIVES IN VENICE |
Newbery Corp said Firemans Fund Corp <FFC> ane United Bancorp of Arizona <UBAZ.O> have elected not to extend a financing agreement with Newbery and the company has been unsuccessful in securing long-term financing from other sources. It said Firemans Fund has declined to provide long-term financial assistance and United does not intend to extend the maturity of 11 mln dlrs in notes owed by Newbery beyond yesterday. Reuter | NEWBERY <NBE> FAILS IN GETTING LONGTERM FUNDING |
The French ship Capitaine Wallis 13847 dwt berthed at the port of Geelong in Victoria today to load 8000 tonnes of urgently needed wheat for Fiji after Australian port unions partly lifted a trade embargo shipping sources said. The wheat is expected to be loaded tomorrow an Australian Wheat Board spokesman said. Reuter | SHIP PREPARES TO LOAD WHEAT FOR FIJI AT GEELONG |
Boeing co said it has started the 37 dlr per share tender offer for all shares of ARGOSystems Inc that it announced yesterday morning. In a newspaper advertisement the company said the offer withdrawal rights and proration deadline all expire June 30 unless extended. The offer is not conditioned on receipt of any minimum number of shares Boeing said. If at least 90 pct of ARGOSystems shares are tendered it said it will buy all shares but if less than 90 pct are tendered it said it plans to buy only 49 pct in the offer. Boeing said if less than 90 pct of ARGOSystems shares are tendered but the purchase of all shares tendered along with the exercise of options it holds would give it over 90 pct of ARGOSystems Boeing may buy all shares tendered. ARGOSystems has granted Boeing an option to buy up to 1238311 new shares or a 15.6 pct interest at 37 dlrs each and shareholders have granted Boeing an option to purchase up to 597885 shares at the same price or about 8.9 pct of those now outstanding without taking the company option into consideration. A merger at the tender price that has been approved by the ARGOSystems board is to follow the offer. Reuter | BOEING <BA> STARTS ARGOSYSTEMS <ARGI.O> BID |
Dumez Investments Inc said it is accepting and paying for 478125 shares of United Westburne Industries Ltd in response to its 25 dlr per share tender offer and it has extended the offer until June 26. Dumez 70 pct owned by Dumez SA <DUMP.PA> and 30 pct by Unicorp Canada Corp <UNIA.TO> said the 478125 shares represent 81.6 pct of those not controlled by Westburne International Ltd which Dumez previously acquired in a tender. Reuter | DUMEZ HAS 478,125 UNITED WESTBURNE<UWI.TO>SHARES |
State oil firm Agip Petroli Spa said it has acquired a 50 pct stake in Steuart Petroleum Co an independent U.S. Oil products company. Financial terms were not disclosed. Agip Petroli a subsidiary of state energy concern Ente Nazionali Idrocarburi said in a statement that the remaining 50 pct of the U.S. Firm is owned by Steuart Investment Co a holding company that also operates in the sectors of transportation hotels and insurance. The Italian firm said Steuart Petroleum operates primarily on the East Coast. REUTER | ITALY'S AGIP PETROLI BUYS STAKE IN U.S. COMPANY |
Peptide T a minute chemical structure that can be easily manufactured effectively blocks the attack of the deadly AIDS virus on human cells researchers claimed. The U.S. National Institute of Mental Health announced at the third annual International Conference on Acquired Immune Deficiency Syndrome that Peptide T first identified by institute neuro-scientist Dr. Candace Pert potently blocks entry of the AIDS virus into cells... The U.S. Food and Drug Administration has quickly approved clinical testing of the naturally-occurring brain chemical. The decision makes possible tests on AIDS victims. Dr. Frederick Goodwin the institutes scientific director said in a joint interview with Pert that my gut reaction is that we are onto something. He said that based on initial findings Peptide T may hold more promise as a treatment for those already suffering from AIDS but could also have some value in the search for a vaccine to prevent the spread of the disease. A research team has found that Peptide T is capable of fully reversing brain cell damage caused by AIDS under a variety of laboratory tests. Pert said that she sent doses of Peptide T last autumn to a Swedish doctor who provided the chemical to four AIDS patients. One died but the three survivors showed some improvement she said. Goodwin said that three major drug firms which he declined to identify are anxious to win permission to produce the Peptide T substance that he said has potential for finding a vaccine to safeguard against the deadly disease that has threatened the lives of over a million people thus far. Pert said that the clinical testing in the United States would involve at least a dozen AIDS patients in a controlled environment probably starting next month which would hopefully verify the chemicals usefulness. Reuter | RESEARCHERS FIND PROMISING ANTI-AIDS AGENT |
Lieberman Enterprises Inc said Carolco Pictures Inc is negotiating for the acquisition of the 50 pct of Lieberman shares held by the families of chairman David Lieberman and president Harold Okinow at 20.50 dlrs each and if the deal were concluded public shareholders would be offered the same price for their shares. Lieberman said the Carolco bid to its public shareholders would be in cash or shareholders could be offered securities as an alternative. The offer would occur within about 90 days after the closing of the sale of the initial 50 pct stake the company said. The company said a final agreement has not yet been reached on the first transaction but negotiations are expected to be concluded in early June. Present management is expected to continue to operate Lieberman the company said. Lieberman distributes prerecorded music video movies and other products. Reuter | CAROLCO <CRC> MAY BID FOR LIEBERMAN <LMAN.O> |
Rainier Bancorp said it will add an extra 58 mln dlrs to its loan loss reserve in the second quarter for possible credit losses related to Third World loans causing a net loss of about 19 mln dlrs or 87 cts per share for the quarter and a loss of two mln dlrs or nine cts a share for the half. It said second half earnings are expected to be at normal profitability levels resulting in significant profits for the year as a whole. The company said the addition will raise its loan loss reserve to 136 mln dlrs. Rainier said the special addition to its reserves represents about one third of its total Third World debt exposure. It said it expects no change in its dividend policy -- it now pays 29 cts per share on a regular quarterly basis -- and plans to continue current dividend payments until it completes its proposed merger into Security Pacific Corp <SPC>. Yesterday Security Pacific itself said it would set up a 500 mln dlr reserve for Third World loans causing a loss of about 175 mln dlrs for the second quarter. Rainier earned 17.4 mln dlrs or 86 cts per share in last years second quarter and 32.9 mln dlrs or 1.62 dlrs per share in last years first half. For all of 1986 Rainier earned 70.0 mln dlrs or 3.41 dlrs per share. Reuter | RAINIER <RBANK.O> TO HAVE LOSS FROM PROVISION |
Fiji today welcomed the ending of a trade ban imposed by Australian labor unions as supporters of the countrys ousted prime minister Timoci Bavadra renewed pressure for his reinstatement with strikes and shop closures. The government welcomed a decision by the Australian Waterside Workers Federation to lift its ban on shipments to Fiji imposed in support of Bavadra whose newly-elected government was overthrown in a military coup on May 14. The ban had threatened food shortages of imported wheat fresh vegetables and medicines. A direct result of the union decision would be the immediate shipment of 9000 tons of rice and wheat from an Australian port the government said. Shops in Nadi and Lautoka center of the countrys sugar industry closed again today in support of Bavadra. In Nadi two bomb threats forced evacuation of the Australian Westpac bank but police said they turned out to be a hoax. Bavadra has launched a campaign of civil disobedience to press for his reinstatement. Reuter | BOMB THREATS, STRIKES AS FIJI SEES END TRADE BAN |
Saudi Arabias Oil Minister Hisham Nazer said Riyadh would not agree to a cut in oil prices and would not accept a mad increase that would drive consumers away. He told al-Riyadh newspaper Saudi Arabia follows a balanced petroleum policy. It does not approve of a decrease in prices from current levels and it also does not accept a mad increase that would drive consumers away and make them try and find alternative sources (for energy). OPEC agreed last December to cut production after world prices hit new lows in 1986. They agreed on a pricing system aimed to stabilize the market around 18 dlrs a barrel. OPEC is scheduled to meet in Vienna on June 25 where it will review its current oil price and production policy. Saudi Arabias King Fahd said last month that he wanted oil prices to remain stable for the next two years. Saudi Arabia is the architect of the current pricing and production pact which is backed by Kuwait and the UAE. The current pact set a production ceiling for first half 1987 of 15.8 mln bpd and implemented fixed prices based on an 18 dlrs a barrel average. REUTER | SAUDI ARABIA OPPOSES DRASTIC CHANGE IN OIL PRICE |
Six months ended March 31 1987 Share 6.0p vs 4.1p diluted Interim dividend 1.4p vs 1.05p Pre-tax profit 312 mln stg vs 158 mln Net profit 234 mln vs 114 mln Sales 3.47 billion vs 1.55 billion Operating profit 296 mln vs 164 mln Interest and other income less central expenses credit 16 mln vs debit six mln Companys full name is Hanson Trust Plc <HNSN.L>. U.K. Operating profit by sector - Consumer goods 123 mln stg vs 32 mln Building products 31 mln vs 26 mln Industrial 14 mln vs same Food 20 mln vs nil. U.S. Sectors - Consumer goods 25 mln stg vs 20 mln Building products 29 mln vs 25 mln Food seven mln vs two mln Businesses owned in 1986 and sold during 1987 nil vs nine mln. Reuter | HANSON TRUST SHOWS SHARPLY HIGHER HALF-YEAR PROFIT |
April 30 end Oper shr 20 cts vs 19 cts Oper net 4625000 vs 6781000 Sales 250.2 mln vs 150.9 mln Orders 351.5 mln vs 122.5 mln 1st half Oper shr 29 cts vs 26 cts Oper net 7453000 vs 12.0 mln Sales 441.1 mln vs 255.6 mln Orders 576.6 mln vs 221.1 mln Backlog 848.3 mln vs 459.2 mln NOTE: Prior year net excludes losses from discontinued operations of 32.9 mln dlrs in quarter and 35.7 mln dlrs in half. Net excludes tax credit 2540000 dlrs vs credit reversal 2300000 dlrs in quarter credit 5500000 dlrs vs nil half. Results include Syscom Corp from December 30 1986 purchase and Beloit Corp from March 31 1986 purchase. Orders exclude 253.6 mln dlrs acquired with Syscon acquisition. Backlog at January 31 747 mln dlrs. Average shares 21.5 mln vs 13.3 mln in quarter and 18.9 mln vs 13.3 mln in half. Income tax provisions 2200000 dlrs vs 3450000 dlrs in quarter and 6200000 dlrs vs 7225000 dlrs in half. Current quarter tax rate of 27.5 pct benefited from Wisconsin Department of Revenue Decision the company said. Reuter | HARNISCHFEGER INDUSTRIES INC <HPH> 2ND QTR NET |
The record 4.9 billion dlrs rise in U.K. Reserves in May to a total 34.7 billion has lifted hopes for a further cut in bank base lending rates after the June 11 general election market analysts said. Sterling would have risen on the much better than expected number but for market nerves about the poll outcome they said. But the weight of foreign currency and gold reserves now available to the authorities to support the pound should curb any market tendency to panic if U.K. Opinion polls show the ruling Conservative Partys lead slipping they added. We have been intervening to a very much greater extent than we have done hitherto Chancellor of the Exchequer Nigel Lawson said at a news conference today commenting on the news of the record reserves rise. He put the U.K. Intervention in the context of the Louvre accord between leading industrial nations to stabilise the dollar partly through direct intervention on foreign exchanges. We have been playing a very full part ourselves he said. But market analysts see the recent upward pressure on sterling and consequent need for official sales to damp down its rise more in the light of local factors. Steven Bell chief economist at Morgan Grenfell Securities said that corporate money has been flowing back into Britain amid hopes of another Conservative government after fears last autumn of a Labour election victory sent it flooding out. U.K. Portfolio investment is also returning while foreign buyers see U.K. Growth propects and high bond yields as attractive. They will be strong buyers of U.K. Assets notably equities once the election is out of the way Bell said. Analysts see this pressure as the main hope for lower interest rates as the government is expected to try to reverse the loss of export competitiveness caused by a strong pound. Today however the pound hardly moved on the reserves news dipping on its trade-weighted index against a basket of currencies from 73.1 pct of its 1975 value at 1000 GMT to 73.0 pct at 1100 GMT half an hour after the figures were released. The market doesnt want to do anything because of the election commented an economist at a big U.S. Investment bank. Several dealers and analysts added that market forecasts of a rise in reserves of between one and three billion dlrs had overestimated the amount of pound sales that were likely to have been disguised by swap arrangements or transactions on the forward market. The market also seemed to have overestimated the amount of sterling the Bank of England bought at the end of May to smooth the pounds sudden downturn while some of the intervention reported in May probably occurred in April they said. The key three months interbank money market rates eased about 1/8 point reflecting cautious hopes that the downtrend in U.K. Interest rates will be revived following the reserves news analysts said. Government bond prices initially firmed but the market was muted as traders worried about the funding implications of another huge rise in reserves they added. Morgan Grenfells Bell forecast a half point base rate cut from the current nine pct level soon after the election so long as poll projections of another Conservative victory prove accurate with another half point later. Justin Silverton equity economist at Credit Suisse Buckmaster and Moore said a full point reduction might be possible. Sterling will be held down by interest rate cuts in future rather than this active intervention he predicted. Kevin Boakes of Greenwell Montagu Gilt-Edged cautioned against over-optimistic forecasts but agreed a half point cut looked likely. A cut before the election has been virtually ruled out. The Bank (of England) is both worried about the political problem of cutting rates during an election campaign ... And has signalled some worry about broad money (growth) said Robin Marshall chief U.K. Economist at Chase Manhattan Securities. He said the 10 billion dlrs increase in total reserves in the past seven months may foreshadow full U.K. Entry into the European Monetary System. But Bell said the authorities would like to see another 10 or 15 billion dlrs in the reserves before joining if they did so. But unlike many analysts he doubted the U.K. Will go in. REUTER | U.K. RESERVES LIFT HOPES OF FURTHER BASE RATE CUT |
Shr profit 29 cts vs loss six cts Net profit 645000 vs loss 118000 Sales 7802000 vs 4330000 1st half Shr profit 58 cts vs profit 10 cts Net profit 1255000 vs profit 212000 Sales 14.5 mln vs 8912000 Avg shrs 2183150 vs 2072779 Reuter | SEAL INC <SINC.O> 2ND QTR APRIL 30 NET |
A subsidiary of state energy concern Ente Nazionali Idrocarburi <ENTN.MI> (ENI) said it has acquired a 50 pct stake in <Steuart Petroleum Co> an independent U.S. Oil products company. Financial terms were not disclosed. Agip Petroli Spa said in a statement that the remaining 50 pct of the U.S. Firm is owned by <Steuart Investment Co> a holding company which also has interests transportation hotels and insurance. The Italian firm said Steuart Petroleum operates primarily on the East Coast of the U.S. Reuter | ENI UNIT AGIP PETROLI BUYS STAKE IN U.S. COMPANY |
Rainier Realty Investors said Rainier Bancorp <RBANK.O> has agreed to increase the interest rate on the notes the bank would offer in connection with the trusts proposed liquidation to 8-1/4 pct from eight pct. The trust said it had asked for the increase to partly compensate for a recent rise in interest rates. It said shareholders will continue to have the option of taking 9.14 dlrs in cash for each of their shares rather than seven-year Rainier notes with a principal value of 10 dlrs. Shareholders weill vote on the proposal at a special meeting to be held July 15. Reuter | RAINIER REALTY <RRETS.O> NOTE INTEREST RAISED |
South Africa is expected to unveil tomorrow an expansionary budget for the second consecutive year in a bid to boost the nations flagging economic growth rate economic analysts said. Faced with competing demands for increased military and police spending and the pressing need for more funds for black housing and education Finance Minister Barend Du Plessis is expected to raise significantly the governments overall expenditure targets when he presents the budget to parliament the analysts said. Analysts expect Du Plessis to provide for a rise in state spending at least equal to the 16 pct inflation rate for the financial year that started on April 1 while ignoring pleas from the private sector to stimulate growth by cutting taxes. Fiscal policy has become gradually more expansionary but simply raising government spending and increasing the budget deficit is an inflationary form of stimulation said Rob Lee chief economist at South African Mutual Life Assurance Co. South Africa this year is targeting inflation-adjusted growth in GDP of three pct against an increase last year of less than one pct. Growth in GDP over the past decade has averaged about 1.5 pct while the unemployment rate among blacks has spiralled to over 30 pct. Economists estimate that the governments spending target will rise to about 47 billion rand with revenue budgeted at around 40 billion rand. This would leave a budget deficit before borrowing of about seven billion rand or four pct of GDP. The government having consistently overshot its own spending targets for more than a decade also faces a credibility crisis over expenditure figures outlined in the budget analysts said. The budget is invariably too optimistic on expenditure said Standard Bank Ltd in a budget preview. Many analysts in the private sector are now paying less attention to the figures presented in the budget and are using their own estimates of expenditure to draw conclusions for the money and capital markets. South African Mutuals Lee believes government spending will again exceed the budget target and increase to around 49 billion rand this year leaving a deficit of between 5 and 5.5 pct of GDP compared with a three pct limit suggested by the IMF. The IMF limit is obviously going to be abandoned predicted one analyst noting that South Africa has moved steadily away from austerity measures recommended by the IMF over the past two years. The policy shift followed a dramatic deterioration in the political situation and the onset of an economic crisis triggered by the refusal of major foreign banks to roll over loans to the country in September 1985. Against a background of Western economic sanctions falling per capita incomes rising joblessness and high inflation government officials say economic growth is the prime objective. But private-sector economists caution that the governments ability to promote growth by boosting state spending is constrained by the need to maintain a large surplus on the current account of the countrys balance of payments. Most of that surplus this year estimated at around 2.5 billion dlrs will be swallowed up by repayments on the nations estimated 23 billion dlr foreign debt in terms of an arrangement reached earlier this year with major international creditor banks. Within these constraints economists believe Du Plessis has little room to manoeuvre. Analysts argue recent rises in civil service salaries and budgeted spending increases for the state-owned Post Office and South African Transport Services suggest that major tax concessions to individuals or corporations are unlikely. Du Plessis earlier this year announced small concessions for taxpayers in a mini-budget before the May 6 whites-only election. The poll delayed presentation of the national budget. This will not be a very exciting budget commented Harry Schwarz spokesman on finance for the liberal Progressive Federal Party. I do not expect any major tax cuts as all the sweets were given out before the election. REUTER | S.AFRICA EXPECTED TO UNVEIL EXPANSIONARY BUDGET |
Alaska Air Group Incs Alaska Airlines subsidiary said its load factor was 58.6 pct last month up from 58 pct in May 1986. It said revenue passenger miles incrased eight pct to 234.9 mln from 217.9 mln in the year ago month and available seat miles were up ;seven pct to 400.7 mln from 375.8 mln. For the first five months of 1987 Alaska Airlines said its passenger load factor was 54.5 pct up from 53.4 pct a year earlier. Revenue passenger miles increased five pct to 1.05 billion and available seat miles were up three pct to 1.92 billion. Reuter | ALASKA AIR <ALK> LOAD FACTOR UP IN MAY |
1st qtr Shr seven cts vs nine cts Net 166000 vs 201000 Revs 801000 vs 687000 Reuter | DEL E. WEBB INVESTMENT PROPERTIES INC <DWPA.O> |
BASIX Corp said it has agreed in principle to sell the stock of its Automatic Toll Systems Inc subsidiary to Cubic Corp for about 26 mln dlrs. The company said it would retain Automatic Toll assets worth about nine mln dlrs to dispose of over time. The company said completion of the transaction is subject to approval by both boards and BASIXs banks and the expiration of the Hart-Scott-Rodino waiting period. Reuter | BASIX CORP <BAS> TO SELL UNIT TO CUBIC <CUB> |
AAR Corp said its AAR Financial Services Corp nonconsolidated leasing subsidiary sold its beneficial interest in five used Boeing 737-200 aircraft. In March 1985 the aircraft were acquired from and leased back to Piedmont Aviation Inc <PIE>. AAR said the beneficial interest was sold to CIS Corp of San Francisco. Reuter | AAR <AIR> ELEASING UNIT SELLS FIVE AIRCRAFT |
Shr loss 12 cts vs loss five cts Net loss 347849 vs loss 103489 Sales 222697 vs 150534 Reuter | ONCOR INC <ONCR.O> 1ST QTR LOSS |
The World Bank in the throes of a painful reorganization faces new strains because of actions by Citibank and others to set aside new Latin debt reserves financial analysts and monetary sources said. The monetary sources said the reorganization has caused some bad feelings and charges that promotions and other personnel actions have been based on personality rather than ability. It also had some effect in undermining the Banks role in the global debt strategy the sources said. At the center of the controversy is Bank President Barber Conable whose reorganization efforts are getting some critical review from many Bank staff members and some member- countries including the United States. I think if he were to do it again he would do it very differently said one source. Conable a former congressman from New York appointed by President Reagan to the senior most position at the Bank nearly a year ago has taken the view that the Bank badly needed to be reorganized and perhaps made more streamlined. In this he had the backing of many in the Reagan administration who viewed the Bank as a bloated and inefficient bureaucracy that gave money to countries when other free-market sources of assistance were available. However the Bank had been singled out for a much greater role under the U.S. debt initiative proposed by Treasury Secretary James Baker. That strategy which called for some 20 billion dlrs in new funding from the commerical banks and nine billion dlrs in spending from the development banks mostly the World Bank came under profound doubt with the decision by Citibank and Chase Manhattan to set aside new reserves. This move heralded by some sources as a measure that gives all parties more time frightened others who see it as the beginning of a tit for tat exercise that could lead to complete unraveling of the monetary system. As envisioned by the latter the next move would be for Brazil which has delayed payments on its debts to say it does not intend to pay interest for a very long period of time. Citibank and other banks could then decide to stop financing the countrys export credits the funds countries use to support their daily activities leading to an economic breakdown. Within six weeks alot of countries could be out of business said one source. Citibanks initial step last month was to set some three billion dlrs in a general reserve for potential losses on loans to developing countries. It was followed by a similar move by Chase Manhattan some days later. In the best of all worlds the kind of cooperation that was demonstrated between the International Monetary Fund (IMF) the multilateral development banks the wealthy countries and commercial banks when the debt crisis surfaced in 1982 could emerge again but no one is expecting that. If anything the negotiations have become much more confrontational with the debtor countries pressing for more concessions arguing that they face growing political instability if they are asked to do or pay more. They are very critical of the IMFs austerity measures and there is sympathy for their view among the development community. When you hear code words like structural adjustment and tightening your belt. What that means is that the poor peasent making 700 dlrs a year should drop it to 500 dlrs says one source. He adds: And when your hear they should have market forces at play that means the level of public services should drop. It had been hoped that giving the World Bank a greater role in the debt strategy might defuse the growing resistance in the debtor countries to measures that increased already prevalent poverty even further. The Bank which primarily assists countries in the building of roads sewerage systems education and other so-called infrastructure is viewed in the Third World as benefactor. The IMF however which essentially forged the debt stategy following the disclosure by Mexico in 1982 that it was near default is considered a stern taskmaster that has little sympathy or even understanding of poverty. But there are doubts about how well the Baker initiative has worked and about the World Banks success at bringing about increased growth in the Third World under the U.S. prescription which indicated that countries might grow their way out of their difficulty. Reuter | NEW PROBLEMS FOR WORLD BANK IN DEBT STRATEGY |
General Motors Corps Hughes Aircraft Co subsidiary said it has been chosen by British Satellite Broadcasting to negotiate for a contract worth about 300 mln dlrs to deliver two satellites for direct broadcast television. The company said the first of the satellites is scheduled to start up three channels of direct broadcast satellite television by late 1989. The company said the contract should be signed by June 30. Each satellite would be equipped with three 110-watt channels. Reuter | GM UNIT <GMH> NEGOTIATING FOR BRITISH CONTRACT |
Resdel Industries Inc said it has agreed to acquire San/Bar Corp in a share-for-share exchange after San/Bar distributes all shgares of its Break-Free Corp subsidiary to San/Bar shareholders on a share-for-share basis. The company said also before the merger San/Bar would Barry K. Hallamore and Lloyd G. Hallamore San/Bars director of corporate development 1312500 dlrs and 1087500 dlrs respectviely under agreements entered into in October 1983. Reuter | RESDEL <RSDL.O>, SAN/BAR <SBAR.O> IN MERGER DEAL |
Sri Lanka today ordered its armed forces to defend the islands territorial waters as India prepared to send a flotilla with relief supplies that Colombo says it does not want for the Tamils in the Jaffna peninsula. The sudden crisis between Sri Lanka and its giant neighbour deepened as Prime Minister Ranasinghe Premadasa told parliament: We have our territorial limits and nobody can be allowed to trespass there ... President (Junius) Jayewardene has ordered the army navy and air force to protect the island and its territorial waters Premadasa said to a round of applause from the house. In New Delhi an Indian spokesman said the plan to send a flotilla of 20 small unarmed boats with Red Cross supplies to Jaffna tomorrow would go ahead despite Colombos objections. The confrontation was the latest result of the long and bitter conflict between Sri Lankas Buddhist Sinhalese majority and the Hindu Tamil minority which has strong ethnic and cultural links with Indias 50 mln Tamils. Reuter | COLOMBO TO DEFEND WATERS, INDIA READIES FLOTILLA |
The Louvre agreement by the Group of Seven finance ministers and central bankers to stabilise currencies has worked well and needs no fundamental strengthening at the economic summit in Venice on June 8-10 U.K. Chancellor of the Exchequer Nigel Lawson said. Previewing the summit which he expected would not produce any major new economic initiatives Lawson told reporters work remained to be done on improving the conditions for lasting world economic growth.side measures to boost growth he said. I think it is possible that there may be scope for a further reduction in interest rates in Germany he added but stressed that he had had no indication that such a move was likely. He made no mention of Japanese interest rates. Lawson said the U.S. Should embark on a gradual reduction of its fiscal deficits over the next two or three years. He said the February 22 Louvre accord had produced satisfactory exchange rate stability in part thanks to heavy coordinated intervention of Group of Seven central banks and he was content with sterlings exchange rate. Pointing to the record 4.8 billion stg rise in U.K. May currency reserves announced today he said we have been playing a very full part ourselves ... We have been intervening to a very much greater extent than we had done hitherto. Lawson said there was a risk that the Louvre agreement may falter if member states did not implement the macro-economic commitments underlying the accord. Certainly it would be more difficult to maintain exchange rate stability if countries are seen not to implement their commitments in Paris ... In this respect. He said the U.S. Budget deficit was very important. Noting the 6000 billion yen economic package announced by Japanese Prime Minister Yasuhiro Nakasone last week Lawson said what is really needed in Japan is an increase in merchandise imports. Supply side measures are critical. There is a specific range of consumer and agricultural goods where they have an extremely restrictive regime which is wholly unjustified he said. Lawson doubted that Tokyos partners would indulge in Japan bashing at the summit especially after the economic stimulation package and the announcement of Nakasones plans to increase Japanese development aid over the next three years. Japans more flexible stance on Tokyo stock exchange membership would also help deflect criticism he said. He said he thought West Germany would instead come under pressure at the summit to adopt similar stimulation measures to jack up faltering economic growth. In this respect Lawson said he hoped Bonn would bring forward to January 1988 part of its agreed package of tax cuts scheduled for 1990. He also called on Bonn to push ahead with the privatisation of German national industries. On debt Lawson said he expected a three point British plan to alleviate the burden of the poorest sub-saharan countries to make progress in Venice. The plan involving concessional rescheduling of sovereign debt in the Paris Club was first proposed at the IMF and World Bank meetings in Washington earlier this year. Lawson said he would seek to consolidate political backing for the plan at the Venice summit and hoped the programme would be finalised at the Autumn meetings of the IMF and World Bank. He welcomed the recent moves by Citicorp and Chase Manhattan to increase sharply their Third World debt provisions. First it is a blow for realism. Second because the market response has shown that banks have much less to fear from this sort of move than they felt before Citicorp he said. U.K. Banks should follow Bank of England recommendations strengthening their balance sheets and making more provisions. They have done it to some extent they need to do it more Lawson said adding it was up to the banks themselves to determine the appropriate size of provisions. He also said the dismantling of farm subsidies would be discussed at the summit. There is a consensus which we have to push further. REUTER | LAWSON SAYS LOUVRE CURRENCY ACCORD SATISFACTORY |
Centel Corp said it completed the sale of its water properties serving 8000 customers in four southwestern Kansas communities to Central Kansas Utility Co of Columbia Mo. Terms were not disclosed. Reuter | CENTEL <CNT> COMPLETES SALE |
Unilever Capital Corp NV is issuing a 65 mln New Zealand dlr eurobond due July 7 1989 with an 18-1/4 pct coupon and priced at 101-1/4 bookrunner Hambros Bank Ltd said. Joint lead managers are EBC Amro Bank Ltd and Hambros. The bonds guaranteed by Unilever Plc will be issued in denominations of 1000 and 5000 dlrs and listed in Luxembourg. Fees comprise 1/2 pct for management and underwriting combined and 7/8 pct for selling. REUTER | UNILEVER CAPITAL CORP ISSUES NZ DLR EUROBOND |
The public stock offering Amoco Canada plans if it succeeds in its 5.2 billion-dlr takeover of Dome Petroleum Ltd <DMP> will be worth more than one billion Canadian dlrs a published report said. Public stockholders would own at least 15 pct of Amoco Canada although Amoco plans to raise the level of Canadian participation higher than that Amoco Canada president Donald Stacy said in an interview in the Toronto Star. Stacy would not say how much higher adding that that question will be the subject of discussions between Amoco and Investment Canada the federal agency which reviews foreign takeovers of Canadian companies the newspaper said. Amoco Canada plans to make its submission to the agency next Thursday. Stacy said the issue would be sold in stages and that the first stage would be worth 200 mln to 300 mln Canadian dlrs the Star said. The initial offering would not take place until at least one year after Amoco acquired Dome to allow the two operations to merge. Reuter | AMOCO <AN> CANADA OFFER TO TOP ONE BILLION DLRS |
W.R. Grace and Co said it has agreed to combine its cocoa processing businesses with those of S. and W. Berisford PLC. It said the joint venture to be 68.4 pct owned by Grace and 31.6 pct by Berisford would have annual sales in 1987 of over 700 mln dlrs. Grace said the transaction involves the combination of its cocoa products division and two Berisford cocoa processing units which would be operated under Grace management. The company said Berisford would contribute its Dutch and West German cocoa subsidiaries and issue new ordinary shares to Grace in connection with the transaction. It said closing is expected by early fall subject to regulatory approvals. Reuter | W.R. GRACE <GRA>, BERISFORD PLAN COCOA VENTURE |
NYSE TO DELIST WEDTECH CORP sTOCK, DEBENTURES |
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CSR Ltd <CSRA.S> intends to proceed with its planned bid for building materials group Monier Ltd <MNRA.S> despite the counter-bid from <Equiticorp Tasman Ltd> (ETL) CSR executive director Gene Herbert told Reuters. ETL said today it would offer 4.15 dlrs each for Moniers issued capital of 156.28 mln shares plus a share alternative. This compares with a 3.80 dlr cash element in CSRs proposed bid. The proposed offer by ETL controlled by New Zealand entrepreneur Allan Hawkins came after it built up a 14.99 pct stake in Monier in a 95 mln dlr share raid in recent days. Herbert said Britains Redland Plc <RDLD.L> which holds just under 50 pct of Monier still supported the CSR bid and had told CSR it is not a seller. He said Redland wanted to maintain and build on its operations in Australia and the U.S. Where Monier has built up a strong presence notably in roofing tile manufacture. The CSR offer contains a put and call option agreement with Redland. This enables Redland to accept the CSR bid within six months of its close or to lift its stake to 50.1 pct in the same period and to run Monier as a joint venture with CSR. CSR has said that Redland will take up the second option. ETL has declined to say why it intervened in Monier beyond describing it as a long term investment. ETL would bring no synergies to Monier unlike CSR which is a leader in building materials Herbert said. We fit better with Monier he said. CSR has said that it will concentrate development on its core businesses of sugar and building materials after its moves into energy several years ago. Asked what he thought ETLs bid sought to achieve Herbert said: Im puzzled as to what Hawkins strategy is. One has to wonder if Monier is the main target. Herbert said CSR had no plans to raise its bid and said a higher price would be difficult to justify on fundamentals. Monier was trading at 2.80 dlrs when CSR launched its original bid of 3.50 or 16.8 times earnings in late April. The shares closed at 3.90 dlrs today down 25 cents on yesterday after ETL withdrew on reaching the top foreign shareholding level permitted without Foreign Investment Review Board (FIRB) approval. Its bid is subject to FIRB approval. Herbert also said that institutions which are more likely to accept a share alternative than cash would have to judge the respective values of ETL and CSR shares. ETL is the third group to become involved in a possible acquisition of Monier this year. Redland held discussions on a possible takeover before the CSR bid emerged but the negotiations foundered on the price. Share analysts said that for this reason they did not think ETLs intervention would flush out a full Redland bid although Moniers ultimate fate rests in its hands. Redland is still in the driving seat said Tim Cohen of <Ord Minnett Ltd> adding that Redland would be happier having CSR as a partner in running Monier than ETL. Moniers independent directors have recommended ETLs bid. REUTER | CSR SAYS IT IS PROCEEDING WITH OFFER FOR MONIER |
Westport Bancorp Inc said it declared a 100 pct stock dividend and increased the quarterly cash dividend. The company said the the stock dividend to effect a two-for-one stock split is payable July six to holders of record June 12. It said the dividend on present shares was increased to 26 cts from 25 cts in the prior quarter payable July one to holders of record June 12. Reuter | WESTPORT BANCORP <WBAT.O> 100 PCT STOCK DIVIDEND |
Periods ended April 30 Shr 18 cts vs 15 cts Net 3309000 vs 2539000 Revs 45.2 mln vs 26.8 mln Avg shrs 18.7 mln vs 16.8 mln NOTE: 1986 net includes gain of 1197000 dlrs or seven cts a share from tax loss carryforwards Reuter | COMP-U-CARD INTERNATIONAL INC <CUCD.O> 1ST QTR |
Comp-U-Card International Inc said it intends to change its name to CUC International Inc. It said shareholders will be asked to approve the new name at the annual meeting on June 16 Reuter | COMP-U-CARD <CUCD.O> PLANS NAME CHANGE |
Chicago Mercantile Exchange floor traders and commission house representatives are guesstimating todays hog slaughter at about 265000 to 275000 head versus 286000 week ago and 278000 a year ago. Cattle slaughter is guesstimated at about 128000 to 132000 head versus 132000 week ago and 137000 a year ago. Reuter | HOG AND CATTLE SLAUGHTER GUESSTIMATES |
The Secretary-General of the African Development Bank expressed confidence in the institutions ability to handle potential problems with repayment of development financing loans. Koffi Dei-Anang told a news conference at the banks headquarters that loan arrears were only 80 mln dlrs at present a small percentage of total ADB lending which exceeded one billion dlrs in 1986. Some commercial banks have recently taken extraordinary measures to deal with third world lending strategies. We do have difficulty with repayment of loans on time Dei-Anang said. But he denied than any ADB loan arrears were more than 12 months behind schedule. We have never had a default. We have never written off a loan he added. Dei-Anang said the Abidjan-based ADB will hold its annual general meeting in Cairo from June 9 to June 11 and over 1000 delegates were expected to attend. The agenda will include the approval of the banks annual report and accounts but there will be no debate on the capital increase which is currently being voted on by the ADB governors. An ADB spokeswoman said the U.S. Had voted for a 200 pct increase in the banks capital but other votes were still coming in. In December an ad-hoc committee of the ADBs board of governors comprising 18 African and non-African countries agreed that a 200 pct increase was necessary to finance a rise in lending between 1987 and 1991. If the recommendations are approved by the board the capital of the bank would rise from around 6.55 billion dlrs to 19.66 billion dlrs. Dei-Anang said the capital increase would help the bank improve its borrowing capacity. The capital increase is in effect a passport to the capital market he said. It will enable us to borrow something like 4.5 billion dlrs in the next five years he added. REUTER | AFRICAN BANK OFFICIAL CONFIDENT ON LOAN REPAYMENTS |
The New York Stock Exchange said it would suspend trading in Wedtech Corps common stock 13 pct convertible subordinated debentures due on June 15 2004 and 14 pct senior subordinated notes due August 15 1996 before the opening of trading on June 16. Following suspension the exchange said an application will be made to the Securities and Exchange Commission to delist the issues. The exchange said the action was taken in view of Wedtechs unsatisfactory financial condition which it said the company disclosed on April 23 and because it believed Wedtech was unable to transfer its listing to another securities martketplace. The exchange said it may at any time suspend a security if it believes that continued dealings in the security on the exchange are not advisable. Reuter | NYSE TO SUSPEND AND DELIST WEDTECH <WDT> ISSUES |
<Virginia Federal Savings and Loan Association> said it has signed a definitive agreement to be acquired by <Montrose Holding Co> an affiliate of <Montrose Capital Corp> for 20 mln dlrs. Virginia Federal and Montrose Capital said the agreement provides for the conversion of Virginia Federal from a mutual to a stock association and the purchase of 100 pct of its stock for 20 mln dlrs by Montrose. According to the companies Virginia Federal has over 700 mln dlrs in assets and operates 16 branches in Virginia. Virginia Federal said the proceeds would enable it to provide increased mortgage and lending services and enable the company to compete more effectively in the Virginia market. The companies said the agreement is subject to Federal Home Loan Bank Board approval expected later this year. Additionally the companies said the converted association would be managed by a board of directors consisting of the six current Virginia Federal directors and two representatives of Montrose Holding. The senior management of Virginia Federal was expected to continue in office after the conversion the companies said. Reuter | MONTROSE HOLDING TO ACQUIRE VIRGINIA FEDERAL |
The coupon on the 50 mln dlr five year equity warrant eurobond for Tokyo Rope Manufacturing Co Ltd has been set at two pct compared with an indicated level of 2-1/8 pct lead manager Nikko Securities Co (Europe) Ltd said. The exercise price was set at 508 yen per share representing a premium of 2.63 pct over todays closing price of 495 yen. The foreign exchange rate was set at 146.20 yen to the dollar. REUTER | FINAL TERMS SET ON TOKYO ROPE EQUITY WARRANT BOND |
Bell Canada a unit of Bell Canada Enterprises Inc <BCE> said it applied for an average eight pct cut in Canadian long distance rates. The application to the Canadian Radio-television and Telecommunications Commission would also reduce the initial period for operated-assisted calls from three minutes to one minute and operator- and customer-dialed calls would be charged the same. The billing of operator-assisted calls would include a conection charge however. The new rate structure is similar to schedules announced by Bell January 1 for calls within Ontario Quebec and parts of the Northwest Territories it said. Reuter | BELL CANADA PLANS LONG DISTANCE TOLL CUT |
U.S. APRIL FACTORY ORDERS ROSE 0.2 PCT, EXCLUDING DEFENSE ORDERS FELL 0.2 PCT |
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/U.S. NON-FARM PRODUCTIVITY ROSE REVISED 0.5 PCT IN 1ST QTR INSTEAD OF 1.7 PCT |
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/U.S. SALES OF SINGLE-FAMILY HOMES ROSE 7.6 PCT IN APRIL AFTER REVISED 2.7 PCT MARCH DROP |
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Productivity in the non-farm business sector increased at a revised seasonally adjusted annual rate of 0.5 pct in the January-March first quarter the Labor Department said. The department previously reported a 1.7 pct increase in the quarter and said productivity fell 1.5 pct in the fourth quarter of 1986. The department said output rose 4.3 pct and hours of employees and all others gained 3.8 pct in the first quarter. Hourly compensation was unchanged from the fourth quarter. Hourly compensation after adjusting for inflation fell 5.0 pct in the nonfarm sector in the first quarter the largest decline since 1951 the Labor Department said. Unit labor costs dropped 0.5 pct for the first quarterly decline in a year. Costs rose 4.2 pct in the fourth quarter of 1986. The implicit price deflator for nonfarm businesses rose 4.2 pct the largest increase since 1982 after declining 0.3 pct in the fourth quarter. Business productivity including farms rose 0.6 pct in the first quarter after a 2.0 pct drop in the fourth quarter. Reuter | U.S. NON-FARM PRODUCTIVITY ROSE 0.5 PCT IN QTR |
U.S. And Soviet negotiators have completed the text of a draft treaty calling for the elimination of medium-range missiles in Europe a Soviet negotiator said. We must say that as a result of the work done at the current round the sides have drafted the first joint draft text of the treaty on medium-range missiles Alexei Obukhov deputy leader of the Soviet negotiating team told reporters. He said there was still much work to be done and several areas of disagreement remained to be resolved. Reuter | U.S. AND SOVIETS DRAFT EUROMISSILE TREATY |
President Jose Sarney today declared a war without quarter on inflation and said the government would watch every cent of public expenditure. Sarney addressing his cabinet live on television also reiterated that he intended to remain in power for five years until 1990. There has been a long-running political debate about how long his mandate should be. Brazil is currently suffering from the worst inflation of its history. In April monthly inflation reached 21 pct. Reuter | BRAZIL'S SARNEY RENEWS CALL FOR WAR ON INFLATION |
REAGAN SAYS VOLCKER WILL NOT ACCEPT 3rd TERM AS FED CHAIRMAN, NOMINATES GREENSPAN |
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Sales of new single-family homes rose 7.6 pct in April from March to a seasonally adjusted annual rate of 777000 units the Commerce Department said. The department revised March sales to show a 2.7 pct decrease from the previous month to 722000 units instead of the previously reported 3.6 pct drop in March. The April increase brought home sales 12.0 pct below the April 1986 level of 883000 units. The April increase brought home sales to the highest level since last Aprils 883000 units. The Commerce Department said that before seasonal adjustment the number of homes actually sold in April was 76000 up from 71000 in March but down from 84000 in April 1986. The average price was 118800 dlrs in April down from 121200 dlrs in March but up from 110300 dlrs a year ago. The median price was unchanged from March at 99000 dlrs but up from 92500 dlrs in April 1986 the department said. Reuter | U.S. HOME SALES ROSE 7.6 PCT IN APRIL |
Brixton Estate Plc is establishing a sterling commercial paper program for an unlimited amount J. Henry Schroder Wagg and Co Ltd said as arranger. Dealers will be Schroder Wagg S.G. Warburg and Co Ltd and County Natwest Capital Markets Ltd. The paper will be issued in denominations of 500000 and one mln stg and will have maturities between seven and 364 days. REUTER | BRIXTON ESTATE LAUNCHES UNLIMITED STG CP PROGRAM |
President Reagan said Paul Volcker has declined to serve another term as chairman of the Federal Reserve Board the U.S. central bank. Reagan nominated economist Alan Greenspan in his place. Volckers term expires in August. Reagan in a brief announcement in the White House briefing room said he accepted Volckers decision with great reluctance and regret. Volcker first appointed to the Fed post by President Jimmy Carter in 1979 said there is a time to leave and a time to come ... I have no feeling I was being pushed. Volcker appearing with Reagan Greenspan and Treasury Secretary James Baker in the briefing room said he will remain on the job until Greenspans nomination is approved by the Senate. In a tribute to a smiling Volcker standing beside him Greenspan told reporters that one of the departing chairmans greatest achievements was reducing inflation. It will be up to those of us who follow him to be certain that those very hard won gains will not be lost. Assuring that will be one of my primary goals Greenspan said. Financial markets reacted with dismay at the departure of Volcker who has been widely credited with holding the line on inflation and seeking to maintain stability in currency values. Immediately following Reagans announcement the U.S. dollar weakened sharply against all major currencies and both the bond and stock markets declined. But Greenspan told reporters he thought the dollar which has fallen sharply over the past year has reached its low point. There certainly is evidence in that direction Greenspan said when reporters asked if the dollar has bottomed out. The market reaction was probably exaggerated by surprise because the announcement followed a number of published reports that the White House had decided to reappoint Volcker. Volckers tenure at the Fed began under the cloud of major inflation under Carter with consumer prices rising more than 10 per cent annually and the prime interest rate exceeding 20 per cent. With Reagans backing Volcker pursued a tight money policy that cut inflation to about three per cent annually and reduced interest rates to their lowest level in nearly a decade. The tight money policies were also blamed for producing a deep recession in 1981 and 1982 that caused major political problems for Reagan. Reagan reappointed Volcker to the chairmanship in 1983. Greenspan who heads his own Wall Street consulting firm was chairman of President Fords Council of Economic Advisers from September 1974 until January 1977. Greenspan a Republican is considered a traditional conservative economist and has been an adviser to several presidents. Reuter | REAGAN SAYS VOLCKER WILL NOT SERVE NEW TERM |
Belgiums public expenditure deficit fell sharply to 59.5 billion francs in May from 96.7 billion in the same month last year the first major sign of the effects of the governments public spending curbs the Budget Ministry said. During the first five months of this year the net government financing requirement was down by 44.1 billion francs from year ago levels at 345.8 billion francs it said in a statement. The government is aiming to cut this years financing requirement to below 420 billion francs this year from around 560 billion in 1986. The Ministry said it was expected that more than half the projected cut should have been achieved by the end of July. Ministry sources noted that for technical reasons the financing requirement is always highest in the early months of the year. REUTER | BELGIAN PUBLIC SPENDING DEFICIT FALLS IN MAY |
Norways Christiania Bank <CHBO.OL> is increasing the size of its 2-1/2 pct seven year bond issue with gold call and put warrants to 75 mln Swiss francs from 50 mln lead manager Bank Gutzwiller Kurz Bungener Ltd said. The issue is priced at par. Each 5000 franc bond carries three 18 month call warrants with a strike price of 490 dlrs and four three year put warrants with a strike price of 420 dlrs. Subscriptions close on June 22 and payment date is July 8. REUTER | CHRISTIANIA RAISES AMOUNT OF GOLD LINKED BOND |
New orders for manufactured goods rose 401 mln dlrs or 0.2 pct in April to a seasonally adjusted 199.8 billion dlrs the Commerce Department said. The slight April gain followed a revised orders increase in March of 2.6 pct. The department originally reported a March increase of 2.3 pct. Excluding defense factory orders fell 0.2 pct in April after rising 1.1 pct in March. Orders for durable goods were virtually unchanged in April up only 13 mln dlrs to 106.2 billion dlrs. The department had estimated on May 22 that April durable goods orders rose 0.1 pct. The department said defense capital goods orders were up 808 mln dlrs or 8.1 pct in April to 10.8 billion dlrs. Defense orders had risen 43.2 pct in March. New orders for non-durable goods were up 388 mln dlrs or 0.4 pct in April to 93.6 billion dlrs. These figures compared with a March increase of 4.2 pct in durables orders and a 0.8 pct rise in non-durables orders. Orders for non-defense capital goods were up 0.8 pct in April after rising 2.0 pct in March. Within major industry categories orders for transportation equipment fell 7.6 pct in April after rising 10.8 pct in March. Primary metals gained 5.4 pct in April after a 6.8 pct March orders increase. Orders for non-electrical machinery were down 0.9 pct in April after rising 2.3 pct in March. Electrical machinery orders rose during April by 19.3 pct after falling in March by 3.4 pct. Reuter | U.S. FACTORY ORDERS ROSE 0.2 PCT IN APRIL |
Pakistan says its economy has continued its recent outstanding performance during the financial year 1986/87 ending on June 30 but areas like balance of payments investments and energy were causing concern. GDP grew in line with the average growth rate since 1980 and the inflation rate was the lowest since 1969/70 according to a government economic survey. The reform of economic regulation had gathered momentum and there was an impressive performance in a five point government program for rural uplift education and poverty alleviation said the survey. Ministry Economic Adviser Qazi Alimullah told a news conference that before recent unseasonal rains and hailstorms damaged the wheat crop GDP growth was calculated at 7.04 pct compared to 7.25 pct in 1985/86.He said the figure might now slide down a little to around 6.8 or 6.9 pct. The survey said monetary expansion was estimated to be nine pct to date but might rise to around 12 pct by the year-end. Alimullah said exports rose 18 pct to 3.5 billion dlrs from 2.9 billion dlrs in 1985/86. But the at the same time home remittances by Pakistanis abroad dropped to 2.3 billion dlrs from the 1985/86 level of 2.595 billion. More exports and an improvement in the balance of payments situation will be required to overcome this declining trend in home remittances he said. The survey said the trade deficit was expected to fall to 2.4 billion dlrs from three billion dlrs in 1985/86 because of the boost in exports. He said national investment continued to be small because of a poor rate of savings about 14 pct of GDP. He said more savings were required to maintain or possibly step up the present growth rate and to finance the countrys seventh five-year development plan to be launched in July 1988. REUTER | PAKISTAN SAYS GOOD ECONOMIC GROWTH CONTINUES |
GREENSPAN SAYS THERE IS EVIDENCE DOLLAR HAS BOTTOMED OUT |
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BANK OF FRANCE LEAVES INTERVENTION RATE UNCHANGED AT 7-3/4 PCT - OFFICIAL |
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Newly-nominated Federal Reserve Board chairman Alan Greenspan said there was evidence the dollar finally had bottomed out. In a White House briefing Greenspan was asked by reporters if he thought the dollar had bottomed out. There certainly is evidence in that direction he replied. Reuter | GREENSPAN SEES EVIDENCE DOLLAR FALL OVER |
U.S. GOLD, SILVER, PLATINUM SOAR ON VOLCKER REJECTION OF 3RD TERM |
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The International Cocoa Organization (ICCO) buffer stock manager bought 5000 tonnes of cocoa today for the buffer stock traders said. The cocoa is believed to have been entirely made up of second hand material they added. Such a purchase would bring cumulative buffer stock purchases to 26000 tonnes. Reuter | ICCO BUYS 5,000 TONNES COCOA FOR BUFFER STOCK |
Yankee Cos Inc said it will be working with the holders of substantially all of its 12-5/8 pct senior secured notres due 1996 to develop and overall debt and asset restructuring program and as a first step the noteholder has agreed to the deferral of the June One interest payment on the notes until June 30. Yankee said interest was paid to other noteholders yesterday. The company said it plans to meet and work with all interest parties including the holders of its three debt issues and federal banking authorities over the next several weeks to formulate and implement a restructuring plan. Reuter | YANKEE COS <YNK> SEEKS DEBT RESTRUCTURING |
Q-Med Inc said preliminary results show its second quarter ended May 31 revenues exceeded 4.2 mln dlrs. A year earlier revenues were nearly 1.4 mln dlrs. The company also said it had appointed Coopers and Lybrand as its auditors. Chairman Michael Cox declined any comment on this appointment. The company said its preliminary second quarter revenues are consistent with managements expectations and represent a greater than 40 pct increase in sales over those reported for the first quarter. Earnings should show a similar growth pattern the company added. Reuter | Q-MED <QEKG.O> SEES SHARPLY HIGHER REVENUES |
Acme Precision Products Inc said a management group has withdrawn a six dlr per share leveraged buyout offer. Acme said the management group dropped its bid due to continued weakness in the machine tool industry and in Acme Precisions operating results and to the inability of the management group to obtain modifications to terms of its financing commitment. It said The effect of these factors led the management group to conclude that the six dlr per share price was excessive under current conditions. Reuter | ACME PRECISION <ACL> BUYOUT BID DROPPED |
Virginia Electric and Power Co a unit of Dominion Resources Inc is raising 100 mln dlrs via an offering of first and refunding mortgage bonds due 2017 yielding 9.89 pct said sole manager E.F. Hutton and Co Inc. Hutton led a group that won the bonds in competitive bidding. It bid them at 99.376 representing a net interest charge to the company of 9.94 pct. The underwriter set a 9-7/8 pct coupon and reoffering price of 99.85 to yield 123 basis points more than comparable Treasury securities. Non-refundable for five years the bonds are rated A-1 by Moodys and A-plus by Standard and Poors. The gross spread is four dlrs and the reallowance is 2.50 dlrs bookrunner Hutton said of the Virginia Electric deal. Virginia Electric last visited the domestic debt market in October 1986 when it sold 100 mln dlrs of same-rated same-maturity 9-1/4 pct bonds. That issue was priced to yield 9.27 pct or 141 basis points over Treasuries. Reuter | DOMINION <D> UNIT SELLS 30-YEAR BONDS |
General Signal Corp said its General Railway Signal Co unit is the apparent low bidder at 32.5 mln dlrs on a transit radio system contract for the Southern California Rapid Transit District in Los Angeles. The company also said its General Farebox Inc subsidiary received a 3.1 mln dlr farebox system contract from the Greater Cleveland Regional Transit Authority. Reuter | GENERAL SIGNAL <GSX> LOW BIDDER ON RADIO JOB |
Williams Cos said it has been reincorporated in Delaware as Williams Cos Inc following approval by shareholders at the annual meeting last month. Reuter | WILLIAMS <WMB> REINCORPORATES IN DELAWARE |
Noble Affiliates Inc is raising 100 mln dlrs via an offering of convertible subordinated debentures due 2012 with a 7-1/4 pct coupon and par pricing said lead underwriter Morgan Stanley and Co Inc. The debentures can be converted into the companys common stock at 19.625 dlrs per share representing a premium of 25.6 pct over the stock price when terms on the debt were set. Non-callable for three years the issue is rated Baa-3 by Moodys and BBB-plus by Standard and Poors. Noble Affiliates is also offering 125 mln dlrs of 10-1/8 pct notes due 1997 through a group led by Morgan Stanley. Reuter | NOBLE AFFILIATES <NBL> SELLS CONVERTIBLE DEBT |
Meridian Insurance Group Inc said its common stock has been included in the NASDAQ National Market System effective today. Reuter | MERIDIAN INSURANCE <MIGI.O> IN NASDAQ EXPANSION |
Canon Sales Co Inc is issuing a 100 mln dlr equity warrant bond due June 30 1992 with an indicated coupon of 1-5/8 pct and par pricing lead manager Yamaichi International (Europe) Ltd said. The issue is guaranteed by Fuji Bank Ltd and final terms will be set on June 9. The selling concession is 1-1/2 pct while management and underwriting combined pays 3/4 pct. The deal is available in denominations of 5000 dlrs and will be listed in Luxembourg. The warrants are exercisable from July 15 until June 23 1992. The payment date is June 30. REUTER | CANON SALES ISSUES 100 MLN DLR WARRANT BOND |
Italys barley crop is generally in good condition and harvesting is expected to begin shortly the agricultural marketing information and research board Irvam said. First consignments were expected to be available around mid-June. Excellent weather characterised by alternating periods of sunshine and rain has encouraged growth except in Sardinia which was expected to lose a large part of its barley crop because of extreme dryness. Irvam said yields are expected higher than last years low levels if favourable weather continues in the next few weeks. Given an average yield of 3.5 tonnes per hectare national production would be around two pct higher than in the previous season at just above 1.6 mln tonnes it said. If yields reach the record 3.78 tonnes per hectare achieved in 1984 production would be around 1.75 mln tonnes an increase of 11 pct compared to 1986. Reuter | ITALIAN BARLEY CROP REPORTED IN GOOD CONDITION |
The Asian Development Bank is issuing a 50 mln stg eurobond due July 1 1997 paying 9-1/2 pct and priced at 101-7/8 pct lead manager County Natwest Capital Markets Ltd said. The non-callable bond is available in denominations of 1000 and 10000 stg and will be listed in Luxembourg. The selling concession is 1-3/8 pct while management and underwriting combined pays 5/8 pct. Payment date is July 1. REUTER | ASIAN DEVELOPMENT BANK ISSUES 50 MLN STG EUROBOND |
Data General Corp said it introduced several new hardware and software products that link International Business Machines Corp <IBM> and IBM-compatible personal computers into mainframe and minicomputer systems. Data General said the products include three local area networks that conform to industry standards. It said it is now offering a Starlan network which was originally introduced by American telephone and Telegraph Co <t> a thin Ethernet and a PC interface for the standard Ethernet. In addition Data General said it will offer several software packages for PC networks including MS Net a product developed by Microsoft Corp <MSFT.O> that allows PCs to share printers data files and other peripherals. The company said it also introduced a PC version of its popular CEO office automation software. Data General said the new products allow computer users to divide work among a collection of PCs and larger computers. Data General is the first vendor to offer three different local area networks for personal computer integration said Colin Crook senior vice president of the companys communications systems group. Were really giving users freedom of choice with industry standard products added J. David Lyons vice president of group marketing. In addition to the new products which were expected Data General announced a joint product development agreement with <Gold Hill Computers> a Cambridge Mass.-based artificial intelligence software company. The company also announced the formation of a new network services group that will help customers plan and design computer networks. The group will also provide service and maintenance for Data General and other vendors equipment the company said. Reuter | DATA GENERAL <DGN> OFFERS NEW NETWORK PRODUCTS |
Perpetual Savings Bank said its board has approved formation of a holding company to be incorporated in Virginia subject to Federal Home Loan Bank Board and shareholder approval. It said its common and prefered shares would be exchanged on a one-for-one basis for shares of the holding company Perpetual Financial corp. Reuter | PERPETUAL SAVINGS <PASB.O> SETS HOLDING COMPANY |
May Two net Shr 11 cts vs eight cts Net 5895000 vs 3896000 Sales 127.3 mln vs 110.5 mln NOTE: Share adjusted for three-for-one stock split payable July 27 to holders of record July One. Reuter | PEP BOYS - MANNY, MOE AND JACK INC <PBY> 1ST QTR |
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