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Shares of Glaxo Holdings PLC fell following a report in todays New England Journal of Medicine that antibiotics may be able to treat ulcers threatening Glaxos billion dlr antiulcer drug Zantac analysts said. Glaxos was trading at 27-7/8 off 1/2 on volume of 1786800 shares. Shares of SmithKline Beckman <SKB> maker of the popular anti-ulcer drug Tagamet also fell 7/8 to 60-1/4. Anything that raises the possiblity of an entirely new therapy for ulcers would attack the core of Glaxos worldwide business which is Zantac said David MacCallum an analyst who follows Glaxo for Hambrecht and Quist. Zantac is the worlds most prescribed drug with annual sales of over one billion dollars accounting for almost 75 pct of Glaxos earnings said MacCallum. If there is any perception that Zantac is not the therapy of choice for ulcers Glaxos sales and profits could decline said Tina Rizopuolos an analyst with Alexanders Laing and Orkshnk. Rizopuolos said the New England Journal article led by a University of Toronto researcher concludes from a study of 71 children with gastric disease that bacteria could cause gastritis and ulcers. In an editorial in the same issue of the medical journal Richard Hornick of the University of Rochester School of Medicine reviewed studies using antibiotics to treat ulcers. Rizopuolos said Hornick concludes that the bacteria ulcer relationship is exciting and intriguing but further studies are needed to show a direct causal effect. Ulcers happen when the stomachs protective lining erodes and is exposed to underlying inflamed tissue but it is unknown what actually causes the process. It is known that stomach acids exacerbate ulcers and therefore antacids were commonly used to alleviate ulcers before Tagamet and Zantac came along. Both of these drugs prevent the release of the hormone histamine in the stomach which triggers acid secretion. I dont think people should run out and sell Glaxo said analyst Rizopuolos. It will take a long time to displace Tagamet and Zantac...those drugs are going to be prescribed by physicians for a long time she added. Reuter | GLAXO <GLX> STOCK OFF ON ULCER REPORT |
The International Tin Council ITC intervened in a High Court hearing in an attempt to prevent the presentation of internal Council documents as evidence. The intervention in Shearson Lehmans action against the London Metal Exchange over its ring out of tin contracts in 1986 is likely to have implications for other cases in which the Council is involved following the collapse of its buffer stock operations in October 1985 ITC delegates said. The ITCs case is being presented by Professor Rosalyn Higgins and is expected to take a further one or two days next week. Court does not sit tomorrow. In essence the Council is claiming that its status is similar to that of a foreign embassy and that its archives can therefore not be used in an English court of law. The Council ended its quarterly session today ahead of schedule. The meeting had been expected to go on until tomorrow when the European Communitys legal advisers were due to attend but delegates reviewed the progress of the various legal actions today. Otherwise the meeting was occupied with internal administrative matters delegates said. The ITC will continue to operate with a reduced staff after June 30 following the two year extension of the sixth International Tin Agreement. As well as dealing with the ongoing litigation the Council will continue with its statistical work and carry out some research studies although staffing in the research department is being cut to one from two previously. At this weeks session the Council elected Philip Sparkes of Australia as first vice-chairman for the producing members and Heinz Hofer of Switzerland as second vice-chairman for the consumers for the year from July 1. Future quarterly sessions are scheduled for October 5/7 and December 14/16. Reuter | ITC CONTESTS USE OF DOCUMENTS AS COURT EVIDENCE |
American Cyanamid Co said it plans to construct a multimillion-dollar addition to its agricultural flagship plant in Hannibal Mo. The company said the facilities will produce Assert herbicide the third in the companys new series of imidazolinone herbicides. Cyanamid which is a biotechnology and chemical research company said the Hannibal plant is its principal agricultural product manufacturing facility. Assert is a wild oat and broadleaf weed herbicide for use on small grains and on sunflowers the company said. Reuter | AMERICAN CYANAMID <ACY> TO BUILD PLANT ADDITION |
First Wisconsin Corp said it has agreed to sell its First Wisconsin Center in Milwaukee and adjacent property to Trammell Crow Co for 195 mln dlrs resulting in a gain of 77 mln dlrs after tax. It said 36 mln dlrs of that amount will be included in 1987 earnings and the remainder will be accounted for over the next 10 years. First Wisconsin said the transaction was valued at 195 mln dlrs. First Wisconsin said Trammell Crow officials said they planned to build a high-rise tower next to the 42-story center where First Wisconsin will continut to have its headquarters. In addition to the center First Wisconsin said the property being sold includes two buildings directly east of the center. First Wisconsin said it will continue to occupy the area leasing the space back from Trammell Crow. Reuter | FIRST WISCONSIN <FWB> TO SELL BUILDING FOR GAIN |
North Hills Electronics Inc said its North Hills Israel Ltd unit closed on a 1500000 dlr loan from Overseas Private Investment Corporation an agency of the U.S. government. North Hills said the unit will use the loan in connection with the construction and equipping of a 16000-square-foot manufacturing facility in Israel to produce components for electrical control systems. Reuter | NORTH HILLS <NOHL.O> CLOSES LOAN |
The World Bank said it approved a 97.4 mln dlr loan for China to help boost fertilizer output in order to increase agricultural production. The 20-year loan supports a project aimed at improving the efficiency of medium-scale fertilizer plants through technical renovations and energy conservation the bank said. It said the project also seeks to reduce agricultural nutrient imbalances by building the capacity for phosphate fertilizer production and to improve institutional efficiency by introducing modern economic financial and operational systems and techniques. Reuter | CHINA GETS 97.4 MLN DLR WORLD BANK LOAN |
Qtly div 2-1/2 cts vs 2-1/2 cts prior Pay Oct One Record Sept Three Reuter | TRITON ENERGY CORP <OIL> SETS QUARTERLY |
Reynolds Metals Co said it plans to restart the last idle potline at its Troutdale Ore. primary aluminum plant. With the restart of this 22700 tonne a year production line Reynolds said it will be operating at 100 pct of its consolidated primary aluminum capacity of 695000 tonnes per year. Reynolds said work on the restart will begin in the near future and it is expected that actual metal production will begin September 1. The company said the start-up was necessitated by continuing strong demand for aluminum and dwindling worldwide inventories and that the metal is needed to supply Reynolds various fabricating businesses. Reuter | REYNOLDS METALS TO RESTART IDLE POTLINE |
Fingermatrix Inc said 2368253 of the 2649387 rights to purchase common shares that it issued to shareholders were exercised and Hallwood Group Inc <HWG> has purchased 165000 common shares under an option to buy shares for which rights were not exercised. In addition it said it received oversubscription requests for another 1400000 shares and will distribute 116134 shares on a pro rata basis. The company said proceeds after underwriting discounts and commissions will be about 12.6 mln dlrs. Reuter | FINGERMATRIX <FINX.O> COMPLETES RIGHTS OFFERING |
Allegheny and Western Energy Corp said it was forming a subsidiary to market gas to smaller users in West Virginia. The company also said it completed negotiations to sell between 10 and 12 mln cubic feet of gas per day to a large unspecified East Coast utility. Interstate markets will become part of the subsidiarys operations the company said. Reuter | ALLEGHENY <ALGH.O> FORMING SUBSIDIARY |
Senate Banking committee chairman William Proxmire D-Wis said a conference will be held with the House Banking committee next week on a bill to refinance the Federal Savings and Loan Insurance Corp. The Senate has passed a 7.5 billion dlr FSLIC refinancing while the House approved five billion dlrs in new funds. The Senate bill also bars new bank services until next March and bans so-called non-bank banks provisions the House opposes. FSLIC is virtually out of money to help ailing thrift institutions according to the Federal Home Loan Bank Board. Reuter | PROXMIRE SAYS FSLIC CONFERENCE SET FOR NEXT WEEK |
OBrien Energy Systems Inc said it expects net income for the year ending June 30 of 12 to 15 cts per share up from eight cts last year. The company said the earnings will be aided substantially be an agreement it has signed with Trafalgar House PLC <THSL.L>. Under the agreement it said Trafalgar will provide turnkey construction operation and maintenance services as well as construction financing for OBrien cogeneration plants to be built in New Jersey and California. Total installation costs will be about 190 mln dlrs it said with construction to start before year-end. Reuter | O'BRIEN ENERGY <OBS> SEES HIGHER YEAR NET |
PPG Industries said it signed an agreement with Formosa Plastics Group to build and operate a continuous strand fiber glass manufacturing plant in Taiwan. The 50-50 joint venture of PPG and Nan Ya Plastics a corporation of Formosa Plastics Group is subject to approval of Taiwan governmental agencies. PPG said the plant scheduled to begin operating in early 1989 will have an initial annual capacity of 20000 metric tons. Reuter | PPG INDUSTRIES <PPG> TO BUILD TAIWAN PLANT |
Consumers Power Co is raising 250 mln dlrs through a two-tranche offering of first mortgage bonds said lead manager Morgan Stanley and Co Inc. A 150 mln dlr offering due 1992 was given a nine pct coupon and par pricing to yield 112.5 basis points over comparable Treasuries. This tranche is non-callable for life. A companion 100 mln dlr issue maturing in 1997 was assigned a 9-5/8 pct coupon and priced at 98.50 to yield 9.703 pct or 143 basis points over Treasuries. These bonds are non-callable for five years. The debt is rated Baa-3 by Moodys BBB-minus by S and P. Reuter | CONSUMERS <CMS> SELLS BONDS IN TWO TRANCHES |
Qtly div 95 cts vs 95 cts prior Pay August three Record June 30 Reuter | NYNEX CORP <NYN> SETS QTLY DIVIDEND |
Ronald Perelman head of Revlon Group Inc <REV> may be trying to ignite a bidding war for Gillette Co that could draw some big international players and in the process make a lot of money for himself Wall Street analysts said. Several hours before a regularly scheduled board of directors meeting Gillette disclosed that Perelman requested consent of its board for an offer of at least 40.50 dlrs per share. Perelman needed the consent because he agreed in November not to buy stock for 10 years without permission. I think Ronald Perelman is less interested in Gillette and more interested in putting Gillette into play because he stands to make a ton of money said Andrew Shore analyst at Shearson Lehman Brothers Inc. In play is a term used on Wall Street to describe what happens when a company becomes an unwiling takeover target. Shore noted that according to the 1986 agreement Revlon gets paid if there is any acquisition of Gillette through November of this year at a price higher than 29.75 dlrs per share. Gillette rose three to 40 today following a gain of three yesterday. The agreement would be calculated on the basis of Perelmans previous holding of 18.4 mln shares adjusted for a split. For example a deal between Gillette and some other company at 44 dlrs per share would make Revlon richer by 262 mln dlrs under the formula. Neither Perelman nor his spokesmen returned telephone calls seeking comment. Revlon stands to make a substantial amount of money if someone else takes over Gillette said Analyst Deepak Raj of Merrill Lynch and Co. Im not saying that is going to happen but Gillette is an undervalued stock with a breakup value of 45 dlrs per share. Shore of Shearson Lehman said there are a couple of reasons why Perelman may not be really interested in acquiring Gillette. He said Perelman in the process of taking Revlon private after acquiring control of the cosmetics company two years ago probably wants to concentrate on improving Revlons operations. Hes trying to overhaul and improve the image of the dearptment store business. Another reason is that Revlon has recently made two other acquisitions. Under those circumstances Shore would not be surprised if some company such as Unilever plc <UN.AS> or Procter and Gamble Co <PG> decided to take a look at Gillette. Shore mentioned half a dozen other potential buyers for Gillette including Sir James Goldsmith Hanson Trust plc <HAN> RJR Nabisco Inc <RJR> American Brands Inc <AMB> and Ralston Purina Co <RAL>. Perelman is trying to put the company in play said a Wall Street arbitrageur. He gets to share in the upside if the company is sold. Another arbitrageur said he expects Gillette to resist Perelmans overture. I cant see the board consenting what has changed between November and now he said. Another arbitrageur said he was not sure what was going on. Perelman never does anything without a fair amount of calculation he said. But he added The Gillette board has to be careful. They just cant say no or theyll be sued by shareholders. Gillettes board was still meeting at 1700 EDT three and one-half hours after the scheduled starting time. According to a copy of Perelmans letter released by Gillette he would be prepared to sign a defnitive merger agreement without any financing condition. He said Citibank N.A. is his lead lender and First Boston Inc is his financial adviser. Reuter | GILLETTE <GS> SEEN OBJECT OF GLOBAL BIDDING WAR |
The World Bank said it approved a 97.4 mln dlr loan for China to help boost fertilizer output in order to increase agricultural production. The 20-year loan supports a project aimed at improving the efficiency of medium-scale fertilizer plants through technical renovations and energy conservation the bank said. It said the project also seeks to reduce agricultural nutrient imbalances by building the capacity for phosphate fertilizer production and to improve institutional efficiency by introducing modern economic financial and operational systems and techniques. Reuter | CHINA GETS WORLD BANK LOAN FOR FERTILIZER |
PNC Financial Corp said it will raise its loan loss reserve by 110 mln dlrs to about 386 mln dlrs reducing second quarter results by 66 mln dlrs or 92 cts per share on a fully diluted basis. The company said that after the charge it still expects to report a second quarter profit and expects a first half profit of about 100 mln dlrs. It added that it expects normal operating earnings in the second half. The company earned 68.5 mln dlrs in the 1986 second quarter and 121.6 mln dlrs in the prior first half. It said the increase in loss reserves was due to its appraisal of the worldwide economy particularly in less developed countries that are experiencing payment problems. The company said the part of its loss reserve allocated to such countries is about 35 pct of its loans to those countries. It said the move would not result in any change to its current dividend policy. Reuter | PNC FINANCIAL <PNCF.O> RAISES LOSS RESERVE |
A.H. Robins Co facing suits over its Dalkon Shield birth control device said a Federal Court of Appeals approved of the way the company notified potential victims about a possible liability. The notification of potential claimants which began in january 1986 and ended several months later was challenged by some claimant committees who said the companys program was inadequate. A company spokesman said A.H. Robins was pleased with the ruling noting an unfavorable decision would have set the whole thing back for quite some time. The ruling by the U.S. Court of Appeals for the fourth circuit which upheld a lower court said the notification program used by Robins was ... reasonable. The evidence indicates that every news outlet in the world received the information. Simiarly there is strong evidence that the news was broadly disseminated worldwide. Women from such unlikely locations as Kenya Botswana Pakistan and Bangladesh ultimately filed claims. A battery of world health and welfare organizations also disseminated the information. It appears to this Court that the extensive notification program was a success. Reuter | A.H. ROBINS <QRAH> WINS APPEALS COURT RULING |
Aluminum Co of America said it is offering to purchase any and all of its outstanding 150 mln dlrs of 12 pct sinking fund debentures of 2012. It said it will buy back the debentures at 1105 dlrs per 1000 dlr principal amount plus accrued interest up to but not including the day of payment. The offer will end at 1700 EDT (2100 GMT) on June 30 unless extended. Payment will be made on July eight. The buyback offer will be co-managed by Merrill Lynch Capital Markets and Salomon Brothers Inc Alcoa said. Reuter | ALCOA <AA> TO BUY BACK 12 PCT DEBENTURES |
MINPECO LIFTS FORCE MAJEURE ON ZINC INGOT SHIPMENTS FROM CAJAMARQUILLA-SPOKESMAN |
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TRW Incs TRW Componenets International Inc unit said it set a pact with Tektronix Incs TriQuint Semiconductor unit to jointly supply gallium arsenide devices for space applications. As part of the agreement the two companyies are working together to establish procedures to produce class S (a stringent military specification for space use) gallium arsenide components. TriQuint makes gallilum arsenide integrated circuits. Reuter | TRW INC <TRW> SETS PACT WITH TEKTRONIX <TEK> |
Perus state minerals marketing arm Minero Peru Comercial SA (Minpeco) lifted a force majeure on zinc ingot shipments from the countrys biggest zinc refinery at Cajamarquilla a spokesman said. The spokesman said the problems affecting sulphuric acid and roaster plants that had halted production since May 4 had been resolved. However he said production of zinc ingots this year was expected to fall to around 86000 tonnes this year at Cajamarquilla from 94000 tonnes in 1986 because of the stoppage. The refinery has an optimum annual production capacity of 100000 tonnes but its highest production was 96000 tonnes of refined zinc ingots in 1985 the spokesman said. Reuter | FORCE MAJEURE LIFTED AT CAJAMARQUILLA |
ASSETS OF U.S. MONEY FUNDS FELL 702.4 MLN DLRS IN LATEST WEEK TO 235.75 BILLION |
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Moodys Investors Service Inc said it may downgrade Crazy Eddie Incs 65 mln dlrs of B-1 convertible subordinated debentures. Moodys cited Crazy Eddies reduced profitability recent acquisition proposals for the company that could increase debt leverage and an uncertain earnings outlook. The agency said its review would consider the companys concentration in the highly competitive New York marketplace as well as Crazy Eddies ability to maintain adequate bank financing. Reuter | CRAZY EDDIE <CRZY> MAY BE DOWNGRADED BY MOODY'S |
AMERICAN EXPRESS BANK LTD WILL ADD 600 MLN DLRS TO LOAN LOSS RESERVES |
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Mexico signed a rescheduling accord covering 120 mln dlrs in official debts to Britain as part of a 1.8 billion dlr restructuring agreed with the Paris club of creditors last year the finance ministry said. The rescheduling is over 10 years with five years grace and carries an interest margin of 1/2 pct over libor. Finance minister Gustavo Petricioli who signed the accord for Mexico said the agreement reflects a strengthening of economic financial and trade relations between the two countries. The Paris Club restructuring forms part of a 12 billion dlr financial package agreed with Mexicos creditors last year. The rescheduling covers public sector trade debts coming due between september 1986 and march 1988. Reuter | MEXICO SIGNS 120 MLN DLR RESTRUCTURING WITH U.K. |
CNS Inc said it completed its initial public offering of 1035000 shares of common stock at 3.75 dlrs a share through an underwriting group headed by Engler-Budd and Co Inc. Concurrent with the offering the company made an exchange offer in which it issued 277127 common shares in exchange for 935333 dlrs of outstanding promissory notes at the rate of 3.375 dlrs a share. This represented over a 93 pct acceptance of the exchange offer the company said. Reuter | CNS <CNXS.O> COMPLETES INITIAL PUBLIC OFFERING |
USX Corp said its USS division has available a comprehensive sheet steel selection and pricing system detailing the companys full line of products. The company said it was the first complete update in 25 years. The new prices in the book are effective after Oct One 1987 the company said. Reuter | USX <X> UNIT OFFERS STEEL PRICES DIRECTORY |
Inspiration Consolidated Copper Co a subsidiary of Inspiration Resources Corp said it is lowering its base price for full-plate copper cathodes by 0.50 cent to 74.0 cents a lb effective immediately. Reuter | INSPIRATION CUTS COPPER PRICE 0.50 CT TO 74 CTS |
Shr 58 cts vs 38 cts Net 4628650 vs 3041407 Revs 45.0 mln vs 28.1 mln Reuter | <AGF MANAGEMENT LTD> SIX MTHS MAY 31 NET |
China has added 30000 tonnes of U.S. corn to its previous commitments according to the U.S. Agriculture Departments latest Export Sales report. The report covering transactions in the week June 11 the additional corn resulted from changes in destinations. Total corn commitments for delivery in the 1986/87 season amount to 1083400 tonnes. Reuter | CHINA ADDS CORN TO COMMITMENTS - USDA |
Period ended May 31 Shr loss five cts vs loss 11 cts Net loss 306007 vs loss 102420 Sales 110522 vs 10105 NOTE: Full name is Data Med Clinical Support Services Inc Per-share data adjusted for three-for-one stock split payable June 30 1987 The only sales reflected in fiscal 1987 period are sales recorded subsequent to the May 22 1986 acquisition of the assets of a predecessor company by Data Med Reuter | DATA MED CLINICAL SUPPORT<DMCS.O> 1ST QTR LOSS |
Alexander and Alexander Services Inc said it formed an insurance unit known as the Environmental Protection Insurance Co-Risk Retention Group to specialize in environmental liability coverage. The company said the unit has started preliminary underwriting activities and will provide environmental impairment coverage to companies with pollution liability exposures. Reuter | ALEXANDER <AAL> ESTABLISHES INSURANCE UNIT |
Standard and Poors Corp said it may downgrade Southland Corps 156 mln dlrs of debt securities and 125 mln dlrs (liquidation value) of preferred stock. The agency cited Southlands announcement that it is studying various restructuring alternatives. S and P said that the company has been a rumored takeover target for a while and a restructuring would probably be a defensive move to thwart an unfriendly bid. Southland currently carries BBB senior debt and A-2 commercial paper. Reuter | SOUTHLAND <SLC> MAY BE DOWNGRADED BY S/P |
Moodys Investors Service Inc said it may downgrade Crazy Eddie Incs 81 mln dlrs of B-1 convertible subordinated debentures. Moodys cited Crazy Eddies reduced profitability recent acquisition proposals for the company that could increase debt leverage and an uncertain earnings outlook. The agency said its review would consider the companys concentration in the highly competitive New York marketplace as well as Crazys ability to maintain adequate bank financing. Moodys corrects amount of debt from 65 mln dlrs. Reuter | CORRECTED - CRAZY EDDIE <CRZY> MAY BE DOWNGRADED |
NOVA CORP SAYS IT IS CONSIDERING A TAKEOVER BID FOR DOME PETROLEUM |
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McDonnell Douglas Corp and Siemens AG <SIEG.F> said they signed a memorandum of understanding dealing with the AH-64 Apache helicopter. They said the memorandum deals with depot maintenance of the U.S. Armys helicopters based in West Germany and a joint study of the potential development and production of the helicopter for the West German Army. Reuter | MCDONNELL DOUGLAS <MD>, SIEMENS SIGN MEMORANDUM |
British companies are being largely frozen out of President Reagans Star Wars project despite earlier hopes of lucrative contracts from the research bonanza according to a report by Members of Parliament (MPs). Funding for the project formally known as the Strategic Defence Initiative (SDI) has so far amounted to some 7.5 billion dlrs parliaments Defence Committee said. But British contractors have won only 34 mln dlrs of this -- 20 mln dlrs on a government-to-government basis with the rest secured directly by U.K. Firms and institutions. In December 1985 Britain and the United States signed a Memorandum of Understanding (MoU) relating to cooperative research for the Strategic Defence Initiative. At the time hopes were expressed that U.K. Industrial participation would lead to significant spin-off of technology both of other defence areas and to the civil sector. But the all-party committee report said the debate about the merits of U.K. Participation in SDI has now to be conducted within a rather different context than was the case when the MoU was negotiated.... It has become evident that SDI participation may not be the great bonanza that some thought. British Prime Minister Margaret Thatcher has been one of President Reagans few staunch supporters on his plan to development an anti-ballistic missile defence screen. But government sources said she has become angry about bureaucratic barriers to British companies trying to break into the lucrative American defence market generally -- a view voiced again today by her defence minister George Younger. He told a gathering here of British and American businessmen We in Europe greatly welcome the emphasis which you in the U.S. Have placed on cooperation and collaboration in the defence equipment sphere. He added But I do worry that the failure of important and influential individuals in Congress and elsewhere to realise the true nature of the two-way street in terms of ideas technology and equipment will lead to the erection of artificial barriers. I am afraid that the danger signals are only too visible in the form of both of the legislative proposals which seem to arise with ever increasing frequency on (Capitol) Hill and of new regulations from the U.S. Administration Younger said. The defence balance of trade with the U.K. and other allies is still markedly in favour of the U.S. Thatcher will visit Washington next month for talks with President Reagan. U.K. Government officials said she would probably raise the subject of defence trade when they meet. The report by Parliaments Defence Committee said that the British position towards SDI was based on four points agreed between Thatcher and Reagan in December 1984 they being that: - The aim was not superiority but to maintain balance - SDI-related deploymewnt would be a matter for negotiation - The overall aim is to enhance not undercut deterence - East-West negotiation should aim to achieve security with reduced levels of offensive systems on both sides. The committee in its report said we very much support the governments view that SDI research should proceed only within the framework of the Camp David four points and in particular that it should be in entire conformity with the provisions of the ABM (Anti-Ballistic Missile) Treaty. We note that all present and envisaged SDI work undertaken by UK contractors falls in the narrow interpretation of the treaty (and) we recommend that the government takes the appropriate steps to ensure that this continues to be the case. That definition prohibits the U.S. And Soviet Union from developing testing or deploying ABM systems experts said. That recommendation would of course change it added if it has become clear that the Soviet Union has taken the lead in renouncing the constraints of the narrow interpretation. Regarding possibilities for technology spin-offs the committee report said that the present predominance of paper studies in SDI contracts awarded to British firms and institutions militates against any such achievement. Reuter | UK "STAR WARS" CONTRACTS SEEN AS TOO SMALL |
Carter Hawley Hale Stores Inc said it has set June 29 as the record date for shareholders voting on the companys proposed restructuring at its annual meeting. The company has yet to set a date for the meeting but has said it will be held before the end of August. Under the proposal Carter Hawley would split into a specialty store company and a department store company. Shareholders would get 17-dlrs in cash and a share in each of the two new companies for each existing common share they hold. The restructuring was announced in December after Carter Hawley rejected a buy-out offer by Retail Partners. Reuter | CARTER HAWLEY <CHH> SETS RECORD DATE FOR VOTE |
Allegheny International Inc said it sold three of its industrial units which served the railroad industry to <Chemetron Railway Products Inc> a senior management group of Allegheny. Terms of the transaction were not disclosed. Included in the sale were Chemetron Railway Products True Temper Railway Appliances Inc and Allegheny Axle Co the company said. The three units include 12 plants throughout the U.S. the company said. Reuter | ALLEGHENY <AI> SELLS THREE INDUSTRIAL UNITS |
Qtly div 30.1 cts vs 30.1 cts prior Pay July 15 Record June 30 Reuter | VESTAUR SECURITIES INC <VES> QUARTERLY DIVIDEND |
Qtly div 26 cts vs 26 cts prior Pay July 15 Record June 29 Note:the companys full name is One Valley Bancorp of West Virginia Inc Reuter | ONE VALLEY BANCORP INC <OVWV.O> QTLY DIVIDEND |
Phillips Petroleum Co said its Provesta Corp unit will build a semi-commercial fermentation products plant with capacity of more than 3 mln lbs a year of Provesteen yeast. The company said construction of the plant is set to begin in August with completion due April-May 1988. It said the plant will be built by Jacobs Engineering Group Inc <JEC>. The company said the purpose of the plant is to demonstrate a scale-up of Phillips and Provestas fermentation technology. Reuter | PHILLIPS PETROLEUM CO <P> UNIT BUILDS NEW PLANT |
Ram Industries Inc a unit of Cortez International Ltd. said an agreement has been reached with <Treasure Valley Foods> of Nampa Idaho to lease all of Treasures buildings and equipment. The company said the joint venture will be between Ram and one of its units Multiple Resources Inc and that the operation will retain key Treasure management employees. Ram said operations will begin by August one and will involve processing onions in addition to other frozen food products during the initial year of the project. Ram said it expects sales to exceed 12 mln dlrs during the first 24 months with net income exceeding 1.8 mln dlrs. The company also said it is in negotiations to purchase a yet undisclosed facility in Mississippi which processes up to 1.4 mln pounds of frozen okra monthly. Reuter | CORTEZ <COZYF.O> UNIT SETS FOOD PARTNERSHIP |
Qtly div 13 cts vs 11-1/3 cts prior Pay Aug 3 Record July 15 Reuter | ENNIS BUSINESS FORMS INC <EBF> QTLY DIVIDEND |
Qtly div 15 cts vs 15 cts prior Pay July 28 Record July one Reuter | GREAT LAKES CHEMICAL CORP <GLK> SETS REG DIV |
The New York Stock Exchange said in connection with the triple expirations of stock index futures options and individual options it will disclose imbalances in 50 major stocks tomorrow at 0900 EDT and again at 1530 EDT. The information will be disclosed via financial news services. Reuter | NYSE TO DISCLOSE IMBALANCES TWICE TOMORROW |
Qtly div 59.5 cts vs 57 cts Pay July 31 Record July 2 Reuter | SOUTHERN CALIFORNIA EDISON <SCE> RAISES DIVIDEND |
MOODY'S AFFIRMS AMERICAN EXPRESS CO'S 8.6 BILLION DLRS OF DEBT |
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Sen. Tom Harkin D-Iowa defended his controversial mandatory supply control farm bill and said U.S. farmers should be allowed to vote in a referendum whether they approve of the proposal. The Harkin proposal would set loan rates of 5.17 dlrs per bushel for wheat 3.77 dlrs for corn and 9.32 dlrs for soybeans all to be put in effect under strict controls on planted acreage reductions. Present loan rates are 2.28 dlrs for wheat 1.92 for corn and effectively 4.56 for soybeans. Also under the plan the U.S. would seek a world market sharing cartel with the European Community and other exporting nations to share-out export markets Harkin said during the first of several Senate Agriculture subcommittee hearings examining farm programs. Harkin made the following claims in testimony on his Family Farm Act. -- The mandatory control bill would increase farm income and reduce government spending on agriculture. -- Harkin said his policy of high price supports would not ruin U.S. agricultural exports as critics claim but would increase overall revenue from exports. This would be done by seeking agreement among major exporting countries including the European Community on market sharing at agreed high prices. Sen. Christopher Bond R-Mo. countered during the hearing that such a grain export cartel is not workable. -- Harkin acknowledged that higher commodity price supports would be passed onto consumers but he said high food prices stem more from gouging by food processing companies than from high farm product prices. Harkin cited what he termed excessive net returns on equity over five years of 33.4 pct at Kellogg 31.9 pct Monfort 22.8 pct Nabisco 22.8 pct ConAgra 21.2 pct H.J. Heinz 19.1 pct Ralston Purina 17.2 pct Pillsbury and 16.7 pct Quaker Oats. -- Harkin said a legitimate concern about his bill would be the impact of higher prices on livestock producers. He said as a transition to the higher prices he would allow livestock producers to purchase Commodity Credit Corp. grain stocks for three years. Thereafter livestock farmers would benefit from a predictable and stable grain price he said. -- Harkin said that under his policy approach farm participation would be no more mandatory than the current farm program. He said farmers now must participate in farm programs in order to receive credit for planting and to protect farm income. Reuter | SENATOR DEFENDS U.S. MANDATORY FARM CONTROL BILL |
MOODY'S MAY DOWNGRADE POTOMAC ELECTRIC'S 1.3 BILLION DLRS OF DEBT |
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Nova Corp is considering a takeover bid for Dome Petroleum Ltd either alone or as part of a consortium Nova chairman Bob Blair said. We are thinking about making an offer to Dome or Amoco (Canada Petroleum Co Ltd) or the creditors Blair told reporters before the annual meeting. Amoco Canada is a unit of Amoco Corp <AN> which has made a 5.2 billion-dlr acquisition offer for Dome. There is ongoing serious thought applied to Dome in Nova and in Husky but no decision of substance as to future action has been taken in either company Blair said. Nova owns 43 pct of Husky Oil Ltd <HYO.TO>. Blair also said that Nova has made no decision as to whether it would want to be lead partner in a joint purchase of Dome. He added that some of the discussions with other parties about Dome included TransCanada PipeLines Ltd <TRP> but refused to name the other participants. Reuter | NOVA <NVAA.TO> CONSIDERING BID FOR DOME <DMP> |
Red Lion Inns Limited Partnership said it declared an initial cash distribution of 43 cts per unit which is a proration of 50 cts per quarter. The distribution is payable August 14 to unitholders of record June 30. The payout was adjusted to reflect the actual number of days the partnership will have owned the hotels during the calendar quarter ended June 30 1987. Reuter | RED LION INNS L.P. <RED> SETS INITIAL DIVIDEND |
Qtly div 95 cts vs 95 cts prior Pay Aug 3 Record June 30 Reuter | NYNEX CORP <NYN> QUARTERLY DIVIDEND |
Qtly div 12 cts vs 12 cts prior Pay Aug 10 Record July 10 Reuter | FIRST FEDERAL OF MICHIGAN <FFOM.O> QTLY DIV |
Standard and Poors Corp said it placed on creditwatch with negative implications Gillette Cos A-2 commercial paper pending the outcome of a possible takeover by Revlon Group Inc <REV>. Revlon currently bound by a standstill agreement following an earlier bid for the company has asked Gillettes board for permission to make a 40.50 dlr per share bid for the firm. Should Revlon be successful Gillettes rating would reflect the weaker credit quality and aggressive nature of Revlon whose senior debt is rated B the agency said. Reuter | GILLETTE <GS> PAPER MAY BE CUT BY S/P |
Kraft Inc said it strongly disagreed with a complaint filed by the Federal Trade Commission that it made false and misleading claims about its Kraft Singles cheese product and said it would fight the charge. Kraft has always been committed to informative and truthful advertising and this compaign clearly meets those criteria Kraft said in a prepared statement. We believe the integreity of the advertising will be established through the litigation process Kraft said. Company spokesman Scott Horne said he could not elaborate on the statement because the case is being litigated. The FTC charged Kraft with making false and misleading claims in its advertising by overstating the calcuim content of its Kraft Singles American Pasteurized Process Cheese Food. In an administrative complaint the FTC charged the Glenview Ill. food and consumer products company with falsely claiming that a slice of Kraft Singles contains the same amount of calcium as five ounces of milk. The company also falsely advertised that Kraft Singles contain more calcium than most slices of imitation cheese and that it could substantiate its claims the FTC charged. Reuter | KRAFT <KRA> DEFENDS CHEESE ADVERTISING |
AMERICAN EXPRESS CO SEES 50 MLN DLR CONSOLIDATED LOSS IN 2ND QTR FROM ADDITION TO UNIT'S LOAN LOSS RESERVE. |
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The Federal Deposit Insurance Corp said the First Midwest Bank based in Maryville Mo. was closed by state regulators becoming the 91st federally insured bank to fail this year. The FDIC said First Midwests 25.1 mln dlrs in deposits are being assumed by the First Bank of Maryville a newly chartered subsidiary of (Citizens Bancshares Co) of Chillicothe Mo. It said the failed banks two offices with assets of 25.2 mln dlrs will reopen June 19 as branches of First Bank. Reuter | FDIC SAYS MISSOURI-BASED BANK HAS FAILED |
First Wachovia Corp said it will add 50 mln dlrs to its loan loss reserve. It said about 35 mln dlrs will cover bad loans to developing countries and the balance is for domestic and international loans. First Wachovia also said it will report a second quarter capital gain of 14.3 mln dlrs from the sale of equity securities. It said the effect of these transactions will reduce its second quarter earnings by 20 mln dlrs or 37 cts a share in net income for the quarter. In the year-ago quarter the bank earned 45 mln dlrs or 83 cts a share. First Wachovia also said that excluding the second quarter special items it expects to report a good operating earnings performance compared with the year-ago quarter. Reuter | FIRST WACHOVIA <FW> ADDS TO LOAN LOSS RESERVE |
A White House associate personnel director Mark Sullivan emerged as a possible candidate to replace Susan Phillips as chairman of the Commodity Futures Trading Commission (CFTC). Commodity industry and government sources said Sullivan who is not well known to the commodities industry has emerged this week as a surprise candidate for the post. Sullivan an attorney has been in charge of Reagan administration personnel appointments in the legal and financial affairs areas since July 1986. Phillips resigned last month to assume the post of vice president of finance at the University of Iowa. Following Phillips resignation CFTC commissioner Kalo Hineman a Kansas farmer or commissioner Robert Davis were considered the strongest candidates to head the agency at least temporarily. However industry sources said the strong speculation about Sullivan suggests he now is the leading candidate. Sullivans name has also been floated recently for other Reagan administration financial regulatory positions. He was rumored in April to be under consideration for a position on the board of the Federal Home Loan Bank Board which regulates Savings and Loan Associations. Reuter | WHITE HOUSE STAFFER CONSIDERED TO HEAD CFTC |
West German economic growth will slow to 1.5 pct this year from 2.4 pct in 1986 due to weak domestic demand and tougher competition from abroad the Organisation for Economic Cooperation and Development (OECD) said in its semi-annual review of the world economy. This view is less favourable than the West German governments forecast of a growth rate of under two pct this year but is in line with forecasts by independent economic institutes of growth ranging from 1.5 to two pct. The OECD said that the economy should pick up next year with the gross national product rising by two pct in real terms. The OECD said it assumed the German economy was passing through a period of temporary weakness and there would be some recovery in business confidence in the near future. But it warned that the key to an improvement in the economy was higher domestic demand which is only forecast to rise by 2.5 pct this year and 2.75 pct in 1988 below 1986s 3.7 pct. While noting that the government is bringing forward a five billion mark tax reform to January 1988 the OECD said that the medium to longer-term performance of the West German economy could be improved by reduction of subsidies - which would allow relatively lower tax rates. Since the OECD report was compiled the West German Federal Statistics Office has released figures showing that the GNP actually fell 0.5 pct in real terms in the first quarter of this year compared with the final three months of 1986. Diplomatic sources here said that West Germany appeared likely to finish the year with the lowest growth rate of any of the Group of Seven leading industrial nations. West Germanys current account surplus the target of considerable criticism by the Reagan administration is expected to rise slightly to 37 billion dlrs this year from 35.8 billion in 1986 before declining to 29 billion dlrs in 1988. REUTER | OECD SEES GERMAN GROWTH HIT BY LOW DOMESTIC DEMAND |
WEDGE Group Inc a Houston investment firm said it raised its stake in TVX Broadcast Group Inc to 682419 shares or 15.1 pct of the total outstanding common stock from 559219 shares or 12.4 pct. In a filing with the Securities and Exchange Commission WEDGE said it bought 123200 TVX common shares at prices ranging from 8.00 to 10.625 dlrs a share. Reuter | INVESTMENT FIRM RAISES TVX <TVXG.O> STAKE |
Frances growth rate is expected to strengthen in the second half of this year after a poor first half but unemployment will worsen the Organisation for Economic Cooperation and Development (OECD) said. In its semi-annual review of the world economy the OECD forecast that growth in the French Gross Domestic Product (GDP) would run at about two pct in the next six months. It said the rate would be in line with the 1986 trends but significantly higher than in the first half of this year. The OECD said Frances economic situation has deteriorated somewhat during the early months of 1987. Activity has slowed primarily reflecting an inventory adjustment while unemployment has risen rapidly and inflation has reaccelerated the OECD said. Unemployment is likely to reach 12 pct of the workforce by the end of 1988. The report said inflation should slow and domestic demand pick up in the second half of this year. But both data are likely to be worse than those recorded in 1986 it added. The OECD forecast a 2.75 pct rise in consumer prices for the second half of this year a one pct drop from the first six months. The slowdown would bring the inflation rate to 3.25 pct for the whole year sharply up from last years 2.2 pct. REUTER | HIGHER GROWTH, UNEMPLOYMENT IN FRANCE, OECD SAYS |
A group including members of the Sobey family of Nova Scotia and Empire Company Ltd said it raised its stake in Nash Finch Co to 442498 shares or 8.6 pct of the total outstanding from 374498 shares or 7.3 pct. In a filing with the Securities and Exchange Commission the group said it bought 68000 Nash Finch common shares between April 7 and June 17. Reuter | GROUP RAISES NASH FINCH <NAFC.O> STAKE |
REVLON SAYS IT REQUESTS NEW CONSENT AGREEMENT FROM GILLETTE |
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Italys economic outlook for 1987 and 1988 is likely to be less favourable than last year with slightly lower growth higher unemployment and an increased trade deficit the Organisation for Economic Cooperation and Development (OECD) said. But the OECD in its half-yearly report forecast a slightly lower inflation rate over the next two years. Last year Italy ranked as one of the OECDs fastest growing economies with Gross Domestic Product (GDP) growth at 2.7 pct. The OECD said Italys GDP may grow by three pct in 1987 but will then fall back to 2.5 pct in 1988. The inflation rate will probably stabilise at around five pct during the projection period as a result of a turnaround in import prices particularly oil an acceleration in labour costs and the effects of domestic demand pressure the report said. This year and to a lesser degree in 1988 domestic demand should be stimulated by buoyant growth in household consumption made possible by wage increases following pay negotiations. Domestic demand pressure coupled with the deterioration in Italian competitiveness is likely to stimulate imports and adversely affect exports in 1987 and 1988. This could result in a sharp negative contribution to the currrent account. REUTER | ITALIAN ECONOMIC OUTLOOK LESS BRIGHT, OECD SAYS |
Japans trade surplus is likely to continue to grow in 1987 as sales of Japanese goods abroad increase while domestic demand remains sluggish the Organization for Economic Cooperation and Development (OECD) said. In its latest half-yearly review of the world economy the OECD said Japan managed to considerably reduce its surplus last year when domestic demand grew by four pct in 1986 while export markets rose by only two pct. But it said this differential between the growth of domestic and foreign demand would reverse in 1987 and 1988 thus weakening the international adjustment process. It forecast a slowing in domestic growth to little over two pct but with a rise in exports of 3.3 pct in 1987 and 3.6 pct in 1988. As a result the current account surplus in 1987 will rise to 95 billion dlrs from 86 billion in 1986 although in 1988 it should fall back to 87 billion dlrs. The OECD outlook did not take account of the 6000 billion yen package announced last month to stimulate domestic demand and increase imports to Japan. However OECD officials said the measures will significantly strengthen domestic demand quite possibly exceeding one pct GNP when the full effects have worked through and thus will provide some stimulus to imports. The OECD outlook said Continued large current account surpluses and the further build-up of an already-substantial net external asset position could well lead to upward pressure on the yen. It said that further appreciation could then lead manufacturers to postpone their investment plans and thus weaken domestic growth. The OECD said Japans Gross National Product was likely to gorw an annual two pct in 1987 and 1988 below 1986s 2.5 pct growth. But it said Japan would continue its good performance on inflation with a zero figure expected in 1987 compared to a 0.6 pct rise in consumer prices last year. Reuter | JAPAN TRADE SURPLUS WILL GROW AGAIN IN 1987, OECD |
U.S.-Canadian ties could worsen if the two nations are unable to reach a free trade pact according to a study published by two nonpartisan public policy research groups. The Cato Institute of Washington and the Fraser Institute of Vancouver said removing the remaining tariffs on cross border trade would benefit both countries. But Cato chairman William Niskanen added the two nations generally harmonious trade relations are probably not sustainable without a new agreement. The United States and Canada whose cross-border trade totaled about 125 billion dlrs last year have been holding talks since last June on a pact to end the few trade barriers remaining between their two countries. The U.S. put a deadline on the talks of October 1 but both sides have said an agreement is likely despite tough bargaining remained. Niskanen said if no pact is reached bilateral trade ties could deteriorate because of Congressional pressure on President Reagan to implement trade laws more aggressively and this could hit some Canadian trade practices. He noted Canada is seeking foreign investment in its auto industry which could put strains on the considerable bilateral free trade in U.S. and Canadian autos and parts. Niskanen also said the Canadian government is vulnerable to a resurgence of economic nationalism which could restrict U.S. exports to Canada. A free trade pact backed by President Reagan and Prime Minister Brian Mulroney would open new markets for Canada and enable its industries to achieve economies of scale which would also help it widen exports worldwide he said. It would also increase the gross national products of both countries. Niskanen said the goal of a pact should be to end all tariffs within 10 years lower subsidies on exports set rules for trade in services and investments end curbs on government procurement and agree ways to resolve trade disputes. Reuter | U.S.-CANADA TIES SEEN WORSE WITHOUT TRADE PACT |
Economic growth will remain sluggish in the Netherlands and Belgium next year and unemployment may rise the Organisation for Economic Cooperation and Development forecast. Belgiums GDP growth may slow down to 1.5 pct this year and next year bringing a rise in the number of jobless the OECD said in its semi-annual survey. Belgian inflation could stabilise at 1.5 to 2.0 pct while the current account surplus will probably remain large at about three pct of GDP. While the Belgian government has made progress in trimming its borrowing requirement it will probably be insufficient to check the self-sustaining nature of the deficit the OECD said. In the Netherlands real GDP growth will also slip to 1.5 pct this year and one pct in 1988 with Dutch exports becoming less competitive and imports rising. Employment is forecast to decelerate as well reflecting more sluggish growth in the private sector and budgetary cuts the report said. Dutch consumer prices are set to fall by 0.5 pct in 1987 and stay stable in 1988 partly as a result of declining domestic gas prices. Luxembourgs economy by contrast will see slightly faster growth in GDP this year as a result of an upward movement in wages. But real growth in consumption will ease next year. REUTER | ECONOMIC GROWTH SEEN SLUGGISH IN BENELUX COUNTRIES |
Strong growth in domestic demand was a key feature of the economies of southern European countries in 1986 though the growth is seen slowing this year and next the Organisation for Economic Cooperation and Development said. In its semi-annual report the OECD said Portugals total domestic demand growth would decline from 7.6 pct last year to five pct in 1987 and 3.75 pct in 1988 as slower wage growth restrained private consumption. Turkeys economy grew much faster than expected in 1986 and domestic demand surged 10.5 pct but this growth was expected to be halved to five pct next year. In Spain buoyant domestic demand led by fixed investment had been the driving force behind rapid growth in Gross Domestic Product. Both fixed investment and private consumption were expected to ease during 1988 but would still remain strong. The OECD forecast that Spanish imports would rise sharply next year reflecting strong demand entry to the European Community and declining competitiveness. In Greece inflation was forecast to turn downwards following an increase early this year linked with the introduction of Value Added Tax and a surge in food prices due to cold weather. REUTER | SOUTHERN EUROPE HAS STRONG DOMESTIC DEMAND GROWTH |
High wage settlements in Nordic countries threaten to cut exports and reduce the international competitiveness of their industries the Organisation for Economic Cooperation and Development (OECD) said. In Denmark the OECD said wage settlements concluded in early 1987 were likely to contribute to a marked deterioration in competitiveness. Swedens competitive position was also seen at risk from accelerating wages. The OECD predicted that domestic demand would come under pressure from tight fiscal policy in Denmark as well as Norway Sweden and Finland. Overall economic growth will vary in the different countries between 1986 and 1988 the OECD semi-annual report said. After a strong rise of 7.8 pct in 1986 total domestic demand in Norway was seen falling by 1.5 pct in 1987 and one pct the following year. Denmark was also expected to see a slump in domestic demand. The report said growth in Gross Domestic Product (GDP) was likely to speed up slightly in Sweden and Finland in 1987 and 1988 while declining in Denmark and Norway. Iceland needs to try harder to implement its new economic strategy if any more progress is to be made towards sustained and balanced non-inflationary growth the OECD said. REUTER | OECD SAYS HIGH WAGE DEALS HARMING NORDIC STATES |
The United States should take urgent action to cut its crippling budget deficit including possible reductions in non-defense spending higher taxes and curbs on growth of the defense budget the Organization for Economic Cooperation and Development said. The OECD in its semi-annual review of the world economy said a failure of the Reagan Administration and Congress quickly to agree on measures to cut the deficit could seriously affect confidence both in the United States and elsewhere. It predicted that the federal deficit in fiscal 1987 running until September 30 this year would substantially overshoot both the Balanced Budget Acts target of 144 billion dlrs and official U.S. Estimates in February of 175 billion. The OECD projection which is based on assumptions of slower growth higher interest rates and actual data for the first half of the financial year is for a deficit of about 190 billion dollars it said. While this would be 30 billion lower than last years deficit much of the improvement would be due to corporate tax increases being introduced before income tax cuts take effect. The U.S. Economic growth rate is expected to edge up to 2.75 pct next year from 2.5 pct this year and last. In contrast to the last two years more competitive exports boosted by the fall in the dollar should help GNP growth. Unemployment should continue to fall slowly as the service sector continues to create jobs. But inflation appears to be heading higher partly due to the lower dollar with consumer prices forecast to rise four pct this year and 4.5 pct next year after just 2.1 pct in 1986. Monetary and fiscal policy appear to be the key factors behind the avoidance of recession the report said. The current account balance of payments deficit is expected to be still around a high 125 billion dlrs next year after hitting a projected record 147.25 billion this year it said. In Canada economic growth is expected to pick up slightly to around 2.75 pct in 1988 from 2.5 pct this year but will still be below levels seen in recent years. Inflation is expected to slow to 3.5 pct next year from 3.75 pct this year unemployment should edge down to nine pct in 1988 from 9.25 pct this year. Canadas current account deficit is projected to shrink to around four billion U.S. Dlrs this year and to remain at about that level in 1988. Reuter | OECD URGES ACTION TO CUT U.S. BUDGET DEFICIT |
Period ended May 2 Shr loss four cts vs loss three cts Net loss 397000 vs loss 330000 Revs 32.1 mln vs 30.4 mln Note: Full name Marks Work Wearhouse Ltd. Reuter | MARK'S WORK WEARHOUSE <(MWW.TO> 1ST QTR LOSS |
Playboy Enterprises Inc said its Playboy Licensing unit has entered into an agreement with Fashionport Private Ltd of India to market Playboy and Playmate fashions and accessories in India the Middle East and several Eastern bloc countries. Fashionport will produce mens and womens apparel leather garments footwear small leather goods and accessories it said. Fashionport is based in Bombay India. No other details were available. Reuter | PLAYBOY <PLA> GETS LICENSING PACT IN INDIA |
REVLON SAYS IT IS WILLING TO WAIVE PRICE PROTECTION PROMPTLY UNDER CERTAIN CONDITIONS |
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Prospects for world economic growth remain very sluggish and coordinated action by western governments is urgently needed to restore business confidence stabilize currencies and encourage investment the Organization for Economic Cooperation and Development (OECD) said here. The economic situation has deteriorated in recent months and ... Slow growth high unemployment and large payments imbalances are likely to persist it said in one of its gloomiest reviews of the world economy in recent years. The gross national product (GNP) of the 24-nation bloc of western industrialised countries is forecast to grow by only 2.25 pct both this year and next even slower than last years 2.5 pct growth rate. We would like to see the aggregate for the OECD area comfortably exceeding three pct David Henderson head of the OECDs economics and statistics department said. The OECD said that the dollar fall had led to rising inflation expectations and higher interest rates in the U.S. Combining with world trade imbalances and the huge third world debt problem to increase the risks of a world economic downturn. At the same time many of the conditions for faster growth remain favorable it said citing low inflation in most major countries healthy corporate finances generally lower interest rates improvements in state budget positions and more flexible labor markets. But private sector confidence had been undermined by uncertainties over exchange rates it said and warned that for confidence to be restored it is important for governments swiftly to implement internationally-agreed commitments. This was a clear reference to last Februarys Louvre accord of the Group of Five nations plus Canada analysts said. The OECD said that apparent disagreements among major countries on implementation of the Louvre accord had helped to undermine business confidence and called on more active fiscal policies from the U.S. West Germany and Japan to slow demand in the U.S. And raise it in the other two countries. Henderson said the 6000 billion yen package announced recently by the Japanese government to encourage public works and cut taxes would make a significant contribution to this process though it was too early to estimate its precise impact. He said the measures will help strengthen Japans domestic demand significantly quite possibly exceeding one pct of GNP. The inflation outlook while broadly satisfactory has worsened in recent months with OECD consumer prices forecast to rise 3.5 pct this year and 3.75 pct in 1988 after a 2.8 pct increase in 1986. There is no prospect for any significant improvement in the unemployment situation over the next 18 months with the average rate expected to stabilize at 8.25 pct similar to last year. The OECD called for efforts to liberalize world agricultural markets through switching farm subsidies away from price guarantees and other measures linked to production towards direct income support for farmers. Reuter | JOINT ACTION SAID VITAL TO BOOST WORLD GROWTH |
Gulf and Western Incs <GW> Paramount Pictures Corp division said its movie Beverly Hills Cop II has topped the 100 mln dlr mark at the box office on the 29th day of its North American release. Paramount said the the movie has become the fastest movie to hit the 100 mln dlr mark with an R rating which means that anyone under 17 must be accompanied by their parents. Reuter | BEVERLY HILLS COP II TOPS 100 MLN AT BOX OFFICE |
Qtly div 44 cts vs 44 cts Pay July 31 Record July 3 Reuter | TRANSAMERICA CORP <TA> QUARTERLY DIVIDEND |
The House today supported a call for Japan to boost its defense spending to help share the burden of protecting Western interests in sensitive areas around the world including in the Gulf. House member approved a measure that would require Secretary of State George Shultz to enter into talks with Japan on increasing Japanese defense spending to at least 3 pct of its gross national product. The measure passed during consideration of the 1988-89 State Department funding bill would not require an increase but legislators called on Japan to spend more on defense. The Senate must approve the measure before it becomes law. We dont have to bash the Japanese. We have to show them how to share the burden of the defense of the free world said Rep. Robert Dornan a California Republican. The amendment calls on Shultz to enter into talks with Japan with the aim of reaching agreement on one of two alternatives: either Japan can spend 3 pct of its GNP on defense by itself or give the equivalent amount of money to the United States as a kind of security fee. Reuter | U.S. HOUSE CALLS HIGHER JAPAN DEFENSE SPENDING |
OECD SEES 1.5 PCT WEST GERMAN REAL GNP GROWTH IN 1987 |
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Australias economy should manage modest growth over the next two years after a sharp slowdown but unemployment could still edge upwards the Organisation for Economic Cooperation and Development (OECD) said. The organisations latest half-yearly report says Gross Domestic Product will grow by 2.5 pct this year and by 2.75 pct in 1988 compared with only 1.4 pct in 1986. The growth will be helped by higher stockbuilding and stronger domestic demand following tax cuts and higher real wages it added. The report forecasts a decline in inflation with consumer prices increasing by 8.5 pct this year and 6.25 pct in 1988. The current account deficit shows signs of easing slightly and could narrow to 12 billion dlrs by the end of 1988. While predicting slightly stronger growth than last year however the report revises downwards the OECDs earlier growth forecast for 1987 of 3.75 pct. The OECD predicts a similar combination of modest economic growth and rising unemployment for New Zealand which is struggling to recover from a major economic crisis. The countrys GDP which contracted by 0.6 pct last year should again show growth over the next two years rising by 0.25 pct this year and a more substantial 2.75 pct in 1988. Reuter | AUSTRALIA SET TO GROW, BUT UNEMPLOYMENT MAY RISE |
Robert Fildes president and chief executive of Cetus Corp <CTUS.O> told Reuters that Squibb Corp is not interested in buying Cetus. Earlier the companies said Squibb would buy from Cetus a five pct equity postion in Cetus for about 40 mln dlrs. This is not an attempt by Squibb to become a major majority holder in Cetus Fildes told Reuters in an interview. Squibb has not approached us with any indication that they want to acquire us and we wouldnt be interested in that kind of arrangement said Fildes. Squibb could not be reached to comment on the late comments by Fildes. Squibb is Cetus first pharmaceutical partner and the only one to own an equity position in Cetus. Eastman Kodak Co <EK> and W.R. Grace <WR> both have joint ventures with Cetus but neither owns an equity position in the company said Fildes. Cetus has a venture with Kodak to develp diagnostic products and with Grace to develop agricultural products. Earlier Squibb and Cetus announced in a joint statement an agreement in principle to form a joint venture to develop new biotechnology products in several fields. As part of the deal Squibb will license several of Cetus anticancer agents including interleukin-2 in development. Squibb will sell the drugs only in Japan and other markets but not in North American and Western Europe. We wouldnt have done this deal had it not been understood that Cetus wants to build its own fully integrated business in North America and Europe said Fildes. He said Squibb was the good partner because Squibb has a major joint venture in Japan and has sales capabilities of its own in that market. Fildes said Cetus has shunned licensing arrangements with pharmaceutical companies because it wanted to build its own business. Many large corporations have invested in small biotech firms. But Squibbs investment in Cetus is the first it has made in biotechnology. Fildes said that was attractive to Cetus because it wanted a partner that didnt have a relationship with a large number of other biotechnology companies. Fildes said his strategy was to have partners in non drug areas like diagnostics and agriculture but to keep the biggest developments in anticancer drugs to ourselves. Fildes said the partnership with Squibb would be used to broaden the companys reach in such big money making areas as the cardiovascular anti-infective and the anti-inflammatory markets. Squibb is also investming 75 mln dlrs in Cetus research over the next five years. Squibb is putting up over 75 mln dlrs in research and development to make it happen while the equity position part of the package is simply to demonstrate the seriousness of this partnership said Fildes. Reuter | SQUIBB <SQB> SAID NOT INTERESTED IN BUYING CETUS |
The National Broadcasting Co a unit of General Electric Co <GE> said it intends to implement on June 29 a labor contract rejected by union represenatives. A spokesman for the National Association of Broadcast Employees and Technicians represening 2800 workers said its negotiating committee adopted a formal resolution today stating it will inform NBC it will strike upon implementation. The union will have to decide what action it thinks is appropriate said Day Krolik NBCs vice president for labor relations. A union spokesman said NBC has until the day of implemetation to peacefully negotiate a contract. Reuter | NBC SAYS IT WILL IMPLEMENT CONTRACT JUNE 29 |
Mark Stahl 45 who was a former senior vice president of Shearson Lehman Brothers until his suspension on April 16 today admitted in U.S. District court here embezzling almost 19 mln dlrs from his firm over the past year. He entered a guilty plea before United States District Court Judge Vincent Broderick to four specific charges totaling 1031000 dlrs on wire fraud. Stahl who was a senior vice president for finance told the judge that the total embezzlement amounted to a little less than 19 mln dlrs. Through an attorney Stahl agreed to make restitution to Shearson Lehman of all the embezzled funds if possible. However his guilty pleas today to the four counts will cover all criminal liability of the embezzlement that occurred between April 1986 to last April. Judge Broderick scheduled sentencing for December nine. Stahl faces a maximum sentence of 20 years in jail and one mln dlrs in fines or both. Reuter | FORMER SHEARSON <SHE> OFFICIAL PLEADS GUILTY |
Shr four cts vs four cts Net 1180000 vs 902000 Revs 146.9 mln vs 37.0 mln Avg shrs 33 mln vs 23.9 mln NOTE: Company changed its fiscal year from December 31 to the last day of February thus results of operations for the year-ago period have been restated to reflect this change. Current first quarter includes results of operations of Loews Theatre Management Corp which Tri-Star acquired December 31. Reuter | TRI-STAR PICTURES INC <TRSP.O> 1ST QTR MAY 31 |
CANADA BUDGET DEFICIT DECLINE TO SLOW IN LATE 1980S - OFFICIAL Reuter |
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CANADA LIFTS CORPORATE TAX REVENUES BY FIVE BILLION DLRS OVER FIVE YEARS - OFFICIAL |
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WILSON CUTS PERSONAL TAX RATES, LIMITS CAPITAL GAINS EXEMPTIONS Reuter |
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CANADA LIFTS FINANCIAL INSTITUTION AVERAGE TAX RATE TO 21.3 PCT FROM 14.5 PCT - OFFICIAL |
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Canada will increase corporate tax revenues by about five billion dlrs over the next five years by broadening the tax base and allowing fewer exemptions finance minister Michael Wilson said. As Wilson previously promised he said corporations will bear an increased tax burden despite new measures to lower overall tax rates. Increased corporate revenues will result from broadening the tax base and eliminating special tax exemptions. The jobs of many Canadians depend on a corporate income tax system that is competitive with other countries particularly the United States Wilson said in a prepared speech to the House of Commons. And it (tax reform) will ensure that profitable corporations carry a bigger share of the total tax burden he added. Federal tax revenue from corporations will increase by 470 mln dlrs in the fiscal year ending March 31 1988 410 mln dlrs in fiscal 1989 and 1.19 billion dlrs in fiscal 1990 according to documents tabled with Wilsons speech. Reuter | CANADA TO INCREASE CORPORATE TAX REVENUES |
The average tax rate for Canadian financial insitutions will increase to 21.3 pct from 14.5 pct under the new tax reform package the federal finance department said. The amount of financial institutions income that is taxed will also increase to 74.0 pct from 48.7 pct it said in documents tabled with finance minister Michael Wilsons prepared speech to the House of Commons. Under Wilsons plan the federal government will collect 1.36 billion dlrs more over the next five years from financial insitutions including banks trust mortgage and life insurance companies according to finance department documents. Financial institutions are going to complain but we believe the changes are appropriate and affordable said one finance department official who asked not to be identified. Ottawa will collect more revenue from financial institutions by reducing the amount of reserves they can deduct from taxes which will broaden the tax base for this low tax paying sector the finance department said. Among the changes chartered banks will no longer be able to use a five-year averaging formula to calculate loan losses that may be deducted for tax purposes. Effective June 17 1987 banks will deduct bad or doubtful loans during the year they are incurred. The finance department said the impact of the new provisions will be cushioned over a period of five years. The changes are needed to ensure that all financial companies are taxed fairly under deregulation of the financial services industry. It would be inconsistent for the tax system to continue to provide different reserves for tax purposes for institutions competing in the same marketplace the finance department said. Reuter | CANADA FINANCIAL TAX RATE INCREASED |
Canada will broaden a federal sales tax levied on manufacturers before scrapping the system in favor of a broad based multi-staged sales tax finance minister Michael Wilson said. As expected Wilson did not include a new sales tax system as part of his wide-ranging tax reforms tabled in the House of Commons today. Instead the federal government will make interim changes to the existing sales tax to make it more fair for low and middle income Canadians. The present (sales) tax is fundamentally flawed. It is a hidden arbitrary and capricious tax Wilson told the House of Commons. The existing federal sales tax system hurts the Canadian economy by putting more tax on Canadian produced goods than imported goods and adding a hidden tax on Canadian exports that makes them less competitive Wilson said. Interim changes effective January 1 1988 will include: -- applying the federal sales tax to marketing companies related to manufacturers -- levying the tax at the wholesale level instead of the manufacturer for a selected range of products -- applying a 10 pct sales tax to telecommunication services except for residential telephone lines -- quicker collection of federal sales taxes. To offset these changes for low income Canadians refundable tax credits will be increased to 70 dlrs from 50 dlrs for adults and to 35 dlrs from 25 dlrs for children the finance department said. Ottawa is considering three alternative forms for a new sales tax including a goods and services tax a value added tax and a national sales tax that would combine existing federal and provincial levies into one system Wilson told the House of Commons. He said the federal government will explore the possibility of one national sales tax with Canadas 10 provincial governments. All provinces except Albeta now levy a provincial sales of tax of varying amounts. Wilson said one joint system would be simpler for taxpayers and maximize economic benefits of tax reform. If Ottawa and the provinces cant agree on a national sales tax system Wilson said the federal government will consider either a goods and services tax or a value-added tax. A goods and services tax would apply at one rate to virtually all goods and services in Canada and would include further increases in refundable tax credits for low and middle income Canadians the finance department said in documents accompanying Wilsons speech. A federal value-added tax similar to European tax systems would also be broad based but would allow more flexibility to exempt selected goods and services the department said. The finance deparment said the main drawback of a value added tax is that it would be more complex and costly to implement than the other two proposals. Reuter | OTTAWA WIDENS SALES TAX, STUDIES REPLACEMENT |
Finance Minister Michael Wilson said tax reform will not affect his determination to reign in expenditures but his forecasts show a slowing of the decline in the budget deficit in the late 1980s. Responsible tax reform must be fiscally responsible Wilson said in a speech prepared for the House of Commons. Wilson estimated the deficit will fall to 29.3 billion dlrs in the year ending March 31 1988 the same level as he forecast in the February budget. And in the year ended this past March the deficit was expected to have been one billion dlrs lower than the 32 billion dlr shortfall originally forecast Wilson said. Wilson said in the current 1988 fiscal year higher-than-anticipated spending particularly in farm income support programs will be offset by higher-than-anticipated revenues. But finance department documents show the pace of deficit reduction was expected to slow temporarily in fiscal 1989 and 1990 as a result of lower oil and grain prices and the transition to the reformed taxation system. The deficit is expected to total 28.9 billion dlrs in fiscal 1989 and 28.6 billion dlrs in 1989 and then fall to 26.1 billion dlrs in 1991. Wilson was optimistic about the outlook for the Canadian economy forcasting gross domestic product would expand 2.8 pct this year and 3.0 pct in 1988. In 1986 the economy grew by an actual 3.1 pct. Inflation meanwhile is expected to stabilize at around the current four pct level over the next two years. Reuter | FALL IN CANADIAN BUDGET DEFICIT TO SLOW |
Finance Minister Michael Wilson tabled a ways and means motion to immediately impose a special tax on preferred share dividends to eliminate a significant loss of corporate tax revenue. Under the motion which is used to introduce most financial tax changes dividends on all preferred shares issued after June 18 will be taxable. The issuing corporation will be able to choose between two forms of tax one that imposes a 25 pct tax on dividends with a subsequent additional 10 pct tax paid by the shareholder and one that imposes a flat 40 pct tax on dividends. Measures to reduce the tax advantages of after-tax financing arrangements using preferred shares are a critical step in achieving the broadened corporate tax base required to fund personal income tax reductions Wilson explained. The minister said many profitable corporations using various deductions built up over the years pay no taxes although they are in a position to pay dividends out of their profits. Reuter | CANADA'S WILSON SETS NEW PREFERRED SHARE TAX |
Finance Minister Michael Wilson unveiled a wide-ranging reform of the personal tax system that includes limiting the capital gains exemption and a sharp cut in the dividend tax credit. With most changes effective at the first of next year Wilson also announced he was cutting the number of tax brackets from 10 to three. He said the changes will cut personal tax revenues by two billion dlrs in 1988 and by more than 11 billion dlrs over the next five years. Most Canadians will pay lower taxes because of two far-reaching changes. A new structure of federal income tax rates and the conversion of exemptions and deductions to tax credits Wilson told the House of Commons. The new tax brackets will be 17 pct on the first 27500 dlrs of taxable income 26 pct on the next 27500 dlrs and 29 pct on taxable income in excess of 55000 dlrs. The maximum tax rate is 34 pct under the current system. In a major reversal of his own initiative Wilson said the controversial 500000 dlrs capital gains exemption will be reduced to 100000 dlrs over an investors lifetime. Wilson introduced the exemption shortly after taking office in 1984 as a a way of stimulating investment but it was sharply criticized by the opposition as over-generous to wealthy investors. The 500000 dlr lifetime exemption will be kept on the sale of farm land and for small businesess however. Also the taxable portion of a capital gain will increase from 50 pct currently to 66-2/3 pct in 1988 and 75 pct in 1990. The dividend tax credit will be reduced from 33-1/3 pct to 25 pct and the deduction for up to 1000 dlrs of interest and dividend income will be eliminated in 1988. Wilson said tax treatment for registered retirement savings plan contributions will be maintained but the phase in of the increase in the maximum limit to 15500 dlrs will be delayed four years to 1994. Reuter | CANADA SETS WIDE-RANGING PERSONAL TAX CHANGES |
ANZ BANKING GROUP SAYS IT WILL CUT PRIME RATE TO 16.00 PCT FROM 16.50 ON JUNE 22 |
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Japan still asking institutions to limit speculative dlr deals - Miyazawa |
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The Australia and New Zealand Banking Group Ltd <ANZA.S> said it will cut its prime rate to 16.00 pct from 16.50 effective June 22. The cut takes the ANZs prime to the lower end of the range of prime rates being offered by Australian trading banks. The highest rate is 17.50 pct. The cut follows announcements of cuts yesterday by <Citibank Ltd> to 16.00 pct from 16.5 effective today and <Commonwealth Bank of Australia> to 15.75 pct from 16.25 effective June 24. REUTER | ANZ BANKING GROUP CUTS PRIME RATE TO 16.00 PCT |
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