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 LONDON DOLLAR FLUCTUATIONS 1000 - JUNE 29 STG 1.6013/23 DMK 1.8270/80 SFR 1.5170/80 DFL 2.0565/75 FFR 6.0950/1000 YEN 146.20/30 LIT 1324/1325 BFC 37.92/95  | |
 PRS PARIS SUGAR OPG - JUNE 29 Aug 1130/1132 ba Oct 1160/1165 ba with 1160P Dec 1180/1190 ba Mar 1222/1235 ba May 1263/1280 ba Aug 1295/1315 ba Sales at call 22 accumulative total 71 Yesterdays official turnover: 171250 steady  | |
A split in the Thai governments main coalition party may prompt Prime Minister Prem Tinsulanonda to dissolve parliament soon Interior Minister Prachuab Suntharangun said. He told reporters that Prem was considering new elections because squabbling in the Democrat Party undermined government performance and held up legislation Prem wanted passed. But Prem was reluctant to call new elections or reshuffle his cabinet because that too would be likely to result in a wobbly multi-party coalition Prachuab said. He declined to say how soon parliament might be dissolved. The Democrats one of four parties in the ruling coalition have been split ever since winning 100 of the parliaments 347 seats in elections in July 1986. The current coalition was formed last August and constitutes a hefty parliamentary majority. But the Democrats inability to work well together or with their coalition partners has made the government vulnerable to the small but more cohesive opposition. Parliament closed the first of its two annual sessions this month and is scheduled to reconvene in September. REUTER | THAI MINISTER SAYS PREM MAY DISSOLVE PARLIAMENT |
The Republic of Portugal is issuing a 700 mln French franc variable-rate bond due July 1995 at 100.05 pct lead manager Credit Commercial de France said. The issue of unsecured unsubordinated debt will have a coupon based on three-month LIBOR plus 20 basis points. If on any interest date this is 25 pct or more above three-month Paris Interbank Offered Rates then the interest rate will be three-month PIBOR plus 30 basis points. Payment date is July 24. There is a call at par at the end of the first year and thereafter on any interest payment date. Listing is Paris and denominations are of 10000 and 100000 francs. Fees total 50 basis points with 25 points for selling and 25 for management and underwriting combined including a six basis points praecipuum. The issue is rated A by Moodys. REUTER | PORTUGAL ISSUES 700 MLN FRENCH FRANC BOND |
The major benefits of BHP Steel International Groups big capital expenditure program should begin to be seen in its 1988 financial year ending next May 31 Broken Hill Pty Co Ltd <BRKN.S> officials said. A decline in BHP Steels net profit to 200.02 mln dlrs in the 1987 year ended May 31 1987 from 253.87 mln the year before contributed to the drop in attributable group earnings to 820.27 mln dlrs from 988.20 mln. We look forward to a 1988 year of consolidation while continuing our strong business development initiatives BHP Steel chief executive officer David Rice told reporters. Rice said BHP Steels capital spending in 1987 totalled 701 mln dlrs and that total expenditure would be about 1.4 billion dlrs by the time the governments five-year Steel Industry Plan expires at the end of calendar 1988. He said the investment program aimed at making BHP Steel both technically and commercially competitive on a world scale was now over its peak and would begin to scale down. Operational and commissioning problems flowing from the investment program combined with the highest levels of industrial action since the steel plan started had contributed to the decline in 1987 earnings he said. Rice said the industrial and production problems forced BHP Steel to import 280000 tonnes of steel in its 1987 financial year to keep faith with customers. The new items of plant are now past their initial teething problems and talks have intensified with the unions on the industrial troubles he said. Despite the profit drop in the 1987 year BHP Steel International group was one of the most profitable steel producers in the world on an after-tax basis he said. Its capacity utilisation was far higher at 89 pct than the current western world average of 69 pct he added. REUTER | BHP STEEL SEES BENEFITS FROM INVESTMENT IN 1988 |
IMF Managing Director Michel Camdessus paid a brief weekend visit to the Ivory Coast during which he discussed the countrys economic difficulties with President Felix Houphouet-Boigny. Camdessus said he wished his visit could have been in more pleasant circumstances in remarks reported by the official Ivorian daily Fraternite Matin. He added that the extremely steep fall in agricultural commodity markets had dealt a harsh blow this year to the Ivorian economy and because of this the country was experiencing a growth problem and difficulties with its international debt. Last month the Ivory Coast informed its creditors it had to suspend payments on its foreign debt estimated at more than eight billion dlrs. Camdessus said his agency had to study the problems of the Ivory Coast but a solution depended on a coordinated effort between the country itself the commercial banks other governments and international finance institutions. He also disussed problems of developing countries in general with banking and government officials in Abidjan. REUTER | IMF MANAGING DIRECTOR HOLDS TALKS IN IVORY COAST |
Yields on certificates of deposit (CDs) issued today by the United Arab Emirates central bank were unchanged from those on last Mondays offer the bank said. The one month yield was set at last weeks 6-3/4 pct while two and three month CDs also remained unchanged at 6-13/16 pct. The six month yield was set at seven pct. REUTER | UAE CENTRAL BANK CD YIELDS UNCHANGED |
Zimbabwes temporary freeze on salaries wages and prices will give the economy a breather but radical economic reforms are needed to resuscitate business and attract foreign investment economists said. They said the June 24 freeze on government state company and private sector wages until January 1988 has postponed rather than provided solutions to Zimbabwes economic problems. They urged a review of the tax system the introduction of investment incentives a review of foreign exchange and price controls and a check on government expenditure. These measures would aim to stimulate investment and create employment for the 100000 school leavers annually seeking jobs. The freeze which Finance Minister Bernard Chidzero said would check production costs and reduce the budget deficit has been partly welcomed by business but criticised by workers whose real purchasing power has been severely eroded since 1980. The government announced the freeze amid a worsening economic crisis caused by serious drought a budget deficit of more than one billion Zimbabwean dlrs and an acute balance of payments problem owing to debt service costs now 357 mln U.S. Dlrs on an external debt of two billion U.S. Dlrs. The crisis has forced the country to make companies halve dividend remittances to overseas shareholders. The Zimbabwe National Chamber of Commerce supported the freeze on wages and salaries but criticised the promised stricter control of prices of goods and services. If those companies whose costs of production increase are not allowed a price increase profit margins will again be severely squeezed and this would negate current government efforts to revitalise the economy the chamber said. The Zimbabwe Congress of Trade Unions said the freeze would worsen the plight of the lowest paid workers. The union body has been campaigning for a minimum monthly wage of 277 Zimbabwean dlrs (165 U.S. Dlrs). The lowest paid now earn about 100 dollars (60 U.S. Dlrs). Inflation is hitting hardest those in the low income bracket which demands that any economic recovery programme should be biased in their favour the union body said. It added that the promised price freeze was bolting the stable door when in fact the horse is gone because prices of most basic commodities had already risen phenomenally. Both unions and business hope that the freeze heralds a return to wage bargaining between workers and employers rather than government-regulated pay awards. Zimbabwe has since 1980 set annual minimum wages for different sectors of the economy and awarded wage and salary increments on a sliding scale which gave higher increases to the lowest paid. REUTER | ZIMBABWE WAGE FREEZE SHOWS ECONOMIC MALAISE |
The European Investment Bank (EIB) said it has lent 200 mln French francs to French railways Societe Nationale des Chemins de Fer (SNCF) to extend its high speed train system. It said in a statement that the loan will help finance the contruction of a 279 km track for high speed TGV trains between Paris and Le Mans in western France and Tours in the south west. The loan will also help pay for new trains. The EIB has already lent a total of 600 mln francs to SNCF for the high speed train system in 1985 and 1986. REUTER | EIB LENDS 200 MLN FRANCS TO FRENCH RAILWAYS |
Banks in Singapore are planning to further expand their treasury securities equities and debt instruments activities in line with global financial markets bankers and economists told Reuters. Banks are moving towards treasury activities because they see them as a vital link in global capital and foreign exchange markets Clemente Escano vice-president of Union Bank of Switzerland said. Central to that link is the Asian Dollar Markets pool of funds with deposits estimated at 212 billion dlrs in March. Banks are fond of booking and tapping offshore Asian Dollar Market funds here for a variety of reasons including low taxes. New impetus has come to this market with growth of 52 billion dlrs in the year to March partly due to the liberalisation of financial markets in Japan leading to an increase in interbank activity bankers said. Despite the slowdown in traditional loan syndications in the region the offshore market has continued to grow as banks rebundle and securitise their assets creating new generations of tradeable debt instruments bankers said. Singapores daily turnover in foreign exchange dealing has increased to 30 billion U.S. Dlrs in 1987 against 21 billion last year according to Finance Minister Richard Hu. Susumu Sakaguchi manager of Dai-Ichi Kangyo Bank said the 22 Japanese banks in Singapore were expanding their foreign exchange departments which accounted for at least 30 to 40 pct of total bank activities last year. Sakaguchi said the liberalisation of the Toyko market stimulated Asian Dollar deposits and foreign exchange turnover and is leading to active Japanese futures trading on the Singapore International Monetary Exchange. Robin Tomlin managing director of Singapore International Merchant Bankers Ltd said international merchant banks cluster in Singapore because of the tax incentives presence of major players and shift in regional capital flows. Tomlin pegged much of the future of the Singapore banking industry to securities and equities. In 1988 we should see an expansion of securities trading following the link-up of the Stock Exchange of Singapore Dealing and Automated Quotation System (SESDAQ) with the London exchange and the National Association of Securities Dealers Automated Quotation System (NASDAQ) he said. Equity and equity-linked issues have dominated the financial markets here to date because of buoyant domestic and international stock markets. Tomlin said privatisation programmes both in Singapore and abroad would encourage huge flows of capital through the banks. Applications received for the 30 mln Singapore Airline shares offered last week were worth 601.1 mln Singapore dlrs. The share offer by Sembawang Maritime Ltd raked in a record 6.8 billion Singapore dlrs in May this year. Bankers said Singapores privatisations and links with exchanges abroad showed its determined international stance. Singapores four major local banks have been venturing into stockbroking the new government securities market and SESDAQ competing successfully for business with the merchant banks. Tomlin said merchant banks will continue to play an important role in the Singapore domestic capital markets but the modest size of the total market would limit the potential of new entrants. Bankers said a total of 650 mln U.S. Dlrs was raised in the Singapore capital market last year and the volume of new issues would to grow in 1987. Total lending by banks in Singapore fell by 1.04 billion dlrs in March 1987 compared with last year following the trend towards asset management services and other capital market activities. Hans-Rudolf Schaub the senior vice-president and manager of Swiss Bank Corp said his bank has chosen Singapore as its Asian treasury centre because of favourable tax rules for offshore banks political stability and economic growth. He said the bank might set up a securities portfolio management service here in addition to its existing links in international money market services with Zurich and New York. REUTER | BANKS IN SINGAPORE SET TO INCREASE SECURITISATION |
The Philippines and its foreign creditor banks will sign formal documents in mid-July to restructure part of its debt the Central Bank said. A spokesman told reporters the documents would formalise the agreement reached in March on the restructuring of 10.3 billion dlrs out of a total foreign debt of 28.2 billion. The interest rate spread agreed was 7/8 of a percentage point over LIBOR. The spokesman gave no date for the signing. Manila had demanded a renegotiation after Argentina won a 13/16 of a percentage point spread but it later dropped this demand. REUTER | PHILIPPINES TO SIGN FORMAL DEBT ACCORD IN JULY |
Belgium current holder of the European Community presidency appears ready to drop a controversial oils and fats tax from this years hotly-contested farm price package diplomats said. In a discussion document prepared for todays summit meeting of EC leaders Belgium proposed the so-called stabilising mechanism be the subject of further study and consultation with the Communitys main trading partners. The proposal for a tax of as much as 330 Ecus per tonne on both imported and domestically-produced vegetable and marine oils and fats has attracted a storm of international criticism. The discussion document aimed at preventing a cash row at the summit and breaking the deadlock at this years farm price talks contained the first formal reference to dropping the measure. Britain and Denmark which assumes the EC presidency on June 30 have led the opposition to the measure. They are supported by West Germany and the Netherlands and to a lesser extent Spain. Although the paper was not universally welcomed diplomats said the proposal to postpone consideration of the tax for a further six months was certain to survive any redrafting. REUTER | EC PRESIDENCY PREPARED TO DROP OILS AND FATS TAX |
<Samsung Semiconductors Inc> the U.S. Subsidiary of South Koreas <Samsung Semiconductors and Telecommunications Co Ltd> has signed for a 22 mln U.S. Dlr loan arranger LTCB Asia Ltd said. The eight year loan has a four year grace period. Interest is set at 1/4 percentage point over London interbank offered rate for the first two years rising to 3/8 point thereafter. Management fee is 1/2 pct flat including a 1/4 pct praecipium. Participating in the loan in addition to LTCB are Credit Lyonnais Daiwa Overseas Finance Ltd Taiyo Kobe Finance Hongkong Ltd and Takugin International (Asia) Ltd. REUTER | SAMSUNG SEMICONDUCTORS SIGNS FOR 22 MLN DLR LOAN |
Bahrains 19 commercial banks have been instructed by the Bahrain Monetary Agency (BMA) to return to a six day working week with effect from July 4. A circular sent to the banks today reverses a shift in early April to a five day week and follows three months of controversy within the domestic banking sector over hours. A BMA spokesman said the circular which does not affect offshore banks represented a compromise solution between differing views within the industry and was drawn up following the agencys own survey of banks staff and customers. In April the BMA allowed commercial banks to operate a five day week from Sunday to Thursday. Banks have since been closed on Fridays the Islamic weekend and Saturdays. The new regulation will require banks to work from 7.30 A.M. To 12 noon from Saturday to Thursday inclusive. Banks may open on these days during the afternoon between 3.30 and 5.30. The regulations apply to bank opening hours not to staff working hours which continue to be decided by banks. Under the five day week introduced in early April banks have been obliged to open from 8 A.M. Until noon and from 3.30 to 5.30 P.M. REUTER | BAHRAIN BANKS WILL RETURN TO SIX DAY WEEK |
NORWAY CENTRAL BANK SELLS CROWNS TO EASE UPWARD PRESSURE ON CURRENCY - DEALERS |
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The Bank of Japan has become increasingly worried about a possible crash of high-flying financial markets Bank of Japan sources said. Were afraid that someday the bubble will burst and that the deflationary impact on the economy will be very disastrous one source said. They said the central bank has embarked on a delicate policy -- it wants to deflate the speculation that has pumped up prices sharply in recent months without bursting the bubble. Stock prices plunged 393.31 points today extending the sharp declines of earlier this month as the market speculated that interest rates would rise. The Bank of Japan bought 100 billion yen in certificates of deposit (CDs) via repurchase agreements today to show its determination to maintain an easy money policy central bank officials said. Todays CD buying operation was designed to reassure the market the Bank has not changed its policy a senior central Bank official told Reuters. There is a possibility that a deflationary impact would permeate the economy if the prices of existing assets collapsed the Bank of Japan said earlier this month in its annual economic report. Such a possibility has been heightened by what the Bank sees as excessive speculation in stock bond and land prices. Over the last two years the stock market average has doubled driving price/earnings ratios to over 70 compared with about 15 on Wall Street. Bond yields have dropped sharply while land prices in Tokyo have soared. The excessive speculation means the markets are increasingly out of touch with economic reality and thus more vulnerable one central bank source said. A collapse now could rob businessmen and consumers of what little confidence they have in the economy after the yen-induced recession of the past year private economists said. Some hard-pressed exporters already make greater profits through financial dealings than from their basic businesses they said. There seems to be an accelerated demand for money to support transactions in shares bonds land and other existing assets which has little bearing on value added and therefore on GNP the Bank of Japan said in its report. The increased inclination of investors to seek capital gains and the accompanying rise in prices of existing assets could have dangerous implications for the economy it added. In the Banks view a major reason behind skyrocketing prices was its own easy monetary policy and the belief in the market that interest rates were heading inexorably lower. Mindful of the potential inflationary dangers posed by excessive liquidity the Central Banks board recently decided it had to spell out clearly to the markets that a further discount rate cut was not in the offing one source said. But the bank had to do that without tightening monetary policy and running the risk of a market collapse. This was achieved partly by a rise in short-term interest rates which Bank sources ascribed to seasonal pressures and to a change in market expectations. While denying the bank was tightening monetary policy a senior source welcomed the change in market expectations. The source acknowledged the shift may have been caused partly by the decision to press commercial banks to limit lending in the July/September period. Faster than expected economic growth and a strong dollar also played a part. In the longer run the Central Bank is counting on a gradual upturn in the economy to draw liquidity from the financial markets into productive areas like capital spending one Bank of Japan economist said. But while it waits for that to occur over the next six months it may have to avoid any overt tightening of monetary policy that could collapse the market and lead to recession. REUTER | BANK OF JAPAN WORRIES ABOUT MARKET COLLAPSE |
Bangladeshs trade gap is expected to widen in fiscal 1987/88 beginning on July 1 after the government relaxed restrictions on some imports including luxury cars. The country has set its export target for the year at 1.1 billion U.S. Dlrs against imports of 1.805 billion dlrs compared with 1986/7s one billion dlrs of export earnings and 1.113 billion dlrs of imports. Commerce Minister Mohammad Abdul Munim said the changes were aimed at encouraging export oriented industries to boost foreign exchange earnings and imports of essential machinery and raw materials to increase industrial production. The government was easing procedures to enhance incentives especially for exporters of textiles and frozen food and importers of industrial machinery and raw materials Munim told reporters. Commerce Ministry officials told Reuters the import policy covered only commercial imports amounting to 1.805 billion dlrs. Imports of capital machinery and foodgrains by the government were not included in the policy they added. They said the countrys total import bill (both commercial and other imports) was expected to reach 2.7 billion dlrs in the new year compared with 2.4 billion dlrs in 1986/87. The minister said ending restrictions on imports of cars and dropping 50 pct sales tax on small cars would not harm the economy. Munim said Bangladesh feared a further drop in prices for its main export jute which will certainly affect our export earnings in the coming year. Bangladeshs jute exports fell to 410 mln dlrs from 500 mln in 1986/87 according official figures. But Munim said exports of non-traditional items which accounted for over 40 pct of total exports this year would play a key role in achieving the 1987/88 export target. REUTER | BANGLADESH'S TRADE GAP TO WIDEN IN 1987/88 |
China and Australias Victoria state signed a joint venture contract for a 290 mln dlr aluminium processing plant in China that will export to South Korea Australian officials told journalists. China has no official direct trade or government ties with Seoul while it maintains close links with North Korea. China International Trust and Investment Corporation (CITIC) would have 75 pct of the equity in <Bohai Aluminium Industries Ltd> the company to build the rolling mill and extrusion plant on the northeast China coast they said. It was Chinas largest joint venture so far they said. A joint venture opens up the potential for penetrating markets that would not otherwise be possible (for China) Victoria state treasurer Rob Jolly said. An Australian diplomat said CITIC was eager to pursue South Korean markets. Indirect trade between China and Seoul is growing but is not officially publicised. Victorias <Aluvic Ltd> on behalf of the state government will hold a 25 pct equity stake in the project which is intended as a sister plant to Victorias Portland aluminium smelter. CITIC in May agreed to invest about 80 mln dlrs in Portland. The China-based joint venture would process Portland aluminium and aim to sell aluminium products to the domestic Chinese market as well as for export Jolly said. The Australian sides investment was limited to about 22 mln dlrs but Aluvic would have the right to appoint key managers he said. Australian officials said they hoped the goodwill generated by their participation would lead to further CITIC investment in Victoria. The Chinese group enjoys a high level of independence from Pekings central government and has extensive overseas investments. REUTER | CHINA ALUMINIUM VENTURE AIMS AT SOUTH KOREA |
Norways central bank sold crowns in the open market in a bid to ease strong upward pressure on the currency which threatens to rise above set levels in a basket of currencies dealers said. The central bank declined comment but dealers noted the bank had also intervened and sold small amounts of crowns on Friday. The bank is committed to defending the crown at certain levels in a basket of 14 trade-weighted currencies. Theyve been in again this morning selling piecemeal whenever they think necessary a senior dealer at an Oslo bank who declined to be identified told Reuters. The crowns index is currently around 109.60 in the basket -- close to its upper limit of 109.50 which the central bank is committed to defending. A low index figure indicates a high value for the crown. The limit at the other end of the scale is set at 114.50. The crown has been bolstered by high Norwegian interest rates currently around 16 pct in the money market and better than expected economic indicators which showed a sharply reduced foreign trade deficit in May and inflation stabilising around the current annual rate of 10 pct. REUTER | NORWAY CENTRAL BANK SELLS CROWNS TO EASE PRESSURE |
United Merchant Finance Ltd a joint venture between Barclays Plc and Jardine Matheson Holdings Ltd is planning a 200 mln H.K. Dlr certificate of deposit issue banking sources said. The five year issue with both put and call options at the end of the third and fourth years carries interest at 1/4 percentage point over Hong Kong interbank offered rate payable quarterly. The management fee is 25 basis points. Jardine Fleming and Co Ltd is lead manager. Co-managers are Barclays Baring Brothers Asia Ltd East Asia Warburg Ltd Indosuez Asia Ltd and Mitsubishi Finance (Hong Kong) Ltd. REUTER | UNITED MERCHANT FINANCE PLANS 200 MLN H.K. DLR CDS |
Prime Minister Yasuhiro Nakasones diminishing hopes of overhauling the tax system have been dealt a serious blow by reports of sharply higher than expected tax revenues in 1986/87 government officials said. Nakasone has argued that the tax system must be reformed to provide the revenue for more than 1000 billion yen of tax cuts promised in the governments emergency economic package last month. But his argument has been undercut by reports that the 1986/87 tax take was as much as 2500 billion yen more than expected. That means the government should have more than enough money in the fiscal year ending next March to pay for the planned tax cuts without having recourse to the unpopular tax measures proposed by Nakasone one official said. The Prime Minister has proposed an indirect tax and the abolition of tax breaks on small savings as ways of raising revenue to offset the tax cuts. But stiff opposition has forced him to shelve the idea of an indirect tax at least for the time being. He still hopes to gain parliamentary approval next month to abolish tax breaks on small savings. The higher than expected revenues in 1986/87 partly stemmed from increased receipts from land and securities taxes as prices of both shares and land soared one official said. But corporate tax revenues have also been more buoyant than expected perhaps indicating the recession of the last year induced by the strong yen was not as bad as thought he said. The final figures for 1986/87 revenues are due to be released by the Finance Ministry on July 1. The higher revenues last fiscal year have also undercut attempts by the Finance Ministrys budget bureau to reduce investment spending by government departments in the 1988/89 budget several officials said. A budget bureau official said the bureau still wanted to stick with its so-called minus-ceiling policy which calls for government departments to reduce investment spending by five pct a year. But he acknowledged this would be difficult given the sharp increase in revenues last fiscal year and heavy domestic and U.S. Pressure on the ministry to stimulate the economy. REUTER | HIGHER REVENUES DEAL BLOW TO JAPAN TAX REFORM PLAN |
Share analysts and commentators say Volkswagen AG <VOWG.F> has suffered an enormous loss of face from which it could take time to recover over its 473 mln mark currency swindle. An auditors report on the affair prepared in time for this weeks annual shareholders meeting largely cleared the management of Volkswagen of blame. But mud sticks said Gavin Launder an analyst with Scrimgeour Vickers in London. (See index on ECRA) The financial daily Boersenzeitung wrote in a commentary: More devastating than the losses linked to the currency scandal is the resulting loss of image for the company. VW had to make provisions of 473 mln marks to cover losses from unauthorised foreign exchange deals which the auditors Deutsche Treuhand-Gesellschaft said highlighted major gaps in the supervisory apparatus of the firms financial department. The auditors report highlighted failings in VWs controlling system especially in relation to a 385 mln mark deal with the Hungarian National Bank but shed little light on why they were made. It said the contracts did not benefit VW and were only advantageous to its banks. It did not detail how the foreign exchange dealers may have profitted. It concluded: The nature scope and technical construction of the deals ... Suggest a targeted and professionally executed manipulation to the detriment of VW. The head of the finance department Rolf Selowsky resigned days after the scandal broke in March. He is not accused of any wrongdoing but auditors concluded he had not applied the necessary diligence in all instances. Two former VW foreign exchange dealers have been arrested. But even VW admits that the report published last week revealed important company failings. Peter Frerk who has temporarily taken over Selowskys reponsibilities said the findings were not a first class acquittal. The currency swindle was a lamentable event for our company he told journalists. The auditors said the remaining members of VWs management board and supervisory board had correctly fulfilled their obligations a verdict which almost certainly means that major West German banks who vote on behalf of large numbers of shareholders will ratify both boards at the July 2 meeting. Many market analysts especially in London do not believe a sharp rise in VWs share price last week reflects a major reassessment of the firm on the basis of the auditors report. The stock closed at 430 marks on Friday up 11 pct from a week earlier. Dealers referrred to short-term bargain-hunting and one London broker said Im not sure its much of a bargain. Most brokers said they would not recommend clients to buy at these levels. Analysts believe VW will do well to match its 1986 group net profit of 582 mln marks this year and one broker in London said the company would be lucky to report profits only 15 pct down. VW is expected to fare very well both in its home market and in Europe. But sales have fallen sharply in the U.S and Brazil where the latest price freeze could exacerbate results even further. The company hopes to benefit in the long term from its takeover of the Spanish company SEAT but this subsidiary is still producing losses. VW has also just announced a deal to build light pick-up trucks with Toyota Motor Corp <TOYO.T> at an under-utilised plant in Hanover but analysts noted production here was only expected to take off fully in 1990. REUTER | VW SUFFERS IMAGE LOSS IN WAKE OF CURRENCY SCANDAL |
BANK OF FRANCE CUTS INTERVENTION RATE TO 7-1/2 PCT FROM 7-3/4 PCT - OFFICIAL |
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Top-level talks last week between the European Community (EC) and the United States failed to resolve a dispute over pasta which may provoke new trade frictions next month diplomatic sources said. The U.S. Insists the EC complies with what it regards as an unambiguous ruling from the world trade body GATT and dismantles an export subsidy system which has led to Italy taking an increasing share of the U.S. Pasta market. The sources said the EC which currently provides subsidies of around 16 cents a pound offered a compromise in last weeks talks in Brussels but that this was rejected by the U.S. U.S. Assistant Special Trade Representative Jim Murphy has returned to Washington ahead of a theoretical July 1 deadline for agreement set last August when the two sides resolved a related dispute over EC restrictions on U.S. Citrus imports. The diplomatic sources said the citrus issue could be reopened if the pasta dispute was not solved quickly. It was also possible the U.S. Would reimpose a 40 pct tariff on EC pasta lifted when the citrus row was settled. But the two sides may agree to extend the deadline for a few days as EC Commissioners Willy de Clercq and Frans Andriessen are due to visit Washington from July 7 to 10. REUTER | EC, U.S. REMAIN DIVIDED OVER PASTA DISPUTE |
BANK OF FRANCE CUTS SEVEN-DAY REPURCHASE RATE TO EIGHT PCT FROM 8-1/4 PCT - OFFICIAL |
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The coupon on the 100 mln dlr five year equity warrant eurobond for Nicherei Corp has been set at the indicated 1-3/8 pct lead manager Nikko Securities Co (Europe) Ltd said. The exercise price was set at 974 yen per share representing a premium of 2.53 pct over todays closing price in Tokyo. The foreign exchange rate was set at 147.45 yen to the dollar. A 50 mln dlr seven year deal for Nichirei will be priced later this morning by lead manager Yamaichi International (Europe) Ltd. REUTER | TERMS SET ON NICHIREI FIVE YEAR WARRANT BOND |
Polish farmers will receive price rises ranging from 13.4 pct for some crops to 23.3 pct for meat from July 1 the Finance and Agriculture ministries said. The state procurement price for rape will rise 13.4 pct to 5500 zloties per quintal while wheat and rye will go up an average 18.2 pct to 3100 and 2400 zloties per quintal. Pork will rise by 18.8 pct and beef 23.3 pct. The ministries said the new prices aimed to ensure farmers profits and meet higher living costs. But at the same time they said fertilisers would rise by an average 50 pct animal feeds by 38 pct and tractors by 25 pct. REUTER | POLISH FARM PRICES AND COSTS TO RISE FROM JULY |
Degussa plans one-for-five rights issue at 225 marks a share |
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European Community agriculture ministers will meet tomorrow evening after the end of a two-day summit meeting of heads of government to again attempt to agree a 1987/88 farm price package an EC Commission spokesman said. He added that tomorrows EC Official Journal will contain notice of special agricultural measures of a purely technical nature which will come into effect on July 1 unless the ministers reach an accord. The spokesman declined to detail these special measures but said they would not be the sort of dynamic moves which EC Farm Commissioner Frans Andriessen has said he would take in the case of complete deadlock among farm ministers. These moves would be taken only if tomorrows meeting of ministers in Brussels again fails to reach an accord EC sources said. Andriessen is thought to be prepared to cut cereals prices by seven pct and to take other drastic action trade sources said. EC farm ministers ended their last meeting on June 18 still split over the Commissions proposal for a tax on vegetable and marine oils and fats. In addition West Germany said it would veto plans for cereal price cuts and for a change in the green currency system. Earlier today diplomats said Belgium the current holder of the European Community presidency appears ready to drop the plans for the controversial oils and fats tax. REUTER | EC FARM MINISTERS TO MEET TOMORROW AFTER SUMMIT |
Land Securities Plc <LAND.L> is issuing a 75 mln stg convertible eurobond due December 31 2002 with an indicated coupon of 6-3/4 to seven pct and par pricing lead manager J. Henry Schroder Wagg Ltd said. The issue is callable at 106 pct declining by one pct per annum to par thereafter but is not callable until 1992 unless the share price exceeds the conversion price by 130 pct. The selling concession is 1-1/2 pct while management and underwriting each pays 1/2 pct. Final terms will be set on or before July 8 and the expected conversion premium is 13 to 18 pct. The payment date is July 30. The issue is available in denominations of 1000 stg and will be listed in London. REUTER | LAND SECURITIES ISSUES 75 MLN STG CONVERTIBLE BOND |
Degussa AG <DGSG.F> said it planned a one-for-five rights issue at 225 marks per share raising nominal share capital by 61 mln marks by the end of its current business year ending September 30. The company said in a statement it would also raise nominal share capital by 20 mln marks in a share swap as part of its planned takeover of French medicine group <Laboratoires Sarget SA>. The two capital measures will raise Degussa nominal share capital to 365 mln marks. Degussa said last week it intended to buy 100 pct of the capital of the medical pharmaceuticals group Sarget based in Merignac near Bordeaux. Sarget had 1986 sales in France Belgium the Netherlands Spain Portugal and Italy of 730 mln French francs. Degussa has not said how much it would pay for Sarget but 20 mln marks nominal of 50-mark shares at todays Frankfurt opening price of 494.70 marks would be worth nearly 198 mln marks. A 61 mln mark nominal capital increase at 225 marks would raise 274.5 mln marks. Degussa said the 20 mln mark nominal capital increase would take the form of an issue of shares for a non-cash consideration. The April 10 annual meeting agreed that there would be no rights issue on this capital which was already authorized but unissued. The rights issue involving the 61 mln mark nominal capital increase will be led by Dresdner Bank AG. Following that capital increase Degussa would be left with 19 mln marks of authorized but unissued capital a Degussa spokesman said. Part of the 274.5 mln marks from the rights issue would also be used for the Serget acquisition he added. REUTER | DEGUSSA PLANS ONE-FOR-FIVE RIGHTS ISSUE |
Ricoh Co Ltd <RICT.T> has predicted group net profit of 11 billion yen in the year ending March 31 1988 up 0.5 pct from a year earlier assuming a yen/dollar rate of 140 yen a company spokesman said. Sales in 1987/88 are expected to rise 6.4 pct from a year earlier to 630 billion yen on an increase in overseas production and an improvement in its domestic sales network. The company earlier reported group net profit of 10.95 billion yen in 1986/87 down 29.2 pct from a year earlier. Sales were 0.3 pct down at 592.37 billion due to reduced exports caused by the yens appreciation against the dollar. Ricohs exports accounting for 34.2 pct of total sales against 39.6 pct a year earlier fell 13.8 pct from a year earlier to 202.83 billion yen in 1986/87 while domestic sales rose 8.7 pct to 389.55 billion. REUTER | RICOH SEES GROUP NET LITTLE CHANGED IN 1987/88 |
Canada has threatened to stop imports of Danish pigmeat from July 14 after Canadian veterinary inspectors approved only two of 33 slaughterhouses a Danish agriculture ministry official told Reuters. The Canadians postponed the original July 1 deadline at the request of the European Commission which Denmark approached for support. Danish Foreign Minister Uffe Ellemann-Jensen said in an interview with the daily Berlingske Tidende: Denmark will not accept a ban on Danish meat exports and I am sure we can reach an understanding with the Canadians with the help of the EC. Danish pigmeat exports to Canada were worth 106 mln crowns in 1986 while Canadian exports to the European Community totalled about 6.5 billion U.S. Dlrs. Some Danish slaughterhouse officials expressed suspicion that the Canadian action was in response to tightening up by EC veterinary inspectors on Canadian food exports to the EC. But an official at the Canadian embassy in Copenhagen said the inspection of Danish slaughterhouses was based on EC regulations. Canadian officials are very concerned about the trade implications. We are holding active discussions with the EC and bilaterally she added. REUTER | CANADA THREATENS BAN ON DANISH PIGMEAT IMPORTS |
Following are extracts from the communique issued at the conclusion of the OPEC conference here. The conference expressed satisfaction about the positive results of the agreement signed in December 1986 by which OPEC re-established the system of fixed price at a level of 18 dlrs per barrel supported by OPEC production ceilings distributed into national production levels. The conference noted that all market indicators including spot prices in the market and netback values of all OPEC crudes have been firming up significantly thus consolidating the OPEC price structure as defined by the agreement. The conference examined the supply/demand outlook for the second half of the year and decided that in order to secure continued firm prices in the market OPEC production during the fourth quarter of 1987 will be equal to that of the third quarter I.E. 16.6 mln barrels per day (bpd) distributed into the same national production levels as were defined by the above-mentioned agreement for that quarter. Furthermore the conference decided to establish a committee of five heads of delegation to monitor the price evolution in the market in relation to the OPEC official prices in order to secure price stability around the opec price structure. Should there be any significant change in market prices the committee would immediately call for an extraordinary meeting of the conference with a view to deciding on the necessary OPEC production levels during the second half of the year which would secure the desired market stability. The conference reiterated the necessity of member countries strict adherence to the agreement signed in December 1986 both in terms of official price and national production levels. For this purpose the conference decided to establish a committee of three heads of delegation to undertake visits to member countries in order to motivate them to comply with the terms of the agreement. Moreover the conference stressed the necessity of the cooperation of the oil-producing exporting countries outside OPEC as an essential prerequisite for a lasting market stability. The conference therefore decided to reinstate the group of five heads of delegation established by the 77th (extraordinary) meeting of the conference in April 1986 to undertake the necessary contacts with those countries. The conference observed the continued fall in the value of the U.S. Dollar and agreed that the matter should be studied and reported to the next meeting of the conference. The conference discussed the appointment of the secretary general and decided to discuss the matter again in its next ordinary meeting. The conference extended the term of office of Fadhil al-Chalabi as deputy secretary general for a period of one year from October 7 1987. The next ordinary meeting of the conference will be convened in Vienna on December 9 1987. REUTER | EXTRACTS FROM OPEC COMMUNIQUE |
Bundesbank President Karl Otto Poehl said West Germany would be badly advised to lower interest rates and that he believed the economy would continue to recover after a six-month lull. Asked by the newspaper Bild am Sonntag if lower interest rates could boost the domestic economy Poehl said: We would be badly advised if we forced further interest rate cuts. This could under certain circumstances release new inflationary fears which would then be more likely to lead to higher interest rates he added. Poehl said Germany had practically no growth in the past six months because of the marks surge and the cold winter. But since April statistics clearly show that the economy finds itself on a course of growth he said. I expect this development to continue in the coming months. Asked about his expectations of a U.S.-European Community trade war Poehl said such an event would be disastrous. For this reason we in Europe must avoid everything used by protectionist forces in the U.S. As pretexts he added. This includes...Eliminating existing restrictions in the EC as far as possible. Protectionism is not found only in the U.S. Reuter | POEHL SPEAKS AGAINST GERMAN INTEREST RATE CUT |
Argentine Economy Minister Juan Sourrouille left at the weekend for the United States for talks with creditor banks and the IMF aimed at obtaining the release of new loans the semi-official news agency Telam said. It said Sourrouille would urge the IMF to release a 480 mln dlrs compensatory loan for falling exports as well as the first two tranches of a standby loan totalling 450 mln dlrs. Release of the funds from the standby loan has been delayed by Argentinas failure to win final approval to a 1.95 billion dlr loan from creditor banks which was a condition for the IMF disbursement. Banks have pledged 97 pct of the 1.95 billion dlr loan but the IMF has not yet defined what amount constitutes the critical mass which is needed for release of the IMF funds and the funds from creditor banks. The president of Argentinas bank steering committee William Rhodes of Citibank said on Friday he thought the loan agreement with Argentina could be signed in August. Reuter | ARGENTINE MINISTER TO SEEK RELEASE OF LOANS |
OPEC output for the second half of 1987 including that of Iraq will be above the official 16.6 mln barrels per day (bpd) output ceiling agreed by OPEC Saturday Kuwait oil minister Sheikh Ali al-Khalifa al-Sabah said. Iraq refused to sign the pact by which OPEC maintained its ceiling at 16.6 mln bpd for both the third and fourth quarters of 1987. In December OPEC set a provisional fourth quarter level of 18.3 mln bpd now cut back to the third quarter target. Ali told a news conference that including Iraq OPEC third quarter output will be between 17.5 and 17.7 mln bpd while fourth quarter output will be nearly 18 mln bpd Ali did not detail what effect he thought these production levels would have on prices. Iraq has an official first half quota of 1.466 mln bpd rising to 1.54 mln in the second half but has refused to adhere to it and has recently been producing around two mln barrels per day exporting it through pipelines to Saudi Arabia and Turkey. Iraqs export capacity will be further boosted when a 500000 bpd oil pipeline via Turkey comes on stream in about September. Iraq has been insisting on a quota equal to its Gulf War enemy Iran which has a quota of 2.255 mln bpd rising to 2.369 mln in the second half. Ali said the position of the 400000 bpd production from the Neutral Zone between Saudi Arabia and Kuwait which has been supplied to Iraq as war relief crude was fixed. We will not discuss it. There will not be any change he said. Ali said the conference which began Thursday and ended Saturday evening had been too short for all necessary problems to be adressed. We are overdoing it in holding too short a meeting. We sweep a lot under the carpet he said. Ali said the problem of price differentials between the prices of various OPEC crudes had not been dealt with properly at the meeting. Ali said The problem of differentials is a real one. I would hate to be producing today a light crude and that problem has not been dealt with properly. Light crudes are overpriced relative to heavy crudes. Asked if the issue of differentials would be raised at the next OPEC meeting to be held in Vienna on December 9 Ali said If my crudes are affected I will raise the issue I will not do the work of another minister. Kuwaits own crudes range from medium to heavy grades. OPEC reintroduced fixed prices on February 1 with a spread of 2.65 dlrs a barrel between its lightest and heaviest crudes. Reuter | KUWAIT SEES OPEC OUTPUT OVER CEILING TO END-YEAR |
Iraq has rejected its new OPEC production quota set in Vienna for the second half of this year the official Iraqi news agency INA reported. It quoted Oil Minister Issam Abdul-Rahim al-Chalabi who returned Sunday as saying Iraq will continue to adhere to its position considering itself as not included in the agreement. Last December Iraq rejected its assigned first half 1987 quota of 1.466 mln bpd and demanded a share equal to the 2.255 mln bpd quota set for Iran its enemy in the nearly seven-year-old Gulf war. The accord reached by OPEC ministers in Vienna Saturday set an output ceiling of 16.6 mln bpd for the groups 13 members from July to December raising Iraqs share to 1.54 mln bpd and Irans to 2.369 mln. Reuter | IRAQ REJECTS NEW OPEC OIL QUOTA |
Shr 15.8 cents vs 12.9 cents Int div six cents vs same Group net 19.90 mln dlrs vs 16.25 mln Turnover 390.70 vs 381.60 mln NOTE - Div pay Aug 3 register July 31. Co says it expects results for the second half year to be similar to those of the first half. REUTER | FRASER AND NEAVE LTD <FRNM.SI> HALF YR TO MARCH 31 |
Year ended March 31 Group shr 33.98 yen vs 39.10 Net 21.16 billion vs 19.96 billion Current 45.23 billion vs 32.87 billion Operating 77.17 billion vs 63.90 billion Sales 616.96 billion vs 527.88 billion NOTE - The company said the 37.6 pct increase in 1986/87 group current profit from a year earlier was mainly due to a drop of two billion yen in interest payments. REUTER | MITSUI REAL ESTATE DEVELOPMENT CO LTD <MREA.T> |
Frances state-run television channel TF-1 which is in the process of being privatised should achieve a profit of around 25 francs per share next year after several years of losses but will not make a profit this year the new TF-1 president Francis Bouygues said. Interviewed on TF-1 on the eve of the public flotation of 40 pct of the channels equity Bouygues said in 1988 we have to make a profit and we will make a profit. I envisage per share profits of 25 francs he said. I am very optimistic. Bouygues said exceptional costs associated with the restructuring of the station would prevent a profit this year. The state sold a 50 pct stake in TF-1 in April to a consortium led by Bouygues a construction magnate and including British press baron Robert Maxwell. Tomorrow 40 pct of the shares go on sale to the public at 165 francs each while 10 pct will be offered at a special price of 132 francs a share to the stations staff. Bouygues said a dividend would be paid to shareholders next year if the station did return to profit. Asked if he thought the flotation price was right Bouygues said I paid virtually double...I consider that it is a good buy. The Bouygues consortium paid three billion francs for its 50 pct controlling stake in April. After the two-week public flotation TF-1 shares will start trading on the second market here in late July. REUTER | FRENCH CHANNEL TF-1 PRESIDENT SEES PROFIT IN 1988 |
French buying power should remain stable this year despite lower economic growth while investment will rise sharply Prime Minister Jacques Chirac said. I think we will maintain our buying power... I do not think it will fall Chirac told a radio interviewer yesterday. Last year French household buying power rose 2.9 pct. Chirac said economic growth would be substantially lower than originally forecast but investment would rise by close to 16 pct in the 1986 to 1988 period reversing the 3.8 pct decline in the previous four-year period. REUTER | CHIRAC SEES STABLE FRENCH BUYING POWER IN 1987 |
Henkel KGaA <HNKG.F> expects 1987 world group turnover and profit to exceed 1986 levels as recent acquisitions should compensate for the negative impact of the strong mark managing board chairman Helmut Sihler said. He told the annual meeting that based on Henkels performance so far the profit increase would be not insignificant. World group sales rose six pct in the first five months this year compared with the same 1986 period but group turnover rose only two pct because of currency factors he said. Sihler said the profit increase surpassed that of turnover but gave no figure. As reported group net profit rose 28 pct to 226 mln marks in 1986. World group sales by volume rose six pct but currency factors trimmed group turnover by six pct to 8.7 billion marks. Sihler said the 1986 profit/sales ratio of 2.6 pct should rise further this year. Sihler said turnover grew more or less equally in all sectors. As reported the 1986 dividend on ordinary voting shares rose to 4.50 marks from 3.50 in 1985 while the dividend on non-voting preference shares increased to 7.50 marks compared with three marks for six months of 1985. REUTER | HENKEL EXPECTS HIGHER 1987 TURNOVER, PROFIT |
South Koreas ruling party will seek a direct presidential election to solve an acute political crisis in the country a party spokesman said. The Democratic Justice Party will ask President Chun Doo Hwan to accept opposition demands for a direct poll to end the current social turmoil he said. The party will also urge Chun to allow an amnesty for top dissident Kim Dae-jung and an immediate release of most political prisoners. - REUTER | S KOREA RULING PARTY SEEKS DIRECT ELECTION |
Hitachi Ltd of Japans <HIT.T> Hitachi Electronic Devices (S) Pte Ltd which suspended selling colour television tubes in the United States since January in anticipation of a dumping duty said that it may be pushed out of the U.S. Market if too high a final duty is assessed. A company spokesman said that the Commerce Department had assessed a temporary 1.52 pct duty on tubes made by his company. The department said it would assess final dumping duties by September 8. The company was Singapores only exporter of colour television tubes to the U.S he said. | HITACHI UNIT MAY WITHDRAW FROM U.S. MARKET |
German May current account surplus 7.5 billion marks (April surplus 6.1 billion) - official |
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German May trade surplus 10.6 billion marks (April surplus 8.9 billion) - official |
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Ivory Coast rainfall this season has been less than in previous years but 1986/87 cocoa and coffee production has not suffered the official Ivorian daily Fraternite Matin reported. The newspaper did not speculate on whether recent dry conditions seriously threatened the main 1987/88 cocoa crop. Trade sources said the weather up to now could be irrelevant if there is good rainfall in coming weeks. Precipitation during the present campaign has been lowest in northern savannah regions where the cotton crop has especially benefitted from the dry weather Fraternite Matin said. Agriculture Minister Denis Bra Kanon said earlier this month 1986/87 cotton output would be a record 213506 tonnes compared with 190000 tonnes in 1985/86. Fraternite Matin said the mainstays of Ivorian agriculture had been little affected by the dry weather. Coffee does not need very much water to survive and only old cocoa plants have been affected in some regions it added. London-based dealer Gill and Duffus recently forecast 1986/87 Ivory Coast cocoa output at a record 590000 tonnes which compares with 585000 estimated for 1985/86. It described early development of the new main crop as patchy. The U.S. Agriculture Department (USDA) earlier this year forecast a drop in 1986/87 coffee production in the Ivory Coast due to drought in the western part of the country. It estimated the crop at 3.84 mln bags compared with the previous years 4.33 mln bag harvest. Ivorian officials have only described this years coffee crop as normal. REUTER | IVORY COAST WEATHER NO PROBLEM FOR 1986/87 CROPS |
Year to March 31 1987 Share 106 rupees vs 130 Pre-tax profit 995.2 mln rupees vs 1.57 billion Net profit 875.2 mln vs 1.07 billion Sales 14.16 billion vs 12.85 billion Dividend 25 pct vs same Tax 120 mln vs 500 mln Note - Full company name is Tata Iron and Steel Co Ltd <TATA.BO>. Dividend is payable to shareholders on Aug 12. REUTER | TATA IRON AND STEEL PRE-TAX FALLS 37 PCT |
Kraft Inc said it has completed the previously announced acquisition of the Anderson Clayton Foods Division from Quaker Oats Co for 235 mln dlrs in cash. Reuter | KRAFT <KRA> COMPLETES BUY OF QUAKER <OAT> UNIT |
MARINE CORP SAYS MARSHALL AND ILLSLEY MADE AN OFFER VALUED AT 62.50 DLRS A SHR |
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Nearly 1000 employees of Bangladesh Shipping Corp called off their two-week-old strike on Saturday after the authorities agreed to consider their demands for higher wages and benefits corporation officials said. The employees walked out on June 11 over their demands forcing the government-run corporation to engage navy personnel to unload grain at the countrys biggest Chittagong port. Anwarul Haq director of the corporation said the strikers joined their work this morning after the authorities assured them they would review their demands soon. Reuter | BANGLADESH SHIPPING EMPLOYEES CALL OFF STRIKE |
Ing C Olivetti EC SpA <OLIV.MI> is in contact with Telerate Inc <TLR> of the U.S. And other unidentifed groups with a view to strengthening its economic news agency business <Radiocor - Agenzia Giornalistica Economica Finanziaria SRL> an Olivetti spokesman said. The spokesman was responding to a Reuters query following an item in the Milan weekly Milano Finanza saying Dow Jones and Co Inc <DJ> which has a controlling stake in Telerate could become a partner in Radiocor through subscribing to a capital increase. The spokesman said that Telerate was among many companies with which Olivetti was in contact with a view to strengthening Radiocor through the entry into the business of new partners but that no accord had been reached. He declined to identify the other companies involved but Milano Finanza named the owners of the Italian financial daily Il Sole 24-Ore and <Societa Elenchi Ufficiali degli Abbonati al Telefono> as likely partners along with Telerate. Olivetti last month announced a joint information technology deal with Societa Elenchi which specialises in publishing telephone and city directories and the Italian publishing group <LEspresso>. Olivetti chairman Carlo De Benedetti told the Olivetti annual meeting last week that the entry of new partners into Radiocor was planned but he did not elaborate. Industry sources said they believed talks between Olivetti and Telerate had been taking place for some months. Olivetti acquired a 76 pct stake in Radiocor last December and has since increased its stake in the agency to 100 pct. The takeover was followed in May this year by the acquisiton by De Benedettis French holding company <Cerus> of a stake of around 35 pct in the French financial information agency <Dafsa>. In May Cerus also acquired a 4.9 pct stake in the British publishing and financial services group Pearson Plc <PSON.L>. REUTER | OLIVETTI SEEKS TO STRENGTHEN RADIOCOR BUSINESS |
Scientific Micro Systems said it has won a major original equipment manufacture contract valued at about 12 mln dlrs from Siemens AG <SIEG.F> West Germany. The company said the contract to be handled by Scientific Micro Systems GmbH Augsburg is for the supply of multi-function disk and tape controllers with SCSI and ESDI interfaces. Scientific is a supplier of computer equipment including data controllers and mass storage subsystems. Reuter | SCIENTIFIC MICRO <SMSI.O> WINS SIEMENS CONTRACT |
Baker Fentress and Co said it named James Gorter as chairman filling the vacancy created by the death on June 23 of Chairman and Chief Executive Officer James Fentress. Gorter a partner of Goldman Sachs and Co has been a Baker Fentress director since 1978. The company said Daivd Peterson president since 1982 was elected chief executive officer. Reuter | BAKER, FENTRESS <BKRF.O> NAMES NEW CHAIRMAN |
Autospa Corp said its wholly owned Autospa Franchising Corp subsidiary entered into an agreement to form a joint venture for franchising Autospa Flat Proof Service Centers with Seal-It Corp a private Los Angeles-based automotive aftermarket company. Under the agreement AutoSpa Franchising and Seal-It each will hold 50 pct of the joint venture company shares. Reuter | AUTOSPA <LUBE.O> UNIT FORMS JOINT VENTURE |
Marine Corp said it received a proposal from Marshall and Ilsley Corp <MRIS.O> under which Marine shareholders would receive Marshall and Ilsley common stock or a combination of cash and stock equal to at least 62.50 dlrs a share of Marine common. It said the proposal will be considered by the Marine board after analysis by its advisers. Reuter | MARINE <MCRP.O> GETS MARSHALL/ILSLEY PROPOSAL |
<Diversified Diagnostic Industries Inc> said it has received approval from the Food and Drug Administration (FDA) for a sceening kit that would test for salmonella in a number of foods including meat. The test called Chik Chek would be the first over-the-counter test for salmonella and can determine in less than 15 minutes if the bacteria is present in poultry pork red meat eggs or dairy products the company said. Diversified said the kit which uses a chemical process to detect the bacteria will be available nationwide shortly. According to the company the FDA estimates that more than four mln Americans may suffer from salmonella poisoning each year with illnesses ranging from mild gastrointestinal distress to arthritis and even typhoid fever. Reuter | DIVERSIFIED GETS APPROVAL FOR SALMONELLA TEST |
Fieldcor Inc said it will take a one-time 30 mln dlr special provision in the second quarter for possible losses in loans to developing countries. The corporation said it will be profitable in the quarter despite the action which will reduce quarterly net income by 23 mln dlrs or 37 cts a share on a fully diluted basis. For the year-ago second quarter Fieldcor reported earnings of 24.8 mln dlrs or 95 cts a share. Fieldcor also said it expects to report strong earnings for the second half of the year. It earned 92.3 mln dlrs or 3.69 dlrs a share fully diluted in 1986. The company said its loans to developing countries experiencing payment or liquidity problems total 88 mln dlrs and represent 1.3 pct of its total loan portfolio. It said there will be no change in the current dividend policy. Reuter | FIELDCOR <FICR.O> TO ADD TO LOAN LOSSES |
IMF Managing Director Michel Camdessus paid a brief weekend visit to the Ivory Coast during which he discussed the countrys economic difficulties with President Felix Houphouet-Boigny. Camdessus said he wished his visit could have been in more pleasant circumstances in remarks reported by the official Ivorian daily Fraternite Matin. He added that the extremely steep fall in agricultural commodity markets had dealt a harsh blow this year to the Ivorian economy and because of this the country was experiencing a growth problem and difficulties with its international debt. Last month the Ivory Coast informed its creditors it had to suspend payments on its foreign debt estimated at more than eight billion dlrs. Reuter | IMF MANAGING DIRECTOR HOLDS TALKS IN IVORY COAST |
Flash floods and high winds have trapped some 10000 people and injured at least 50 in northeastern Bangladeshs Sunamganj district officials said. They said water knee-deep in at least 10 villages following heavy rains last Wednesday was receding after extensively damaging crops and property. The situation was aggravated by a 40-mile-per-hour storm which swept across the area yesterday and flattened at least 200 houses the officials said but gave no other details. Relief Ministry officials describing the floods as a routine hazard told Reuters relief squads had been dispatched to the area with food and medicine. Reuter | THOUSANDS TRAPPED IN BANGLADESH FLASH FLOODS |
Premier Group Holdings Ltd <PMLJ.J> anticipates that current fiscal year profits will show a reasonable increase over last year when per share results rose 43 pct to 233 cents the company said in the annual report. The profit projection assumed no further significant political deterioration inside South Africa and no unmanageable increase in sanctions in industries that Premier is involved the company added. The company with total turnover of 2.62 billion rand in the year ended March 31 operates in the food fishing pharmaceutical and leisure industries. Reuter | PREMIER GROUP SEES REASONABLE PROFIT RISE |
Micron Products Inc said it has agreed to acquire Numedco Inc from <Myraid Group Inc> for 500000 Micron common shares 2400 shares of 1000 dlrs par value preferred and an undisclosed amount of cash. The company said the acquisition has been approved by Micron and Myraid directors and is subject to approval by shareholders of both companies. Micron now has about 1.9 mln common outstanding. Numedco could increase Microns sales by 800 pct and its earnings by 100 pct it said. In the nine months ended March 31 it earned 269000 dlrs on sales of 2.7 mln dlrs. Reuter | MICRON <PMR> WILL ACQUIRE NUMEDCO |
 COLOMBIA OPTIMISTIC ON COFFEE QUOTAS repeat from late yesterday MEDELLIN Colombia June 28 - Colombia considers conditions are favourable for reestablishing coffee export quotas but Brazil believes that difficulties remain with the United States coffee leaders from the two countries said. Colombia considers that if the principal International Coffee Organisation (ICO) members adopt a realistic and objective approach it will be possible to find a solution at the next meeting in London Colombian Coffee Federation president Jorge Cardenas said at a coffee symposium. The symposium has raised hopes that producers would find a common position on quota distribution before a September ICO plenary meeting in London when quotas will be the main item on the agenda. Cardenas representing the worlds second largest coffee producer said all producer countries as well as consumer countries including the United States Japan and the European Community had expressed an interest in reestablishing quotas. However the President of the Brazilian Coffee Institute Jorio Dauster told Reuters that problems remained between the United States and Brazil. By the end of the February meeting it was shown that 85 pct of the producer countries were with Brazil he said. However up to now I have not seen fundamental changes in their positions. ICO talks on quotas broke down in February largely due to a conflict between the worlds main producer Brazil and main consumer the United States. ICO director Alexandre Beltrao said at the symposium that conditions were right to discuss reestablishing export quotas. He said the strong views of Brazil and United States expressed in February had abated. Confirmation of the bumper crop in Brazil is good for prices and compels countries to seek agreement on basic quotas Beltrao told Reuters. Brazilian authorities have said the crop for 1987/88 coffee season could be 35.2 mln 60 kg bags he added. Beltrao spoke of the presence of new factors that work against the stability of the ICO created 25 years ago. Foreign debt and as a result worse economic political and social conditions make the adoption of a national and international coffee strategy more difficult he said. The ICO board would meet in July to discuss these matters. Reuter  | |
TEXACO SAID SEC PLANS BRIEF ASKING TEXAS COURT TO REVIEW U.S. SECURITY LAWS |
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OPECs weekend decision to cut planned oil output levels for second half 1987 has renewed market confidence in the oil price outlook for the rest of the year and boosted international spot prices oil traders said. Spot crude prices are now standing 80-85 cents a barrel higher than at the start of the OPEC meeting last Thursday and could continue their rise in the next few weeks they said. The new optimism springs from the agreement reached by OPEC ministers in Vienna on Saturday to fix a July-December output ceiling of 16.6 mln barrels per day (bpd). At its previous meeting in December OPEC set a provisional 16.6 mln bpd output limit for the third quarter but proposed a sharp rise to 18.3 mln in the fourth. The ceilings were to back up its newly restored fixed prices of around 18 dlrs a barrel. When signs first emerged last Friday that OPEC was contemplating cutting the planned fourth quarter ceiling spot prices of the most widely traded crude oil Britains Brent Blend surged 30-40 cents a barrel. Traders said the trend continued in a cautious rally this morning in London taking quoted levels up to around 19.25/35 dlrs compared with 18.45/50 dlrs in the middle of last week. Most traders on international oil markets reacted bullishly to news of the final agreement. They forecast tight supplies later in the year when demand for oil increases with the onset of the Northern Hemisphere winter and further rises in spot prices. There will be a scramble for oil in the third and fourth quarters of this year one trader said. In the past three months we have already seen a rise in demand particularly from the U.S. And I expect to see even higher prices he added. Mehdi Varzi analyst with stockbroker Kleinwort Grieveson in London agreed. Varzi told Reuters that OPEC was if anything too cautious in setting the new output ceilings. There is now a great chance that Brent crude oil will hit 20 dlrs a barrel in the next month he said. Laurie Law analyst at E.F. Hutton and Co Inc in New York said over the weekend that she saw the spot price of West Texas Intermediate (WTI) rallying to around 22 dlrs by the end of the year from just over 20 dlrs now. WTI the U.S. Benchmark crude usually fetches a premium of 80 cents to one dlr over Brent. So far this year spot Brent has held mostly between 18 and 19 dlrs a barrel. But some traders fearing continued over-production by some OPEC members sounded a note of caution over the new accord. Iraq has again refused to be a party to the agreement because other OPEC ministers turned down its repeated demand for the same production quota as its Gulf War enemy Iraq. In recent months Iraq has been producing 500000 bpd above its assigned quota and it could begin pumping a further 500000 bpd when a new export pipeline comes on stream in September. According to Kuwaiti oil minister Sheikh Ali al-Khalifa al-Sabah actual OPEC production in the fourth quarter could be well above the official ceiling at nearly 18 mln bpd. REUTER | INTERNATIONAL SPOT OIL PRICES FIRM ON OPEC ACCORD |
In the fast paced personal computer industry millions can be made in six months and such an opportunity may exist now for companies seeking to capitalize on the delay of a new IBM software standard. When International Business Machines Corp <IBM> announced its new generation of personal computers the PS/2 family in April it also decided to establish a new operating system for the machines a death sentence for the billions of dollars of software now in use on the existing system. Because IBM is the worlds largest computer company - some 70 pct of the worlds computers bear the IBM logo - most industry analysts and even IBMs competitors expect that within two years the new operating system called OS/2 will be as commonplace as the current standard MS-DOS is now. By 1989 at least one half to 60 pct of all personal computers will be sold with OS/2 predicted George Colony president of the consulting firm Forrester Research Inc. But until then there is an opportunity some analysts said for firms selling advanced versions of MS-DOS specialised multi-tasking software packages and Unix an alternative to MS-DOS developed by American Telephone and Telegraph Co <T> that has developed a following among engineers and the federal government. OS-2 which IBM is developing with Microsoft Corp the author of MS-DOS will not be ready for another six months. IBM said last week that the product is on schedule but analysts and other software developers are skeptical since delays in major new software products are commonplace. Initial acceptance of the new system will most likely be hindered by the disgruntlement of hardware and software vendors alike who would prefer to keep making products that work with tried and true MS-DOS according to Paul Cubbage software analyst with the market research firm Dataquest Inc. Compaq IBMs major personal computer competitor has already said it will stick with the MS-DOS standard. Compaq president Rod Canion said recently their will be no automatic mass migration to OS/2. (Advanced MS-DOS) applications will continue to meet a far broader set of users needs than OS/2 will supply long after it becomes available he said. Cubbage acknowledged that it will probably be a year or more before any really useful applications are available for OS-2 creating opportunities for multi-tasking programs. But there comes a time when the memory limits of those gets to you he said. IBMs new operating system was as big an event to the computer industry as the PS-2 announcement itself. The new computers the most powerful of which will use Intel Corps fast 80386 microprocessor are expected to rejuvenate the sagging sales of the personal computer industry and already gave a big boost to IBM. Company officials said last week that 250000 PS/2s were shipped in the 2-1/2 months since their introduction and IBM expect record pc sales ths year as a result. The enthusiasm for the PS-2 is particularly striking since the full potential of the powerful computers cannot be tapped until a new operating system or other high level software is available analysts said. OS-2 will allow users to work on many different programs or tasks at once on a personal computer ideally without any slowdown in operation a capability the industry has long strived for. Microsoft is already promising alternatives to OS-2 in particular an advanced version of its Windows multitasking program which is used in conjunction with MS-DOS. Microsoft chairman Bill Gates has suggested an advanced version of the program Windows 386 will be announced in September and available six to eight weeks later at a price of 100 dlrs and 300 dlrs. OS/2 is expected to cost 325 dlrs. Some software developers have said the the program designed for 80386-based personal computers may even be superior to OS/2 in allowing users to multitask applications without disruption. But several analysts commented that what users really want is a multi-taksing operating system for 80386-based personal computers and so far that desire has been met primarily by a small Atlanta software publisher The Software Link Inc. In late spring the company announced PC-MOS/386 a multi-tasking multiuser operating system that is compatible with MS/DOS and works on 80386-based computers. The company said it filled 2500 orders in the first four weeks of availability and expects shipments to reach 40000 by year end. International Data Corp analyst Will Zachmann said Unix could be the most promising alternative to OS/2 even once the IVM system is available. IBM did not endorse Unix for any of its PS/2 models although it did say that it would announce a version of its Advanced Interactive Executive (AIX) a Unix compatible operating system. But the federal government requires Unix compatability for most of its computer contracts it is almost certain that other companies will provide Unix-style operating systems for the IBM systems. ATT itself two weeks ago introduced a version of Unix that is compatible with the 80386 microprocessor although not IBMs computer specifically. Analysts saw the announcement as a move to get Unix accepted as a strong alternative to OS/2 before the IBM system has a chance to take off. Reuter | TECHNOLOGY/ALTERNATIVES TO IBM SOFTWARE STANDARD |
Kuwait aided by the recovery in world oil prices announced a mildly expansionary budget for 1987/88 with a 3.3 pct rise in the deficit to 1.38 billion dinars. Oil revenues slashed by some 40 pct in the original budget for the 1986/87 year ending tomorrow were forecast to rise 4.2 pct to 1.73 billion dinars in 1987/88 Finance Minister Jassim al-Khorafi said. This would account for 87.2 pct of total estimated income in the year starting on July 1 compared with 86.6 pct in original 1986/87 estimates the Kuwait News Agency Kuna quoted him as saying. Spending by ministries and public institutions is forecast to be 3.4 pct higher at 3.16 billion dinars in 1987/88 after an 11 pct cut in the current fiscal years budget. In addition the government as is usual will transfer a sum equal to 10 pct of total expected revenue to a special savings reserve for future generations. The minister made no mention of how the deficit would be covered. He also gave no actual outturn for spending and income in 1986/87. REUTER | KUWAIT SETS HIGHER 1987/88 BUDGET DEFICIT |
Prime Minister Jacques Chirac has attacked budget proposals made by the European Communitys executive Commission saying they ignore efforts to cut spending and added that divisions over the issue would be hard to resolve at this weeks EC summit. The Commission has proposed radical changes in the way the member countries contribute to the budget suggesting payments should be linked to economic output instead of tax revenue. But the richer northern nations such as Britain West Germany and France are insisting on stricter spending controls before agreeing to any reform. The proposals of the Commission at the level they are being made are not compatible with the efforts which each of our nations is making to reduce spending ... Therefore there is a big problem Chirac said in a radio interview. EC leaders would also try to resolve a dispute on reforms of agricultural spending largely to blame for an expected 5.7 billion dlr shortfall in the EC budget this year. Chirac said that West Germany under pressure from its powerful farm lobby was alone in opposing reforms to the common agricultural policy while France shared a common position on the issue with the 10 other EC states. Reuter | CHIRAC ATTACKS EC COMMISSION BUDGET PROPOSALS |
ALLIS-CHALMERS CORP SAID IT FILED CHAPTER 11 BANKRUPTCY PETITION |
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French financial group Metrologie International said it is issuing 73.8 mln francs worth of stock option bonds with Banque Paribas as lead manager. The eight-year issue at par will carry interest of six pct payable on August 3. Existing shareholders will have priority subscription to the 1000 franc nominal bonds on the basis of one bond for 14 shares held. Each bond will be accompanied by two warrants giving the right to subscribe to one 40 franc nominal share at a price of 580 francs. REUTER | METROLOGIE ISSUES 73.8 MLN FRENCH FRANC BOND |
Two supertankers attacked in the Gulf by Iranian gunboats on Saturday have anchored off Bahrain for damage inspection shipping sources said. The 224607 tonne Norwegian ship Mia Margrethe and the Liberian-registered Stena Concordia 273616 tonnes both came under fire off the Saudi Arabian coastline. Agents for the tankers in Bahrain told Reuters the extent of damage had not yet been estimated. Both ships will be inspected in Bahrain and may be repaired by the Arab Shipbuilding and Repair Yard Co. The U.S. Frigate Stark damaged last month in an Iraqi air attack in the Gulf left Bahrain early on Sunday and anchored four miles off shore. The vessel is due to return shortly to the U.S. for further repairs. Reuter | SUPERTANKERS ANCHOR OFF BAHRAIN AFTER ATTACKS |
FIRST CHICAGO BANKING UNIT TO BUY INTEREST IN INVESTMENT BANKER WOOD GUNDY |
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Allis-Chalmers Corp said the company and its domestic affiliates filed voluntary petitions for reorganization under Chapter 11 of the Federal Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The company said its business units outside the United States are not affected by the action. Allis-Chalmers said the rapid agreement was essential for its restructuring plan announced March 4. However the company said agreement could not be worked out within the short time frame available and it was determined that the only practical alternative was to obtain court protection. This protection enables us to keep on operating our business in the ordinary course while affording us time to work out our obligations and complete our operational restructure strategy. Allis-Chalmers said the proposal announced in March called for a complete restructuring of its obligations and capital structure as well as major structural changes in operations. The company said funds generated by U.S. operations are currently inadequate to meet its U.S. obligations primarily due to the carryover from discontinued and drastically downsized businesses. It said funds produced by non-U.S. operations are not readily available to help meet those obligations which include a health care program for retirees and debt service carried over from the larger Allis-Chalmers of earlier years. Allis-Chalmers said its U.S. cash flow exceeded a negative 24 mln dlrs in 1986 and was a negative two mln dlrs in the first quarter of 1987. The company has financed a portion of its debt service and other obligations through sales of assets and has relied on short-term waivers from its lenders to prevent defaults on principal and interest payments. Because of Allis-Chalmers financial position it said new financing facilities were not available outside of Chapter 11 adding substantially all U.S. assets other than inventory are pledged as security for its debts. Reuter | ALLIS-CHALMERS <AH> FILES FOR CHAPTER 11 |
First Chicago Corp said its First National Bank of Chicago subsidiary agreed in principle to acquire a 35 pct interest in Wood Gundy Corp an international investment banking firm headquartered in Toronto. Under terms of the agreement the bank through its Canadian bank subsidiary First National Bank of Chicago (Canada) will invest 271 mln canadian dlrs in a combination of newly issued common equity and convertible debentures of Wood Gundy it said. First Chicago said it also agreed to invest additional funds jointly with Wood Gundy in venture capital and merchant banking businesses. Wood Gundy shareholders will retain 65 pct ownership it said. First Chicago said its investment in Wood Gundy is consistent with recent legislation which removed ownership restrictions and broadened access to the Canadian securities industry. The proposed agreement is subject to approval of U.S. and Canadian regulatory agencies and completion of a definitive agreement. The transaction is expected to be completed on September 30 1987 or as soon as possible thereafter it added. First Chicago said the investment in Wood Gundy permits it to consolidate and enhance its present position in Canada and internationally and provides the basis for future growth. Reuter | FIRST CHICAGO <FNB> TO BUY WOOD GUNDY STAKE |
Period ended March 31 Oper shr loss 1.07 dlrs vs not applicable Oper net loss 49098000 vs n.a. Revs 240.5 mln Avg shrs 45810000 Year Oper shr loss 84 cts Oper net loss 36609000 Revs 766.2 mln Avg shrs 43428000 NOTE: Full name is Lorimar Telepictures Corp Prior-year comparisons not applicable. Lorimar and Telepictures merged in February 1986 Earnings exclude losses from discontinued operations of 13562000 dlrs or 30 cts a share in the quarter and 21992000 dlrs or 51 cts a share for the year Reuter | LORIMAR TELEPICTURES <LT> 4TH QTR OPER LOSS |
Pullman Co said its PCII Acquisition Co subsidiary completed a previously announced tender for Clevite Industries Inc. Pullman said as of midnight June 26 5248712 shares of Clevite common 278965 shares of nonvoting common and 1913194 warrants had been tendered. Including the 989426 shares of nonvoting common stock Pullman has an option to buy from Prudential Insurance Co of America the total shares and warrants represent about 99 pct of the common and nonvoting common of Clevite and 96 pct of the outstanding warrants. Reuter | PULLMAN<PMN> COMPLETES CLEVITE <CLEV.O> TENDER |
Leaders of the European Community (EC) began their two-day summit with reform of the groups creaking finances heading the agenda officials said. The 12 government leaders were joined by French President Mitterrand and their foreign ministers. The twice-yearly meeting will also examine some world issues especially the Middle East but diplomats said the groups cash crisis would dominate the talks. Reuter | EC LEADERS BEGIN BRUSSELS SUMMIT |
Allied-Signal Inc and Schlumberger Ltd <SLB> said that Schlumberger has acquired Allied-Signals Neptune International unit headquartered in Atlanta Ga. for an undisclosed sum. Allied-Signal said Neptune produces water meters and flow measurement equipment and last year had sales of 80 mln dlrs. The company said Schlumbergers activities include providing oil field services to locate and produce oil and gas and the manufacture of electricity gas and water meters for utilities. Reuter | ALLIED-SIGNAL <ALD> SELLS UNIT TO SCHLUMBERGER |
Di Giorgio Corp <dig> said it received an unsolicited letter from <Gabelli and Co Inc> proposing a Di Giorgio recapitalization in which stockholders would receive 20 dlrs a share in cash and certain securitites including subordinated notes preferred stock and new common stock. Di Giorgio said the letter estimates the total value of these securities at eight dlrs per share. It also said any transaction is subject to completion of a due dilligance investigation and the obtaining of necessary financing. After Di Giorgios board and investment bankers have evaluated the letter they will respond the company said. Reuter | DI GIORGIO <DIG> OFFERED 28 DLRS A SHARE |
CTS CORP CUTS DIVIDEND TO 12-1/2 CTS FROM 25 CTS |
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Soviet Prime Minister Nikolai Ryzhkov described the Soviet Unions economic management system as obsolete and called on the Supreme Soviet the nominal parliament to adopt a draft law on major economic reform. In a speech to the 1500 member body Ryzhkov said excessive central control by Moscow-based ministries and wasteful use of resources had led to a situation where 13 pct of Soviet industrial enterprises were making a loss in 1986. He said the public faced acute food and housing problems and a shadow economy was growing because the state could not meet demand. He added that the USSR had failed to keep up with the technology revolution. The methods of the past system of economic management have become obsolete Ryzhkov declared. The need for change is evident and urgent. Kremlin leader Mikhail Gorbachev who set the tone last week with a frank speech on the economy was present during the speech. The legislation outlined by Ryzhkov formally called the draft law on state enterprises is expected to be approved by the Supreme Soviet to take effect next January 1. Under the law all enterprises are to become financially self-supporting by taking charge of income and outlay with wages tied to profit in order to increase worker incentive. Firms will compete for orders from the state which are due to decline as direct contracts between enterprises expand. Ryzhkov said the state planning agency Gosplan would be restructured to set national economic priorities instead of administering factories directly through five year plans. We need a fundamentally new approach to yearly planning he added saying annual central plans would be abandoned from 1991 and enterprises charged with developing their own plans. He said scientific research should be integrated closely with industry to make up a technology gap with the West and enterprises should use market research to meet consumer demand. Ryzhkov blamed the state supply body Gossnab for allowing shortages to occur. He said Gossnab was hoarding 27 billion roubles worth of raw materials and semi-finished products of enterprises. He said Gossnab should help expand wholesale trade. Ryzhkov said improved economic management of consumer goods and services was required to stem increasing speculation and the growth of the black market economy. He called for a 10 fold increase in the number of cooperatives to help in this field. He said the price system needed radical revision to accurately reflect supply and demand with the state setting prices only for products of national importance in changes to be fully in place by the next five year plan beginning in 1991. The practice of using credit to cover losses must also stop. Outstanding debts to the state had reached 40 billion roubles. He said there were proposals to replace the cumbersome banking system with six new banks -- a state bank and banks for foreign economic relations agro-industry construction housing and commercial services and credit. Ryzhkov said guarantees should be built into the law to prevent the distortion of the rights of enterprises. But non-profitable enterprises would be declared bankrupt if efforts to make them self-supporting failed. Bemoaning the economic illiteracy of many managers he called for the retraining of economic personnel. Ryzhkov said an immense amount of work lay ahead and doing it on the go would be difficult but added We do not have time to stop and ponder. He said the changes should give a new image to socialism. REUTER | RYZHKOV CALLS FOR SOVIET ECONOMIC REFORMS |
First Chicago Corp said its First National Bank of Chicago subsidiary agreed in principle to acquire a 35 pct interest in Wood Gundy Corp an international investment banking firm headquartered in Toronto. Under the agreement the bank through its Canadian bank subsidiary First National Bank of Chicago (Canada) will invest 271 mln canadian dlrs in a combination of newly issued common equity and convertible debentures of Wood Gundy. First Chicago also agreed to invest additional funds jointly with Wood Gundy in venture capital and merchant banking businesses. Wood Gundy shareholders will retain 65 pct ownership. Reuter | FIRST CHICAGO <FNB> TO BUY WOOD GUNDY STAKE |
The coupon on the 50 mln dlr seven year equity warrant eurobond for Nicherei Corp has been fixed at the indicated 2-7/8 pct lead manager Yamaichi International (Europe) Ltd said. The exercise price was set at 974 yen per share representing a premium of 2.54 pct over todays close in Tokyo of 950 yen. The foreign exchange rate was set at 147.45 yen to the dollar. Nicherei also launched a 100 mln dlr five year equity warrant deal through Nikko Securities Co (Europe) Ltd. The coupon on this issue was fixed at 1-3/8 pct earlier today. REUTER | TERMS FIXED ON NICHEREI SEVEN YEAR WARRANT BOND |
Chicago Mercantile Exchange floor traders and commission house representatives are guesstimating todays hog slaughter at about 260000 to 265000 head versus 259000 a week ago and 262000 a year ago. Cattle slaughter is guesstimated in the 127000 to 130000 head range versus 125000 week ago and 138000 a year ago. Reuter | HOG AND CATTLE SLAUGHTER GUESSTIMATES |
AMEV Holdings Inc the New York-based operating arm of NV AMEV <AMEV.AS> in The Netherlands and parent company of Security Mutual Finance Corp said it reached a definitive agreement to sell Security Mutual to USA Financial Services Inc. Security Mutual based in Decatur Ala. operates 33 loan offices in fourh Southeastern states and has 90 mln dlrs in receivables outstanding. USA Financial is a subsidiary of Chicago-based United Savings of America. Reuter | AMEV HOLDINGS TO SELL UNIT TO USA FINANCIAL |
PGI-Houtex a private Houston company said it bought about 80 pct of the common stock of Seis Pros Inc at 2.85 dlrs a share from the founding stockholders. It said the total price for the 3100100 shares was 8835285 dlrs. Completion of the merger transaction is expected in three to four months. Reuter | PGI-HOUTEX BUYS 80 PCT OF SEIS PROS <SEI> |
Shr 50 cts vs 40 cts Net 20.8 mln vs 16.4 mln Revs 531.7 mln vs 418.7 mln NOTE: 1987 first qtr net gain from discontinued operations was 47.1 mln or 1.64 dlrs per share. 1986 first qtr ended on May 31. Reuter | RITE AID CORP <RAD> 1ST QTR NET MAY 30 |
Munson Geothermal Inc said power plant projects under development in Nevada have a completion value of about 70 mln dlrs. The company said an appraisal was conducted by Marshall and Stevens Inc. Munson said its financial adviser Samuel Montagu Capital Markets called for the appraisal. Montagu is to assist Munson in raising up to 20 mln dlrs of additional financing to complete existing installation at Brady Hot Springs Nev. and create a new geothermal generating facility at Black Butte Nev. Munson said it and its partners have invested more than 9.0 mln dlrs in the Brady project a 9.7-megawatt facility that was appraised at a market value of 28.5 mln dlrs upon completion based on the income approach. Munson and partners have 30-year power sales contracts with Sierra Pacific Resources <SRP>. Reuter | MUNSON GEOTHERMAL <MGEO.O> VALUES PROJECTS |
<Ciba-Geigy Corp> said at the close of business on June 25 the approximate number of Spectra-Physics Inc <SPY> shares that it tendered was 116271. The company said on June 26 its offer to purchase all outstanding shares of Spectra-Physics at 36.50 dlrs per share had been extended to 5 p.m. New York City time on July one. Reuter | CIBA-GEIGY ANNOUNCES NUMBER OF SHARES TENDERED |
Core-Mark International Inc said it agreed to sell the assets of its fast food subsidiary Sandys Fast N Fresh to a subsidiary of Vista Group Ltd a Los Angeles based investment banking firm. Core-Mark said undisclosed proceeds from the sale would be about 80 pct cash and 20 pct note. Part of the proceeds will be used to pay off existing bank lines of credit the company said. Reuter | CORE-MARK <CMK.TO> TO SELL FAST FOOD UNIT |
Madagascar will tender today for two 10000-tonne cargoes of soft red winter wheat for last-half July and first-half August shipments with PL480 financing U.S. exporters said. Reuter | MADAGASCAR TENDERS FOR 20,000 TONNES SOFT WHEAT |
Moseley Securities Corp said Howard Berg resigned as chairman and chief executive officer. It said Frederick S. Moseley III assumed the position of chairman. In other management changes Omar Kassem was named vice chairman and chief executive officer and James Wolitarsky executive vice president and chief financial officer was appointed president and chief operating officer. The company also said it named a Management Committee consisting of Wolitarsky and six executive vice presidents. Reuter | MOSELEY SECURITIES <MOSE.O> CHAIRMAN RESIGNS |
U.S. SALES OF SINGLE-FAMILY HOMES FELL 14.9 PCT IN MAY AFTER REVISED 1.0 PCT APRIL RISE |
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West Germanys foreign trade and current account surpluses are expected to decline only slightly in 1987 from their record levels last year economists said. Figures released by the Federal Statistics Office in Wiesbaden showed that in the first five months of the year the trade surplus grew 15.7 pct compared with the same 1986 period to 47.2 billion marks. The current account surplus rose 9.8 pct to 33.7 billion marks. West Germany reported a 1986 current account surplus of 77 billion marks and a trade surplus of 113 billion marks. Economists had expected the rise of the mark from year-ago levels to have started biting more strongly into the nominal surpluses. The real surpluses are already declining. The Statistics Office said after cheaper import prices were taken into consideration West Germanys imports by volume rose by more than three pct in the first five months. Exports had risen by only about one pct in real terms. The government has pointed to this stronger real rise in imports than exports when rejecting international pressure to boost domestic consumption. The Statistics Office said West Germanys trade surplus had risen in May to 10.6 billion marks from 8.9 billion in April and 8.1 billion in May last year. The current account surplus had risen to 7.5 billion marks in May from 6.1 billion in April and 6.3 billion marks a year earlier. Exports rose strongly from the year-ago month by 6.6 pct to 43.31 billion marks while May imports of 32.76 billion marks had risen only 0.8 pct in the year. The Ifo economic research institute in Munich said in a study published today that the trade surplus would probably only fall to around 101 billion marks this year compared with the 113 billion mark 1986 record. It predicted a fall in the current account surplus to 61 billion marks from 77 billion. Ifo said this reduction would only be a small step on the way to reducing imbalances in the world economy. Peter Pietsch an economist with Commerzbank AG predicted a 1987 trade surplus of 100 billion marks. He saw a slightly higher current account surplus than Ifo of possibly 65 billion marks. Helmut Henschel with Westdeutsche Landesbank put the 1987 trade surplus at 95 billion marks and the current account surplus at 60 billion marks. He said the strong rise in exports in May from the year-ago period was surprising but it probably reflected calendar factors. REUTER | GERMAN 1987 TRADE SURPLUS SEEN STAYING HIGH |
Texaco Inc said the U.S. Securities and Exchange Commission will urge the Texas Supreme Court to accept the Texaco Pennzoil Co <PZL> case for review with respect to Commission Rule 10b-13 as it applies to the facts of the case. Texaco said it is pleased and encouraged by the SECs decision pointing out Pennzoils own counsel told the trial court that If Rule 10B-13 was an impediment then in fact our contract was void and further that if the alleged contract was void we have no case. In a letter dated June 26 the SECs general counsel told attorneys representing Texaco and Pennzoil the commission will urge the Texas Supreme Court to review the issue of federal securities law in the Texaco-Pennzoil case Texaco said. This is to inform you that the commission has determined to file a brief amicus curiae in the (Texaco-Pennzoil) litigation. The brief will focus on Commission Rule 10b-13 as it applies to the facts of this case and will urge the Texas Supreme Court to accept the case for review with respect to that issue the letter said. The SECs general counsel said we currently anticipate that the brief will be filed around the week of July 20. An issue concerning SEC Rule 10b-13 is part of Texacos application for a Writ of Error which was filed with the Texas Supreme Court on June 15 the company said. The SEC rule prohibits private agreements or arrangements to purchase a target companys stock while a tender offer by a prospective purchaser is pending the companys statement said. In its application to the Texas Supreme Court Texaco said it points out that on the day that Pennzoil made its alleged agreement to purchase Getty Oil stock (Jan. 3 1984) it (Pennzoil) had outstanding a public tender offer for Getty Oil stock. Reuter | SEC SEEKS COURT REVIEW OF TEXACO <TX> CASE |
Sales of new single-family homes fell 14.9 pct in May from April to a seasonally adjusted annual rate of 616000 units the Commerce Department said. The department revised April sales downward to show a 1.0 pct increase from March to 724000 units instead of the previously reported 7.6 pct gain. Last months drop was the biggest since January 1982 when sales fell 19.5 pct and brought the level of sales to its lowest point since December 1984 when 597000 units were sold the department said. Home sales in May were 20.7 pct below the May 1986 level of 777000 the department said. Before seasonal adjustment the number of homes actually sold in May totaled 58000 down from 71000 in April and 75000 in May a year ago. The average price was 129600 dlrs in May up from 117500 dlrs in April and 114600 dlrs in May 1986. The median price was 106800 dlrs up from 97900 dlrs in April and 92100 dlrs in May a year ago. Reuter | U.S. HOME SALES FELL 14.9 PCT IN MAY |
Mauritian Finance Minister Seetanah Lutchmeenmaraidoo said the islands first offshore bank could open in January 1988. The minister was announcing the creation of a committee of eight economists to look at ways of encouraging foreign investment especially offshore banking. The committee part of the governments plans to make Mauritius an international financial centre is expected to submit its recommendations within three months. Lutchmeenmaraidoo also circulated a white paper on legislation to set up a stock exchange on the island. He said the exchange would be a powerful instrument of economic democratisation and the legislation would include incentives to encourage shareholding by a wide public. The government would also introduce a bill to protect investors and set up a vigilance committee with powers to suspend any company from the stock exchange halt trading in its shares and take punitive measures for illegal practices. The stock exchange would probably become fully operational in the next five to 10 years he added. REUTER | MAURITIUS COULD HAVE OFFSHORE BANKING BY JANUARY |
CTS Corp said its directors voted to halve the quarterly dividend to 12-1/2 cts from 25 cts payable August five record July seven. CTS said the action was taken to increase cash available for reinvestment in the companys business. Reduction in the quartelry dividend was not the result of any sudden materially adverse change in business conditions or in response to any actions taken by its banks or creditors according to a company statement. Reuter | CTS <CTS> HALVES DIVIDEND TO 12-1/2 CTS |
Pennwalt Corp said it is making a new refrigerant available as an alternative to chlorofluorocarbon (CFC) 12 a product suspected of depleting the earths ozone layer. The company said the new product called isotron 142b/22 is a blend of partially halogenated CFCs and has less than five pct of the ozone depletion potential of CFC 12 which is fully halogenated. According to the company the blend is currently used to replace CFC 12 as a propellant in aerosol containers and has been successfully tested as a refrigerant. Pennwalt manufactures chemicals pharmaceuticals and precision equipment. Reuter | PENNWALT <PSM> INTRODUCES NEW REFRIGERANT |
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