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The Bank of Thailand said it has floated 500 mln baht of new five-year loan bonds for public sale. The bonds will yield 7.25 pct net after tax with interest compounded semi-annually. The aggregate five-year yield will amount to 42.77 pct of the principal on maturity. REUTER | BANK OF THAILAND FLOATS NEW GOVERNMENT BOND |
Prime Minister Yasuhiro Nakasone will step down only after his plan to overhaul Japans tax system gets parliamentary approval one of his closest aides said today. The aide who declined to be identified said at a private meeting Nakasones power in office does not necessarily terminate at the end of his term in October. It depends on when (the) seven tax reform bills get parliamentary approval. Nakasone vowed yesterday to press on with his plan despite Sundays unexpected Upper House by-election defeat of the ruling Liberal Democratic Party (LDP) in a conservative stronghold. The socialist winner backed by other opposition parties had campaigned against a controversial five pct value added sales tax the main plank of the reform plans. The aide dismissed the possibility of any amendment of the sales tax on the grounds the opposition parties were demanding nothing but retraction of the tax. They have been refusing to discuss a draft budget for the 1987 fiscal year starting on April 1 which includes the tax plans. They have been resorting to an on-off boycott of parliament since February 4. If I were Nakasone I would close the current regular parliamentary session on May 27 as scheduled attend the Venice summit of industrial democracies in June and open an extraordinary session to discuss the tax plans the aide said. Under law a regular session can be extended only once while an extraordinary session can be extended twice.The other option would be to extend the current session he said. The opposition parties will surely present a no-confidence motion against the Nakasone Cabinet at one stage or another. One scenario then will be to reject the motion opening up the way for tax reform. Another scenario is the resignation of the Nakasone Cabinet en masse. A third scenario is a dissolution of the Lower House for a snap general election the aide said. That is only possible if the 200 opposition members resign from the 512-seat Lower House necessitating by-elections. The LDP now has 304 seats in the Lower House after its landslide victory in general elections last July. There are five independents and three vacancies. The LDP which will put up candidates will certainly inflate their seats but at the expense of fierce media criticism the aide said. He said he expected the proposed sales tax to have little effect on local elections to be held on April 12 and 26. About 2600 elections will be held in all but three of the nations 47 prefectures including 13 gubernatorial elections. Candidates running in prefectural assemblies will all oppose the sales tax irrespective of their party tickets. Possible effects if any will be on gubernatorial elections in Japans northernmost island of Hokkaido and Fukuoka in southern Japan he said. The two posts are now held by opposition socialists. REUTER | NAKASONE SET TO STAY UNTIL TAX REFORM APPROVED |
Credit Foncier de France is issuing a 150 mln ECU eurobond due April 14 1994 at 7-5/8 pct and priced at 101-5/8 pct lead manager Banque Paribas Capital Markets said. The issue is guaranteed by France and will have a 50 mln ecu tap exercisable for six months. The bond will be available in denominations of 1000 and 10000 ECUs and will be listed in Luxembourg. Fees comprise 1-1/4 pct selling concession and 5/8 pct management and underwtriting combined. Payment date is April 14. REUTER | CREDIT FONCIER DE FRANCE ISSUES 150 MLN ECU BOND |
Belgium cuts discount rate to 8.0 pct from 8.50 - official |
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A spokesman for Preussag AG <PRSG.F> said it was not yet certain whether the company would pay a dividend on 1986 results He was commenting on a Preussag statement which said results in 1986 were lower than in 1985. Preussag has frequently said its results came under further pressure in 1986 following a difficult year in 1985. Managing board chairman Guenther Sassmannshausen said in December the board would prefer to stick to its policy of not dipping into reserves to pay dividends. The spokesman noted the final dividend decision rests with the supervisory board. The Preussag statement said results fell in 1986 compared with 1985 because declines in earnings in metals oil and shipping were not entirely compensated by positive trends in the groups other divisions. The spokesman said it was not clear whether the domestic group would show a net profit in 1986 adding this would depend partly on the level of provisions. Preussag cut its 1985 dividend to eight marks from nine marks on 1984 results after parent company net profit dropped to 65.0 mln marks from 103.0 mln the year before. The Preussag world group made a net loss of 13.1 mln marks in 1985 after a net profit of 154.5 mln the year before. Domestic group net profit fell to 77.9 mln from 122.2 mln. The statement said its results in 1986 were affected by unsatisfactory selling prices for metals and oil as well as by poor use of capacity in the supply ship sector. The reduction in natural gas prices in the fourth quarter of 1986 to reflect earlier falls in oil prices was an additional factor behind the drop in results. Preussag said rationalization measures already introduced would not begin to take full effect until this year. Preussags domestic group turnover rose to 4.48 billion marks in 1986 from 4.29 billion in 1985 helped by the first time consolidation of 951.8 mln marks of turnover from its majority-owned oil and gas subsidiary C. Deilmann AG. Domestic group turnover in the 1986 fourth quarter alone was 1.1 billion marks it said without giving comparison figures. Preussag said its domestic crude oil production fell 4.0 pct to 94400 tonnes in 1986 while foreign oil production rose to 182900 tonnes from 174500 tonnes. Preussag said its Amalgamated Metal Corporation Plc (AMC) subsidiary whose results are included in the world group accounts made an unspecified profit in the fourth quarter of last year. AMCs large losses in 1985 caused principally by the international tin crisis were the reason behind the world group losses that year. REUTER | PREUSSAG SAYS PAYMENT OF A 1986 DIVIDEND NOT CERTAIN |
Dutch car imports rose 27.5 pct in 1986 to 610500 units in 1986 reflecting a 41.8 pct growth in Japanese imports the association for the Dutch vehicle industry reported. Dutch imports of Japanese cars rose 41.8 pct last year to 143880 units compared with a 37.4 pct rise in imports from other EC countries to 437500 units the association said quoting unpublished Central Bureau of Statistics figures. The figure excludes Dutch imports of vehicles for final destination outside the Netherlands. REUTER | DUTCH CAR IMPORTS RISE 27.5 PCT IN 1986 |
Foreign oil companies will spend less on exploration in Indonesia this year than last budgeting 2.7 billion dlrs for calendar 1987 against 1986 spending of 2.8 billion dlrs the state oil company Pertamina said. Actual spending last year fell short of the budgeted figure of 3.2 billion dlrs as oil companies slashed expenditure because of the crash in world oil prices. Jumardi Jukardi head of Pertaminas coordinating board for foreign contractors said foreign companies will drill 110 exploration wells and 431 development wells this year against 108 and 330 last year. REUTER | OIL FIRMS CUT 1987 INDONESIAN EXPLORATION SPENDING |
Imperial Chemical Industries Plc <ICI.L> is issuing a 100 mln stg eurobond due April 15 2005 paying 9-3/4 pct and priced at 101-1/4 pct lead manager Warburg Securities said. Morgan Grenfell and Co Ltd is co-lead. The bond is in partly paid form with 30 pct due on April 15 and the remainder due for payment on July 15. It will be available in denominations of 1000 and 10000 stg and will be listed in London. Fees comprise 1-1/2 pct selling concession and 1/2 pct each for management and underwriting. REUTER | ICI ISSUES 100 MLN STG 9-3/4 PCT EUROBOND |
Negotiations between Indonesias state oil company Pertamina and foreign oil contractors on extension of the standard 30-year production sharing contract will be concluded by the end of this month a Pertamina official said. Jumardi Jukardi head of Pertaminas foreign contractors coordinating board gave no details about the outcome of the talks. But Pertamina President Abdul Rachman Ramly has said priority will be given to extending contracts for companies whose exploration and production contracts expire within the next seven to 10 years. Jukardi speaking to Indonesian reporters said the negotiations would determine whether the 85-15 production sharing split in favour of Pertamina would be adhered to or altered in some cases as oil companies are asking for. Hardjoko Seputro spokesman for the Mines and Energy Ministry has said that President Suharto has agreed in principle to extension of the standard 30-year production sharing contract to reflect better current depressed conditions on the international oil market. REUTER | INDONESIA OIL CONTRACT NEGOTIATIONS END THIS MONTH |
Salomon Brothers Internationals CMO Eurotrust subsidiary is issuing a 228 mln dlr collateralised mortgage obligation priced at par and yielding 40 basis points over the three-month London interbank offered rate (Libor) Salomon said as lead manager. However interest which is paid quarterly cannot rise above 11.50 pct. The stated maturity date of the issue is May 1 2017 but the deal has an expected life of 3.6 years which will vary with the rate at which homebuyers prepay their mortgages The pool itself consists of Federal National Mortgage Association (Fannie Mae) securities paying 10.50 pct. The issue settles on April 27 with no accrued interest. Salomon noted that the issue carries the lowest spread over Libor of any CMO issued in the euromarkets to date. In explaining the pricing a Salomon official noted that there has been very heavy demand for high-coupon U.S.Agency mortgage issues such as Fannie Maes and that the rising price of the collateral must be passed along to investors. REUTER | SALOMON ISSUES 228 MLN DLR FLOATING RATE CMO |
Traders here and in Paris said the results of todays EC white sugar tender are hard to forecast because of plans by a group of French West German Dutch and Belgian operators to sell one mln tonnes of sugar into intervention. London traders said bids for licences have been reported between 43.00 and 44.00 Ecus per 100 kilos and if any licences are granted they are likely to be towards the lower end of that range possibly 43.30/43.50 Ecus. Traders in Paris said they expect maximum rebates of between 43 and 43.50 Ecus. Other than the Commission releasing no sugar for export the likely tonnage is expected to be very small the London traders said while the French sources declined to estimate volume in view of the psychological impact of the planned sales into intervention in protest against EC export policies. Last week licences for 60500 tonnes were awarded at a maximum rebate of 43.147 Ecus. REUTER | TRADE SAYS EC SUGAR TENDER HARD TO FORECAST |
South Korea will further open its market to help cut its trade surplus with the U.S. And to fight off pressure to revalue the won against the dollar a government spokesman said. The spokesman said Korean trade minister Rha Woong-Baes stand in Washington yesterday against pressure from industrial nations to revalue the won underlined the governments determination to stand firm. Rha told the U.S. Chamber of Commerce Demands that Korea carry out a drastic and sudden currency revaluation of five or 10 pct are I believe extremely ill-advised. Deputy prime minister Kim Mahn-Je told a meeting of local businessmen The governments policy on the question of revaluing the won is to maintain a steadfast position. Kim said South Korea was ready to move slowly to raise the wons value because of its heavy foreign debt which stood at 44.5 billion dlrs at the end of 1986. Six industrialised nations agreed in Paris last month that newly industrialising countries such as South Korea and Taiwan should allow their currencies to appreciate. But local businessmen have said won/dollar parity has already reached a crisis level. An official of the Korea Traders Association (KTA) said if the won strengthened another five pct this would mean the loss of profitability for nearly half of all South Korean exporters. We are determined not to go the way of Latin American debtor nations which have suspended interest payments of their debts the spokesman said. The only way to keep our good record is to maintain our exports.+ The trade minister said yesterday should Seoul revalue the won suddenly Korea would run a tremendous trade deficit and could degenerate into a country like many other developing countries which is reneging on its international obligations. The spokesman said South Korea had been gradually appreciating its currency ruling out a major revaluation. So far this year the won has gone up by 0.8 pct against the dollar after a 3.34 pct revaluation in 1986. He said South Korea was selecting many of 122 items on which Washington recently asked Seoul to lower tariffs to help narrow its trade surplus with the U.S. No further details were given. Seoul announced in January the lifting of bans on 158 items including sensitive agricultural products and large cars effective from July. South Korea posted its first ever current account surplus last year due largely to a trade surplus with the U.S. Of 7.1 billion dlrs against a 4.3 billion deficit in 1985. It earlier forecast that its current account surplus could reach eight billion dlrs this year. But the government official said the surplus would be held at around five billion dlrs to avoid further pressure by industrialised nations to push up the value of its currency. REUTER | KOREA PLANS TO OPEN MARKETS TO EASE WON PRESSURE |
Security Services Plc a unit of Securicor Group Plc is seeking a 50 mln stg multi-option facility County NatWest Capital Markets said as arranger. The facility will be for seven years and will allow the borrower to issue multi-currency advances and sterling acceptances through a tender panel. There will be an underwriting margin of up to of 3/16 pct over the London interbank offered rate. Underwriters will receive a fee of 15 basis points on the available portion of the facility and a fee of 10 basis points on the unavailable portion which could be for up to half the facility. There will be a utilization fee of 1/16 pct when more than half the facility is in use. Securicor Group and other subsidiaries will guarantee the facility. REUTER | SECURICOR UNIT SEEKS 50 MLN STG CREDIT FACILITY |
Call money eased to 3.75/80 pct from 3.80/85 yesterday following a net injection of 6.7 billion marks at a rate of 3.80 pct in fresh funds from this weeks securities repurchase agreement dealers said. But rates were expected to rise toward the end of the week. A major tax payment period by banks on behalf of customers payments for the federal railways loan stock and repayments of mark liabilities incurred by foreign central banks with the Bundesbank in the framework of the European Monetary System (EMS) are likely to significantly burden the system. Banks built up minimum reserves today ahead of the expected outflow. The Bundesbank credited banks with a gross 15.2 billion marks but some 8.5 billion left the system at the same time as an earlier securities repurchase pact matured. Dealers estimated the EMS related outflow as high as six billion marks. The Bundesbank declined to comment but a spokesman said yesterday although the funds now due may be allowed to roll over the possibility that other central banks may choose to redeem them meant a net infusion was needed. Dealers forecast tax payments of 25 and 30 billion marks but much of it is expected to burden the system only next week. Banks minimum reserve holdings at the Bundesbank totalled 53.6 billion marks on Monday averaging 54.0 billion over the first nine days of March. Dealers said although the figure was well above an expected requirement of around 51 billion marks the expected outflow of funds was so large that banks might find it difficult to meet the requirement toward the end of March. No securities repurchase agreement is expiring next week but dealers said the Bundesbank could offer fresh liquidity if conditions significantly tighten. The Bundesbank wants to keep rates around 3.80 pct one dealer said. REUTER | GERMAN CALL MONEY EASES AFTER LIQUIDITY INJECTION |
Krupp Stahl AG <KRPB.F> said it will cut about 2000 of a total 18000 jobs by the end of 1987 and is considering reducing the work force by a further 3000 in subsequent years. The company which is 70.4 pct owned by Fried Krupp GmbH said the job losses were part of immediate and longer-term restructuring plans. The statement denied published reports that total job losses would amount to 9000 employees. Krupp has said previously that the work force cuts are necessary because of weaker conditions on the steel market. REUTER | KRUPP SAYS 2,000 STEEL JOBS TO GO THIS YEAR |
Borrowing on the international capital markets rose moderately in February with 25.9 billion dlrs of medium and long term funds raised up 1.5 billion from January and up 3.2 billion from February last year the Organisation for Economic Cooperation and Development OECD said. Borrowing on external bond markets totalled 20.8 billion dlrs some 2.8 billion more than in January the OECD said in its latest monthly report. But the market for floating rate notes (FRNs) saw further serious difficulties and the volume of new offerings was only 1.4 billion dlrs against a 1986 monthly average of 4.2 billion. However the OECD said issues of straight bonds and especially equity-related issues continued at a brisk pace. As in January exchange rate uncertainties had a major impact on the currency composition of new bond issues with issues in dlrs totalling only 6.5 billion against a monthly average of over 10 billion dlrs in 1986. The share of the U.S. Dollar in total external bond offerings has fallen below 32 pct this year - the lowest figure in the present decade the report said but added that the market has absorbed a record volume of yen offerings. In the syndicated credit market the volume of new loans declined to 3.9 billion dlrs in February from 4.7 billion in January. Activity on the market for note issuance and other back-up facilities continued to be particularly subdued with a total of only 1.2 billion dlrs completed in February some 500 mln dlrs less than the already depressed figure for January. In February OECD borrowers accounted for some 85 pct of total borrowing with major borrowers including the U.S. With 4.5 billion dlrs Japan 3.1 billion and France with two billion in addition to a one billion dlr refinancing for electricity board EDF. REUTER | CAPITAL MARKET BORROWING ONLY MODERATE IN FEBRUARY |
Shr 21.2p vs 16.0p Div 4.75p making 8.25p vs 5.83p Pretax profit 505 mln stg vs 362 mln Turnover 4.02 billion vs 3.88 billion Tax 128 mln vs 85 mln Operating profit 527 mln vs 421 mln Operating profit includes - Other income 30 mln vs 41 mln Financial costs 52 mln vs 100 mln Minorities 25 mln vs 16 mln Earnings 352 mln vs 261 mln Extraordinary credit 78 mln vs 34 mln debit. REUTER | BTR PLC <BTRX.L> 1986 YEAR |
A Turkish-West German joint venture Turk Henkel A.S. Issued the first commercial paper in Turkey through private Yapi ve Kredi Bankasi A.S. Bank officials said. A total of 500 mln lira of commercial paper of Turk Henkel A.S. Is on sale today Osman Erk deputy general-manager of Yapi ve Kredi Bankasi told Reuters. He said the 90-day paper of the chemicals company has an annualised yield of 46.64 pct. Turkey passed legislation last year allowing commercial paper. Erk said the capital and other requirements for issuing commercial paper is too high for some Turkish companies to meet. The state Capital Markets Board has also limited the yield with 46.64 pct which is slightly higher than that of the 90-day government paper Erk said. REUTER | FIRST COMMERCIAL PAPER ISSUED IN TURKEY |
The Tokyo Metropolitan Government said it would float a 100 mln dlr 10-year bond with a 7.5 pct coupon in New York its first Yankee bond issue in 21 years. The bond will be priced at 99.515 to yield 7.585 pct. The issue will be immediately swapped into Swiss francs putting actual interest rates at around four pct a Tokyo government spokeswoman said. The lead manager is First Boston Corp and the co-leaders are Goldman Sachs and Co and Merrill Lynch Capital Markets she said. The funds will be used for sewerage and reclamation work. REUTER | TOKYO TO ISSUE 100 MLN DLR BOND IN NEW YORK |
The yens rise against the dollar is expected to boost Japans unemployment rate to an average 3.3 pct in the 1987/88 fiscal year beginning April 1 from Januarys record three pct the private Nomura Research Institute said. The official 1987/88 estimate is 2.9 pct. The research arm of Nomura Securities Co forecast unemployment would exceed two mln by mid-fiscal 1987 against an estimated 1.75 mln for the current year. Nomura urged the government to take pump-priming measures to help redress trade imbalances and boost employment. Employment in manufacturing during fiscal 1987/88 was predicted to fall 550000 from the current year due to higher job losses in the steel shipbuilding and heavy electrical machinery sectors Nomura said. Employment in the non-manufacturing sector will continue to increase the institute said without giving figures. REUTER | JAPAN'S JOBLESS SEEN RISING TO 3.3 PCT IN 1987/88 |
The Bank of China will become a card-issuing member of <Visa International> this year Visas chief general manager for Asia Carl Pascarella said in a statement. Visa is designing a card for China where international credit cards are accepted but not yet issued. He said Visa was developing training programs for the bank on card issuance and processing procedures. A Chinese group will visit Visas San Francisco headquarters next month to discuss future cooperation he said. REUTER | BANK OF CHINA TO JOIN VISA INTERNATIONAL |
A one billion stg tranche of 8-3/4 pct Treasury Loan stock due 1997 was exhausted in very early trading on the U.K. Government bond market only minutes after becoming available for trading dealers said. The Bank of England said the issue announced on Monday and available for official dealings from this morning was no longer operating as a tap. The striking price was a partly paid 41 stg pct at which price bids were allotted 53.8 pct. Dealers noted that strong demand had been detected for the bonds yesterday afternoon and interest was further stimulated by sterlings surge at the opening this morning. Reuter | U.K. ONE BILLION STG BOND TRANCHE EXHAUSTED |
Indonesia signed an agreement to borrow up to 150 billion yen in an untied yen loan from Japans governmental Export-Import Bank a bank spokesman said. The accord on the loan for Indonesias 21 development projects was signed by the visiting Indonesian Finance Minister Radius Prawiro and Ex-Im President Takashi Tanaka the spokesman said. The loan will be the banks first untied loan to an Asian country in co-financing with the World Bank but it will not be tied to purchase of Japanese goods or services he said. REUTER | JAPANESE 150 BILLION YEN LOAN FOR INDONESIA |
The Bank of Spain has extended the reserve requirement for banks to their convertible peseta funds in an attempt to curb speculation in short-term capital which is currently fuelling money supply growth. In a statement issued late last night the central bank said convertible peseta accounts funds which are not subject to exchange controls would also be subject to a 19 pct reserve requirement with effect from Friday. Convertible peseta funds had been previously exempt from reserve requirements. The measure comes one week after the central bank raised reserve requirements on domestic deposits by one percentage point to 19 pct also with effect on Friday. Banking sources say the high real interest rates on offer now -- around eight pct for overnight funds -- have attracted a large influx of speculative foreign capital which is threatening the governments monetary targets. They say this influx is largely responsible for Spains principal measure of money supply the broad-based liquid assets in public hands (ALP) to have grown by an estimated 17 pct annualised rate in February compared with Januarys 8.3 pct rise and an 11.4 pct rise during the whole of 1986. The target for 1987 is eight pct. The Bank of Spain today did not provide assistance funds to banks in a move to drain excess liquidity from the money market. Liquidity will be further tightened by the fortnightly Treasury Bill auction tomorrow and Fridays hike in reserve requirements expected to absorb over 200 billion pesetas from the system. The immediate reaction was a hike in interbank interest rates today to 13.75/14.00 pct from yesterdays 13.46 pct average for deposits. Bank of Spain officials said this was an understandable response given that the market is short of funds. But banking sources noted that a continued rise in interest rates would neutralize the central banks attempts to curtail short-term speculation with foreign funds by making the Spanish money markets more attractive. REUTER | SPAIN EXTENDS RESERVE REQUIREMENT |
Iraq said today its forces had crushed an Iranian attack on a strategic mountain peak in a rugged and snow-clad area of Iraqi Kurdistan. The official Iraqi news agency INA said the attack was repelled yesterday by the Fifth Army Corps 96th Brigade on Karda Ku peak overlooking the northern post of Haj Omran and 340 kms north of Baghdad. INA said hundreds of Iranians were killed and large quantities of armour and weapons were left behind. It did not give Iraqi casualties. The Iranian news agency IRNA said yesterday that Iraqi troops had suffered 3000 casualties in Irans week-old offensive in northeast Iraq. Iran attacked across snow-capped peaks of northeastern Iraq last week in an area which saw heavy fighting in mid-1983. The thrust followed fierce battles near Basra Iraqs second city on the southern front of the 6-1/2-year-old conflict after an Iranian cross-border offensive launched on January 9. The political department head at Iraqs Defence Ministry Abdul Jabbar Muhsen said on Monday fighting was continuing in the north but that Iran had exaggerated battle reports. He said Tehran had done this to make up for failure in the south and to encourage anti-Baghdad Kurdish rebels to support its troops. Tehran has supported anti-Baghdad Kurdish guerrillas in operations against government positions and installations in northern Iraq. REUTER | IRAQ SAYS IT CRUSHED IRANIAN ATTACK IN NORTH |
Hungary is to devalue the forint by an average of eight pct against Western currencies the official news agency MTI said. MTI did not say when the devaluation would become effective but it expected new rates to be announced later today. Hungary devalued the forint by a similar amount last September 23. Western bankers say the forint is more realistically valued than currencies of Hungarys COMECON allies. REUTER | HUNGARY TO DEVALUE FORINT AGAINST WESTERN UNITS |
Prices rose on the Danish bond market after Prime Minister Poul Schlueter said the government was prepared to impose further austerity measures to limit domestic consumption if the economy did not improve over the summer. A typical 20-year mortgage bond had risen to 81 by noon from 79-1/4 at the close last night. It is because of possible optimism that the government will intervene if necessary one dealer told Reuters. Schlueter said after a routine cabinet meeting yesterday If economic tightening up is necessary we will do it. The government has already imposed three austerity packages since December 1985 in an attempt to bring down the external current account deficit which rose to a preliminary 34.5 billion crowns in 1986 from 29.1 billion the previous year. Schlueter made clear that an autumn general election would not make the government postpone any austerity measures. The government has to call an election by January 1988. He expressed surprise at concern in some financial quarters over the level of private and public wage settlements last month worth a minimum three to four pct a year. These would lead to higher productivity Schlueter said. REUTER | DANISH BOND PRICES RISE AFTER AUSTERITY PLEDGE |
Bank of Japan governor Satoshi Sumita said there is little room left for the central bank to further ease its credit policy as interest rates levels are now approaching their lower limit. The government should instead seek ways of making the best use of its fiscal policy he told a press conference. His remarks were concerned with a comprehensive economic stimulative package the government plans to adopt in the coming days. At the recent talks among the six major industrialised nations in Paris Japan promised to work out a comprehensive economic package to boost domestic demand which in turn would help increase its imports and reduce its trade surplus. Sumita also said the economy will show a gradual upturn in the second half of the year if the yen remains stable. He said there is caution in the foreign exchange market against a further rise of the yen and mark and this explains the recent stability in the currency markets. Conflicting economic indicators from the U.S. Have also been dampening market activity he added. REUTER | SUMITA SAYS LITTLE ROOM FOR BANK TO EASE POLICY |
Gunze Sangyo Inc of Tokyo is issuing 25 mln Swiss francs of five year convertible notes with a 1-1/2 pct coupon lead manager Swiss Volksbank said. The conversion price has been set at 463 yen per share compared with todays 450 yen close. Payment is due March 30. REUTER | GUNZE SANGYO ISSUING 25 MLN SWISS FRANC NOTES |
The Finance Ministry said its auction yesterday of 1000 billion yen of tankoku six-month debt financing paper produced a record low average yield of 3.246 pct on aggressive bidding from securities houses. The tankoku mature on September 21 1987. The previous record low was 3.383 pct at the last auction on February 12. One of four major Japanese securities house bought 39.5 pct of the total 1021.1 billion yen in bids accepted ministry sources said. Securities houses bid aggressively as big retail accounts such as tokkin special money trust and trust funds have been showing strong interest in tankoku on increasing demand for short-term fund management securities house managers said. The yield for tankoku issued on a discount basis is one point below the 4.26/12 pct interest rates for six-month certificates of deposit today. In the previous auction for 1000 billion yen the four majors took 92 pct of the issue to increase their tankoku inventory the managers said. Bids totalled 1975.8 billion yen. The average price was 98.36 to give a yield of 3.246 pct and lowest was 98.33 giving 3.314 pct the Ministry said. REUTER | JAPAN TANKOKU YIELDS HIT RECORD LOW AT AUCTION |
Westpac Banking Corp and the Melbourne University Institute of Applied Economic and Social Research said their leading index of Australian economic activity rose for the ninth successive month in December. The index rose to 134.1 (base 1980) from 129.8 in November and 122.8 a year earlier the Westpac-Institute report said. Annualised it rose 13 pct in December against seven pct in November and one pct a year earlier based on the ratio of the latest index to the average over the previous 12 months. The report said the index is now 12 points or 9.8 pct above its trough in March 1986. Westpacs chief economist Bob Graham said the consistent upward trend in the leading index emphasised the need for a tough mini-budget in May. An untoward increase in consumption spending before the balance of payments improves would have disastrous consequences he said. The coincident index also rose an annualised three pct in December against zero movement in November and a seven pct rise a year earlier Westpac and the Institute said. They said this index continued to show the current recession is shallow and is more likely to involve a slowing in real growth than an absolute fall in economic activity. REUTER | AUSTRALIA LEADING INDEX CONTINUES RISE IN DECEMBER |
Japan cannot bear a further rise of the yen Foreign Minister Tadashi Kuranari said. A further stronger yen would be a misfortune for Japan and the Japanese people would not be able to bear such a burden he told reporters. The minister said he wants to tell U.S. Political leaders of the sacrifices Japan is making to cut its trade surplus. Kuranari was widely expected to fly to Washington tomorrow for talks focussing on trade. But departure remains uncertain because of the continuing parliamentary boycott by opposition parties protesting plans for a new sales tax. If the boycott is lifted tomorrow Kuranari would probably have to remain in Japan to attend parliamentary discussions on the governments 1987/88 budget Japanese officials said. Kuranari said both the U.S. And Japan should approach the trade imbalance in a calm unemotional manner. But he added If the issue of rice is to be raised...I would mention the feelings of the Japanese people. Japanese politicians have said repeatedly the country cannot bow to U.S. Pressure to liberalize rice imports because the issue is too sensitive. REUTER | JAPAN CANNOT BEAR FURTHER YEN RISE, MINISTER SAYS |
The Bank of England said it did not operate in the money market during the morning. Initially the bank forecast a liqudity shortage of some 300 mln stg for the market today. Overnight interbank sterling traded at the 11-1/4 1/8 pct level for most of the morning while period rates have eased on the strength of sterling dealers said. At 1200 gmt sterlings trade-weighted index was up 0.6 at 72.7. REUTER | BANK OF ENGLAND DOES NOT INTERVENE IN MONEY MARKET |
The U.S. is urging reluctant commercial banks to seriously consider accepting a novel Philippine proposal for paying its interest bill and believes the innovation is fully consistent with its Third World debt strategy a Reagan administration official said. The officials comments also suggest that debtors pleas for interest rate concessions should be treated much more seriously by the commercial banks in cases where developing nations are carrying out genuine economic reforms. In addition he signaled that the banks might want to reconsider the idea of a megabank where Third World debt would be pooled and suggested the administration would support such a plan even though it was not formally proposing it. At the same time however the official expressed reservations that such a scheme would ever get off the ground. The Philippine proposal together with Argentine suggestions that exit bonds be issued to end the troublesome role of small banks in the debt strategy would help to underpin the flagging role of private banks within the plan the official said in an interview with Reuters. All of these things would fit within the definition of our initiative as we have asked it and we think any novel and unique approach such as those should be considered said the official who asked not to be named. In October 1985 Washington outlined a debt crisis strategy under which commercial banks and multilateral institutions such as the World Bank and the International Monetary Fund (IMF) were urged to step up lending to major debtors nations. In return America called on the debtor countries to enact economic reforms promoting inflation-free economic growth. The multilaterals have been performing well the debtors have been performing well said the official. But he admitted that the largest Third World debtor Brazil was clearly an exception. The official who played a key role in developing the U.S. Debt strategy and is an administration economic policymaker also said these new ideas would help commercial banks improve their role in resolving the Third World debt crisis. We called at the very beginning for the bank syndications to find procedures or processes whereby they could operate more effectively the official said. Among those ideas the official said were suggestions that commercial banks create a megabank which could swap Third World debt paper for so-called exit bonds for banks like regional American or European institutions. Such bonds in theory would rid these banks of the need to lend money to their former debtors every time a new money package was assembled and has been suggested by Argentina in its current negotiations for a new loan of 2.15 billion dlrs. He emphasised that the megabank was not an administration plan but something some people have suggested. Other U.S. Officials said Japanese commercial banks are examining the creation of a consortium bank to assume Third World debt. This plan actively under consideration would differ slightly from the one the official described. But the official expressed deep misgivings that such a plan would work in the United States. If the banks thought that that was a suitable way to go fine. I dont think they ever will. He pointed out that banks would swap their Third World loans for capital in the megabank and might then be reluctant to provide new money to debtors through the new institution. Meanwhile the official praised the Philippine plan under which it would make interest payments on its debt in cash at no more than 5/8 pct above Libor. The Philippine proposal is very interesting its quite unique and I dont think its something that should be categorically rejected out of hand the official said. Banks which found this level unacceptably low would be offered an alternative of Libor payments in cash and a margin above that of one pct in the form of Philippine Investment Notes. These tradeable dollar-denominated notes would have a six-year life and if banks swapped them for cash before maturity the country would guarantee a payment of 7/8 point over Libor. Until now bankers have criticised these spreads as far too low. The talks now in their second week are aimed at stretching out repayments of 3.6 billion dlrs of debt and granting easier terms on 5.8 billion of already rescheduled debt. The country which has enjoyed strong political support in Washington since Corazon Aquino came to power early last year owes an overall 27.8 billion dlrs of debt. But the official denied the plan amounts to interest rate capitalisation a development until now unacceptable to the banks. Its no more interest rate capitalisation than if you have a write down in the spread over Libor from what existed before the official said in comments suggesting some ought to be granted the rate concessions they seek. Some people argue that (cutting the spread) is debt forgiveness... What it really is is narrowing the spread on new money he added. He said the U.S. Debt strategy is sufficiently broad as an initiative to include plans like the Philippines. Reuter | U.S. URGES BANKS TO WEIGH PHILIPPINE DEBT PLAN |
Interest in the currency futures market has shifted to the soaring British pound and the potentially explosive Canadian dollar and away from the dull Continental and Japanese currencies analysts said. The June pound which added 6.3 cents over the past week-and-a-half to reach a new contract high of 1.5930 to the dollar on Monday has spawned a new-found speculative boom. Brokers have to push their clients somewhere...and technically the pound is in the best shape PaineWebber analyst Jason Gillard said. Weve tried to take a bullish approach to the pound and were going to stay with that theres no reason to change Smith Barney analyst Craig Sloane said. Many traders took on long pound/short West German mark futures positions although some of those cross-trades were liquidated yesterday Sloane said. The fundamental keys to the pounds rise have been relatively high U.K. interest rates and a vague optimism surrounding the British economy analysts said. Money seems to be chasing yields William Byers of Bear Stearns said of the 10-1/2 pct U.K. base lending rate. Many analysts are skeptical about further gains in the pound on the inference that the Bank of England will seek to relieve upward pressure on the currency by pushing down interest rates after the nations budget is released March 17. The budget itself could have an impact depending on how well it is received but analysts say relative interest rates and oil income remain the main influences on the currency. However the market may be able to absorb lower U.K. interest rates as it has done when other countries have cut their discount rates and extend the pounds rally Sloane said. The Canadian dollar has not been rising like the pound but Sloane and other analysts cautiously predicted a big move soon. The sideways price pattern in the June contract with smaller and smaller price ranges has formed a bull flag on price charts technically-oriented analysts said. It makes for an explosive type of situation that often leads to a breakout in this case to the upside Sloane said. Byers agreed there was potential for the June Canadian dollar to rally above the 77.00 cent level from the most recent close at 74.80 cents to the U.S. dollar. At this stage of the game Id call the market long-term positive but for the technical burden of proof you need a close above (the previous contract high of) 75.25 Byers said. As to the traditionally more active currencies stability was the catchword and reluctance the watchword among analysts. Sloane said it was important that June Swiss francs and June German marks held above support at 0.6400 and 0.5400 respectively closing at 0.6438 and 0.5430. Yesterdays rebound showed the market was still very respectful of the Paris accord and the threat of central bank intervention by the G-5 nations plus Canada. We may still probe to see what the parameters are Byers said but people are very reluctant because they dont know where the central banks will be (to intervene). Gillard said the mark could drop to a previous price consolidation area around 0.5250 based on the profoundly sluggish West German economy but that he would be a buyer at that level. Reuter | POUND AND CANADIAN DOLLAR CAPTURING ATTENTION |
The stg convertible bond issue launched Monday for Storehouse PLC <STHL.L> was raised to 69 mln stg from the original 60 mln co-lead Swiss Bank Corp International said. County NatWest Capital Markets is the other co-lead manager. The coupon has been fixed at 4-1/4 pct. The conversion price into Storehouse ordinary shares has been fixed at 346 pence which represents a premium of 9.84 pct over last nights 315 pence closing share price. The put price after five years is 126.8 to yield 8-3/4 pct. Selling period for the bond -- which dealers say has been seeing good demand -- has been accelerated to noon on Friday. The bond was trading today at 104-3/8 104-7/8 against its par issue price traders said adding the equity link ensured popularity on an oversupplied eurosterling primary market. The proceeds of the issue will be used to fund outstanding short-term borrowings Storehouse Plc corporate treasurer Lance Moir told Reuters. The issue was also designed to increase the international profile of the British high street retail conglomerate and was consequently aimed primarily at continental investors who have shown a high degree of interest in the issue he added. Demand came mainly from West Germany and Switzerland. REUTER | STOREHOUSE CONVERTIBLE BOND RAISED TO 69 MLN STG |
European Community Commission President Jacques Delors said he met with strong objections from some EC government heads to his radical plan for changes to Community financing. In a speech to the European Parliament Delors said some EC leaders told him on a recent tour they could not easily allow additional resources for the bloc when they were themselves pruning their own spending. Others called for major spending cut in the ECs controversial farm policy in order to free money for regional and social development. The Parliament later registered its support for the Delors plan by voting to approve his continuation in office for a second two-year term. Delors has proposed that payments by member states to the EC should be based on their gross national product instead of on the amount of value added tax they receive. He said this would increase EC resources and provide a fairer system of sharing the financial burden. He told the Parliament that in reply to complaints about increased payments he had told some heads of government the Community needs more money. Delors said he agreed with leaders who argued the need to reform the EC farm policy which currently accounts for over two thirds of the 41 billion dlr annual budget.We have to ask for sacrifices but we have to create a future for those farmers. He added I was forced to say to some heads of government - Do you want to destroy this common market in agriculture when you are asking for a common market in goods and services? EC leaders have set 1992 as a target for creating a genuine internal market in industrial products and services. Delors said the people had to be convinced that increasing group resources did not necessarily mean raising their taxes. REUTER | DELORS REPORTS STRONG OBJECTIONS TO EC CASH PLAN |
NEW WORLD PICTURES TO HAVE GAIN FROM SALE OF FIVE PCT OF TAFT BROADCASTING |
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Jamaica agreed in principle with its bank advisory committee on a rescheduling of 181 mln dlrs of foreign commercial bank debt falling due between 1987 and 1989 the Jamaican Information Service said. Repayments on the debt will be stretched out over 12 years with 8-1/2 years grace at 1-1/4 percentage points over the London Interbank Offered Rate Libor. The margin on previously restructured debt also will be cut to 1-1/4 point from 2-1/2. The package should save Jamaica about 3.3 mln dlrs a year. Prime Minister Edward Seaga who led the Jamaican delegation called the terms very favourable to his country. The agreement in principle with the bank advisory committee led by the Bank of Nova Scotia <BNO.TO> comes five days after Jamaica successfully concluded a 125.5 mln dlr rescheduling accord with the Paris Club of creditor nations. That pact in turn followed the International Monetary Fund (IMF)s approval on March 5 of a 85 mln special drawing rights standby arrangement and a 40.9 mln sdr drawing under the compensatory financing facility. Of Jamaicas foreign debt of 3.3 billion dlrs only 12 pct is owed to commercial banks and Seaga yesterday reaffirmed the governments policy of not seeking new bank loans. REUTER...^M | JAMAICA AGREES DRAFT BANK DEBT RESCHEDULING |
Lower production of coconut and palm oils could lead to a decline in vegetable oil stocks this year despite growing supplies of oilseeds senior oilseeds analyst for Merrill Lynch Capital Markets Mario Balletto said. Balletto told a conference of Canadian farmers at Alberta Agricultures annual farm outlook conference that the world vegetable oil situation is one of potentially tight supplies. Prices for edible oils appear to have more upside potential reflecting strong world demand and an unprecedented decline in the production of tree oils Balletto said. Balletto estimated production of palm coconut and palm kernel oils this year at 8.5 mln tonnes down from 9.1 mln tonnes last year enough to offset higher oilseed output. He estimated total vegetable oil production this year at 33.4 mln tonnes up from 33.0 mln last year and disappearance at 34.0 mln tonnes up from 32.6 mln. Unless oilseed crushing increases sharply he said disappearance of vegetable oils could exceed production by 600000 tonnes the largest deficit since 1976. If world protein meal demand stagnates thus limiting the crush of soybeans ... the need for serious supply rationing in the edible oils sector could develop he said. This would be relatively favorable for the prices of high oil yielding seeds Balletto said. Oilseeds on the other hand remain at depressed prices because of burdensome supplies he said. World ending stocks of oilseeds are estimated to increase for the fourth straight year to a record 28.4 mln tonnes compared with 25.4 mln last year. The increase should result from lower disappearance as production is expected to fall to 184.0 mln tonnes from 185.7 mln last year he said. World soybean production in 1987 totalled a record 98.9 mln tonnes up from 90.6 mln the previous year Balletto said while production of other oilseeds was lower. Higher soybean production in South America and Europe made up for lower production in the United States he said. Soybeans account for the bulk of the surplus and U.S. stocks make up most of those Balletto said. The Commodity Credit Corporation owned 12.7 mln tonnes about half of the world soybean surplus he said. Since 1983-84 he said world oilseed stocks have increased 13.1 mln tonnes. During the same period U.S. soybean stocks increased 12.1 mln tonnes becoming the dumping ground of the entire world surplus courtesy of the CCC and highlighting the artificially high prices caused by the U.S. loan program. Soybean prices and to a great extent world oilseeds prices are likely to be dominated by the loan program as long as the U.S. soybean surplus continues. For the 1987 crop he said prices are likely to hover in a range tied to the U.S. loan program. Upside potential for prices is limited by the huge supply overhang while strong underlying support is provided by the U.S. loan rate. The problem is likely to become worse as the artificially high prices encourage producers in South America Canada and Australia to shift from grains to oilseeds Balletto said. Reuter | VEGETABLE OILS MAY TIGHTEN DESPITE SEED SURPLUS |
Portugals trade deficit narrowed in 1986 to 336.5 billion escudos from 354.8 billion in 1985 according to provisional National Statistics Institute figures. Imports totalled 1412.6 billion escudos and exports 1076.1 billion compared with 1326.5 billion and 971.7 billion in 1985. Expressed in terms of dollars imports rose 21.2 pct and exports 26.1 pct and the trade deficit increased by 7.8 pct. In its first year as a member of the European Community Portugal recorded a deficit of 98.1 billion escudos in its trade with the other Community states compared with a deficit of 2.4 billion escudos in 1985. Imports from the EC in 1986 totalled 830.2 billion escudos while exports to the Community were 732.1 billion compared with 609.5 billion and 607.1 billion the previous year. Portugals deficit with Spain was 83.2 billion escudos against 57.7 billion in 1985 with Italy it was 70.4 billion against 30.3 billion and with West Germany 40.5 billion against 19.1 billion. REUTER | PORTUGUESE TRADE DEFICIT NARROWS IN 1986 |
Brazils central bank governor Francisco Gros will meet senior commercial bankers here today in a new attempt to defuse the anger generated by the countrys unilateral suspension of interest payments on 68 billion dlrs of foreign commercial bank debt bankers said. Gros will meet representatives of Citibank the head of Brazils bank advisory committee and of co-heads Morgan Guaranty Trust Co and Lloyds Bank Plc. High on the agenda will be banks complaints about Brazils accompanying freeze on some 15 billion dlrs of short-term trade and interbank lines the bankers said. Brazils several hundred creditor banks worldwide agreed last March to extend the credit lines until March 31 1987 as part of a 31 billion dlr financing package. Bankers said the looming expiry of this commitment coupled with Brazils freeze raised a spate of technical and legal questions that the banks want to discuss with Gros. They said they face problems because of the freeze requirement that any payment due to be made by a Brazilian bank under the trade facility must be deposited instead with the central bank. This means foreign bankers cannot easily switch their credit lines from one borrower to another. The requirement to deposit with the central bank has also meant Brazilian banks have been able to negotiate lower interest-rate spreads because foreign banks would rather accept a reduced margin than see their money deposited with the central bank. Its caused a lot of ill-will with the banking community one banker said. Gros is also expected to brief the banks on the results of a 10-day tour of Europe and Japan that he and finance minister Dilson Funaro have just completed to seek official support for Brazils debt stance. REUTER | BRAZIL'S GROS TO MEET BANKS ON TRADE LINE ISSUE |
Oper shr profit five cts vs loss 1.71 dlrs Oper net profit 196000 vs loss 2388000 Sales 40.5 mln vs 43.2 mln Avg shrs 2212000 vs 1482000 Year Oper shr profit 71 cts vs loss 6.24 dlrs Oper net profit 1799000 vs loss 8991000 Sales 154.5 mln vs 145.0 mln NOTE: Net excludes losses from discontinued operations of 712000 dlrs vs 2843000 dlrs in quarter and 1972000 dlrs vs 10.6 mln dlrs in year. 1986 net excludes extraordinary loss 1167000 dlrs in quarter and gain 628000 dlrs in year. 1986 year net includes gain one mln dlrs from sale of building and gain 3200000 dlrs from termination of pension plan. Reuter | SERVICE RESOURCES CORP <SRC> 4TH QTR NET |
Axlon Inc said Austin C. Marshall has been named president and co-chief executive officer sharing power in the latter post with founder and chairman Nolan K. Bushnell. The company said Marshall who had been executive vice president of New York toy company Playtime will have responsibility for the distribution of toys and Bushnell will concentrate on research and development and licensing. Reuter | AXLON <AXLN> NAMES CO-CHIEF EXECUTIVE OFFICER |
Oper shr 22 cts vs 22 cts Oper net 2058000 vs 2129000 Revs 44.5 mln vs 35.7 mln Avg shrs 9589000 vs 9348000 Year Oper shr 94 cts vs 94 cts Oper net 8889000 vs 8570000 Revs 155.0 mln vs 123.4 mln Avg shrs 9450000 vs 9174000 NOTE: Net excludes discontinued operations gain 1637000 dlrs vs loss 720000 dlrs in quarter and gain 4679000 dlrs vs loss 720000 dlrs in year. 1986 net both periods includes charge 865000 dlrs from repal of investment tax credits. Reuter | TELEPHONE AND DATA SYSTEMS INC <TDS> 4TH QTR NET |
China welcomed a U.S. Supreme Court decision dismissing claims by holders of 41 mln dlrs of pre-1949 Chinese bonds but U.S. Officials said Peking has a long way to go before it can issue bonds in the U.S. A Foreign Ministry spokesman told a news briefing that China welcomed a Monday court ruling which rejected a petition by holders of railway bonds issued in 1911 by the ruling Qing dynasty which the Communist government does not acknowledge. The spokesman said the ruling indicates the ... Railway bearer bonds case is finally closed. But a U.S. Embassy official said that two other bond cases were still in litigation and it was not known if the other courts involved would accept the Supreme Court ruling. China has issued much of its recent overseas debt in Japan and has been badly hit by the yens sharp rise. A Western banker said the U.S. Market has become more attractive to China since it is likely to issue bonds denominated in currencies other than yen and so protect itself against future currency fluctuations. But a Western diplomat warned that potential U.S. Buyers would not give China the warm reception it received in Japan. U.S. Investors are not interested in China per se as many Japanese are. China has no track record in the U.S. Bond market. Investors may demand disclosure of information Chinese institutions are unwilling to give he said. He said potential buyers might scrutinise Chinas human rights record. Some institutions are reportedly concerned about recent events in China including a drive by the Chinese media against bourgeois liberalism. An official of state-owned China International Trust and Investment Corp which has raised funds in Hong Kong Tokyo and Frankfurt declined comment on the court decision. REUTER | CHINA WELCOMES U.S. COURT BOND DECISION |
New World Pictures Ltd said it sold 456900 shares or about five pct of Taft Broadcasting Co common stock for a gain of 17.8 mln dlrs. The company said in a brief statement that it acquired the stock in late 1986. It gave no further details and company officials were not immediately available for comment. On Friday Taft vice chairman Dudley S. Taft and Narragansett Capital Inc <NARR> offered to acquire Taft for 145 dlrs per share. Dudley Taft and his family have owned 12 pct of the company. An investment group leds by Robert M. Bass one of the Bass brothers of Fort Worth Texas has been reported as owning about 25 pct of Taft stock and <American Financial Corp> chairman Carl Lindner has been reported to own about 16 pct. Both Bass and Linder have acquired Taft shares in recent months. Reuter | NEW WORLD PICTURES <NWP> SELLS TAFT <TFB> STAKE |
Los Angeles Securities Group said the National Association of Securities Dealers intends to delist its securities effective tomorrow because the NASD believes that market-making sales of the companys securities by its Los Angeles Securities brokerage subsidiary are not being made under an effective registration statement. The company said it must demonstrate compliance with the Securities Act of 1933 which requiresd the registration statement to avoid delisting. It said it believes that the NASD action is without merit and that an effective registation stateement is in place. Los Angeles Securities said it is asking the NASD to stay the delisting pending a review of the matter consultation with the Securities and Exchange Commission and a potential hearing on the merits. It said pending resolution of the matter it has ceased making a market in its own securities. The NASD has instituted similar actions against other holding companies for broker/dealers that are quoted on its NASDAQ system. Reuter | NASD TO DELIST LOS ANGELES SECURITIES <LASG> |
Canadian Prime Minister Brian Mulroney announced a major shakeup in the ranks of his key advisers after weeks of continuing criticism of his government. Mulroney announced the departure of his senior policy advisor the resignation of his press secretary and the reassignment of his communications director. Mulroneys Progressive Conservative government shaken by a series of cabinet resignations and allegations of corruption has been trailing the opposition parties for months in public opinion polls. The prime minister who led the Conservatives to a landslide victory in the 1984 general election had been urged by party loyalists to make major changes within his office. A cabinet shuffle is expected later this month in advance of more personnel changes within Mulroneys office as the prime minister seeks to regain public confidence. The next election is expected sometime in 1988 although it could be delayed until mid-1989. Reuter | CANADA'S MULRONEY MAKES SENIOR STAFF CHANGES |
The borrowing limit of the Hong Kong Exchange Fund set up to regulate the value of the Hong Kong dollar has been raised to 50 billion H.K. Dlrs from 30 billion by the legislature an official statement said. The limit governs total borrowing by the fund from the governments general revenue account and various funds as well as borrowing by the fund arising from money market operations. The bulk of the governments fiscal surplus is invested by the Treasury with the exchange fund against the issue by the fund of interest-bearing debt certificates Financial Secretary Piers Jacobs said. At the close of the business today the total amount of debt certificates issued by the Exchange Fund in return for money transferred from the general revenue account and the various funds in other words the total borrowing by the Exchange Fund from these sources will be 26.9 billion dlrs Jacobs said. He said borrowing arising from money market operations would amount to an additional 2.9 billion dlrs making a total of 29.8 billion dlrs just short of the borrowing limit of 30 billion dlrs. Jacobs said the governments fiscal reserves are expected to total 32 billion dlrs by the end of the current fiscal year ending March 31. The current borrowing limit of 30 billion dlrs will therefore constrain the ability of the Exchange Fund to continue to take in these fiscal reserves by the issue of interest-bearing debt certificates he said. It will also constrain the ability of the exchange fund in its money market operations he added. REUTER | HONG KONG RAISES EXCHANGE FUND BORROWING LIMIT |
The Reagan administration is totally opposed to recent Democratic suggestions that securities transactions should be taxed to help curb the budget deficit an administration official said in an interview. Were totally opposed to a securities transfers tax. It would impair the efficiency of some of the most efficient markets in the world he said. He declined to be named. In recent days House Speaker Jim Wright a Texas Democrat has called for such a tax to raise the 20 billion dlrs he estimates is needed to meet legal deficit reduction targets. It would fall primarily in my view not on wealthy individuals but on middle income people who occasionally invest and trade. So I think its a very bad idea said the official who is an administration economic policy-maker. The official also rejected a suggestion by Wright that the administration delay next years cut in top tax rates called for in the recently-passed overhaul of the U.S. Tax system. It is breaking faith with the American people ... It would be a real breach of faith he said. The Gramm-Rudman Hollings law calls for a balanced budget by 1991 but its power has been reduced in the Supreme Court. Wright and other Democrats say even if they pass President Reagans budget proposals for the fiscal year starting this October they would miss by some 20 billion dlrs the 108 billion dlr target for the budget deficit set under the Gramm-Rudman law. The administration puts the deficit at 173.2 billion dlrs in the current fiscal year and claims that spending cuts and revenue increases will achieve the Gramm-Rudman goal. The official who is knowlegeable on budget strategy also said President Reagan was still opposed to a so-called budget summit with Congress to resolve the deficit issue. The suggestion of a budget summit emerged again recently after Democrats and Republicans alike said Reagan needed a deficit reduction package and an arms control accord with Moscow to rebuild his presidency after the Iran arms scandal. But the official dismissed the budget summit idea as an attempt by the Democrats to secure a tax increase. He accused them of being overly critical before they had written their own budget proposal due out on April 1. Its easier to write a book review than it is to write a book. Weve written a book and the Democrats are writing a book review every day. Lets see their book he said. REUTER | OFFICIAL SAYS REAGAN OPPOSES SECURITIES TAX |
The London Commodity Exchange (LCE) has put back the date at which it will move to its new premises in Commodity Quay to end-May from the intended early April launch an LCE spokeswoman said. The move has been delayed as the installation of telecommunication facilities is running behind schedule due to the recent British Telecom strike she said. Trading in the LCEs present markets is expected to end on May 22 and start in the new premises after the Spring Bank Holiday on May 26. The introduction of local traders and traded options is scheduled for early June the spokeswoman added. REUTER | LCE MOVE TO NEW PREMISES DELAYED TO END-MAY |
There is little chance Soviet exports to the United States will rise in 1987 but Moscows current trade reforms should result in more trade in manufactured goods in future a Soviet economist said. Sergey Frolov chief economist at Amtorg Trading Corp an agent for Soviet trade organisations and industries told a U.S.-USSR business meeting the Soviet Union produces few items that western nations want. But reforms including upgrading the quality of goods and allowing joint ventures with foreign firms will encourage modest export gains in future. Frolov said the Soviet Union exported 500 mln dlrs worth of goods to the United States in 1986 and imported 1.5 billion dlrs worth. He gave no trade forecast for 1987. But he said that even if all obstacles were removed total trade between the two countries would remain between two and three billion dlrs a year. The post-detente embargoes have taught the USSR to limit its trading with the U.S. he said. REUTER | SOVIET ECONOMIST SEES FEW GAINS IN U.S. TRADE |
Sight deposits of commercial banks at the Swiss National Bank fell 2.88 billion Swiss francs in the first 10 days of March to 7.65 billion the National Bank said. Foreign exchange reserves rose 3.30 billion francs to 33.94 billion. Sight deposits are a major indicator of money market liquidity in Switzerland. The National Bank said banks paid back 5.5 billion francs of central bank credit taken out at the end of February for the end-month liquidity requirement. This drain was offset in part by new currency swaps which had the effect of increasing the National Banks foreign exchange holdings. Bank notes in circulation fell 309.1 mln francs to 24.49 billion and other deposits on call -- basically government funds -- rose 1.06 billion to 2.10 billion. REUTER | SWISS SIGHT DEPOSITS FALL 2.88 BILLION FRANCS |
U.S. Commercial banks are expected to receive Finance Ministry approval in late April to operate securities subsidiaries in Japan U.S. Bank officials said. A senior official at one of four prospective banks said the ministry told his bank it would give approval as long as the parent firm holds no more than 50 pct of the capital. We expect the ministry to give us permission by the end of April he said. <J.P. Morgan and Co> Bankers Trust New York Corp <BT.N> Manufacturers Hanover Corp <MHC.N> and Chemical New York Corp <FNBF.N> have asked for securities business licenses. Ministry officials declined to say when they would give formal approval but said they were working on the issue. Approval would pave the way for U.S. Commercial banks to underwrite and trade equities in Japan under their own names. Citicorp <CCI.N> and Chase Manhattan Corp <CMB.N> have already entered the Japanese securities market by acquiring U.K. Securities houses already operating in Japan. Citicorp took over <Vickers de Costa Ltd> and Chase bought <Laurie Milbank and Co>. Bankers did not know if all the banks would get licenses but said J.P. Morgan probably would as it was first to ask. REUTER | U.S. BANKS TO GET APPROVAL FOR SECURITIES BUSINESS |
Ecuador needs 120 mln dlrs to repair the damage to its oil export pipeline caused by last weeks earthquake which will stop crude exports for five months energy and mines minister Javier Espinosa Teran said. Espinosa said yesterday the pipeline which carries crude from jungle fields to the Pacific Ocean coast of Balao would be repaired with the help of Texaco Inc <TX.N> and a Mexican and an Argentine firm. President Leon Febres Cordero said two days ago that Ecuador an OPEC member would have to suspend crude exports for four months due to the quake. Oil traditionally accounts for up to two-thirds of Ecuadors total exports and as much as 60 pct of government revenues. Deputy energy minister Fernando Santos Alvite said Ecuador would have to import six to seven mln barrels of crude oil to meet its needs until the line was repaired. The Ecuadorean minister at the Presidency Patricio Quevedo told reporters that Venezuela will lend Ecuador five mln barrels of crude which would repaid in kind after a 180-day period. He added the Caracas-based Andean Development Corp had granted a loan of 11.7 mln dlrs towards repairing the pipeline 50 km of which had been damaged in the quake. In Quito Foreign Minister Rafael Garcia Velasco yesterday summoned ambassadors from about 40 countries to whom he issued appeal for emergency aid for the country. Only three countries the U.S. Colombia and Venezuela had offered assistance. REUTER | ECUADOR CRUDE OIL EXPORTS STOPPED FOR FIVE MONTHS |
Oper shr seven cts vs 20 cts Oper net 347855 vs 787117 Revs 6748868 vs 6849499 Avg shrs 5391666 vs 4277157 Year Oper shr 56 cts vs 46 cts Oper net 2617528 vs 2003661 Revs 27.1 mln vs 27.3 mln Avg shrs 4763793 vs 3377157 NOTE: Net excludes realized gains on investments of 925576 dlrs vs 577389 dlrs in quarter and 1776341 dlrs vs 797932 dlrs in year. Reuter | SOUTHLIFE HOLDING CO <SLHC> 4TH QTR NET |
The International Monetary Fund has warned Israel in a report that a continued rapid rise in wages could undo the achievements of its economic stabilization program in controlling hyperinflation. An IMF delegation which visited Israel this week issued an interim report praising Israels success in slashing inflation from 440 pct in 1985 to 19.7 pct last year without triggering mass unemployment. But it held up Argentina and Brazil as examples of the perils awaiting countries who did not follow up on stabilization programs. Continued rapid rise in wages would threaten the progress in reducing inflation and the present level of employment the IMF said. The report echoed warnings last week by Bank of Israel Governor Michael Bruno and the private Bank Hapoalim that higher wages government overspending and a consumer boom were rekindling inflation. Though wage developments and the reacceleration of inflation are worrisome there is still time to put the stabilization program back on track it said. The warning comes ahead of Israels key public sector wage negotiations next month. Bank Hapoalim chief economist Petahia Bar-Shavit said real growth of wages in 1986 was about 10 pct following a fall of between 15 and 20 pct in the second half of 1985 when the governments economic stabilisation programme was introduced. Hapoalim forecast last week that inflation would rise to around 30 pct this year and a second devaluation might be necessary later in the year following the 9.75 pct devaluation against the dollar in January. Bar-Shavit also said the government was implementing a policy of cutting taxes without a clear strategy for balancing the budget. The IMF report said monetary policy was relaxed too fast last year and it supported the Bank of Israels raising of interest rates in the last month. REUTER | IMF WARNS ISRAEL PAY RISES MAY THREATEN STABILITY |
The Algerian authorities have regulated the addition of chickpeas and barley used to make imported coffee go further the official APS news agency reported. Taking advantage of scarcity private roasters were selling ground coffee mixtures which were 75 pct non-coffee it said. Since the beginning of March the coffee market has been strictly regulated by the state food marketing monopoly Enapal. Now a third of imported coffee will be sold as pure beans and two thirds as a ground mixture with a choice of 30 pct chickpeas or 30 pct barley. In March private dealers will handle 2050 tonnes of pure coffee and Enapal 6050 tonnes of mixtures. Reuter | ALGERIA REGULATES USE OF COFFEE ADDITIVES |
Foreign Secretary Joe Clark urged the United States to take firm action on reducing acid rain and on sticking with the strict interpretation of the Anti-Ballistic Missile Treaty but said he won no promises. After a day of meetings with Vice President George Bush Secretary of State George Shultz and Commerce Secretary Malcolm Baldrige Clark told a press conference he was persuaded the Reagan adminstration had begun to deal seriously with Canada and its concerns. But he admitted he had won no assurances Washington would go along with his governments position on several key controversial issues. Theres a lot more attention to Canadian files. What remains to be seen is how much progress will be achieved he told reporters. The meetings which end today with talks on Capitol Hill are part of a routine U.S.-Canadian consultation but are also expected to lay groundwork for a summit in Ottawa next month between President Reagan and Prime Minister Brian Mulroney. Clark discouraged speculation that lack of a firm American committment on the thorny issue of acid rain could render the summit a failure. Canada is seeking evidence that Reagan is prepared to live up to a commitment made last year to implement in the United States a five-year five billion dlr U.S. program to test cleaner ways of burning coal. We expect the U.S. government to honor its commitment and discussed this with Shultz today Clark said. Theres no question the matter is under serious detailed consideration at the highest levels of the U.S. government he said adding that Shultz left my meeting today to attend a (White House) cabinet meeting that was discussing this as well as other questions. We will wait and see the results of that examination he said. Clark also said he reiterated Canadas position that the United States should adhere to a strict interpretation of the 1972 ABM treaty the only remaining operative arms control agreement. Reuter | CLARK HOLDS TALKS WITH SHULTZ IN WASHINGTON |
The National Weather Service said heavy afternoon and evening rainfall caused a threat of flooding over portions of Texas. There were reports of more than two inches of rain falling across Terrall and Val Verde counties during the afternoon which caused street and highway flooding. A coastal flood watch was also posted along the outer banks of North Carolina and warnings of gale force winds have been posted along the central Atlantic Coast. Cold temperatures and rain mixed with snow caused the advisories for livestock which were posted over northwest Texas through the morning. Rain continued over central Texas into the morning hours. Rain also extended over the Oregon coast near San Francisco Bay California and over northwest Montana. Snow was scattered over northwest Texas as well as from northeast Montana across North Dakota into western Minnesota. There were no reports of measurable snowfall during the six hours ending at one am est. Reuter | FLOOD THREAT IN TEXAS |
U.S. banks and savings and loan institutions could face important changes as a result of emergency legislation adopted overwhelmingly by the Senate Banking Committee. The bill approved 12-6 yesterday would rescue the underfunded federal deposit insurance fund for thrifts and temporarily halt new developments in the provision of financial services. The bill which goes to the full Senate will infuse a badly needed 7.5 billion dlrs into the Federal Savings and Loan Insurance Corp. which insures accounts of depositors. It also limits banks ability to sell securities and restricts a new breed of competitor the so-called nonbank banks. Committee Chairman William Proxmire the bills sponsor promised the committee will work on a long-term plan for new developments in the financial services industry which is confronted by growing competition from firms in other commercial centers such as London and Tokyo. This bill we are taking up today is the first step in this effort the Wisconsin Democrat said. But Sen. Jake Garn the committees top Republican chastised senators for imposing temporary restrictions on financial providers. It is time to forget the special interests the Utah senator said. Garn failed to win approval for an amendment that would have eliminated virtually all of the bills provisions except the rescue for FSLIC. A major controversy focused on nonbank banks which offer limited financial services of a bank and avoid most banking regulations. Proxmire succeeded in closing a loophole which would permit new nonbank banks and thrifts until Congress passes comprehensive bank reform a move welcomed by the bank industry. But at the same time the bill set a moratorium on a number of new activities that banks may undertake including selling insurance securities and real estate for one year after the bill becomes law. The 7.5 billion dlr rescue for FSLIC represented a compromise between a larger amount sought by the Reagan administration and a smaller figure proposed by the thrift industry. The U.S. League of Savings Institutions an industry group feared approval of a larger amount for FSLIC would lead to a surge of closings of thrifts by federal superviors. We hope the Congress will finally settle on a lower number William OConnell president of the league said after the committee voted. Reuter | U.S. BANKS, THRIFTS FACE CHANGE FROM SENATE BILL |
The oil services industry is on the verge of a recovery because of rising crude prices oil industry analysts said. The analysts who issued buy recommendations on some stocks said the recovery in oil services should begin in the second half of 1987 after drilling activity bottoms out in the first half and continue into the next decade. People however cannot afford to wait for drilling to go up to start buying said Sandi Haber Sweeney senior research analyst at Sanford C. Bernstein and Co Inc. Among the recommended buys are Schlumberger Ltd <SLB> Halliburton Co <HAL> Dresser Industries <DI> Baker International <BKO> and McDermott International Inc <MDR> which may be the target of a takeover by Harold Simmons a Dallas-based investor. Analysts said although major oil companies are increasing exploration and development overseas they expect the pickup in oil services will begin in the U.S. Activity in the U.S. is so depressed it should move up faster said Vishnu Sharp of Goldman Sachs. The number of active oil drilling rigs in the U.S. was 766 last week compared with 1212 rigs one year ago Huges Tool Co <HT> figures show. The average number of working rigs in the U.S. for 1987 is projected at 978 versus 964 in 1986 according to Ike Kerridge vice president of stockholder relations at Hughes Tool. The first significant pickup in drilling activity will occur in the second half of 1988 Kerridge said. Overseas drilling activity is expected to follow a similar pattern Kerridge said. Halliburton is the best value said Jeffrey Freedman vice president at Smith Barney Harris and Upham Inc adding the company controls the greatest amount of liquidity of common stock market value is diversifed in non-oil field businesess and has the lowest multiple of stock price to operating cash flow including debt. Schlumberger is Freedmans second favorite oil service stock. Schlumberger is expected to continue to be the dominant technical leader in the industry Freedman said. Schlumbergers management shift asset restructuring including a pending merger of Fairchild Semiconductor and its considerable cash horde sets the stage for the company to maximize its significant industry advantage and capitalize on the project upturn in exploration and development activity according to a report by George Gaspar first vice president at Robert W. Baird and Co Inc. Gaspar estimates earnings per share for Schlumberger at 25 cts for 1987 and one to 1.75 dlrs in 1988 compared with 20 cts in 1986 excluding a fourth quarter special charge of 1.87 billion dlrs. Bernsteins Sandi Sweeney is recommending a group of oil service companies and said choosing among them is difficult. Her favorite is Baker International which is involved in a possible merger with Hughes Tool Co. Dresser Industries will also benefit from the recovery but possibly not as much as other companies because it is not a pure service company Sweeney said. Dresser is expected to improve profitability owing to cost reductions and streamlined operations including the sale and leaseback of its headquarters said Swarup. Reuter | TALKING POINT/OIL SERVICES TURNAROUND SEEN |
Creditanstalt-Bankverein <CABV.VI> is likely to raise its 1987 dividend from the 1986 payment of 12 pct of share capital deputy general-director Guido Schmidt-Chiari said. The 1985 dividend was 10 pct unchanged from the previous year and Schmidt-Chiari noted that the parent banks share capital had risen to 3.1 billion schillings at the end of 1986 from 2.7 billion a year earlier. Schmidt-Chiari made the forecast at a news conference when the bank announced a 1986 consolidated banking group net profit of 496.7 mln schillings for 1986 against 354.5 mln in 1985. Schmidt-Chiari did not elaborate on his dividend forecast. The banking groups consolidated balance sheet total rose to 453.4 billion schillings at year-end from 425.4 billion. General director Hannes Androsch said higher investment would lead to continuing growth in profits in future. Last years better profits had resulted from improvements in services provided by the bank and also in profits on schilling lending. Schilling lending had grown last year and interest rate margins had also improved but remained unsatisfactory when compared with those in other countries he said. Increased provisions for possible bad debts at home and abroad particularly in Latin America had lowered profits Androsch said but declined to give an exact figure. Schmidt-Chiari said that foreign lending business had fallen significantly due to exchange rate fluctuations removing some 22 billion schillings from the balance sheet total. In an attempt to generate more foreign business representative offices would be opened this year in Tokyo Hong Kong Moscow and Prague. Androsch welcomed government plans to abolish legal controls on foreigners buying voting shares and drawing dividends. Preference shares of state-controlled Creditanstalt rose eight schillings on the Vienna Bourse today to 2008. Brokers said improved results had been widely expected by investors. Androsch said industrial holdings had performed better in 1986 than in previous years giving a return on investment of 2.6 pct compared with 1.3 pct in 1985. Creditanstalt Austrias largest bank holds majority interests in 10 medium-sized and large Austrian companies. But he forecast its biggest industrial subsidiary Steyr -Daimler-Puch AG <SDPV.VI> would return a 1987 result similar to the expected 1986 operating loss of 700 mln schillings. REUTER | CREDITANSTALT SEES HIGHER 1987 DIVIDEND |
CPC International Inc said it has agreed in principle to sell its Peterson/Puritain Inc subsidiary to Hi-Port Industries Inc. CPC said the sale is not expected to have a significant impact on its earnings and is subject to approval by boards of both companies. Terms were not disclosed. Peterson/Purittan is a contract packager of personal care and household products. Reuter | CPC <CPC> TO SELL UNIT TO HI-PORT <HIPT> |
Gynex Inc said distributor Monsanto Co <MTC> has recalled at Gynexs request two generic oral contraceptives developed by 50 pct-owned Gynex Laboratories Inc because some packages may contain out of order or missing tablets. The company said privately-held <Watson Laboratories Inc> owner of the other 50 pct of Gynex Laboratories has temporarily suspended production of the products and an inspection of the packaging operation is currently underway. It said corrective measures will be implemented to prevent a recurrence. Gynex said because of the recent introduction of the products it believes only a limited number of packages have been dispensed to consumers. The products are Gynex 1-35E and Gynex 0.5-35E. Reuter | GYNEX <GYNXU> RECALLING ORAL CONTRACEPTIVES |
Foreign Minister Tadashi Kuranari has cancelled a trip tomorrow to the U.S. Because of continued confusion in the Japanese Parliament Foreign Ministry officials said. The cancellation comes just as the U.S. Congress is to consider legislation aimed at cutting Americas mammoth trade deficit much of which is with Japan. Kuranari has to attend the budget debates the ruling Liberal Democratic Party (LDP) have been forced to resume after the opposition accused it of trying to railroad the bill through parliament. REUTER | JAPAN FOREIGN MINISTER CALLS OFF TRIP TO THE U.S. |
Shanghai plans to rely on soft loans to finance a number of large-scale projects in the city including an underground railway system Mayor Jiang Zemin said. Jiang told Reuters general manager Michael Nelson that he hoped work on the railway system to ease Shanghais transport problems would start within two years. Other projects in this city of 12 mln people include a bridge and an extra tunnel under the Huangpu river a new airport and passenger ship terminals and Chinas biggest railway station due to open at the end of this year. The mayor said foreign companies would be invited to participate in some projects through international tendering. But he added that firms hoping to take part would have to come up with package deals involving soft loan financing. This is a complex issue. The conditions relating to tendering will have to be associated with conditions for receiving soft loans he said. He said the city was willing to use commercial loans to finance technological improvements to factories which could show a quick return in increased exports and foreign exchange earnings. But infrastructure projects take much longer and involve much bigger investments and with them the ideal way is to use soft loans he said. The mayor added that British French and Japanese firms had already contacted the Shanghai authorities with proposals on the underground railway project. Western business sources in Shanghai said the project involving the construction of 14 km of tunnelled track had been discussed for over 20 years adding it was expected to cost at least 750 mln dlrs. REUTER | SHANGHAI PLANS SOFT LOANS TO FINANCE MAIN PROJECTS |
Shr 47 cts vs 40 cts Net 4258000 vs 5942000 Revs 92.6 mln vs 77.1 mln Avg shrs 8977000 vs 15.0 mln Year Shr 1.22 dlrs vs 1.34 dlrs Net 16.4 mln vs 20.0 mln Revs 329.1 mln vs 272.1 mln Avg shrs 13.5 mln vs 15.0 mln NOTE: Interest expense 4384000 dlrs vs 545000 dlrs in quarter and 6979000 dlrs vs 2425000 dlrs in year. 1986 year net reflects undisclosed amount of expenses for defense of takeover effort. Reuter | PULITZER PUBLISHING CO <PLTZC> 4TH QTR NET |
HUGHES TOOL SAYS IT APPROVES REVISED TERMS FOR MERGER WITH BAKER INTERNATIONAL |
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OPEC has reaffirmed its commitment to fixed crude oil prices of around 18 dlrs a barrel and an overall output ceiling of 15.8 mln barrels per day (bpd) to defend prices its president Rilwanu Lukman said. He told a news conference here After due consultation with my colleagues in OPEC I hereby wish to emphasize that Nigeria and all member countries of OPEC remain determined to uphold the December agreement by adhering strictly to their various quotas and official selling prices. Lukman added no extraordinary OPEC conference was planned. We are in a position to re-confirm that despite misleading news in foreign media to the contrary ... OPEC member countries as a whole produced below their agreed quota in the month of February Lukman who is Nigerian oil minister said. Lukman put the overall OPEC output shortfall in February at 900000 bpd and said this was as a result of their firm determination to defend official selling prices of 18 dlrs agreed upon last December in Geneva. The December agreement set an overall output ceiling for OPEC of 15.8 mln bpd for first half 1987 and restored fixed prices as from February 1 around a reference point of 18 dlrs. Oil prices rallied immediately after the Geneva accord but fell again last month on reports that OPEC was producing more than the agreed level. The idea was to suggest that OPECs agreement would not hold and this caused some customers to hold back purchases of OPEC oil and resort to destocking to meet their needs Lukman said. He said the 900000 bpd shortfall last February was based on the verified figure for 10 out of OPECs 13 members adding that Nigeria alone had a shortfall in production of 100000 bpd. Iraq disassociated itself from the December agreement while the production figures of Ecuador and the United Arab Emirates needed to be verified Lukman said. If that is the price we have to pay to make the agreement succeed we are ready ... OPEC is not changing its price level of 18 dlrs the groups president said. He said the OPEC price differentials committee meeting formerly postponed to April had been put off indefinitely. Furthermore no extraordinary meeting of the conference is at the moment contemplated since most agreements reached in December are being adhered to he said. Asked if the committee did not need to meet soon to narrow the gaps in the prices of the various OPEC crudes -- fixed in relation to the 18 dlr benchmark -- Lukman replied We consider the defence of our prices much more crucial than differentials. Lukman said OPEC was aware that consumers had heavily drawn on stocks of both crude oil and refined products to levels well below this time last year and soon they would return to the market in search of crude. We dont see that there is going to be any difficulty in maintaining the 18 dlr price throughout the rest of the year Lukman said. The OPEC president praised non-OPEC oil producers which he said had contributed to the groups efforts to stabilise prices but he criticised Britain for maintaining its long-held view not to do anything to help the market. We are quite confident however that in the long-term with two-thirds of the worlds reserves in OPEC hands the future is ours. We will use that advantage responsibly he said. Lukman described the disruption in Ecuadors output following an earthquake as tragic but refused to say if the South American country would be allowed a higher output quota when it recovered from the disaster. REUTER | OPEC REAFFIRMS COMMITMENT TO FIXED PRICES, CEILING |
Dutch port and transport union FNV is presenting its case against 800 planned redundancies in Rotterdams general cargo sector to parliaments standing committee on social affairs today a union spokesman said. With 285 of the 4000-strong workforce on strike the union will tell the committee the government has a duty to help solve the dispute that has been disrupting the general cargo sector for more than seven weeks the spokesman added. The union will also take its case against the redundancies 350 of them planned for this year to a court in Amsterdam tomorrow he added. Reuter | DUTCH PORT UNION TO MEET PARLIAMENTARIANS TODAY |
<Qintex America Ltd> said it is again extending its offer of 13 dlrs a share for 3.3 mln Princeville Development Corp shares until today from yesterday. At midnight yesterday 7242117 Princeville shares had been tendered up from 5887165 shares 24 hours earlier. Qintex said it is extending the offer to allow Princeville to comply with federal law restricting the ownership of U.S. airlines by non-U.S. citizens and to finalize the terms and conditions of the letter of credit or bank guarantee required under the previously announced acquisition agreement. Reuter | QINTEX AGAIN EXTENDS PRINCEVILLE <PVDC> OFFER |
St. Joe Gold Corp said it plans to proceed with development of its Golden Patricia gold property in northwestern Ontario. It said about five mln dlrs will be spent to continue underground development and obtain operating permits and another 10.2 mln dlrs is expected to be required to complete underground development construct a mill and provide the infrastructure needed to put the mine into commercial production. St. Joe Gold said if the necessary operating permits were granted in time it would start gold production in the second half of the year ending October 31 1988 at an annual rate of about 40000 troy ounces. The company said the property is estimated to contain over 500000 troy ounces of gold and the initial mining project covers only seven of 192 claims with drill-indicated reserves of 293000 short tons grading 0.88 troy ounce of gold per ton. It said initial mine output is expected to be about 150 tons of ore daily. St. Joe Gold said the Golden Patricia vein has not been tested at depth or along strike to the east and west and exploration is continuing on the Golden Patricia property and the adjacent wholly-owned Muskeg Lake property. The company also said its Richmond Hill gold and silver deposit in the Carbonate district of western South Dakota has been shown by drilling to contain about 3900000 tons grading 0.055 troy ounce of gold and 0.23 troy ounce of silver per ton. It said preliminary results are encouraging and a feasibility study is nearing completion. Reuter | ST. JOE GOLD <SJG> TO DEVELOP MINE |
Novell Inc said its board declared a two-for-one stock split payable to holders of record at the close of business on MArch 31. It said shareholders at the annual meeting approved a doubling of authorized common shares to 30 mln from 15 mln and a limitation of directors liability. Reuter | NOVELL <NOVL> SETS TWO FOR ONE STOCK SPLIT |
Thousands of people evacuated from two towns in flood-hit southern New Zealand began returning to their homes late today as the waters began to recede. A state of emergency had been declared in Southland province apart from the city of Invercargill and its port Bluff as rivers rose over four meters above normal after torrential rain. Local officials in the farming province said stock losses were miraculously low but they expect major crop destruction. Roads and rail links were cut and Invercargill airport was closed. Part of neighbouring Otago province also had a state of emergency with some rivers well above normal. Reuter | FLOOD THREAT EASES IN SOUTHERN NEW ZEALAND |
Johnson and Johnson said the U.S. Food and Drug Administration has notified the company its food additive petition for a high-intensity sweetener has been formally accepted and now will be reviewed by the agency. The company said the product with the generic name of sucralose is made from sugar and tastes like sugar but is about 600 times sweeter. It yields no calories and does not promote tooth decay. Reuter | AGENCY TO REVIEW JOHNSON/JOHNSON <JNJ> SWEETNER |
Heart Federal Savings and Loan Association said its board declared a two-for-one stock split payable April 30 to holders of record April 15. The company said the split is subject to shareholder approval at the April 15 annual meeting of an increase in authorized common shares to 10 mln from five mln. Reuter | HEART FEDERAL <HFED> SETS TWO FOR ONE SPLIT |
Pre-tax income 788 mln Danish crowns vs 872 mln Sales 4.21 billion crowns vs 4.11 billion Income after tax 521 mln crowns vs 604 mln Earnings per 20-crown share 20.45 crowns vs 23.79 Dividend 20 pct (unchanged). Reuter | NOVO INDUSTRI A/S (NVO.CO) YEAR 1986 |
Qtly div 10 cts vs 10 cts in prior qtr Payable March 31 Record March 23 Reuter | OVERMYER CORP <OMCO> REGULAR DIVIDEND |
The European Court in Luxembourg has ruled a so-called Christmas butter scheme under which surplus stocks were sold off cheaply did not infringe European Community (EC) rules a Commission spokesman said. The spokesman said the Court rejected a case brought by three European margarine manufacturers which argued the EC Executive Commission did not have the power to launch the scheme in October 1984 without approval from EC ministers. The plan was aimed at offloading 200000 tonnes of butter from a one mln tonne stockpile at a specially reduced price of 1.6 European currency units per kilogram. Reuter | EC COURT RULES IN FAVOUR OF CHEAP BUTTER PLAN |
Shr 18 cts vs 14 cts Net 556036 vs 403945 Sales 15.6 mln vs 13.6 mln Avg shrs 3132555 vs 2934285 Year Shr 60 cts vs 48 cts Net 1805229 vs 1400247 Sales 60.1 mln vs 52.3 mln Avg shrs 3012917 vs 2940219 NOTE: 1985 share data adjusted to reflect three for two stock split effective June 30 1986 Reuter | UNIFORCE TEMPORARY PERSONNEL INC <UNFR> 4TH QTR |
Japanese car makers will curb their exports to the European Community (EC) following an unofficial directive from the Ministry of International Trade and Industry (MITI) automobile industry sources said. Some sources said exports to the EC this year are likely to be at most unchanged from last years 1.10 mln units and may even fall due to an anticipated slackening of EC economic growth and increasing trade friction. Last week MITI vice minister for international affairs Makoto Kuroda said the ministry had asked car makers to exercise prudence in exporting to Europe. Reuter | JAPAN TO CURB VEHICLE EXPORTS TO EC |
The Bank of England said it gave the money market assistance worth 106 mln stg this afternoon buying bank bills at the rates established on Monday. The Bank bought 11 mln stg of band one bills at 10-3/8 pct and 95 mln stg of band two paper at 10-5/16 pct. This is the first time that it has intervened today. The Bank has revised its estimate of the liquidity shortage in the market down to 250 mln stg from 300 mln initially. REUTER | U.K. MONEY MARKET GIVEN 106 MLN STG ASSISTANCE |
Shr 45 cts vs 50 cts Net 18.0 mln vs 19.9 mln Sales 116.1 mln vs 108.8 mln Year Shr 1.01 dlrs vs 1.04 dlrs Net 39.8 mln vs 41.1 mln Sales 304.5 mln vs 278.1 mln NOTE: Share adjusted for three-for-two split in June 1986. Reuter | PIC'N'SAVE CORP <PICN> 4TH QTR NET |
GOODYEAR TIRE TO RECEIVE 588 MLN DLRS FOR GOODYEAR AEROSPACE FROM LORAL CORP |
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Hughes Tool Co said its board voted at a special meeting last night to approve a new agreement with regulators that would allow the company to complete its proposed merger with Baker International Corp <BKO>. The agreement approved by the U.S. Department of Justice yesterday will give the merged company Baker Hughes six months instead of three to sell certain assets. The pact also allows a three-month extension if warranted and limits the obligation of the new company to give financial support to the businesses to be divested pending their sale. The company said its board recommended that shareholders approve the merger of the oilfield service companies. A previously adjourned meeting of Hughes Tool stockholders will be resumed this afternoon it said. Hughes will work with Baker and the Justice Department towards negotiating the final form of the consent decree and filing it as soon as possible the company said in a statement. Closing of the merger would occur immediately after the filing it said. The assets to be sold under the consent decree consist of Bakers domestic oilfield drilling bit business and its domestic submersible electric pump business. Baker has an agreement to sell the pump business to Trico Industries Inc <TRO>. The financial terms of the merger are unchanged a Hughes spokesman said. Under those terms each Baker common share and Hughes common share would be converted into one share and 8/10 of a share respectively of Baker Hughes Inc which would be formed as a new holding company. Reuter | HUGHES TOOL <HT> BOARD APPROVES MERGER |
Lorimar Telepictures Corp said it accepted resignations of three executives at Karl-Lorimar Home Video its wholly owned subsidiary. The company said Stuart Karl president and chief executive officer; Court Shannon executive vice president and Gary Hunt vice president sales resigned effective immediately. Lorimar said it had been reviewing possible conflicts of interest involving the departing executives with an unnamed outside service organization. Lorimar declined to explain the nature of the conflict or the amount involved. The company said a settlement has been reached between the parties and and Karl Lorimar which includes a settlement of the employment contract between Lorimar and Stuart Karl. No employment contracts exists with the other executives the company said. The company said Jerry Gottlieb senior vice president Lorimar-Telepictures will serve as acting chief executive officer of Karl Lorimar video. Gottlieb joined Lorimar as senior vice president in 1985. Reuter | LORIMAR TELEPICTURES <LT> EXECUTIVES RESIGN |
Johnson and Johnson said the U.S. Food and Drug Administration has notified the company its food additive petition for a high-intensity sweetener has been formally accepted and now will be reviewed by the agency. The company said the product with the generic name of sucralose is made from sugar and tastes like sugar but is about 600 times sweeter. It yields no calories and does not promote tooth decay. Johnson and Johnson said the sweetner is being jointly developed with Tate and Lyle PLC <TATL>. Tate and Lyle is seeking approval in Canada the United Kingdom and other European countries Johnson and Johnson said. The company noted its petition covering the product and its safety evaluation were submitted to the FDA last month. While awaiting FDA approval the company said it is proceeding with plans for commercialization through its McNeil Specialty Products Co subsidiary. Johnson and Johnson said it is operating under a licensing agreement with Tate and Lyle whose collaborative research with scientists at Queen Elizabeth College in London led to the discovery of Sucralose in 1976. Patents and licensing agreements control the use of sucralose through the year 2001 Johnson and Johnson said. Sucralose is a chlorinated derivative of ordinary sugar. The carbon-chloride bonds in sucralose are stable and are not broken during digestion or metabolism. Sucralose is essentially not metabollized by the body. The chlorine content enhances sweetness without providing calories. Reuter | AGENCY TO REVIEW JOHNSON AND JOHNSON SWEETENER |
Senators and a special prosecutor were in dispute today over a legal maneuver to force quick answers from key figures in the Iran arms scandal and the diversion of profits to Nicaraguan rebels. Senators on a special Senate committee investigating the scandal want to grant limited immunity from prosecution to force early testimony from Lt. Col. Oliver North and John Poindexter. North is the National Security Council (NSC) aide President Reagan fired November 25 for possibly illegal diversion of Iran arms payments to the so-called contra rebels. Poindexter who was NSC director and Norths boss resigned the same day. The Washington Post said over the weekend that Poindexter was ready to testify that he told Reagan twice of the funds diversion contrary to Reagans denial that he knew of it. Special prosecutor Lawrence Walsh said he asked a special House committee yesterday to delay limited immunity for North and Poindexter for at least 90 days and would make the same request to the Senate committee today. Walsh said he was also urging the committees to delay granting immunity for a third key figure retired Air Force Maj. Gen. Richard Secord a close North associate. Walsh whose job is to determine whether anyone should be prosecuted for criminal misconduct said premature immunity could put the three beyond the law before a grand jury can decide whether they should be prosecuted. Reuter | SENATORS, PROSECUTOR DISAGREE ON IRAN TESTIMONY |
HANSON TRUST PLC UNIT TO SELL KAISER CEMENT TERMINAL AND PLANT FOR 50 MLN DLRS |
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Triton Energy Corp said its 70 pct owned <Canadian Worldwide Energy Ltd> affiliates Lasmo et al Tableland 4-36-2-10W2 well in Saskatchewan flowed 567 barrels of 37 degree gravity oil through a 17/64 inch choke from depths of 8531 to 8548 feet and 636 barrels of oil per day through a 20/64 inch choke from depths of 8500 to 8507 feet. Triton said because of the wells status as a deep exploratory well production qualifies for a five-year royalty holiday under the Saskatchewan drilling incentive products. It said the wells initial production is expected to be restricted to an allowable level of about 300 barrels a day although it is capable of sustaining much higher rates. The company said London and Scottish Marine Oil PLC owns a 50 pct interest in the well and its spacing unit Canadian Worldwide 25 pct <Saskatchewan Oil and Gas Corp> 10 pct <Interprovincial Pipeline Ltds> Home Oil Co Ltd 7.5 pct and Scurry-Rainbow Oil Ltd <SRB> 7.5 pct. Triton said Royal Dutch/Shell Groups <RD> <SC> Shell Canada Ltd <SHC> affiliate retains a convertible overriding interest in the well. Reuter | TRITON ENERGY <OIL> AFFILIATE IN CANADIAN FIND |
National Bank of Hungary first vice-president Janos Fekete said he hoped a planned eight pct devaluation of the forint will spur exports and redress last years severe trade deficit with the West. Fekete told Reuters in an interview Hungary must achieve at least equilibrium on its hard currency trade. It is useful to have a devaluation he said. There is now a real push to our exports and a bit of a curb to our imports. The official news agency MTI said today Hungary would devalue by eight pct and it expected the new rates to be announced later today. Fekete said the rates would come into effect tomorrow. He said one reason for the devaluation was that Hungary had a higher rate of inflation over the past two years than its main partners (around eight pct in 1985 and between five and 5.5 pct in 1986). This was partly an after-effect of action Hungary took to prevent inflation from soaring during the oil price shocks of the 1970s he added. Hungary devalued by a similar amount last September and by between three and four pct early last year. But the countrys hard currency trade balance nevertheless fell into a deficit of 539.4 mln dlrs from a surplus of 295.3 mln in 1986 and 1.2 billion in 1985. Fekete said Hungary was hoping for a hard currency trade surplus of between 200 and 300 mln dlrs this year but that a more likely outcome would be closer to equilibrium on total hard currency trade of around 10 billion dlrs. One Western commercial attache here said: Devaluation of itself will not change anything. It will only be useful if they also make efforts to restructure industry and improve the quality of their export goods. Fekete said he hoped to raise credits on good terms this year to invest in restructuring industry. It would be his role to persuade international banks to cooperate in this process. He noted Hungary had been given an AA rating enabling it to raise money on the Japanese Samurai bond market. Hungarys net hard currency debt soared to 7.79 billion dlrs last year from 5.01 billion in 1985 partly because of a current account deficit of 1.42 billion dlrs and partly because the fall in the dollar increased the dollar value of debt denominated in marks or yen. He said he feared net debt would also rise slightly this year but he was in favour of borrowing for the purpose of modernisation. I am for credits to invest for that purpose he said. I am against credits for consumption. He forecast gross domestic product growth of two pct this year from one pct in 1986. Fekete said Hungary would continue to restructure its debt profile by prepaying high interest shorter and medium term loans with cheaper long term money for which it was looking more and more to the fixed interest rate bond market where he considered rates to be low. Hard currency foreign exchange reserves would stay at around 3.5 billion dlrs he said. On the budget deficit which tripled to a provisional 47 billion forints last year after quadrupling in 1985 Fekete said the finance ministry was working out measures to reduce an approved target deficit for this year of 43.8 billion forints to between 30 and 35 billion forints. REUTER | HUNGARY HOPES DEVALUATION WILL END TRADE DEFICIT |
Ecuadors deputy energy minister Fernando Santos Alvite arrived here last night for talks on further Venezuelan assistance to his countrys oil industry following last weeks earthquake officials said. Ecuador was obliged to suspend crude oil exports for an expected five months as a result of damage to 25 miles of pipeline linking its jungle oil fields with the Pacific port of Balao. Oil normally accounts for 60 pct of its exports. Fellow OPEC member Venezuela has already agreed to lend Ecuador five mln barrels of crude to be repaid in kind after 180 days to help meet its domestic consumption needs. The officials could neither confirm nor deny reports that Venezuela will temporarily produce Ecuadors entire OPEC quota set at 210000 barrels per day for first half 1987. All options are open at this moment in the context of cooperation on oil production a Venezuelan energy and mines ministry source said. Discussions are also under way to arrive at a formula to compensate Ecuador for the loss in oil export revenue while the pipeline is repaired officials said. Santos Alvite last night met Venezuelan energy and mines minister Arturo Hernandez Grisanti and will today hold talks at technical level officials said. Industry sources said that among the options are for Venezuela to produce Ecuadors entire quota or for Venezuela and non-OPEC Mexico to share it and for the latter to supply Ecuadors Far Eastern clients. But the ministry source said that no decision has yet been reached on the matter and that an announcement would be made in due course. Santos Alvite said earlier in Quito that Ecuador would have to import six to seven mln barrels of crude oil to meet its needs until the line was repaired. Ecuador energy and mines minister Javier Espinosa Teran said last night his country needs 120 mln dlrs to repair the damage to the export pipeline caused by the earthquake. REUTER | ECUADOR DEPUTY MINISTER SEEKS OIL AID IN VENEZUELA |
Chicago Mercantile Exchange floor traders and commission house representatives are guesstimating todays hog slaughter at about 295000 to 308000 head versus 305000 week ago and 308000 a year ago. Cattle slaughter is guesstimated at about 128000 to 132000 head versus 130000 week ago and 126000 a year ago. Reuter | HOG AND CATTLE SLAUGHTER GUESSTIMATES |
Goodyear Tire and Rubber Co said it will receive about 588 mln dlrs in cash from Loral Corp <LOR> for the business of Goodyear Aerospace Corp. Goodyear said the previously announced acquisition by Loral is expected to be completed March 13. When Loral announced the transaction January 12 the company said it was paying 640 mln dlrs for Goodyear Aerospace. Goodyear said the price it will receive is after adjustments for such items as pension and benefits provision allocation of liabilities and asset valuations. Last year Goodyear Aerospace had revenues of 695 mln dlrs. Reuter | GOODYEAR <GT> TO RECEIVE 588 MLN DLRS FOR UNIT |
Raab Karcher AG a trading subsidiary of VEBA AG <VEBG.F> said it increased operating profit in 1986 despite a sharp decline in turnover and added there were good chances this profit level could be held in 1987. Operating profit rose to just under 120 mln marks in 1986 from around 100 mln in 1985. However the groups third party sales fell sharply to 7.2 billion marks from 9.4 billion the year before largely due to lower prices for energy products particularly oil and coal managing board chairman Klaus Giesel told a news conference. Reuter | VEBA'S RAAB KARCHER RAISES 1986 OPERATING PROFIT |
Hovnanian Enterprises Inc said its board of directors has declared a two-for-one split of its outstanding common stock. The company said shareholders will receive one additional share for each share held at the close of business on March 23 1987 and additional shares will be distributed on April 13 1987. Reuter | HOVNANIAN ENTERPRISES <HOV> SPLITS STOCK |
British Aerospace Plc <BAEL.L> said it has increased its stake in <Systems Designers Plc> to 22.1 pct or 25.46 mln ordinary shares following the purchase of 10.45 mln ordinary shares. The British Aerospace Pension Fund holds 2.15 mln ordinary shares in Systems representing a stake of 1.9 pct. A spokesman for British Aerospace said it has no present or future intention of making a full bid for Systems Designers. System Designers shares were nine pence higher at 100 prior to the share stake announcement and have showed little movement since. Reuter | BRITISH AEROSPACE RAISES SYSTEM DESIGNERS STAKE |
CIGNA Corp said it has fixed April 24 as the date for the previously-announced redemption of its 99.8 mln dlrs of outstanding eight pct subordinated exchangeable debentures due December 1 2007 at 105.867 pct of par plus accrued interest. The debentures are exchangeable through the redemption date into 29.205 common shares of PaineWebber Group Inc <PWJ> for each 1000 dlrs principal amount. Reuter | CIGNA CORP <CI> SETS DATE FOR DEBT REDEMPTION |
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