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South Korea proposed a meeting of prime ministers to improve relations with North Korea but said the two countries must first restore mutual trust. South Korean Prime Minister Lho Shin-yong proposed in a letter to his North Korean counterpart Li Gun-mo that they meet to discuss ... Various issues raised by the two sides to improve relations and ease tension. The letter released to the media by a government spokesman said if the proposed meeting took place it would open the way for summit talks between South Korean President Chun Doo Hwan and North Korean leader Kim Il-sung. The letter was in reply to a recent North Korean call for high-level political and military talks. Lho said the prime ministers could discuss any proposal to be made by the North once the minimum conditions for mutual trust have been created by the convening of a water resources meeting and the resumption of the suspended dialogues. Lho was referring to discussions on a controversial northern dam project Seoul has said is aimed at flooding large areas of the South and to a resumption of stalled talks on trade and humanitarian issues. REUTER | SOUTH KOREA PREMIER OFFERS TALKS WITH NORTH KOREA |
The government proposed a 1987 budget of up to 41.7 billion Syrian pounds a 4.8 pct decrease from last years allocation. Finance minister Qahtan Seyoufi told parliament last night the reduction was due mainly to a cut in investment allocations. Planned recurrent spending of 24.2 billion pounds almost unchanged from 1986 took account of national security needs and Syrias role in steadfastness and liberation he said. The budget which is still subject to approval by parliament and by President Hafez al-Assad also aims to meet mounting spending on education health and essential imports. Power and water projects would take up 43.5 pct of investment allocations of 17.5 billion pounds and agriculture about 20 pct Seyoufi said. The budgets basic goals were to restrict current spending curb inflation and step up reliance on local resources he said. REUTER | SYRIA PROPOSES REDUCED BUDGET FOR 1987 |
Japan October/December GNP up 0.8 pct (July/Sept revised 0.7 rise) - official |
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Japan GNP rises 2.5 pct in calendar 1986 (4.7 pct in 1985) - official |
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Japans gross national product (GNP) rose a real 0.8 pct in the October/December quarter after an upwardly revised 0.7 pct increase the previous three months the Economic Planning Agency (EPA) said. The rise in the July/September quarter had originally been put at 0.6 pct. The annualized growth rate accelerated to 3.2 pct in October/December from 3.0 pct in July/September. In the 1986 calendar year GNP rose 2.5 pct after a 4.7 pct increase in 1985. Last years performance was the worst since 1974 when GNP fell 1.4 pct. Agency officials blamed the strong yen for depressing exports and manufacturing industry. In nominal terms GNP rose 0.5 pct in the October/December quarter reflecting stable prices after a one pct increase in the previous three months the Agency said. Domestic real demand increased 0.6 pct in October/December after a one pct rise the previous quarter. Domestic demand contributed 0.5 percentage point to real GNP growth in October/December while foreign trade added 0.2. The figures do not tally exactly due to rounding. In July/September domestic demand contributed one percentage point to GNP growth while foreign trade knocked off 0.3 point. Of the 0.2 point contribution of foreign trade to GNP last quarter falling exports knocked off 0.2 while falling imports contributed 0.4 point. Total export volume fell 1.2 pct quarter on quarter in October/December. Imports also fell by 2.9 pct. Of the 0.5 point contribution of domestic demand to October/December GNP growth the private sector accounted for 0.4 point and the public sector 0.2. The private sector contribution included 0.3 point for housebuilding 0.4 for corporate capital outlays and 0.1 for stockbuilding. Consumer spending had a 0.4 negative impact. REUTER | JAPAN OCTOBER/DECEMBER GNP RISES 0.8 PCT |
<The Commonwealth Bank of Australia> said it was preparing a 500 mln dlr commercial paper facility aimed at establishing a new Australian dollar denominated paper market in Asia. Commonwealth senior manager Graham Hand told Reuters the facility was the first in a program modelled on the U.S. Commercial paper market. Hand said the bank was still putting together its dealing panel and would begin discussing the facility with potential customers in Hong Kong Singapore and Tokyo next month. It hoped to launch the facility soon afterwards he said. The paper would be investor driven with the bank gauging demand through the dealing panel which would also offer a liquid secondary market Hand said. For flexibility the bank would post yields daily to dealers on an absolute rate basis providing a range of short term maturities. The paper would be issued at a discount and guaranteed by the Australian government Hand said. REUTER | COMMONWEALTH BANK PLANS 500 MLN DLR PAPER FACILITY |
The government will find it very difficult to achieve its new gross national product (GNP) forecast of three pct growth in the fiscal year ending March 31 Economic Planning Agency officials said. They made the comment to reporters after news that GNP rose 0.8 pct in the October/December quarter after a 0.7 pct increase the previous three months. For Japan to achieve three pct growth in 1986/87 GNP in the January/March period would have to grow 2.6 pct from October/December the officials said. The government lowered its GNP forecast for 1986/87 from four pct last December. REUTER | JAPAN OFFICIALS SEE DIFFICULTY HITTING GNP TARGET |
Schlumberger Ltds <SLB.N> decision to end an agreement in principle for Fujitsu Ltd <ITSU.T> to buy 80 pct of its <Fairchild Semiconductor Corp> and the political furore that surrounded the proposed sale will make Japanese companies more cautious in their efforts to acquire U.S. High technology firms but will not halt such attempts industry analysts said. The collapse of the deal will not be a critical blow to Fujitsu but it will boost the cost of future U.S. Expansion by the Japanese firm said analysts polled by Reuters. The acquisition of Fairchild is not essential to Fujitsus North American operations but it would have been a great boost James Capel and Co analyst Tom Murtha said. French-controlled Schlumberger said yesterday it was ending the agreement because mounting political controversy in the U.S. Made it unlikely that the sale of the Fairchild stake could be completed in a reasonable time. The sale was opposed by the U.S. Commerce Department and Defence Department partly on national security grounds. Fujitsus acquisition of Fairchild would have given the Japanese computer maker control of a comprehensive North American sales and distribution system and access to microprocessor technology an area where Fujitsu is weak analysts said. The deal would also have given Fujitsu 14 additional microchip production facilities worldwide eight of them in the U.S. A report by the Capel firm said. It was an entry point a port for semiconductors and a marketing channel for other things said Barclays de Zoete Wedd analyst Rick May. Several analysts said the purchase would not have given Fujitsu access to critical defence technology. (Fairchild) simply doesnt have key technology -- thats a thing of the past May said. The failure could be a blessing in disguise for Fujitsu as it might have had to spend several hundred million dollars to modernise Fairchilds production lines Capels Murtha said. The failure of the deal will doubtless encourage Japanese firms to take a lower profile in attempts to acquire U.S. High tech firms but they are unlikely to stop analysts said. Most analysts said Fujitsu was likely to go the more costly route of expanding its own production and distribution facilities in the U.S. Although some said it could use the estimated 200 mln dlrs set aside for buying Fairchild to try to acquire some less politically symbolic firm. It may slow the pace of Japanese acquisitions but the necessity of expanding their production and design capacity in America remains said Capels Murtha. The Japanese will continue to shop for bargains but it will be harder to find ones that are politically acceptable. Japanese firms are likely to favour joint ventures or smaller equity stakes in firms to avoid the political backlash that blocked the Fairchild sale analysts said. Theyre not going to slow up theyre just going to buy smaller pieces ... Because of the political risk said Barclays de Zoetes May. Several Japanese firms have already taken 10 to 30 pct shares in smaller U.S. High technology firms such as super minicomputer makers he said. Opposition of the sort that blocked Fujitsu could end up harming U.S. Firms and undermining a trend toward multinational tie-ups some analysts said. This is not really of benefit to U.S. Firms either said Jardine Fleming (Securities) Ltd analyst Nick Edwards. The pooling of resources in semiconductors is a positive move -- why should the government step in to prevent it? Japans Minister of International Trade and Industry Hajime Tamura told a press conference that interference by U.S. Government officials in the Fairchild deal was inappropriate. This is entirely a private sector matter and not a matter for governments comment Tamura said. I think it was improper for U.S. Government officials to intervene to the extent they did he said. A spokesman told Reuters the ministrys view is that international investment flows ought to be free and that such flows are of increasing importance in line with the growing closeness of U.S.-Japanese economic ties. REUTER | FAIRCHILD DEAL FAILURE SEEN MAKING JAPANESE WARY |
The Bank of Japan will sell 300 billion yen of financing bills tomorrow under a 55-day repurchase accord maturing on May 12 money traders said. The bills are meant to soak up a projected money market surplus due largely to coupon and principle payments of a previously issued Japanese National Railways bond. The yield on the bills for sales to banks and securities houses from money houses will be 3.9497 pct against the 3.9375 pct discount rate for two-month commercial bills and the 4.43/32 pct yield on two-month certificates of deposit today. The sale will raise the bill supply to 1500 billion yen. REUTER | BANK OF JAPAN TO SELL 300 BILLION YEN IN BILLS |
Japan has complained to the secretariat of the General Agreement on Tariffs and Trade (GATT) that South Koreas five-year plan to cut its trade deficit with Japan breaks GATT rules Trade Ministry officials here said. They said Japan submitted a report earlier this month alleging South Koreas plan to import less from Japan and more from the U.S. And elsewhere was tantamount to creating non-tariff trade barriers. South Korea unveiled the plan in November. It said it hoped to narrow its trade deficit with Japan to two billion dlrs by 1991. South Koreas trade deficit with Japan was a record 5.45 billion dlrs in 1986 and rose to 752 mln dlrs in the first two months of 1987 from 727 mln in the same 1986 period. The plan envisages giving incentives to importers not to import Japanese goods and to exporters to sell more to Japan. The officials said they believed the Japanese action one step short of filing a suit was designed to bring South Korea to the negotiating table and stop the plan. The Seoul government wants Tokyo to ease various import restrictions and simplify customs inspections for South Korean goods to help reduce the trade deficit. REUTER | S.KOREA SAYS JAPAN COMPLAINS TO GATT ON TRADE PLAN |
Spot volume in the Australian foreign exchange market jumped to a record 22.63 billion dlrs a day in January from 16.18 billion in December and 8.27 billion a year earlier the Reserve Bank said in its monthly bulletin. The previous record was 17.51 billion dlrs last August. The peak broke a steady trading trend of 15 to 17 billion dlrs a day seen in the second half of 1986. Including forward deals total deliverable volume was 27.01 billion dlrs a day (13.43 billion against the Australian dollar) against 19.56 billion (8.48 billion) in December and 9.92 billion (5.88 billion) a year earlier the bank said. REUTER | AUSTRALIAN CURRENCY TRADING SET RECORD IN JANUARY |
The Agriculture Ministry is expected to reduce official intervention prices for beef and pork in 1987/88 starting in April but the cutback ratio has not been set yet industry sources said. Production prices the basis for setting intervention prices have been falling because of declining compound feed prices due to low coarse grain import prices they said. Last November an advisory panel urged the government to work on reducing officially set high farm product prices to levels closer to international values the sources added. In Japan the government maintains a price stabilisation zone system for beef and pork to support domestic producers. The stabilisation zone is kept by the semi-government Livestock Industry Promotion Corp (LIPC) through a buffer stock operation in the wholesale market. The 1987/88 beef and pork price stabilisation zone will be set by the end of March after an advisory panel to the Agriculture Ministry recommends the price zone at a meeting on March 25 ministry officials said. At present the standard or bottom price of castrated wagyu beef known as marbled beef is 1400 yen per kilo while its ceiling is 1820 they said. The standard price of other beef mainly produced from dairy steers is now 1090 yen per kilo and the ceiling is 1420 the officials said. The pork standard price is now 540 yen per kilo and the ceiling 760. They said the domestic beef intervention price influences imported beef selling prices on the domestic market. Japan sets an annual beef import quota. A semi-government body imports most of this and releases it to wholesalers or processors in line with the standard price of other beef categories in an attempt to avoid jeoparadising domestic beef prices they said. REUTER | JAPAN SEEN REDUCING BEEF, PORK INTERVENTION PRICES |
Swiss watchmaker SMH Societe Suisse de Microelectronique et dHorlogerie is issuing a 100 mln Swiss franc 10-year bond with warrants to buy participation certificates lead manager Union Bank of Switzerland said. The bond carries a 2-1/4 pct coupon and is priced at par. Subscription is from March 24 to 30. The bond can be called at par on April 15 1995 or 1996. Each 2000 franc bond carries three warrants each of which allows the purchase of one certificate of a nominal 100 francs at a price of 600 francs from June 1 1987 until November 30 1990. The certificates created in October last year closed at 570 francs today. REUTER | SMH ISSUES 100 MLN SWISS FRANC BOND WITH WARRANTS |
Danish central bank cuts overnight money market interest rate to 10.5 pct from 11 pct - official |
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Year ended January 31 Parent shr 5.73 yen vs 5.80 Div five yen vs same Net 7.01 billion vs 6.77 billion Current 24.06 billion vs 23.76 billion Operating 37.62 billion vs 45.26 billion Sales 630.08 billion vs 810.89 billion NOTE - Company forecast for current year parent div five yen net seven to eight billion current 24 billion sales 610 billion. REUTER | MITSUBISHI CHEMICAL INDUSTRIES LTD <MCIT.T> YEAR |
The Belgian governments new 150 billion franc eight pct loan has been priced at par a Finance Ministry spokesman said. The eight-year loan features a call option after four years at 102 falling to 101-1/2 after five years and by half a point each year thereafter. The conditions are the same as those on the most recent public authority loan stock issue for the state road building fund Fonds des Routes. Some 120 billion francs of the loan will be taken up by members of the issuing consortium comprising major commercial banks and the remaining 30 billion by publicly-owned credit institutions. REUTER | BELGIAN STATE LOAN PRICED AT PAR |
The Taiwan cabinet approved a record deficit budget calling for government spending of 479.67 billion Taiwan dlrs in fiscal 1987/88 starting July 1 a cabinet statement said. The budget which has been submitted to parliament for approval in May represents an increase in spending of 11 pct over the 432.06 billion dlrs budgeted for the current year. The deficit will widen by 33 pct to a record 73.97 billion dlrs from 55.6 billion in the current year. Spending on defence and foreign affairs traditionally combined will be 175.92 billion dlrs against 160.33 billion. Social affairs will receive 85.37 billion dlrs against 71.76 billion. Economic construction and communications will receive 82.68 billion against 85.49 billion and education 62.21 billion compared with 54.34 billion. Public debt repayments will rise to 23.91 billion dlrs from 17.86 billion. Central government revenue from business and personal tax and sales from the government alchohol and cigarette monopoly will be 262.52 billion dlrs 54.7 pct of the total. Income from state-owned corporations will be 99.50 billion dlrs accounting for 20.8 pct of the total. Income from sales of property and fines imposed by the government will bring in 28.59 billion dlrs 5.9 pct of the total. The 1987/88 deficit will be covered by the issue of government bonds worth 59.5 billion dlrs and a budget surplus of 13.54 billion from the current year. The cabinet allocated 16.92 billion dlrs to cover a 10 pct rise in civil service salaries. Central government revenue excluding proceeds from sales of government bonds but including the carried over current year budget surplus will rise 6.6 pct to 419.24 billion dlrs. Total capital investment by the central government local governments and state-owned corporations will increase 38 pct to 330 billion Taiwan dlrs the statement said. Capital investment covers 14 major construction projects including several coal-fired power stations highways a naphtha cracking plant and an underground railway. REUTER | TAIWAN CABINET APPROVES RECORD DEFICIT BUDGET |
New foreign shipbuilding orders received by Japanese yards in February rose to six vessels totalling 329999 gross tons from three ships of 79499 tons in January the Japan Ship Exporters Association said. This compared with six ships of 125150 gross tons a year earlier an association official said. The backlog of orders at end-February was 157 ships of 4.41 mln gross tons against 161 ships of 4.39 mln a month earlier and 265 vessels of 6.81 mln a year earlier an association official said. REUTER | JAPAN FOREIGN SHIPBUILDING ORDERS RISE IN FEBRUARY |
The Bank of England said it forecast a shortage of around 450 mln stg in the money market today. Among the main factors affecting liquidity bills maturing in official hands and the take-up of treasury bills will drain some 650 mln stg while bankers balances below target will take out around 50 mln stg. Partly offsetting these outflows exchequer transactions and a fall in note circulation will add some 200 mln stg and 50 mln stg to the system respectively. REUTER | U.K. MONEY MARKET DEFICIT FORECAST AT 450 MLN STG |
Meritor Savings Bank a U.S. Savings and loan is issuing 200 mln dlrs of collateralised eurobonds due April 14 1992 priced at 101-3/8 with a 7-1/2 pct coupon lead manager Goldman Sachs International Corp said. The issue is non-callable and is collateralised by U.S. Treasury and agency securities and cash and will be offered in targetted registered form. The bonds will be sold in denominations of 5000 and 10000 dlrs and listed in Luxembourg. Fees are 1-1/4 pct for selling and 5/8 pct for management and underwriting combined. Payment is April 14. REUTER | MERITOR SAVINGS BANK LAUNCHES 200 MLN DLR BOND |
Major tanker operator Japan Line Ltd <JLIT.T> said it will raise seven billion yen by issuing 63.66 mln shares at 110 yen each to help reduce debt and restore profitability within two years. Half of the sum raised will be returned to creditor banks which in December were asked to temporarily waive part of their loan repayments it said. The other half will be used to bolster operations hit by the yens steep appreciation and the global shipping slump the company added. MORE | JAPAN LINE FLOATS STOCK TO HELP RESTORE SOLVENCY |
Net profit 16.66 mln H.K. Dlrs vs 11.28 mln Total divs to shareholders 7.5 mln vs nil Note - Firm underwrote 23 capital market issues in 1986. Next industrial transaction in May is syndication of a 35 mln U.S. Dlr loan to the Shanghai Ta Chun Tyre Project. The company is a joint venture merchant bank between the <Bank of China> <First National Bank of Chicago> and the Industrial Bank of Japan <IBJT.T> REUTER | CCIC FINANCE LTD - YEAR TO DEC 31 |
Swedish Export Credit (SEK) has launched a novel 220 mln Australian dlr bond which will give the investor the option of receiving interest and principal in Australian dollars or marks Warburg Securities said as lead manager. The issue is a five-year bullet maturing March 26 1992 and carries a coupon of 7-1/2 pct and is priced at 101-3/4. The coupon will be paid 75 pct in Australian dlrs with the investor having the option to receive the balance in Australian dlrs or marks. Redemption at maturity is at par when 50 pct will be paid in Australian dlrs and again the investor will be able to opt for the balance in one of the two currencies. The exchange rate has been fixed at 1.24 Australian dlrs to the mark. Fees total two pct and are divided 1-3/8 pct for selling and 5/8 pct for management and underwriting combined. The bonds will be sold in denominations of 500000 Australian dlrs and listing will be in Luxembourg. Payment is March 26. The lead manager noted that the issue already has been pre-placed in Europe and the Far East. It is believed to be the largest ever issue denominated in Australian dlrs. REUTER | SWEDISH EXPORT CREDIT LAUNCHES AUSTRALIAN DLR BOND |
General Motors Acceptance Corp Canada is issuing a 100 mln Canadian dlr eurobond due October 15 1992 paying 8-1/2 pct and priced at 101-1/2 pct lead manager Union Bank of Switzerland Securities Ltd said. The bond guaranteed by parent General Motors Acceptance Corp is available in denominations of 1000 and 10000 dlrs and will be listed in Luxembourg. Payment date on the issue if April 15 1987 and the first coupon will be short. Fees for the issue comprise 1-1/4 pct selling concession and 5/8 pct for management and underwriting combined. REUTER | GMAC CANADA UNIT ISSUES CANADIAN DOLLAR BOND |
Honda Motor Co Ltd <HMC.T> said it shifted production of motorcycles with engine capacity of 700 cc and bigger for sale in the U.S. To its wholly owned subsidiary <Honda Motor of America Inc> in Ohio partly due to the yens appreciation against the dollar. A parent company spokesman said the Ohio plant which makes 360000 cars a year is now also producing 1100 cc and 1200 cc motorcycles partly for export. Motorcycle output in Ohio totalled 28000 in 1986 down 33 pct from a year earlier but the shift in production will raise production to 44000 in 1987 the spokesman said. The move to the U.S. Of large motorcycle manufacturing was also due partly to higher U.S. Tariffs for imported motorcyles bigger than 700 cc industry sources said. The U.S. Imposed tariffs on imports of large motorcycles from April 1983 starting at 49.9 pct and gradually falling to help the U.S. Motorcycle manufacturing industry to reconstruct the sources said. The tariff for U.S. Fiscal year 1987/88 is set at 14.5 pct. They said the U.S. Planned to cut the tariff to 4.4 pct for fiscal 1988/89 but that the higher level is likely to be kept for a few years due to the slow pace of reconstruction. REUTER | HONDA SHIFTS SOME MOTORCYCLE PRODUCTION TO U.S. |
The heaviest rains for seven months are believed to have saved more than one mln hectares of drought-threatened crops in southeast China the official New China News Agency said. This weeks rains have alleviated drought conditions in Guangdong Province the agency said. China has warned that this years harvest will be affected by drought in many areas. REUTER | SOUTHEAST CHINA CROPS SAVED BY HEAVY RAIN |
Zambia has stopped sending its copper exports through South Africa the official Times of Zambia said. The newspaper yesterday quoted highly placed sources as saying the state-owned Zambia Consolidated Copper Mines (ZCCM) was diverting its mineral exports away from South Africa but it did not say which alternative routes were being used. ZCCM officials declined to comment on the report but Standwell Mapara general manager of the Tanzania-Zambia Railway Authority (TAZARA) told Reuters recently virtually all Zambian mineral exports had been channelled along the TAZARA line to Dar es Salaam for the last three months. During that period no Zambian copper had been shipped through Zimbabwe to the Mozambican port of Beira - the only other available route which avoids South Africa Mapara said. Last December TAZARA carried 36000 tonnes of Zambian mineral ore the lines record for any one month period he added. Copper cobalt and other mineral exports account for 95 to 98 pct of Zambias foreign exchange earnings and President Kenneth Kaunda told Reuters in a recent interview it was vital for his country to assure new outlets for them avoiding the traditional route through South Africa. Referring to Zambias preparations for a possible cut in economic links with South Africa Kaunda told Reuters in an interview on March 1 My main concern of course is the mines because whatever happens we must continue to run the mines. According to Mapara TAZARA handled 1.1 mln tonnes of freight last year and is still working well below its present 1.4 mln capacity. Kaunda said that once preparations had been completed for evacuating Zambias mineral exports on safe and dependable routes his government would look to increase its usage of TAZARA for other types of cargo. The 1986 annual report of Zambias state-run Metal Marketing Corporation said 81 pct of the countrys metal exports were channelled through Dar es Salaam last year versus 79 pct in 1985. The report said Zambian copper production fell to 463000 tonnes last year from 526000 in 1985. Despite the official optimism about diversifying Zambias export routes diplomatic sources in Lusaka expressed reservations about the capacity of Dar es Salaam and Beira ports to handle all of Zambias mineral exports even if they could be hauled there by train. The two ports cannot in any way and in their present form handle the huge exports of Zambian copper one western diplomat said. A serious disruption in copper movement to the markets could be brought about as it would pile up at the two ports which lack the facilities and space to handle the copper tonnage he added. REUTER | ZAMBIA STOPS SENDING COPPER THROUGH SOUTH AFRICA |
Mitsubishi Heavy Industries Ltd <MITH.T> and Mitsui and Co Ltd <MITS.T> are likely to win an order for oil-related equipment worth about 600 mln yen this week from a Hungarian company trading in equipment for the chemical industry sources in the industry said. The equipment developed by Royal Dutch/Shell Group <RD.AS> removes water from carbonic acid gas which is injected into oil wells to increase oil production. The sources said the Hungarian company Chemokomplex has asked the World Bank for money to buy the equipment. Hungary gets 90 pct of its crude oil from the Soviet Union. REUTER | JAPAN FIRMS SEEK OIL EQUIPMENT DEAL WITH HUNGARY |
<Nissho Iwai Corp> proposes to install a transport system built by Westinghouse Electric Corp <WX> of the U.S. In Japans six billion dlr offshore airport at Osaka western Japan a Nissho Iwai spokesman said. It also proposed <Chiyoda Chemical Engineering and Construction Co> and <Hitachi Zosen Corp> install the unmanned system which will transport people between terminals. He would not confirm a local report which said the system would cost about 30 mln dlrs. The proposal is one of several being considered. The U.S. Europe and South Korea are pushing hard for greater foreign participation. REUTER | NISSHO IWAI PROPOSES WESTINGHOUSE FOR AIRPORT |
Inflation in the 24 industrialised nations of the Organisation for Economic Cooperation and Development was 2.1 pct in the year to January unchanged from December the OECD said. But monthly inflation throughout the OECD was an average 0.4 pct in January a rise compared to the 0.2 pct in the last quarter. Retail energy prices rose strongly in January reflecting the firming of world oil prices. For OECD states the increase was 0.7 pct but the January level of retail energy prices was still 11.6 pct lower than a year earlier the OECD said. The increase in consumer prices excluding food and energy at 0.4 pct in January for the whole OECD area was unchanged on the four previous months but over the year to January OECD consumer prices rose by 3.5 pct against 3.3 pct in December. Unadjusted annual inflation for the seven leading industrialised nations in January was running at 4.4 pct in Italy 3.9 pct in Britain and Canada three pct in France 1.4 pct in the U.S. Minus 0.8 pct in West Germany and minus 1.5 pct in Japan the OECD said. REUTER | OECD JANUARY ANNUAL INFLATION STEADY AT 2.1 PCT |
Toronto Dominion Bank is issuing a 20 billion yen eurobond due April 6 1992 with a 4-5/8 pct coupon and priced at 101-5/8 lead manager Nomura International Ltd said. The bonds will be listed in London and will be issued in denominations of one mln yen. Fees consist of 5/8 pct for management and underwriting including a 20 basis point praecipuum and 1-1/4 pct for selling. Pay date is April 6. REUTER | TORONTO DOMINION ISSUES 20 BILLION YEN EUROBOND |
The Stock Exchange of Singapore has decided to discontinue a 150 mln dlr standby credit facility for broking firms facing financial problems because of the failure of Pan-Electric Industries Ltd an exchange statement said. The credit line from four local banks was set up on December 3 1985 to bail out firms involved in forward contracts with Pan-Electric which went into receivership in November 1985 owing 390 mln dlrs. The company was wound up last year. Local broking houses have been contributing a 0.125 pct levy on share transactions to the scheme but will no longer do so the statement said. REUTER | SINGAPORE ENDS SCHEME TO HELP BROKING FIRMS |
Further talks will be held this morning at Cargill U.K. Ltds oilseed processing plant at Seaforth after yesterdays meeting between management and unions failed to produce a solution to end the three month old strike a company spokesman said. Talks will be extended to tomorrow if there is no breakthrough in todays session he said. REUTER | CARGILL STRIKE TALKS CONTINUING TODAY |
Fuerzas Electricas de Catalunya (FECSA) suspended repayments of principal on its debts in order to start renegotiating its obligations with banks next month a company spokesman said. He said the decision did not affect payment of interest on loans and debentures. FECSA faces repayments of 60 billion pesetas in interest and 30 billion pesetas in principal this year. The Madrid stock exchange suspended trading in FECSA shares on February 6 saying the company was unable to meet payments on its 594 billion peseta debt. Foreign banks hold almost half the debt. The spokesman said FECSA was sending telexes to its creditors to set dates for the renegotiation. It would seek longer repayment deadlines and lower interest rates. He said banks had insisted on a formal declaration that FECSA was suspending principal repayments before discussing a renegotiation of its debts. REUTER | SPAIN'S FECSA SUSPENDS PRINCIPAL REPAYMENTS |
Indonesian sugar output is forecast by the government to reach 2.126 mln tonnes in calendar 1987 against projected consumption of 2.039 mln tonnes Agriculture Minister Achmad Affandi said. Production in 1986 when Indonesia was forced to import sugar is officially estimated at 2.016 mln tonnes against 1.728 mln in 1985. The U.S. Embassy said in its annual Agriculture Report on Indonesia there were growing signs that actual output was lower than official figures. It estimated 1986 production at 1.8 mln tonnes and forecast little change for 1987. Indonesia imported 162000 tonnes of sugar towards the end of last year and in early 1987 to boost low stocks. Affandi told reporters stocks fel to as low as 159000 tonnes at the beginning of 1987. Industry sources said this represented under one months consumption. The minister said Indonesia should hold three months supply or 510000 tonnes. A spokesman for the National Logistics Bureau which distributes and stores sugar said stocks this month were 489437 tonnes. The harvesting season begins in April. REUTER | INDONESIAN SUGAR OUTPUT FORECAST TO RISE IN 1987 |
Taiwans central bank issued 12 billion Taiwan dlrs worth of certificates of deposit after issuing six billion yesterday bringing CD issues so far this year to 115.47 billion dlrs a bank official told Reuters. The new CDs have maturities of six months one year and two years and bear interest rates ranging from 4.07 pct to 5.12 pct he said. The issues are aimed at helping curb the growth of M-1b money supply which is the result of large foreign exchange reserves. The reserves now total more than 51 billion U.S. Dlrs. REUTER | TAIWAN ISSUES MORE CERTIFICATES OF DEPOSIT |
The European Investment Bank said it was advancing loans to Italy worth a total of 318.5 billion European Currency Units equivalent to 460.6 billion lire to finance transport industry and infrastructure projects. It said 40 billion lire will go to state airline Alitalia for the purchase of 10 McDonnell Douglas Corp <MD.N> MD82 aircraft. A further 14 billion lire loan will be made to the internal Italian airline Alisarda for the purchase of one MD82 and the improvement of an airport on the island of Sardinia. The bank said among the other loans was one of 40 billion lire to Ing C. Olivetti SpA <OLIV.MI> unit Olivetti Peripheral Equipment SpA. The money will help to enlarge a factory which produces data processing equipment in the Piedmont region. The bank gave no details of the interest rates and other terms for the loans. This is in accordance with its normal policy. REUTER | EIB LOANS TO ITALY FOR INDUSTRY AND TRANSPORT |
FRENCH JANUARY PAYMENTS SURPLUS 0.3 BILLION FRANCS (3.8 BILLION DECEMBER SURPLUS)-OFFICIAL |
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The wholesale price index rose 1.1 pct month-on-month in January 1987 after increasing by 0.3 pct in December 1986 the national statistics institute Istat said. The index base 1980 equals 100 registered 172.8 in January compared with 170.9 in December. The January 1987 figure represents a fall over January 1986 of 1.7 pct after a year-on-year decrease in December 1986 of 2.5 pct. REUTER | ITALIAN WHOLESALE PRICES UP 1.1 PCT IN JANUARY |
The European Community cereal trade lobby Coceral has written to Farm Commissioner Frans Andriessen asking for talks on ways of preventing their members losing money as a result of future realignments of currencies in the European Monetary System. In the text of a letter made available to journalists Coceral says some members suffered considerable losses on contracts entered into just before the last realignment in January. This was because of an unforeseeable increase in monetary compensatory amounts (MCAs) for some member states it says. Coceral estimates losses sustained by West German traders who are its members at 8.05 mln marks. It says Andriessen should work out new regulations to prevent a repetition of such losses as a result of future realignments. A Coceral spokesman said problems had arisen when traders importing cereals from weak currency countries into those with strong currencies bought the weak currencies with which they were to pay for the cereals forward. REUTER | CEREAL TRADERS SEEK TALKS WITH ANDRIESSEN ON EMS |
Taiwans central bank is considering proposals to ease currency restrictions to reduce foreign exchange reserves of 51 billion U.S. Dlrs a local newspaper reported today. The China Times which has close ties with the government quoted central bank governor Chang Chi-cheng as saying the government had agreed in principle to liberalise financial restrictions. The bank was considering proposals to allow firms and individuals to hold foreign exchange and invest in foreign stocks for the first time Chang was quoted as saying. All foreign exchange must now be handed to local banks and exchanged for local currency. Firms and individuals may only invest in foreign government bonds treasury bills and certificates of deposit. Central bank and other government officials were not available to comment on the report. Economists said it was likely that the government would ease foreign exchange controls but only gradually. They said vast foreign currency reserves earned mainly from huge trade surpluses with the United States made Taiwan a target for U.S. Protectionism. Taiwans trade surplus with the U.S. Rose to 13.6 billion U.S. Dlrs last year compared with 10.2 billion in 1985. The central bank has to go in this direction said Su Han-min chief economist with the International Commercial Bank of China. If they dont quicken the pace Washington could retaliate and really damage Taiwan. REUTER | TAIWAN SAID CONSIDERING CURRENCY LIBERALISATION |
Frances current account payments surplus slipped to a provisional 300 mln francs seasonally adjusted in January from a downward revised surplus of 3.8 billion in December the Finance Ministry said. The December figure was revised from a provisional 4.8 billion franc surplus reported a month ago. On an unadjusted basis January payments showed a 5.2 billion franc deficit after a revised 7.1 billion December surplus. The December unadjusted surplus was revised down from a provisional 8.2 billion. The Ministry said trade measured on balance of payments criteria showed an unadjusted 7.1 billion franc January deficit while services showed a 3.7 billion surplus. Other items mainly including unilateral transfers showed a 1.8 billion deficit. The current account showed an adjusted surplus of 6.1 billion francs in January last year and an unadjusted deficit of one billion. The full year 1986 current account surplus was reported last month at 25.8 billion francs. REUTER | FRENCH PAYMENTS SURPLUS SHRINKS IN JANUARY |
Kobeya Baking Co Ltd is planning a private placement of 10 mln Swiss franc notes paying 4-5/8 pct and priced at 100-1/8 pct lead manager The Long Term Credit Bank of Japan (Schweiz) AG said. The notes due March 31 1992 will be guaranteed by the Sumitomo Trust and Banking Co Ltd and the Sumitomo Bank Ltd. The notes may be redeemed on September 30 1989 at 101-1/4 pct declining by 1/2 pct per annum thereafter. Denominations will be 50000 francs and payment is due March 31. REUTER | KOBEYA BAKING HAS SWISS FRANC PRIVATE PLACEMENT |
U.K. FEB PSBR REPAYMENT 300 MLN STG, 11 MONTH REQUIREMENT 100 MLN - OFFICIAL. |
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U.K. JAN INDUSTRIAL OUTPUT RISES 0.4 PCT, MANUFACTURING DOWN 2.3 PCT - OFFICIAL |
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Britains Public Sector Borrowing Requirement (PSBR) showed a provisional net repayment of 300 mln stg in February compared with an unrevised 3.7 billion stg repayment in January the Treasury said. This gives a cumulative PSBR in the first 11 months of the current fiscal year of 100 mln stg compared with a 2.7 billion requirement in the like period last year. The governments forecast for the PSBR in fiscal 1986/87 is 7.1 billion stg but markets expect a significant undershoot on this number. The February data was within market forecasts. The Central Government Borrowing Requirement on its own account in February was a net repayment of 100 mln stg after a unrevised net repayment of 3.4 billion stg in January. In the first 11 months the central government borrowing on its own account was 2.3 billion stg after 2.1 billion in January. Local Authorities made a repayment estimated at 100 mln stg in February. The cumulative local authorities repayment for the first 11 months was 700 mln. The Treasury said the fall about 2.5 billion stg in the cumulative PSBR at this point this year over last was largely due to lower public corporation and local authority borrowing. This was also the case last month it said. The Public Corporations Borrowing Requirement is estimated at minus 400 mln stg to give a cumulative repayment of 1.4 billion stg. The local authority and public sector surplus on the 11 months cumulative basis was 2.1 billion compared with a flat position at the same stage last year. The Treasury said that the proceeds from privatisation of <British Airways Plc> reduced requirements by 400 mln stg. The Treasury said the General Government Borrowing Requirement is estimated to be a net repayment of 100 mln stg in February giving a cumulative requirement of 1.1 billion. Consolidated fund revenue was 8.8 billion stg in February giving a cumulative total of 101.4 billion in the first 11 months 4.5 pct up from the like stage last year. Inland Revenue Receipts for the first 11 months were 1.8 billion stg or 3.5 pct higher than a year earlier. Receipts from Customs and Excise were 3.5 billion stg in the first 11 months 10.5 pct higher than in the previous year. The Treasury said that budget forestalling when traders bring in goods in advance of todays annual budget brought in 300 mln stg more in customs and excise receipts than in February 1986. Consolidated fund expenditure was 8.4 billion stg in February with a cumulative 102.5 billion for the first 11 months four pct higher than in the previous year. Supply expenditure was provisionally estimated at 8.3 billion stg in February giving a cumulative total of 91.2 billion or three pct above last years equivalent total. REUTER | U.K. FEBRUARY PSBR REPAYMENT 300 MLN STG |
Maize deliveries to Zimbabwes state-owned Grain Marketing Board (GMB) will fall by over 65 pct this year following a prolonged dry spell agricultural industry sources said. They said 1987 maize deliveries are expected to decline to around 520000 tonnes from 1.6 mln tonnes last year. About 60 pct of the maize will be delivered by large-scale commercial farmers and the balance by small-scale peasant producers. Although this will be the lowest level of maize deliveries since 1980 the sources said there is no danger of a food shortage in Zimbabwe. While annual maize consumption is estimated at 750000 tonnes the GMB stockpile is currently around 1.8 mln tonnes which means that even with the sharply reduced production this year Zimbabwe has enough maize for the next three years. The sources said the lower maize crop would be offset by a 25 pct increase in cotton production to 315000 tonnes from 248000 tonnes last year and by a rise of 20 pct in soybean deliveries to 100000 tonnes from 84000 tonnes in 1986. REUTER | ZIMBABWE MAIZE OUTPUT TO FALL 65 PCT |
U.K. Industrial production rose a provisional 0.4 pct in January after a 0.6 pct decline in December 1986 figures from the Central Statistical Office show. The index for industrial production base 1980 was set at a seasonally adjusted 109.8 in January after Decembers 109.4 and compared with 108.2 a year earlier. Output of manufacturing industries fell a provisional 2.3 pct in January after a 0.2 pct rise last December. The index for manufacturing base 1980 fell to 103.9 from 106.3 and compared with 102.3 a year earlier. The CSO said industrial production in the three months to January was provisionally estimated to have fallen by 0.7 pct from the level of the previous three months while manufacturing output rose by 0.5 pct in the same period. In the three months industrial production was 1.5 pct higher than in the same period a year earlier while manufacturing output was two pct higher. Within manufacturing output of the metals industry rose by six pct and that of engineering and allied industries by one pct between the two latest three month periods. Output of chemicals and textiles fell by one pct and minerals by two pct. The Office said output of the investment goods industries rose 0.1 pct while consumer goods output increased 0.6 pct. Output of intermediate goods fell 1.6 pct between the two latest three-month periods. The figures showed the energy production index base 1980 rose 7.2 pct in January to 126.4 from Decembers 117.9 and from 124.6 in January 1986. In the latest three months the energy index which comprises oil natural gas and coal production was down 3.5 pct on the previous quarter and 0.5 pct below the same period a year earlier. REUTER | U.K. INDUSTRIAL OUTPUT RISES IN JANUARY |
Zimbabwes real gross domestic product increased 0.2 pct in 1986 according to preliminary figures published by the Central Statistical Office (CSO). This contrasts with a rise of more than nine pct in 1985. The main reason for the slower rate of economic growth was a drop in the real value of agricultural output. This declined 12 pct in 1986 following a 24 pct improvement the previous year. Mining output fell one pct in 1986 but manufacturing production increased 1.4 pct. The CSO said that at current prices GDP rose 12.7 pct to 8.2 billion Zimbabwe dlrs but inflation measured by the GDP deflator was estimated at 12.2 pct so there was virtually no growth in real output during 1986. REUTER | ZIMBABWE GDP RISES 0.2 PCT IN 1986 |
Japanese officials sought to convince the U.S. That a U.S.-Japan pact on microchip trade is working ahead of an April 1 deadline set by the U.S. For them to prove their case. We are implementing the agreement in good faith and the situation does not run counter to the pact Osamu Watanabe Director of the Ministry of International Trade and Industrys (MITI) Americas and Oceanic Division told foreign reporters. The effects of the measures we have taken and are taking are emerging in the market place he said. U.S. Trade officials have repeatedly accused Japanese microchip makers of violating the pact by continuing to sell at below cost in markets outside Japan and the United States. The agreement signed last September aimed at halting predatory Japanese pricing policies and increasing U.S. Semiconductor firms access to the Japanese market. The comments by MITI officials followed a call by Prime Minsiter Yasuhiro Nakasone to clear up any misunderstandings on the U.S. Side about the pact Watanabe said. Yukio Honda director of MITIs Industrial Electronics Division denied that Japanese chipmakers were selling at below cost in third countries. MITIs call to Japanese chip makers last month to cut production of key memory chips in the first quarter of this year has begun to dry up the source of cheap chips for sale in the non-regulated grey market Honda said. The grey market exports from Japan are shrinking now but in contrast U.S. And South Korean companies are expanding market share because of their cheaper prices Honda said. MITI plans to take further steps to reduce the excess supply of inexpensive chips which developed in Japan after the pact was formed because of a slump in Japanese semiconductor exports to the United States he added. The ministry will soon release its supply-demand guidelines for the second quarter and suggested production volumes are likely to be lower than that for the first quarter he said. Despite businessmens ingenuity in finding ways around any artificial controls regulation of supply and demand should bring positive results Watanabe said. I am optimistic he added. REUTER | JAPAN SAYS U.S.-JAPAN MICROCHIP PACT WORKING |
Bankers in Saudi Arabia are negotiating a delicate balance between western business practice and oriental justice as they try to restructure the troubled corporate sectors debt. The problem lies in reconciling Saudi Arabias western-style banking system and an Islamic Sharia legal system in which interest payments may be viewed as usury and illegal. So Saudi Arabias 11 commercial banks have pinned hopes on negotiated settlements rather than enforced ones and are resigned to not being able to recoup loans in full. And they have become highly selective over enterprises eligible for new credit after a run of failures that forced heavy loan loss provisions and ate relentlessly into profits. As a result they have attracted complaints from a business community that says it is starved of funds while the government is criticising it for not playing a larger role in the economy. The private sectors downturn began in earnest in 1983 as oil prices slid and some companies were slow to react businessmen said. Bloated inventories and in some cases poor management created problems. Some also blamed the government for not paying for public sector contracts promptly. Long negotiations to reschedule some debt are now producing results. One banker said Banks are agreeing reschedulings but often at a high price... They are resigned to the fact that full recovery (of loans) is not always possible. In a few cases private sector firms have been stripped of assets during or prior to debt renegotiations leaving banks virtually no hope of repayment in full. The first major rescheduling was not sealed until mid-February this year when <Arabian Auto Agency> known as AAA reached agreement to stretch out repayments of 700 mln riyals of debt to some 50 Saudi and international banks. Bankers said the deal for the Jeddah-based heavy equipment importer is likely to set a precedent for the private sector. It was greeted with relief after 18 months of negotiations. AAAs rescheduling has been followed in the last few days by a draft accord on the 1.3 billion riyal debt of one of the Kingdoms most publicised companies <Saudi Research and Development Corp> REDEC. These two cases have raised hopes that other companies will also reach agreement soon. Bankers said the cement importer <Arabian Bulk Trade> and the construction and trading firm <Ali and Fahd Shobokshi Group> are still negotiating with creditor banks. They are increasingly resigned to there being little legal recourse in Saudi Arabia and that rescheduling with payments geared to a companys cash-flow -- often very low -- is the only way to recover at least a portion of outstanding loans. Though bankers feel they generally have the tacit backing of the Saudi Arabian Monetary Agency (SAMA) the Kingdoms central bank some say it should take a more active role. However bankers said it is encouraging SAMA has not blocked a black list of borrowers banks have drawn up and circulated for over a year. Bankers said the AAA accord negotiated by a committee led by <Saudi British Bank> is a likely model in that banks have not insisted on full repayment of all obligations. Sixty pct of the debt will be repaid in monthly instalments over seven years at 1/4 point over Bahrain interbank offered rates (BIBOR). The remaining 40 pct is only to be paid after completion of the first tranche also at 1/4 over BIBOR. And accrued interest on the 40 pct will be waived as long as the first tranche is met in full. As one banker put it Many banks took the view it was better to get some money back rather than none at all. REUTER | ECONOMIC SPOTLIGHT - SAUDI CORPORATE DEBT |
Norways parliament has approved an extensive trade ban against South Africa but left shipowners a key loophole through which controversial oil shipments on Norwegian tankers may continue government officials said. The unilateral boycott gives domestic companies until late September to cut trade ties with South Africa and Namibia. Although forbidding crude oil shipments to South Africa on Norwegian-owned tankers the boycott makes a crucial exception for ships whose final destination is decided while at sea. As oil cargoes are often resold after loading critics said the door will be left open for continued shipments to South Africa. Norwegian tankers supplied South Africa with about 30 pct of its crude oil imports during the early 1980s but the trade has dropped sharply to just one cargo in the last three months trade ministry officials said. The latest trade figures show Norwegian imports from South Africa dropped 36 pct to 160 mln crowns during the first eight months of 1986 while exports plunged 52 pct to 265 mln crowns from the year-ago figure. The boycott legislation now goes to the upper house for formal ratification later this week parliamentarians said. REUTER | LOOPHOLE FOR TANKERS IN NORWAY'S S. AFRICA BAN |
The Bank of Japan will sell 300 billion yen of financing bills tomorrow under a 55-day repurchase accord maturing on May 12 money traders said. The bills are meant to soak up a projected money market surplus due largely to coupon and principle payments of a previously issued Japanese National Railways bond. The yield on the bills for sales to banks and securities houses from money houses will be 3.9497 pct against the 3.9375 pct discount rate for two-month commercial bills and the 4.43/32 pct yield on two-month certificates of deposit today. The sale will raise the bill supply to 1500 billion yen. REUTER | BANK OF JAPAN TO SELL 300 BILLION YEN IN BILLS |
Hanson Trust Plc <HNSN.L> said it will sell its Finlays confectionery tobacco and newsagent business to a specially formed company <Finlays Plc> for an estimated 16.9 mln stg cash. The chain of stores was acquired when Hanson took over <Imperial Group Plc> last year. REUTER | HANSON SELLS FINLAYS UNIT FOR 16.9 MLN STG |
General Motors Acceptance Corp Canada is issuing a 100 mln Canadian dlr eurobond due October 15 1992 paying 8-1/2 pct and priced at 101-1/2 pct lead manager Union Bank of Switzerland Securities Ltd said. The bond guaranteed by parent General Motors Acceptance Corp is available in denominations of 1000 and 10000 dlrs and will be listed in Luxembourg. Payment date on the issue if April 15 1987 and the first coupon will be short. Fees for the issue comprise 1-1/4 pct selling concession and 5/8 pct for management and underwriting combined. REUTER | GMAC CANADA UNIT ISSUES CANADIAN DOLLAR BOND |
Toronto Dominion Bank is issuing a 20 billion yen eurobond due April 6 1992 with a 4-5/8 pct coupon and priced at 101-5/8 lead manager Nomura International Ltd said. The bonds will be listed in London and will be issued in denominations of one mln yen. Fees consist of 5/8 pct for management and underwriting including a 20 basis point praecipuum and 1-1/4 pct for selling. Pay date is April 6. REUTER | TORONTO DOMINION ISSUES 20 BILLION YEN EUROBOND |
Strikes against a government freeze on wages spread to most regions of Yugoslavia last week the official news agency Tanjug said last night. It said thousands of workers were involved and officials feared more strikes were on the way. At least 60 strikes have taken place around Yugoslavia in the past two weeks but most of those previously reported were in the northern republic of Croatia. Prime Minister Branko Mikulic imposed the wage freeze last month in an effort to curb rampant inflation now running at an annual rate of almost 100 pct. The government froze wages at their level in the fourth quarter of 1986 and said any future rises must be linked to productivity. The measure met widespread disapproval. Even some senior executives of major industrial enterprises have criticised the freeze in interviews with Tanjug. The agency said strikes took place last week in the southern republic of Montenegro and the predominantly ethnic Albanian province of Kosovo. In the central republic of Bosnia and Hercegovina 1700 workers struck while many teachers in Belgrade refused to take their paychecks. Reuter | STRIKES AGAINST WAGE FREEZE SPREAD IN YUGOSLAVIA |
Underlying dollar sentiment is bearish and operators may push the currency to a new low unless Japan takes steps to stimulate its economy as pledged in the Paris accord foreign exchange analysts polled by Reuters said here. The dollar is expected to try its psychological barrier of 150.00 yen and to fall even below that level a senior dealer at one leading bank said. The dollar has eased this week but remains stable at around 151.50 yen. Six major industrial countries agreed at a meeting in Paris in February to foster currency stability. Some dealers said the dollar may decline in the long term but a drastic fall is unlikely because of U.S. Fears of renewed inflation and fears of reduced Japanese purchases of U.S. Treasury securities needed to finance the U.S. Deficit. Dealers generally doubted whether any economic package Japan could adopt soon would be effective enough to reduce its trade surplus significantly and said such measures would probably invite further U.S. Steps to weaken the dollar. Under the Paris accord Tokyo promised a package of measures after the fiscal 1987 budget was passed to boost domestic demand increase imports and cut its trade surplus. But debate on the budget has been delayed by an opposition boycott of Parliamentary business over the proposed imposition of a five pct sales tax and the government has only a slim chance of producing a meaningful economic package in the near future the dealers said. If no such steps are taken protectionist sentiment in the U.S. Congress will grow putting greater downward pressure on the dollar they said. The factors affecting the U.S. Currency have not changed since before the Paris accord they added. Underlying sentiment for the dollar remains bearish due to a still-sluggish U.S. Economic outlook the international debt crisis triggered by Brazils unilateral suspension of interest payments on its foreign debts and the reduced clout of the Reagan administration as a result of the Iran/Contra arms scandal said a senior dealer at a leading trust bank. There is a possibility that the dollar may decline to around 140.00 yen by the end of this year said Chemical Bank Tokyo branch vice president Yukuo Takahashi. But operators find it hard to push the dollar either way for fear of possible concerted central bank intervention. Dealers said there were widespread rumours that the U.S. Federal Reserve telephoned some banks in New York to ask for quotes last Wednesday and even intervened to sell the dollar when it rose to 1.87 marks. The Bank of England also apparently sold sterling in London when it neared 1.60 dlrs on Wednesday they said. But other dealers said they doubted the efficacy of central bank intervention saying it may stimulate the dollars decline because many dealers are likely to await such dollar buying intervention as a chance to sell dollars. However First National Bank of Chicago Tokyo Branch assistant manager Hiroshi Mochizuki said The dollar will not show drastic movement at least to the end of March. Other dealers said the U.S. Seems unwilling to see any strong dollar swing until Japanese companies close their books for the fiscal year ending on March 31 because a weak dollar would give Japanese institutional investors paper losses on their foreign holdings which could make them lose interest in purchases of U.S. Treasury securities. U.S. Monetary officials may refrain from making any comments this month to avoid influencing rates they said. REUTER | DOLLAR SEEN FALLING UNLESS JAPAN SPURS ECONOMY |
Orion Royal Bank has decided to withdraw from making markets in floating rate notes (FRNs) an official of Orion said. He said the decision to withdraw was made about 11 days ago before the market was battered by a loss of confidence which resulted in sizeable losses in these securities. The official who declined to be identified said Orion the merchant banking arm of Royal Bank of Canada had operated profitably in the market from 1984 to date. However the decline in the market made it appear that they could no longer justify the overhead. The official said Orion would redeploy the three traders who had been in the FRN sector mostly to their Euro-commercial paper operation an area the bank believes has a greater growth potential. Officials at several other firms who also declined to be identified said they were reviewing their position to decide whether to continue making markets in FRNs. In trading earlier today traders said prices of several dated FRNs had firmed slightly and that some buyers were beginning to re-enter the market. REUTER | ORION ROYAL WITHDRAWS FROM FRN MARKET |
The World Bank is expected to approve a 310 mln dlr economic recovery loan for the Philippines at a meeting of its executive board today in Washington Central Bank sources said. The sources said the loan agreed upon in principle last September during a visit to the United States by President Corazon Aquino had been held up by Philippine government delays in fulfilling key conditions. They said the documents required by the World Bank were not submitted by Manila until late February. The sources said the loan is needed to rehabilitate the the state-owned Philippine National Bank (PNB) and the Development Bank of the Philippines (DBP) which together are burdened with seven billion dlrs of non-performing assets. They said the World Bank had insisted the two banks appoint independent auditors and draft revised charters. It also laid down several conditions for an Asset Privatisation Trust (APT) planned by the government to dispose of the banks unproductive assets the sources said. The APT set up in January is headed by banker and businessman David SyCip. The sources said the World Bank wanted respected private sector individuals to be appointed to the APT and immunity from prosecution for the trust. It wanted a clause saying buyers of non-performing assets could not be prosecuted. The Manila Standard newspaper quoted Rolando Arrivillaga World Bank representative in the Philippines as saying the loan would be in three 100 mln dlr tranches. The first tranche would be available late this month or in early April. Arrivillaga said the remaining 10 mln dlrs was in the form of technical assistance available for disbursement during a 36-month period. Finance Secretary Jaime Ongpin has said approval of the loan will trigger another 300 mln dlr loan expected from the Export-Import Bank of Japan. The Central Bank sources said negotiations would start in April on another 150 mln dlr loan from the World Bank to implement reforms in the government corporate sector. The sources said the World Bank is expected to approve the loan by August after a review of the governments non-financial institutions. The governments 14 major corporations rely heavily on budgetary support to supplement external borrowing to meet their yearly revenue shortfalls. REUTER | WORLD BANK EXPECTED TO APPROVE PHILIPPINES LOAN |
The Bank of England said it did not operate in the money market in the morning session. Earlier the central bank had estimated the deficit in the system today at some 450 mln stg. REUTER | U.K. MONEY MARKET RECEIVES NO MORNING ASSISTANCE |
Finance Minister Kiichi Miyazawa said he had no intention of modifying at the moment a proposed bill introducing a sales tax. Parliamentary deliberation must be conducted fully before we see whether to revise it or not Miyazawa told reporters. He also said he had not heard anything about Deputy Premier Shin Kanemaru suggesting modification of the tax. The Japanese press has reported that Kanemaru proposed yesterday a freeze or a modification of the value-added tax as he saw growing public opposition. Debate on the sales tax has been stalled by a sporadic opposition boycott over their objections to the tax. Miyazawa said he did not expect the bill to be altered even after Parliament completes its deliberations. He also said the Government is undecided on the scale of a proposed provisional budget for fiscal 1987 beginning on April 1. The minister declined to comment on wide-spread press speculation that the stop-gap budget would total more than 1000 billion yen. Reuter | MIYAZAWA SAYS NO INTENTION TO ALTER SALES TAX BILL |
U.S.-backed Contra rebels tried to blow up an electricity pylon supplying a Managua industrial zone in what Western diplomats say was the rebels first sabotage attack in the Nicaraguan capital. An Interior Ministry statement said power supplies were not affected by the blast which slightly damaged the tower. No injuries were reported. Residents near the site of the blast told reporters the rebels also scattered leaflets in the area encouraging rebellion against the Sandinista government. REUTER | CONTRAS CARRY OUT FIRST RAID IN NICARAGUAN CAPITAL |
West German President Richard von Weizsaecker said both debtor and creditor nations share responsibility for the Third Worlds foreign debt crisis. Weizsaecker in a speech on the first day of an official visit to Argentina said: Debtor and creditor countries have created this situation jointly. They also share responsibility for finding lasting solutions. Local officials have payed great importance to Weizsaeckers visit because they consider him a key backer of more flexible repayment terms for Argentinas 51 billion dlr foreign debt Latin Americas third largest. Weizsaecker speaking at a reception held for him by President Raul Alfonsin at Buenos Aires City Council hall also said no one could overlook the enormity of the obstacle posed by the foreign debt to countries like Argentina. Democracy in Latin America must not be endangered because of misery or new injustices he said. Argentine officials said they might halt debt payments last month if creditor banks did not agree to a new 2.15 billion dlr loan. An Argentine mission is now in the U.S. For talks with 11 banks seeking to win an easing of repayment terms and secure the loan. Weizsaecker said Argentina has had difficulties with the European Community over trade barriers and subsidies for grain exports. We are making efforts to eliminate them with the help of balanced interest from all parties he said. Argentina has said the barriers and subsidies cut unfairly into the countrys traditional markets for its grain exports. Weizsaecker arrived for a four-day visit opening a Latin American tour which includes Bolivia and Guatemala. He held brief talks on Sunday with Brazilian President Jose Sarney during a stopover in Brasilia. REUTER | CREDITORS/DEBTORS SHARE RESPONSIBILITY-WEIZSAECKER |
Sweden is recalculating the January inflation rate which showed a sharp 1.3 pct rise in the cost of living to check if the figures were overstated a Central Bureau of Statistics spokesman said. Rumours the figure had been overstated by 0.3 pct due to a statistical error sent bond prices soaring on the domestic credit market today. The head of the Bureaus consumer price index unit Hugo Johannesson told Reuters We are extremely busy at the moment recalculating the January figures and I think the best thing is for us to be allowed to get on with it. REUTER | SWEDEN RECHECKS JANUARY INFLATION RATE |
A Cypriot tanker was set ablaze in the Persian Gulf yesterday after an Iranian gunboat fired missiles at it shipping sources quoting reports from Japanese tankers said today. No casualties were seen and the tanker Pivot laden with crude oil was towed towards Dubai by tugs after they put out the fire the sources said. Iranian gunboats usually check a ships nationality and cargo before attacking but the Pivot was hit near Bu Musa island without warning they added. Reuter | IRAN SAID TO ATTACK CYPRIOT TANKER |
Production of a four-megabit superchip developed jointly by Siemens AG <SIEG.F> and NV Philips Gloeilampenfabrieken <PGLO.AS> could start by late 1988 or early 1989 West German Technology Minister Heinz Riesenhuber told a news conference. We have caught up (with) our competitors a Technology Ministry spokeswoman said. Now its a question of who will be first to produce it and we are in with a good chance. Companies in the United States and Japan say they already have a prototype but have not yet reached the production stage. Siemens and Philips together with the West German and Dutch governments have invested a total of 1.4 billion marks in researching and developing the chip. Representatives of the two companies said the sophisticated technology could be used to produce cheaper medical diagnosis instruments and to regulate car fuel consumption and emissions. REUTER | EUROPEAN SUPERCHIP PRODUCTION COULD START IN 1988 |
<Billiton International Metals B.V.> the Dutch mining company has urged Surinam to change policies it says are causing heavy losses on bauxite mining operations there a company spokesman said. He told Reuters that Billiton a fully-owned Royal Dutch/Shell <RD.AS> subsidiary presented the demands to Henk Heidweiler a top aide to Surinam military leader Desi Bouterse who visited the Netherlands last week for official talks. Billiton and <Suralco> owned by U.S. Conglomerate Alcoa <AA.S> both want devaluation and lower wages welfare contributions taxes on bauxite and energy prices. The two firms are the biggest private sector employers in Surinam. Billiton also urged Heidweiler to improve the safety of its employees in the campaign against a jungle guerilla group the spokesman said adding rebel fighting since July 1986 had depressed production at Billiton and Suralco plants. High voltage cables from the power plant of Afobakka have been cut and a bauxite mine at Moengo has been shut he added. We are already making vast losses in Surinam and you cant expect any company to remain operating with losses the spokesman said. REUTER | BILLITON SEEKS CHANGE IN SURINAM POLICIES |
While most of the worlds financial markets will be monitoring the U.K. budget traders and analysts in the U.S. credit market will be pouring over latest housing starts data for fresh clues about current and future domestic growth trends economists said. Most economists expect the seasonally-adjusted annualized rate to ease to about 1.75 mln units in February from just under 1.81 mln in both January and December. The level of housing starts is likely to have declined modestly but still have remained at a relatively high level said Peter Greenbaum of Smith Barney Harris Upham and Co Inc. Unfortunately meaningful comparisons between Februarys and prior months underlying trends may prove difficult. Caution should be used when interpreting (Decembers and Januarys) increase cautioned Smith Barneys Greenbaum. Although underlying fundamentals remain strong -- mortgage rate stability healthy income gains -- warmer than usual weather undoubtedly also had some influence in pushing starts higher in both months he added. Economists at Shearson Lehman Brothers Inc were more succinct in a weekly newsletter: a slight decline across the board no particular economic reason mostly weather. Charles Lieberman of Manufacturers Hanover Securities Corp said single-family homes would account for most of the housing starts drop although Smith Barneys Greenbaum saw signs of stabilization in both the single- and multi-family sectors. U.S. Treasury Secretary James Baker is also due to appear before a Congressional committee Tuesday morning. Federal funds are expected to open at 6-1/8 to 6-1/4 pct after being quoted at 6-3/16 late yesterday. U.S. government securities prices continued to drift aimlessly yesterday with the key 7-1/2 pct 30-year Treasury bond closing 7/32 lower at 99-25/32. Reuter | U.S. CREDIT MARKET OUTLOOK - HOUSING STARTS |
Employers in Rotterdams troubled general cargo sector have decided to restart stalled redundancy procedures within a week employers organisation labour relations manager Gerard Zeebregts told Reuters. Port and transport union spokesman Bert Duim said the employers decision would not lead to the immediate resumption of eight weeks of strikes in the sector. The strike action was called off on Friday after an interim court injunction against the employers plans for 350 redundancies this year. A court in Amsterdam ruled last week the employers had made an error in the complicated procedure for obtaining permission for the redundancies and therefore could not proceed until a final ruling on May 7. Zeebregts said the initiation of new procedure might well take up to two months but the employers were not prepared simply to sit and wait for the May 7 court ruling with the chance they would have to start all over again in any case. We cannot afford not to continue with our plans. The strikes have already cost a lot of money and damaged business and further delays would do even more damage Zeebregts said. The campaign of lightning strikes in the ports general cargo sector began on January 19 in protest at employers plans for 800 redundancies from the sectors 4000 strong workforce by 1990 starting with 350 this year. Reuter | DUTCH PORT EMPLOYERS RESUME LAY-OFF PLANS |
Congressional investigators tentatively plan to grant immunity to former presidential National Security Advisor John Poindexter who they say may help track missing money from Iran arms sales. Congressional sources told Reuters the House of Representatives and Senate committees probing the arms scandal are expected to back a preliminary accord reached last Friday by their legal advisors to grant Poindexter immunity from prosecution in return for his testimony. He would be the first leading figure in the affair to be granted immunity. Poindexter resigned from his White House post in November when it was divulged that up to 30 mln dlrs in arms sales profits might have been diverted to Nicaraguan contra rebels. Congressional investigators and a presidential review commission have not tracked beyond secret Swiss and Cayman Island bank accounts mlns of dlrs said to have been diverted. The sources said Poindexter could help trace the money which is one of the big riddles of the scandal. Obviously we think he is a very important witness said a House source. Poindexter has refused to testify before Congress citing his constitutional rights against self-incrimination. Reuter | POINDEXTER MAY GET IMMUNITY TO HELP TRACK FUNDS |
Western Health Plans Inc said Douglas C. Werner has resigned as president and chief executive officer to pursue other business opportunities. It said executive vice president Ray Mendoza will serve as interim chief executive. Reuter | WESTERN HEALTH <WHP> PRESIDENT RESIGNS |
Commercial International Corp said it has completed the previously-announced acquisition of most of the assets of Growers Distributing International Corp a table grape marketer for an undisclosed amount. It said the entire purchase price will be payable over a three-year period and based on a percentage of pre-tax earnings of the acquired operation. The company said it has an option to acquire Growers cold storage facility and related assets in Tulare County Calif. Growers is owned by Commercial chairman Sid Schuman Jr. and director Arnold T. Cattani Jr. Reuter | COMMERCIAL INTERNATIONAL <CMMC> MAKES PURCHASE |
The American Stock Exchange said effective March Three it started allowing specialists to accept both stop orders and stop limit orders in which the stop price and limit price are not identical. Previously specialists were only allowed to accept stop order and stop limit orders in which the stop and limit prices were identical. The Amex said floor officials may still prohibit specialists from accepting stop and stop limit orders that would be detrimental to the market. Reuter | AMEX CHANGED STOP/STOP LIMIT ORDER POLICY |
<Swiss Corp for Microelectronics and Watchmaking Industries> said it has acquired International time corp from privately-held Timex corp for undisclosed terms. International Time is exclusive distributor of Swiss Corps Tissot watches in the U.S. Reuter | <TIMEX CORP> SELLS UNIT |
Wavehill International Ventures Inc said it has completed the previously-announced acquisition of Personal Computer Rental corp for 500000 restricted common shares giving former shareholders of Personal Computer a 25 pct interest in the combined company. Reuter | <WAVEHILL INTERNATIONAL INC> MAKES PURCHSE |
TransNet Corp said its TransNet Service Center in Mountainside N.J. has been named an authorized service organization for <Leading Edge> computer products. Reuter | TRANSNET <TRNT> TO SERVICE LEADING EDGE PRODUCTS |
Identix Inc said it has sold 59 IDX-10 and IDX-50 identity verification systems to BankAmerica Corp for undisclosed terms. It said deliveries have already started. Reuter | IDENTIX <IDXX> GETS BANKAMERICA <BAC> ORDER |
The Japanese economy will remain sluggish in the months ahead after turning in its worst performance for 12 years in 1986 private economists said. Consumer spending a main driving force of domestic demand was likely to remain lacklustre although brisk housing and business investment would help sustain the economy this year the economists said. They said they were shocked by an Economic Planning Agency report today that private spending fell 0.7 pct in the Oct/Dec quarter for the first time in 12 years. The report said Japans gross national product rose a real 0.8 pct in Oct/Dec after a revised 0.7 pct increase in the previous quarter. It said GNP growth for 1986 was a real 2.5 pct down from 4.7 pct in 1985. Agency officials said this was the worst performance since 1974 when GNP contracted 1.4 pct in the wake of the first oil crisis. They expressed concern about the 0.7 pct decline in consumer spending in the final quarter of 1986 but said it was only temporary as exceptionally warm winter weather had depressed retail sales. But most private economists disagreed and said consumers were likely to remain pessimistic in coming months as they saw their real income level off. Sure consumers may have spent less on winter clothes or heating apparatus because of the warm winter this year but they have done so because they have become even more uneasy about their future pay rises said Shoji Saito general manager of Mitsui Banks economic research division. He said the outlook for pay increases was gloomy because of falling employment in many industries particularly those hit hard by the yens rise. Masao Suzaki senior economist at the Bank of Tokyo said weakened consumer confidence was the most worrying factor. Without brisk consumer spending Japan can hardly achieve domestically generated economic growth as the government has put a lid on fiscal measures he said. Other economists said the 0.8 pct growth registered in Oct/Dec may have been inflated by special factors including exceptionally heavy spending in the public sector. Johsen Takahashi chief economist at Mitsubishi Research Institute said the 14.4 pct increase in public sector spending in Oct/Dec resulted from an issue of gold coins. This is just a one-shot spending and we cant expect that high level of public-sector consumption in the following quarter Takahashi said. Agency officials said public spending would have risen 1.1 pct in Oct/Dec without the issue which marked 60 years of Emperor Hirohitos reign. Takahashi said the economy might contract in the current quarter given the lack of additional significant government spending and sluggish consumer spending. Saito said the most effective government action would be income tax cuts and the postponement beyond next January of a proposed controversial sales tax. REUTER | ECONOMISTS SEE SLUGGISH JAPANESE ECONOMY AHEAD |
The International Cocoa Organization (ICCO) buffer stock working group meeting set for 1130 GMT today was rescheduled for 1430 ICCO delegates said. The meeting was delayed so a draft compromise proposal on buffer stock rules could be completed they said. ICCO Executive Director Kobena Erbynn was preparing the plan in consultation with other delegates for presentation to the full working group they added. REUTER | COCOA WORKING GROUP MEETING DELAYED |
Seven black youths were knifed and shot to death today in a mass killing in the South African township of KwaMashu near the Indian Ocean city of Durban the government reported. The Bureau for Information said the bodies of the youths aged from 15 to 17 were found lying together. It looks like a mass execution a spokesman said. Local residents said tensions have been high in the teeming township since Thursday with periodic clashes between black radicals and supporters of the conservative Inkatha movement. The bureau spokesman said the bodies with knife and bullet wounds were discovered this morning. No other details were immediately available he added. Reuter | SEVEN KILLED IN BLACK SOUTH AFRICAN TOWNSHIP |
<Goldman Sachs and Co> said <Pearson PLCs> Financial Times newspaper has started publishing the daily FT-Actuaries World Indices which are jointly compiled with Goldman Sachs broker <Wood Mackenzie and Co Ltd> and the British Institute of Actuaries. The company said the indices include a main world share index and indices plotting share prices in different geographical regions and individual countries as well as a number of international industrial indices. Goldman said the indices are based on the price of about 2400 issues from 23 stock markets. Reuter | FINANCIAL TIMES ADDS NEW INDICES |
U.S. FEB HOUSING STARTS ROSE 2.6 PCT TO 1.851 MLN, PERMITS ROSE 4.4 PCT TO 1.764 MLN |
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Boise Cascade Corp said on April 30 it will redeem all 62000 shares of its Series A three dlr cumulative convertible preferred stock at 65 dlrs per share. The company said the shares are convertible through April 29 into common stock at the rate of 0.84896 common share per preferred share. Reuter | BOISE CASCADE <BCC> TO REDEEM PREFERRED STOCK |
Data on the U.K.s public sector borrowing requirement has boosted hopes of a large fiscal adjustment for the coming financial year broking and banking analysts said. Some analysts say that the Chancellor of the Exchequer Nigel Lawson may announce this afternoon a total of up to six billion stg in tax cuts and lower government borrowing targets. Total PSBR in the first 11 months of the fiscal year of 100 mln stg compares with a projected seven billion. Forecasts had generally been for a net repayment in February but the 300 mln stg repayment was toward the better end of expectations. March is usually a high-spending month boosting the 11 month figure at the end of the fiscal year. Nevertheless Lawson is expected to downwardly revise the 1986/87 PSBR later today. Until now only the more optimistic forecasts put Lawsons room for manoeuvre as great as six billion stg for 1987/88 with many favouring a four billion of five billion package. But Bill Martin economist at brokers Phillips and Drew said a six billion stg adjustment now looks within range split between three billion off the PSBR and three billion off taxes. Malcolm Roberts of Salomon Bros International also said six billion was within a credible range of forecasts. Roberts added that he was now expecting Lawson to have at least five billion stg available following this mornings data against his own previous estimates of around four billion. He said todays 11 month PSBR figure was genuinely low rather than distorted by unusual factors which fuels pressure on Lawson to reduce next years borrowing target. However he forecast a March 1987 PSBR of 3.5 billion stg. Peter Fellner of brokers James Capel cautioned that six billion still looks on the high side of expectations. Something like 4.5 (billion) or so is still more realistic he said. Reuter | U.K. BUDGET HOPES BOOSTED BY PSBR DATA - ANALYSTS |
U.S. housing starts rose 2.6 pct in February to a seasonally adjusted annual rate of 1851000 units the Commerce Department said. In January housing starts fell a revised 0.5 pct to 1804000 units. The department previously said they fell 0.1 pct. The rate at which permits were issued for future construction rose in February by 4.4 pct to a seasonally adjusted 1764000 units after falling 11.52 pct to 1690000 units in January. Permits for single-family houses fell in January by 6.6 pct to 1091000. The number of permits for multi-family houses fell in February by 11.7 pct to 529000 units after falling in January by 19.3 pct the department said. Housing starts in February included a seasonally adjusted 5.6 pct rise in single family units to 1317000 units and a 4.1 pct fall in multi-family homes to 534000 units. The seasonally adjusted permits total in February for single family units was 1235000 and for multi-family units was 529000 units. Reuter | U.S. HOUSING STARTS ROSE 2.6 PCT IN FEBRUARY |
Production of fish meal by the three South American producers -- Chile Peru and Equador -- last year reached 2.5 mln tonnes equalling the record output of 1970 the International Association of Fish Meal Manufacturers (IAFMM) said. However IAFMM said in a statement that it expected Chilean and Peruvian fish meal production in the first quarter of 1987 to be much lower than the 651000 tonnes produced in the last quarter of 1986 due to a ban on sardine fishing in Chile for the month of February and to adverse fishing conditions in Peru in the same month. The statement added that due to technical market promotion and energetic sales by Chile and Peru the stock position at the end of the year remained reasonable. Fish meal production outside South America decreased slightly falling from 114400 to 111100 tonnes. The IAFMM said fish meal consumption in 1986 rose in West Germany Scandinavian countries Eastern Europe and the Far East but fell in the U.S. And remained static in the U.K. It added that fish meal consumption had suffered from competition with feed grade tallow in the U.S. And with skimmed milk powder in the U.K. IAFMM figures for fish oil production in the main producing nations in thousands of tonnes were - Oct/Dec Jan/Dec 1986 1985 1986 1985 CHILE 22 8 109 76 PERU 56 28 238 104 NORWAY 14 14 97 130 ICELAND 44 52 102 118 DENMARK 20 18 88 77 U.S. 10 8 152 129 JAPAN 67 91 213 249 REUTER | SOUTH AMERICAN FISH MEAL PRODUCTION AT RECORD HIGH |
Copper shares which have lagged behind the market should pick up steam this year on stronger demand and improving prices for the metal analysts said. Copper prices should move up over the next four to six quarters said Daniel Roling of Merrill Lynch and Co <MER>. I see average copper prices at 70 cts a pound in 1988 up from around 63 or 64 cts based on tight supply and continued world economic growth. Other analysts see metal prices ranging from 65 to 68 cts a pound this year and 70 to 73 cts in 1988. Analysts said Phelps Dodge Corp <PD> will be a strong performer because it is the largest U.S. copper producer. But Asarco Inc <AR> with about 45 pct of total sales from copper and Newmont Mining Corp <NEM> are also potential winners they said. Newmont is spinning off 85 pct of its copper operations to its shareholders. In theory Phelps is the best stock. Its the purest play and benefits most from higher copper prices one said. William Siedenburg of Smith Barney Harris Upham and Co said Phelps has lowered costs and streamlined mining operations. Theyve accomplished a great deal he said. The companys move into carbon black a product used in tires should provide steady earnings although not rapid growth as a hedge against a copper downturn Siedenburg said. He estimates Phelps will earn 2.45 dlrs in 1987 and 4.45 dlrs in 1988 including tax benefits versus 1.79 dlrs in 1986. Other analysts including Clarence Morrison of Dean Witter Reynolds Inc and Merrills Roling also recommend Phelps. Morrison projects Phelps will earn 3.25 dlrs in 1987 and four dlrs in 1988 while Roling sees earnings at 2.75 dlrs this year and around 3.50 dlrs next year. The stock can go to the mid 30s Roling said from its current level of around 30. But others see it climbing to 40. Their (Phelps Dodge) costs are so low they dont need copper prices higher than 70 cts to make a lot of money said Vahid Fathi of Prescott Ball and Turben Inc. The shares will outperform the market over the next 18 months he said. But Nick Toufexis of Prudential-Bache Securities Inc says Newmont Mining is a more attractive investment. Wed rather place our bets with Newmont. Any way you slice it I see a significant premium to the current stock price he said. After the spinoff which closes next month Newmont will have gold operations including 95 pct of Newmont Gold Co <NGC> a 15 pct stake in its copper unit and energy operations Toufexis noted. Analysts see Newmont earning 2.85 dlrs to three dlrs in 1987 and about 3.75 dlrs in 1988 versus earnings of about 1.40 dlrs from operations in 1986. Id be buying up to 90 Toufexis said last week when the stock rose sharply to near that level. But the shares are probably worth about 108 dlrs (each). Dean Witters Morrison and Fathi of Prescott Ball like Asarco because of cost cutting and restructuring. Morrison sees 1987 earnings at 1.25 dlrs and 1988 at 1.75 against losses in 1986. Fathi projects Asarco will earn one dlr in 1987 and from three dlrs to 3.25 dlrs in 1988. Roling of Merrill Lynch is recommending Cyprus Minerals Co <CYPM> in addition to Phelps Dodge. Cyprus has interests in coal and other minerals aside from copper. But Siedenburg of Smith Barney thinks Cyprus is overpriced at current levels. I would be willing to sell Cyprus and buy Phelps Dodge if I were picking one copper stock he said. Reuter | TALKING POINT/COPPER STOCKS |
OII Holdings Corp a company formed by Kohlberg Kravis Roberts and Co said it received and purchased about 58.3 mln shares or 96 pct of Owens-Illinois Inc common stock and 50275 of 4.75 dlr cumulative convertible preference shares of Owens or about 83 pct. The company said its tender offer for all common and preference shares expired last night. It said Owens-Illinois will be merged into a subsidiary of OII Holdings on March 24. Common shares not bought in the offer will be converted into the right to receive 60.50 dlrs per share in cash the tender price. The preference stock has been called. Reuter | KOHLBERG KRAVIS HAS 96 PCT OWENS-ILLINOIS <OI> |
ABM Gold Corp said it has filed with the U.S. Securities and Exchange Commission for an initial public offering of six mln Class A common shares at an expected price of seven to nine U.S. dlrs each through underwriters led by PaineWebber Group Inc <PWJ> and Advest Group Inc <ADV>. The company said it will use about 30.6 mln dlrs of the proceeds to buy from Sonora Gold Corp <SONNF> 5456000 Sonora shares at 5.60 U.S. dlrs each and Sonora will use about 25.0 mln dlrs of its proceeds from that deal to buy 9259000 shares of <Goldenbell Resources Inc> at 2.70 dlrs each. ABM Gold said Sonora will use the 5553600 dlrs remaining to repay short-term debt and for working capital and Goldenbell will use its own proceeds from the sale of shares to Sonora to provide about half the financing needed to complete the construction of production facilitiues for a property. ABM said it will use another 8120000 dlrs of its proceeds to buy <New Jersey Zinc Exploration Co>s 15 pct interest in net operating profits derived from some Sonora properties. ABM said it will trade this interest for 1234042 Sonoira shares valued at 6.58 dlrs each. ABM Gold said it will use another 2825370 dlrs of the proceeds to buy from <United Gold Corp> 1053000 United common shares at 229 dlrs each and exercise a warrant to buy another two mln common shares at 20.7 cts per share with United to use its proceeds to fund exploration. ABM gold manages and develops properties for Sonora Goldenbell United and Inca Resources Inc <INCRF>. Reuter | ABM GOLD FILES FOR INITIAL OFFERING |
U.S. banks are under pressure to meet vigorous competition but Congress continues to duck hard choices on banking law reform that could benefit consumers. Supporters say deregulating banking will increase competition offer consumers more choices and bring lower fees for financial services and home mortgage interest rates. But the Senate Banking Committee last week put off until later in the year decisions on pressing issues such as whether banks could enter new businesses like underwriting corporate debt and selling insurance and real estate. The committee also reined in banks competitors the so-called nonbank banks which elude the technical definition of a bank because they do not both accept deposits and make loans. The committee meeting room became a battleground for giants of the financial industry -- banks brokerages insurance firms retail and industrial corporations -- with but little consideration given to the consumer. The lobbies backed various amendments to protect their turf and a bill that rescues a federal deposit insurance fund for thrift institutions and puts a moratorium on any changes in banking law was passed and sent on to the full Senate. The House of Representatives has yet to act. Behind the political deals was the larger question whether Congress would end or modify the half-century-old separation of commercial and investment banking or leave it alone. One argument in support of change is that fees for financial services would come down if Congress expands banks powers. Lower fees to underwrite mortgage-backed securities for example could lead to lower interest rates on home mortgages supporters say. A lot of nonbanking firms have used loopholes to get into banking but banks have not be allowed into any new businesses says Robert Litan of the Brookings Institution. We have been seeing a gigantic turf war says Litan who favors new powers for banks if deposits are safeguarded. The swirl of corporate mergers and the financial information explosion have blurred the distinction between the activities of banks and security brokerages. On a wider horizon U.S. financial institutions face stepped-up competition from financial centers like London and Tokyo in international transactions. West German and Japanese banking is more concentrated in a few large banks while most European countries allow banking and securities to be mixed. All these forces put pressure on U.S. financial firms to adapt to change but the congressional debate over reform drags on. The committees bill put a freeze on any changes and its chairman Senator William Proxmire promised to return the issues in October. If approved by Congress the bill would postpone applications before the Federal Reserve for new powers to three of the largest banks -- Citicorp J.P. Morgan and Bankers Trust. Other industries where regulatory barriers have fallen have experienced lower fees the emergence of new players and accelerated innovation. But these advances in airlines trucking and telecommunications have not been without drawbacks. Companies that were slow to adapt disappeared under the new competitive regime while the public faced a bewildering number of new choices. The Reagan administration favors bank reform. The traditional method companies use to raise funds -- borrowing from banks -- has given way to selling corporate debt and other new securities that are off limits to banks. But critics say the soundness of the banking system created by such laws as the 1933 Glass-Steagall Act would be undermined. Banks are treated as special and shielded from the marketplaces vagaries by the Federal Deposit Insurance Corp. The Federal Savings and Loan Insurance Corp (FSLIC) performs the same function for thrifts. The one issue the committee did act on which benefits consumers is new funding for the federal insurance fund for deposits at savings and loan associations which has fallen to its lowest ratio of reserves to deposits in history. Despite efforts toward change in Congress a ban on interstate banking remains. The barriers are crumbling anyway because state legislatures are agreeing to permit bank mergers across state lines within a region. Congress is proceeding cautiously having in mind the banking industrys tribulations in the early 1930s. But some say it is moving too cautiously for banks to keep pace with what is happening in business here and around the world. Reuter | ECONOMIC SPOTLIGHT - U.S. BANKING REGULATION |
President Desmond Hoyte said recent reports of widespread thallium sulphate poisoning in Guyana were mischievous and had gravely damaged the countrys food exports. There is no thallium sulphate poisoning epidemic in Guyana as has been rumored Hoyte said in a radio address late Sunday. Reports of a spate of poisonings from the chemical had led some newspapers in the Caribbean to call for a ban on food exports from Guyana and Trinidad and Tobago had restricted imports of Guyanese rice Hoyte said. Thallium sulphate banned in many countries and blacklisted since 1973 by the World Health Organization as a deadly chemical has been used by Guyanas state sugar corporation as a rodent poison. Calling the reports a mischievous invention Hoyte said tests had shown some of Guyanas main exports such as wheat and flour were not contaminated. Hoyte based his statements on tests conducted by the WHO and the Pan American Health Organization which found only seven cases of thallium sulphate poisoning thus far. Reuter | GUYANA PRESIDENT CALLS POISON SCARE "MISCHIEVOUS" |
Admar Group Inc said it will open a new Eastern Operations Center for its HealthWatch Medical Review System in Dedham Mass. by April One. The company said it will also make its Med Network multistate preferred provide organisation available in the Boston area during the second quarter. Reuter | ADMAR GROUP <ADMR> OPENING NEW OFFICE |
Shr one cent vs nine cts Net 51057 vs 554878 Sales 24.5 mln vs 21.3 mln First half Shr 15 cts vs five cts Net 1026479 vs 313676 Sales 48.4 mln vs 37.4 mln NOTE: Net includes gains of 28000 dlrs or one cent a share vs 61000 dlrs or seven cts a share in quarter and 453000 dlrs or seven cts a share vs 61000 dlrs or one cent a share in half from tax loss carryforward Reuter | MACGREGOR SPORTING GOODS INC <MGS>2ND QTR JAN 31 |
The European Community (EC) yesterday warned Japan and the United States its main trading partners that friction over trade issues is affecting the ECs relations with both countries. EC foreign ministers issued a statement deploring Japans continued trade imbalance and appealed for the country to make a greater effort to open up its markets. They also said they were disturbed by a draft bill before the U.S. Congress that would impose permanent quotas on textile imports and were prepared to react. The U.S. Administration has already distanced itself from the bill. EC External Trade Commissioner Willy De Clercq has written to his U.S. Counterpart Trade Representative Clayton Yeutter outlining the ECs concerns. The statement said ministers were very disturbed by U.S. Moves towards protectionism. The adoption of such measures would not fail to have a negative effect on the process of multilateral negotiations just started as well as on bilateral relations it said. Any unilateral U.S. Moves would leave the EC no option but to react according to the laws of the General Agreement on Tariffs and Trade it said. In a separate statement on Japan the EC ministers said they deplore the continued aggravation of the imbalance in trade (and) expect Japan to open up its market more. The statement said the EC would continue to insist that Japan boost imports and stimulate domestic demand. Ministers also called on the EC Commission to prepare a report on U.S.-Japanese trade for July this year to enable them to take appropriate action where necessary. One diplomat said the call for a report showed ministers were determined not to let the Japanese question drop. It will be back on the table again and again the diplomat said. De Clercq talking to journalists during the meeting said There is a certain nervousness a growing impatience within the Community concerning trade relations with Japan. But diplomats said the EC is keen to negotiate with Tokyo to solve the problem rather than embark on a costly and damaging trade war and the ministers called for more cooperation with Japan in industry and research. Reuter | EC WARNS U.S. AND JAPAN ON TRADE TENSIONS |
Livestock analysts expect renewed bull spreading in live cattle futures following yesterdays USDA 7-state cattle on feed report. The USDA reported high placements in February which may weigh on back months of cattle futures. Meanwhile continued strong marketings during the month will support the April contract. Contracts for June delivery forward could open 25 to 50 cents lower while April will likely open about steady analysts said. Cheap corn is still the main incentive for putting cattle on feed according to Smith Barney livestock analyst Tom OHare. They have no place to send the grain he said. Strong daily fundamentals may add to nearby support while the current discount of deferred months to the cash market may offset much of the effect of the report analysts said. The cash market is strong and may overshadow the report said Robin Fuller analyst for Agri Analysis. She added that even though placements came in above the average trade guess many traders had expected high placements. Placements are not that negative especially since the technical correction in June and August live cattle futures since last week GH Miller analyst Jerry Gidel said. He said the current marketing posture will provide added support to the nearby month. Feedlot marketings have been running at a heavier than expected pace. Chuck Levitt analyst for Shearson Lehman said that with the number of cattle on feed down five pct at the beginning of the year a three pct decline in marketings was expected. But the report for January showed marketings at 101 pct of a year ago and in February marketings were at 100 pct Levitt noted. So far we havent seen any decline in marketings. They (feedlot operators) are marketing more cattle than they had intended for the first quarter which is a bullish development Levitt said. Gidel also noted that marketings for the early part of March are running ahead of a year ago. Feedlots are not falling behind and are holding that 100 pct marketing pace. Reuter | RENEWED BULL SPREADING LIKELY ON CATTLE REPORT |
Tandem Computers Inc said it has applied for a New York Stock Exchange listing and expects to start trading there by mid-April. Tandems stock is now traded on the NASDAQ system. Reuter | TANDEM <TNDM> APPLIES FOR NYSE LISTING |
Shr 15 cts vs 14 cts Net 614000 vs 449000 Revs 4186000 vs 4124000 Avg shrs 4131000 vs 3321000 Year Shr 47 cts vs 42 cts Net 1768000 vs 1394000 Revs 15.0 mln vs 12.5 mln Avg shrs 3799000 vs 3324000 Reuter | MICROBILT CORP <BILT> 4TH QTR JAN 31 NET |
<Shamrock Holdings Inc> said its subsidiary Shamrock Holdings of California acquired controlling interest in <DBMS Inc> through the purchase of 575000 shares of its preferred stock. The company said the stock was purchased for an undisclosed amount from an unnamed group of investors. Shamrock said Raymond Nawara a former executive vice president of DBMS a privately-held software company also granted it options and voting rights on a major portion of his shares of common stock. The combination of preferred and common stock holdings permit Shamrock and Nawara to exercise voting control over approximately 53 pct of the shares of the company. Shamrock also said Nawara has been elected president of DBMS and one of its directors. Reuter | SHAMROCK HOLDINGS UNIT AQUIRES SOFTWARE COMPANY |
French state agricultural bank <Caisse Nationale du Credit Agricole> has joined the group led by publishing house <Hachette> which is bidding for control of the state television station TF1 replacing <Banque Nationale de Paris> which has withdrawn Hachette said in a statement. Credit Agricoles stake in the consortium will be 3.5 pct. Last week the broadcasting supervisory board asked Hachette to remove BNP from the consortium because the bank had acted as adviser to the government for the imminent privatisation of TF1. Reuter | CREDIT AGRICOLE REPLACES BNP IN HACHETTE TV BID |
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