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TURKISH-GREEK AEGEAN TENSION ABATES
| Turkey"s standoff with Greece over Aegean
oil rights appeared at an end after the government said it had
been assured Athens would not start prospecting in disputed
waters.
A Foreign Ministry statement last night hinted Turkey was
claiming victory. A Greek-based international consortium, North
Aegean Petroleum Co., Had given up plans to start searching for
oil in international waters east of Thasos island, it said.
"In the same way it has been understood that Greece will
also not undertake oil activities outside its territorial
waters," the statement added.
An Ankara Radio report monitored in London said Foreign
Minister Vahit Halefolu had called on Greece to engage in
dialogue over the dispute. It was impossible to resolve the
dispute by crises, he was quoted as saying.
"We call on Greece to come and engage in a dialogue with us
- let us find a solution as two neighbours and allies should,"
he said.
The radio said Halefoglu had briefed the leaders of a
number of the country"s political parties on the latest
developments.
Turkey sent the survey ship Sismik 1 into the Aegean
yesterday, flanked by warships, to press its case but having
earlier said it would go into disputed waters, declared the
vessel would stay in Turkish areas.
Prime Minister Turgut Ozal, in London on his way home after
heart surgery in the United States, is expected to receive an
ecstatic welcome from thousands of Turks when he returns today.
He was in defiant mood last night, telling Turkish radio:
"We can never accept that Greece should confine us to the
Anatolian continent. If there are riches under the sea, they
are for mankind."
Despite the end of the crisis, Turkish officials
acknowledged that the underlying dispute over delimiting the
continental shelf in the Aegean remained unsolved.
Turkey alleged that the consortium"s plans would have
infringed the 1976 Berne agreement between the two countries,
which called for a moratorium on any activities until the
delimitation was agreed. Greece earlier this month declared it
considers the accord inoperative.
| Other |
TOLL BROTHERS INC <TOL> 1ST QTR JAN 31 NET
| Shr 22 cts vs 12 cts
Net 3,243,000 vs 1,656,000
Revs 28.4 mln vs 21.5 mln
NOTE: All amts reflect 3-for-2 stock split of company's
common in form of 50 pct stock dividend paid Feb 26, 1987.
| Corporate News |
BANK SEES MODEST RECOVERY IN GULF ARAB ECONOMIES
| The Emirates Industrial Bank has
predicted a modest economic recovery in the Gulf Arab states
following higher oil revenues.
A bank study, carried by the Emirates news agency WAM, said
total oil revenues of the six Gulf Cooperation Council (GCC)
countries were likely to reach 39 billion dlrs this year from
33.5 billion in 1986.
The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia
and the United Arab Emirates (UAE).
The bank said the improvement would result from higher oil
prices made possible by last December's OPEC accord to restrain
overall group production.
These curbs have pushed up oil prices from around eight
dollars a barrel in mid-1986 to around 18 dlrs.
"All signs point to the possibility of a modest recovery in
the economies of these (GCC) countries, although this expected
growth will not be similar to that of the (1970s) boom years,"
the study said.
It added, however, that GCC states would experience higher
budget deficits this year because of needs arising from past
recession and the difficulty of making fresh spending cuts.
The study said the combined GCC bugdet deficits would rise
to 23.2 billion dlrs from 17.9 billion last year.
It said lower oil exports cut the GCC states' combined
trade surplus to 18 billion dlrs in 1986 from 21.5 billion in
1985.
The UAE suffered a 19.5 pct drop in gross domestic product
to 77.6 billion dirhams last year from 96.4 billion in 1985, it
added.
| Other |
ARAB BANKER SAYS TOO SOON FOR SINGLE CURRENCY
| Gulf Arab states must coordinate
economic policies more closely before moving towards their goal
of a unified currency system, the President of the Arab Bankers
Association said.
Hikmat Nashashibi told a news conference at the end of an
Arab currency traders meeting: "We have to start with
coordination of fiscal policies as a prerequisite for a common
system of currencies ... There is quite a substantial way to go
yet."
He said only then would a unified Gulf currency system be a
plausible project.
The six nations of the Gulf Cooperation Council -- Saudi
Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab
Emirates -- have held a series of meetings this year to
examine linking their currencies to a single peg in a system
which bankers say could be modelled on the European Monetary
System (EMS).
At present, five currencies are linked either officially or
in practice to the U.S. Dollar, while the Kuwaiti dinar is
pegged to a trade-weighted basket of currencies.
A common currency system or EMS-style "grid" would, in
theory, foster regional trade by providing a basis for stable
exchange rates, but Nashashibi said inter-Arab trade is at a
very low ebb and capital flows between Gulf states remain
small. "Capital markets in the Arab world are still in their
infancy," he said.
Nashashibi said lack of experience among Arab banks, a
paucity of financial instruments and a legal framework that
often does not recognise the western banking concept of
interest have hampered the growth of Arab markets.
| Other |
CHINA FOREIGN RESERVES EXCEED 10 BILLION DLRS
| China's foreign exchange reserves are
more than 10 billion dlrs, enough to cover import payments for
three to four months, Vice Premier Tian Jiyun said.
He told a news conference that China also has considerable
reserves of gold. He gave no figure.
The last published figure for foreign exchange reserves was
10.37 billion dlrs at end-September 1986, down from 10.47
billion at end-June and 12.59 billion at end-September 1985.
| Financial Reports |
ITALY RELAXES RESTRICTIONS ON LIRA IMPORTS
| Italy is to modify restrictions limiting
the amount of lira cash that can be brought in and out of the
country, the Foreign Trade Ministry said.
A statement said Foreign Trade Minister Rino Formica has
signed a measure lifting currency regulations that currently
impose a 400,000 lire limit on the value of lira bank notes
that can be brought into Italy. It did not say when the new
measure would come into force.
In future, there will be no limit to the amount of lira
bank notes both residents and non-residents can bring into
Italy.
The statement said the 400,000 lire limit would remain for
Italian residents wishing to take cash out of the country, but
non-residents could re-export lira cash if they made
appropriate declarations at customs points.
It said the lifting of the restrictions "reinforces the
international status of the lira and meets the requirements
expressed several times by foreign exchange dealers."
| Other |
ARAB FOREX ASSOCIATION ELECTS NEW CHAIRMAN
| The Inter-Arab Cambist Association
(ICA) elected Abdullah al-Dakhil of Kuwait's Burgan Bank its
new chairman, succeeding Hani Ramadan of Beirut Riyad Bank for
a three-year term, ICA officials said
The annual meeting elected three Vice-Chairmen -- Ezzedine
Saidane of Banque Internationale Arabe de Tunis, Mohammed Osman
of Societe Bancaire du Liban and Walid Nasouli of Morgan
Guaranty Trust Co of New York.
Ibrahim Buhindi of the Saudi National Commercial Bank in
Bahrain and Imad Bata of Finance and Credit Corp of Jordan were
elected Secretary and Treasurer, respectively.
| Financial Reports |
COFFEE PRICES BAD NEWS FOR LATIN AMERICA -MINISTER
| A senior Nicaraguan official said a
recent plunge in coffee prices was economically and politically
disastrous for Latin American coffee-producing countries.
Nicaraguan Foreign Trade Minister Alejandro Martinez Cuenca
was in London to brief International Coffee Organisation (ICO)
executive board producer members after a meeting last weekend
in Managua attended by eight Latin American coffee producers to
discuss the fall in coffee prices.
London coffee prices slid 300 stg per tonne in March, to
1,279 stg from 1,580 stg at end-February.
Martinez told reporters the price fall since the ICO failed
to agree export quotas on March 1 has had disastrous results on
Latin America, both economically and politically.
He urged continued negotiations among coffee producers to
pave the way for a coffee export quota agreement by September.
Coffee export quotas, used to regulate coffee prices under
an International Coffee Agreement, were suspended a year ago
when prices soared in response to a drought in Brazil.
Central American economic ministers have estimated the
region will lose 720 mln dlrs in foreign exchange earnings in
1987 if coffee prices are not rescued by a quota arrangement,
Martinez said.
He said ICO quota talks broke down last month because
consumer members lack the political will to fully support
commodity agreements, and because consumers tried to dictate to
producers.
| Financial Reports |
TURKEY LIFTS SURVEY SHIP ESCORT AS TENSION ABATES
| Turkey pulled warships back from close
escort of its Sismik 1 survey ship as the threat of conflict
with Greece over oil rights in the Aegean Sea abated.
The semi-official Anatolian Agency said naval vessels ended
their close protection of the ship as it continued work in
Turkish waters but were following it at a distance.
Popular newspapers headlined what they saw as Turkish
resolve and international pressure forcing Greece to pull back
from planned exploration in disputed international waters.
"Intense United States and NATO efforts bore fruit: Greece
will stay in its national waters," said the daily Gunes. The
top-selling Hurriyet topped its front page with: "Our resolute
stand made Greece see reason."
But two newspapers, Cumhuriyet and Milliyet, noted in
identical headlines -- "Crisis Frozen" -- that the basic
disagreement over exploration rights remained unsolved.
The confrontation eased after the Turkish government said
it had been assured Athens would not begin prospecting in
disputed waters.
| Corporate News |
TOKYO BIDS TO STOP CHIP ROW TURNING INTO TRADE WAR
| Japan is seeking to prevent its computer
chips dispute with the U.S. From erupting into a full-scale
trade war, government officials said.
"We hope that the dispute on this specific issue won't have
an adverse effect on our overall relationship with the United
States," a Ministry of International Trade and Industry (MITI)
official said.
On Friday, Washington announced plans for as much as 300
mln dlrs in tariffs on Japanese electronic goods for Tokyo's
alleged failure to live up to a bilateral computer chip pact.
That agreement, reached last year after heated
negotiations, called on Japan to stop selling cut-price chips
in world markets and to buy more American-made semiconductors.
Foreign Ministry officials immediately tried to isolate the
fall-out from the dispute by seeking to separate it from Prime
Minister Yasuhiro Nakasone's planned trip to Washington at the
end of April.
While Japan has already done about all it can to make sure
the chip pact is working, the government is studying measures
it can take in other fields to defuse American anger and ensure
the trip's success, they said.
"The perception of Japan in the (U.S.) Congress is very bad,"
one official told Reuters. "We would very much like to do
something to respond to that."
In an apparent effort to prevent the chip dispute from
spreading to other areas, MITI officials sought to depict the
U.S. Action as a severe warning to Japanese semiconductor
makers, not to the government.
Faced with a belligerent domestic chip industry and an
angry American Congress, the Japanese government has been
forced to walk an increasingly fine line in the semiconductor
dispute, trade analysts said.
They said that it was an open secret that Japan's largest
chip maker, NEC Corp, was not happy with what it viewed as the
draconian measures MITI was taking to implement the pact,
included enforced production cuts.
The angry response of Japanese chip makers yesterday to the
announcement of the U.S. Tariffs highlighted the difficulties
the government faces in taking further action.
"Japanese semiconductor manufacturers have complied with the
U.S./Japan agreement," said Shoichi Saba, Chairman of the
Electronic Industries Association of Japan.
He accused the U.S. Of being "irrational." He said the U.S.
Action had made the bilateral chip pact "meaningless."
Saba's comments contrasted with those of Prime Minister
Yasuhiro Nakasone, who said Tokyo wanted to solve the dispute
through consultations.
Japan is expected to send a high-level official to
Washington early next month to try to convince the U.S. Not to
go ahead with the tariffs on April 17.
Trade analysts say Tokyo is likely to outline industry
plans to step up purchases of U.S. Chips and to propose a joint
investigation into Washington's allegations of chip dumping.
| Financial Reports |
U.S. SEES MORE HARMONY IN TALKS WITH FRANCE
| The U.S. Expects more harmonious
talks than usual during French Prime Minister Jacques Chirac's
first official visit this week as frequently rancorous disputes
between the two countries begin to fade.
"The Libyan bombing is a thing of the past, the trade war
didn't happen and we have reached reasonably good cooperation
on terrorism," one U.S. Official told Reuters.
"It looks like a reasonably harmonious visit in prospect,
more harmonious than usual."
Since taking office a year ago, Chirac has been obliged to
deal with a series of potentially serious disputes with the
United States.
During the U.S. Bombing of alleged terrorist targets in
Libya last April, France refused to allow British-based U.S.
Planes to overfly its territory, forcing them to take a
circuitous route. That angered Washington.
The U.S. Officials, who asked not to be identified, said a
year ago Washington felt the French were not taking strong
enough action against terrorism. "Now they are. We're pleased
and they are pleased that we are pleased," one said.
More recently, a dispute over U.S. Access to the grain
markets of Spain and Portugal after they joined the European
Community threatened to become a trade war.
In retaliation for what Washington saw as deliberate
Community moves to exclude U.S. Grain, the United States was
poised to impose swingeing tariffs on European Community food
imports and a major trade war was averted at the last minute.
Last week, the forces of President Hissene Habre of Chad,
supported, trained and armed by Paris and Washington, scored a
major success by pushing Libyan troops out of their last bases
in northern Chad.
A French official added: "There is also a common interest in
getting Japan to cut its trade surplus with the rest of the
world by opening up its markets."
Although relations have improved markedly between the two
countries, many irritants remain. At the top of the list is the
Community's common agricultural policy (CAP).
To Washington, as one official put it, "CAP is the root of
all evil" in international food trade because it subsidises
farmers and sells vast amounts of excess produce at below world
prices, thereby eating into U.S. Markets.
| Other |
BANK FUER GEMEINWIRTSCHAFT AG <BKFG.F> YEAR 1986
| Year ended December 31, 1986.
Group net profit 30 mln marks vs 35 mln.
Balance sheet total 61.50 billion marks vs 63.67 billion.
Credit volume 42.00 billion marks vs 43.15 billion.
Parent bank net profit 20 mln marks vs 20 mln.
Transfer to trades union holding co 80 mln marks vs 80 mln.
Payment to open reserves 20 mln marks vs 20 mln.
Balance sheet total 48.67 billion marks vs 49.01 billion.
Partial operating profit 182.6 mln marks vs 313.7 mln.
Interest surplus 897.9 mln marks vs 981.1 mln.
Surplus on commission 208.8 mln marks 188.1 mln.
Ordinary expenditure 969.7 mln marks vs 909.7 mln.
Earnings from subsidiaries through profit transfer
agreements 494.2 mln marks vs 54.2 mln.
Earnings from writing back provisions 326.5 mln marks vs
65.6 mln.
Published risk provisions 736.3 mln marks vs 224.0 mln.
Credit volume 32.63 billion marks vs 33.51 billion.
Group figures for 1986 exclude <BSV Bank fueer Sparanlagen
und Vermoegensbildung AG> which no longer consolidated.
| Market and Economy |
BFG PARTIAL OPERATING PROFITS FALL SHARPLY IN 1986
| Bank fuer Gemeinwirtschaft AG
<BKFG.F>, BfG, partial operating profits fell to 182.6 mln
marks in 1986 from 313.7 mln in 1985, new majority shareholder
Aachener und Muenchener Beteiligungs-AG <AMVG.F>, AMB, said.
But total operating and extraordinary profits, including
earnings from currency and securities trading on the bank's own
account and earnings from the sale of holdings in other firms,
were more than double the previous year's level, AMB said.
BfG's 1986 accounts were included in a prospectus for AMB's
capital increase, which is to finance the insurance company's
acquisition of 50 pct plus one share of BfG.
Despite the fall in partial operating profits, BfG paid an
unchanged 20 mln marks into open reserves and transferred an
unchanged 80 mln marks to its trade union holding company,
<Beteiligungsgesellschaft fuer Gemeinwirtschaft AG>, from which
AMB has acquired the majority stake.
The bank has said its business last year suffered from the
turbulence around the troubled trade-union-owned housing
concern Neue Heimat.
AMB said the 500 mln mark drop in BfG's business volume to
50.1 billion marks affected the interest surplus.
The interest surplus, which fell to 897.9 mln marks from
981.1 mln, was also depressed by the 0.1 point fall in the
interest margin to 1.9 pct.
A rise in the surplus on commission to 208.8 mln marks from
188.1 mln was not enough to compensate for this.
The rise in total operating profits enabled BfG to step up
risk provisions, with country risks particularly emphasised
because of the continuing difficulties of some countries.
Disclosed risk provisions, which under West German
accounting rules do not necessarily reflect the full amount,
rose to 736.3 mln marks from 224.0 mln.
BfG's parent credit volume eased to 32.63 billion marks in
1986 from 33.51 billion. Foreign debtors accounted for 24 pct
of this credit volume, and Latin American debtors accounted for
14.7 pct of total lending to foreigners.
BfG posted extraordinary earnings from the sale of 25.01
pct of <Volksfuersorge Deutsche Lebensversicherung AG>, 74.9
pct of <BSV Bank fuer Sparanlagen und Vermoegensbildung AG> and
five pct of <Allgemeine Hypothekenbank AG>. The sale was linked
to AMB's acquisition of a majority of BfG.
These sales show up as 494.2 mln marks from profit transfer
agreements and 326.5 mln from writing back risk provisions.
| Other |
PILLSBURY CO <PSY> VOTES QUARTERLY DIVIDEND
| Qtly div 25 cts vs 25 cts prior qtr
Pay 31 May
Record 1 May
| Other |
DOLLAR OPENS AT A RECORD LOW FOR TOKYO AT 145.80 YEN - DEALERS
|
DOLLAR OPENS AT A RECORD LOW FOR TOKYO AT 145.80 YEN - DEALERS
| Commodities and Trade |
Bank of Japan intervenes, buys dollars around 145.90-95 yen -- Tokyo dealers
|
Bank of Japan intervenes, buys dollars around 145.90-95 yen -- Tokyo dealers
| Corporate News |
DOLLAR FALLS BELOW 145.00 YEN IN TOKYO -- DEALERS
|
DOLLAR FALLS BELOW 145.00 YEN IN TOKYO -- DEALERS
| Financial Reports |
BANK OF JAPAN ALREADY PURCHASED ONE BILLION DLRS IN MORNING INTERVENTION - DEALERS
|
BANK OF JAPAN ALREADY PURCHASED ONE BILLION DLRS IN MORNING INTERVENTION - DEALERS
| Market and Economy |
JAPAN CENTRAL BANK BUYS ONE BILLION DLRS IN TOKYO
| The Bank of Japan has already purchased
more than one billion dlrs in intervention since the opening
and continues to buy the U.S. Currency, dealers said.
The central bank was supporting the dollar against the yen
amid heavy selling pressure from investment trusts and
securities houses which had pushed the dollar as low as 144.75
yen earlier this morning, they said.
The dollar recovered slightly from the intervention and was
trading around 145.00, they added.
It had opened in Tokyo at 145.80 yen.
| Corporate News |
Sumita says he does not repeat not expect dollar to fall further.
|
Sumita says he does not repeat not expect dollar to fall further.
| Commodities and Trade |
Japan will continue to cooperate with other nations to stabilize dlr, Sumita
|
Japan will continue to cooperate with other nations to stabilize dlr, Sumita
| Other |
SUMITA SAYS HE DOES NOT EXPECT FURTHER DOLLAR FALL
| Bank of Japan governor Satoshi Sumita
said he does not expect the dollar to remain unstable and fall
further.
He told a Lower House Budget Committee in Parliament that
the Bank of Japan would continue to cooperate closely with
other major nations to stabilize exchange rates.
The central bank has been keeping extremely careful watch
on exchange rate movements since last week, he said.
He said the dollar would not continue to fall because of
underlying market concern about the rapid rise of the yen.
Sumita said the currency market has been reacting to
overseas statements and to trade tension between Japan and the
U.S. Over semiconductors.
The yen's tendency to rise will prevent Japan from
expanding domestic demand and undertaking necessary economic
restructuring, he said.
| Corporate News |
BERKSHIRE GAS CO <BGAS> PAYS REGULAR QTLRY DIV
| Qtrly div 28.5 cts vs 28.5 cts
Pay April 15
Record March 31
| Financial Reports |
DLR FALLS ON FEAR TOKYO WON'T HIKE DEMAND-MIYAZAWA
| Finance Minister Kiichi Miyazawa said
that the dollar's drop today to 145 yen is partly attributable
to the perception inside and outside Japan that the country has
failed to fulfill its promise to expand domestic demand.
He told a Lower House budget committee in Parliament that
it was natural for other nations to think that Japan is not
doing enough because of the delay in the passage of the 1987/88
budget.
The budget has been delayed by opposition boycotts of
Parliament to protest government plans for a new sales tax.
| Financial Reports |
JAPAN CAREFULLY CONSIDERING MONEY POLICY -- SUMITA
| Bank of Japan governor Satoshi Sumita
said the central bank will carefully consider its monetary
policy in light of the recent sharp fall of the dollar.
Asked if the Bank of Japan will consider a further cut in
its discount rate, he said he now thinks the bank will have to
carefully consider its future money policy.
He told a Lower House Budget Committee in Parliament that
credit conditions have been eased by the five discount rate
cuts by Japan since the beginning of last year.
Japan must now be especially careful about a flare-up in
inflation, with money supply growth accelerating, he said.
Sumita said the central bank would continue to make a
judgement on monetary policies while watching consumer prices,
exchange rates and economic and financial conditions both in
and outside Japan.
Asked if the September 1985 Plaza agreement was a failure
because the dollar had fallen too far, Sumita said he still
thought the pact was a good one in the sense that it had
corrected the overvaluation of the dollar. But the Plaza accord
did not set any target for the dollar's fall, he said.
The dollar's steep fall stems from the market's belief that
the trade imbalance will continue to expand, he said.
| Corporate News |
PERU SAYS NEW GOLD DEPOSITS WORTH 1.3 BILLION DLRS
| President Alan Garcia said Peru has found
gold deposits worth an estimated 1.3 billion dlrs in a jungle
region near the Ecuadorean border about 1,000 km north of here.
He told reporters the deposits, located at four sites near
the town of San Ignasio, contained the equivalent of 100 tonnes
of gold.
Garcia said the government would soon install a two mln dlr
treatment plant at Tomaque. It will extract enough ore to
provide an estimated 25 mln dlr profit by the end of this year,
he added.
Garcia said the other gold-bearing deposits are located at
Tamborapa, Pachapidiana and a zone between the Cenepa and
Santiago rivers.
| Corporate News |
BALDRIGE PREDICTS END OF U.S.-JAPAN TRADE DISPUTE
| The United States and Japan will
soon settle their trade dispute over semiconductors, U.S.
Commerce secretary Malcolm Baldrige said on television.
Baldrige, referring to the U.S.-Japan trade agreement on
semiconductors, said: "Their government wants to live up to it.
Their industries haven't been doing it, and I think we'll have
a good settlement to spare both sides."
"I think the Japanese understand full well that they haven't
lived up to this commitment," he said.
He added: "I do not think there will be a trade war at all."
On Friday, Washington announced plans to put as much as 300
mln dlrs in tariffs on Japanese electronic goods from April 17,
because of Tokyo's failure to observe the agreement.
The officials said the tariffs would be ended as soon as
Japan started adhering to the agreement. But they said there
was little chance Japan could react quickly enough to avert the
higher tariffs.
Baldrige said the Reagan administration hoped the strong
U.S. Action against Japan would convince Congress to tone down
protectionist trade legislation now being drafted.
He denied the action had been taken for that reason.
| Corporate News |
29-MAR-1987
| 29-MAR-1987
| Financial Reports |
U.K. WHEAT AND BARLEY EXPORTS ADJUSTED UPWARDS
| The U.K. Exported 535,460 tonnes of wheat
and 336,750 tonnes of barley in January, the Home Grown Cereals
Authority (HGCA) said, quoting adjusted Customs and Excise
figures.
Based on the previous January figures issued on February 9,
wheat exports increased by nearly 64,000 tonnes and barley by
about 7,000 tonnes.
The new figures bring cumulative wheat exports for the
period July 1/February 13 to 2.99 mln tonnes, and barley to
2.96 mln compared with 1.25 and 1.89 mln tonnes respectively a
year ago.
January wheat exports comprised 251,000 tonnes to European
Community destinations and 284,000 tonnes to third countries.
The Soviet Union was prominent in third country
destinations, taking 167,700 tonnes while Poland was credited
with 54,500 and South Korea 50,000 tonnes. Italy was the
largest EC recipient with 75,000 tonnes followed by West
Germany with 55,200 and France 52,000 tonnes.
Barley exports for January comprised 103,700 tonnes to the
EC and 233,000 to third countries. The Soviet Union was the
largest single importer with 133,265 tonnes followed by Saudi
Arabia with 53,800 tonnes.
| Corporate News |
BTR NYLEX RAISES OFFER FOR BORG-WARNER AUSTRALIA
| <BTR Nylex Ltd> said it will increase
its takeover offer for Borg-Warner Corp's <BOR> listed unit,
<Borg-Warner (Australia) Ltd> (BWA) to five dlrs each from four
dlrs for all issued ordinary and preference shares.
The new offer values the diversified auto parts
manufacturer's 27.22 mln ordinary shares and 13.22 mln first
participating preference shares at 202.2 mln dlrs.
Formal documents will be sent to shareholders as soon as
possible, it said in a brief statement.
BTR Nylex, which manufactures rubber and plastic products,
first bid for BWA in late January.
As previously reported, Borg-Warner Corp, which owns 65 pct
of BWA's ordinary shares and 100 pct of the preferences,
advised a month ago that it would not accept the offer.
This meant BTR Nylex's 50.1 pct acceptance condition could
not be met, BWA said in a statement reporting its parent's
decision.
BWA advised shareholders to ignore the offer and said other
parties had expressed interest in bidding for it.
But no other bid has yet emerged.
BTR Nylex is a 59.5 pct-owned listed subsidiary of
Britain's BTR Plc <BTRX.LON>.
| Commodities and Trade |
INVESTOR GROUP PUTS PRESSURE ON GENCORP <GY>
| An investor group trying to acquire
GenCorp Inc said it would move to unseat the board of directors
and take other action if GenCorp refuses to discuss a 2.3
billion dlr takeover bid.
General Acquisition Co, a partnership of Wagner and Brown
and AFG Industries Inc <AFG>, reiterated in a statement sent to
GenCorp on Friday that it was willing to negotiate its earlier
offer of 100 dlrs a share for the tire, broadcasting, plastics
and aerospace conglomerate.
Analysts have speculated GenCorp could fetch at least 110
to 120 dlrs per share if broken up.
GenCorp officials declined to comment on the statement, but
a spokesman reiterated a request to shareholders to wait until
the board renders an opinion before making a decision on the
offer. GenCorp has said a statement would be made on or before
the company's annual meeting on Tuesday.
General Acquisition said the board could not carry out its
duties to shareholders and make an informed decision until it
has, "... Explored with us the ways in which our offer can be
revised to provide greater value to your shareholders."
General Acquisition added it was aware the board may be
reviewing alternative transactions, which might provide GenCorp
shareholders with a payment other than cash.
"If that is the case, you should recognise that our
additional equity capital may very well enable us to offer cash
and securities having greater value than GenCorp could provide
in any similarly structured transaction," it said.
It added GenCorp's board had an obligation to present any
alternative proposal to shareholders in a way that allowed
competing offers.
General Acquisition requested it be given a chance to bid
on a competitive and fair basis before any final decision was
made on any other buyout proposal.
The statement repeated the request GenCorp remove a "poison
pill" preferred share purchase rights to shareholders, making
any takeover more expensive.
It said it might take legal action, or seek the support of
shareholders in calling a special meeting to replace the board
and consider other proposals.
GenCorp should not accept any other proposal containing
defensive features, it said.
| Commodities and Trade |
SUMITOMO MINING <SMIT.T> RAISES NICKEL OUTPUT
| Sumitomo Metal Mining Co said it will
raise its monthly nickel output to around 1,750 tonnes from
April 1 from 1,650 now because of increased domestic demand,
mainly from stainless steel makers.
Sumitomo produced 1,800 tonnes of a nickel a month until
end-1986, but cut output in January because of stagnant demand,
a company official said.
Calendar 1987 production is likely to fall to around 20,000
tonnes from 22,000 in 1986 as a result of the first quarter
reduction, he said.
Sumitomo is Japan's only nickel producer.
| Industrial and Sector News |
Nakasone says major nations committed in Paris to stable dlr above 150 yen
|
Nakasone says major nations committed in Paris to stable dlr above 150 yen
| Financial Reports |
CANADA GDP RISES 3.1 PCT IN 1986
| Canada's real gross domestic product,
seasonally adjusted, rose 1.1 pct in the fourth quarter of
1986, the same as the growth as in the previous quarter,
Statistics Canada said.
That left growth for the full year at 3.1 pct, which is
down from 1985's four pct increase.
The rise was also slightly below the 3.3 pct growth rate
Finance Minister Michael Wilson predicted for 1986 in
February's budget. He also forecast GDP would rise 2.8 pct in
1987.
Statistics Canada said final domestic demand rose 0.6 pct
in the final three months of the year after a 1.0 pct gain in
the third quarter.
Business investment in plant and equipment rose 0.8 pct in
the fourth quarter, partly reversing the cumulative drop of 5.8
pct in the two previous quarters.
| Financial Reports |
Miyazawa says major nations have intervened aggressively since dlr fell below 150 yen
|
Miyazawa says major nations have intervened aggressively since dlr fell below 150 yen
| Financial Reports |
PATON REPORTS U.S. GREEN COFFEE ROASTINGS HIGHER
| U.S. roastings of green coffee in the
week ended March 21 were about 250,000 (60-kilo) bags,
including that used for soluble production, compared with
195,000 bags in the corresponding week of last year and about
300,000 bags in the week ended March 14, George Gordon Paton
and Co Inc reported.
It said cumulative roastings for calendar 1987 now total
3,845,000 bags, compared with 4,070,000 bags by this time last
year.
| Financial Reports |
G-6 WANTS TO HOLD DLR ABOVE 150 YEN - NAKASONE
| Prime Minister Yasuhiro Nakasone said
that Japan and other industrialized nations committed
themselves in Paris last month to stabilize the dollar above
150 yen.
He told a Lower House Budget Committee in Parliament that
the six nations have taken measures, including market
intervention, to support the dollar above that level.
Finance Minister Kiichi Miyazawa told the same committee
that the six - Britain, Canada, France, Japan, the U.S. And
West Germany - had intervened aggressively since the dollar
fell below 150 yen.
Miyazawa said major nations are trying hard to stabilize
exchange rates.
Asked if there had been any change in the fundamentals of
each nation since the February 22 Paris accord, he said he did
not think the fundamentals themselves had changed
substantially.
But he said the market is sensitively looking at what is
happening in major nations. He did not elaborate.
Miyazawa added that it was difficult to say why there has
been such speculative dollar selling in the market.
| Other |
BASF 1986 world group pre-tax profit 2.63 billion marks vs 3.04 billion
|
BASF 1986 world group pre-tax profit 2.63 billion marks vs 3.04 billion
| Financial Reports |
AUSTRALIAN SUGAR AREAS SAID RECEIVING SOME RAIN
| Dry areas of the Australian sugar cane
belt along the Queensland coast have been receiving just enough
rain to sustain the 1987 crop, an Australian Sugar Producers
Association spokesman said.
The industry is not as worried as it was two weeks ago, but
rainfall is still below normal and good soaking rains are
needed in some areas, notably in the Burdekin and Mackay
regions, he said from Brisbane.
Elsewhere, in the far north and the far south of the state
and in northern New South Wales, the cane crop is looking very
good after heavy falls this month, he said.
The spokesman said it is still too early to tell what
effect the dry weather will have on the size of the crop, which
is harvested from around June to December.
He said frequent but light falls in the areas that are
short of moisture, such as Mackay, mean they really only need
about three days of the region's heavy tropical rains to
restore normal moisture to the cane.
But rainfall in the next two or three weeks will be crucial
to the size of the crop in the dry areas, he said.
"It's certainly not a disastrous crop at this stage but it
might be in a month without some good falls," he said.
| Other |
BASF AG <BASF.F> 1986 YEAR
| Year to December 31.
World group pre-tax profit 2.63 billion marks vs 3.04
billion.
World group turnover 40.47 billion vs 44.38 billion.
World group investment in fixed assets 2.66 billion vs 2.46
billion.
Parent company pre-tax profit 1.97 billion vs 1.91 billion.
Parent turnover 18.72 billion vs 20.46 billion.
Parent domestic turnover 7.10 billion vs 8.14 billion.
Parent foreign turnover 11.62 billion vs 12.32 billion.
Parent investment in fixed assets 1.14 billion vs 884 mln.
| Corporate News |
JAPAN ISOLATED, YEN RISES, WORLD FEELS CHEATED
| Japan is becoming dangerously isolated
again as the U.S. And Europe feel they have been cheated by
Japanese promises to switch from export to domestic-led growth,
officials and businessmen from around the world said.
As the dollar today slipped to a record low below 145 yen,
making Japanese exporters and holders of dollar investments
grit their teeth harder, Finance Minister Kiichi Miyazawa said
there was a perception Japan had reneged on its promise.
The problem goes deep and centres on misunderstandings by
both sides over the key Maekawa report of April, last year.
The document was prepared by a private committee formed by
Prime Minister Yasuhiro Nakasone and led by former Bank of
Japan head Haruo Maekawa. It recommended that to stop friction
due to its large trade surpluses, Japan must "make a historical
transformation in its traditional policies on economic
management and the nation's lifestyle. There can be no further
development for Japan without this transformation."
Americans and Europeans took the report to heart and have
looked in vain for clear signs of this historic change. But the
Japanese remain doubtful about the short, or even medium term
prospects of totally transforming their economic habits.
The bubble of frustration against what appears as Japanese
prevarication burst last week. The U.S. Said it intended to
raise tariffs of as much as 300 mln dlrs on Japanese exports to
the U.S. On the grounds Japan had abrogated a bilateral
semiconductor pact.
British Prime Minister Margaret Thatcher threatened to
block Japanese financial firms from London after the Japanese
placed what the British say are restrictive conditions on a bid
by British firm Cable and Wireless to join a domestic
telecommunications joint venture.
On Friday, European currency dealers said European central
banks, annoyed at restrictive Japanese trade practises, might
leave Japan alone to intervene to staunch the rise of the yen.
Eishiro Saito, head of top Japanese business group
Keidanren, spotted the dangers inherent in such contradictory
views last November when he visited the European Community.
"Related to this matter of (trade) imbalance, the point that I
found to be of great cause for alarm during this trip to Europe
was the excessive degree of hope placed by the Europeans in the
results of the Maekawa report," he said.
"We explained that the process of restructuring the economy
away from its dependence on exports toward a balance between
domestic and external demand...Would take time," Saito said.
Saito's words were ignored. In February, EC Industrial
Policy Director Heinrich von Moltke came to Japan and said "I
only know that your government, under the leadership of
Maekawa, points to restructuring your economy into a less
outward looking, more inward looking one. It is the Maekawa
report which has attracted the most attention in Europe."
And Europeans and Americans want quick action. "A far better
answer than protectionism would be structural change within the
Japanese economy, the kind suggested by the Maekawa report. And
we hope to see changes occur in the near future," visiting
Chairman of General Motors Roger Smith said in March.
Such expectations are now ingrained, which was partly the
fault of Nakasone, who heralded Maekawa's report as a sea of
change in Japanese affairs, said U.S. Officials.
Months before the report was issued, U.S. And EC business
leaders met their Japanese colleagues to discuss the trade
problem.
"We are more anxious than ever that the new approach of the
Maekawa committee does lead to speedy and effective action,"
said EC Industrial Union leader Lord Ray Pennock.
"The important implication of the Maekawa report is that it
is finally looking to let Japanese enjoy the fruits of their
labour," said Philip Caldwell, Senior Managing Director of
Shearson Lehman Brothers.
Contents of the report were leaded well ahead of issuance.
Japanese officials say they are implementing the report as
fast as they can, said a European ambassador who has travelled
the country asking about this issue.
He said People mentioned many things in line with the
spirit of the report, including restructuring of the coal and
steel industries.
A major misunderstanding is that the private report was
government policy. Europeans are confused about this,
underlined by von Moltke's reference to the "leadership" of the
Maekawa report. Even so, Japanese officials point to last
September's government programme of new economic measures.
"Without endorsing the report as policy, officials point out
that the government has put its signature to a programme
designed to implement the report," the ambassador said.
| Commodities and Trade |
EAST EUROPE WHEAT WINTERKILL POSSIBLE, ACCU SAYS
| Winter wheat crops in the
western Soviet Union, Poland and eastern Czechoslovakia through
northern Romania may suffer some winterkill over the next two
nights, private forecaster Accu-Weather Inc said.
Western USSR winter wheat areas have had only light and
spotty snow and winterkill is possible tonight and tomorrow
night as temperatures drop to minus 10 to 0 degrees F.
Snow cover is scant in Poland, with only about 50 pct of
the winter wheat areas reporting one to two inches of snow as
of this morning.
The remaining 50 pct of winter wheat crops do not have snow
cover, making winterkill possible on each of the next two
nights. Lowest temperatures will be minus 10 to 0 degrees F.
Winter wheat areas from eastern Czechoslovakia through
northern Romania had light snow flurries yesterday and last
night, but amounts were an inch or less. With temperatures
expected to fall to near 0 degrees F over the next two nights,
some light winterkill is possible, Accu-Weather added.
| Commodities and Trade |
Woolworth Holdings says it bidding 244 mln stg for Superdrug stores
|
Woolworth Holdings says it bidding 244 mln stg for Superdrug stores
| Commodities and Trade |
INDONESIA LIMITS OIL PRICE IMPACT-FINANCE MINISTER
| Indonesia has minimised the economic
impact of falling oil prices, kept inflation within limits and
boosted exports, Finance Minister Radius Prawiro said.
Indonesia was badly hit by last year's steep plunge in
crude prices, which cut revenue from oil exports by half.
But Prawiro was quoted by Indonesian newspapers as telling
President Suharto that inflation was kept to around nine pct in
the financial year ending tomorrow, against around 4.3 pct the
previous year.
Exports were estimated to have risen by seven pct, he said,
although he did not give complete figures.
The depressed economy forms the main backdrop to general
elections next month in Indonesia, a major producer of rubber,
palm oil, tin, timber and coffee.
Prawiro said 1986/87 had also been difficult because of the
appreciation of currencies like the yen and the mark against
the dollar, which increased Indonesia's debt repayments.
He said the economy would have suffered more from the world
economic recession if the government had not devalued the
rupiah by 31 pct last September.
In an editorial on the economic outlook, the Jakarta Post
said the government must press ahead with measures to
deregulate the economy to help boost non-oil exports.
The English-language daily said bigger export earnings were
needed to finance not only imports but also the country's
growing foreign debt, estimated at around 37 billion dlrs.
"About 50 pct of our foreign debt obligations fall due
within the next three to five years and will steadily increase
the debt servicing burden," the paper said.
However, end-investors were seen bargain hunting in
expectation of a further yen interest rate decline, dealers
said.
Most dealers were cautious in the face of the dollar's
nosedive today and the possibility of a U.S. Interest rate
rebound to halt further dollar depreciation.
A 4.7 pct coupon and volume of 1,400 billion yen for the
April 10-year bond proposed by the Finance Ministry this
afternoon were taken favourably by the market.
| Financial Reports |
WOOLWORTH BIDS 244 MLN STG FOR SUPERDRUG
| Woolworth Holdings Plc <WLUK.L> said it
would make a 244 mln stg agreed bid for <Superdrug Stores Plc>
valuing the company's shares at about 696p each.
The offer would be made on the basis of 17 new Woolworth
ordinary shares for every 20 in Superdrug.
Woolworth said it had received acceptances from the holders
of 61 pct of Superdrug shares.
The bid is Woolworth's second attempt in recent months to
acquire a retail chemist chain. Earlier this year it negotiated
a possible bid for <Underwoods Plc> buit the talks were broken
off two weeks ago.
Full acceptance of the offer would involve the issue of
about 29.8 mln new Woolworth shares, or 14 pct of the enlarged
share capital. A cash alternative would offer 646p for each
share in Superdrug. Members of the Goldstein family have
accepted the offer for 11.7 mln shares, which have not been
underwritten.
Another major shareholder, Rite Aid Corp's Rite Investments
Corp unit, had accepted the offer for 9.9 mln shares, and would
take the cash alternative for 9.0 mln of these.
In the year to end-January, Woolworth reported pretax
profits sharply higher at 115.3 mln stg after 81.3 mln
previously.
In the year to end-February, Superdrug reported pretax
profits of 12.26 mln after 10.36 mln previously on turnover
that rose to 202.9 mln from 164.3 mln. Superdrug shares firmed
to 670p from 480p on Friday. Woolworth eased to 813p from 830p.
| Other |
JAPAN HAS LITTLE NEW TO OFFER IN MICROCHIP DISPUTE
| The Japanese government appears to have
little new to offer to settle a dispute with the U.S. Over
computer chips, trade analysts and government officials said.
The U.S. Has threatened to impose tariffs worth up to 300
mln dlrs on Japanese electronics exports to the U.S., In
retaliation for Japan's alleged failure to keep a pact on the
microchip trade signed last September.
A Foreign Ministry official told Reuters "Japan has done
what it can, and now we must persuade the United States to wait
for those steps to take effect."
The U.S. Alleges that, in defiance of the September
agreement, Japan is still selling microchips at below cost in
non-U.S. Markets and refusing to open Japan further to U.S.
Chip sales. U.S. Tariffs are due to take effect on April 17.
Analysts noted Japan's Ministry of International Trade and
Industry (MITI) has already ordered chipmakers to cut
production in order to dry up the source of cheap chips sold in
third countries at non-regulated prices.
"I'm not sure MITI can do much more than it has," said
Jardine Fleming (Securities) Ltd analyst Nick Edwards.
A MITI official said the Ministry was not planning to call
for production cuts beyond those already sought, although it
would continue to press chip users to buy more foreign goods.
Spokesmen for some Japanese electronics firms said they
would consider buying more U.S. Chips. But a Matsushita
Electric Industrial Co spokesman said a rapid increase in
imports was not likely.
Most analysts said Japanese exporters would be hard hit if
the United States did implement the tariffs, which would be
levied on consumer electronics products rather than on
microchips themselves.
"If the tariffs remain in place for any length of time,
there will be complete erosion of exports to the United States,"
said Tom Murtha, analyst at James Capel and Co.
"The Japanese electronics industry is too powerful to be
stopped altogether, but recovery for the industry will be
delayed for another year," he said.
Some analysts said tariffs would also harm U.S. Industry by
stepping up offshore production and by reducing demand in Japan
for semiconductors U.S. Firms are trying to sell here.
"The American approach is full of contradictions," Jardine
Fleming's Edwards said.
"If they want to expand (U.S.) exports, the last thing they
want to do is hit the makers of the final products because that
hurts the final market," Edwards said.
But other analysts said the dispute reflects not just U.S.
Concern over what it sees as a strategic industry, but also
frustration with Japan's vast trade surplus. Some analysts
argued that to solve the semiconductor problem Japan may have
to take action beyond that pledged in the semiconductor pact.
Carole Ryavec, an analyst at Salomon Brothers Asia Ltd,
said "The major overall issue is to stimulate the domestic
economy and move away from an export-dependent economy."
| Corporate News |
H.K. DEALERS SAY NAKASONE G-6 COMMENT TOO LATE
| Remarks by Japan's Prime Minister
Yasuhiro Nakasone that last month's G-6 meeting agreed to
stabilize the dollar above 150 yen have come too late to
influence currency trading, dealers said.
After Nakasone's statement the dollar rose to 146.40/50 yen
from an initial low of 144.20/40 and New York's Friday finish
of 147.15/25. But the rebound was largely on short-covering,
they said.
"I think (Nakasone's) desperate," said a U.S. Bank foreign
exchange manager.
Nakasone told a Lower House Budget Committee in Parliament
that Japan and other industrialized nations committed
themselves in Paris last month to stabilize the dollar above
150 yen.
Finance Minister Kiichi Miyazawa told the same committee
that the six - Britain, Canada, France, Japan, the U.S. And
West Germany - had intervened aggressively since the dollar
fell below 150 yen.
"His (Nakasone) remarks should have been made and should
have had a bigger influence when the dollar was still above 150
yen," said P.S. Tam of Morgan Guaranty Trust.
Tam said the dollar has hit short-term chart targets and
is likely to rebound. But he warned of another dip to below 145
yen.
Dealers said the worsening trade relations between the U.S.
And Japan will continue to depress the dollar.
The trade issue has now become a political issue since the
Reagan Administration is facing uproar in Congress over
th3pYgks in cutting the country's 169.8 billion dlr trade
deficit, they said.
| Financial Reports |
ARBED SA <ARBB.BR> YEAR 1986
| Net profit 890 mln Luxembourg francs
vs 1.12 billion.
Turnover 57.8 billion francs vs 65.3 billion.
Cash flow 5.72 billion francs vs 6.70 billion.
Steel production 3.74 mln tonnes, down seven pct.
Board will decide on April 24 whether to pay a dividend. No
dividend has been paid since 1984.
| Other |
CHARMING SHOPPES INC <CHRS> 4TH QTR JAN 31 NET
| Shr 28 cts vs 22 cts
Net 14 mln vs 10.6 mln
Revs 163.8 mln vs 127.3 mln
Year
Shr 81 cts vs 59 cts
Net 40.5 mln vs 28.7 mln
Revs 521.2 mln vs 391.6 mln
| Other |
JAPAN ACTIVELY BOUGHT U.S. CORN LAST WEEK - TRADE
| Japanese feed and starch makers actively
bought U.S. Corn last week, C and F basis, for July/September
shipment in view of bullish freight rates following active
inquiries by the Soviet Union, trade sources said.
Some said the makers were seen buying some 30 pct of their
requirements, estimated at about three mln tonnes for the
three-month shipment period.
"Belief is growing that freight rates will not decline
sharply from current high levels even in the usually sluggish
summer season because the Soviet Union's chartering is seen
continuing five to seven months from April," one source said.
The sources said Japanese trading houses were seen covering
a total of 500,000 tonnes of Chinese corn for shipment in May
to October. But they are believed to have not yet sold most of
the corn to end-users in anticipation of further corn price
rises in the world market.
Supply from Argentina and South Africa for July/September
is still uncertain. But the sources forecast supplies from
Argentina may fall to 400,000 to 500,000 tonnes from an
anticipated 800,000 in calendar 1987 and from South Africa to
700,000 to 800,000 tonnes from an estimated one mln in light of
tighter export availability.
| Financial Reports |
ARBED SEES NEED TO MAINTAIN PRESSURE ON COSTS
| The recent deterioration in the
steel market makes it important for Arbed SA <ARBB.BR> to
maintain efforts to reduce costs, the company said in a
statement.
It reported that its competitive position had weakened
considerably in the second half of 1986, leading to a seven pct
cut in steel output over the whole of the year to 3.74 mln
tonnes.
Arbed had managed to make a 890 mln franc net profit,
slightly down from the 1.12 billion profit in 1985, thanks to
lower raw material costs and prudent management, the company
said.
Arbed said the early months of 1987 had seen the market
deteriorate further, but the decision of the European Community
to maintain anti-crisis measures, at least provisionally,
should under normal circumstances have a beneficial effect.
EC ministers have agreed to extend a quota production
system while discussions continue on an industry plan for
capacity reductions.
Arbed said in current conditions, cost cutting efforts
remain necessary to avoid any weakening of resources which have
been built up over the last three years.
| Financial Reports |
BASF <BASF.F> SAYS 1986 RESULTS AFFECTED BY DLR
| BASF AG said
the volatile currency situation last year, particularly the
fall of the dollar, led to sharp drops in turnover denominated
in marks and to price reductions for exports from domestic
production.
But in a statement accompanying year-end figures, the group
said it expected satisfactory business development over the
next months. "At the moment we do not expect any extraordinary
influences such as there were last year," it said. Orders in
hand and incoming orders were steady at a high level.
BASF reported 13.6 pct lower 1986 world group pre-tax
profit at 2.63 billion marks compared to 1985.
The unusual situation on the crude oil market last year
also produced a clear sales slide in the oil and gas sector and
forced price declines for petrochemical products, BASF said.
The fall in pre-tax profit corresponded to the losses on
stocks in the oil and gas sector at the beginning of 1986. In
the parent company, the positive earnings development
continued, it said, where pre-tax profit rose by 3.2 pct to
1.97 billion marks. The decline in parent company turnover was
balanced out by increased capacity use and price declines in
raw materials.
In 1986, world group turnover was off 8.8 pct at 40.47
billion marks compared to 1985, BASF said. Parent turnover fell
8.5 pct to 18.72 billion.
Turnover increases, with the exceptions of the sectors fine
chemicals and informations systems, had only been achieved in
those areas widened last year through acquisition in 1985.
Results from these had been taken only partly into the
fourth quarter of that year but fully included in 1986 data.
So far in the current year, the investment volume of the
parent company and the world group is exceeding that in 1986,
BASF said, without giving concrete figures.
| Other |
BAHRAIN INTRODUCES NEW MONEY MARKET REGIME
| Bahrain is introducing a new domestic
money market regime to provide dinar liquidity aid centred on
the island's newly launched treasury bill programme.
The Bahrain Monetary Agency has issued a circular to all
commercial banks outlining a new policy from April 1 which
gives liquidity aid through sale and repurchase agreements in
treasury bills, or through discounting them.
The circular, released officially to Reuters, said current
arrangements for providing liquidity aid will no longer be
valid except "in quite exceptional circumstances."
Under the current system, the agency provides the island's
20 commercial banks with dinar liquidity by means of short-term
swaps against U.S. Dollars and, less frequently, by short-term
loans secured against government development bonds.
"The agency considers that it is now appropriate to replace
these operations with short-term assistance based on Government
of Bahrain treasury bills," the circular to banks states.
The agency said it will repurchase treasury bills with a
simultaneous agreement to resell them to the same bank at a
higher price which will reflect an interest charge.
The agency said it envisages the repurchase agreements will
normally be for a period of seven days.
Bahrain launched a weekly tender for two mln dinars of
91-day treasury bills in mid-December last year and has since
raised a total of 26 mln dinars through the programme.
Bahrain's commercial banks are currently liquid and have
been making little use of the traditional dollar swaps offered
by the agency. But banking sources said the new regime from
April 1 will mean banks cannot afford not to hold treasury
bills in case they need funds from the central bank.
Banking sources said more than half of the 20 banks hold
treasury bills, although the need by others to take up paper
could increase demand at weekly tenders and push down allotted
yields slightly.
Last week's yield was six pct, although the programme had
started at the end of last year with rates as low as 5.60 pct.
Banking sources said the cost of liquidity through
repurchase accords will not differ much from that on dollar
swaps. But a bank using dollars to obtain liquidity would
foresake interest on the U.S. Currency while the underlying
treasury bill investment is unaffected in a repurchase accord.
| Other |
JAPAN BUYS LARGE AMOUNT OF BRAZILIAN SOYBEANS
| Japanese crushers have bought some
214,000 tonnes of Brazilian soybeans for late April/early July
shipment and may buy up to 140,000 to 190,000 tonnes more for
June to August shipment, trade sources said.
Japan imported 128,089 tonnes of Brazilian beans in
calendar 1986, Finance Ministry customs-cleared statistics
show.
The sources said Brazilian beans were cheaper than U.S.
Origin which may account for the heavy purchases, but added
there were concerns about deliveries from Brazil in the near
term due to labour problems there.
The Japanese purchases comprise 30,000 tonnes for April
20/May 10 shipment, 102,000 for May, 15,000 for late May/early
June, 36,000 for June, and 31,000 for late June/early July
shipment, the sources said.
As a result of the large volumes of Brazilian beans
purchased, Japanese crushers will buy a total of only 150,000
tonnes of U.S. Beans for May shipment. Some 100,000 of this
shipment has already been purchased, the sources added.
They said crushers bought some 270,000 to 280,000 tonnes of
U.S. Beans for April shipment.
| Market and Economy |
DUTCH MONEY SUPPLY HARDLY CHANGED IN DECEMBER
| Dutch seasonally adjusted M2 money
supply was hardly changed in December at 169.49 billion
guilders compared to 169.56 billion in November, Central Bank
data show.
The figure was 2.6 pct higher than in December 1985.
In November, M2 fell 1.9 pct from its level in October and
was 3.9 pct above its level a year before.
Seasonally adjusted M1 money supply was also hardly changed
at 97.21 billion guilders in December, compared to 97.05
billion guilders in November. It was up 9.4 pct on its level a
year before.
| Other |
SINGAPORE WELCOMES NEW LME ALUMINIUM CONTRACT MOVE
| Singapore welcomed the London Metal
Exchange's (LME) decision to list Singapore as a delivery point
for the LME's new dollar-denominated aluminium contract.
Tay Thiam Peng, manager for international trading at the
Trade Development Board, said the decision would boost
Singapore's image as a major delivery port.
"We hope this will encourage more metal traders to set up
shop here and that Singapore can become a delivery port for
other metals as well," he said.
The new contract, to start trading on June 1, is LME's
first dollar-contract.
| Other |
PANSOPHIC SYSTEMS <PNS> SPLITS STOCK 2-FOR-1
| Pansophic Systems Inc said it
will split its stock two-for-one effective April two to
shareholders of record March 13.
It also said it will pay a six cts per share dividend on
the pre-split shares, a regular quarterly dividend, on April
two to shareholders of record March 13.
| Other |
BANK OF ENGLAND FORECASTS SURPLUS IN MONEY MARKET
| The Bank of England said it forecast a
liquidity surplus of around 100 mln stg in the money market
today.
Among the main factors affecting liquidity, exchequer
transactions will add some 985 mln stg to the system today
while a fall in note circulation and bankers' balances above
target will add around 360 mln stg and 110 mln stg
respectively.
Partly offsetting these inflows, bills for repurchase by
the market will drain some 785 mln stg while bills maturing in
official hands and the treasury bill take-up will remove about
546 mln stg.
| Financial Reports |
PHILIPPINE COCONUT AGENCY GETS NEW ADMINISTRATOR
| Newly-installed Philippine Coconut
Authority Chairman Jose Romero has announced the appointment of
lawyer Leandro Garcia as administrator, replacing Colonel Felix
Duenas who is returning to military duty.
The new constitution does not allow military men to hold
positions in civilian agencies.
Duenas and four other military men who were assigned to the
authority in 1978, will return to the ministry of defence where
they worked prior to their appointments at the coconut agency.
| Financial Reports |
TESCO BUYS 5.4 PCT OF HILLARDS
| Tesco Plc <TSCO.L> said <County Bank
Ltd> had bought 165,000 shares in <Hillards Plc> on its behalf,
increasing its stake to 5.4 pct. The shares were bought at
313.25p each.
Tesco is making an opposed 151 mln stg bid for Hillards.
Hillards shares at 0900 GMT were quoted one penny firmer at
317p while Tesco was one penny easier at 479p.
| Financial Reports |
ROYALE BELGE <RBVB.BR> YEAR 1986
| Non-consolidated net profit 3.435
billion francs vs 2.330 billion.
Turnover 39.3 billion francs (no direct comparison)
Own funds 20 billion francs vs 9.2 billion after transfer
of 1.28 billion francs from profits and 8.5 billion from sale
of securities.
Note - company said the figure is slightly lower because
French branches have become group subsidiaries).
Proposed net dividend on ordinary shares 100 francs,
including 20 franc supplement due to the exceptional character
of results, vs 71.9 francs.
Note - Company was created in May 1986 by the merger of
(Royale Belge Vie-Accidents) and (Royale Belge
Incendie-Reassurance).
Vie-Accidents shareholders received eight new shares and
Incendie-Reassurance shareholders six for every share held in
the old companies.
Comparisons are therefore company calculations.
| Corporate News |
JAPANESE SHIPYARDS TO FORM CARTEL, CUT OUTPUT
| Japan's ailing shipyards have won
approval from the Fair Trade Commission to form a cartel to
slash production to about half of total capacity for one year,
effective April 1, industry sources said.
The approval follows an act of parliament passed last week
designed to help the industry regroup and shed 20 pct of
capacity by March 31, 1988, Transport Ministry officials said.
The cartel, comprising 33 yards capable of constructing
ships of more than 10,000 gross tonnes, will limit newbuilding
output to a maximum of three mln compensated gross registered
tonnes in 1987/88, the Shipbuilders Association of Japan said.
Industry sources said the 33 will seek to renew the cartel
in 1988/89 in the belief demand will remain sluggish.
Last week's temporary act of parliament also allows
shipbuilders to receive favourable taxation terms plus up to 50
billion yen in compensation for liabilities incurred through
job losses and the sale of excess capacity.
Up to 30 billion yen has been allocated for purchasing
redundant land and equipment from shipbuilders.
The Ministry will start drawing up its restructuring
guidelines from April 1 and the yards will implement the
guidelines from September, industry sources said.
| Corporate News |
INDONESIAN RUPIAH SLIPS AGAINST MARK AND YEN
| The Indonesian rupiah has held steady
since its 31 pct devaluation against the dollar six months ago,
but has slipped against the mark and to a lesser extent against
the yen, according to central bank figures.
In the past month, the rupiah has fallen five pct against
the yen. Today's middle rate per 100 yen was 1,129.78 against
1,075.20 at end-February and 1,058.6 at devaluation in
September.
Bank Indonesia's quoted rate for the dollar, the main
currency for Indonesia's oil and gas exports, was 1,644.0
today, the same rate fixed at the time of devaluation.
The rate for the West German mark was 913.28 today, a sharp
drop from September when it was 786.06.
The British pound has risen to 2,657.93 against 2,429.83.
The value of the rupiah is set daily against a basket of
currencies by the central bank.
The rise in the value of the mark and the yen has hit
Indonesia by increasing its debt servicing levels. Its total
disbursed foreign debt is estimated by the World Bank at 37
billion dlrs.
Japan is one of Indonesia's key trading partners, taking
half its oil exports.
| Other |
LAC <LAC> INTERSECTS MORE GOLD AT DOYON MINE
| Lac Minerals Ltd and <Cambior Inc> said
they completed a second hole at their jointly owned Doyon mine
in Quebec, which showed two significant gold intersections.
One intersection graded 0.33 ounce gold a short ton over 44
feet at depth of 1,411 feet, while the other graded 0.22 ounce
gold a ton over 23 feet at 2,064 feet, the companies said. The
hole is 460 feet east of the previously reported first hole.
They said they were now drilling another hole 460 feet to
the west of the first drill hole and expected to report results
in late March or early April.
| Corporate News |
PHILIPPINE COCONUT INDUSTRY WORRIED BY EC TAX
| Philippine coconut oil exports to Europe
would be virtually wiped out if the European Community (EC)
implements a new tax on vegetable oils, Philippine Coconut
Authority (PCA) chairman Jose Romero said.
But he told reporters he did not think the EC would impose
the tax because of objections from the U.S.
"There's just so much flak coming from many countries,
spearheaded by the United States, whose soybean exports would
be adversely affected. This would spark a trade war," he said.
The tax, to be imposed from July, would add about 375 dlrs
a tonne to vegetable oils entering the EC.
The Philippines exported 43,540 tonnes of coconut oil worth
11.7 mln dlrs to Europe in January, against total exports of
86,959 tonnes worth 23.8 mln. It also exports copra and copra
meal.
Agriculture Secretary Carlos Dominguez has also raised
objections to the proposed EC tax.
He said it could cause the collapse of world demand and
prices and destroy the domestic industry.
| Corporate News |
WALLENBERG GROUP RAISES STAKE IN ERICSSON
| Sweden's Wallenberg group said it
raised its holding in telecommunications maker Telefon AB L.M.
Ericsson <eric.St.> to 37.5 of the voting rights from 28.9 pct.
The move by the Knut and Alice Wallenberg Foundation, one
of the institutions at the core of the group of companies
formed by the late industrialist Marcus Wallenberg, further
consolidated group control over one of its key firms, analysts
said.
The foundation now controls 14.1 pct of Ericsson's voting
rights with 22.3 pct held by the group's investment companies
<AB Investor> and <Forvaltnings AB Providentia>.
The move comes after the Wallenberg group fought off a
hostile takeover bid earlier this month for match and packaging
conglomerate Swedish Match AB <smbs.St> from arms and chemical
concern Nobel Industrier AB <NOBL.ST> by increasing its stake
in Swedish Match to 85 pct from 33 pct.
| Commodities and Trade |
FRENCH FEBRUARY INFLATION CONFIRMED AT 0.2 PCT
| French retail prices rose a confirmed 0.2
pct in February, in line with provisional figures released two
weeks ago showing a rise of between 0.1 and 0.2 pct, the
National Statistics Institute said.
The rise compared with a 0.9 pct rise in January.
Year-on-year retail price inflation was confirmed at 3.4
pct for February compared with a three pct rise year-on-year in
January.
| Financial Reports |
SRI LANKA TO UPROOT OR BUD DISEASED RUBBER TREES
| Sri Lanka will uproot rubber trees that
are more than two years old and affected by the leaf disease
corynespora, the head of the government's Rubber Research
Institute told Reuters.
Rodney De Mel said affected trees less than two years old
would undergo base-budding -- attaching a clone as close as
possible to the trunk's base and cutting off the top of the
tree once the bud has taken. Uprooted or base-budded trees
mature later, causing an output loss estimated at 350 kilos per
hectare from the sixth year when they begin producing.
About 7,000 acres are planted with the high yielding RIC
103 variety, the clone afflicted by corynespora.
Only about 2,000 acres are affected by the disease, which
causes leaves to fall off, De Mel said.
Sri Lanka has 508,000 acres planted with rubber trees.
De Mel said the disease was detected in nurseries as early
as in middle 1985, but it was only in August-September 1986
that it became widespread.
The Institute is conducting a survey to determine how many
trees will be uprooted or base-budded. Healthy trees will be
sprayed and remain under observation.
T.P. Lilaratne, head of the government's Rubber Controller
Department, which monitors the industry, told Reuters
replanting and base-budding would have to be undertaken before
late May when the monsoon rains begin.
De Mel said clones in the nurseries which are susceptible
to corynespora, identified as RIC 103, RIC 52, RIC 104, RIC
106, RIC 107 and RIC 118, will be uprooted and burned.
The same procedures will be undertaken for the foreign
clones indentified as NAB 12, RRIM 725, FX25, PPN 2444, PPN
2447, KRS 21 and PPN 2058.
Lilaratne said the susceptible clones would be replaced by
PB 86, RRIM 600, RRIC 110, RRIC 121, RIC 100 and RIC 102.
These six varieties would also be used to replace trees
uprooted or base-budded, De Mel said.
Lilaratne said planters would receive 10,000 rupees per
hectare for replanting and plants would be free of charge.
"But no compensation is contemplated at the moment," he
added.
De Mel said a drought in Sri Lanka has helped control the
spread of the disease.
"The drought has not stopped the disease, but probably
helped in some way because trees have not been affected in
areas that are dry," he said.
Brokers said the disease had not affected prices because it
has not caused a drop in production.
Prices for the best latex crepe at the Colombo auction last
week firmed to 20.19 rupees per kilo from 20.05 rupees at the
previous sale.
| Financial Reports |
Miyazawa expects dollar to rebound soon, spokesman says
|
Miyazawa expects dollar to rebound soon, spokesman says
| Financial Reports |
PHILADELPHIA EXCHANGE TO EXTEND HOURS FOR ASIA
| The Philadelphia Stock Exchange (PHLX),
a leading trader of currency options, plans to extend its
trading hours to serve Australasian and Far Eastern markets,
exchange president Nicholas Giordano said.
He told reporters the PHLX will open a new session between
1900 and 2300 hours U.S. EST from the beginning of the third
quarter this year.
The PHLX is also opening an office in Hong Kong to serve
clients in the region and educate financial markets about the
advantages of currency options, Giordano said.
Giordano was in Sydney to start an Asian-Pacific tour by
exchange executives promoting the hedging benefits of the
exchange-trade currency option market against existing
over-the-counter option trading during the local working day.
Currency options pioneered by the PHLX in 1982 had become
an accepted means of hedging against foreign exchange risk and
had grown in popularity, he said.
The PHLX now offered options in eight currencies, including
a new Australian dollar option, and traded an average 42,000
contracts daily with underlying open interest of more than 30
billion U.S. Dlrs.
Giordano said the exchange had been impressed with the
performance of its Australian dollar contract, which since its
introduction last year had regularly topped the French franc as
the third most popular traded option, with up to 8,000
contracts traded daily.
Having the Philadelphia exchange open during the
Asia-Pacific market day would open new hedging opportunities,
set a truer level for over-the-counter option trading, increase
arbitraging opportunities and give corporations and treasuries
access to a currency option market of much greater depth and
liquidity with the security of a clearing house, he said.
| Market and Economy |
MIYAZAWA EXPECTS DOLLAR REBOUND SOON - SPOKESMAN
| Japanese Finance Minister Kiichi Miyazawa
expects the dollar to rebound soon, a Ministry spokesman said.
He quoted Miyazawa as telling Japanese reporters that major
industrial nations are aggressively intervening in currency
markets worldwide to prevent a dollar free-fall.
The minister believes that market forces will push the
dollar back up from its record low of 144.70 yen today,
according to the spokesman.
Miyazawa told the Japanese reporters the U.S. Unit fell
because Japanese investors sold dollars to hedge currency risks
before the close of the 1986/87 fiscal year on March 31.
| Market and Economy |
U.K. CONFIRMS FEBRUARY STERLING M3 RISE
| The Bank of England said the broad
measure of U.K. Money supply, Sterling M3, rose a seasonally
adjusted 2.2 pct in February after a 1.1 pct rise in January.
The unadjusted year on year rise was 18.9 pct after 17.6
pct in the year to January, the Bank said.
The narrow measure of money supply, M0, fell by a
seasonally adjusted 0.8 pct in February, and rose by a
non-adjusted 4.1 pct year on year. In January, M0 fell by an
adjusted 0.6 pct, and rose by a non-adjusted 4.1 pct year on
year.
The figures confirm provisional data issued by the Bank on
March 19.
The Bank said sterling bank lending grew by a seasonally
adjusted 2.91 billion stg in February, after a 1.70 billion stg
adjusted rise in January.
The measure of private sector liquidity, PSL2, rose an
unadjusted 0.9 pct in February, making a year-on-year
unadjusted 13.1 pct rise. Adjusted, PSL2 rose by 1.2 pct in
February, against a 0.6 pct rise in January, the Bank said.
It said the public sector contribution to the growth in
Sterling M3 was contractionary by about 40 mln stg after a
contractionary contribution of 2.3 billion stg in January.
Within this, the Public Sector Borrowing Requirement showed
a repayment of 380 mln stg after a 3.7 billion stg repayment in
January, while the non-bank private sector's holdings of
government debt fell by about 260 mln stg after a 1.1 billion
stg fall in January.
There was a 50 mln stg rise in notes and coins in
circulation in February after a 290 mln stg fall in January,
the Bank said.
Non-interest bearing sight deposits rose by 460 mln stg
after a 1.5 billion stg fall in January and interest-bearing
deposits fell 200 mln stg after a 1.6 billion rise in January.
| Financial Reports |
SLOUGH ESTATES VIEWS 1987 PROSPECTS CONFIDENTLY
| Slough Estates Plc <SLOU.L> said it
views the prospects during 1987 with confidence.
In a statement accompanying its 1986 results, it reported a
rise of over 10 mln stg in 1986 pretax profit to 49.6 mln stg
and said there are signs that the existing threat of excess
supply may be lessened in 1987. There has also been a return of
interest in industrial investment.
An external appraisal of the group's investment properties
was carried out last year which found their gross value to be
851.3 mln stg as at Dec 31.
| Other |
CALMAR <CLMI> SEEKS TO BE ACQUIRED BY <KEBO AB>
| Calmar Inc said KEBOO Ab of
Sweden, which now owns about 64 pct of Calmark, has approved
the acquisition of remaining Calmar shares at 25.375 dlrs in
cash at the request of the Calmar board.
Calmar said a special meeting of its board will be held
March Nine to form a special committee of directors not
affiliated with KEBO to evaluate the transaction.
KEBO is in turn 60 pct owned by <Investment AB Beijar> of
Sweden.
| Commodities and Trade |
EC COMMISSIONER WELCOMES COCOA ACCORD
| The new International Cocoa Agreement
should lead to a stabilisation of prices, both benefitting
producer countries and promoting an equilibrium in
international economic relations, European Community
Development Commissioner Lorenzo Natali said.
He said in a statement welcoming the agreement on buffer
stock rules reached last week in London that it resulted in
large part from initiatives taken by the EC Commission after
consumers and producers had reached deadlock in initial
negotiations.
| Corporate News |
RUGBY WELL PREPARED FOR NEW CEMENT COMPETITION
| Rugby Portland Cement Plc <RBYL.L> said
it was well placed to operate in the new circumstances
following the ending in February of the 53-year old cement
manufacturers common price and marketing arrangements.
In a statement following the release of its 1986 results,
IT stated that the current year had started well. It reported
that pretax profits in the year rose to 35.46 mln stg from
21.84 mln previously on turnover higher at 313.3 mln after
252.2 mln.
The strong recovery of the first six months continued into
the second half, although U.K. Cement demand rose only
modestly. Results benefitted from cost cutting and higher
volumes.
The decision by the Cement Makers Federation to end the
pricing agreement reflected pressure from higher competition
due to growing imports and the possibility that the system
would be taken to the Restrictive Practices Court by the U.K.
Government. It stated that its John Carr unit benefitted from
strong organic growth, although overseas its Cockburn operation
had a difficult period with high maintenance costs and
increased depreciation charges.
The company is proposing to change its name at the next
annual meeting to <Rugby Group Plc>.
Rugby said it spent 27 mln stg on acquisitions in 1986. It
noted that its Western Australia hotels company had agreed to
sell the Parmelia hotel for 31.5 mln Australian dlrs, some
seven mln stg above end-1986 book value.
The results were largely in line with forecasts and Rugby
shares were little changed at 242p after 241 at Friday's close.
| Commodities and Trade |
MANNESMANN BUYS INDIRECT MAJORITY STAKE IN SACHS
| Mannesmann AG <MMWG.F> said it has
reached a series of agreements giving it an indirect majority
stake in the <Fichtel und Sachs AG> car parts group.
The takeover is contingent on approval from the Federal
Cartel Office in West Berlin, a spokesman said, adding that
Mannesmann was confident the authorities would not block the
purchase.
Mannesmann is buying 75 pct of <MEC Sachs
Vermoegensholding> which owns 37.5 pct of Sachs AG, which in
turn holds 96.5 pct of Fichtel und Sachs. The MEC shares will
be bought from the granddaughters of the firm's founder.
Mannesmann is also purchasing a 25.01 pct stake in Fichtel
und Sachs from Commerzbank AG <CBKG.F> and has an option to buy
the bank's remaining 10 pct stake, a company statement said.
In addition to these firm agreements, Mannesmann is also
talking with the state-owned steel group Salzgitter AG
<SALG.H> on buying its 24.98 pct stake in Fichtel und Sachs.
This would give Mannesmann around 75 pct of Fichtel und Sachs.
Salzgitter said it decided to give up its own original
plans to seek a majority stake in Sachs after holding talks
with the government in Bonn.
Earlier this month Mannesmann disclosed that it might want
a majority stake in Sachs after previously saying it was
seeking to buy only a minority holding in the company, which
has annual turnover of 2.2 billion marks and employs 17,000.
The acquisition is part of Mannesmann's efforts to
diversify into high-technology areas and away from its previous
reliance on steel and pipe-making. More
A spokesman for the Federal Statistics Office later said
the anti-cartel authorities would probably rule on the takeover
in the new few weeks.
| Other |
SINGAPORE M-1 MONEY SUPPLY 2.7 PCT UP IN JANUARY
| Singapore's M-1 money supply rose
2.7 pct in January to 10.09 billion Singapore dlrs after a 3.7
pct increase in December, the Monetary Authority of Singapore
said.
Year on year, M-1 grew by 15.6 pct in January compared with
an 11.8 pct growth in December.
The January rise was largely seasonal, reflecting an
increase in currency in active circulation prior to the Lunar
New Year. Currency in active circulation rose to 5.42 billion
dlrs from 5.03 billion in December and 4.84 billion a year ago.
The demand deposit component of M-1 dropped in January by
4.67 billion dlrs from 4.79 billion in December and compared
with 3.89 billion in January, 1986.
Broadly-based M-2 money supply rose 1.1 pct to 31.30
billion dlrs in January, after a 1.6 pct rise in December,
bringing year on year growth to 12.1 pct in January against
10.0 pct in the previous month.
| Financial Reports |
B AND C REORGANISES COMMERCIAL OPERATIONS
| British and Commonwealth Shipping Co Plc
<BCOM.L> said that it would reorganise its commercial and
service operations into a single public grouping with
autonomous management.
The group has expanded rapidly in the past year through the
672.5 mln stg acquisition of <Exco International Plc> and 90
mln bid for <Steel Brothers Holdings Plc>.
It noted that its operations were now divided between
financial services, including money broking, investment
management and forfaiting, and more traditional areas such as
aviation, hotels, commodity trading and office equipment.
It said that each sector had exciting prospects but
required different methods of management and financing.
B and C planned to form a new public company to hold the
commercial operations and envisaged it operating with a capital
of between 400 mln and 600 mln stg.
It has retained Barclays de Zoete Wedd to advise on the
introduction of independent investors to subscribe for
additional capital, and believes that the proportion of equity
capital held by outside investors would not exceed 20 pct of
the total.
The statement said that with the continued support of B and
C, together with outside capital, the new grouping would emerge
as a major group in its own right with the ability to take
advantages of opportunities as they arose. However, the group
would not seek a listing for the time being.
B and C also said that its chairman, Lord Cayzer, planned
to retire in June. The company proposed that he be appointed
life president and that current chief executive John Gunn
should take over as chairman.
B and C shares eased 11p to 459p at 1040 GMT.
| Corporate News |
JAPAN CONDUCTS CURRENCY SURVEY OF BIG INVESTORS
| A Finance Ministry official said the
ministry has recently conducted a survey on foreign exchange
transactions by institutional investors but declined to say if
it was aimed at moderating their dollar sales.
However, financial market sources said they had heard the
ministry has asked life insurance and securities firms to
refrain from selling dollars, but they were unable to confirm
this directly.
Dealers said life insurance firms were not major sellers of
dollars in recent trading sessions because they had already
sold them to hedge risks.
Dealers said securities houses and trust banks on the other
hand have aggressively sold the dollar.
| Market and Economy |
BP U.K. REFINERY DUE TO PARTLY RE-OPEN NEXT WEEK
| The British Petroleum Co PLC (BP.L) oil
refinery at Grangemouth, closed after an explosion and fire
eight days ago, is expected to partially reopen next week, a
refinery spokesman said.
He said the entire 178,500 bpd refinery has been shut since
the accident which killed one person and damaged the site's
hydrocracker. The main units will resume operation next week
but the hydrocracker will be closed for an unspecified period.
The spokesman said the refinery had been operating at about
half its capacity since end-January due to overhaul work on
part of the complex. The overhaul is expected to end by late
April.
| Corporate News |
NO INTERVENTION, DOLLAR FIXED AT 1.8063 MARKS
| The Bundesbank did not intervene as
the dollar was fixed lower at 1.8063 marks after 1.8231 on
Friday, dealers said.
Business calmed down after a hectic start, with European
operators sidelined because of uncertainty about the short-term
direction of the dollar, dealers said. "At the moment, all the
action is taking place in New York and Tokyo," one said.
The U.S. Currency traded within a 145 basis point range in
Europe, touching a low of 1.7940 and a high of 1.8085 marks.
But it remained within a narrow 40 basis point span around
1.8050 marks after the first hour of European trading.
Comments by Japanese officials and Bank of Japan dollar
support had pushed it above 145 yen and 1.80 marks after
falling as low as 144.50 and 1.7860 respectively in Tokyo.
| Financial Reports |
TOP QUALITIES SOUGHT ON HAMBURG COFFEE MARKET
| The green coffee market saw some demand
for high quality coffees in the past week, but business was
described as generally unsatisfactory, trade sources said.
Especially sought were spot East African and Ethiopian and
some Brazils, they said, adding that some high grade robustas
also met some demand.
Sporadic business was noted in the second hand which
offered Kenya coffee for May/June shipment up to 25 dlrs below
origin levels.
Roasters are said to be well covered and are not expected
to enter the market for larger purchases in the near term.
| Corporate News |
SINGAPORE BANK CREDIT RISES IN JANUARY
| Total loans and advances extended by
banks in Singapore rose in January to 36.01 billion Singapore
dlrs from 35.79 billion in December but fell from 36.93 billion
a year ago, the Monetary Authority of Singapore said.
It said the increase was concentrated in loans to the
manufacturing and real estate sectors, while loans to the
commerce sector declined.
Deposits of non-bank customers also fell in January to
30.44 billion dlrs from 30.61 billion in December but rose from
28.33 billion in January, 1986.
Total assets and liabilities of banks rose to 77.60 billion
dlrs in January from 76.83 billion in the previous month and
69.45 billion a year ago.
Assets and liabilities of finance companies fell to 6.87
billion dlrs from 6.95 billion and compared with 6.85 billion,
respectively.
Loans extended by finance companies rose to 4.77 billion
dlrs from 4.74 billion in December and against 5.34 billion in
January last year, while deposits placed with them dropped to
4.68 billion against 4.89 and 4.79 billion.
| Other |
BANK OF ENGLAND DOES NOT OPERATE IN MONEY MARKET
| The Bank of England said it had not
operated in the money market during the morning session.
Earlier, the Bank revised its forecast of the liquidity
position to flat from its original estimate of a 100 mln stg
surplus.
| Commodities and Trade |
ASIAN DOLLAR MARKET ASSETS FALL IN JANUARY
| The gross size of the Asian dollar
market contracted to 197.2 billion U.S. Dlrs in January, down
3.4 billion dlrs from December, reflecting a decline in
interbank activity, the Monetary Authority of Singapore (MAS)
said in its latest monthly bulletin.
The assets stood at 151.7 billion dlrs in January last
year.
MAS said interbank lending fell in January to 140.9 billion
dlrs from 146.6 billion in December but rose from 102.0 billion
in january 1986 and interbank deposits to 154.0 billion against
159.4 and 117.1 billion, respectively.
Loans to non-bank customers increased to 40.1 billion dlrs
in January from 38.7 billion in December and 36.9 billion in
January, 1986.
Deposits of non-bank customers also increased in January to
34.9 billion from 33.8 billion a month ago and 27.7 billion a
year ago. REUTER
| Financial Reports |
H.K. M3 MONEY SUPPLY RISES 1.4 PCT IN FEBRUARY
| Hong Kong's broadly defined M-3 money
supply rose 1.4 pct in February to 615.59 billion H.K. Dlrs
from January when it rose 2.2 pct, the government said.
Total M3 rose 22.4 pct from February, 1984. Local currency
M3 rose 0.6 pct to 282.11 billion dlrs from January, and 16.8
pct on the year.
Total M2 rose 2.0 pct to 545.71 billion dlrs in February
from January, when it increased by 3.3 pct.
Local currency M2 rose 1.0 pct to 251.49 billion dlrs last
month after it rose 4.7 pct in January. Total M2 and local M2
rose 32.0 pct and 24.9 pct respectively from February, 1984.
Total M1 fell 5.3 pct to 59.52 billion dlrs in February
after a 12 pct rise in the previous month. Local M1 dropped 6.0
pct to 54.47 billion dlrs after January's rise of 12.3 pct.
Year on year growth in total M1 and local M1 was 26.3 pct
and 27.6 pct, respectively.
Total loans and advances rose 1.3 pct to 523.74 billion
dlrs from January, when they were up 3.3 pct. However, loans
for financing Hong Kong's visible trade fell 1.3 pct to 36.23
billion dlrs after a 3.4 pct rise in the previous month.
| Commodities and Trade |
ALGERIA SETS TENDER FOR RAPE/SUNFLOWERSEED OIL
| Algeria will tender on April 3 for
20,000 tonnes of optional origin sunflowerseed oil/rapeseed oil
for Apr/May loading, traders said.
Meanwhile, the market is awaiting results of an Algerian
import tender which took place over the weekend for about
10,000 tonnes of refined vegetable oils in drums, traders
added.
| Corporate News |
ITALY'S BNL NEGOTIATING PURCHASE OF GERMAN BANK
| Italy's state-owned <Banca Nazionale Del
Lavoro-BNL> said it is negotiating to buy a West German bank as
part of its foreign expansion policy.
BNL president Nerio Nesi told a news conference the Italian
bank was currently involved in talks but declined to name the
German institution.
He said the takeover move could be seen as BNL's reply to
Deutsche Bank AG <DBKG.F>, which entered the Italian market in
December 1986, with the purchase of BankAmerica <BACN>
subsidiary <Banca D'America e D'Italia>.
Nesi said BNL had also approved a 200 mln dlr credit line
to the Soviet Union aimed at enabling Soviet companies to pay
for Italian imports. He gave no further details.
BNL officials said the group had also decided to increase
its activities in the Soviet Union by opening a representative
office in Moscow this month through its subsidiary <Sogecred>,
which specialises in Italian-Soviet trade.
| Other |
COCOA DEAL SEEN POSITIVE, BUT NO PRICE GUARANTEE
| The buffer stock rules agreement reached
on Friday by the International Cocoa Organization (ICCO) is an
improvement on previous arrangements but the price-support
mechanism is unlikely to do more than stem the decline in cocoa
prices, many ICCO delegates and trade sources said.
The accord was reached between producers and consumers of
the 35-member ICCO council after two weeks of talks.
European chocolate manufacturers and delegates said the
accord may boost cocoa prices immediately, but world surpluses
overhanging the market will pull prices down again before long.
"If the buffer stock operation is successful, I doubt it
will do anything more than stop the price from falling further,
and it will have no relevance at all to retail chocolate
prices," a European dealer said.
And if the buffer stock manager delays too long in buying,
or is not seen to be using his purchasing power when the market
is relying on him to do so, the bearish trade reaction could
pressure prices dramatically, dealers said.
The buffer stock is the market-regulating tool of the ICCO,
into which cocoa can be bought or from which it can be sold to
manoeuvre prices into a pre-set stabilization range.
A new cocoa agreement came into force in January but
delegates could not agree buffer stock rules at that time.
The new rules take effect immediately. The buffer stock
manager is expected to begin buying cocoa within the next three
weeks, after organizing communications with cocoa producing
countries and assessing the market, since prices are below the
"must-buy" level of 1,600 Special Drawing Rights per tonne
specified in the agreement, the sources said.
The buffer stock theoretically has funds to buy a maximum
100,000 tonnes within a five week period, but its approach will
be more cautious, buffer stock manager Juergen Plambeck said.
The buffer stock has around 250 mln dlrs in funds and a
buying limit of 250,000 tonnes of cocoa, 100,000 tonnes of
which are already in the buffer stock.
ICCO council chairman and Ivorian Agriculture Minister
Denis Bra Kanon said the new rules have a good chance of
stabilizing prices. Ivory Coast is the world's largest cocoa
producer.
"We have established rules which will permit us to withdraw
immediately the surplus of cocoa on the world market," Bra Kanon
told reporters after the council adjourned. Bra Kanon reckoned
the world cocoa surplus could be less than half the 94,000
tonnes estimated by the ICCO statistics committee.
However, some producer and consumer members emerged from
the final ICCO council meeting with reservations about the
pact.
Ghana, whose high-quality cocoa is the world's most
expensive and provides 60 pct of the country's export earnings,
made a formal protest to the council about the price
differentials assigned to its cocoa, saying they were too high
for Ghanaian cocoa to be bought for the buffer stock.
According to consumer spokesman Peter Baron of West
Germany, "Consumers weren't perfectly happy with the buffer
stock rules. We reached a very sensitive compromise...There
were no real winners or losers."
Some European Community delegates were not satisfied that
important points were fully discussed during the talks, and as
a result, doubted the rules can deal with world surpluses as
effectively as they could have, delegates said.
Under the new rules, the buffer stock manager would seek
offers of different origin cocoas, using price differentials to
reflect different qualities. Non-ICCO member cocoa can comprise
up to 15 pct of the total buffer stock.
London cocoa prices traded today around 1,300 stg per
tonne, down from around 1,450 stg in January 1987 and 1,750 stg
in January 1986.
A cocoa withholding scheme can take a further 120,000
tonnes of cocoa off the market if a special council session
decides market conditions warrant it, according to the
agreement.
The withholding scheme can only be used if prices fall
below the 1,600 SDR lower intervention price for more than five
days and if 80 pct of the maximum buffer stock capacity has
been filled, or if the buffer stock runs low on funds, it says.
The ICCO will discuss withholding scheme rules at an
executive committee meeting on June 9/12, ICCO officials said.
| Financial Reports |
G-6 WANTS TO HOLD DLR ABOVE 150 YEN - NAKASONE
| Prime Minister Yasuhiro Nakasone said
that Japan and other industrialized nations committed
themselves in Paris last month to stabilize the dollar above
150 yen.
He told a Lower House Budget Committee in Parliament that
the six nations have taken measures, including market
intervention, to support the dollar above that level.
Finance Minister Kiichi Miyazawa told the same committee
that the six - Britain, Canada, France, Japan, the U.S. And
West Germany - had intervened aggressively since the dollar
fell below 150 yen.
Miyazawa said major nations are trying hard to stabilize
exchange rates.
Asked if there had been any change in the fundamentals of
each nation since the February 22 Paris accord, he said he did
not think the fundamentals themselves had changed
substantially.
But he said the market is sensitively looking at what is
happening in major nations. He did not elaborate.
Miyazawa added that it was difficult to say why there has
been such speculative dollar selling in the market.
| Corporate News |
MIYAZAWA EXPECTS DOLLAR REBOUND SOON - SPOKESMAN
| Japanese Finance Minister Kiichi Miyazawa
expects the dollar to rebound soon, a Ministry spokesman said.
He quoted Miyazawa as telling Japanese reporters that major
industrial nations are aggressively intervening in currency
markets worldwide to prevent a dollar free-fall.
The minister believes that market forces will push the
dollar back up from its record low of 144.70 yen today,
according to the spokesman.
Miyazawa told the Japanese reporters the U.S. Unit fell
because Japanese investors sold dollars to hedge currency risks
before the close of the 1986/87 fiscal year on March 31.
| Corporate News |
NAKASONE SOUNDS CONCILIATORY NOTE IN CHIP DISPUTE
| Prime Minister Yasuhiro Nakasone sounded
a conciliatory note in Japan's increasingly bitter row with the
United States over trade in computer microchips.
"Japan wants to resolve the issue through consultations by
explaining its stance thoroughly and correcting the points that
need to be corrected," he was quoted by Kyodo News Service as
saying.
While expressing regret over America's decision to impose
tariffs on imports of Japanese electrical goods, Nakasone said
Tokyo was willing to send a high-level official to Washington
to help settle the dispute.
Government officials said Japan would make a formal request
next week for emergency talks and that the two sides would
probably meet the week after, just days before the April 17
deadline set by Washington for the tariffs to take effect.
Tokyo is expected to propose a joint U.S./Japan
investigation of American claims that Japanese companies are
dumping cut-price chips in Asian markets.
On Friday, Washington announced plans to put as much as 300
mln dlrs in tariffs on imports of certain Japanese electronic
goods in retaliation for what it sees as Tokyo's failure to
live up to their bilateral chip pact.
| Financial Reports |
AMYLUM CHAIRMAN DISAPPOINTED BY FERRUZZI-CPC DEAL
| Belgian starch manufacturer <Amylum NV>
is surprised and disappointed that its 675 mln dlr offer for
the European business of CPC International Inc <CPC.N> was
apparently rejected in favour of a lower 630 mln dlr bid by
Italy's <Gruppo Ferruzzi>, chairman Pierre Callebaut said.
Callebaut told Reuters that Amylum, a leading starch and
isoglucose manufacturer in which Britain's Tate and Lyle Plc
<TATL.L> holds a 33.3 pct stake, had made an undisclosed
initial takeover offer for CPC's European corn wet milling
business by the close of CPC's tender on March 17.
The offer was raised on March 24 to a final 675 mln dlrs in
cash after CPC told Amylum its initial bid was below Ferruzzi's
630 mln stg offer, Callebaut said.
On the same day, CPC announced it had agreed in principle
to sell its European business to Ferruzzi in a 630 mln dlr
deal.
Noting that Ferruzzi was studying a public offering of
shares in its unit <European Sugar (France)> to fund the CPC
takeover, Callebaut said Amylum may still succeed in its bid.
"For the time being we just await developments. But I note
that whereas our higher offer was in cash, Ferruzzi apparently
is still organising finance," Callebaut said.
| Industrial and Sector News |
SUMITA SAYS HE DOES NOT EXPECT FURTHER DOLLAR FALL
| Bank of Japan governor Satoshi Sumita
said he does not expect the dollar to remain unstable and fall
further.
He told a Lower House Budget Committee in Parliament that
the Bank of Japan would continue to cooperate closely with
other major nations to stabilize exchange rates.
The central bank has been keeping extremely careful watch
on exchange rate movements since last week, he said.
He said the dollar would not continue to fall because of
underlying market concern about the rapid rise of the yen.
Sumita said the currency market has been reacting to
overseas statements and to trade tension between Japan and the
U.S. over semiconductors.
The yen's tendency to rise will prevent Japan from
expanding domestic demand and undertaking necessary economic
restructuring, he said.
| Financial Reports |
THREE KILLED IN SOUTH AFRICA ZINC REFINERY CLASH
| Three black workers were killed and
seven injured in fighting at a South African zinc refinery last
night, Gold Fields of South Africa Ltd said.
The company said two groups of workers began attacking each
other at about 1000 local time with machetes, knives and sticks
at a hostel at the Zincor plant, some 40 kms east of
Johannesburg.
It said the fighting was "quelled" after 25 minutes by its
own security staff. Police were called but the fighting had
ended by the time they arrived.
A company spokesman said he had no idea of the cause of the
fighting. An investigation was underway, he said.
| Other |
DLR FALLS ON FEARS, MIYAZAWA SAYS
| Finance Minister Kiichi Miyazawa said
that the dollar's drop today to 145 yen is partly attributable
to the perception inside and outside Japan that the country has
failed to fulfill its promise to expand domestic demand.
He told a Lower House budget committee in Parliament that
it was natural for other nations to think that Japan is not
doing enough because of the delay in the passage of the 1987/88
budget.
The budget has been delayed by opposition boycotts of
Parliament to protest government plans for a new sales tax.
| Other |
JAPAN ISOLATED, YEN RISES, WORLD FEELS CHEATED
| Japan is becoming dangerously isolated
again as the U.S. And Europe feel they have been cheated by
Japanese promises to switch from export to domestic-led growth,
officials and businessmen from around the world said.
As the dollar today slipped to a record low below 145 yen,
making Japanese exporters and holders of dollar investments
grit their teeth harder, Finance Minister Kiichi Miyazawa said
there was a perception Japan had reneged on its promise.
The problem goes deep and centres on misunderstandings by
both sides over the key Maekawa report of April, last year.
The document was prepared by a private committee formed by
Prime Minister Yasuhiro Nakasone and led by former Bank of
Japan head Haruo Maekawa. It recommended that to stop friction
due to its large trade surpluses, Japan must "make a historical
transformation in its traditional policies on economic
management and the nation's lifestyle. There can be no further
development for Japan without this transformation."
Americans and Europeans took the report to heart and have
looked in vain for clear signs of this historic change. But the
Japanese remain doubtful about the short, or even medium term
prospects of totally transforming their economic habits.
The bubble of frustration against what appears as Japanese
prevarication burst last week. The U.S. Said it intended to
raise tariffs of as much as 300 mln dlrs on Japanese exports to
the U.S. On the grounds Japan had abrogated a bilateral
semiconductor pact.
British Prime Minister Margaret Thatcher threatened to
block Japanese financial firms from London after the Japanese
placed what the British say are restrictive conditions on a bid
by British firm Cable and Wireless to join a domestic
telecommunications joint venture.
On Friday, European currency dealers said European central
banks, annoyed at restrictive Japanese trade practises, might
leave Japan alone to intervene to staunch the rise of the yen.
Eishiro Saito, head of top Japanese business group
Keidanren, spotted the dangers inherent in such contradictory
views last November when he visited the European Community.
"Related to this matter of (trade) imbalance, the point that I
found to be of great cause for alarm during this trip to Europe
was the excessive degree of hope placed by the Europeans in the
results of the Maekawa report," he said.
"We explained that the process of restructuring the economy
away from its dependence on exports toward a balance between
domestic and external demand...Would take time," Saito said.
Saito's words were ignored. In February, EC Industrial
Policy Director Heinrich von Moltke came to Japan and said "I
only know that your government, under the leadership of
Maekawa, points to restructuring your economy into a less
outward looking, more inward looking one. It is the Maekawa
report which has attracted the most attention in Europe."
And Europeans and Americans want quick action. "A far better
answer than protectionism would be structural change within the
Japanese economy, the kind suggested by the Maekawa report. And
we hope to see changes occur in the near future," visiting
Chairman of General Motors Roger Smith said in March.
Such expectations are now ingrained, which was partly the
fault of Nakasone, who heralded Maekawa's report as a sea of
change in Japanese affairs, said U.S. Officials.
Months before the report was issued, U.S. And EC business
leaders met their Japanese colleagues to discuss the trade
problem.
"We are more anxious than ever that the new approach of the
Maekawa committee does lead to speedy and effective action,"
said EC Industrial Union leader Lord Ray Pennock.
"The important implication of the Maekawa report is that it
is finally looking to let Japanese enjoy the fruits of their
labour," said Philip Caldwell, Senior Managing Director of
Shearson Lehman Brothers.
Contents of the report were leaded well ahead of issuance.
Japanese officials say they are implementing the report as
fast as they can, said a European ambassador who has travelled
the country asking about this issue.
He said People mentioned many things in line with the
spirit of the report, including restructuring of the coal and
steel industries.
A major misunderstanding is that the private report was
government policy. Europeans are confused about this,
underlined by von Moltke's reference to the "leadership" of the
Maekawa report. Even so, Japanese officials point to last
September's government programme of new economic measures.
"Without endorsing the report as policy, officials point out
that the government has put its signature to a programme
designed to implement the report," the ambassador said.
| Financial Reports |
PHILADELPHIA EXCHANGE TO EXTEND HOURS FOR ASIA
| The Philadelphia Stock Exchange (PHLX),
a leading trader of currency options, plans to extend its
trading hours to serve Australasian and Far Eastern markets,
exchange president Nicholas Giordano said.
He told reporters the PHLX will open a new session between
1900 and 2300 hours U.S. EST from the beginning of the third
quarter this year.
The PHLX is also opening an office in Hong Kong to serve
clients in the region and educate financial markets about the
advantages of currency options, Giordano said.
Giordano was in Sydney to start an Asian-Pacific tour by
exchange executives promoting the hedging benefits of the
exchange-trade currency option market against existing
over-the-counter option trading during the local working day.
Currency options pioneered by the PHLX in 1982 had become
an accepted means of hedging against foreign exchange risk and
had grown in popularity, he said.
The PHLX now offered options in eight currencies, including
a new Australian dollar option, and traded an average 42,000
contracts daily with underlying open interest of more than 30
billion U.S. Dlrs.
Giordano said the exchange had been impressed with the
performance of its Australian dollar contract, which since its
introduction last year had regularly topped the French franc as
the third most popular traded option, with up to 8,000
contracts traded daily.
Having the Philadelphia exchange open during the
Asia-Pacific market day would open new hedging opportunities,
set a truer level for over-the-counter option trading, increase
arbitraging opportunities and give corporations and treasuries
access to a currency option market of much greater depth and
liquidity with the security of a clearing house, he said.
| Commodities and Trade |
JAPAN CAREFULLY CONSIDERING MONEY POLICY - SUMITA
| Bank of Japan governor Satoshi Sumita
said the central bank will carefully consider its monetary
policy in light of the recent sharp fall of the dollar.
Asked if the Bank of Japan will consider a further cut in
its discount rate, he said he now thinks the bank will have to
carefully consider its future money policy.
He told a Lower House Budget Committee in Parliament that
credit conditions have been eased by the five discount rate
cuts by Japan since the beginning of last year.
Japan must now be especially careful about a flare-up in
inflation, with money supply growth accelerating, he said.
Sumita said the central bank would continue to make a
judgement on monetary policies while watching consumer prices,
exchange rates and economic and financial conditions both in
and outside Japan.
Asked if the September 1985 Plaza agreement was a failure
because the dollar had fallen too far, Sumita said he still
thought the pact was a good one in the sense that it had
corrected the overvaluation of the dollar. But the Plaza accord
did not set any target for the dollar's fall, he said.
The dollar's steep fall stems from the market's belief that
the trade imbalance will continue to expand, he said.
| Corporate News |