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VENEZUELA RE-ESTABLISHES POSTED PRODUCT PRICES

Petroleos de Venezuela, PDVSA, the state owned oil company, has re-established posted prices for some light products and heavy fuel oil, industry sources in New York said. The return to posted prices is a sign that the market is returning to a more stable and orderly condition after a year of volatile price movements in which Venezuela ceased posting prices and moved to negotiating prices with companies. "We are in more stable market now and PDVSA has probably decided to return to postings for some products," one industry trade source said. But there was no talk of Venezuela posting prices for crude oil which were also dropped in 1986. Posted prices were dropped in the first quarter of 1986 when prices for crude oil and products tumbled in response to OPEC's market share strategy and netback arrangements. PDVSA has set out posted prices for several groups of light products including gasoline, naphtha, jet kerosene and distillates effective April 15 as follows. Unleaded gasoline was posted at 19.74 dlrs a barrel (47 cts a gallon) with leaded gasoline at 20.16 dlrs a barrel (48 cts a gallon). Light naphtha was posted at 17.85 dlrs a barrel (42.5 cts a gallon), full range naphtha at 19.11 dlrs a barrel (45.50 cts a gallon), and heavy naphtha at 19.53 cts a gallon (46.5 cts a gallon). Jet kerosene was posted at 18.90 dlrs a barrel, also effective April 15, or (45 cts a gallon) with dual purpose kerosene at 18.06 dlrs a barrel (43 cts a gallon). Distillates of 0.2 pct sulphur and 0.3 pct sulphur grades were posted at 18.48 dlrs a barrel (44 cts a gallon), each with 0.5 pct sulphur 18.08 dlrs a barrel (43.05 cts a gallon). LPG postings, also effective from April 15, were made as follows, propane 175 dlrs a tonne (33.33 cts a gallon), butane 210 dlrs a tonne (46.26 cts a gallon) and isobutane at 240 dlrs a tonne. Heavy fuel products were given a posted price effective April 10 and ranged from 0.3 pct sulphur at 19.35 dlrs a barrel to 17.21 dlrs a barrel for 2.8 pct sulphur. Heavy fuel postings are also referred to as minimum export prices. Reuter 

EXXON <XON> RAISES HEATING OIL PRICE, TRADERS SAID

Oil traders in the New York area said Exxon Corp's Exxon U.S.A. subsidiary raised the price it charges contract barge customers for heating oil in the New York harbor by 0.50 cent a gallon, effective today. They said the 0.50 cent a gallon increase brings Exxon's contract barge price to 49.25 cts a gallon. Reuter 

PHILIPS PLANS MEDICAL JOINT VENTURE WITH GEC

NV Philips Gloeilampenfabrieken <PGLO.AS> and General Electric Co Plc <GEC.L> are planning a 50-50 joint venture in the medical equipment field, Philips announced. The venture will group all the medical systems of the two companies, combining GEC's Ohio-based medical division Picker International with Philips' medical division in a new U.S.-based subsidiary. Picker employs 6,000 people worldwide and has production and distribution facilities in North America, Britain, West Germany, the Caribbean and Japan. Picker's turnover in the year ending March 31, 1986 totalled 612 mln dlrs, according to Philips. Philips' own medical systems activities, currently part of its Professional Products and Systems division, with headquarters in the Dutch town of Brest near Eindhoven, has production facilities in the U.S., West Germany, France, Italy and Britain as well as in the Netherlands. Its 1986 turnover was 2.82 billion guilders. Philips said GEC was planning substantial additional investment in the project to bring its share to 50 pct. "The new company will be a vigorous competitor in all the important areas in the world, with matching distribution networks and other facilities capable of meeting the needs of rapidly advancing technology in medical systems," Philips said. Dutch corporate analysts said the merger will create the world's second biggest company specialised in medical technology after U.S. General Electric Co <GE.N>. The new company should start operations in the second half of this year, a Philips spokesman said. Reuter 

HYUNDAI AUTO CANADA TO RECALL 126,524 CARS

Hyundai Auto Canada Inc, wholly owned by the South Korean concern, said it recalled 126,524 cars for inspection of a mechanism that may cause the hood to open without warning while the vehicle is in motion. The company said the voluntary recall affects Hyundai Pony cars sold in Canada and produced before Dec 4, 1986. Hyundai models sold in the United States and other countries are not affected by the recall. Reuter 

TRADERS CONFIRM SOME INDIAN PALM OLEIN PURCHASES

Traders said the Indian State Trading Corporation (STC) bought three 6,000 tonne cargoes of refined bleached deodorised palm olein at its import tender today. They also said the STC is still in the market and additional business may be concluded over the weekend. The confirmed business comprised two cargoes of rbd olein for June shipment at 351.50 dlrs per tonne and one July at 352 dlrs cif, all on 30 pct counter trade. Reuter 

ZIMBABWE BANKING CORP URGES POLICY REFORM

A range of substantial policy initiatives need to be implemented to shift resources from consumption to production in the Zimbabwe economy, says the Zimbabwe Banking Corporation (ZBC) in its quarterly economic review. The state owned banking group says although Zimbabwe's balance of payments improved significantly last year the underlying position deteriorated. Last year's improved trade surplus was partly the result of sales of stockpiled gold and continued import restraint. It says debt service charges are projected to exceed 35 pct of exports in 1987 and warns against squeezing imports further. ZBC says mining industry import quotas for the first six months of 1987 have been halved and those for manufacturing industry cut by a third. It contrasts the performance of manufacturing industry in 1967 to 1974, with that since independence in 1980. Industrial production almost doubled between 1967 and 1974, when foreign currency allocations almost trebled in real terms. Since 1980, import allocations have been cut 45 pct and the Zimbabwe dollar has depreciated by more than 60 pct. As a result the bank says the external purchasing power of foreign currency allocations is currently only 20 pct of its 1980 levels. REUTER 

CANADA STOCK PURCHASES BY FOREIGNERS SOAR

Foreign investors purchased, on a net basis, a record one billion dlrs of Canadian stocks in February, more than the total for all of 1986, Statistics Canada said. U.S. residents continued to be the largest investor, with purchases doubling from the previous month to more than 800 mln dlrs. Net sales of outstanding Canadian bonds to Japan, however, amounted to 679 mln dlrs in February, which, on average, was about 500 mln less than in each of the four previous months. Reuter 

NOBLE <NBL> SUBMITS HIGH BID FOR TRACT

Noble Affiliates Inc said it submitted the high bid for six tracts at the Central Gulf of Mexico sale on April 22. It said its exploration and production subsidiary, Samedan Oil Corp, participated in the high bid for the following tracts, West Cameron 296, East Cameron 296, Vermilion 266, Ship Shoal 350, Main Pass 90 and Main Pass 100. Reuter 

COMINCO <CLT> B.C. WORKERS AUTHORIZE STRIKE

Cominco Ltd's 3,200 unionized workers at its Trail and Kimberley, British Columbia lead-zinc operations voted 94 pct in favor of authorizing a possible strike, the union said in reply to an inquiry. Their two-year contracts expire on April 30. A spokesman for the United Steelworkers of America, which represents the workers, reiterated that private mediation talks are set for Monday and that no strike date had been set. The union has said it is asking for a three pct wage hike in each year of a proposed two-year contract, while Cominco has offered a 40 ct an hour increase in the third year of a proposed contract if workers agree to loosen rules on job classifications. The average unionized worker's wage is now about 14.78 dlrs an hour. Cominco's Trail operations produced 240,000 long tons of zinc and 110,000 long tons of lead in 1986. The Sullivan mine at Kimberley produced 2.2 mln long tons of ore last year, most for processing at the Trail smelter. Reuter 

PETRANOL IN TAKEOVER TALKS WITH PERRODO GROUP

<Petranol Plc> said it was discussing the takeover of an unnamed company owned by Frenchman Hubert Perrodo in exchange for Perrodo taking a 51 pct stake in Petranol. It said in a statement the assets of the company to be acquired included a "substantial interest" in an unspecified oil field in Torrance, California, and five mln dlrs in cash. Funding commitments for Petranol, both in respect of the Californian oil field and Petranol's existing U.S. Assets, would be included in the agreement. Petranol said the deal would enhance its presence in the U.S., Increase its capital and secure the availability of development cash. Reuter 

HAGENSBORG RESOURCES <HGS.V> RAISES SEVEN MLN

Hagensborg Resources Ltd said it will receive a seven mln dlrs Canadian line of credit from the Bank of Novia Scotia to develop a salmon farming operation. The company said the funds will be used to complete construction of the land-based operation at Nanaimo in British Columbia. Details of the credit line are being finalized with the Bank of Novia Scotia with the financing to be fully guaranteed by Norway-based Den Norske Creditbank and the Norwegian Guarantee Institute for Export Credit, it added. Reuter 

WORLD BANK LOANS MOROCCO 125 MLN DLRS

The World Bank said it will provide Morocco a 125 mln dlr loan for a project intended to improve, expand and modernize its telecommunications network. The Bank said the project expects to satisfy about 80 pct of the demand for telephone service and the 100 pct of the demand for telex service by 1994. The total cost of the project is 647.5 mln dlrs, with the Office National des Postes et Telecommunications du Maroc providing 359.6 mln dlrs and bilateral sources expected to provide 189.9 mln dlrs, the Bank said. REUTER 

JIM WALTER <JWC> APROVES STOCK SPLIT

Jim Walter Corp said its board approved a 5-for-4 stock split in the form of a 25 pct stock dividend to be distributed July 12 to stockholders of record June 15. It also said its board approved a regular quarterly cash dividend of 35 cts a share on its pre-split common, payable July one to holders of record June 15. The current dividend is equal to 28 cts on the common outstanding after the split. The company said it plans to increase the quarterly cash dividend on the post-split shares by seven pct to 30 cts beginning with the October one payment. Reuter 

BANK BOARD CHAIRMAN SAYS MORE FSLIC FUNDS NEEDED

Federal Home Loan Bank Board chairman Edwin Gray said pending bills do not provide enough money for the Federal Savings and Loan Insurance Corp to deal with insolvent thrift associations. The Senate has passed a bill to provide 7.5 billion dlrs in FSLIC recapitalization, while the House Banking Committee has approved five billion dlrs in new funds. "We are operating right now on net operating losses of four billion dlrs a year. That's double last year. We think it's going to increase," Gray told a Senate Appropriations subcommittee hearing. "The FSLIC is insolvent under generally accepted accounting procedures and it lacks the financial resources to cost-effectively resolve its caseload of insolvent institutions," Gray said. Gray said FSLIC now had 191 cases and the number was expected to increase. He said the gap between the 80 pct of healthy savings associations and the other 20 pct of thrifts grew in 1986. Banking committee chairman William Proxmire, D-Wis, told Gray he supported more recapitalization, but other members did not want to impose a greater burden on healthy thrifts. Reuter 

INVESTOR HAS 5.1 PCT OF SIERRA HEALTH <SIE>

Peter Lin, a Montebello, Calif., physician, told the Securities and Exchange Commission he has acquired 285,000 shares of Sierra Health Services Inc, or 5.1 pct of the total outstanding common stock. Lin said he bought the stock for about 1.7 mln dlrs solely for investment purposes. Although he said he may buy more stock in Sierra Health Services, Lin said he has no intention of seeking control of the company. Reuter 

GM <GM>, TOYOTA JOINT VENTURE CUTS PRODUCTION

New United Motor Manufacturing Inc, a joint venture formed by General Motors Corp and Toyota Motor Corp, said it plans to cut production at its automaking facility here because of lower than anticipated sales. The company said production will be reduced to about 750 vehicles per day from the current rate of 800 per day, effective May 18. It said there will be no layoffs because of the cutbacks, but the lower production schedule will be in effect throughout the 1987 model year. GM and Toyota produce the Chevrolet Nova at the joint-venture plant, which began production in December, 1984. Reuter 

IRAQ SAYS IT HIT TWO SHIPS IN GULF, DOWNS IRAN F-4

Iraq said its warplanes attacked two large naval targets -- Baghdad's usual term for oil tankers or merchant ships -- in the Gulf today. A military spokesman said the planes scored accurate and effective hits in both attacks. There was no immediate confirmation of the raids from independent shipping sources in the region. The spokesman said during one of the attacks, Iraqi planes intercepted an Iranian F-4 Phantom and shot it down. All Iraqi warplanes returned safely to base, he added. REUTER 

U.S. MINT ANNOUNCES COPPER/NICKEL AWARDS

The U.S. Mint said it awarded contracts to Philipp Brothers, N.Y., and Sidney Danziger, a New York metals merchant, to procure 3,701,000 lbs of electrolytic copper and 629,000 lbs electrolytic cut nickel cathodes or briquettes. The Mint said Philipp Brothers will supply the entire 3,701,000 lbs of copper at a cost of 0.66845 dlrs per lb. Sidney Danziger will furnish 338,000 lbs of the nickel at 1.8344 dlrs per lb, while Phibro will provide 291,000 lbs at 1.8369 dlrs per lb, the Mint said. Reuter 

GERMAN GROWTH WILL NOT CUT U.S. DEFICIT -BANGEMANN

Economics Minister Martin Bangemann, who flies to Washington this weekend for high level talks, said boosting West German economic growth would not have any significant effect on the high U.S. Current account deficit. In a paper prepared ahead of his trip, Bangemann said Bonn's trading partners had been asking whether West German growth was slowing and whether the Federal Republic should not in the future pursue more strongly expansionary policies. In the paper Bangemann wrote, "It is not possible to reduce the U.S. Current account deficit by any signficant amount just through more stimulation of the West German economy." One U.S. Administration policy maker said in Washington this week that the United States government wanted West Germany and Japan to reduce their interest rates even further to stimulate their economies. Bangemann said it was clear the high mark, as well as uncertainty about further currency developments, was making companies here cautious about production plans and investments. While West Germany did not seek exchange rates which unilaterally favoured its exports, it favoured more stability and realistic rates, which corresponded to "fundamentals." He welcomed the February "Louvre Agreement" of six industrial nations to stabilise currencies and said, "(We) expect all parties to hold by the accords struck there." West Germany had fulfilled its pledge of boosting planned tax cuts, he noted. Despite calls for lower interest rates, Bundesbank Vice-President Helmut Schlesinger has hinted that central bank policy may even have to be tightened. He wrote in a newspaper article published yesterday that the Bundesbank's current accommodative stance could not continue in the long term. During his trip to Washington, which runs from April 26 to 29, Bangemann will meet Secretary of State George Shultz, trade envoy Clayton Yeutter, World Bank President Barber Conable, IMF Managing Director Michel Camdessus and Paul Volcker, Chairman of the Federal Reserve Board. REUTER 

PHIBRO ENERGY CHAIRMAN SAID TO HAVE RESIGNED

Thomas O'Malley, Chairman of Phibro Energy, a subsidiary of Salomon Bros Inc <SB>, has left the company to form his own oil trading firm because of unhappiness with the current arrangement between Salomon Brothers and Phibro Energy, industry sources said. Earlier he resigned as a Director and Vice Chairman of Salomon Inc. A Salomon spokesman did not deny that O'Malley had left the company but offered no further comments at this time. Al Kaplan, another former Phibro Energy executive, will join the new business, the sources said. The new company, Argus Energy, is located in Stamford, Conn., and will begin active trading in June of this year. Reuter 

FARM CREDIT SEEN NEEDING UP TO 4.5 BILLION DLRS

The Farm Credit System will need 3-4.5 billion dlrs in federal assistance to cover losses over the next three years, a member of the board of the System's regulatory agency said. Jim Billington, member of the three-person board of directors of the Farm Credit Administration, said he intended to ask the board on May 5 to vote to certify that the ailing farm lending network needs federal aid. Billington, the sole Democrat on the board, said the System would need federal aid sooner than suggested by a FCA report, which said assistance would be required by the end of 1987. "I would say the System will require outside financial assistance possibly by July 1 if System districts don't lend unsecured credit to one another to meet collateral problems," he said. FCA officials today disclosed that efforts by the System's districts to reach a collateral-sharing agreement has been suspended. Reuter 

ABM GOLD TO RAISE INTERESTS IN CANADA COMPANIES

ABM Gold Corp will use the proceeds of an initial public offering of seven mln shares of stock at 10 dlrs a share to increase its interest in three Canadian companies, said co-managing underwriters PaineWebber Inc and Advest Inc. ABM Gold manages and develops properties of Sonora Gold Corp <SON.TO>, Goldenbell Resources Inc <GBL.TO>, United Gold Corp <UGC.V> and Inca Resources Inc <IRI.TO>. Proceeds will be used to raise its stake in Sonora, buy a 15 pct interest in the net profits of Sonora's Jamestown mine, and buy capital stock of Goldenball and United, they said. ABM Gold explores, acquires and develops gold properties in California, and also processes gold-bearing ore into gold bullion. The co-managing underwriters said they are selling 3.5 mln shares in the U.S. and Canada, while an interational offering will be managed by PaineWebber International. The underwriters have been granted an option to buy up to an additional 105,000 shares to cover over-allotments. Reuter 

EUROPEAN BEET SOWINGS CATCH UP, USSR DELAYED

Fine weather throughout Europe allowed farmers to make good progress with sugar beet sowings during the period April 16-21, but conditions in the Soviet Union remained unfavourable, West German analyst F.O. Licht said. With daytime temperatures in parts of Europe exceeding 20 degrees centigrade Licht said sowings have been boosted and may be completed in most countries by the end of the month. In France the beet growers' association said the entire crop could be sown within a week if the good weather persists. Sowings this year will still be behind 1986 but Licht noted that good results have often been produced from late-sown crops. In the Soviet Union, however, most beet-growing regions still had cool weather with night frosts. Only in the western Ukraine was it warm enough to permit sowings, Licht said. Sowings in the USSR will consequently be much later than last year when one mln hectares had already been drilled by mid-April. Reuter 

FERRO <FOE> INCREASES SHARES

Ferro Corp said shareholders approved increasing the number of authorized common shares to 50 mln from 20 mln. Shareholders also approved amending the indemnification provisions of the Code of Regulations of the company and re-elected three directors to three-year terms on the board of directors. Reuter 

AMOCO <AN> TO SUPPLY LEADED GAS TO FARMERS

Amoco Oil Co said it will continue to sell leaded gasoline to farmers in certain portions of the midwest as long as there is sufficient demand for the product. "It appears that the agricultural community will need limited amounts of leaded gasoline for certain types of equipment until an acceptable alternative is found," the company said. Amoco previously announced it would sell all lead-free gasoline to motorists at its service stations. Reuter 

BAKER SAYS G-7 WANTS TO HALT DOLLAR FALL

Treasury Secretary James Baker said the Group of Seven leading industrial nations is fully committed to halting a further decline in the dollar. "Let me emphasize that all seven major industrial nations remain fully committed to strengthening policy coordination, promoting growth and cooperating to foster stability of exchange rates," he told the American Enterprise Institute. "We all believe a further decline of the dollar could be counter productive to our efforts (to promote growth)," he said. Baker also said that after meeting Japanese special envy Shintaro Abe, "it's clear that Japan intends to take strong steps to stimulate its economy to meet its committments under the Louvre Accord." Baker said in the past two years he has worked to promote greater coordination of economic policies and important progress has been made. "Substantial exchange rate adjustments have also been accomplished over the past two years so that today we are better positioned to promote growth and reduce external imbalances," he said. Baker pointed out that in February the seven agreed to foster stable exchange rates and those commitments were renewed recently. In a speech largely devoted to discussing trade and competitiveness, Baker again warned of the dangers of protectionist trade legislation, saying it would harm the U.S. standard of living. Baker stressed adminstration trade policy sought to remove foreign barriers to trade and via forthcoming GATT talks will focus on agriculture, services and intellectual property. The Treasury Secretary said that as well as trade issues he had to focus on macroeconomic issues as well which encompass the trade picture. "The world economy today is really one constantly flowing circle of capital and goods. Trade accounts catch and measure that flow at only one spot on the circle," he said. Reuter 

ELDERS ACQUIRES 95 PCT OF CARLING <CKB>

<Elders IXL Ltd>, of Australia, said it acquired 20.8 mln or 95 pct of Carling O'Keefe Ltd common shares under its previously announced tender offer that expired yesterday. Investment Canada said earlier this week it approved Elders's takeover of Carling, Canada's third largest brewery. Reuter 

WHITE HOUSE SAYS MARCH CPI "NO CAUSE FOR ALARM"

The White House said last month's 0.4 per cent in increase in the CPI, the third sharp rise in three months and one that brought the annual inflation rate to 6.2 pct so far this year, was no cause for alarm. "While this is something to watch, it's not something to be alarmed about," said spokesman Marlin Fitzwater. He said the three month increase in inflation was due almost entirely to higher energy prices. Fitzwater said once an OPEC price hike is "passed through the system," the nation should see a slowing of the inflation rate to the administration's 3.8 pct 1987 forecast. REUTER 

U.S. PRODUCTIVITY REPORT RESCHEDULED TO MAY 4

The Labor Department said it rescheduled the release of the first-quarter nonfarm productivity report to May 4 at 1000 EDT (1400 GMT) from April 27. The delay was necessary because the Commerce Department moved back release of national income and product data used by the Labor Department to compute productivity. Reuter 

SEARS <S> RESTRUCTURES BUSINESS SYSTEMS CENTERS

Sears Roebuck and Co said it will restructure its business systems centers, which sell computer systems. The restructuring reflects the changing personal computer market, Sears said. Sears will consolidate 41 business systems center outlets in markets where it has more than one sales facility. Sales and support staffs will remain intact and will report to a single location in most metropolitan areas. When the consolidation is complete, Sears will operate 59 computer centers in 51 markets nationwide. Some 31 markets with single sales offices will not be affected. "We no longer need as many sales locations in each market because our sales organization will be calling directly upon our customers at their places of business," explained John H. Rollins, national manager of Sears Business Systems Centers. Reuter 

SPANISH SUNOIL EXPORTERS SEEK SEED CLEARANCE

Spanish exporters are asking the government to clear 33,200 tonnes of sunflower seed authorised for export by the European Community (EC), a spokesman for one of Spain's major sunflower oil producers said. He told Reuters in a telephone interview the government was holding back on authorisation to hold prices low. "They are deliberately keeping prices down to help meet this year's inflation target despite the threat of a surplus on what looks like a bigger harvest than we expected," he said. He said the policy of allowing stocks to accumulate had caused a price drop, with raw oil prices falling to 147 pesetas a kilo from 160 at the start of the 1986/87 marketing year ending July 31. Sunflower oil output was expected to rise to 370,000 tonnes this year from 340,000 last year, with seed output up at 905,000 tonnes from 860,000 last year. He said domestic consumption was falling due to imports of other edible oils. "We estimate demand at 296,000 tonnes this year, leaving a 124,000 tonne surplus with the 50,000 tonnes now stockpiled," he said. "If we discount 24,000 tonnes held for strategic purposes, this still leaves us with 100,000 tonnes." Reuter 

JAPAN BUYS UP TO 8,000 TONNES CANADIAN RAPESEED

Japanese crushers bought 5,000 to 8,000 tonnes of Canadian rapeseed for last-half May/first-half June shipment, trade sources said. Price details were not available. Reuter 

CONTINENTAL <CONT.O> BOARD CONSIDERS SUIT

Continental Medical Systems Inc said its board met to consider the allegations in the derivative action filed by Continental Care Group and that officers named as defendants believe it to be totally without merit is likely to be dismissed in Maryland Federal court. Continental Medical has sued Continental Care Group for over 5 mln dlrs for breach of a contract calling for it to buy 12 nursing homes from Continental Care. Yesterday, Continental Care filed a derivative action against Continental Medical charging it with fraud and misrepresentation of fiduciary duties. Reuter 

SHELL OIL FIRST QUARTER NET DROPS 61 PCT

Shell Oil Co said first quarter net income dropped 61 pct over the prior-year quarter on revenues that slipped four pct. "Lower prices for crude oil and natural gas and reduced margins in our oil and chemical products businesses were the major factor for the earings decline," John F. Bookout, president, said in a statement. For the quarter, the company, a unit of Royal Dutch/Shell Group <RD> <SC>, earned 108 mln dlrs on sales of 4.50 billion dlrs, compared with 276 mln dlrs on sales of 4.67 billion dlrs a year ago. Bookout said the company is cautiously optimistic oil markets will be less volatile in coming months than they were in 1986. "In coming months, oil products results should benefit from seasonally higher gasoline volumes," he said. "However, so long as U.S. product inventories remain high, it may be difficult to fully recover from the depressed margins of recent periods," he added. Bookout said the company's chemical products earnings should benefit from strong performances in chemical sales volumes and continued high industry operating rates. Shell said its oil and gas exploration and product segment earned 110 mln dlrs for the quarter vs 91 mln dlrs in 1986. It said earnings were hurt by lower selling prices for crude oil, natural gas and natural gas liquids. Domestic crude oil prices averaged 14.24 dlrs a barrel, compared with 19.28 dlrs last year, while natural gas prices dropped 24 pct, Shell said. Shell said earnings at its oil products segment plunged by 53 mln dlrs, to eight mln dlrs. It said lower refined product selling prices were only partially offset by reduced raw material costs. The company said earnings from chemical products also fell sharply, to 40 mln dlrs from 72 mln dlrs, due mainly to lower margins, especially in commodity chemicals, coupled with its pullout from the agricultural chemicals business in October 1986. Shell said capital and exploratory outlays totaled 500 mln dlrs for the quarter, off from 645 mln dlrs. Reuter 

AFRICAN GOVERNMENTS COMPLY ON RECOVERY PROGRAMMES

A majority of 31 African countries replying to a questionnaire had carried out economic reforms recommended in United Nations and Organisation of African Unity (OAU) recovery programmes, Adebayo Adedji, Executive Secretary of the U.N.'s Economic Commission for Africa said. He told African planning and economy ministers that the questionnaires, distributed by the Economic Commission to monitor the programmes, showed that 25 of the 31 countries had taken steps to increase foreign aid. The same number had improved the investment climate in their countries, he said. Twenty-two had made structural adjustments to their economies, 22 had taken measures to promote exports and five had carried out an "overall economic rehabilitation," he added. The main thrust of the recovery programmes was to encourage agriculture by giving farmers greater incentives to produce. The OAU plan envisaged investment of 128 billion dlrs in all 50 African countries over the next five years. Foreign donors were expected to contribute 46 billion dlrs. Nineteen out of 50 African governments have failed to answer the questionnaire, he said. REUTER 

ASCS SEEKS 12.5 MLN POUNDS VEG OIL FOR EXPORT

The Agricultural Stabilization and Conservation Service (ASCS) is seeking 12.5 mln pounds of vegetable oil for export June 6-20 and June 21/July 5, an ASCS official said. Offers must be received at the Kansas City Commodity Office by 1430 CDT May 4, and successful offerors will be notified May 5. reuter 

TREASURY'S BAKER - G-7 OPPOSE FURTHER DLR DROP

Treasury Secretary James Baker said the Group of Seven countries, in seeking to foster stability in exchange markets, believe a further decline in the value of the dollar would be counterproductive. In answer to questions by a business group, Baker said that for one thing further reductions could make it economically difficult for the surplus countries to grow, thereby making it difficult for them to purchase overseas goods. In addition, Baker said he was opposed to the U.S. selling a yen denominated bond arguing that such a move might send the wrong signal to markets. Reuter 

GERMAN BANKS FACE DISRUPTION AFTER TALKS COLLAPSE

West German banks face disruption from strike ballots and selective strikes after the breakdown of talks on wages and working hours, the German Employees Union, DAG, and the Commerce, Banking and Insurance Union, HBV, said. But the chairman of the bank employers' federation, Horst Burgard, told reporters in Frankfurt he hoped the two sides would reach agreement after a pause for thought. DAG chief negotiator Gerhard Renner said the employers' offer to resume talks was farcical as long as they refused to remove the issue of flexible working hours from the talks. Both sides agreed there was now little point in top level negotiations similar to those held in the engineering industry which resolved a dispute on working hours. Renner and HBV chief negotiator Lorenz Schwegler said they were prepared to compromise on the issue of flexible working hours, but this subject should not be included in the wage negotiations for the 380,000 bank employees. Burgard, also management board member of Deutsche Bank AG, said the employers sought acceptance of more flexible hours on an unchanged 40 hour week in the negotiations. The employers have unilaterally imposed a 3.6 pct pay rise backdated to March 1, with the collapse of the talks. The HBV is seeking a six pct rise and DAG a 6.5 pct increase. Schwegler said the unions would react to the collapse of the talks with protest and warning strikes. Union officials would resist overtime and attempts to introduce flexible hours. Next week the unions will set strike ballots aiming at strikes in sensitive areas such as bank computer and bourse data centres. The unions only account for some 25 pct of bank employees. DAG will seek support from its members in the Bundesbank who are not directly affected by the negotiations. REUTER 

GERMAN INTERVENTION SUGAR FOR EXPORT - LDN TRADE

The most likely reason for West German producers withdrawing white sugar from intervention stores is that they already have, or are reasonably certain of, obtaining European Community (EC) export licences for it, traders said. They were responding to EC Commission sources in Brussels saying West German producers have withdrawn most of the 79,250 tonnes of the sugar they put into intervention on April 1. The traders said it is also likely that French producers, who put over 700,000 tonnes into intervention, will withdraw a significant proportion of this for the same reason before they are due to accept payment for the sugar in early May. Earlier this week traders said the stepping up of the level of export licences being granted by the EC at recent tenders, with generous subsidies, had been due to producer threats to leave the sugar in intervention and to a desire to move most of the old crop sugar before the new crop tenders start in May. The EC has so far granted licences for 2,467,970 tonnes out of around 3.1 mln tonnes targetted for export in the 1986/87 series of tenders. This would indicate the likelihood of high tonnages continuing to be moved over the next few tenders and subsidies also remaining high in order to attract producer bids for the export licences, traders said. Reuter 

UGANDAN GOVERNMENT PROPOSES NEW TAXES

The Ugandan government, in its four year investment and development plan, proposed taxing land and food crops in an attempt to broaden its revenue base away from dependence on coffee sales. The government also said in the plan, made available to Reuters, that a devaluation of the Ugandan shilling would do little to redress a chronic balance of payments deficit. The plan, the first since President Yoweri Museveni took power 15 months ago, seeks to raise 2.4 billion dlrs in investment funds from abroad between 1987 and 1991. It says the government had already secured 1.4 billion dlrs in pledges before Islamic lenders promised a further 494 mln dlrs at a conference in Kampala last week. Uganda already had an external debt of 984 mln dlrs at the end of 1986 and in the nine months of the current budget debt servicing will cost 204 mln dlrs, almost 50 pct of export earnings of 431 mln, the plan said. The new fiscal measures include a proposed tax on large land holdings, regardless of whether the owners are exploiting them, and taxes on maize, beans and other crops sold by the Produce Marketing Board. The plan says the aim is to spread the tax burden, which in Uganda has traditionally fallen almost exclusively on coffee farmers. Coffee provides over 90 pct of foreign exchange earnings and more than 70 pct of government revenue. On exchange rate policy, it repeats Museveni's argument that any form of fotation would not help allocating resources. Western governments and multilateral funds say the Ugandan shilling is grossly overvalued and the government must change the exchange rate if it wishes to encourage investment. The shilling sells on the black market at more than 15,000 to the dollar, compared with an official rate of 1,400. REUTER 

NO MEXICO REACTION TO PERU SILVER TALKS PROPOSAL

mexico's minister of energy and mines, alfredo del mazo, has yet to reply to a peruvian invitation for ministerial-level talks on bilateral cooperation in silver marketing, a ministry spokesman said. Peruvian officials said they extended the invitation earlier this week and that it was possible the talks could be held within the next 15 days. Meanwhile, a banco de mexico spokesman confirmed that mexican central bank head miguel mancera aguayo held private talks here yesterday with the president of the peruvian central bank leonel figueroa. Reuter 

SEAGA PRESENTS GROWTH BUDGET FOR 1987

prime minister edward seaga last night presented a budget of 6.9 billion jamaica dlrs, the largest in the country's history, which projects increases in capital spending and continued divestment of state companies. In a nationally televised speech to the parliament, the prime minister, who is also minister of finance, said jamaica's gdp grew by four pct, the highest level in 15 years, while unemployment stood at 23.6 pct, down from last year's 26 pct. Inflation, meanwhile, was 9.4 pct, as compared to 19.7 pct two years ago. Government revenues were up by 419 mln jamaica dlrs, to 4.3 billion, enough to finance the entire recurrent expenditure of 3.7 billion dlrs, with a 666 mln dlr surplus. Seaga said that with financial accounts in order, the government will proceed to reduce the country's debt service ratio from the current level of 49 pct of gdp to 25 pct over the next five years. During this period, he said, growth would be targetted at three to four pct. The 6.9 billion dlr budget, which represents an increase of 18 pct over last year's 5.8 billion, will be financed by borrowing of 8.868 billion dlrs and estmated revenue of 1.385 billion. Seaga said 1.835 billion of the budget will go to finance a government capital investment program. The plan, which represents a 10.3 pct increase over last year, projects greater spending on health, education, housing and infrastructure. Some 818 mln dlrs in revenue to finance the budget will come from the government's divestment program, which seaga said will be stepped up in 1987. Reuter 

FRANCE REVISES 1986 GDP GROWTH FROM TWO TO 1.9 PCT

France's National Statistics Institute (INSEE) said French 1986 Gross Domestic Product (GDP) grew by 1.9 pct, after Finance Minister Edouard Balladur reported a 1986 rise of just two pct in February. France's balance of payments surplus in goods and services rose to 53 billion francs in 1986 against 28 billion in 1985. The annual average monthly rise in retail prices was 2.7 pct in 1986 from 1985, INSEE added. REUTER 

SOVIET CORN CARGO REJECTED, RELOADING AT CHICAGO

A cargo of U.S. corn for the Soviet Union was rejected and forced to be unloaded at a Chicago export elevator earlier this week after it failed to make grade, with the British vessel Broompark now being reloaded, an elevator spokesman said. The first attempt to load the ship failed when the percentage of broken kernels proved to be higher than contract specifications, he said. The Soviets traditionally refuse to take sub-grade grain at a price discount, as is the practice with many other importing nations, he added. The official estimated the reloading of the vessel with about 700,000 tonnes of corn may be completed by Tuesday, April 28. Reuter 

HENLEY GROUP <HENG.O> DID NOT HIRE BEAR STEARNS

Henley Group said it has not hired Bear Stearns and Co in connection with Santa Fe Southern Pacific Corp <SFX>, a Henley spokesman said. Traders have said in the past two sessions that it seems Bear Stearns was restricted in both Santa Fe Southern and Henley, implying that Bear Stearns may be helping Henley examine the possibility of taking over Santa Fe. "We don't have them looking into anything, including Santa Fe," a spokesman said, in response to questions from Reuters. Bear Stearns has declined comment. Traders said there was also speculation that Henley was a buyer of Santa Fe stock in the last two days. Henley said it does not comment on whether it is buying or selling stock in a company. Separately, Wall Street sources said the reports of Henley acquiring Santa Fe stock in recent sessions are untrue. Henley has told the securities and exchange commission that it bought about five pct of Santa Fe stock last year. Santa Fe was up earlier by more than two points. It was trading at 42, up 1/8. Reuter 

BANK OF FINLAND EASES REFERENCE RATE RESTRICTIONS

The Bank of Finland said it was reducing restrictions on the use of money market rates as reference rates for loans. The Bank would start quoting money market rates referred to as HELIBOR (Helsinki Interbank Offered Rate). Banks may henceforth use these as reference rates in their lending, it said. From May 1 the banks would be allowed, without special central bank approval, to use as a reference rate not only its base rate but also other Bank of Finland rates or the official money market rate used in market transactions. A derivative of these could also be used, the statement said. But housing loans would be excepted and their lending rate would, as formerly, be linked directly or indirectly to the Bank of Finland's base rate. The new guidelines involve mainly two changes. Money market rates in future would be used as reference rates for loans with a maturity of over five years and the introduction of a new reference rate would no longer require central bank approval. The decision was made as a continuation of the central bank's process of liberalisation, it said. REUTER 

ROCKWELL SIGNS AGREEMENT ON VALEO SUBSIDIARY

Rockwell International Corp <ROK.N> has signed an agreement leading to the takeover of Valeo <VLOF.PA> subsidiary <SO.M.A. Europe Transmissions>, Valeo said in a statement. The company said Rockwell had agreed to handle Soma sales around the world and to help Valeo in restructuring its loss-making subsidiary. It also said Rockwell, an American high-technology engineering group with interests in aerospace and the car industry, would take control of Soma at the beginning of 1988 if it obtained approval from the French government. Soma, a fully owned subsidiary of Valeo, makes axles and gear boxes for heavy vehicles and machinery mostly used in the construction business. A Valeo spokesman said <S.E.S.M.>, a subsidiary of Soma specialized in equipment for military vehicles, had been excluded from the agreement with Rockwell. He said no details were available on the eventual amount Rockwell would pay for Soma. Vehicle components maker Valeo was the object of a takeover bid in 1986 by Italian group <Compagnie Industriali Riunite> (CIR), controlled by Olivetti chairman Carlo de Benedetti. The French government limited CIR's holding in Valeo to less than 30 pct in June 1986, after classifying Valeo as a defence contractor. Today CIR has effective control of Valeo through its French holding company <Compagnies Europeenes Reunies>, Cerus, which has a 18.24 pct stake in Valeo. Since CIR won control of the French group in June, Valeo has pursued a policy of concentrating its activities on the car industry. The company spokesman said Valeo had sold off all its construction interests in 1986 but declined to comment on the amount of the sales. The spokesman said figures were not available on Soma's losses in 1986 but said the company had registered a turnover of 546 mln francs. Valeo recorded a consolidated net loss of 388 mln francs in 1986 on a turnover of 12.1 billion francs. REUTER 

MEXICO YET TO REPLY TO PERU'S SILVER INVITATION

Mexico's minister of energy and mines, Alfredo del Mazo, has yet to reply to a Peruvian invitation for ministerial-level talks on bilateral cooperation in silver marketing, a ministry spokesman said. Peruvian officials said they extended the invitation earlier this week and that it was possible the talks could be held within the next 15 days. Meanwhile, a Banco de Mexico spokesman confirmed that Mexican central bank head Miguel Mancera Aguayo held private talks here yesterday with the president of the Peruvian central bank. The spokesman said the talks were in line with mutual consultation agreements made during Peruvian President Alan Garcia's visit to Mexico in march. Press reports citing diplomatic sources at the meeting said the two central bank heads discussed means of coordinating actions in the silver market. Mexico is the world's leading silver produer. It produced about 73.9 mln troy ounces in 1986, according to preliminary government figures. Peru, the second biggest producer of the precious metal, earlier this week froze new silver sales in an effort to stabilize silver prices. It produced 57 mln troy ounces in 1986. Reuter 

WURLITZER <WUR> ELECTS NEW TOP OFFICERS

Wurlitzer Co said George Howell was elected vice chairman, succeeding Sid Weiss who was named chief executive officer. Weiss became vice chairman in December 1986. Weiss and Leonard Friedman, Wurlitzer chairman, led Wurlitzer Investments Ltd, a Texas partnership which purchased a controlling interest in Wurlitzer. In other action, Frank Rubury was elected president and chief operating officer of Wurlitzer, effective April 27. Rubury was formerly president of Horsman Inc, a subsidiary of Drew Industries Inc <DRWI.O>. Reuter 

GLENMEDE TRUST TO SELL PART OF SUN <SUN> STOCK

<Glenmede Trust Co> and Sun Co said that Glenmede plans to sell a portion of its charitable holdings of Sun common stock, of which it holds 28 pct of the outstanding shares. They said the sales, to be made in the market subject to prevailing market conditions, will not exceed 2.5 pct of Sun's 107.7 mln outstanding common shares. Glenmede, a trustee for various trusts and estates, said the sales are part of an ongoing plan to maintain its Sun holdings at levels roughly equal to those prior to the Sun stock buyback program that began in 1980. Reuter 

ALGERIAN MINISTER RULES OUT DEBT RESCHEDULING

Algeria's Finance Minister Abdelaziz Khelaf said no rescheduling of his country's foreign debt is envisaged. Khelaf, who came to Geneva for a meeting organised by the World Economic Forum, told Reuters Algerian debt amounted to about one third of the country's Gross National Product of 55 billion dlrs. France and Algeria yesterday finalised two agreements giving Algeria a total 580 mln dlrs in credits to finance trade and projects. REUTER 

VOLKSWAGEN TO IDLE U.S. PLANT, 1,650 WORKERS

Volkswagen of America said it will shut down its U.S. car assembly plant for two weeks and idle 1,650 workers. The wholly owned subsidiary of Volkswagen A.G. said the facility will be closed for two weeks starting today to adjust inventories. The 1,650 hourly workers will be laid off until May 11. Volkswagen's sales of U.S.-made cars this year have dropped sharply below last year's figures, a spokeswoman said. So far this year, sales are down nearly 40 pct compared to last year. The U.S. company has sold a total of 13,218 U.S.-made cars so far this year, down from 21,943 during the same period last year. In its most recent 10-day sales period, April 11-20, the company sold 30.7 pct fewer cars. It sold a total of 1,167 cars during the period against 1,683 in the same 1986 period. The spokeswoman also said inventories of Volkswagen's cars are running as high as 335 day's supply as of April 20, well above the inventory level of 50 to 60 days supply considered acceptable by the U.S. car industry. The highest inventories are on the company's new "GT" model. Stocks of Volkswagen's 16-valve "GTI" model are 164 days' supply. Inventory levels for other Volkswagen models are as follows--"Golf" gas-powered-87 days, "Golf" diesel-powered 20 days, regular "GTI"-83 days. Reuter 

PERU SAYS IT HELD TALKS WITH MEXICO ON SILVER

The heads of the central banks of Mexico and Peru have met in Mexico city to coordinate actions aimed at consolidating the upward trend in the price of silver, the official newspaper El Peruano said. It said that Peruvian central bank president Leonel Figueroa met yesterday with the president of the bank of Mexico, Miguel Mancera Aguayo. Peru, which froze new sales of refined silver and its government-marketed silver ore on tuesday, is the world's second biggest producer of the precious metal. Mexico is the largest producer. Together, the two nations account for nearly 40 pct of the world's silver output, the official paper El Peruano said. Peru adopted the move on tuesday in an bid to stablilise the price of silver bullion, which has climbed in a month from about 5.70 dlrs an ounce to over 9.00 dlrs an ounce today. After the meeting of the Peruvian and Mexican central bank heads, it was understood that Mexico might diversify the use of silver, El Peruano said. It said that Mexico and Peru did not want to speculate with the price of silver. Instead, they aimed to see that the price of the precious metal recuperated to adequate levels. El peruano did not specify what these levels were. El peruano quoted energy and mines minister Wilfredo Huayta as saying that Peru did not want to participate in speculative operations with silver. He said the government's aim was to avoid a "brutal fall" in the price of silver. Figueroa's office confirmed the Peruvian central bank president had travelled to mexico city. It was not certain if he had returned to Lima by midday today. Reuter 

SPAIN APPROVES AID FUNDS FOR STEEL INDUSTRY

The Spanish cabinet agreed a 223.33 billion peseta aid package for the steel industry to restore the sector to profitability by 1989, Industry Minister Luis Carlos Croissier said. He told reporters at a news conference the money would be shared among four state and privately-owned mills, which now operate at a loss. The funds will be used to help modernise the industry, increase productivity and cut production to 17.5 mln tonnes a year from a current capacity of 18.2 mln tonnes. Reuter 

U.S. M-1 MONEY SUPPLY SURGE EXPECTED NEXT WEEK

The U.S. M-1 money supply number to be announced next Thursday is expected to show one of the largest one-week increases in history, analysts said. The average forecast of economists polled by Reuters calls for a 17.7 billion dlr M-1 jump for the week ended April 20. Estimates of the increase range from five billion dlrs to 26.3 billion dlrs. "The M-1 surge will be very temporary. About two thirds of the increase is likely to be washed out in the following week," said Kim Rupert, an economist at Money Market Services Inc. Rupert said a huge increase in M-1 for the April 20 week is implied by very strong deposit survey data and by an unexpectedly sharp gain in required reserves in Federal Reserve data released Thursday. Those numbers, covering the two-week bank statement period that ended on April 22, show a 2.5 billion dlr jump in basic required reserves. Economists said this largely reflected the parking in checking accounts of the proceeds from stock market sales and mutual fund redemptions to pay annual income taxes. Fed seasonal adjustments do not adequately compensate for these and other special factors. Analysts noted that income tax refunds from the Treasury also appear to be coming earlier than usual. They also are not adequately compensated for by the Fed's seasonal adjustment factors to the money supply. The Federal Reserve is no longer targeting M-1 because the link between M-1 and economic growth has largely been severed by financial market innovation and deregulation. As such, there is likely to be little financial market reaction to the huge M-1 increase that is expected to be announced next week. Reuter 

ALGERIAN MINISTER RULES OUT DEBT RESCHEDULING

Algeria's Finance Minister Abdelaziz Khelaf said no rescheduling of his country's foreign debt is envisaged. Khelaf, who came to Geneva for a meeting organised by the Word Economic Forum, told Reuters Algerian debt amounted to about one third of the country's Gross National Product of 55 billion dlrs. France and Algeria yesterday finalised two agreements giving Algeria a total 580 mln dlrs in credits to finance trade and projects. Reuter 

BOEING <BA> GETS ORDERS TOTALING 543 MLN DLRS

Boeing Co said it confirmed orders totaling 543 mln dlrs for 14 jet aircraft from four customers. The company said Delta Air Lines <DAL> has increased its orders for the 767-300 jetliner by six, bringing its total commitment for the longer-fuselage plane to 15, with a total value of more than 300 mln dlrs. Boeing said <Lufthansa German Airlines> will take delivery of five more 737-300 jetliners worth about 130 mln dlrs, bringing its orders for the twinjets to 15. <Quantas> of Australia has ordered its first 767-300 with extended range capability for about 75 mln dlrs, Boeing said. Boeing said <Air France> has placed firm orders for two additional 737-200 twinjets valued at 38 mln dlrs. Reuter 

COMINCO <CLT> TO CLOSE B.C. FERTILIZER PLANT

Cominco Ltd said it will permanently close its fertilizer plant at Kimberley, British Columbia, in the latter half of May and 140 employees will lose their jobs. It said the operation has been losing money for several years, and lost seven mln dlrs in 1986. Cominco said the decision to close the plant was based on high production costs, anticipated continued losses and excess capacity for phosphate-based fertilizers. The plant produced 98,500 metric tonnes of ammonium phosphate fertilizer and 190,000 tonnes of sulphuric acid in 1986. Reuter 

NIGERIA REVERSES POLICY, RESTORES MINIMUM WAGE

Nigeria's military government retreated in the face of hostile public opinion and restored the minimum wage of 125 naira (about 32 dlrs) a month. It revoked an order made only last December which exempted companies with fewer than 500 employees -- the vast majority -- from paying the minimum wage. Labour Minister Brigadier Ike Nwachukwu, announcing the decision in Lagos today, said it was made out of respect for public opinion and to maintain industrial harmony. Nwachukwu said the thinking behind the exemption was in line with Nigeria's far-reaching structural adjustment program and the measure was intended to promote small-scale industry and agriculture. Reuter 

U.S. ENERGY COSTS ROSE IN MARCH BY 1.0 PCT

Consumer energy costs rose 1.0 pct in March following a moderate rise last month, the Labor Department said. The March increase in the overall energy costs, including petroleum, coal and natural gas, followed a 3.0 pct rise in January and a 1.9 pct rise in February, it said. However, energy prices were 5.6 pct below year-ago levels. The department's Consumer Price Index showed that the cost of gasoline rose in March by 2.3 pct, after a 4.2 pct rise in February. Gasoline prices were nonetheless 5.9 pct below their levels as of March 1986. Also, the category including fuel oil, coal and bottled gas rose in March by 1.4 pct, putting it 9.0 pct under the year-ago figure. The index also showed that natural gas and electricity were unchanged last month, but down 3.1 pct from the March 1986 figure, the department said. The index has been updated to reflect 1982-84 consumption patterns. Previously, the index was based on 1972-73 patterns. Reuter 

INTERSTATE (I) CHIEF DOUBTFUL ON BRAZIL DEBT

First Interstate Bank Corp Chairman Joseph Pinola said he was not optimistic about the prospects for a resolution of the Brazilian debt situation during the current year. "I am not as optimistic personally on a resolution as some others are," Pinola told reporters after the company's annual meeting. He said it did not seem likely that the Brazilian government has the will to take the steps necessary to resolve their domestic economic difficulties. In February, Brazil suspended interest payment on about 68 bln dlrs of its commercial debt. Many U.S. banks have placed their Brazilian loans on non-accrual status as a result of this action, but they also expressed confidence that Brazil and U.S. lenders could resolve the situation before the end of the year. Reuter 

FMC <FMC> TO SELL STAKE IN GOLD PROPERTIES

FMC Corp said it will consider selling to the public a minority interest in a subsidiary that will hold the company's North American gold and precious metals properties and operations. FMC said its board also authorized the transfer of the metals properties to the newly formed unit. An unnamed investment advisor has been retained to help in evaluating alternatives on the properties, which consist of a wholly owned gold mine at Paradise Peak, Nev., a 30 pct interest in a gold mine at Jerritt Canyon, Nev., and a 28 pct interest in a gold mine near Austin, Nev. Reuter 

INTERSTATE (I) SPENT 3.5 MLN ON TAKEOVER BID

First Interstate Bank Corp spent about 3.5 mln dlrs on its attempted takeover of BankAmerica Corp, First Interstate Chairman Joseph Pinola said. In response to a shareholder's question following the company's annual meeting, Pinola also said that figure could ultimately be lower depending on the outcome of negotiations with the firm's insurers. Pinola explained that the company's insurance rates went up "substantially" after last year's attempt to acquire BankAmerica Corp. In February, First Interstate withdrew its 3.20 bln dlr bid for BankAmerica and said it was no longer interested in the acquisition because of BankAmerica's divestitures. During the takeover battle, BankAmerica sold its Italian banking operations and its profitable Charles Schwab and Co discount brokerage firm. Reuter 

CATTLE ON FEED REPORT CALLED NEGATIVE

Chicago Mercantile Exchange floor traders' immediate comments on the 13-state USDA quarterly cattle on feed report were negative. Traders said that placements on feed and total on-feed numbers were at the high end of expectations and will likely weigh on futures tomorrow. Reuter 

WALL STREET STOCKS/PAPER AND LUMBER PRODUCERS

Stocks of paper and lumber producers tumbled as a rumor spread that the Japanese may impose tariffs on wood and paper products, analysts and industry officials said. But, they said, logic and their own research do not support the rumors. "Apparently a rumor is floating around trading circles about the Japanese doing something about tariffs on wood and paper products," Lowell Moholt, director of investor relations at Weyerhaeuser Co said. "And we can only assume that this rumor is one of the factors hurting the stocks." "I have talked to many people, some with government contacts, and most of them have been mystified by the rumor," said Moholt. Nevertheless, International Paper <IP> fell 4-3/8 to 95-1/2, Weyerhaeuser Co <WY> two to 51-1/2, Potlatch Corp <PCH> 3-1/2 to 69, Great Northern Nekoosa <GNN> 3-1/8 to 85-1/2, Temple Inland Inc <TIN> 2-3/4 to 57-1/4, Boise Cascade 2-3/8 to 74-3/8, Georgia Pacific Corp <GP> 1-1/2 to 43-3/4, Champion International Corp <CHA> 1-3/8 to 36-1/2 and Pope and Talbot Inc <POP> 1/2 to 36. "My sources told me there is no grain of truth to the Japanese imposing tariffs," Sherman Chao, analyst with Salomon Inc said. "The realities and the logic do not support these rumors," he said. "The Japanese have a lot more to lose by imposing tariffs. They are running a trade surplus," he said, "and if they started a trade war it would hurt them more than the U.S." Chao said that U.S. producers annually export about two billion dlrs of forest products to Japan. "Three quarters of that is in the form of wood products, meaning logs, wood chips and lumber, and the balance is paper products." "They (the Japanese) don't have any domestic sources to make up for the restrictions," Chao said, "so it's not like they would put a tariff to protect their own industry." "The rumors do no make economic sense, and I am skeptical," analyst Mark Rogers of Prudential Bache Securities said, "but politics has been known to override economic concerns." Speculation has surfaced on Wall Street recently that the Japanese would take action to retaliate against tariffs the Reagan Administration imposed last Friday on Japanese electronics products. Rogers said the rumor fueled the profit taking that was already occuring in these stocks. "In a nervous market, people tend to take profits, and they tend to take profits that have been the biggest gainers lately." Reuter 

USDA ANNOUNCES EXPORT BONUS WHEAT TO ALGERIA

The U.S. Agriculture Department announced it accepted three bids from two exporters for export bonuses to cover sales of 54,000 tonnes of durum wheat to Algeria. USDA said the bonuses awarded were 42.45 dlrs per tonne, to be paid in the form of commodities from CCC inventory. The bonus awards were made to Cam USA Inc (36,000 tonnes) and Corprostate Inc (18,000 tonnes). Shipment is scheduled for June 1-30, 1987. An additional 64,000 tonnes of durum wheat are still available to Algeria under the export enhancement program. Reuter 

MOLECULAR GENETICS <MOGN.O> IN MERGER TALKS

Molecular Genetics Inc said it has held preliminary discussions with a privately-held company convening a possible acquisition. "No agreement in principle has been reached, and serious negotiations on material terms have not begun," said Robert Auritt, acting co-chief executive officer and co-president. Molecular said it would have no further comment on the matter until an agreement in principle is reached or discussions are terminated. Reuter 

TREASURY BALANCES AT FED FELL ON APRIL 23

Treasury balances at the Federal Reserve fell on April 23 to 6.211 billion dlrs from 9.431 billion dlrs on the previous business day, the Treasury said in its latest budget statement. Balances in tax and loan note accounts rose to 25.154 billion dlrs from 24.953 billion dlrs on the same respective days. The Treasury's operating cash balance totaled 31.366 billion dlrs on April 23 compared with 34.385 billion dlrs on April 22. Reuter 

SOVIETS SAY 1987 ECONOMIC RESULTS UNSATISFACTORY

The Soviet government said economic results achieved in the first three months of the year were unsatisfactory, the official news agency Tass said. Soviet industrial production from January to March grew by 2.5 per cent compared with the same period last year, but fell short of its target by 0.8 percent, official statistics showed. "The Council of Ministers (government) emphasised that the results did not meet the Communist Party's exacting demands for the radical reconstruction of the economy," Tass said. "The first quarter economic results were deemed unsatisfactory." The government said poor economic results last January, when industrial production was 0.1 lower than in January 1986, had been overcome to a considerable extent in March, but the negative effects had not been completely eliminated. It singled out failings in the engineering, chemical and timber industries, as well as light industry. Growth in the machine-building sector, a priority in Kremlin plans for economic renewal, also fell short of target by 4.2 per cent, with below-level output in nearly all branches at a cost of 723 million roubles (1.08 billion dollars) in undelivered products. The sales volume of consumer goods fell 2.7 per cent short of planned growth, with a resulting decline in income to the state, the figures showed. Foreign trade turnover totalled 27.5 billion roubles (41.25 billion dollars), or 4.8 billion roubles (7.2 billion dollars) less than in the same period last year. The power industry, however, performed well. Output of oil, electricity, gas and coal were all above plan. Reuter 

CARMEL <KML> HOLDER SELLS SHARES

Carmel Container Systems Ltd said Mikhal Industrial and Development Management Ltd sold 202,500 shares to a group of private investors. After the sale, Mikhal retains a 49 pct ownership of Carmel Plaro Holding Ltd, which owns 51 pct of Carmel Container SYstems' outstanding stock. Reuter 

BARCLAYS SAYS PROSPECTS BRIGHT FOR UK ECONOMY

Britain can look forward to fairly strong economic growth, falling interest rates and firm Sterling, Barclays Bank Plc chairman-elect John Quinton said. "We should see a reasonable decline in interest rates in the next few months, but not a great one and not a rapid one," Quinton told a press luncheon. He said that whereas the British economy is growing at about three pct, he expects only "minor" growth for the western industrialized world as a whole. But, unless there is a major move toward protectionism, there should be no need to worry about a recession in the next two or three years. Quinton said much will depend on the resolution of trade disputed between the United States and Japan. He said Tokyo, in resisting the appreciation of the yen, had been "holding back the laws of economics." But if the dollar has to fall further to reduce Japan's trade surplus, he said he hoped the fall would be slow rather than rapid. Quinton said it will be difficult for the City of London to stave off the creation of a powerful securities industry regulatory body along the lines of the Securities and Exchange Commission in the U.S., especially if there are more insider trading scandals and if the Labour Party wins the next U.K. election. Reuter 

U.S. GASOLINE SURPLUS SEEN OVER NEAR TERM

Unless U.S. refiners reduce the amount of gasoline they now produce, the oil industry will enter the coming summer driving season with the largest surplus of motor fuel since 1984, oil analysts and traders said. "They key question is how much gasoline refiners produce in the coming weeks," said Larry Goldstein of Petroleum Industry Research Inc. "If refiners cut output and demand turns upward, gasoline stocks could begin to draw, and the surplus could potentially turn around in four to eight weeks," said Goldstein. The American Petroleum Institute said U.S. gasoline stocks for the week ended April 17 are 37.6 mln barrels above last year's levels, and analysts said they don't believe the expected one to two pct rise in demand will take care of the surplus before the start of the summer driving season, which begins Memorial Day weekend. The API said the last time stocks were this high was in 1984, when there was a 27 mln barrel excess. Oil traders said that the surplus held throughout the summer of 1984, depressing prices for the motor fuel. Over the past several weeks, analysts said they expected refiners to reduce production because there was no profit in continued production of gasoline due to the surplus. However, refineries continued to operate at higher levels, they said. U.S. refineries have been running at about 78.8 pct of capacity during March and April this year, compared to 77.5 at this time last year, API statistics show. Because of the current excess in stocks, one planner for a major oil company said he believed that most companies are contemplating cutting refinery throughput over the near term. He said some refiners appear to be selling less aggressively in order to have product on hand to meet the expected rise in demand this summer. Goldstein said that other factors, such as higher speed limits, the gasoline lead phasedown, and possible new restrictions on gasoline vapor pressure could tighten the supply situation this summer. However, a planner at another major oil company said that although large inventories are dampening the price outlook for gasoline this season, he does not expect refiners to cut output soon. That oil company planner said high crude oil runs reduce the refiner's average costs, making the incremental barrel of gasoline cheaper to produce. Most analysts expect a slight upturn this summer over the summer of 1986. Bo Poates, an analyst at the Energy Futures Group Inc said he foresees demand up about one pct in the second and third quarters of 1987. Chase Econometrics' Scott Jones sees gasoline demand rising 1.9 to 2.2 pct for the year, due mainly to continued low prices. Reuter 

BECOR WESTERN <BCW> SETS SPECIAL MEETING DATE

Becor Western Inc said it set June 4 as the date for a special meeting at which stockholders will vote on two proposals involving the sale of its subsidiary and the acquisition of the company. The previously-announced proposals call for the sale of its aerospace operations subsidiary to <Lucas Industries Inc> and the related leveraged buyout of the company by <BCW Acquisition Co>, the company said. Becord said May 4 has been set as the record date for the special meeting. Reuter 

ATCOR INC <ATCO.O> TO CONTEST ANTITRUST RULING

Atcor Inc said a Federal Court has reinstated a 1986 jury verdict against it and in favor of Indian Head Inc for antitrust damages of 3.8 mln dlrs before trebling and attorneys' fees. The company said it will challenge the ruling by the United States Court of Appeals for the Second Circuit which reversed a decision of the District Court in its favor. The case involved charges that Atcor acted improperly in opposing Indian Head's attempt to have its plastic electrical conduit sanctioned by the National Fire Protection Association under the 1981 National Electrical Code, it said. Atcor said the ruling by the three-judge panel of the Court of Appeal was incorrect and "seriously questionable in light of established Supreme Court doctrine". The legal avenues to be examined in an attempt to have the ruling reversed could include filing a petition for Supreme Court review, the company added. Reuter 

USDA REPORTS SEEN NEGATIVE TO LIVESTOCK FUTURES

Commission house livestock analysts agreed with Chicago Mercantile Exchange floor traders in calling today's USDA 13-state quarterly cattle on feed report and cold storage report for pork bellies negative. June live cattle futures are called 0.20 to 0.50 cent lower on Monday and back months of cattle are expected 0.50 to 1.00 cent lower. Pork bellies are expected 0.50 to 1.00 cent or more lower, the analysts said. Disappointment was voiced over the placement and total on feed figures in the cattle report. Both the quarterly section and monthly 7-state part showed the amount placed on feed and on feed numbers at the high end of expectations. The other disappearance figure of only three pct above a year ago in the 7-state section was also vieved as negative. Most of the early guesses predicted a much larger number for death loss following the two winter snow storms that struck the west in late March, they said. However, weight groupings were friendly to the nearby futures and should prompt some bull spreading on the decline, they said. William Arndt from Dean Witter noted that the 900 to 1,100 lb steers and 700 to 900 lb heifers were at 94 pct of a year ago and should lend some support to June futures. However, 700 to 900 lb steers at 119 pct will weigh on August, he said. "The big reduction in cattle weighing over 900 lbs should be friendly to the market for at least the next 30 to 60 days," AGE Clearing analyst Jerry Abbenhaus said. Movement of bellies into frozen storage was at the high end of expectations and should weigh on futures tomorrow, especially as futures prices ended weak today, they said. Other parts of the cold storage report were also viewed as negative to livestock and meat futures. "We have a lot of poultry in storage. Even though we have smaller pork supplies, the decline is not enough to offset the increases in poultry," Shearson Lehman analyst Chuck Levitt said. Also, there is more beef in storage than last year and this was achieved on smaller production. Reuter 

PERU TO MAINTAIN SILVER SALES FREEZE

Energy and mines minister, Wilfredo Huayta, said Peru would maintain its freeze on new sales of silver until the price of the precious metal reaches "the true value this raw material should have." He spoke to reporters at the presidential palace after meeting president Alan Garcia, whom he said recently spoke by telephone with Mexican president Miguel de la Madrid. Mexico and Peru are the world's two largest silver producers. Huayta, asked what the true price level of silver should be, repled: "well, this cannot be predicted." He said Minero Peru Comercial (Minpeco), the government's minerals marketing arm, would closely study the price of silver in the world market. Last Tuesday, the government instructed Minpeco, which handles all Peru's exports of refined silver and state- produced ore, to immediately freeze all new silver sales until the metal's price reached equilibrium in the world market. Peru plans to produce 63 mln ounces of silver this year, and is the largest producer of the precious metal after Mexico. Huayta said both nations' central banks would coordinate their work, but did not elaborate how they would do this. Peruvian central bank president Leonel Figueroa and the head of Bank of Mexico, Miguel Mancera Aguayo, met in Mexico City yesterday to coordinate actions aimed at consolidating the upward trend in the price of silver, the official newspaper El Peruano said today. Huayta said his Mexican counterpart, minister of oil, mines and parastatal industry, Alfredo del Mazo, should be in Lima on a visit at a nearby date. Huayta added Peru did not want to see great fluctuations in the price of silver, but declined to comment on what Peru would like to see as a ceiling for the precious metal's price. Silver bullion climbed to nearly 10.00 dlrs an ounce today from about 5.70 dlrs an ounce a month ago. Reuter 

GABELLI GROUP LIFTS ALLEGHENY INT'L <AG> STAKE

An investor group led by New York money manager Mario Gabelli said it raised its stake in Allegheny International to the equivalent of 1,026,261 shares, or 9.4 pct of the total, from 884,061 shares, or 8.2 pct. In a filing with the Securities and Exchange Commission, Gabelli and companies he controls said they bought a total of 142,200 Allegheny common shares between March 30 and April 22 at prices ranging from 24.125 to 24.875 dlrs a share. The stake, which includes some 11.25 dlr cumulative preferred stock, was bought solely for investment purposes and not to seek control of the company, the group said. Reuter 

USDA SEEKING COMMENTS ON 1988 FARM PROGRAMS

The U.S. Agriculture Department is seeking comments on common provisions of the 1988 wheat, feedgrains, cotton and rice programs. It said many program provisions are common to all the commodity programs and decisions made in regard to one will likely apply to other program crops. It asked for specific comments on the percentage reduction for acreage limitation requirements under the wheat program, the loan and purchase level, and whether a marketing loan, the inventory reduction program and related provisions should be implemented. The percentage acreage reduction of between 20 and 30 pct must be announced no later than June 1, 1987 for wheat, it said. Reuter 

BRAZIL TRADE SURPLUS FALLS SHARPLY IN MARCH

Brazil's trade surplus in March totalled 136 mln dlrs, down from 1.13 billion dlrs in the same month last year, the official Banco do Brasil announced. In a news conference, the director of the bank's Foreign Trade Department (Cacex), Roberto Fendt, attributed March's weak performance to labour strikes. March exports totalled 1.43 billion dlrs, against 1.53 billion dlrs in February, and 2.16 billion dlrs in March 1986. March imports amounted to 1.29 billion dlrs compared to 1.27 billion dlrs in February and 1.02 billion dlrs in March 1986. Fendt said coffee earnings were up to 220 mln dlrs in March from 110 mln dlrs in February, while oil derivatives were down to 54 mln dlrs from 58 mln dlrs in February. He said that although the March results were considerably lower than the same month last year, the government's target of an eight billion dlr surplus for 1987 should be achieved. The January-March trade surplus totalled 526 mln dlrs, below the same period last year, which reached 2.46 billion dlrs. Asked to explain the reason for his optimism, Fendt said the trade surplus should reach one billion dlrs in each of the last six months of the year. Even though results in the exports of steel, shoes and frozen concentrated orange juice were weaker compared to February, Fendt said this was not an indication that the United States was retaliating on account of its dispute with Brazil in the issue of informatics. For the next three months, Fendt estimated a monthly trade surplus of 400 mln dlrs, for an overall surplus of 1.2 billion dlrs in the April-May-June period. Reuter 

ANALYST UPGRADES OPINION ON U.S. BANK STOCKS

Analyst George Salem of Donaldson, Lufkin and Jenrette Securities Corp upgraded his recommendation on most U.S. money center banks following comments from a Japanese official that Japan plans to provide developing nations with up to 30 billion dlrs in loans. Salem said he changed his trading recommendation from negative to a buy. He is still neutral to negative long term. But the Japanese assistance is a psychological boost for the stocks. He said his report focused on Citicorp <CCI> , J.P. Morgan and Co <JPM>, Chase Manhattan Corp <CMB> and Bankers Trust Co <BT>. Yesterday, a U.S. state department spokesman said the loans will help the countries import goods needed to increase domestic production. The countries could then boost exports and earn foreign exchange, making it easier to repay loans to U.S. banks. "This is a group of stocks that was starving for good news," Salem said. "I"m not declaring an end to the debt crisis, or that problems of all the countries are now under control." Stocks in the money center bank group were generally higher today, adding to yesterday's gains. Reuter 

ENTWISTLE <ENTW.O> HAS 5.1 PCT OF ESPEY <ESP>

Entwistle Co told the Securities and Exchange Commission it has acquired 62,500 shares of Espey Manufacturing and Electronics Corp, or 5.1 pct of the total outstanding common stock. Entwistle, a Hudson, Mass., machinery maker and military contractor, said it bought the stake for investment purposes and has no plans to seek control of the company or to seek representation on its board of directors. But Entwistle said it has indicated its interest to Espey management in acquiring a family-held 19 pct stake in the company in addition to its current stake. Reuter 

USDA ADJUSTS LOUISIANA GULF PRICE DIFFERENTIALS

The U.S. Agriculture Department has narrowed by three cents the price differential between the Louisiana Gulf price of corn and posted country prices pegged to the gulf price, USDA officials said. The change, effective April 27, means posted county prices will be three cents higher in the region, Robert Sindt, assistant deputy administrator of USDA's Agricultural Stabilization and Conservation Service, said. Trade sources said USDA adjusted the differentials because gulf prices had shown some weakness in recent days compared with the rest of the country. Sindt said Louisiana Gulf corn price differentials that had been between four and eight cents would, effective Monday, range between one and five cents. Trade sources said cash bids at the Louisiana Gulf have been between three and 4.5 cents weaker than in the rest of the country in recent days, and that USDA's move would strengthen the front end of the corn market. Reuter 

ALEXANDER'S <ALX> SERVED WITH COMPLAINTS

Alexander's Inc said that although no proposal has been received, the company has been served with several shareholder complaints challenging the 47-dlr-a-share acquisition price under consideration by Donald Trump and Interstate Properties. Alexander's chairman Robin Farks said that an announcement made earlier this month indicated that no assurance could be given that Trump and Interstate would reach any agreement regarding an acquisition of the company, or what price might be offered. Reuter 

OECD WARNS SWEDEN ON LABOUR COSTS

High labour costs and slower corporate investment could hinder Sweden's economic growth after 1987, the Organisation for Economic Cooperation and Development, OECD, said. The Swedish economy grew at a slower rate in 1986 than in previous years. GDP rose about 1.7 pct in 1986 compared with 2.2 pct in 1985. But this growth depended largely on external factors, particularly lower oil prices, the OECD secretariat said in its latest annual report on Sweden. It warned that labour costs had risen more rapidly in Sweden than in other OECD countries. Because of high labour costs Swedish industry, which largely relies upon export markets, was losing market share. Wages in the manufacturing sector grew by seven pct in 1986, in line with 1985 increases, while public sector wages rose an estimated 9.2 pct in 1986, up from six pct in 1985. This was significantly higher than average wage increases of 3.75 pct for the seven largest members of the OECD in 1986. The report said wage moderation was central to maintaining economic growth in Sweden. It suggested that wage negotiations should be at least partly centralised to control the total wages bill and hold down inflation and unemployment levels. Helped by low oil prices and the government's tight fiscal policy, inflation fell to just over three pct in 1986 from almost six pct in 1985 but remained higher than in most other OECD countries, the report said. Unemployment, a principal policy target, was at 2.7 pct in 1986, in line with 1985's 2.8 pct and well below the OECD average of 8.6 pct. The report said Sweden's employment policies accounted for the high levels of wage inflation. It also said that economic growth in 1986 relied increasingly on private consumption because corporate investment in machinery and equipment had shrunk. The total volume of industrial investments dropped by two pct in 1986, with sharp declines in spending by the wood, pulp and paper industries. This compared to a 19 pct rise in 1985 when there was heavy investment in these industries. The OECD said Sweden should now make an effort to boost corporate investments and reduce its dependence on domestic consumption for economic growth. It suggested there was room for reform in the tax system. Sweden should continue to cut public sector spending, especially in local government, to keep in line with its tighter fiscal policy, the report said. REUTER 

BRAZIL TRADE SURPLUS FALLS SHARPLY IN MARCH

Brazil's trade surplus in March totalled only 136 mln dlrs compared to 1.13 billion dlrs in the same month last year, director of the Banco do Brasil's Foreign Trade Department (Cacex) Roberto Fendt said. In a news conference, Fendt attributed the weak performance in the March trade balance to labour strikes in the country. March exports totalled 1.43 billion dlrs, against 1.53 billion dlrs in February, and 2.16 billion dlrs in March 1986. March imports amounted to 1.29 billion dlrs compared to 1.27 billion dlrs in February and 1.02 billion dlrs in March 1986. Fendt said that coffee earnings rose to 220 mln dlrs in March from 110 mln dlrs in February while oil derivatives were down to 54 mln dlrs from 58 mln dlrs in February. He said that although the March results were considerably lower than the same month last year, the government's target of an eight billion dlr surplus for 1987 should be achieved. The January-March trade surplus totalled 526 mln dlrs, well below a similar period last year, which reached 2.46 billion dlrs. Asked to explain the reason for his optimism, Fendt said they were estimating that in each of the last six months of the year the trade surplus would amount one billion dlrs. Reuter 

PERU PRESIDENT WARNS OF RETALIATION ON SILVER

The Peruvian government's freeze on silver sales, which has contributed to a sharp boost in the metal's price, could draw retaliation by rich nations and big traders seeking lower prices, President Alan Garcia said. Peru, the world's second biggest silver producer, stopped selling its refined silver and state-marketed ore on tuesday. Since then, the metal's price has risen to its highest level in nearly three years. It closed today at over nine dlrs an ounce on world markets. Garcia said the move showed that a small nation like Peru could move international markets and did not have to accept cheap prices for silver, traditionally one of the top revenue earners of the country. Peru exported its refined silver last year at an average price of 5.40 dlrs a troy ounce. As recently as one month ago, silver bullion was trading for about 5.70 dlrs an ounce on world markets. "One thing is that Peru, which produces silver, sells it silently and in a submissive manner at the price world markets want," he told reporters at the presidential palace. "The other is that a nationalist government says, 'wait a moment I can't sell silver at these prices,'" he added. The peruvian energy and mines minister, Wilfredo Huayta, said the government would maintain its freeze on new sales of silver until the price of the metal reaches "the true value this raw material should have." He did not specify this level. Garcia said rich nations and big traders, faced with Peru's stance, could try to defend themselves. "They have some stocks, they have silver deposits, they can make fictitious sales and that way try to make the price of our mineral fall in the world market," Garcia said. "Whatever manoeuvre they take will be answered by Peru," he said. "Peru is in a position of action." President Garcia had recently spoken by telephone with Mexican President Miguel de la Madrid, Huayta said. Mexico is the world's biggest producer of silver. Mexico and Peru together produce nearly nearly 40 pct of the world's silver, the official newspaper El Peruano said. The newspaper added that Peruvian central bank president Leonel Figueroa and the head of the central bank of Mexico, Miguel Mancera Aguayo, met in Mexico City yesterday to coordinate actions aimed at consolidating the upward trend of the price of the metal. Analysts in Zurich, a major silver trading centre, said today the rally in silver prices was also fuelled by investors buying the metal to protect themselves against inflation, which they fear could be rekindled by the dollar's weakness. On an historical basis, silver is still relatively cheap compared to gold, which some investors believe could set the stage for further rises, they said. Reuter 

SOVIET GOVT SAYS ECONOMIC RESULTS UNSATISFACTORY

The Soviet government said economic results achieved in the first three months of the year were unsatisfactory, the official news agency Tass said. Soviet industrial production from January to March grew by 2.5 pct compared with the same period last year, but fell short of its target by 0.8 pct, official statistics showed. "The Council of Ministers (government) emphasised that the results did not meet the Communist Party's exacting demands for the radical reconstruction of the economy," Tass said. "The first quarter economic results were deemed unsatisfactory." It singled out failings in the engineering, chemical and timber industriess, as well as light industry. Reuter 

AM INT'L <AM> SAYS 3RD QTR MAY NOT TOP BREAKEVEN

AM International Inc said its third quarter net income may not exceed the breakeven level. However, the company said its fourth quarter operating profits are expected to be the largest of this year, and added its operating profits for the full year should be more than twice the fiscal 1986 year. AM International earned 8.5 mln dlrs, or 17 cts a share in the third period last year. Its operating profit for the fourth quarter last year was 6.7 mln dlrs. For the full year last year AM International had an operating profit of 29.1 mln dlrs. Reuter 

ECUADOR ECONOMY SEEN CONTRACTING IN 1987

The Ecuadorean economy, struck by an earthquake last month, will contract an estimated four pct in 1987 and its crude oil output will drop by 42 pct, the government's national development council (Conade) said. A Conade report, dated April 21 and obtained, said that the country's gross domestic product (gdp) would fall by an estimated four pct compared to 1.5 pct growth last year. Conade functions as the country's main planning institution. Crude output will fall to 61.2 mln barrels in 1987 from 105.6 mln in 1986, Conade said. It forecast exports of 22.9 mln of crude and derivatives against 63.3 mln last year. The March five earthquake killed up to 1,000 people and caused an estimated one billion dlrs in damage. It paralyzed Ecuador's crude output because it ruptured the country's main pipeline from Lago Agrio, at the heart of jungle oilfields, to the Pacific Ocean port of Balao. It will take until at least end-July to repair the line and return output to normal levels, oil officials said. Ecuador output was about 250,000 barrels per day before the tremor. Conade forecast total 1987 exports of 1.77 billion dlrs, 572 mln dlrs of which would be oil and derivatives. Imports were forecast at 1.70 billion dlrs. Total 1986 exports were 2.18 billion dlrs, of which 979 mln dlrs were crude and derivatives, with total imports 1.66 billion dlrs. Conade predicted that payments on Ecuador's 8.16 billion dlrs foreign debt will be limited to 947 mln dlrs this year against 1.489 billion dlrs last year. Conade's projected ceiling on payments is not legally binding. The current account balance of payments deficit was seen at 934 mln dlrs in 1987. It was 696 mln dlrs in 1986. Reuter 

HONG KONG BANKS LEAVE INTEREST RATES UNCHANGED

The Hong Kong Association of Banks said it decided to leave interest rates unchanged at today's regular weekly meeting. Current rates are savings accounts and 24-hours two pct, seven-day call, one and two-weeks 2-1/4 pct, one and two months 2-3/4 pct, three and six months 3-1/4 pct, nine months 3-1/2 pct and 12 months four pct. Prime rate is 6-1/2 pct. REUTER 

KUMAGAI GUMI'S UNIT SEEKS LISTING IN HONG KONG

A subsidiary of the Japanese construction group Kumagai Gumi Co Ltd <KUMT.TOK> is seeking to float its shares on the Hong Kong Stock Exchange, merchant banking sources said. They said <Kumagai Gumi (Hong Kong) Ltd> has appointed <Canadian Eastern Finance Ltd>, <Sun Hung Kai International Ltd> and <Wardley Ltd> as arrangers for the flotation. But they declined disclosure of any further details. A spokesman of Cheung Kong (Holdings) Ltd <CKGH.HKG> told Reuters the group's chairman Li Ka-shing also will take a 10-15 pct stake in Kumagai Gumi (Hong Kong). He said the privately held <Li Ka-shing Foundations Ltd> will receive a certain number of shares in Kumagai Gumi (Hong Kong) for injection into the company and up to 50 pct interest in a 520 mln H.K. Dlr worth property project at Hong Kong's New Territories. But he added the Cheung Kong group will have no interest in the construction firm. REUTER 

BUNDESBANK AIMS FOR TIGHT MONEY POLICY - SCHLESINGER

The Bundesbank is trying to keep monetary policy tight in order to counter inflationary tendencies, Bundesbank Vice-President Helmut Schlesinger was quoted as saying. "We are trying to keep the monetary framework tight, so that inflationary pressures cannot develop," he told the Frankfurter Neue Presse daily in an interview. "Central bank money stock does not have to be reduced because of this, but it must continue to grow modestly," he said. Bundesbank spokesmen were not available for comment. On Thursday Schlesinger said in a contribution to the Handelsblatt daily that the accommodative monetary stance in West Germany caused by outside pressures could not determine policy in the long term. The improvement in West German terms of trade, providing room for non-inflationary expansion of domestic demand in excess of output growth, put the overshoot of central bank money stock in a more positive light, he said on Thursday. Central bank money stock, the Bundesbank's main monetary measure, was growing at an annual rate of 7.3 pct in March, above the 1987 three-six pct target range. Money stock overshot the 3.5-5.5 pct 1986 growth target. Schlesinger told the Frankfurter Neue Presse that the phase of falling prices was over in West Germany. Prices might still be lower on a comparison with their level one year earlier. But the cost of living index has risen to 120.7 in March from its November 1986 low of 120.0, expressing a slight rise in prices, Schlesinger said. In March the cost of living was steady against February but 0.2 pct below March 1986. Schlesinger said a rise of between one and 1.5 pct during 1987 would be acceptable, and effectively mean price stability. Agreements so far in the current West German wage round are neutral as far as inflation is concerned because of the strength of the mark, Schlesinger said. Wage agreements in the public service and engineering industry were relatively high in view of the stable cost of living. But the higher costs would be compensated for, he said. "I am thinking above all of the fact that in the course of this year we will in all probability have a stronger mark against other currencies than last year," he said, adding "Without this mark revaluation effect, we would have had to say that the wage rise agreements were not neutral for prices." Schlesinger said exchange rate movements had increased the scope for redistributing wealth this year, but this development was unlikely to continue in 1988. "For this reason I cannot comment on that part of the engineering agreement which covers the coming years," he said. Some 2.3 mln workers for the public services received a 3.4 pct pay rise from January 1. An agreement for four mln engineering workers raised pay by 3.7 pct from April 1, and then raises pay by another two pct from April 1, 1988 and by 2.5 pct from April 1, 1989. The engineering agreement also cuts the working week by 1-1/2 hours to 37 hours in two stages. REUTER 

NAKASONE ADVISED TO EXPAND PURCHASES ABROAD

Prime Minister Yasuhiro Nakasone was advised to work out a plan for his government to buy more than one billion dlrs worth of foreign industrial products as part of efforts to defuse Japan's trade frictions with the United States, officials said. Former Foreign Minister Shintaro Abe made the recommendation at a meeting with Nakasone soon after returning from a U.S. Visit designed to pave the way for the prime minister's visit to Washington starting next Wednesday. Abe met President Ronald Reagan and U.S. Congressional leaders during his visit. It was not known how Nakasone responded to the suggestion. It also included increasing the nation's untied loans to developing countries to between 25 billion and 30 billion dlrs over the next three years and giving foreign firms greater access to a six billion dlr international airport project in western Japan, officials said. Abe called for tax cuts and government funds to be funneled into public works projects to stimulate domestic demand. Abe spoke of the possibility that Nakasone's visit could coincide with the passage of a protectionist trade bill by the U.S. House of Representatives. REUTER 

EC SAYS JAPAN CAR EXPORT RESTRAINT NOT ENOUGH

Japan"s 1987 car export restraint to the European Community (EC) is not enough, EC external trade chief Willy de Clercq said. There are also strong signs Japanese exporters are diverting cars to the EC after the dollar"s fall against the yen made their U.S. Market unprofitable, he told reporters after meeting U.S., Japanese, and Canadian trade ministers. The EC has agreed that if it detects an abnormal diversion in Japanese exports from the U.S. To the EC market due to currency movements over the past two years, it will move to prevent it, he said. Over the period, the yen has risen against the dollar almost eight times as fast as against the European Currency Unit, he said. Japan has set an unofficial, voluntary 10 pct rise in car exports to the EC this year as part of its efforts to stop its rising trade surplus with the Community, which hit a record 18 billion dlrs last year. But Japanese car exports to the EC so far this year jumped over 30 pct compared to a drop of 17 pct in U.S. Sales, and a seven per cent fall globally. "We think there is some diversion there," said de Clercq. Japanese officials say the overall annual rise will be only 10 pct. "But even 10 pct is 100,000 cars, whereas we sell only 40,000 cars to Japan (per year) in total," he said. The EC is also demanding that Japan ease its strict checks and requirements for imported cars, which Brussels says is a non-tariff barrier. The EC is also worried because EC demand for cars is falling this year, making any rise in Japanese imports even more serious for EC auto manufacturers. De Clercq, who has taken a hard line on world trade problems at this weekend meeting in central Japan, said the EC appreciated Japan"s plans to cut exports and lift domestic growth instead. "But even if all these measures are implemented, it will take time. But there is not time," he said. "There are burning issues on the table which cannot wait. It were better that the fire were put out immediately and not to wait till the house burns down," he said. REUTER 

UAE TO COORDINATE EXCHANGE RATES WITH GCC

United Arab Emirates (UAE) Central Bank Governor Abdel Malik al-Hamar said any changes in the UAE"s exchange rate policy would be carried out in conjunction with other Gulf Cooperation Council (GCC) countries. In a speech opening a seminar on Arab exchange rate policies, he noted the UAE had not changed the value of the dirham against the U.S. Dollar since 1980 despite wide fluctuations in the latter"s value against other currencies. "The exchange rate policy of the dirham has realised its goals in the past and changes in this policy depend on coordination and cooperation with other GCC countries," he said. The GCC states -- the UAE, Saudi Arabia, Bahrain, Qatar, Oman and Kuwait -- have agreed in principle to link their currencies to a common grid. Their currencies are now linked either to the dollar, IMF special drawing right (SDR) or, in the case of Kuwait, a trade-weighted basket of international currencies. The UAE dirham can fluctuate within a band of 7.25 pct higher or lower than 4.7619 to the SDR but has been fixed at 3.671 to the dollar since November 1980. REUTER 

WORLD BANK AGREES 2.4 BILLION DLR PAKISTAN AID

The World Bank, citing Pakistan"s progress in its economic performance and fiscal policy reforms, said it had agreed a 2.4 billion dlr aid programme for 1988. The bank said in a statement "substantial increases" had been approved to help fund support for refugees from neighbouring Afghanistan. But the bank said it had expressed serious concern at Pakistan"s budget. "This year"s overall budget deficit is expected to be larger than either either last year"s outcome or the amount originally budgeted (for 1987)," it added. REUTER 

TOP NATIONS AGREE OVER FARM TRADE ISSUE

Ministers from the major trading nations have for the first time made a concerted commitment to review the whole distorted structure of world farm trade, Canadian Trade Minister Patricia Carney said. "We think we can get some movement on this," she told reporters at a briefing following informal talks with the U.S., Japanese and European Community (EC) trade ministers here. Canada, strongly supported by Australia, has championed the cause of both developed and developing nations which have seen their farm trade suffer largely due to a farm subsidy war between the United States and the EC. Japan"s protected agricultural markets have also attracted criticism. The issue is of extreme importance to many indebted, developing nations which often rely totally on one or two farm sector exports to sustain their economies but which cannot compete with the subsidised U.S. And EC products. "Canada can afford so many billions of dollars (to do so), but many countries cannot," said Carney. She said the EC had changed its previous unhelpful attitude and had raised proposals similar to those of Canada under which to discuss the issue. Talks will now continue at the Organisation of Economic Cooperation and Development (OECD), which meets next month, and at the series of discussions on a new world trading framework, begun at Punta del Este, Uruguay, last year. Carney said Japan had also agreed to take a positive role in the farm talks, and that the United States was willing to see short-term progress, as long as long-term solutions were not affected. Canada"s five point programme demands that farm product prices must reflect open world market prices, that any support for farmers incomes should not be linked to production incentives, that there should be no new farm subsidies, no new farm import barriers, and that any decisions should be implemented collectively. The farm trade problem was almost completely ignored by the industrialised world until Canada raised it last year at the Tokyo summit of seven leading industrial powers. The distortions created by subsidies and protectionism have created some absurd situations. For example, to protect its farmers the Japanese government buys Canadian wheat and sells it at 10 times the purchase price to Japanese consumers. "So we end up borrowing in the Japanese (financial) market to help pay subsidies to keep our farmers while they make a profit on our wheat to help pay the price support for their farmers," said Carney. The problem causes pain for many nations and increases the already dangerously high debts that they owe mainly to U.S., Japanese and EC banks. REUTER 

QATAR"S BANKS SET FOR FURTHER LEAN SPELL

Bank profits in the Gulf oil state of Qatar are coming under renewed pressure and foreign banks are retrenching further in one of the region"s most overbanked markets. Results for 1986 show a year of declining profit for several foreign banks, although locally-owned operations were in some cases able to cushion the drop by increasing market share. <Qatar National Bank SAQ>"s (QNB) General Manager, Abdulla Khalid al-Attiya, said: "The economy is not improving as we hoped... 1987 will be another difficult year for the banks." Oil-dependent Qatar, with a tiny indigenous population of 60,000 to 80,000 and an expatriate workforce estimated at about 280,000, boasts five local banks and 10 foreign bank operations. Local and foreign bankers in the capital said the Gulf-wide recession, aggravated this year by Qatar"s severe difficulty marketing its crude oil at official OPEC prices, has taken a heavy toll on the economy and bank profitability. As a result, the only U.S. Bank, <Citibank NA>, is thought to be negotiating to sell its operation to the fast growing locally based <Al Ahli Bank of Qatar QSC> which only started operations in 1984, bankers said. Citibank would not comment. Other foreign banks have retrenched, with <Standard Chartered Bank> cutting staff and others expected to follow. <Banque Paribas> is examining a change in its status to admit 51 pct Qatari ownership in a bid to improve its access to local business, bankers said. One banker added: "Weak profits are here to stay for the time being. There is no cause for optimism at the moment." Sentiment had picked up briefly at the end of last year when OPEC reached its accord to curb oil output and return to fixed prices. However, it soon became apparent that Qatar was having difficulty selling oil at OPEC prices. The soft spot oil market has left official Qatari crude prices 20 to 40 cents more expensive and sales have been running in recent weeks at 100,000 and 120,000 barrels per day, well down on the nation"s OPEC quota of 285,000, oil sources said. Bankers said this serious shortfall in Qatar"s revenue has led to a new spate of payments delays from the public sector to private contractors after a marginal improvement in January. Loan loss provisions continued to eat into bank profits last year, as did the introduction of minimum reserve requirements by the Qatar Monetary Agency. Trade financing has almost dried up as a traditional source of bank income. Of the local banks, QNB conducts the bulk of the government"s business and subsequently enjoys a huge advantage its rivals cannot expect to match, bankers said. The bank reported a 2.9 pct rise in net 1986 profit to 93.1 mln Qatari riyals, while its balance sheet grew by 10.8 pct to 9.0 billion, making it by far the largest bank in Qatar. But the strong assets growth partly reflected bridging loans for the public and private sector to tide government departments and local business over the lean economic spell, Attiya said. "Generally speaking, we are overbanked in Qatar," he said, echoing a widespread feeling in the banking community. Other local banks fared less strongly. The second largest, <Doha Bank Ltd QSC>, reported a 13 pct drop in net profit to 27.5 mln riyals, while <Commercial Bank of Qatar Ltd QSC>, registered a decline to 18.5 mln riyals from 19.4 mln in 1985. The newcomer Al Ahli Bank, continued to expand rapidly and reported net profit of 5.2 mln compared with 3.3 mln during the start-up period from August 4, 1984 to end-1985. Bankers said the local banks had clearly begun to win commercial deposits previously held by foreign banks, increasing already strong pressure on non-Qatari banks to reexamine their staffing levels and overheads. <Grindlays Bank PLC> recorded a net loss at its Doha branch last year of 4.7 mln riyals after registering a nominal profit in 1985 of 12,000 riyals. Two other long-established banks in the Gulf, the <British Bank of the Middle East> (BBME) and Standard Chartered, also found last year a difficult climate to make strong profits. BBME"s net profit fell to 3.2 mln riyals from 10.4 mln in 1985, but Assistant Manager John Farquharson said 1985"s result had been artificially inflated by tax rebates on provisions. "Foreign banks are seeing their assets decline, while local banks are increasing their market share," Farquharson said. BBME"s operating profit was steady in 1986, edging up to 12.3 mln riyals from 11.5 mln in 1985. "We are expecting the same level of operating profit in 1987," Farquharson said. Standard Chartered"s net profit last year recovered slightly to 1.6 mln riyals after a loss of 161,000 in 1985. Staff numbers were cut last year to reduce overheads. Bankers said the lack of new construction projects in Qatar means business is unlikely to pick up this year although hopes are rising that the start of Qatari gas exploitation could provide a boost. But the threat of higher U.S. Interest rates may erode bank deposits as savings are moved offshore. REUTER 

U.S. CENTRAL BANKER OPPOSES FURTHER DOLLAR FALL

New York Federal Reserve Bank President Gerald Corrigan opposed a further fall in the value of the dollar but refused to say whether U.S. Interest rates would be raised to protect the currency. "A further decline in the dollar or appreciation of the yen at this juncture I would regard as counterproductive," he told a news conference. His comments echoed those made last week by U.S. Treasury Secretary James Baker, who also warned against a further dollar fall. The U.S. Currency plunged to a post-war low below 140 yen last week, despite dollar-buying by a number of central banks. Currency speculators and investors are convinced that a further dollar fall is needed to help reduce the huge U.S. Trade deficit, dealers said. The only thing likely to help the dollar is seen as a rise in U.S. Interest rates. Corrigan refused to say whether the U.S. Was ready to risk damaging its economic recovery by raising interest rates. The dollar"s sharp drop this month has also raised questions about the usefulness of recent meetings of the Group of Seven. But Corrigan said: "They have played a constructive role in so far as the broad objective of facilitating a higher degree of economic policy coordination." REUTER