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MAIL BOXES ETC <MAIL> 3RD QTR JAN 31 NET | Shr 23 cts vs 18 cts
Net 509,144 vs 277,834
Revs 2,258,341 vs 1,328,634
Avg shrs 2,177,553 vs 1,564,605
Nine mths
Shr 55 cts vs 42 cts
Net 1,150,633 vs 649,914
Revs 6,169,168 vs 3,178,115
Reuter
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MUNSINGWEAR INC <MUN> 4TH QTR JAN 3 LOSS | Shr loss 32 cts vs loss seven cts
Net loss 1,566,000 vs loss 292,000
Revs 39.4 mln vs 34.7 mln
Year
Shr profit 79 cts vs profit 74 cts
Net profit 3,651,000 vs profit 3,020,000
Revs 147.9 mln vs 114.2 mln
Avg shrs 4,639,000 vs 4,059,000
Note: Per shr adjusted for 3-for-2 stock split July 1986
and 2-for-1 split May 1985.
Reuter
|
FED DATA SUGGEST STABLE U.S. MONETARY POLICY | Latest Federal Reserve data suggest that
the central bank voted to maintain the existing degree of
pressure on banking reserves at its regular policy-making
meeting two weeks ago, money market economists said.
"The numbers were a little disappointing, but I think we
can take Mr Volcker at his word when he said that nothing had
changed," said Bob Bannon of Security Pacific National Bank.
Fed Chairman Paul Volcker told a Congressional committee
last Thursday that the Fed's policy "has been unchanged up to
today."
Although Volcker's statement last Thursday allayed most
fears that the Fed had marginally tightened its grip on
reserves to help an ailing dollar, many economists still wanted
confirmation of a steady policy in today's data, which covered
the two-week bank statement period ended yesterday.
This need for additional reassurance was made all the more
acute by the Fed's decision yesterday to drain reserves from
the banking system by arranging overnight matched sale-purchase
agreements for the first time since April of last year,
economists added.
Today's data showed that the draining action was for a
fairly large 3.9 billion dlrs, economists said.
"The one thing that caught my eye were the relatively
sizeable matched sales on Wednesday," said Dana Johnson of
First National Bank of Chicago. "But there was a clearly
justified need for them. There was nothing ominous."
"The Fed couldn't have waited until the start of the new
statement period today. If it had, it would have missed its
(reserve) projections," added Security Pacific's Bannon.
A Fed spokesman told reporters that there were no large
single-day net miss in reserve projections in the latest week.
Economists similarly shrugged off slightly higher-than-
expected adjusted bank borrowings from the Fed's discount
window, which averaged 310 mln dlrs a day in the latest week,
compared with many economists' forecasts of about 200 mln.
For the two-week bank statement period as a whole, the
daily borrowing average more than doubled to 381 mln dlrs from
160 in the prior period.
"There were wire problems at two large banks on Tuesday and
Wednesday, so I am not too bothered about the borrowings," said
Scott Winningham of J.S. Winningham and Co. The Wednesday
average rose to 946 mln dlrs from 148 mln a week earlier.
Lending further support to the stable policy view was a
relatively steady federal funds rate of about six pct in the
latest week and persistently high levels of excess reserves in
the banking system, economists said.
"For the time being, the Fed is following a neutral path,
with fed funds at about six to 6-1/8 pct," said Darwin Beck of
First Boston Corp. "I expect it to continue in that vein."
"Excess reserves fell but they are still over a billion
dlrs," added First Chicago's Johnson. Banks' excess reserves
averaged 1.03 billion dlrs a day in the latest statement
period, down from 1.50 billion in the previous one.
After the Fed declined to assign a 1987 target growth range
to the wayward M-1 money supply measure last week, little
attention was paid to a steeper-than-anticipated 2.1 billion
dlr jump in the week ended February 16.
Looking ahead, economists said the Fed will have to tread a
fine line between the dollar's progress in the international
currency markets and the development of the domestic economy.
"The market has perhaps exaggerated the dollar's effect on
Fed policy," said First Chicago's Johnson. "Of course, it will
take the dollar into account in future policy decisions but if
the economy is weak, it won't pull back from easing."
Reuter
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FEDERAL INDUSTRIES LAUNCHES EUROBOND ISSUE | <Federal Industries Ltd> said
it launched a 40 mln Canadian dlr Eurobond issue for five
years, bearing a coupon of 9-1/4 pct.
Issue price is 100-5/8. Lead manager is Union Bank of
Switzerland.
Proceeds will be used to reduce short-term debt.
Reuter
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NYSE TO STUDY REGULATION OF SECURITY INDUSTRY | The New York Stock Exchange said it will
begin a review of regulation in the securities industry to
determine what changes may be needed to maintain the integrity
of the market and protect investors in coming years.
The Exchange said the study is needed because of the rapid
changes taking place in the securities industry. Among the
factors it cited were the increase in trading volume, the
proliferation of new trading instruments and the rise of
computerized trading techniques.
The Exchange did not mention, however, the insider trading
scandal that has caught several top Wall Street executives.
The NYSE said its study will be chaired by Richard R.
Shinn, executive vice chairman of the Exchange and former
chairman and chief executive officer of <Metropolitan Life
Insurance Co.>
Other members of the study committee include Charles F.
Barbar, former chairman of Arsarco Inc <AR>, Roger Birk,
chairman emeritus of Merrill Lynch and Co <MER> and Irwin
Guttag, chairman of the NYSE special surveillance committee.
The committee's report should be completed by the end of
the year, the Exchange said.
Reuter
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KOREAN AIR ORDERS MCDONNELL DOUGLAS <MD> MD-11S | McDonnell Douglas Corp said Korean
Air signed formal orders for four MD-11 jets with options to
buy four more.
The company said if the options are exercised, the purchase
will total about one billion dlrs.
McDonnell Douglas said on December 30 that Korean Air was
among the initial 12 customers that placed orders and options
for 92 aircraft valued at about nine billion dlrs.
Delivery of the first MD-11 is scheduled for the summer of
1990.
Korean Airlines currently operates four McDonnell Douglas
DC-10 jets. In 1985, it ordered six MD-82s valued at about 150
mln dlrs. Four of these are in service and two will be
delivered this year.
Reuter
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DELTA ROCKET BLASTS OFF FROM CAPE CANAVERAL | An unmanned Delta rocket
carrying a 57 mln dlr hurricane-tracking satellite blasted off
here today in NASA's first successful launch of the year.
The 116-foot (35.4-meter) Delta -- a reliable workhorse of
the U.S. rocket fleet -- lifted off at 1805 EST from Cape
Canaveral Air Force Station in a crucial test of the space
agency's ability to recover from the Challenger disaster and a
string of other failures.
The launch came after two delays in two days. The first
postponement was caused by fuel leak and the second by
high-speed crosswinds that NASA officials say could have torn
the rocket apart during fiery ascent.
Reuter
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JAPAN TO TRY TO OPEN MARKET TO U.S. CAR PARTS | Japan has pledged to try to increase
its purchase of U.S. car parts and also to exchange data to
monitor the purchases, the Commerce Department said.
U.S. negotiators opened talks last August with Japanese
officials to try to force open the Japanese market to
American-made parts in an effort to redress an estimated five
billion dlr deficit in car parts trade.
Japan had agreed to try to increase purchases of U.S.-made
parts by Japanese car makers and to begin long term contracts
for parts purchases, a Commerce department official said.
He added that the agreement also said Japan agreed to try
to devise a way to collect purchasing information in order to
monitor progress in stepping up Japanese orders.
The Commerce Department said in a statement last year that
"statistics support the perception in the United States that
American auto parts suppliers are not welcome in the inner
circles of Japan's auto companies and their traditional
suppliers."
It estimated that while Japan's car firms sold almost five
billion dlrs worth of parts in the United States in 1985, U.S.
firms sold only one per cent of Japan's 55 billion dlr market.
reuter
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FRANCE FACES PRESSUE TO CHANGE POLICIES | France's right wing government is facing
growing pressure to modify its economic policies after revising
down its 1987 growth targets and revising up its inflation
forecasts for this year.
Moving reluctantly into line with most private sector
forecasts the government yesterday raised its 1987 inflation
estimate a half percentage point to 2.5 per cent and cut its
economic growth estimate to between two and 2.8 per cent from a
2.8 per cent target written into the annual budget last
september.
Finance Minister Edouard Balladur said the revised figures
would not push the government off its chosen mix of price
deregulation, budget-cutting rigour and pay restraint.
But Trade Union leaders served immediate notice they would
push to protect the purchasing power of their members, raising
the spectre of a vicious spiral of wage and price rises.
And bank economists contacted by Reuters said they believed
Prime Minister Jacques Chirac could be forced by slow growth
and rising unemployment to reflate the economy later this year,
perhaps in the autumn, to boost his prospects in Presidential
elections due by April 1988.
"The outlook is more worrying than it was a few weeks ago,"
said Societe Generale economist Alain Marais. "We have the
impression it may be difficult to get even two per cent growth
this year."
"The big question is whether the government's policy of wage
moderation will be maintained," he added.
The government has set public sector wage rises at aboout
1.7 per cent this year, with a three per cent ceiling for rises
justified by increased productivity.
But the head of the socialist CFDT union federation, Edmond
Maire, meeting with Chirac today, renewed union demands already
rejected by the government for indexation clauses to be built
into future pay contracts to safeguard workers against higher
prices.
Calling the government's policies "unbalanced and unjust," he
also demanded investment incentives to boost employment. He
announced after his meeting that Chirac had told him the
government would spend two billion francs on a series of
measures to boost employment and training
Andre Bergeron, a widely respected leader of the moderate
Force Ouvriere labour group, put similar demands to Chirac
earlier in the week while the Communist-led CGT, the largest of
France's unions, declared the defence of its members earnings
its top priority.
But with unemployment nearing 11 per cent last month, and
still rising, government supporters and some economic analysts
said they were confident Chirac could resist union pay demands.
"Salary indexation was ended by the previous Socialist
government and I dont think this administration is going to
reverse that," commented Michel Develle, economist at
recently-privatised Banque Paribas.
Damaging transport and electricity strikes over Christmas
and the New Year, partly blamed by the government for higher
inflation, had undermined the unions power and popularity, he
said.
Develle said Paribas expected inflation to rise even more
than the governments revised forecast, perhaps to 2.6 or 2.7
per cent this year against last years 2.1 per cent.
"But that would still be an exceptional achievement
considering that for the first time since the Second World War
all french prices have been freed," he commented.
Finance Ministry officials said that the governments
abolition of price and rent controls last year was responsible
for nearly a quarter of a 0.9 per cent surge in January living
costs.
But they claimed it was a once-off phenomenon that should
have no knock-on impact on the rest of the year.
Both Marais and Develle said they agreed with that, so long
as the government kept wages under control.
Prices could rise 1.5 per cent in the first three months of
1987 and two per cent in the first half year, fractionally more
than forecast this week by the National Statistics Institute,
INSEE, Marais said. But the second half year should be better,
he added.
Ironically, one side effect of higher inflation could be to
help the government achieve its aim of cutting the state budget
deficit, several analysts said.
So long as public sector wages are held down, higher Value
Added Tax receipts resulting from rising prices should offset a
loss in revenues that otherwise would result from slower than
expected growth, they said.
Reuter
|
GTI CORP <GTI> 4TH QTR OPER NET | Oper shr profit six cts vs loss two cts
Oper net profit 225,000 vs loss 91,000
Revs 4,814,000 vs 3,339,000
Year
Oper shr profit 12 cts vs loss two cts
Oper net profit 415,000 vs loss 73,000
Revs 16.4 mln vs 16.9 mln
Note: data does not include from discontinued operations,
4th qtr 1986 gain of 632,000 dlrs, or 19 cts per shr; 4th qtr
1985 loss of 250,000 dlrs, or seven cts per shr; 1986 year loss
of 4,054,000 dlrs, or 1.17 dlrs per shr; and 1985 year loss of
606,000 dlrs, or 17 cts per shr.
Reuter
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HOUSTON OIL <HO> RESERVES STUDY COMPLETED | Houston Oil Trust said that independent
petroleum engineers completed an annual study that estimates
the trust's future net revenues from total proved reserves at
88 mln dlrs and its discounted present value of the reserves at
64 mln dlrs.
Based on the estimate, the trust said there may be no money
available for cash distributions to unitholders for the
remainder of the year.
It said the estimates reflect a decrease of about 44 pct in
net reserve revenues and 39 pct in discounted present value
compared with the study made in 1985.
Reuter
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FAMOUS RESTAURANTS INC <FAMS> 4TH QTR LOSS | Shr loss 2.07 dlrs vs loss eight cts
Net loss 11,445,000 vs loss 501,000
Revs 14.5 mln vs 11.0 mln
Year
Shr loss 1.91 dlrs vs profit four cts
Net loss 12,427,000 vs profit 211,000
Revs 60.8 mln vs 51.5 mln
Note: includes non-recurring charges of 12,131,000 dlrs in
the 4th qtr and 12,500,000 dlrs in the year for reserve for
underperforming restaurants.
Reuter
|
JAPAN CONSUMER PRICES FALL 0.4 PCT IN JANUARY | Japan's unadjusted consumer price index
(base 1985) fell 0.4 pct to 99.7 in January from the previous
month, the government's Management and Coodination Agency said.
The fall compares with a decline of 0.2 pct in December.
The January index compared with a year earlier was down 1.1
pct, the first drop larger than 1.0 pct since it fell 1.3 pct
in September 1958.
Food costs rose in January from December but prices fell
for clothing, footwear and utilities, causing the overall
decline for the month.
Housing, medical and educations costs increased in January
compared with a year earlier but the cost of utilities,
gasoline and vegetables fell.
The unadjusted consumer price index for the Tokyo area
(base 1985) was down 0.1 pct in mid-February from a month
earlier at 100.2, reflecting lower prices for food, clothing
and footwear. Compared with a year earlier, the index was down
0.7 pct due to lower vegetable, fuel oil and utility costs.
REUTER
|
AVERY <AVY> SETS TWO FOR ONE STOCK SPLIT | Avery said its board authorizerd
a two for one stock split, an increased in the quarterly
dividend and plans to offer four mln shares of common stock.
The company said the stock split is effective March 16 with
a distribution of one additional share to each shareholder of
record March 9.
It said the quarterly cash dividend of 10.5 cts per share
on the split shares, a 10.5 pct increase from the 19 cts per
share before the split.
Avery said it will register with the Securities and
Exchange Commission shrortly to offer four mln additional
common shares. It will use the proceeds to repay debt, finance
recent acquisitions and for other corporate purposes.
Reuter
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MICROSOFT CORP <MSFT> HALTS MS-DOS IMPORTS | Microsoft Corp said it obtained a
federal court order to seize a shipment of over 15,000
unauthorized copies of its MS-DOS operating system labeled
"Falcon MS-DOS".
Federal marshals made the seizure in San Francisco on Feb
17.
Microsoft said the U.S. District Court for the Northern
District of California also granted it a temporary restraning
order against Wetex International, Quadrant Corp and other
persons, prohibiting copyright infringement by reproducing
Microsoft software.
Reuter
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JAPAN MARCH BOND COUPON SEEN UNCHANGED AT FIVE PCT | The Finance Ministry has proposed
informally to its bond underwriting syndicate that the coupon
on the January 10-year government bond remain unchanged from
February at five pct, underwriting sources said.
They said the ministry wants a 0.50 yen raise in issue
price from February to 99.50 to yield a record low 5.075 pct.
The 5.151 pct February bond issue yield was itself a record
low. The proposed issue volume is 475 billion yen against the
600 billion in February.
The underwriting syndicate is likely to accept the proposed
terms immediately, the sources said.
REUTER
|
U.S. LAUNCHES WEATHER SATELLITE | An unmanned Delta rocket
carrying a 57 mln dlr weather observation satellite blasted off
here today in the first U.S. Space launch of the year.
The 116-foot rocket lifted off at 1805 local time (2305
GMT) and placed in orbit a 1,850 pound Geostationary
Operational Environmental Satellite (GOES) to replace an
identical one that was destroyed last May when a Delta rocket
exploded after liftoff.
Weather forecasters have had only a single satellite to
cover the entire U.S. Since another GOES failed in orbit in
August 1984.
"We'll have both our weather eyes open again," said Thomas
Pyke, a spokesman for the National Oceanic and Atmospheric
Administration, which owns and operates the satellite.
The smooth launching came after two delays in as many days.
The first was caused by a fuel leak and the second by powerful
crosswinds.
The Delta was the first of six rockets scheduled for launch
by the National Aeronautics and Space Administration this year.
The launch marked the third straight success for the space
program which was battered by a series of failures in 1986,
including the loss of the Challenger shuttle.
REUTER
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ITALIAN COALITION MEETS AS GOVERNMENT CRISIS LOOMS | Leaders of Italy's five coalition parties
have agreed to meet today to try to settle their differences
which are mainly between Prime Minister Bettino Craxi's
Socialist Party and the majority Christian Democrats.
Sources close to Deputy Prime Minister Arnaldo Forlani said
Craxi told him he would announce his resignation next week,
allowing negotiations on a new government leader.
The conservative Christian Democrats demanded the meeting
after Craxi said a pact agreed during a government crisis last
August, under which he was to hand over the prime minister's
job next month, was unlikely to be fulfilled.
Political sources said the Christian Democrats are likely
to leave the coalition, which also includes Republicans, Social
Democrats and Liberals, unless they get the prime minister's
job. They said Craxi's plans to resign show he has decided to
stick to the pact but talks on a leader, a government program
and sharing of ministries will not be easy.
They said there is dissent among the partners and that
Forlani has been trying to mediate to avoid a crisis. They said
the five are likely to begin talks tomorrow on whether
formation of a new government is feasible or early elections
are inevitable. Elections are not due until 1988.
REUTER
|
N.Z. CENTRAL BANK SEES SLOWER MONEY, CREDIT GROWTH | Monetary and credit growth rates in
New Zealand are not expected to continue at current levels
following the Reserve Bank's move to tighten liquidity late
last year, Reserve Bank Governor Spencer Russell said.
The monetary and credit growth figures for the December
quarter were probably artifically inflated by unusually high
growth in inter-institutional lending activity on the short
term money market, Russell said in a statement.
The bank moved to tighten liquidity when the initial signs
of the recent expansion became apparent in September and
October last year, Russell said.
Broadly defined M-3 figures released today showed growth of
17.8 pct in the year ended December compared with 13.1 pct in
the year ended September.
Annual growth of private sector credit in calendar 1986 was
30.7 pct compared with 16.5 pct in the September year.
"Available evidence suggests that corporate customers,
including non-bank financial institutions, have been exploiting
differences between interest rates on overdrafts with trading
banks and rates in the call market," Russell said.
REUTER
|
AVERAGE YEN CD RATES FALL IN LATEST WEEK | Average interest rates on yen certificates
of deposit, CD, fell to 4.27 pct in the week ended February 25
from 4.32 pct the previous week, the Bank of Japan said.
New rates (previous in brackets), were -
Average CD rates all banks 4.27 pct (4.32)
Money Market Certificate, MMC, ceiling rates for the week
starting from March 2 3.52 pct (3.57)
Average CD rates of city, trust and long-term banks
Less than 60 days 4.33 pct (4.32)
60-90 days 4.13 pct (4.37)
Average CD rates of city, trust and long-term banks
90-120 days 4.35 pct (4.30)
120-150 days 4.38 pct (4.29)
150-180 days unquoted (unquoted)
180-270 days 3.67 pct (unquoted)
Over 270 days 4.01 pct (unquoted)
Average yen bankers' acceptance rates of city, trust and
long-term banks
30 to less than 60 days unquoted (4.13)
60-90 days unquoted (unquoted)
90-120 days unquoted (unquoted)
REUTER
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BRITAIN'S ALLIANCE OPPOSITION WINS BY-ELECTION | Britain's centrist Liberal-Social
Democratic Alliance won a surprise victory in a parliamentary
by-election in the London borough of Greenwich, a seat held by
the main opposition Labour party for the past 50 years.
Rosie Barnes, a Social Democratic member of the Alliance,
won with 18,287 votes, or 53 pct, and a majority of 6,611 seats
over her nearest rival, Labour candidate Deirdre Wood.
The Conservatives came third with 3,852 votes.
The result is expected to play a key role in determining
when Prime Minister Margaret Thatcher, leader of the ruling
Conservatives, might call a general election.
REUTER
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ECONOMIC SPOTLIGHT - JAPAN EYEING FOREIGN STOCKS | Japanese life insurers, trust banks and
corporations, largely responsible for vitalising the U.S. Bond
market in recent years, are now eyeing stockmarkets in the
U.S., Britain, France and Hong Kong, fund managers said.
After concentrating on U.S. Treasury bonds for years,
Japanese institutions now see a risk in relying too much on
similar types of investments, they said.
Japan's net buying in overseas stockmarkets this year may
double or triple to 15-20 billion dlrs from seven billion in
1986, Shigeki Matsumoto of Nikko Securities Co Ltd, said.
Matsumoto, who manages Nikko's investment research and
strategy, said there is evidence Japanese investors began
poking around in foreign stockmarkets around July last year,
but few made firm commitments until December when net purchases
suddenly grew to 1.5 billion dlrs from around 500 mln in each
of the previous five months.
Net buying in 1985 totalled only 995 mln dlrs, he added.
This sudden penchent for overseas stocks is likely to draw
the widest smiles from Wall Street because about 70 to 80 pct
of funds will be invested in the U.S. Markets, Matsumoto said.
"The trend has been to head toward the U.S. Market, first
because of its size and next because it has been successful
over the last couple of years," said Eugene Atkinson, managing
director of Goldman Sachs International Corp.
Wall Street's massive turnover offers good liquidity,
enabling institutions to easily move large volumes of money in
and out of shares with the minimum of risk, he added.
However, few see holdings in U.S. Treasuries dwindling.
They will remain a Japanese mainstay, fund managers said.
Institutions, particularly life insurance companies which
concentrate on income rather than capital gains to cover
payouts to policy holders, are unlikely to sell their U.S.
Treasuries, but will put in less money, said Shinichi Kobuse,
manager of Yamaichi Securities Co Ltd's international fixed
income activities.
There has been some selling of U.S. Bonds by short-term
investors, but the selling is unlikely to amount to a
significant chunk of Japanese bond holdings because the
liquidity of the U.S. Bond market remains attractive, he added.
Kobuse said investment managers are bullish on the U.S.
Equity markets despite predictions by economists the U.S.
Economy will remain sluggish over the next couple of months.
Interest in Wall Street has been spurred by recent reports
of significant growth in earnings by major U.S. Corporations,
he added.
Yutaka Hashimoto general manager of Nippon Life Insurance
Co told an economic conference that insurance companies, which
are responsible for 26 pct of Japanese funds in foreign
securities, hold a lopsided proportion of U.S. Treasuries and
intend to diversify into other instruments and currencies.
Insurance companies have put the dominant portion of their
funds into the U.S., But will now invest in Britain, West
Germany, France and other countries, Hashimoto said.
Lower interest rates worldwide make the returns on stocks
relatively high in comparison with bonds and in light of the
strength in the yen, the growth in stock values is expected to
offset currency risks, he added.
One trust bank official said his bank aims for a 10 pct
annual return on overseas investments but the recent decline in
U.S. 30-year bond yields has caused a rethink in pension fund
investment stategies.
The bank is looking more at U.S. Equities and European
bonds, he said.
Japanese investments in British equities have already
turned active and the pace is likely to increase, said Andrew
Sheaf, general manager of international equity activities at
County Securities Japan.
"Last week was the busiest week we had," he said.
Investments are being spurred by the growth in profits of
British companies and the recent deregulation of government
controlled firms, fund managers said.
Deregulation in France is also attracting Japanese
interest, but stock investments there will be inhibited by
worries about the French franc, they said.
Investments in Hong Kong will be mostly short-term and
speculative due to uncertainty about the colony's long-term
political stability, they added.
Japanese investors are cautious about West Germany,
particularly as German firms, like their Japanese counterparts,
are concerned about the recent dollar fall.
Australia also poses some risks due to currency values,
they added.
REUTER
|
TAIWAN OFFSHORE BANKING ASSETS RISE IN JANUARY | The combined assets of Taiwan's offshore
banking units (obu) rose to 6.28 billion U.S. Dlrs at end-
January from 6.21 billion in December and 6.34 billion in
January 1986, the central bank said.
A bank official told Reuters the increase came mainly from
increased local obu borrowings from their Asian counterparts.
He said the assets, held by 15 foreign and local banks,
were mainly in U.S. Dollars with the remainder in certificates
of deposit and bonds. About 90 pct of the assets came from Asia
and the rest from North America and Europe, he added.
REUTER
|
JAPAN EXPECTED TO CUT BASE RATE FOR STATE BODIES | Japan is expected to cut the base lending
rate for state financial institutions to 5.5 pct from 6.2 as
part of the recent pact by major industrial nations in Paris,
Finance Ministry sources said.
They said the cut is based on a revision of the Trust Fund
Bureau Law, which should be approved by parliament on March 3,
abolishing the 6.05 pct minimum interest rate on deposits with
the bureau.
The bureau channels funds to government financial
institutions for public works and other official uses, they
said.
The base lending rate for state bodies such as the Japan
Development Bank, People's Finance Corp and the finance
corporations of local public enterprises usually moves in
tandem with long-term prime rates, the sources said.
However, it was impossible for them to follow the last cut,
to 5.8 pct from 6.2 pct on January 28, because the Trust Fund
Bureau rate was legally set at 6.05 pct.
The ministry will abolish the minimum rate and introduce a
market-related one to resolve the problem and stimulate the
domestic economy, they said.
On Tuesday, the ministry allowed long-term bankers to cut
their prime to a record low of 5.5 pct, effective February 28.
The move suggested it had reached agreement with depositors
using the bureau, the postal savings system of the Posts and
Telecommunications Ministry and the Japan welfare annuity of
the Ministry of Health and Welfare, the sources said.
These ministries are trying to determine which market rates
should be considered when setting the bureau's deposit rate,
the ministry sources said.
Coupon rates on new 10-year government bonds, minus 0.1
percentage points, is the likeliest choice, they added.
REUTER
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JAPAN HOUSE BUDGET TALKS TO REOPEN NEXT WEEK | Japan's ruling and opposition parties
agreed to reopen talks on the budget for the fiscal year ending
March 31 1988 when the Lower House Budget Committee meets next
Tuesday, a parliamentary official said.
He said officials of the ruling Liberal Democratic Party
and the opposition parties agreed at a meeting of the
committee's board of directors.
Strong opposition objection to government tax reform
proposals including a controversial sales tax has delayed
deliberation by the Lower House Budget Committee.
REUTER
|
AUSTRALIA'S KEATING CHANGES ECONOMIC FORECASTS | Domestic demand is now expected to make
no contribution to Australian economic growth in fiscal
1986/87, ending June 30, while net exports will account for all
of the overall increase, Treasurer Paul Keating said here.
However, he did not say in his speech to the Economic
Planning Advisory Council (EPAC) if the forecast 2.25 pct rise
in gross domestic product (gdp) had been revised.
But Keating said domestic demand could fall slightly this
financial year and net export growth will provide the total
source of gdp growth.
The August budget had forecast domestic demand would
contribute 0.75 percentage points to non-farm gdp growth of 2.5
pct while net exports would account for 1.75 points.
Keating said the overall impact of the changed economic
parameters is welcome as it appears to have contributed to a
slightly more rapid correction in the current account deficit
than first anticipated.
"The government initially forecast a current account deficit
for 1986/87 of 14.75 billion -- our present expectation is that
the result will be somewhat lower, around 14 billion," he said.
Partial indicators released since the last meeting of EPAC
in December indicate that the 1986/87 budget strategy is
broadly on track, Keating said.
"They indicate that domestic demand has been a little more
sluggish than was expected at budget time," he said.
"On the other hand, net exports seem to be expanding by more
than expected at budget time, and this is underpinning growth
in domestic production and employment."
Keating said it now seems likely that the 1986/87 inflation
rate will exceed the budget forecast of eight pct.
"Nevertheless, there is likely to be a marked slowing in
inflation over coming quarters as depreciation and budgetary
effects wane," he said.
Keating said the government expects economic growth to pick
up moderately in 1987/88 due to a further significant rise in
net exports and a very moderate but positive contribution from
private domestic demand.
He said domestic demand growth will be due to a
strengthening in real household disposable income.
The moderate rise in economic growth next financial year
should be sufficient to sustain employment growth at a level
broadly equivalent to that of the current fiscal year.
"The current account deficit will continue to show
improvement in 1987/88," Keating said.
"As the impact of the exchange rate depreciations of recent
years recede further, and given continued effective wage
restraint, inflation should moderate markedly in 1987/88," he
said.
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THAI RICE EXPORTS RISE IN WEEK ENDED FEBRUARY 24 | Thailand exported 84,960 tonnes of rice
in the week ended February 24, up from 80,498 the previous
week, the Commerce Ministry said.
It said government and private exporters shipped 27,510 and
57,450 tonnes respectively.
Private exporters concluded advance weekly sales for 79,448
tonnes against 79,014 the previous week.
Thailand exported 689,038 tonnes of rice between the
beginning of January and February 24, up from 556,874 tonnes
during the same period last year. It has commitments to export
another 658,999 tonnes this year.
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TOKYO GRAIN EXCHANGE TO RAISE MARGIN REQUIREMENTS | The Tokyo Grain Exchange said it will raise
the margin requirement on the spot and nearby month for U.S.
And Chinese soybeans and red beans, effective March 2.
Spot April U.S. Soybean contracts will increase to 90,000
yen per 15 tonne lot from 70,000 now. Other months will stay
unchanged at 70,000, except the new distant February
requirement, which will be set at 70,000 from March 2.
Chinese spot March will be set at 110,000 yen per 15 tonne
lot from 90,000. The exchange said it raised spot March
requirement to 130,000 yen on contracts outstanding at March
13. Chinese nearby April rises to 90,000 yen from 70,000.
Other months will remain unchanged at 70,000 yen except new
distant August, which will be set at 70,000 from March 2.
The new margin for red bean spot March rises to 150,000 yen
per 2.4 tonne lot from 120,000 and to 190,000 for outstanding
contracts as of March 13.
The nearby April requirement for red beans will rise to
100,000 yen from 60,000, effective March 2.
The margin money for other red bean months will remain
unchanged at 60,000 yen, except new distant August, for which
the requirement will also be set at 60,000 from March 2.
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MANILA SAID TO OFFER DEBT BONDS TO BANKS | The Philippines will offer its commercial
bank creditors an innovative pricing plan that will make debt
payments through certificates of indebtedness as an alternative
to cash, the authoritative Business Day newspaper said.
Finance Secretary Jaime Ongpin told reporters yesterday the
alternative proposal is designed to avoid an impasse when debt
rescheduling talks reopen in New York on Tuesday.
He did not give details but said, "It is a very useful
alternative and in the end will permit the banks to say that
they achieved their pricing target and will likewise permit the
Philippines to say exactly the same thing."
Quoting negotiation documents to be presented to the
country"s 12-bank advisory committee, Business Day said the debt
certificates will carry maturities of five or six years.
It said the certificates will be classified as zero-coupon
bonds or promissory notes with no interest but priced at a
considerable discount from their redemption price.
It said the debt bonds will entitle holder banks to a
guaranteed return on both interest and principal since no
payment of any kind is made until the bond matures.
It said a bank can sell the bonds on the secondary bond
market for either dlrs or pesos depending on its requirement.
The documents said peso proceeds can be invested in
selected industries under the Philippines" debt/equity program.
Ongpin said Manila is sticking to its demand of a spread of
5/8 percentage points over London Interbank Offered Rates
(LIBOR) for restructuring 3.6 billion dlrs of debt repayments.
"(The proposal) will give the banks a choice of 5/8ths or
the alternative," Ongpin said. "Our representatives have gone to
Washington to the (International Monetary) Fund, the (World)
Bank, the Fed (Federal Reserve Board) and the (U.S.) Treasury
to brief them in advance on this alternative and it has
generally been positively received."
"We don"t believe that there is going to be a problem on the
accounting side," Ongpin said. "We have run this alternative
proposal to the accounting firms. Neither have the government
regulators indicated that there will be a problem."
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POLL MAJORITY DISAPPROVE OF REAGAN PRESIDENCY | A majority of Americans disapprove of
the way Ronald Reagan has handled the presidency and one-third
believe he should resign, a new poll said.
The poll conducted by Newsweek magazine said 53 pct of the
respondents gave Reagan a negative performance rating, nearly
double his disapproval rating before the Iran/Contra scandal.
The magazine said, however, that Reagan remained personally
popular. By better than a three-to-one ratio, a majority of
those polled said they liked Reagan on a personal level.
And Newsweek said 52 per cent of those questioned believed
the administration"s accomplishments outweighed its failures.
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PRODUCER SPLIT HEATS UP COFFEE QUOTA TALKS | Talks on the possibility of reintroducing
global coffee export quotas have been extended into today, with
sparks flying yesterday when a dissident group of exporters was
not included in a key negotiating forum.
The special meeting of the International Coffee
Organization (ICO) council was called to find a way to stop a
prolonged slide in coffee prices.
However, delegates said no solution to the question of how
to implement quotas was yet in sight.
World coffee export quotas -- the major device used to
regulate coffee prices under the International Coffee Agreement
-- were suspended a year ago when prices soared in reaction to
a drought which cut Brazil"s output by nearly two thirds.
Brazil is the world"s largest coffee producer and exporter.
Producers and consumers now are facing off over the
question of how quotas should be calculated under any future
quota distribution scheme, delegates said.
Tempers flared late Saturday when a minority group of eight
producing countries was not represented in a contact group of
five producer and five consumer delegates plus alternates which
was set up to facilitate debate.
The big producers "want to have the ball only in their court
and it isn"t fair," minority producer spokesman Luis Escalante of
Costa Rica said.
The majority producer group has proposed resuming quotas
April 1, using the previous ad hoc method of carving up quota
shares, with a promise to try to negotiate basic quotas before
September 30, delegates said.
Their plan would perpetuate the status quo, allowing Brazil
to retain almost all of its current 30 pct share of the export
market, Colombia 17 pct, Ivory Coast seven pct and Indonesia
six pct, with the rest divided among smaller exporters.
But consuming countries and the dissident producer group
have tabled separate proposals requiring quotas be determined
by availability, using a formula incorporating exportable
production and stocks statistics.
Their proposals would give Brazil a smaller quota share and
Colombia and Indonesia a larger share, and bring a new quota
distribution scheme into effect now rather than later.
Brazil has so far been unwilling to accept any proposal
that would reduce its quota share, delegates said.
Delegates would not speculate on prospects for agreement on
a quota package. "Anything is possible at this phase," even
adjournment of the meeting until March or April, one said.
If the ICO does agree on quotas, the price of coffee on the
supermarket shelf is not likely to change sinnificantly as a
result, industry sources said.
Retail coffee prices over the past year have remained about
steady even though coffee market prices have tumbled, so an
upswing probably will not be passed onto the consumer either,
they said.
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ITALIAN TREASURY CUTS INTEREST ON CERTIFICATES | The Italian treasury said annual coupon
rates payable March 1988 on two issues of long-term treasury
certificates (CCTs) would be cut by about four percentage
points compared with rates this March.
Coupon rates on 10-year certificates maturing March 1995
will fall to 9.80 pct from 13.65 pct and rates on 10-year
issues maturing in March 1996 would fall to 10.05 pct from
14.30 pct.
The Treasury also cut by 0.60 point six-monthly coupons
payable this September on six issues maturing between September
1988 and September 1991.
The issues carry terms of between five and seven years and
will have coupon rates of between 4.85 and 5.65 pct in
September compared with 5.45 and 6.25 pct this March.
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BRITISH CONSERVATIVES AHEAD OF LABOUR IN NEW POLLS | Britain"s ruling Conservatives have
enlarged their lead over the opposition Labour Party, according
to results of two opinion polls released on Saturday.
A Market & Opinion Research International (MORI) poll
conducted for The Sunday Times showed the Conservatives with a
six point lead, while a poll by Telephone Surveys Limited for
The Sunday Express found them to be four points ahead.
The Sunday Express poll is the first conducted since the
Social Democratic Party scored an upset victory on Thursday in
a parliamentary by-election in the former Labour stronghold of
Greenwich, near London.
The MORI poll, conducted in the six days leading up to the
by-election, showed the Conservatives with 41 pct of the vote,
Labour with 35 pct and the Alliance of Social Democrats and
Liberals with 21 pct.
The Sunday Express said its poll, conducted on Friday,
found the Conservatives ahead with 35.6 pct of the vote, Labour
with 31.9 pct and the Alliance with 31.4 pct.
A Harris poll published in The Observer newspaper last
Sunday gave the Conservatives only a two-point lead over
Labour. In that survey, the Conservatives had the support of 39
pct of the voters, Labour 37 pct and the Alliance 23 pct.
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INDONESIAN AGRICULTURE GROWTH EXPECTED TO SLOW | Indonesia"s agriculture sector will grow
by just 1.0 pct in calendar 1987, against an estimated 2.4 pct
in 1986 as the production of some commodities stagnates or
declines, the U.S. Embassy said in a report.
Production of Indonesia"s staple food, rice, is forecast to
fall to around 26.3 mln tonnes from an embassy estimate of
26.58 mln tonnes in 1986, according to the annual report on
Indonesia"s agricultural performance.
The government officially estimates 1986 rice production at
26.7 mln tonnes, with a forecast 27.3 mln tonnes output in
1987.
The report says wheat imports are likely to fall to 1.5 mln
tonnes in calendar 1987 from 1.69 mln tonnes in 1986 because of
a drawdown on stocks.
"Growth prospects for agriculture in 1987 do not look
promising as rice production is forecast to decline and the
production of sugarcane, rubber and copra show little or no
gain," the report says.
"The modest overall increase which is expected will be due
to significant gains in production of corn soybeans, palm oil
and palm kernels."
Constraints to significant overall increases in
agricultural output include a shortage of disease resistant
seeds, limited fertile land, insect pests and a reluctance by
farmers to shift from rice production to other crops, the
report underlines.
The fall in rice production is caused by an outbreak of
pests known as "wereng" or brown plant hoppers in 1986 which
largely offset gains in yields.
The outbreak has forced the government to ban the use of 57
insecticides on rice because it was believed the wereng are now
resistant to these varieties, and to use lower-yielding, more
resistant rice types.
The government is depending on increased production of
export commodities such as coffee, tea, rubber, plywood and
palm oil to offset revenue losses brought on by falling crude
oil prices.
Palm oil production is expected to increase by over 7.0 pct
in 1987 to 1.45 mln tonnes from 1.35 mln, with exports rising
to an estimated 720,000 tonnes from 695,000 tonnes in 1986, the
report says.
But while production of soybeans in 1987/88 (Oct-Sept) will
rise to 1.075 mln tonnes from 980,000 in 1986/87, imports will
also rise to supply a new soybean crushing plant.
The report says that imports of wheat, soybeans, soybean
meal and cotton are not likely to decline as a result of last
September"s 31 pct devaluation of the rupiah because of a rise
in domestic demand.
The report said that Indonesia"s overall economic
performance in calendar 1986 was about zero or even a slight
negative growth rate, the lowest rate of growth since the
mid-1960s. It compares with 1.9 pct growth in 1985 and 6.7 pct
in 1984.
The dramatic fall in oil prices last year was responsible
for the slump.
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KUWAIT SAYS NO PLANS FOR EMERGENCY OPEC TALKS | Kuwait"s Oil Minister, in remarks
published today, said there were no plans for an emergency OPEC
meeting to review oil policies after recent weakness in world
oil prices.
Sheikh Ali al-Khalifa al-Sabah was quoted by the local
daily al-Qabas as saying: "None of the OPEC members has asked
for such a meeting."
He denied Kuwait was pumping above its quota of 948,000
barrels of crude daily (bpd) set under self-imposed production
limits of the 13-nation organisation.
Traders and analysts in international oil markets estimate
OPEC is producing up to one mln bpd above a ceiling of 15.8 mln
bpd agreed in Geneva last December.
They named Kuwait and the United Arab Emirates, along with
the much smaller producer Ecuador, among those producing above
quota. Kuwait, they said, was pumping 1.2 mln bpd.
"This rumour is baseless. It is based on reports which said
Kuwait has the ability to exceed its share. They suppose that
because Kuwait has the ability, it will do so," the minister
said.
Sheikh Ali has said before that Kuwait had the ability to
produce up to 4.0 mln bpd.
"If we can sell more than our quota at official prices,
while some countries are suffering difficulties marketing their
share, it means we in Kuwait are unusually clever," he said.
He was referring apparently to the Gulf state of qatar,
which industry sources said was selling less than 180,000 bpd
of its 285,000 bpd quota, because buyers were resisting
official prices restored by OPEC last month pegged to a marker
of 18 dlrs per barrel.
Prices in New York last week dropped to their lowest levels
this year and almost three dollars below a three-month high of
19 dollars a barrel.
Sheikh Ali also delivered "a challenge to any international
oil company that declared Kuwait sold below official prices."
Because it was charging its official price, of 16.67 dlrs a
barrel, it had lost custom, he said but did not elaborate.
However, Kuwait had guaranteed markets for its oil because
of its local and international refining facilities and its own
distribution network abroad, he added.
He reaffirmed that the planned meeting March 7 of OPEC"s
differentials committee has been postponed until the start of
April at the request of certain of the body"s members.
Ecuador"s deputy energy minister Fernando Santos Alvite said
last Wednesday his debt-burdened country wanted OPEC to assign
a lower official price for its crude, and was to seek this at
talks this month of opec"s pricing committee.
Referring to pressure by oil companies on OPEC members, in
apparent reference to difficulties faced by Qatar, he said: "We
expected such pressure. It will continue through March and
April." But he expected the situation would later improve.
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INDONESIA SEEN AT CROSSROADS OVER ECONOMIC CHANGE | Indonesia appears to be nearing a
political crossroads over measures to deregulate its protected
economy, the U.S. Embassy says in a new report.
To counter falling oil revenues, the government has
launched a series of measures over the past nine months to
boost exports outside the oil sector and attract new
investment.
Indonesia, the only Asian member of OPEC and a leading
primary commodity producer, has been severely hit by last year"s
fall in world oil prices, which forced it to devalue its
currency by 31 pct in September.
But the U.S. Embassy report says President Suharto"s
government appears to be divided over what direction to lead
the economy.
"(It) appears to be nearing a crossroads with regard to
deregulation, both as it pertains to investments and imports,"
the report says. It primarily assesses Indonesia"s agricultural
sector, but also reviews the country"s general economic
performance.
It says that while many government officials and advisers
are recommending further relaxation, "there are equally strong
pressures being exerted to halt all such moves."
"This group strongly favours an import substitution economy,"
the report says.
Indonesia"s economic changes have been welcomed by the World
Bank and international bankers as steps in the right direction,
though they say crucial areas of the economy like plastics and
steel remain highly protected, and virtual monopolies.
Three sets of measures have been announced since last May,
which broadened areas for foreign investment, reduced trade
restrictions and liberalised imports.
The report says Indonesia"s economic growth in calendar 1986
was probably about zero, and the economy may even have
contracted a bit. "This is the lowest rate of growth since the
mid-1960s," the report notes.
Indonesia, the largest country in South-East Asia with a
population of 168 million, is facing general elections in
April.
But the report hold out little hope for swift improvement
in the economic outlook. "For 1987 early indications point to a
slightly positive growth rate not exceeding one pct. Economic
activity continues to suffer due to the sharp fall in export
earnings from the petroleum industry."
"Growth in the non-oil sector is low because of weak
domestic demand coupled with excessive plant capacity, real
declines in construction and trade, and a reduced level of
growth in agriculture," the report states.
Bankers say continuation of present economic reforms is
crucial for the government to get the international lending its
needs.
A new World Bank loan of 300 mln dlrs last month in balance
of payments support was given partly to help the government
maintain the momentum of reform, the Bank said.
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INDIAN BUDGET COMES IN FOR WIDE CRITICISM | Opposition politicians, businessmen
and newspapers criticised India"s newly unveiled 1987/88 budget
and large projected deficit of around 57 billion rupees.
They said the budget failed to provide incentives for
economic growth and merely tinkered with tax reform.
But few politicians were prepared to criticise a sharp rise
in defence expenditure in the Hindu-majority nation where
playing on fear of aggression by Moslem Pakistan has proved a
vote winner. The Indian Express, the country"s biggest selling
paper, said: "The defence cow has never been holier."
The Sunday Mail newspaper branded the budget "shamelessly
political." It said in a front page commentary the "budget is bad
for growth, bad for prices, bad for the stock market and
neutral in respect of everything else."
Businessmen polled by Reuters said the budget had done
little for them.
Gandhi announced small increases in poverty alleviation and
education outlays but he ordered a hold-down on current
expenditure in an attempt to rein in the budget deficit. He
told ministries to curb spending and promised a review of
money-losing public sector industries.
Gandhi lowered import tariffs on some computer parts but
otherwise did little to extended the economic liberalisation
policy launched two years ago.
Reaction in Bombay, India"s business capital, was generally
unfavourable.
Businessmen and economists said the budget had no proposals
for closing the 1987/88 budget deficit. It also failed to boost
industrial investment and productivity needed to lift real
economic growth above the five pct a year envisaged by the
1985-90 development plan.
Nalin Vissanji, President of the Indian Merchants Chambers
of Commerce said the budget gave no incentives to the capital
market and had not fulfilled a government pledge to remove
surtax on corporate income.
Shares on The Bombay Stock Exchange, India"s biggest, fell
in a post-budget session yesterday but brokers welcomed Gandhi"s
proposal to set up a regulatory board for the securities
industry.
The exchange was shaken last year by several scandals and
trading was suspended several times.
Brokers said trading volume may increase with the change in
capital gains tax on stock sales.
Stockholders can now sell shares after one year instead of
three years without incurring capital gains tax.
Stock Exchange President Ramdas Dalal said yesterday the
fall in share prices after the budget came as profits were
taken and he expected to the market to firm in days to come.
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CHINA TO BORROW 390 MLN DLRS | China will receive loans totalling 390
mln dlrs from Japan and the World Bank for investment in new
highways and port facilities.
The Japan Overseas Economic Co-operation Fund is to provide
260 mln dlrs towards China"s plans to improve its road network,
the official New China News Agency reported.
A 130 mln dlr World Bank loan will be used to build 12 new
berths incorporating container handling systems at the
northeast China port of Tianjin, the agency said.
It gave no details of the repayment terms of the loans.
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MANILA SAID TO OFFER DEBT BONDS TO BANKS | The Philippines will offer its commercial
bank creditors an innovative pricing plan that will make debt
payments through certificates of indebtedness as an alternative
to cash, the authoritative Business Day newspaper said.
Finance Secretary Jaime Ongpin told reporters yesterday the
alternative proposal is designed to avoid an impasse when debt
rescheduling talks reopen in New York on Tuesday.
He did not give details but said, "It is a very useful
alternative and in the end will permit the banks to say that
they achieved their pricing target and will likewise permit the
Philippines to say exactly the same thing."
Quoting negotiation documents to be presented to the
country's 12-bank advisory committee, Business Day said the
debt certificates will carry maturities of five or six years.
It said the certificates will be classified as zero-coupon
bonds or promissory notes with no interest but priced at a
considerable discount from their redemption price.
It said the debt bonds will entitle holder banks to a
guaranteed return on both interest and principal since no
payment of any kind is made until the bond matures.
It said a bank can sell the bonds on the secondary bond
market for either dlrs or pesos depending on its requirement.
The documents said peso proceeds can be invested in
selected industries under the Philippines' debt/equity program.
Ongpin said Manila is sticking to its demand of a spread of
5/8 percentage points over London Interbank Offered Rates
(LIBOR) for restructuring 3.6 billion dlrs of debt repayments.
"(The proposal) will give the banks a choice of 5/8ths or
the alternative," Ongpin said. "Our representatives have gone to
Washington to the (International Monetary) Fund, the (World)
Bank, the Fed (Federal Reserve Board) and the (U.S.) Treasury
to brief them in advance on this alternative and it has
generally been positively received."
"We don't believe that there is going to be a problem on the
accounting side," Ongpin said. "We have run this alternative
proposal to the accounting firms. Neither have the government
regulators indicated that there will be a problem."
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CHINESE WHEAT CROP THREATENED BY PESTS, DISEASE | China's wheat crop this year is seriously
threatened by plant pests and diseases, the New China News
Agency said.
More than 5 mln hectares of wheat-producing land in North
China could be affected because relatively warm and dry weather
had allowed bacteria and insect eggs to survive the winter, the
agency added.
China"s Ministry of Agriculture, Animal Husbandry and
Fisheries has called for measures including the timely supply
of pesticides to farmers to combat the threat, it said.
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SAUDI RIYAL DEPOSIT RATES REMAIN FIRM | Saudi riyal interbank deposits were
steady at yesterday's higher levels in a quiet market.
Traders said they were reluctant to take out new positions
amidst uncertainty over whether OPEC will succeed in halting
the current decline in oil prices.
Oil industry sources said yesterday several Gulf Arab
producers had had difficulty selling oil at official OPEC
prices but Kuwait has said there are no plans for an emergency
meeting of the 13-member organisation.
A traditional Sunday lull in trading due to the European
weekend also contributed to the lack of market activity.
Spot-next and one-week rates were put at 6-1/4, 5-3/4 pct
after quotes ranging between seven, six yesterday.
One, three, and six-month deposits were quoted unchanged at
6-5/8, 3/8, 7-1/8, 6-7/8 and 7-3/8, 1/8 pct respectively.
The spot riyal was quietly firmer at 3.7495/98 to the
dollar after quotes of 3.7500/03 yesterday.
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IRAN CLAIMS NEW VICTORIES NEAR BASRA | Iran said its forces had captured one of
Iraq's strongest fortifications east of Basra on the Gulf War
southern front in a major battle overnight.
The Iranian National News Agency, received here, said
Iranian forces smashed four Iraqi brigades, killed or wounded
1,500 Iraqi soldiers and destroyed 45 enemy tanks and personnel
carriers.
IRNA said the Iranian troops seized one of the strongest
Iraqi fortifications and breached Iraqi defence lines southwest
of Fish Lake, 10 kilometres (six miles) east of Iraq's second
largest city of Basra.
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BANGLADESH MOVES AGAINST LOAN DEFAULTERS | Bangladesh police mounted a cross-country
hunt for defaulters on bank loans, arresting four
industrialists and issuing arrest warrants against 50 others
for failure to repay overdue obligations. No names were given.
Metropolitan police told reporters the four arrested, put
under six month pre-trial detention, owed nearly 50.7 mln taka
-- the equivalent of about 1.7 mln dlrs -- to Bangladesh Shilpa
(Industrial) Bank.
President Hossain Mohammad Ershad has said non-payers are
crippling the industrial sector. But the Chamber of Commerce
and industry said the crackdown would scare away entrepreneurs.
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IRAQ SAYS IT REPELS IRANIAN ATTACK | Iraq said its troops repelled an
overnight attack by three divisions of Iranian Revolutionary
Guards near Basra in southern Iraq.
A military communique said the Iranians in a "perfidious"
attack rushed forward positions last night and this morning.
A military spokesman later said the Iraqi Third Army Corps,
whose troops fought off the Iranians, had a new commander,
revealing for the first time that the previous general had been
replaced. He said Lieutenant General Dhiya'uldin Jamal, former
commander of the Fifth Army Corps, also positioned in the Basra
area, had replaced Major General Tala' Khalil al-Douri.
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QATAR UNVEILS BUDGET FOR FISCAL 1987/88 | The Gulf oil state of Qatar, recovering
slightly from last year's decline in world oil prices,
announced its first budget since early 1985 and projected a
deficit of 5.472 billion riyals.
The deficit compared with a shortfall of 7.3 billion riyals
in the last published budget for 1985/86.
In a statement outlining the budget for the fiscal year
1987/88 beginning today, Finance and Petroleum Minister Sheikh
Abdul-Aziz bin Khalifa al-Thani said the government expected to
spend 12.217 billion riyals in the period.
Projected expenditure in the 1985/86 budget had been 15.6
billion riyals.
Sheikh Abdul-Aziz said government revenue would be about
6.745 billion riyals, down by about 30 pct on the 1985/86
projected revenue of 9.7 billion.
The government failed to publish a 1986/87 budget due to
uncertainty surrounding oil revenues.
Sheikh Abdul-Aziz said that during that year the government
decided to limit recurrent expenditure each month to
one-twelfth of the previous fiscal year's allocations minus 15
pct.
He urged heads of government departments and public
institutions to help the government rationalise expenditure. He
did not say how the 1987/88 budget shortfall would be covered.
Sheikh Abdul-Aziz said plans to limit expenditure in
1986/87 had been taken in order to relieve the burden placed on
the country's foreign reserves.
He added in 1987/88 some 2.766 billion riyals had been
allocated for major projects including housing and public
buildings, social services, health, education, transport and
communications, electricity and water, industry and
agriculture.
No figure was revealed for expenditure on defence and
security. There was also no projection for oil revenue.
Qatar, an OPEC member, has an output ceiling of 285,000
barrels per day.
Sheikh Abdul-Aziz said: "Our expectations of positive signs
regarding (oil) price trends, foremost among them OPEC's
determination to shoulder its responsibilites and protect its
wealth, have helped us make reasonable estimates for the coming
year's revenue on the basis of our assigned quota."
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GULF BOND, STOCK MARKETS LAG BEHIND, GIB SAYS | Gulf money markets have grown reasonably
well during the past decade, but bond and stock markets remain
to a large extent fragmented and lag behind, <Gulf
International Bank BSC> (GIB) said.
The bank's economist Henry Azzam said in a review of Gulf
capital markets that investors have to relinquish traditional
investment vehicles such as real estate, foreign currency bank
accounts and precious metals.
"Greater financial sophistication is needed coupled with
more diversified capital market instruments and a change in the
disclosure requirements on company accounts," he said.
The GIB study reviewed capital markets under three
categories -- money markets, stock and bond markets.
Azzam said Gulf states had been making greater use of
short-term money market instruments and banks in the region had
floated various euronotes and underwriting facilities.
"Nevertheless, bond and stock markets remain, to a large
extent, fragmented and lagging behind," he said.
Most debt in the region is still raised by syndicated loans
and bank facilities and very few companies had made use of
stock or bond issues. Only Kuwait has an official stock
exchange, while other Gulf nations have yet to establish
exchanges.
But with dwindling financial surpluses in the Gulf,
governments are actively pursuing ways to develop capital
markets and set up domestic stock exchanges, Azzam said.
He said recession stemming from sliding oil prices had
"clearly had a negative impact on the development of capital
markets in the region."
In addition, family firms are reluctant to go public,
financial awareness among investors is still lacking and
investment analysis and corporate reporting standards lack
depth. A sharp fall in share prices in the early 1980s prompted
investors to hold on to shares hoping for an eventual recovery.
Azzam said the absence of proper commercial law in some
Gulf countries and authorities' apparent reluctance to adopt
financial innovations had also hampered capital markets.
He called for clearly defined laws governing incorporation
of joint stock companies and the flotation of debt instruments.
Azzam said capital market instruments should be made
available to all citizens and institutions of Gulf Cooperation
Council (GCC) states -- Bahrain, Kuwait, Qatar, Oman, Saudi
Arabia and the United Arab Emirates (UAE). Some moves had been
taken in this direction, with Bahrain allowing GCC nationals to
own up to 25 pct of locally incorporated companies.
Azzam said Gulf money markets had received greater depth
from the introduction of treasury bill offerings in Bahrain and
the expansion of securities repurchase regulations in Saudi
Arabia.
But he added there is "no bond market to speak of" in Saudi
Arabia, Qatar, Oman or the UAE, with the last Saudi riyal
denominated bond issued in 1978.
While Bahrain plans an official stock exchange and trading
in Saudi Arabia has picked up, establishment of formal
exchanges in Qatar, Oman and the UAE does not appear imminent,
Azzam said.
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SAUDI ARABIA REITERATES COMMITMENT TO OPEC PACT | Saudi Arabian Oil Minister Hisham Nazer
reiterated the kingdom's commitment to last December's OPEC
accord to boost world oil prices and stabilise the market, the
official Saudi Press Agency SPA said.
Asked by the agency about the recent fall in free market
oil prices, Nazer said Saudi Arabia "is fully adhering by the
... Accord and it will never sell its oil at prices below the
pronounced prices under any circumstance."
Nazer, quoted by SPA, said recent pressure on free market
prices "may be because of the end of the (northern hemisphere)
winter season and the glut in the market."
Saudi Arabia was a main architect of the December accord,
under which OPEC agreed to lower its total output ceiling by
7.25 pct to 15.8 mln barrels per day (bpd) and return to fixed
prices of around 18 dlrs a barrel.
The agreement followed a year of turmoil on oil markets,
which saw prices slump briefly to under 10 dlrs a barrel in
mid-1986 from about 30 dlrs in late 1985. Free market prices
are currently just over 16 dlrs.
Nazer was quoted by the SPA as saying Saudi Arabia's
adherence to the accord was shown clearly in the oil market.
He said contacts among members of OPEC showed they all
wanted to stick to the accord.
In Jamaica, OPEC President Rilwanu Lukman, who is also
Nigerian Oil Minister, said the group planned to stick with the
pricing agreement.
"We are aware of the negative forces trying to manipulate
the operations of the market, but we are satisfied that the
fundamentals exist for stable market conditions," he said.
Kuwait's Oil Minister, Sheikh Ali al-Khalifa al-Sabah, said
in remarks published in the emirate's daily Al-Qabas there were
no plans for an emergency OPEC meeting to review prices.
Traders and analysts in international oil markets estimate
OPEC is producing up to one mln bpd above the 15.8 mln ceiling.
They named Kuwait and the United Arab Emirates, along with
the much smaller producer Ecuador, among those producing above
quota. Sheikh Ali denied that Kuwait was over-producing.
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COFFEE QUOTA TALKS CONTINUE, NO ACCORD SEEN LIKELY | The International Coffee Organization
(ICO ) council talks on reintroducing export quotas continued
with an extended session lasting late into Sunday night, but
delegates said prospects for an accord between producers and
consumers were diminishing by the minute.
The special meeting, called to stop the prolonged slide in
coffee prices, was likely to adjourn sometime tonight without
agreement, delegates said.
The council is expected to agree to reconvene either within
the next six weeks or in September, they said.
The talks foundered on Sunday afternoon when it became
apparent consumers and producers could not compromise on the
formula for calculating any future quota system, delegates
said.
Coffee export quotas were suspended a year ago when prices
soared in response to a drought which cut Brazil's crop by
nearly two-thirds. Brazil is the world's largest coffee
producer and exporter.
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NEW ZEALAND CANCELS WEEKLY T-BILL TENDER | The Reserve Bank said it cancelled
the regular weekly treasury bill tender scheduled for March 3.
It said in a statement it forecasts a net cash withdrawal
from the system over the settlement week. Cash flows to the
government are expected to more than offset cash injections, it
added.
The bank said it expects to conduct open market operations
during the week and after these, cash balances should fluctuate
around 30 mln N.Z. Dlrs.
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SHARE TRADING IN CHEUNG KONG GROUP SUSPENDED | Trading in the shares of three of the
Cheung Kong group of companies will be suspended for two days
at the request of the companies, the Stock Exchange of Hong
Kong said.
The three are Cheung Kong (Holdings) Ltd <CKGH.HK>,
Hongkong Electric Holdings Ltd <HKEH.HK> and Hutchison Whampoa
Ltd <HWHH.HK>.
They will announce their 1986 results later today, with
market speculation of a major reorganisation within the group.
Cheung Kong rose 75 cents to 45.25 dlrs on Friday, Hk Electric
60 to 16.00 and Hutchison 1.50 dlrs to 54.50.
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|
FEBRUARY U.S. PURCHASING MANAGER INDEX FALLS | The U.S. Economy continued to expand in
February but at a slower pace than in January, which saw a
spurt of activity, the National Association of Purchasing
Management (NAPM) said in a report.
The Association's composite survey index dropped to 51.9
pct in February from 55.8 pct in January, the NAPM said. It was
the seventh consecutive month in which this leading indicator
was over 50 pct.
A reading above 50 pct generally indicates that the economy
is in an expanding phase. One below 50 pct implies a declining
economy.
The NAPM report, based on a survey of purchasing managers
at 250 U.S. Industrial companies, also found that the growth
rate in new orders and production slowed in February.
But production remained vigorous, with more than three
times as many members reporting it better rather than worse.
Vendor deliveries improved slightly last month, but members
reported that steel supplies were tight as USX Corp gradually
resumed production.
The same number of members reported inventories were higher
as reported them lower. The NAPM said that had not happened
since August 1984.
For a sixth straight month, more purchasers reported paying
higher rather than lower prices, this time by a ratio of nine
to one.
Robert Bretz, chairman of the NAPM's business survey
committee, said: "The economy continued to expand in February,
but at a more subdued rate than in January. The slowing of new
orders should not be significant enough to dampen prospects for
a respectable first quarter."
The composite index is a seasonally adjusted figure, based
on five components of the NAPM business survey - new orders,
production, vendor deliveries, inventories and employment.
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CANADA-EGYPT WHEAT NEGOTIATIONS TO CONTINUE | Canadian and Egyptian wheat negotiators
failed to conclude an agreement on Canadian wheat exports to
Egypt during talks last week, but the Canadian team will return
to Cairo for further negotiations, Canadian embassy officials
said.
An embassy official declined to identify which issues
remained to be resolved and when the talks would resume.
In a five-year protocol signed in 1985, Cairo agreed to
purchase 500,000 tonnes of Canadian wheat a year.
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INDONESIAN WHEAT IMPORTS EXPECTED TO FALL IN 1987 | Indonesia's wheat imports are expected
to fall to 1.5 mln tonnes in calendar 1987 from 1.69 mln in
1986, the U.S. Embassy's annual agriculture report said.
It said the drop was expected, because there will be a
drawdown on stocks built up near the end of 1986.
It said wheat stocks at the end of 1986 were 390,000
tonnes, up from 223,000 at end-1985. It forecast end-1987
stocks at around 290,000 tonnes.
The main suppliers in 1986 were Australia (44 pct), the
U.S. (29 pct), Canada (12 pct), Argentina (8 pct) and Saudi
Arabia (5 pct).
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SHULTZ LIKELY TO VISIT MOSCOW SOON | U.S. Secretary of State George Shultz is
likely to visit Moscow soon for talks following new Soviet arms
control proposals, U.S. Officials said.
The officials told Reuters no decision had been reached on
when the trip might take place, but it was likely to be within
a month.
Kremlin leader Mikhail Gorbachev proposed on Saturday that
talks on medium range missiles be separated from other arms
issues.
Schultz is currently visiting Peking.
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ZAMBIA TO RETAIN CURRENCY AUCTION, SAYS KAUNDA | Zambia will retain its foreign-exchange
auction system despite the suspension of weekly auctions since
January 24, President Kenneth Kaunda said.
"We have not run away from the auction. It hasn't been
abolished at all," he told Reuters in an interview.
He said the system would be reintroduced after current
talks with the World Bank and the International Monetary Fund
and, he hoped, would be backed by fresh foreign aid funds.
Kaunda dismissed central bank statements the new auction
system would be used to allocate foreign exchange to private
bidders but not to fix the exchange rate.
Kaunda said the auction system had faltered because of the
government's shortage of foreign exchange to meet demand.
It was suspended when the kwacha's rapid devaluation and
strong fluctuations made economic planning almost impossible
for the government and the private sector, he said.
Weekly foreign-exchange auctions began in October 1985. The
kwacha fell from 2.20 to the dollar to about 15 in 16 months.
In January 1987 the government was more than two months in
arrears in paying foreign currency to successful bidders, and
the auction was suspended and replaced with a fixed exchange
rate of nine kwacha to the dollar.
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|
POLISH BANKER PLEASED WITH WORLD BANK, IMF TALKS | Poland's talks in Washington with the
World Bank and the International Monetary Fund (IMF) on the
country's 33.5 billion dlr foreign debt were concrete, open and
frank, a senior Polish banker was quoted as saying.
Wladyslaw Baka, head of Poland's National Bank, told the
official news agency PAP yesterday the talks were a step
towards possible fresh credits or easier terms.
"Much attention was given to the Polish delegation and the
talks at both institutions involved displayed a lot of
understanding for Poland's difficult economic position," PAP
quoted Baka as saying.
Baka said he stressed Poland would meet its financial
obligations to the U.S., "but not in a short time, and not
without major changes in the Polish economy as well as a
cooperative stand on the part of its foreign economic partners."
Since Poland rejoined the IMF last June, after a 36-year
absence, IMF and World Bank teams have visited Warsaw on
fact-finding missions on at least three occasions. A major
report is expected to be issued in Washington soon.
Poland has said it will not be able to meet interest
repayments and debt principle falling due this year.
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|
RECORD N.Z. FUTURES VOLUMES TRADED IN FEBRUARY | The volume of contracts traded on the
New Zealand Futures Exchange (NZFE) reached a record 25,559
contracts in February, the International Commodities Clearing
House (ICCH) said.
The previous high was 22,583 contracts in December 1986.
The ICCH said the value of the contracts traded in February
was 2.90 billion N.Z. Dlrs.
The seven contracts currently traded on the NZFE are:
five-year government bonds, the share price index, 90-day bank
bills, 90-day prime commercial paper, the U.S. Dollar,
crossbred wool, and wheat.
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|
INDONESIAN SUGAR OUTPUT SEEN SHORT OF TARGET | Indonesia's raw sugar output is likely
to be 1.8 mln tonnes in calendar 1987, unchanged from 1986 and
below the government's 1987 forecast of 2.5 mln, the U.S.
Embassy said in its agricultural outlook for 1987.
Indonesia bought 162,500 tonnes of raw sugar on world
markets in late 1986, the report said.
The embassy estimated Indonesia's calendar 1986 raw sugar
production at 1.8 mln tonnes, against a government estimate of
1.99 mln.
It said that Indonesia's move into sugar self-sufficiency
in 1984 may have been short-lived.
The report said, "The government continues to promote
sugarcane production through its smallholder intensification
program and a relatively high guaranteed price to sugarcane
producers.
"However, there are considerable indications that farmers
are reluctant to plant cane because its economic return is not
as good as that of other crops."
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|
NIPPON KOKAN STEEL AFFILIATES CONSIDERING MERGER | Toshin Steel Co Ltd <TOSS.T> and <Azuma
Steel Co Ltd>, affiliates of Nippon Kokan KK <NKKT.T>, are
considering a merger, company spokesmen said.
Toshin Steel, owned 41.9 pct by Nippon Kokan, and Azuma
Steel, owned 41.3 pct by Nippon Kokan, are expected to decide
by the end of March, they said. Both firms have been struggling
with losses caused by the recession in the steel industry and
the yen's appreciation.
Azuma Steel's current losses are estimated at 3.1 billion
yen in the year ending March 31 against a 6.99 billion loss a
year earlier, a spokesman said. The firm employs 1,100 workers
Toshin Steel, with 1,700 workers, has given no forecast for
the year ending March 31.
But industry sources said they expected the company to show
current losses of about five billion yen or more in 1986/87
compared with a 2.98 billion loss in 1985/86.
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|
Qantas Airways says will buy four Boeing 747-400's for one billion Australian
| |
EGYPT TO HOST NINE-NATION AFRICAN TALKS THIS MONTH | Representatives of nine African countries
will meet here on March 11 to discuss the African debt crisis,
the Chad political situation and other issues, Egypt's Minister
of State for Foreign Affairs, Boutros Boutros Ghali, said.
He told reporters on his return from Ethiopia and Djibouti
that the meeting and venue had been agreed by the Organisation
of African Unity (OAU). He said Egypt, Zambia, Djibouti, Zaire,
Uganda, Sierra Leone, Congo, Algeria and Mali would be
represented. Foreign Ministry sources said Congo President
Denis Sassou-Nguesso would chair the meeting.
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|
EC MINISTERS CONSIDER BIG AGRICULTURE PRICE CUTS | European Community (EC) agriculture
ministers meet later today to consider a package of deep cuts
in prices and subsidies after a week marked by strong protests
by European farmers, Community officials said.
The common target for the farmers' wrath is the EC's
Brussels Commission, which for the fourth year running has
called for radical changes in the price support system.
EC Agriculture Commissioner Frans Andriessen says huge food
surpluses, which have alienated international trade partners
and pushed the Community to the edge of bankruptcy, demand such
action.
With Community warehouses stocked with some 16 mln tonnes
of unwanted cereals, over one mln tonnes of butter and huge
stocks of wine and olive oil, Andriessen says bluntly the days
of open-ended price guarantees must end.
EC agriculture ministers try to fix the guaranteed prices
paid to Community farmers before an April 1 deadline for the
new marketing year, an increasingly difficult task as EC
members cut funds and demand greater budget discipline.
Andriessen has proposed a freeze for most prices, coupled
with reductions in other support mechanisms, which could lead
to price cuts of as much as eight pct for some products.
A producer's right to sell into EC warehouses at a fixed
guaranteed price when he finds no real market outlet is to be
scaled back so it applies only in exceptional cases.
The latest proposals are designed to keep expenditure on
agriculture virtually stable. EC farm policies now swallow
two-thirds of an annual budget of about 36 billion European
currency units (Ecu) and are mainly responsible for an expected
shortfall this year of about five billion Ecus.
The most contentious aspects of the package are a new oils
and fats tax and a change in the "green" exchange rate system,
which translates EC farm prices into national currencies.
The tax, of up to 330 Ecus per tonne, would be levied on
imported and domestically produced oilseeds, but could trigger
a fresh trade dispute with the United States, which provides
the EC with the bulk of its soybeans.
It would increase the cost of margarines and low-fat
products in an attempt to increase both olive oil and butter
consumption.
West Germany has flatly rejected green rate changes, which
would cause a fall in prices for producers as countries with
weak and strong currencies were brought more into line.
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|
QANTAS TO BUY FOUR 747-400'S FOR ONE BILLION DLRS | <Qantas Airways Ltd> has placed a firm
order with Boeing Co <BA> for four 747-400 aircraft at a cost
of 250 mln Australian dlrs each, chairman Jim Leslie said.
The first is due for delivery in April 1989 with the others
arriving in May, June and September of that year, he said in a
statement.
The 400 series is the latest model of the Boeing 747
family, he said.
The purchase will take government-owned Qantas's 747 fleet
to 28, he said.
Leslie said Qantas is talking to three engine makers who
are all offering engines for the Boeing 747-400 and it will
announce a decision on engine purchases later this year.
He said they are United Technologies Corp <UTX> unit <Pratt^M
and Whitney>, General Electric Co <GE> and Britain's <Rolls-Royce^M
Ltd>.
He said the 747-400, which incorporates new technology such
as extended wings with six-feet high winglets and enhanced
electronics, should have its first flight next February. The
400 series has a designed range of 12,500 kms, 2,140 kms
further than the current Qantas 747-300's, he said.
The aircraft will be financed by foreign borrowings and
foreign exchange earnings, and Qantas believes they will pay
for themselves in four to five years, Leslie said.
The 747-400 has a take-off weight of 870,000 pounds, up
from 833,000 for the 300 series, and offers an eight pct fuel
saving, he said.
The higher range and payload means they will first be used
on the route to Britain and Europe via Asia.
They will also be used on non-stop flights between Sydney
and Los Angeles.
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|
IEL SETS 100 MLN DLR NOTE/COMMERCIAL PAPER ISSUE | Australian investment group <Industrial
Equity Ltd> (IEL) said it will raise 100 mln U.S. Dlrs by the
issue of medium term notes and commercial paper in the U.S.
Domestic market.
IEL has mandated <Merrill Lynch Capital Markets> to arrange
a letter of credit (LOC) facility in support of the notes and
commercial paper, making this the first facility of its kind,
the company said in a statement.
The notes will be issued by its <IEL Finance Ltd> unit.
Merrill Lynch will be the note and paper dealer and
<Sumitomo Trust and Banking Co Ltd> will provide the LOC.
The term of the LOC is five years with an evergreen feature
which provides for annual reinstatement of the five-year term
at the support banks' option, IEL said.
The LOC will be underwritten by a group of banks which will
receive a facility fee of 20 basis points plus a utilisation
fee of 25 basis points, it added.
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|
AMERICAN EXPRESS STUDIES OPTIONS FOR SHEARSON | American Express Co <AXP>, rumoured to
be considering a spinoff of part of <Shearson Lehman Brothers
Inc>, said it is studying ways to improve Shearson's access to
capital and help it meet stiffer international competition.
In a joint statement, American Express and the brokerage
unit said the actions under consideration are an integral part
of American Express's worldwide financial services strategy.
The statement also said American Express and Shearson have been
having both internal and external discussions on the matter,
but no final decision has been reached.
American Express said in its statement it would not comment
on the rumours circulating on Wall Street last week.
Analysts said there was speculation that American Express
would sell a stake of Shearson to a Japanese firm and also that
20 pct of the profitable brokerage would be sold to the public.
Shearson contributed 316 mln dlrs of American Express's 1.25
billion dlrs net in 1986.
American Express remained silent last Thursday and Friday
as rumours drove its stock up a total of 5.50 dlrs in two days.
It closed Friday at 74.
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INDONESIA UNLIKELY TO IMPORT PHILIPPINES COPRA | Indonesia is unlikely to import copra
from the Philippines in 1987 after importing 30,000 tonnes in
1986, the U.S. Embassy's annual agriculture report said.
The report said the 31 pct devaluation of the Indonesian
rupiah, an increase in import duties on copra and increases in
the price of Philippines copra have reduced the margin between
prices in the two countries.
Indonesia's copra production is forecast at 1.32 mln tonnes
in calendar 1987, up from 1.30 mln tonnes in 1986.
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SRI LANKAN BANK OFFERS 250 MLN RUPEES T-BILLS | Sri Lanka's Central Bank offered 250 mln
rupees worth of three-month treasury bills at its weekly tender
closing on March 6, a Bank spokesman said.
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|
STRONG EARTHQUAKE HITS NEW ZEALAND | An earthquake measuring 6.5 on the
Richter scale caused widespread damage in northern New Zealand
and a civil defence emergency was declared in some areas,
officials and seismologists said.
There were no immediate reports of casualties. The quake
jolted the Bay of Plenty and Waikato areas.
The town of Whakatane was said by officials to be virtually
isolated.
A civil defence emergency was declared in Whakatane which
has about 16,000 people. Officials said many roads and bridges
in the area had been damaged.
No deaths were reported but one man was admitted to
hospital in serious condition after his car was buried in a mud
slip.
Seismologists said Whakatane was hit by three earthquakes,
the strongest measuring 6.5 on the Richter scale. They were
followed by a series of aftershocks.
The quakes were felt across the Bay of Plenty and Waikato
regions in the northeast of the North Island.
Smaller tremors had been felt in the Bay of Plenty for more
than a week.
Police said many districts lost power supplies and
telephone links.
Energy Ministry officials ordered the release of water
behind the Matahina hydro-electric dam, 32 kilometres above
Whakatane on the Rangitaiki river. The quake cracked the
roadway and concrete abutment along the top of Matahina, the
largest earth dam in the North Island.
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PHILIPPINES HEADS CONFIDENTLY INTO DEBT TALKS | Philippine Finance Secretary Jaime Ongpin
starts negotiations with the country's 12-bank advisory
committee in New York tomorrow, buoyed by an economy on the
mend and political stability one year after President Corazon
Aquino took power, central bank officials said.
The country now has foreign debt totalling 27.8 billion
dlrs and faces debt repayments of 3.6 billion dlrs due between
January 1987 and December 1992. Manila also hopes to tack on
another 5.8 billion dlrs, rescheduled in a 1985 accord, to any
new agreement, the officials said.
Chile's 15-1/2 year rescheduling accord at one percentage
point over London Interbank Offered Rates (LIBOR) and
Venezuala's 21 billion dlr package at 7/8 point over LIBOR
portend well for the Philippines, despite Brazil's repayment
suspension last week, the officials said.
Manila, which has not made any principal repayments since
1983, wants terms better than the 20-year repayments at 13/16
percentage point over LIBOR offered in October to Mexico in a
77 billion dlr rescue.
Ongpin wants 5/8 point over the benchmark rate, which is
currently hovering around 6-1/2 pct.
The banks are said to be firm on the 1-1/8 points offered
when the last round of negotiations collapsed on November 7.
Ongpin said every 1/16 point over LIBOR meant an additional
5.1 mln dlrs in annual interest payments.
One banker said banks were wary of repeating a Mexico-type
accord, which some 70 small creditor banks are still refusing
to endorse five months after it was signed.
In Manila's case, about 40 pct of the 15 billion dlrs
outstanding to commercial banks is owed to the 12 large banks
on the advisory committee, while about 180 smaller banks have
average exposures of 20 mln dlrs each.
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|
JAPAN FEBRUARY INTERIM TRADE SURPLUS JUMPS | Japan's customs-cleared trade surplus in
the first 20 days of February jumped to 3.58 billion dlrs from
1.94 billion a year earlier, the Finance Ministry said.
The February interim surplus was sharply up from a 965.04
mln dlr surplus in the same January period.
FOB exports rose 14.6 pct from a year earlier in the first
20 days of February to 10.91 billion, while CIF imports fell
3.2 pct to 7.33 billion.
The average dollar/yen rates were 152.32 for exports and
152.31 for imports against 196.61 for exports and 196.27 for
imports a year earlier.
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|
NIPPON LIGHT METAL CONTINUES ALUMINIUM OUTPUT CUT | Nippon Light Metal Co Ltd <NLGT.T>, which
has annual capacity of 63,000 tonnes, will continue primary
aluminium production at a rate of 35,000 tonnes owing to low
domestic and world prices and low water supplies at its
hydroelectric power plant, a company official said.
Nippon, which has no plans to restore output to the 48,000
tonnes a year at which it was working until late 1986, will
become Japan's only smelter.
<Ryoka Light Metal Industries Ltd> will stop smelting in
April owing to high power costs and low prices, and <Mitsui
Aluminium Co Ltd> has said it stopped smelting in February.
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|
SAUDI FEBRUARY CRUDE OUTPUT PUT AT 3.5 MLN BPD | Saudi crude oil output last month fell
to an average of 3.5 mln barrels per day (bpd) from 3.8 mln bpd
in January, Gulf oil sources said.
They said exports from the Ras Tanurah and Ju'aymah
terminals in the Gulf fell to an average 1.9 mln bpd last month
from 2.2 mln in January because of lower liftings by some
customers.
But the drop was much smaller than expected after Gulf
exports rallied in the fourth week of February to 2.5 mln bpd
from 1.2 mln in the third week, the sources said.
The production figures include neutral zone output but not
sales from floating storage, which are generally considered
part of a country's output for Opec purposes.
Saudi Arabia has an Opec quota of 4.133 mln bpd under a
production restraint scheme approved by the 13-nation group
last December to back new official oil prices averaging 18 dlrs
a barrel.
The sources said the two-fold jump in exports last week
appeared to be the result of buyers rushing to lift February
entitlements before the month-end.
Last week's high export levels appeared to show continued
support for official Opec prices from Saudi Arabia's main crude
customers, the four ex-partners of Aramco, the sources said.
The four -- Exxon Corp <XON>, Mobil Corp <MOB>, Texaco Inc
<TX> and Chevron Corp <CHV> -- signed a long-term agreement
last month to buy Saudi crude for 17.52 dlrs a barrel.
However the sources said the real test of Saudi Arabia's
ability to sell crude at official prices in a weak market will
come this month, when demand for petroleum products
traditionally tapers off. Spot prices have fallen in recent
weeks to more than one dlr below Opec levels.
Saudi Arabian oil minister Hisham Nazer yesterday
reiterated the kingdom's commitment to the December OPEC accord
and said it would never sell below official prices.
The sources said total Saudi refinery throughput fell
slightly in February to an average 1.1 mln bpd from 1.2 mln in
January because of cuts at the Yanbu and Jubail export
refineries.
They put crude oil exports through Yanbu at 100,000 bpd
last month, compared to zero in January, while throughput at
Bahrain's refinery and neutral zone production remained steady
at around 200,000 bpd each.
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INDONESIAN PALM OIL OUTPUT EXPECTED TO RISE | Indonesia's palm oil output is expected
to rise and exports to increase, the U.S. Embassy said in its
annual report on Indonesia's agriculture sector.
The Indonesian government said crude palm oil (CPO) output
is expected to rise to 1.56 mln tonnes in 1987 and 2.11 mln in
1988, up from a projected 1.45 mln tonnes in 1986 and 1.26 mln
in 1985.
The 1986 projection of 1.45 mln tonnes is up from a
provisional figure of 1.3 mln tonnes.
A U.S. Embassy assessment puts 1987 output at 1.45 mln
tonnes, against 1.35 mln in 1986 and 1.208 mln in 1985.
"More realistic estimates indicate that 1988 production will
be between 1.5 and 1.6 mln tonnes," the report said.
The report said the abolition of the five pct CPO export
tax, the devaluation of the rupiah in September 1986 and higher
international palm oil prices should lead to a modest increase
in exports this year.
Exports are forecast to rise to 720,000 tonnes against
695,000 tonnes in 1986, the report added.
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INDONESIAN TEA, COCOA EXPORTS SEEN UP, COFFEE DOWN | Indonesia's exports of tea and cocoa
will continue to rise in calendar 1987 but coffee exports are
forecast to dip slightly in 1987/88 (April-March) as the
government tries to improve quality, the U.S. Embassy said.
The embassy's annual report on Indonesian agriculture
forecast coffee output in 1986/87 would be 5.77 mln bags of 60
kilograms each. That is slightly less than the 5.8 mln bags
produced in 1985/86.
In 1987/88 coffee production is forecast to rise again to
5.8 mln bags, but exports to dip to 4.8 mln from around 5.0 mln
in 1986/87. Exports in 1985/86 were 4.67 mln bags.
The embassy report says coffee stocks will rise to 1.3 mln
tonnes in 1987/88 from 1.15 mln in 1986/87. It bases this on a
fall in exports as a result of the "probable" re-introduction of
quotas by the International Coffee Organisation.
Cocoa production and exports are forecast to rise steadily
as the government develops cocoa plantations. Production of
cocoa in Indonesia increased to 32,378 tonnes in calendar 1985
from 10,284 tonnes in 1980. It is projected by the government
to rise to more than 50,000 tonnes by 1988.
Production in 1986 is estimated by the embassy at 35,000
tonnes, as against 38,000 tonnes in 1987.
The report forecasts cocoa exports to rise to 35,000 tonnes
this year, from 33,000 tonnes in 1986 and 31,000 in 1985.
The Netherlands is at present the biggest importer of
Indonesian cocoa beans.
The report forecasts that in calendar 1987, Indonesia's CTC
(crushed, torn and curled) tea exports will increase
significantly with the coming on stream of at least eight new
CTC processing plants.
Indonesia plans to diversify its tea products by producing
more CTC tea, the main component of tea bags.
Production of black and green teas is forecast in the
embassy report to rise to 125,000 tonnes in calendar 1987 from
123,000 tonnes in 1986.
Exports of these teas are likely to rise to 95,000 tonnes
in 1987 from 85,000 in 1986 and around 90,000 in 1985.
The embassy noted the ministry of trade tightened quality
controls on tea in October 1986 in an effort to become more
competititve in the world market.
REUTER
|
SINGAPORE EXCHANGE SEEKING NASDAQ/LONDON LINK | The Stock Exchange of Singapore (SES)
plans to introduce electronic trading of shares listed on the
National Association of Securities Dealers Automated Quotation
System (NASDAQ) in the U.S. And on London's Stock Exchange
Automated Quotation System, banking sources said.
The SES is discussing the idea with the London and New York
authorities. Gordon Macklin, president of the National
Association of Securities Dealers in Washington, said he was
very optimistic about an early agreement, possibly by the end
of this month.
Monetary Authority of Singapore (MAS) sources told Reuters
they supported the proposed linking of computer trading systems
on the three exchanges, and the banking sources said local
financial support for the plan existed.
Macklin said if an agreement were reached it would move the
three exchanges towards 24-hour trading, with Singapore filling
a gap when no trading takes place.
A small group of selected stocks would be used at the start
of three-centre trading to determine investor interest.
The Singapore, London and New York authorities have agreed
in principle on how the three exchanges would trade and
transfer information among the different time zones, but some
details still have to be worked out, a senior Singapore bank
director said.
Questions remain concerning investor willingness to deploy
sufficient capital in Singapore to ensure adequate market
liquidity and communication links to the other three centres.
But if agreement is reached, Singapore will have a head
start over the other Asian financial centres in Hong Kong,
Toyko and Australia, he said.
On February 18 the SES created the Stock Exchange of
Singapore Dealing and Automated Quotation System (SESDAQ),
modelled on NASDAQ.
At present SESDAQ is trading the shares of only one
company, the government-owned Singapore National Printers Ltd
(SNP), but its turnover has been fairly active, and other small
firms have said they plan to seek listings soon.
Market sources expect the next few companies listed will
also be government-owned entities, which would have no problem
meeting the listing conditions. Approval for a listing of
Trans-Island Bus Service Pte Ltd is expected soon, they said.
SNP, previously wholly-owned by the government's Temasek
Holdings (Pte) Ltd, issued seven mln 50-cent shares at one dlr
each last month in a public offering oversubscribed 119 times.
In SESDAQ trading, SNP shares have advanced from an initial
1.87 dlrs to a Friday close of 2.32 after a 2.80 high. So far
more than 900,000 shares have traded.
REUTER
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INDONESIA'S EXPORTS DROP IN CALENDAR 1986 | The total value of Indonesia's exports
fell in calendar 1986 to 15.995 billion dlrs from 18.762
billion in calendar 1985, according to the central bank's
latest report.
The value of crude oil exports fell to 7.431 billion dlrs
in 1986 from 8.976 billion in 1985, while liquefied natural gas
exports dropped to 2.795 billion dlrs from 3.802 billion in
1985.
The value of Indonesia's non-oil exports also fell in
calendar 1986, to 5.768 billion dlrs from 5.983 billion in
1985.
REUTER
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GERMAN EUROBOND MARKET EXPECTS BREATHING SPACE | After an onslaught of new paper, fewer
mark eurobonds issues are expected this week, bankers said.
Most managers said they were planning a low issue volume
for the Bundesbank's two-week bond calendar beginning today.
"We want to have a week's pause," one manager said.
Last week borrowings totalled 1.775 billion marks,
including a 300 mln mark private placement for Deutsche Bank.
Issues for all of February rose to nearly five billion marks,
from 3.6 billion in January.
The heavy volume also meant most borrowers except the very
best addresses were having to accept higher coupons.
"I think the D-mark market is still good, but only if you
can give a good coupon," another manager said.
But even some government borrowers were not getting the
best reception for bonds which would have been taken up more
readily under other conditions.
Of the three mark eurobonds launched on Tuesday alone,
bonds for Den Danske Bank and Iceland were trading outside fees
on Friday, although prices had recovered from initial lows.
Den Danske's 5-3/4 1992 bond was quoted at midday on Friday
at 97.35/65 compared with its par price, and Iceland's 6-1/2
pct 1997 bond traded at 97.25/75 against a 100-1/4 issue price.
A 300 mln mark 6-1/8 pct 1997 issue for Nippon Telegraph
and Telephone was also depressed, but traded Friday within fees
at 98.15, 98.50 from its par price.
Some shorter maturities did better. In contrast to the
10-year NTT and Iceland issues, a five-year six pct bond for
Hoogovens, traded at 98.40/75 from its 99-1/2 price, thanks
mainly to its shorter maturity, dealers said.
The large amount of paper brought to the market in the last
two months has also led many syndicate managers to complain
about the Bundesbank's present fixed calendar system, which
they say is too inflexible.
Currently all mark denominated eurobonds have to be
registered with the Bundesbank in the week preceding the
two-week issue period. A bank may decline to issue a bond on
the requested day in the calendar, but then has to wait for the
next calendar period to schedule the bond again.
Some managers said they would prefer to abolish the system.
The Bundesbank shortened the reporting period to two weeks
from four weeks last July. But few expect the calendar to be
completely abolished. "I don't think the Bundesbank would give
that up," one banking analyst said.
"I wouldn't have anything against getting rid of the system,"
the analyst said, adding banks were capable of regulating the
volume of new issues themselves.
The Bundesbank plays a passive role in setting the calendar
without trying to regulate the issues, but it needs the
registration to gauge the volume of mark bonds going through
the euromarket, he said.
For this reason, few managers here foresee the Bundesbank
sacrificing its present calendar system.
Bond activity in West German bond trading and syndication
departments is also expected to be quieter than normal owing to
the carnival holiday.
Carnival will close banks in Duesseldorf all day on Monday.
In Frankfurt, banks will close on Tuesday in the afternoon.
REUTER
|
JAPAN'S NTT FORECASTS PROFITS FALL IN 1987/88 | <Nippon Telegraph and Telephone Corp>
(NTT) expects its profits to fall to 328 billion yen in the
year ending March 31, 1988 from a projected 348 billion this
year, the company said.
Total sales for the same period are expected to rise to
5,506 billion yen from a projected 5,328 billion this year, NTT
said in a business operations plan submitted to the Post and
Telecommunications Ministry.
NTT said it plans to make capital investments of 1,770
billion yen in 1987/88, including 109 billion for research and
development, as against a total of 1,600 billion this year.
An NTT spokesman said increased competition from new
entrants to the telecommunications field and the effect of a
sales tax scheduled to be introduced next January, were the
major factors behind the projected decrease in profits.
The Japanese telecommunications industry was deregulated in
1985.
REUTER
|
SINO-U.S. VENTURE IN CHINA TO MAKE RINSING AGENTS | <Ecolab Co> of the United States signed
a contract with North China Industrial Co to set up the first
Sino-U.S. Joint venture in China to make rinsing agents, the
New China News Agency said.
It said total investment in the new venture, <Ecolab
Chemical Industrial Co>, is 2.4 mln dlrs. It said the venture
will be based in Shanghai and produce agents for use in hotels
and industries.
It gave no further details.
REUTER
|
CHINA SIGNS WORLD BANK LOAN FOR TIANJIN PORT | China has signed a 130 mln dlr loan
agreement with the World Bank to partly finance 12 new berths
with an annual capacity of 6.28 mln tonnes at the 20 mln tonne
a year capacity Tianjin port, the New China News Agency said.
China will provide 370 mln yuan for the project and a
Chinese company won a bid against 12 other firms from seven
countries to do the foundation work, it said.
It said 11 of the new berths will be able to handle ships
of more than 10,000 tonnes, three will handle containers and
the expansion will enable the port to handle coke, non-metal
mineral ores and mining equipment for the first time.
REUTER
|
THAI AIRWAYS INTERNATIONAL TO ALMOST DOUBLE FLEET | Thai Airways International plans to
expand its fleet to 58 from 30 aircraft by 1995, company
officials said.
Thamnoon Wanglee, vice-president for finance, told a
weekend marketing conference Thai would finance the expansion
by borrowing, but he did not give details.
He said the airline planned to reduce its yen borrowing to
36.4 pct of overall debt by September 1992. It is currently
64.3 pct of overall debt.
He said dollar borrowing should rise to 56.2 pct of overall
debt in the same period, compared to 15.7 pct now.
Other company officials said the state-owned airline had no
plans to go private. They said the airline is studying a
government proposal for it to merge with Thai Airways Company,
the state-owned domestic carrier.
A report presented to the conference showed the airline
expects passenger sales revenue to be 13 pct higher in 1987
than in 1986. This follows a 20 pct jump in passenger sales
revenue in the past four months.
Executive vice president Chatrachai Bunya-ananta said the
current expansion of Bangkok airport would be completed this
year.
REUTER
|
Japan February external reserves record 51.73 billion dlrs (January 51.46 billion)
| |
JAPAN FEBRUARY RESERVES RECORD 51.73 BILLION DLRS | Japan's external reserves rose to a record
51.73 billion dlrs at the end of February from the previous
record of 51.46 billion at end-January, the Finance Ministry
said.
End-February reserves last year were 27.58 billion dlrs.
In January, the nation's foreign reserves showed the
largest-ever monthly increase at 9.22 billion dlrs due to
massive Bank of Japan dollar buying intervention during the
month as the dollar fell briefly to an all-time low of 149.98
yen on January 19, foreign exchange dealers said.
REUTER
|
SIMEX TRADING VOLUME HITS RECORD IN FEBRUARY | Trading volume on the Singapore
International Monetary Exchange (Simex) hit a record 122,819
contracts in February, surpassing the previous record of
116,767 in September last year, the exchange said in a
statement.
Volume in the Eurodollar contract hit a peak of 78,546
contracts against the previous record of 70,306, also set last
September.
Open interest in the Nikkei Stock Average contract passed
2,000 contracts for the first time, to hit a record high 2,697
on February 26.
REUTER
|
SHULTZ VISIT TO MOSCOW POSSIBLE, SAY SOVIETS | A senior Soviet official said a visit to
Moscow by U.S. Secretary of State George Shultz for arms
discussions was under consideration.
Deputy Foreign Minister Alexander Bessmertnykh told a news
conference such a visit would be part of continuing contacts
between the two powers "in the framework of security questions."
Earlier, U.S. Officials with Shultz in Peking said he was
likely to go to Moscow soon following Kremlin leader Mikhail
Gorbachev's weekend proposal for a separate agreement on
withdrawing Soviet and American medium-range missiles from
Europe.
|
JAPAN DISTRIBUTOR MAY IMPORT MAZDA U.S.-MADE CARS | <Autorama Inc>, a distributor for Ford
Motor Co <F> in Japan, is considering importing cars made by
<Mazda Motor Manufacturing (USA) Corp>, (MMUC), a wholly owned
U.S. Subsidiary of Mazda Motor Corp <MAZT.T>, an Autorama
spokesman said.
Mazda, owned 24 pct by Ford, is due to begin production of
the 2,000-cc-engine cars at the Michigan plant in September at
an annual rate of 240,000, of which between 60 and 70 pct will
go to Ford and the rest to Mazda's own U.S. Sales network.
REUTER
|
IRAQ DEFERS PAYMENTS ON 500 MLN DLR EUROLOAN | Iraq has secured agreement to defer
outstanding payments on a 500 mln dlr syndicated euroloan
following five months of negotiations with creditor banks.
Banking sources said the rescheduling is part of Iraq's
continuing effort to defer payments of foreign debt as its
economy comes under strain from the Gulf War and soft world
oil prices.
Iraq informed the 37 banks in the loan syndicate last
September it could not meet the remaining four principal
repayments totalling 285 mln dlrs, and missed the first of
these for 71.25 mln due on September 29.
The 500 mln dlr credit, under the lead management of
Paris-based Union de Banques Arabes et Francaises (UBAF), has a
five-year maturity and a margin of one percentage point over
London Interbank Offered Rates (LIBOR).
Banking sources said the agreement now worked out goes some
way to meeting creditor bank demands that at least part of the
first missing instalment of 71.25 mln dlrs be paid and not
deferred.
One quarter or 17.8 mln dlrs will be paid on signature of
the accord, expected in late March, with the remainder in three
more instalments to be made every six months.
The remaining three principal instalments - originally due
in March 1987, September 1987 and March 1988 - will each be
deferred for two years from the due date, banking sources said.
The margin for the loan remains unchanged and no penalty
interest is being imposed, the sources added.
Bank reaction to Iraq's rescheduling request has been one
of resignation, with many bankers seeing little alternative for
Baghdad's economic planners. Iraq is estimated to have foreign
debt of about 50 billion dlrs, although about half is thought
to be in the form of loans from its Gulf Arab allies,
particularly Saudi Arabia and Kuwait.
The 500 mln dlr credit is in the name of the state-owned
Rafidain Bank. The only other major eurocredit, a 500 mln dlr
deal under the agency of Gulf International Bank, was signed in
October, 1985 and is still in a two year grace period.
The bulk of Iraq's commercial debt - excluding loans by its
allies in the Gulf War - is in the form of trade financing.
But Rafidain bank stopped paying debt due on letters of
credit last March and a series of negotiations with banks and
western government export credit agencies has been underway.
Some banks have agreed to a three-year deferrment of
obligations due on letters of credit.
REUTER
|
TAIWAN CENTRAL BANK ISSUES CERTIFICATES OF DEPOSIT | The Central Bank issued 2.14 billion
Taiwan dlrs of certificates of deposit (CD), bringing the total
so far this year to 86.21 billion, a bank official told
Reuters.
The new CD have maturities of six months and one and two
years and bear interest rates ranging from 3.9 pct to 5.15 pct.
The issues are aimed at curbing the growth of M-1B money
supply, which is the result of large foreign exchange reserves,
the official said.
REUTER
|
ICO TALKS ON COFFEE QUOTAS TO RESUME AT NOON | Talks on coffee export quotas at the
International Coffee Organization (ICO) special council session
will resume at noon gmt today, following a last minute decision
taken early this morning to extend the meeting 24 hours, ICO
officials said.
An 18 member contact group will meet at midday to examine
new ideas, and the full council is to convene at 1900gmt, they
said.
The extension resulted from a last ditch effort by Colombia
to salvage the talks, which by late yesterday looked perilously
close to ending without agreement on quotas, delegates said.
REUTER
|
CAECL ISSUES 12 BILLION YEN EUROBOND | Caisse d'Aide a l'Equipement des
Collectives Locales (CAECL) is issuing a 12 billion yen
eurobond due March 31, 1994 paying 5-1/8 pct and priced at 102
pct, lead manager Mitsubishi Trust International Ltd said.
The non-callable bond is available in denominations of one
mln yen and will be listed in Luxembourg. The selling
concession is 1-1/4 pct while management and underwriting
combined pays 5/8 pct.
The payment date is March 31.
REUTER
|
CHINESE BANKS TO ISSUE MORE BONDS, OFFICIAL SAYS | China's state and collective firms do not
have enough cash to operate imported equipment, so banks will
issue more bonds to raise funds, a Chinese bank official was
quoted by the China Daily as saying.
Xie was quoted as saying the present cash shortage means
some state firms do not run at full capacity and are
inefficient. The central government does not have enough money
to meet their needs.
The paper said, "Reliable sources disclosed that the country
is running a budget deficit." It gave no figure.
Xie said her bank sooner or later will have to punish the
many firms that have failed to repay loans made to them over
the past two years at high interest rates. The bank financed
the loans by issuing two billion yuan of bonds, but she gave no
other details.
REUTER
|
INDIAN SUGAR OUTPUT RISES IN FIRST FOUR MONTHS | India's sugar output to January 31 in
the 1986/87 season (October/September) rose to 3.66 mln tonnes
from 3.46 mln in the same 1985/86 period, the Indian Sugar
Mills Association said.
Total offtake in the first four months of the current year
was 2.71 mln tonnes (including 241,000 tonnes imported) for
domestic use and 4,000 tonnes for export, against 2.81 mln
tonnes (including 993,000 imported) for domestic use and 3,000
tonnes for export in the corresponding period of 1985/86.
Factory stocks at end-January were 3.05 mln tonnes (96,000
imported) against 3.13 mln (96,000 imported) a year earlier.
REUTER
|
INTERNATIONAL LEISURE NEGOIATING ON BOEING LEASE | <International Leisure Group Plc> said
its <Air Europe> subsidiary was in advanced negotiations with
manufacturers and banks for the lease of 10 <Boeing Co> and 13
<Rolls-Royce Ltd> engines.
The deal would be for the lease, with purchase options, of
five Boeing 757-200 planes and five 737-400s. The Rolls-Royce
RB211-535E4 engines would be fitted to the Boeing 757s.
Delivery would be in 1988 and 1989.
REUTER
|
JAPAN PLANS MORE FLEXIBLE CORPORATE BOND ISSUES | Japanese securities houses will issue new
corporate bonds more quickly, accept issue requests throughout
the month instead of at month-end and introduce a competitive
underwriting method from April 1, to bring Japanese firms back
to the Tokyo bond market, securities managers said.
Domestic issues have slowed to a trickle as more and more
companies turn to more flexible overseas markets for cash, but
the proposed moves are expected to pave the way for a review of
public bond issues, they said.
"Relaxation of issue rules would be better applied not only
to straight corporate bonds, but also convertible bonds and
warrant bonds, to call back issuers effectively from overseas
markets," a Nikko Securities house bond manager said.
Securities houses will launch an issue about 10 days after
a corporate declaration of intent instead of 25 days as now,
the securities managers said.
Underwriters are expected to abolish the lump-sum issuance
system, in which all corporate bonds are issued at month-end,
and accept issue requests during the month, they said.
Securities houses also plan to introduce free competition
among underwriters when negotiating with issuers over terms in
order to better reflect the market, securities managers said.
Market participants expect the new issue methods to be
applied beginning in April, with the projected issue by <Nippon
Telegraph and Telephone Corp>.
The so-called proposal method abolishes the practice of
taking lead-managership and enables more market-oriented
decisions on terms, securities sources said.
The four major Japanese securities houses now take turns
underwriting corporate bonds.
Setting issue terms using financial criteria prepared by
securities houses and in reference to coupon rates on latest
public bonds is now almost automatic, they said.
The new moves are based on wide-ranging proposals made in
late December by advisers to Finance Minister Kiichi Miyazawa.
They were aimed at revitalising the domestic corporate bond
market, securities house managers said.
The finance ministry, commissioned banks and securities
houses agreed in January to lower the eligibility ceiling for
companies wanting to issue non-collateral straight and
convertible bonds from March 1, securities managers said.
The cut will more than double the number of corporations
able to make non-collateral issues from around 70 for straight
bonds and 180 for convertibles now, securities managers said.
The Bond Market Committee of the Securities Exchange
Council also recommended introduction of a shelf registration
system, more use of corporate ratings systems and
simplification of disclosure rules to help speed up the issuing
process, securities sources said.
It also called for a major review of the commissioned bank
system, which increases the cost of issuing domestic bonds, and
for deregulation of private placements, they said.
Some of these proposals are likely to take some time to put
into effect, the sources said. A shelf registration system
would need a revision of Japanese commercial law, expected in
1988, the sources said.
REUTER
|
NEW DUTCH ADVANCES TOTAL 4.8 BILLION GUILDERS | The Dutch Central Bank said it has
accepted bids totalling 4.8 billion guilders at tender for new
seven-day special advances at 5.3 pct covering the period March
2 to 9 aimed at relieving money market tightness.
Subscriptions to 300 mln guilders were met in full, amounts
above 300 mln at 50 pct.
The new facility replaces old five-day advances worth 8.0
billion guilders at the same rate.
Dealers expect this week's money market shortage to be
around 12 billion guilders.
Reuter
|
JAPAN BUYS SOME 95,000 TONNES SOYBEANS FROM CHINA | Japanese importers bought some 95,000
tonnes of Chinese soybeans late last month for May to September
shipment, under the semi-annual trade accords, trade sources
said.
The FOB premium rose to 13.50 dlrs per tonne, up 2.50 dlrs
from the premium for the November to April shipment, but down
from 13.80 for the last May to September shipment.
Flat prices for Chinese beans are based on futures prices
in Chicago plus the FOB premium.
Japanese purchases of Chinese soybeans, including spot
buying, may have totalled 240,000 to 250,000 tonnes of the 1986
crop for November to April 1987 shipment, down from some
300,000 tonnes the previous year, the sources said.
Domestic demand for edible-use soybeans is expected to
remain stable at about 240,000 to 250,000 tonnes a year, the
sources said.
In recent years Japanese importers have overbought Chinese
edible-use soybeans and sold the surplus to domestic crushers,
but low 1986 U.S. Crop prices have discouraged the purchase of
Chinese origin beans for crushing, they said.
REUTER
|
SHV SAYS IT MAKING TENDER OFFER FOR UP TO 33 MLN SHARES IN IC GAS
| |
CHEUNG KONG (HOLDINGS) LTD <CKGH.HK> YEAR 1986 | Shr 3.25 H.K. Dlrs vs 1.40
Final div 52 cents vs 38, making 75 cents vs 57
Net 1.28 billion dlrs vs 551.7 mln
Note - Earnings excluded extraordinary gains of 983.6 mln
dlrs vs 81.3 mln. Bonus issue one-for-four vs nil. Share split
four-for-one. Dividend payable June 3, books close May 11-21.
REUTER
|
TRADING DELAYED ON SINGAPORE'S NEW BILL MARKET | The start of trading on the new
Singapore Government Securities Market has been postponed until
late March or early April because legislative amendments still
need parliamentary approval, banking sources said.
The new bill market, intended to establish a base for a
wider capital market and to encourage private bond issues in
Singapore, was supposed to be launched today.
William K.K. Wong, managing director of Indosuez Asia
(Singapore) Ltd, said there is no real obstacle to prevent the
new market from taking off. Most dealers are optimistic it will
provide more liquidity for operators to trade, he said.
Lawrence Yeo, director of Citicorp Investment Bank
(Singapore) Ltd, said the market's success depends on domestic
participation.
The five primary dealers and the three registered dealers
will all be local companies.
The primary dealers are <Commercial Discount Co Ltd>,
<National Discount Co Ltd>, Oversea-Chinese Banking Corp Ltd
<OCBM.SI>, <Overseas Union Bank Ltd> and United Overseas Bank
Ltd <UOBM.SI>. They will underwrite the Monetary Authority of
Singapore (MAS) auctions, maintain market liquidity and channel
open-market operations, MAS said.
<Citicorp Investment Bank (Singapore) Ltd>, <Indosuez Asia
(Singapore) Ltd> and <Credit Suisse First Boston Asia Ltd> will
be recognised as registered dealers. They will act as market
makers but will not bid directly at auctions.
MAS plans to launch trading by issuing taxable instruments
grossing seven billion dlrs in the first year and a gross 38
billion dlrs of paper over the first five years.
Non-competitive bids from primary dealers prepared to
accept average yield will be allocated first, to a maximum
500,000 dlrs for notes and bonds and to an unlimited amount for
treasury bills.
The remaining amount will be awarded to competitive bidders
from the lowest yield upwards.
In the secondary market, the standard lot traded between
dealers will be one mln dlrs worth of treasury bills and
500,000 dlrs worth of government notes and bonds.
REUTER
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