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CORRECTED - MAJOR SWISS BANKS RAISE CUSTOMER TIME DEPOSIT RATES 1/4 POINT TO 3-1/4 PCT - CREDIT SUISSE

FISONS SEES STRONG INTERNATIONAL GROWTH IN 1986

Fisons Plc <FISN.L> said strong international growth had been the main feature of the group's 1986 progress, with the pharmaceutical division reporting a 50 pct increase in U.S. Sales during the period. The rise was due to a sustained marketing programme, a larger sales force and the introduction of an aerosol form of its Intal anti-asthma drug, which pushed U.S. Sales up 70 pct. The company was commenting on 1986 results which saw pre-tax profits rising to 85.1 mln stg from 72.3 mln in 1985. The result was in line with market forecasts, but its shares nevertheless eased in a falling market to 634p at 0857 GMT from 643p. Fisons said the potential for future growth of Intral, as well as its Opticrom and Nasalcrom products, was clearly indicated by a strong 1986 performance. The scientific equipment business had raised the proportion of high technology products it manufactures and also raised its ability to generate higher margins. The horticulture operations had demonstrated outstanding marketing ability. Underlying cash flow from all three operations had been positive despite a full programme of capital investment. Action to protect the group against foreign currency movements resulted in a small net gain to profits. REUTER 

PHILIPPINE PLANNING CHIEF URGES PESO DEVALUATION

The Philippines must devalue the peso if it wants its exports to remain competitive, Economic Planning Secretary Solita Monsod told Reuters. "The peso/dollar rate has to be undercut to make our exports more competitive," Monsod said an interview. "No question about it. I'm saying you cannot argue with success. Taiwan, South Korea, West Germany, Japan, all those miracle economies deliberately undervalued their currencies." The peso has been free-floating since June 1984. It is currently at about 20.50 to the U.S. Dollar. Finance Secretary Jaime Ongpin has said the government does not intend to devalue the peso and wants it to be flexible and able to continue to respond to market conditions. Monsod said Ongpin was looking at the exchange rate from the point of view of finance. "If the dollar rate goes higher, our debt service in terms of pesos gets higher, so the financing is very difficult," she said. "But I am looking at it in terms of the economy." She said she was not trying to oppose official policy. "I'm just saying, keep it competitive. I do not want it to become uncompetitive because then we are dead." Monsod said, "The ideal movement in the peso/dollar rate is a movement that will reflect differences in inflation (rates) of the Philippines versus the other country. It's an arithmetic thing." Official figures show Philippine inflation averaged 0.8 pct in calendar 1986. Ongpin told reporters on Saturday it was expected to touch five pct this year. He said the government and the International Monetary Fund had set the peso/dollar 1987 target rate at 20.80. The peso lost 22.2 pct in value to slump to 18.002 to the dollar when it was floated in 1984. REUTER 

U.K. CLEARS CONS GOLD U.S. PURCHASE

The U.K. Trade Department said it would not refer Consolidated Goldfields Plc's <CGLD.L> purchase of <American Aggregates Corp> to the Monopolies Commission. Cons Gold said last month that its <ARC America Corp> unit had agreed to buy the Ohio-based company for 30.625 dlrs a share cash, or 242 mln dlrs, in a deal recommended by the Aggregates board. REUTER 

NEDERLANDSE GASUNIE ISSUES 100 MLN DLR EUROBOND

NV Nederlandse Gasunie is issuing a 100 mln dlr eurobond due April 15, 1992 paying 7-1/4 pct and priced at 101-1/8 pct, lead manager Citicorp Investment Bank Ltd said. The non-callable bond is available in denominations of 5,000 dlrs 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 April 15. REUTER 

SAAB-SCANIA ISSUES 150 MLN DLR EUROBOND

Saab-Scania AB is issuing a 150 mln dlr eurobond due April 2, 1992 paying 7-3/4 pct and priced at 101-3/4 pct, lead manager Morgan Guaranty Ltd said. The bond is available in denominations of 5,000 and 50,000 dlrs and will be listed in London. Payment date is April 2, 1992. Fees comprise 1-1/4 pct selling concession and 5/8 pct management and underwriting combined, and listing will be in London. REUTER 

MERRILL MANDATED FOR IEL U.S. NOTE.

Merrill Lynch Capital Markets said it received a mandate from Industrial Equity Ltd (IEL) of Australia to arrange a letter of credit facility in support of 100 mln dlrs of medium term notes and U.S. Commercial paper to be sold in the U.S. Domestic market. Merrill, which will be the dealer for the medium term notes and commercial paper, said this was the first facility of its kind. Sumitomo Trust and Banking Co Ltd has agreed to provide the letter of credit. The letter of credit has a five year term, with an evergreen feature allowing for extension at the support banks' option. The notes and paper will be issued by IEL's Sydney-based subsidiary, IEL Finance Ltd. The letter of credit will be underwritten by a group of banks who will be paid a 20 basis point facility fee and a 25 basis point utilisation fee. IEL itself is 51 pct owned by Brierley Investments Ltd of New Zealand, Merrill Lynch said. REUTER 

ZAIRE ACCEPTS TIN-EXPORT QUOTA, ATPC SAYS

Zaire agreed to limit its tin exports to 1,736 tonnes for 12 months from March 1 in line with an Association of Tin Producing Countries (ATPC) plan to curb exports, the ATPC said. ATPC Executive Director Victor Siaahan told Reuters he received a telex from Zaire indicating its willingess to take part in the plan to limit total ATPC exports to 96,000 tonnes for a year from March 1. Siaahan said Zaire is expected to produce 1,900 tonnes of tin in calendar 1987, and that in 1986 its output and exports were about 1,200 tonnes. The ATPC hopes to cut the 70,000-tonne world surplus by 20,000 tonnes and boost prices. All ATPC members except Zaire and Australia recently agreed to adhere to the export quotas allocated them under the plan. Australia said its quota of 7,000 tonnes was roughly equal to its expected output this year. The ATPC consists of Malaysia, Indonesia, Thailand, Bolivia, Australia, Nigeria and Zaire. China and Bolivia, important producers of tin, are not members. REUTER 

JAPANESE BANKS PLAN JOINT FIRM TO AVOID DEBT RISK

Japan's major commercial banks plan to set up a joint company to which they will transfer assets acquired by lending to developing countries to build up a reserve against possible bad loans, a senior official of a major bank told Reuters. He said about 10 banks are likely to finish details of the project in a few weeks. The intent is to avoid risk arising from unrecoverable debt owed by Third World countries, he said. REUTER 

JAPANESE FINANCIAL FUTURES PLAN REVEALED

The Federation of Bankers' Associations of Japan released its proposal for early creation of a comprehensive financial futures market in Tokyo. The market should include a comprehensive range of futures and options trading so Tokyo can develop into a real global money centre where a variety of risk-hedging instruments is available, the proposal said. It should provide currency and interest rate futures, and incorporate the existing yen bond futures and planned stock index futures contracts. The proposal said transactions in all these contracts must be conducted on the same market so participants can readily engage in arbitrage between various financial instruments. To make this possible, the proposal calls for new legislation which would administer all related futures and options transactions under the same legal framework. Banking sources said they expect that initially the currency futures would be dollar-yen and interest futures would include Japanese domestic yen certificates of deposit, three-month Eurodollar deposits and 20-year U.S. Treasury bonds. Banking sources quoted federation chairman Yoshiro Araki as saying he hoped the market would be created as soon as possible because it would help promote the liberalisation of Japan's financial markets. Araki said he had no intention of limiting prospective market participants to banks but was willing to accept those from wider business circles, the sources said. Japan's only current financial futures market, in yen bonds, began on the Tokyo Stock Exchange in October 1985. But the Osaka Stock Exchange plans to start futures trading in a basket of leading stocks in April. REUTER 

EC, EURATOM FRENCH FRANC EUROBONDS EXPECTED

The European Community (EC) and Euratom, the European atomic energy agency, are expected to issue French franc eurobonds this month, a Treasury spokesman said. Other eurofranc bonds this month are likely to include issues by a bank and a company, both unidentified, but no other details were available. The spokesman said the March calendar would be flexible, to take account of market conditions. REUTER 

AUSTRALIAN POLICE ARREST FORMER WESTPAC CLERK

Australian police said they charged a former currency clerk of Westpac Banking Corp <WSTP.S> with misappropriating 8,300 dlrs in July in an alleged foreign-exchange fraud. A spokeswoman for the New South Wales Corporate Affairs Commission (CAC) said the arrest was part of its investigation stemming from complaints from Westpac and <Kleinwort Benson Australia Ltd>. CAC and Westpac officials said they were working out how much money was involved, but said press reports it was as much as five mln dlrs were probably exaggerated. Police told reporters it was alleged the former clerk quoted an incorrect dealing price relationship between the yen and the Swiss franc. They said the CAC was investigating 14 other cases involving 214,000 dlrs. A Kleinwort Benson spokesman declined to comment on the case but the company said in a statement yesterday a small loss incurred in 1986 in its foreign-exchange division was unrelated to "certain alleged forex irregularities." REUTER 

U.K. MONEY MARKET DEFICIT FORECAST AT 350 MLN STG

The Bank of England said it forecast a shortage of around 350 mln stg in the money market today. Among the main factors affecting liquidity, bills maturing in official hands and the take-up of treasury bills will drain some 525 mln stg while bankers' balnces below target will take out around 175 mln stg. Partly offsetting these outflows, exchequer transactions and a fall in note circulation will add some 300 mln stg and 40 mln stg to the system respectively. REUTER 

JAPAN LIKELY TO LET U.S. BANKS DEAL SECURITIES

Japan looks likely to allow U.S. Banks to conduct securities business here, a move that will probably cause the barriers separating Japanese commercial banks from brokerage houses to break down, financial analysts said. But the timing of the approval remains uncertain, due to conflicting domestic interests. J.P.Morgan and Co <JPM>, Bankers Trust New York Corp <BT>, Manufacturers Hanover Corp <MHC> and Chemical Bank New York Corp <CHL> are expected to win approval to conduct securities business in Japan, U.S. Bank officials said. "There is no reason for extended delay of approval," one official at a U.S. Bank said. The four U.S. Banks have been seeking finance ministry approval for months. To date, Japan has allowed European banks to do securities business here through 50-pct owned subsidiaries. As Japanese banks can conduct securities business in European countries, this was seen as a reciprocal move and did not pave the way for Japanese banks to enter the domestic securities market. But if U.S. Banks win approval, Japanese banks will press hard for similiar status, since they are not allowed to conduct securities business in the U.S. Many U.S. Bank officials expect their applications to be approved before June. But Japanese banking sources said the decision will be delayed until next year. A spokesman for the finance ministry declined comment. U.S. Bankers will meet with ministry officials for talks on financial market deregulation sometime in the next few months. Ministry sources said the talks are likely to be held in April or June. At the last round of financial negotiations in September, U.S. Officials said Japan's commitment to deregulation was flagging. Analysts said the finance ministry has been seriously considering the U.S. Request since the U.S. Federal Reserve Bank of New York approved five new primary government securities dealers, including two Japanese brokerages, last December. They said the ministry will have to approve the U.S. Request soon to head off criticism its markets are not as open to foreigners as those of the U.S. Analysts said Japan has proceeded rapidly with financial deregulation since 1984, but has not touched upon the clear division between the securities and banking businesses. Japanese banks and securities houses have fought hard to protect their interests, but analysts said the banks are finding it increasingly difficult to earn money in traditional fields. Officials of major Japanese banks said they will pay special attention to the ministry's reaction to U.S. Bank requests because approval would accelerate market liberalization in Japan. The Japanese bankers hope approval will pave the way for their own entry into the domestic securities market. REUTER 

SAUDI RIYAL DEPOSIT RATES EASE

Saudi riyal interbank deposit rates eased across the board in a dull market which was long in day-to-day funds, dealers said. Today's quiet market continued a lull of several days in which traders were said to be waiting on the sidelines ahead of further clues to the direction of oil prices and the Saudi economy. Dealers cited some borrowing interest in two, three, and six-month deposits but said activity focused on short dates and one-month deposits as banks tried to lend surplus funds. Spot-next was put at 5-3/4, 5-1/4 pct, down from six, 5-1/2 yesterday while one-week rates were steady at six, 5-1/2 pct. One-month deposits declined to 6-1/4, 1/8 pct from 6-1/2, 1/4 on Monday, while three months was barely changed at seven, 6-15/16 pct. The spot riyal was little changed at 3.7501/03 to the dollar after quotes of 3.7498/7501 yesterday. REUTER 

CURRENCY SECTORS CONTINUE TO FEATURE EUROBOND TRADE

Early dollar straight eurobond trade was quiet with currency sectors, particularly eurosterling, continuing to perform strongly, closely reflecting current trading patterns on the foreign exchanges, dealers said. Eurosterling bonds continued to rise steadily, bolstered by the extremely ebullient tone of the U.K. Government bond market on a combination of positive U.K. Economic fundamentals. The dollar was initially stabler but most dollar straight bonds were static in dull trade. A handful of issues showed signs of weakness but dealers said investors were awaiting today's release of U.S. Leading indicators for January. The U.S. Data due out this afternoon is expected to be weak, placing the U.S. Unit under renewed pressure and robbing the market in dollar-denominated eurobonds of fresh trading impetus, one dollar straight trader said. "It's going to be another tedious day and I can't see how anybody is going to make any money," he said. Eurosterling issues continued to rally on the back of general sterling euphoria -- with the U.K. Currency trading at six month highs on interest rate optimism and the strength of the domestic equity markets. Eurosterling bonds saw early gains of up to half a point. However, some eurosterling dealers noted the bonds could soon fall back marginally if -- as expected -- professionals stepped in to take profits at current healthy levels. Trade in mark-denominated bonds was expected to be subdued today due to pre-Lenten carnival festivities in West Germany. There were signs of reawakened investor nerves affecting trade in the floating rate note market which yesterday started the week extremely quietly after a hectic sell-off last week. FRN dealers said paper of U.S. -- and also of Canadian -- banks was seeing some pressure as a result of recent press reports focussing on their exposure to Latin American debt. "(Brazilian Finance Minister Dilson) Funaro's visit to Europe has also brought the spotlight back onto the debt crisis after things had more or less quietened down following the first shock statements last week," one FRN specialist said. Despite the dearth of activity in the dollar straight secondary market, two new dollar issues were the only early features on the primary market. These were a five year 150 mln dlr deal launched by Morgan Guaranty Ltd for Saab Scania at 7-3/4 pct priced at 101-3/4 pct. The other issue was a 100 mln dlr deal -- also due 1992 -- for NV Nederlandse Gasunie paying 7-1/4 pct and priced at 101-1/8 pct, with Citicorp Investment Bank Ltd as lead manager. Dealers predicted reasonable demand for both issues due mainly to a lack of fresh, good name paper in the market. REUTER 

FRENCH TREASURY DETAILS PLANNED TAP ISSUE

The French Treasury will issue between eight and 12 billion francs worth of tap stock depending on market conditions at its monthly tender on Thursday, the Bank of France said. The planned issue will be of two fixed-rate tranches, of the 8.50 pct June 1997 and the 8.50 pct December 2012 stock, and one tranche of the variable-rate January 1999 stock. The minimum amount of each tranche to be sold will be one billion francs. REUTER 

PEMEX SIGNS 500 MLN DLR JAPAN LOAN FOR PIPELINE

Mexican state oil firm Petroleos Mexicanos (Pemex) signed for a 500 mln dlruntied loan from the Export-Import Bank of Japan to finance its Pacific Petroleum Project, Pemex Japan representative Tito Ayal said. No further details on the loan were immediately available. Ayala told an oil seminar the project, due for completion in 1988, is aimed at improving distribution of oil products in the domestic market, mainly along the Pacific coast. The project consists of a pipeline linking Nueva Teapa on the Gulf of Mexico with Salina Cruz on the Pacific Coast, and construction of the second phase of the Salina Cruz refinery. The project also includes construction of liquified petroleum gas (LPG) storage tanks at Santa Cruz, additional crude oil storage at both ends of the pipeline, an ammonia complex at Lazaro Cardenas on the Pacific Coast and expansion of the infrastructure of the port of Salina Cruz, Ayala said. Pemex will buy 80 mln dlrs worth of foreign equipment and materials for the project, he said. The new pipeline will enable Japan to load Mexico's Maya crude oil at Salina Cruz rather than in the Gulf of Mexico. Pemex will also have some LPG surplus available in Salina Cruz that may help Japan diversify its supply sources of that product, he added. REUTER 

SUPPLIES OF U.K. INDEX-LINKED BOND EXHAUSTED

The Government broker's supplies of a 400 mln stg issue of two pct Treasury index-linked stock due 1992 were exhausted in early trading on the U.K. Government bond market this morning, the Bank of England said. The Bank said that the issue was no longer operating as a tap, having been supplied at a price of 94 stg pct this morning. The issue was undersubscribed at a tender on February 18, but the Government broker has supplied amounts of the stock on a number of occasions since then. The relatively small quantity remaining in the authorities' hands was quickly sold out on a small upturn in demand early today. REUTER 

STC PLC <STCL.L> YEAR TO END-1986

Shr profit 15.9p vs 2.25p loss Div 3p making 4.5p vs nil Turnover 1.93 billion stg vs 1.99 billion Pretax profit 134.2 mln vs 11.4 mln loss Tax 47.2 mln vs nil Operating profit 163.0 mln vs 92.7 mln Interest less investment income 13.8 mln vs 37.2 mln Exceptional debit 15.0 mln vs 66.9 mln Minorities 0.3 mln vs 0.4 mln Extraordinary credit 16.4 mln vs 42.0 mln debit Operating profit includes - International computers 90.2 mln vs 61.7 mln Communications systems 56.1 mln vs 48.7 mln Components and distribution 20.0 mln vs 1.5 mln Defence 9.4 mln vs 13.1 mln REUTER 

COMALCO SAYS LOWER COSTS HELPED RETURN TO PROFITS

Comalco Ltd <CMAC.S> said its return to profit reflected reduced costs, improved primary aluminium prices and its withdrawal from a Japanese smelter venture. It said the earlier reported 57.1 mln dlr profit for the year ended December 31 against a 69.13 mln dlr loss in 1985 was also aided by lower interest rates on U.S. Dollar debt and greater sales of bauxite and aluminium. Comalco said it expected to pay at least a four cents per share final, dividend delayed until July 1 to take advantage of proposed dividend imputation laws. This would make five cents for the year against a first and final of one cent in 1985. Comalco said the aluminium industry continued to suffer from low prices and excess capacity, though the weak Australian dollar had helped earnings. Withdrawal from the <Showa Aluminium Industries KK> joint venture had been recapitalised in expansion by the <New Zealand Aluminium Smelters Ltd> project with Japan's <Sumitomo Aluminium Smelting Co Ltd>, permitting repayments and increases in liquid funds totalling 165 mln dlrs, it said. As previously reported Comalco's <Commonwealth Aluminium Corp> unit has conditionally agreed to sell its smelter at Goldendale, Washington, and port facilities at Portland, Oregon to <Columbia Aluminium Corp>. Comalco said it had made a 27.3 mln dlr extraordinary provision for Goldendale losses and closure costs but that if the sales agreement were completed it would reduce the provision made in the 1986 accounts. The other items in the total extraordinary loss of 140.5 mln dlrs were a 102.9 mln write-off of unrealised exchange losses and 10.3 mln for an increase in future tax provision. REUTER 

CRA EXPECTS TO PAY FINAL DIVIDEND OF 10 CENTS

CRA Ltd <CRAA.S> said it expected to pay a final 1986 dividend of not less than 10 cents a share after July 1, making 13 cents forthe year against 15 in 1985. The mining and smelting group earlier reported 1986 net earnings rose to 138.2 mln dlrs from 87.8 mln in 1985, against analysts' forecasts yesterday of 125 mln to160 mln. CRA said it was deferring consideration of a dividend until later this year to provide the benefit of dividend imputation to its shareholders. After July 1, dividends will be tax-free to shareholders provided they come out of earnings on which the full 49 pct company tax rate has been pid. The company operates on a substituted tax year, not the fiscal year ending June 30, and as a result has incurred tax at the 49 pct rate on 1986 earnings, CRA said in a statement. Consequently, it has funds available for distribution with dividend imputed but is waiting to see the imputation legislation before determining the final payout, it said. Despite the higher net earnings, CRA said 1986 was a poor year for the minerals industry, with the notable exception of gold producers. Prices for major metals expressed in real U.S. Dollars declined to the lowest levels in about 50 years, it said. Fluctuating exchange and interest rates added volatility and uncertainty, while the revaluation of the yen is leading to substantial restructuring of Japanese industry, CRA said. World demand for metals is growing slowly. Inventories have steadily declined, with supply and demand in better balance, but overcapacity continues, CRA said. Turning to contributions to its earnings, CRA said Bougainville Copper Ltd <BUVA.S> contributed 31.3 mln dlrs while its share of Comalco Ltd's <CMAC.S> net was 37.8 mln. Net earnings from iron-ore operations were 111.8 mln dlrs against 149.2 mln in 1985, it said. Lead, zinc and silver mining and smelting operations incurred a net loss of 66.8 mln dlrs against a 38.1 mln loss in 1985, CRA said. Coal activities resulted in a net profit of 36.7 mln dlrs against 34.1 mln, while salt raised its contribution to 4.7 mln from 2.8 mln. CRA's share of earnings from the Argyle diamond project amounted to 12.0 mln dlrs against nine mln in 1985. CRA said the main item in its 250.28 mln dlr extraordinary loss was a 172.9 mln writeoff of unrealised foreign exchange losses on borrowings as required by a new accounting standard. Other extraordinary items were 63.3 mln dlrs provided for closures and writedown of assets and a 14.1 mln increase in future tax provisions, CRA said. Cash flow continued at a high level, being 950.6 mln dlrs before capital expenditure against 1.02 billion in 1985. The strong cash flow, coupled with the proceeds of the 1986 rights issue and the use of existing cash balances, enabled group debt to be reduced by nearly 500 mln dlrs. CRA said it held forward contracts at year-end to buy 985 mln U.S. Dlrs to hedge part of its foreign debt. This cost 47.0 mln dlrs after tax, included in the net interest cost. REUTER 

MONTEDISON UNIT ISSUES 50 MLN AUSTRALIAN DLR BOND

Montedison Finance Overseas Ltd, a unit of Montedison SpA, is issuing a 50 mln Australian dlr eurobond due April 3, 1990 paying 15-1/2 pct and priced at 101-3/8 pct, lead manager Orion Royal Bank Ltd said. The non-callable bond is guaranteed by the parent. The selling concession is one pct while management and underwriting combined pays 1/2 pct. The issue will be listed in Luxembourg and is available in denominations of 1,000 and 10,000 Australian dlrs. The payment date is April 3. REUTER 

SWISS CAPITAL EXPORTS RISE IN JANUARY

Swiss capital exports rose to 4.64 billion francs in January after 2.54 billion in December and a year earlier 3.64 billion, the Swiss National Bank said. New bond issues accounted for 4.12 billion of the total after December's 2.15 billion, and credits 525.1 mln after 389.9 mln. In January 1985, before the National Bank ended the distinction between notes and bonds, bond issues totalled 1.66 billion francs, notes 1.39 billion and credits 597.5 mln. REUTER 

CHINA CALLS FOR BETTER TRADE DEAL WITH U.S.

China called on the United States to remove curbs on its exports, to give it favourable trading status and ease restrictions on exports of high technology. But the U.S. Embassy replied that Chinese figures showing 13 years of trade deficits with the U.S. Out of the last 15 are inaccurate and said Peking itself would have to persuade Congress to change laws which limit its exports. The official International Business newspaper today published China's demands in a editorial to coincide with the visit of U.S. Secretary of State George Shultz. "It is extremely important that the U.S. Market reduce its restrictions on Chinese imports, provide the needed facilities for them and businessmen from both sides help to expand Chinese exports," the editorial said. "The U.S. Should quickly discard its prejudice against favourable tariff treatment for Chinese goods and admit China into the Generalised System of Preference (GSP). "Despite easing of curbs on U.S. Technology exports in recent years, control of them is still extremely strict and influences normal trade between the two countries," it added The paper also printed an article by China's commercial counsellor in its Washington embassy, Chen Shibiao, who said that "all kinds of difficulties and restrictions" were preventing bilateral trade fulfilling its full potential. He named them as U.S. Protectionist behaviour, curbs on technology transfer and out-of-date trade legislation. The paper also printed a table showing that, since bilateral trade began in 1972, China has had a deficit every year except 1972 and 1977. It shows the 1986 and 1985 deficits at 2.09 billion and 1.722 billion dlrs. A U.S. Embassy official said the U.S. Did not accept Peking's trade figures at all, mainly because they exclude goods shipped to Hong Kong and then trans-shipped to U.S. While U.S. Figures are based on country of origin. He said that, if China wants to obtain GSP status, it will have to lobby Congress itself to persaude it to amend several laws which currently prevent Peking getting such status. The U.S. Trade Act of 1974 says that to qualify for GSP, China must be a member of the General Agreement of Tariffs and Trade (GATT), for which it applied in July 1986, and "not be dominated or controlled by international Communism." The official said China was well aware of the laws, some of which date to the anti-Communist early 1950's, but that there is not sufficient political will in the U.S. To change them. China has been the subject of about a dozen cases involving anti-dumping in the U.S. Within the last two years, which the U.S. Side won, he said. But, for the first time, China signed last week an agreement which it itself initiated to voluntarily restrain exports of at least two categories of steel goods, which may lead the U.S. Side to withdraw the anti-dumping case, he added. Another diplomat said willingness to provide such voluntary export restraints would be an important issue in bilateral trade issues and in Peking's application to GATT. "China has the potential to disrupt world markets, especially in textiles. Other GATT countries will be nervous about China in this respect. But there is a precedent for other centralled planned economies in GATT," the diplomat said. Poland, Czechoslovakia, Hungary and Romania are members of GATT but none has China's massive market potential for imports or its vast labour pool to produce cheap exports. In a speech today in the northeast city of Dalian, U.S. Secretary of State George Shultz said his country welcomed China's interest in participating in GATT. "The process of Chinese accession will not be accomplished overnight -- the GATT rules were not designed for a large economy of the Chinese type," Shultz said. "China can play an important role by actively joining GATT discussions seeking to expand general trading opportunities and enhance market access for exports worldwide. China can further develop its foreign trade system so as to gain the maximum benefit from its GATT participation," he said. The problems facing U.S.-China trade and GATT membership are similar -- a pricing system which many foreign businessmen regard as arbitrary and not related to actual costs, especially for exports, and a de facto dual currency system. In a memorandum backing its application presented to GATT last month, China said it was gradually reforming its economic system and replacing mandatory instruction with "guidance planning" and economic levers. The diplomat said that, to join GATT, China had much to do. REUTER 

NO BUNDESBANK POLICY CHANGES EXPECTED THURSDAY

The Bundesbank is unlikely to change its credit policies at its central bank council meeting on Thursday, as exchange rates and short-term interest rates have stabilized over the past few weeks, money market dealers said. Attention in the money market is focused on tomorrow's tender for a securities repurchase pact, from which funds will be credited on Thursday, when an earlier pact expires, draining 16 billion marks from the system. The tender was announced last Friday, because carnival festivities closed banks in Duesseldorf yesterday, and will close banks here this afternoon. Because of the disruption to business from carnival, minimum reserve figures for the start of the month are unrealistic, making it difficult for banks to assess their needs at the tender. Dealers said the Bundesbank would want to inject enough liquidity in this week's pact to keep short-term rates down. But because of uncertainty about banks' current holdings, the Bundesbank may well allocate less than 16 billion marks this week, and top it up if necessary at next week's tender. "I would not be surprised if the Bundesbank cuts the amount a little, to say 14 or 15 billion marks," one dealer said. "They would then stock it up at the next tender when the need is clearer," he added. An earlier pact expires next week, draining 8.5 billion marks from the system. Banks also face a heavy but temporary drain this month from a major tax deadline for customers. Banks held 52.0 billion marks on February 27 at the Bundesbank, averaging 51.0 billion over the whole month, just clear of the 50.5 billion February reserve requirement. Call money traded today at 3.85/95 pct, up from 3.80/90 yesterday. REUTER 

TAIWAN BANKS ASKED TO TAKE PART IN INDONESIA LOAN

Chase Manhattan Asia Ltd of Hong Kong has approached Taiwan banks to take part in a syndicated loan of 300 mln U.S. Dlrs to finance a liquefied natural gas (LNG) project in Indonesia, local banking sources said. The project calls for construction of a 400 mln U.S. Dlr facility which could produce two mln tonnes of LNG for supply by Taiwan's state-owned Chinese Petroleum Corp . This was the first time Taiwanese banks, including the Bank of Taiwan and Bank of Communications, were invited to form a syndicated loan, they added. Pertamina has initialled a 20-year contract with Chinese Petroleum Corp <CPC> for the supply of 1.5 mln tonnes of LNG for Taiwan starting October 1989, a CPC official said. CPC is building an LNG receiving terminal in southern Taiwan city of Kaohsiung at a cost of 820 mln U.S. Dlrs. The terminal will be completed in mid-1989. A Taiwanese banker said"It will be a good idea for our banks to take part in the loan if we want to start in the international lending market." REUTER 

COUNCIL OF EUROPE ISSUES LUXEMBOURG FRANC BOND

The Council of Europe is issuing a 125 mln luxembourg franc private placement bond carrying a 7-1/4 pct coupon and priced at par, lead manager Banque Internationale a Luxembourg SA (BIL) said. The non-callable, bullet issue maturing in August 1992 follows an earlier private placement bond announced last month for 250 mln francs but with the same conditions. The new issue is for payment on March 31 and coupon payments annually on August 11, with the first coupon a long coupon. REUTER 

ITALY CONSUMER PRICES RISE 0.4 PCT IN FEBRUARY

Italy's consumer price index rose 0.4 pct in February compared with January after rising 0.6 pct in January over December, the national statistics institute (Istat) said. The year-on-year rise in February was 4.2 pct down from 4.5 pct in January and compared with 7.6 pct in February 1986. Istat said its consumer prices index for the families of workers and employees (base 1985) was 109.1 in February against 108.7 in January and 104.7 in February 1986. REUTER 

MOBIL PLAN TO OPEN PEKING OFFICE, CHINA DAILY SAYS

Mobil Corp <MOB.N> of the U.S. Plans to open an office in Peking to develop oil exploration opportunities in China, the China Daily said. It quoted Mobil president Richard Tucker, currently in Peking, as saying he is optimistic about investment prospects in China and that Peking will continue to encourage foreign private businesses to invest here. It said Mobil bought 73 mln dlrs of crude oil and oil products from China in 1986 and sold it lubricant and fertiliser, but gave no more details. REUTER 

EC ISSUES 600 MLN FRENCH FRANC EUROBOND

The European Community (EC) is issuing a 600 mln franc 8-3/4 pct bond due April 7, 1997, at 99-1/2 pct, lead manager Banque Nationale de Paris said. Fees total two pct, with 1-3/8 pct for selling and 5/8 pct for management and underwriting combined. Payment date is April 7, denominations are of 10,000 and 50,000 francs and listing is in Luxembourg and Paris. REUTER 

KLM TO TAKE 15 PCT STAKE IN AIR UK

KLM Royal Dutch Airlines <KLM.A> said it agreed to take a 15 pct stake in Air U.K. Ltd, a subsidiary of British and Commonwealth Shipping Plc <BCOM.L>, in a transaction worth around two mln stg. A KLM spokesman said KLM already cooperated closely with Air UK, which runs 111 flights a week to Amsterdam's Schipol airport from nine UK cities. British and Commonwealth Shipping said last week it held preliminary talks about a KLM minority stake in Air U.K. But gave no further details. KLM said it hoped the move would attract more British feeder traffic to Amsterdam Airport. REUTER 

AIRBUS SIGNS ONE BILLION DLR JAPANESE CONTRACT

The European <Airbus Industrie> consortium has signed a one billion dlr contract to sell 10 A320 short-haul jets to <All Nippon Airways> of Japan, with an option on the sale of a further 10 planes, an Airbus spokesman said today. The 10 planes on firm order will be delivered between September, 1990 and November, 1991, and will be powered either by CFM-56-5S engines made by the Franco-U.S. <CFM International> consortium, or V2500S engines built by the <International Aero Engine> group. The spokesman declined to comment on a New York Times report that Airbus is about to announce a sale to American Airlines. But industry sources said American was about to announce the purchase of 25 wide-bodied planes from Airbus, as well as 15 747s from Boeing Co <BAN>. Airbus has already signed large deals with Pan Am Corp <PNN>, NWA Inc <NWA> and Eastern Airlines Inc <EALN>, as well as a smaller contract with <Continental Airlines>. The A320 made its first flight on February 22 and is not due to enter commercial service until March next year. The All Nippon purchase brings the total number of commitments to the A320 to 439 from 16 airlines, comprising 275 firm orders and 164 options. REUTER 

FRENCH BOND COMMITTEE APPROVES THREE ISSUES

The French domestic bond issuing committee said it has approved three new issues totalling 1.8 billion francs. Credit Lyonnais will lead manage a 1.2 billion franc issue for the Caisse Centrale de Credit Cooperatif. Banque Francaise de l'Agriculture will lead, with Union de Garantie et de Placement, a 300 mln franc issue for its own account. Caisse Centrale des Banques Populaires will lead a 300 mln issue for the Groupement des Industries pour le Batiment et Travaux Publics. No further details were immediately available. REUTER 

DEGUSSA COMBINES PHARMACEUTICAL INTERESTS

Degussa AG <DGSG.F> is combining its foreign and domestic pharmaceutical activities into the Frankfurt-based <Asta Pharma AG>, so as to promote its business in that sector, the company said. Group consolidated turnover in Degussa's pharmaceuticals sector rose to 380 mln marks in 1985/86 to September 30 from 377 mln marks in the preceding year, the company said. Turnover from all pharmaceutical interests, including minority holdings, was 700 mln marks in 1985/86, somewhat higher than in the preceding year. The company did not disclose exact 1984/85 results in that sector, a spokesman said. REUTER 

U.K. RESERVES SHOW UNDERLYING RISE IN FEBRUARY

Britain's gold and currency reserves showed an underlying rise of 287 mln dlrs in February, after a 72 mln dlrs rise in January, the Treasury said. The underlying trend, which is a guide to Bank of England operations to support the pound on foreign exchanges, is net of borrowings and repayments. This was above market expectations for a 100 mln dlrs rise. The Treasury said the Bank of England used the opportunity of strong demand to rebuild reserves after losses last autumn and said the underlying rise was still relatively modest. Actual reserves rose by 305 mln dlrs in February to 22.26 billion dlrs, after rising 29 mln in January to 21.95 billion. Accruals of borrowings under the exchange cover scheme were 36 mln dlrs last month, after 163 mln in January, while repayments were 16 mln dlrs after the previous 151 mln, a Treasury spokesman said. Capital repayments totalled two mln dlrs. In January, capital repayments totalled 14 mln dlrs, with a valuation change that resulted in a fall of 41 mln dlrs due to the quarterly rollover from the European Monetary Cooperation Fund swap. The Treasury would not comment on the Bank of England's market operations, but currency traders reported moderate Bank of England intervention to curb upward pressure on the pound today. A Treasury spokesman, commenting on the reserves figures, said that the government does not want sterling either to rise too far or to fall substantially from current levels. He noted that the Chancellor of the Exchequer Nigel Lawson stressed this after the recent Paris currencies meeting. REUTER 

COMALCO SAYS LOWER COSTS HELP RETURN TO PROFITS

Comalco Ltd said its return to profit reflected reduced costs, improved primary aluminium prices and its withdrawal from a Japanese smelter venture. It said the earlier reported 57.1 mln dlr profit for the year ended December 31 against a 69.13 mln dlr loss in 1985 was also aided by lower interest rates on U.S. Dollar debt and greater sales of bauxite and aluminium. Comalco said it expected to pay at least a four cents per share final dividend, delayed until July 1 to take advantage of proposed dividend imputation laws. This would make five cents for the year against a first and final of one cent in 1985. Comalco said the aluminium industry continues to suffer from low prices and excess capacity, though the weak Australian dollar had helped earnings. Comalco's Commonwealth Aluminium Corp unit said earlier it has conditionally agreed to sell its Goldendale smelter in Washington, and port facilities at Portland, Oregon to Columbia Aluminium Corp. Comalco said its extraordinary provision of 27.3 mln dlrs costs for Goldendale losses and closure may be reduced if the sales agreement were completed. REUTER 

ULTRAMAR SELLS U.K. MARKETING UNITS FOR 50 MLN STG

Ultramar Plc <UMAR.L> said it had reached agreement in principle to sell its wholly owned U.K. Marketing companies to Kuwait Petroleum Corp for around 50 mln stg. Ultramar's marketing units include <Ultramar Golden Eagle Ltd> which in 1985 made a profit of around 1.4 mln stg before financing and group administration charges. A small loss was recorded for the first nine months of 1986. The sale is due to take place on April 1 with the proceeds intended to reduce group debt in the short term. But Ultramar said the funds would ultimately be used for further development of its core businesses in the U.K. And North America. REUTER 

HONG KONG M3 RISES 2.2 PCT IN JANUARY

Hong Kong's broadly defined M3 money supply rose 2.2 pct to 607.17 billion H.K. Dlrs in January, after a 3.1 pct rise in December, for a year-on-year rise of 23.3 pct, the government said in a statement. Local currency M3 rose 3.6 pct to 280.36 billion dlrs from December when it was up 3.4 pct from November, for a rise of 16.3 pct on the year. Total M2 rose 3.3 pct to 535.26 billion dlrs in January from December when it rose 3.5 pct on the previous month. Local M2 rose 4.7 pct to 249.03 billion dlrs in January from December when it climbed 4.2 pct. Total M2 and local M2 rose 32.5 pct and 23.9 pct on the year-ago month, respectively. Total M1 rose 12 pct to 62.84 billion dlrs in January after a 5.0 pct rise the previous month. Local M1 rose 12.3 pct to 57.97 billion dlrs after a 6.2 pct rise. Total M1 and local M1 year-on-year growth was 32.5 and 32.6 pct, respectively. Total loans and advances rose 3.3 pct to 517.19 billion dlrs from December when they rose 1.2 pct. Loans for financing Hong Kong's visible trade rose 3.4 pct to 36.72 billion dlrs after a 1.8 pct rise in December. REUTER 

WOOLWORTH, UNDERWOODS FAIL TO AGREE ON BID

<Underwoods Plc> said it had not been possible to agree terms on a bid to be made by Woolworth Holdings Plc <WLUK.L> during talks. The two companies had been holding exploratory discussions. No spokesman for either company was immediately available to say why terms could not be agreed, nor whether the possibility of a bid was now being abandoned. Last week, Underwoods shares rose 49p to 237p ahead of any announcement of the talks. The announcement today brought them back down to 214p from last night's close at 241p. Woolworth was unchanged at 758p. REUTER 

NO BUNDESBANK POLICY CHANGES EXPECTED THURSDAY

The Bundesbank is unlikely to change its credit policies at its central bank council meeting on Thursday, as exchange rates and short-term interest rates have stabilized over the past few weeks, money market dealers said. Attention in the money market is focused on tomorrow's tender for a securities repurchase pact, from which funds will be credited on Thursday, when an earlier pact expires, draining 16 billion marks from the system. The tender was announced last Friday, because carnival festivities closed banks in Duesseldorf yesterday, and will close banks here this afternoon. Because of the disruption to business from carnival, minimum reserve figures for the start of the month are unrealistic, making it difficult for banks to assess their needs at the tender. Dealers said the Bundesbank would want to inject enough liquidity in this week's pact to keep short-term rates down. But because of uncertainty about banks' current holdings, the Bundesbank may well allocate less than 16 billion marks this week, and top it up if necessary at next week's tender. "I would not be surprised if the Bundesbank cuts the amount a little, to say 14 or 15 billion marks," one dealer said. "They would then stock it up at the next tender when the need is clearer," he added. An earlier pact expires next week, draining 8.5 billion marks from the system. Banks also face a heavy but temporary drain this month from a major tax deadline for customers. Banks held 52.0 billion marks on February 27 at the Bundesbank, averaging 51.0 billion over the whole month, just clear of the 50.5 billion February reserve requirement. Call money traded today at 3.85/95 pct, up from 3.80/90 yesterday. REUTER 

U.K. MONEY MARKET SHORTAGE FORECAST REVISED UP

The Bank of England said it revised up its forecast of the shortage in the money market today to around 500 mln stg from its initial estimate of 350 mln. REUTER 

PAKISTAN TO RETENDER FOR RBD PALM OIL TOMORROW

Pakistan will retender for 6,000 tonnes of refined bleached deodorised palm oil for second half March shipment tomorrow, after failing to take up offers today, palm oil traders said. REUTER 

MOBIL PLANS TO OPEN OFFICE IN PEKING

Mobil Oil Corp of U.S. Plans to open an office in Peking to develop oil exploration opportunities in China, the China Daily said. It quoted Mobil president Richard Tucker, currently in Peking, as saying he is optimistic about investment prospects in China and that Peking will continue to encourage foreign private businesses to invest here. It said Mobil bought 73 mln dlrs of crude oil and oil products from China in 1986 and sold it lubricant and fertiliser, but gave no more details. Reuter 

MERRILL MANDATED FOR IEL U.S. NOTE.

Merrill Lynch Capital Markets said it received a mandate from Industrial Equity Ltd (IEL) of Australia to arrange a letter of credit facility in support of 100 mln dlrs of medium term notes and U.S. Commercial paper to be sold in the U.S. Domestic market. Merrill, which will be the dealer for the medium term notes and commercial paper, said this was the first facility of its kind. Sumitomo Trust and Banking Co Ltd has agreed to provide the letter of credit. The letter of credit has a five year term, with an evergreen feature allowing for extension at the support banks' option. The notes and paper will be issued by IEL's Sydney-based subsidiary, IEL Finance Ltd. The letter of credit will be underwritten by a group of banks who will be paid a 20 basis point facility fee and a 25 basis point utilisation fee. IEL itself is 51 pct owned by Brierley Investments Ltd of New Zealand, Merrill Lynch said. REUTER 

EC, EURATOM FRENCH FRANC EUROBONDS EXPECTED

The European Community (EC) and Euratom, the European atomic energy agency, are expected to issue French franc eurobonds this month, a Treasury spokesman said. Other eurofranc bonds this month are likely to include issues by a bank and a company, both unidentified, but no other details were available. The spokesman said the March calendar would be flexible, to take account of market conditions. REUTER 

AUSTRALIAN POLICE ARREST FORMER WESTPAC CLERK

Australian police said they charged a former currency clerk of Westpac Banking Corp <WSTP.S> with misappropriating 8,300 dlrs in July in an alleged foreign-exchange fraud. A spokeswoman for the New South Wales Corporate Affairs Commission (CAC) said the arrest was part of its investigation stemming from complaints from Westpac and <Kleinwort Benson Australia Ltd>. CAC and Westpac officials said they were working out how much money was involved, but said press reports it was as much as five mln dlrs were probably exaggerated. Reuter 

Unilever Plc and Nv combined 1986 pre-tax profit 1.14 billion stg vs 953 mln.

GERMAN BANKS SEEK GREATER BRAZIL LINK WITH IMF

West German banks would like Brazil to work more closely with the International Monetary Fund (IMF) with a view to seeking a solution to the country's debt problems, senior West German banking sources said. The sources, speaking ahead of a meeting later today between Brazilian Finance Minister Dilson Funaro and his West german counterpart Gerhard Stoltenberg, also believed Brazil should come up with a convincing economic recovery program. Their comments echoed those of British Chancellor of the Exchequer Nigel Lawson, who met Funaro yesterday. Funaro is currently on a European trip seeking to involve governments in negotiations with commercial banks on rescheduling part of Brazil's foreign debt, which totals some 109 billion dlrs. But Lawson told Funaro Brazil had to solve its problems with the banks rather than governments. Diplomatic sources in Bonn said Funaro would leave early tomorrow morning for Zurich after meeting Stoltenberg this evening. Funaro has rejected suggestions for negotiations with the IMF and said there is no question of Brazil agreeing to an austerity program with the Fund. However, the West German banking sources said institutions here felt it was particularly important that Brazil presented a credible recovery program and that there be a "rapprochement" with the IMF. "Consultations are the least that can be expected," said one banker. Funaro's trip follows the decision by Brazil 10 days ago to suspend interest payments on 68 billion dlrs of commercial debt. It has also frozen bank and credit lines deposited by foreign banks and institutions worth about 15 billion dlrs. One senior banker closely involved in Brazilian debt negotiation offered qualified support for a call from Funaro for a change in the structure of the advisory committee of banks which has coordinated Brazilian debt since 1982. Funaro said yesterday that U.S. Banks, holding 35 pct of Brazilian debt, were over-represented on the 14-bank advisory committee with 50 pct of the committee seats. He said Brazil might adopt a different approach to its creditor banks, involving separate discussions with the regions. Such a move would be in Brazil's interest, since European banks have been more supportive than U.S. Banks of alternative debt solutions, such as interest capitalisation. The senior banker was strongly opposed to a purely regional approach, saying: "There must be one committee and one solution." But he added: "There must be an understanding that special requests from special regions be taken into account." German banks had objected to the fact that the idea of interest capitalisation had been rejected in the committee. It was imperative that alternative options be considered. "The menu must become richer," the banker said. Banking sources said commercial banks would not be involved in today's talks with Funaro. A spokesman for the Bundesbank in Frankfurt said the central bank would also not be represented. West German banks have taken a more relaxed attitude to the Brazilian suspension of interest payments than institutions in the United States, because of their lower exposure. According to Bundesbank data from September last year, West German bank exposure to Latin America of slightly under 16 billion marks represented less than five pct of all foreign credit. REUTER 

AQUINO ANNOUNCES LAND REFORM PLANS

President Corazon Aquino announced government plans to devote to land reform an estimated 24 billion pesos (about one billion U.S. Dlrs) raised from the sale of failed businesses taken over by the government. Aquino said she was willing to have her family's sugar estate broken up in compliance with Philippine land reform programmes but hinted it would not be offered voluntarily. "Whatever laws will be enacted, I say that nobody is above the law and that includes me. My brothers and sisters are Filipino citizens ... We will abide by whatever laws are enacted as far as sugar land is concerned," she told reporters. A committee was now formulating guidelines for the plan, including the question of whether land operated by multinational companies should also be covered, she added. Agrarian Reform Secretary Heherson Alvarez said recently the government planned to distribute 9.7 mln hectares of land to impoverished farmworkers under a revised land reform programme. The plan, requiring about 1.7 billion dlrs, now also covers sugar and coconut areas, apart from rice and corn lands, he said. It was expected to benefit about three mln landless peasants, he added. Land reform pressure groups have called on Aquino to break up her family's 6,000-hectare sugar estate to demonstrate her sincerity on the issue political analysts have called one of the most pressing problems facing the Philippines. It was not known whether government would wait for the Congress to convene by mid-year to formalise the programme or have Aquino carry it out through an executive order. Under the plan, government will purchase land mainly from landowners with holdings over seven hectares. It will include vacant and untenanted farmland as well as 50,000 hectares seized from former associates of deposed president Ferdinand Marcos. REUTER 

OPEC WITHIN OUTPUT CEILING, SUBROTO SAYS

Opec remains within its agreed output ceiling of 15.8 mln barrels a day, and had expected current fluctuations in the spot market of one or two dlrs, Indonesian Energy Minister Subroto said. He told reporters after meeting with President Suharto that present weakness in the spot oil market was the result of warmer weather in the U.S. And Europe which reduced demand for oil. Prices had also been forced down because refineries were using up old stock, he said. He denied that Opec was exceeding its agreed production ceiling. Asked what Opec's output level was now, he replied: "Below 15.8 (mln barrels per day)." He did not elaborate. He said there appeared to have been some attempts to manipulate the market, but if all Opec members stick by the cartel's December pricing agreement it would get through present price difficulties. He predicted that prices would recover again in the third and fourth quarters of 1987. He also reiterated that there was no need for an emergency Opec meeting. He said Opec had expected to see some fluctuations in the spot price. "We hope the weak price will be overcome, and predict the price will be better in the third and fourth quarters." Refiners, he said, appeared to have used up old stock deliberately to cause slack demand in the market and the price to fall. But Opec would get through this period if members stuck together. REUTER 

U.K. MONEY MARKET GIVEN 24 MLN STG ASSISTANCE

The Bank of England said it provided 24 mln stg help to the money market in the morning session. This compares with the bank's upward revised shortage forecast of around 500 mln stg. The central bank purchased bank bills outright comprising two mln stg in band one at 10-7/8 pct and 22 mln stg in band two at 10-13/16 pct. REUTER 

COUPON ON MITSUBISHI WARRANT BOND CUT

The coupon on the 300 mln dlr equity warrant bond deal for Mitsubishi Estate Co Ltd has been cut to three pct from the 3-1/4 pct initially indicated, Nikko Securities Co (Europe) Ltd said as lead manager of the deal. Exercise price for the warrants has been fixed at yen 2,817 representing a 2.53 pct premium over the latest Tokyo close adjusted for a free share issue this month. Foreign exchange fix is yen 154.65/dlr and payment date on the deal is March 20. REUTER 

JAPAN'S UNEMPLOYMENT RATE SEEN RISING TO 3.5 PCT

Japan's unemployment rate is expected to continue to climb to about 3.5 pct within the next year from January's three pct record, senior economists, including Susumu Taketomi of Industrial Bank of Japan, said. December's 2.9 pct was the previous worst level since the government's Management and Coordination Agency began compiling statistics under its current system in 1953. "There is a general fear that we will become a country with high unemployment," said Takashi Kiuchi, senior economist for the Long-Term Credit Bank of Japan Ltd. The government, which published the January unemployment figures today, did not make any predictions. "At present we do not have a forecast for the unemployment rate this year, but it is difficult to foresee the situation improving," a Labour Ministry official said. Finance Minister Kiichi Miyazawa said the government had expected the increase and had set aside money to help 300,000 people find jobs in fiscal 1987 beginning in April. Prime Minister Yasuhiro Nakasone told a press conference the record rate underlines the need to pass the 1987 budget which has been held up by opposition to proposed tax reforms. The yen's surge has caused layoffs in the mainstay steel and shipbuilding industries. Other export-dependent industries, such as cars and textiles, have laid off part-time employees and ceased hiring, economists said. Although the growing service industry sector has absorbed a great number of workers the trend is starting to slow down, said Koichi Tsukihara, Deputy General Manager of Sumitomo Bank Ltd's economics department. However, other economists disagreed, saying the service sector would be able to hire workers no longer needed by the manufacturing sector over the next five years. Reuter 

TAIWAN REJECTS TEXTILE MAKER PLEA ON EXCHANGE RATE

Central bank governor Chang Chi-cheng rejected a request by textile makers to halt the rise of the Taiwan dollar against the U.S. Dollar to stop them losing orders to South Korea, Hong Kong and Singapore, a spokesman for the Taiwan Textile Federation said. He quoted Chang as telling representatives of 19 textile associations last Saturday the government could not fix the Taiwan dollar exchange rate at 35 to one U.S. Dollar due to U.S. Pressure for an appreciation of the local currency. The Federation asked the government on February 19 to hold the exchange rate at that level. Reuter 

JAPANESE DEMAND FOR U.K. GILTS SEEN RISING

Japanese investor interest in British gilt-edged securities is growing rapidly due to expectations sterling will remain stable despite the drop in oil prices, and on calculations gilt prices will firm, bond managers said. Japanese, British and U.S. Securities houses have been expanding inventories of gilts to meet demand from investors seeking capital gains, including city and trust banks, which have been active on the U.S. Treasury market, they said. Dealing demand for gilts with coupons around 10 pct has been getting stronger, the general manager of the local office of a British securities firm said. On the other hand, major long-term investors such as Japanese insurance companies are not very enthusiastic about buying British securities ahead of the March 31 close of the Japanese financial year, traders said. These investors, who must convert yen into sterling through dollars for British securities purchases, appear to be buying in London rather than in Tokyo, a bond manager for a British securities house said. The sterling/yen rate was about 240.34/44 today, up from 234.50 at the start of the calendar year and a narrow range of 230 to 234 late last year. Many bond traders in Tokyo are doubtful that sterling will further appreciate steeply. However, gilts may benefit from further declines in U.K. Interest rates, they said. "The U.K. Government is in no hurry to issue more bonds, suggesting further market improvement and continuing demand from brokers here," said Laurie Milbank and Co assistant manager Machiko Suzuki. She said she expected the yield on the actively traded 11-3/4 pct gilt due March 2007 to dip below 9.5 pct, against 9.581 pct at yesterday's close in London. REUTER 

DAIMLER OUTPUT COULD BE AFFECTED BY DISPUTE

Daimler-Benz AG [DAIG.F] said its car production could fall by 150 cars a day in the foreseeable future if works councils continue to refuse to approve the firm's requests for employees to work overtime when necessary. A company spokesman said the works council at Daimler's Unterturkheim plant, which makes axles and other components for Daimler cars, has withheld approval for overtime since the beginning of the month. The IG Metall metalworkers union in the state of Baden-Wuerttemberg has called on works councils in the state to reject overtime in a bid to get industry to employ more workers. The Daimler spokesman said the lack of overtime work at the Unterturkheim plant could eventually affect car output at other plants but added he was unable to say when this might occur. A spokesman for Dr.-Ing. H.C. F. Porsche AG [PSHG.F], which is also located in Baden-Wuerttemberg, said he did not think Porsche would suffer any loss of production because of a ban on overtime by its own works councils. A strike by IG Metall in Baden-Wuerttemberg in 1984 closed down the German car industry for about seven weeks as the union sought to win a 35-hour working week for its members. It later settled for a reduction in the working week to 38.5 hours. The spokesman said Daimler's total output of cars was currently around 2,500 a day. REUTER 

HK HOTELS SOARS ON TAKEOVER SPECULATION

The price of Hongkong and Shanghai Hotels Ltd <SHLH.HK>'s stock soared on speculation of a takeover battle between major shareholders the Kadoorie family and the Evergo Industrial Enterprise Ltd <EVGH.HK> group, stock brokers said. They noted heavy buying in Hk Hotel shares after an announcement by Evergo's <China Entertainment and Land Investment Co Ltd> unit that it bought about 20 pct of Hk Hotels from the firm's deputy chairman David Liang for 1.06 billion dlrs. The stock rose 12 H.K. Dlrs to 62 dlrs today. Thomas Lau, Evergo's executive director, declined comment on whether the group is seeking a further stake in Hk Hotels. But he told Reuters the group will hold the 20 pct stake bought from Liang as long term investment. He said Evergo "was attracted by the underlying strength of Hk Hotels." Analysts said Evergo may be looking for a possible redevelopment of the Peninsula Hotel, one of Asia's best known hotels, and another site on Hong Kong island. Both are owned by Hk Hotels. <Lai Sun Garment Co ltd> yesterday said it acquired a 10 pct stake in Hk Hotels from Liang for 530 mln dlrs. Lau denied any link between China Entertainment and Lai Sun on their acquisitions of the Hk Hotels stake. "It is purely coincidence," he said. But analysts were not so certain, saying that the Evergo group, which has a reputation as a corporate raider, may team up with Lai Sun Garment for a takeover. Lau also denied any contact with the Kadoorie family, which analysts estimate has more than 20 pct of Hk Hotels. Michael Kadoorie is chairman of Hk Hotels. Lau said two representatives of Evergo will be nominated to the Hk Hotels board. A source close to the Kadoorie family said the family has not considered any countermoves so far. Analysts said it would be difficult for Evergo and the Kadoorie family to cooperate because of different management styles. "Evergo may want to split up the hotel management and property developments of Hk Hotels but that strategy may not fit the conservative Kadoorie family," said an analyst who asked not to be named. Another analyst noted the price of Hk Hotels had been distorted by the takeover talks because its net asset value is only worth about 50 dlrs a share. The offers by Evergo and Lai Sun were for 53 dlrs a share, though that is well below the current trading price. Trading was suspended today in shares of Lai Sun, Evergo, China Entertainment and the group's associate <Chinese Estates Ltd>. Chinese Estates lost 25 cents to 20.15 dlrs yesterday, China Entertainment five to 8.60 dlrs and Evergo one to 74 cents. Lai Sun gained 50 cents to 70.50 dlrs. REUTER 

OERLIKON UNIT REJECTS DUTCH PATENT CHARGES

Oerlikon-Buehrle Holding AG <OEBZ.Z> unit <Contraves AG> unequivocally rejects charges by NV Philips Gloeilampenfabrieken <PGLO.AS> subsidiary <Hollandse Signaalapparaten BV> that it violated patent rights in a radar system developed by the latter, a Contraves official said. Max Baumann, a member of the Contraves board, told Reuters his company was awaiting judgement in the case before a Zurich court "quite calmly," but he declined to discuss it in detail. Signaal claims Contraves included the Dutch firm's patented X/KA double-frequency radar in an anti-aircraft system. Baumann said he expected judgement to take several months at least. REUTER 

CASSA DI RISPARMIO DI ROMA LAUNCHING CD PROGRAM

Italian savings bank Cassa di Risparmio di Roma is launching a 100 mln dlr euro-certificate of deposit issuance program, Chase Investment Bank Ltd said as arranger. Chase will also be a dealer for the program, along with Swiss Bank Corporation International Ltd. Chase Manhattan Bank NA, London Branch, will be issuing and paying agent. The paper will be issued in denominations of 500,000 and one mln dlrs. REUTER 

BRYSON PAYS 5.4 MLN DLRS FOR CENERGY CORP STAKE

<Bryson Oil and Gas Plc> said it paid a cash consideration of around 5.4 mln dlrs for about 8.6 pct of <Cenergy Corp>, a U.S. Oil and gas exploration and production company. Bryson said its board has been considering a number of possible investments to expand the company's interests and believes the opportunity to acquire an investment in Cenergy provides a suitable extension to its existing U.S. Interests. Cenergy reported a net loss of 7.27 mln dlrs in the nine months to September 30, 1986 while total stockholders equity on the same date was 40.72 mln dlrs. REUTER 

REAGAN APPROVAL RATING FALLS TO FOUR-YEAR LOW

President Reagan's approval rating fell after the Tower Commission criticised his handling of the Iran arms scandal, a New York Times/CBS poll indicates. The poll found 51 pct of those surveyed thought he was lying when he said he did not remember if he had approved the original arms sales to Iran and 35 pct thought he was telling the truth. The poll found 42 pct of those surveyed approved Reagan's handling of his job and 46 pct disapproved. The approval rating was the lowest since January 1983, when 41 pct approved of the way Reagan was doing his job. REUTER 

REGAN DEPARTURE MAKES 3RD VOLCKER TERM LIKELY

Last week's White House shake-up has increased the odds that Federal Reserve Board chairman Paul Volcker, a symbol of strength in a government reeling from the arms-to-Iran scandal, will serve a third term, sources close to the Fed say. But they said that no decision on the appointment, which must be filled this August, has been taken by the White House and Volcker too has not made up his mind. Former White House Chief of Staff Donald Regan, who resigned last week when ex-senator Howard Baker was named as his replacement, was implacably opposed to Volcker and tried often to undermine him. It is an open secret in Washington that Regan tried to ensure that Volcker, first appointed in 1979 by President Carter, will not be offered a third term by President Reagan. Only Volcker's key allies in the Reagan administration, Vice-President George Bush and Treasury Secretary James Baker, kept Regan's recent maneuvering at bay, the sources said. Sources close to the administration say Regan leaked a story, quickly shot down by others in the administration, that Beryl Sprinkel, chairman of the council of economic advisers, had been chosen to replace Volcker. But as the administration's credibility was increasingly under fire, it became clear that Regan's power to bring about such changes was on the wane. The sources said New White House Chief of Staff Howard Baker has a very good relationship with his namesake at the Treasury Department and is likely to respect his views on the Fed chairmanship. As a moderate Republican, Baker is also unlikely to share the right-wing's opposition to Volcker. "This new White House is going to need all the strength it can get," said one source when asked about the possibility of Volcker's reappointment. Paul Volcker is deeply respected in financial markets both in the United States and around the world. At a time when the stability of the dollar and the viability of major debtor nations are in question, Volcker's departure would definitely undermine U.S. leadership, foreign exchange analysts say. U.S. officials say Volcker works very closely with Treasury Secretary Baker on issues like international debt and global economic cooperation. The two men seem only to differ on how far to deregulate the banking industry, but recent statements by Volcker, in which he adopted a more liberal attitude on deregulation, signalled the politically-independent central bank is coming around at least partially to the Treasury position. And a recent statement by a Reagan administration official that the two men saw "exactly eye-to-eye" on the dollar was seen as an indication of Baker's support for the Fed chairman. Baker is understood to have played a key role in Volcker's reappointment to the Fed in mid-1983. The sources said Baker respects Volcker and when appointed Treasury Secretary in February 1985, he decided to ensure a good working relationship, in part because he believed the two key government economic institutions have to work closely. Regan, Treasury Secretary during President Reagan's first term, was formerly head of Wall Street's largest brokerage firm Merrill Lynch and came to Washington determined to be America's pre-eminent economic spokesman. He developed a deep antipathy for Volcker, whose political skills undermined that ambition, and who financial markets took much more seriously. But the sources said Volcker would have to be invited to stay. "Is the president going to ask him? he wouldn't stay otherwise," said one. "He'd have to be asked," said Stephen Axilrod, formerly staff director of monetary policy at the Fed and now vice-chairman of Nikko Securities Co. International. Otherwise, the list of potential candidates is not awe-inspiring. And if Volcker left this Augsut, he would leave behind one of the most inexperienced Fed Boards in years. Many analysts believe this lack of collective experience -- the four sitting members were all appointed within the last three years -- is dangerous, coming at a time when the global economy is threatened by instability. An experienced successor, therefore, would seem a necessity. One widely mentioned possibility is Secretary of State George Shultz, whose experience as Treasury Secretary under Preesident Nixon and background as a trained economist would make him ideal. But Shultz too may have been damaged by the arms-to-Iran scandal, while vice-chairman Manuel Johnson is regarded at 37 years old as too young for the job. Other potential candidates include economist Alan Greenspan, frequently an informal presidential economic adviser, New York Fed President E. Gerald Corrigan, Federal Deposit Insurance Corp chairman William Seidman, and Sprinkel. Long a Regan protege, Sprinkel's chances may be damaged by his patron's departure from the White House. Reuter 

GM <GM> CUTS WAGE BOOSTS FOR SALARIED EMPLOYEES

General Motors Corp has changed its method of disbursing merit raises for salaried employees and is reducing the size of the merit raise pool to 3.5 pct of the total amount available for salaries from 5.5 pct last year, a company spokesman said. He said GM will no longer include merit raises in the calculation of base pay but will make them simply lump-sum payments. As a result, the merit raises will not be included in the calculation of pensions and other benefits. The change affects about 109,000 salaried workers in the U.S. and Canada. GM last year eliminated cost of living increases for salaried workers, making pay increases based on merit alone. As a result of the new action, GM has effectively frozen the base pay rates of salaried employees. The spokesman said GM is making the change to remain cost-competitive with other U.S. automakers. GM is currently in thje midst of a program to cut employment of salaried workers by 25 pct. Reuter 

PRE-PAID LEGAL <PPD> GETS I.C.H. <ICH> FINANCING

Pre-Paid Legal Services Inc said it has signed a letter of intent under which it would receive financing from I.C.H. Corp. The company said under the proposed transaction I.C.H. would loan it up to 100 mln dlrs, and the loan balance would be convertible at any time by either party into Pre-Paid common stock at 11 dlrs per share. In addition, it said it would grant I.C.H. a five-year option to purchase new shares at the same price. It said the option would enable I.C.H. to acquire up to 500 pct plus one share of Pre-Paid common. Pre-Paid said until expiration of the option, and as long as Pre-Paid maintained a mutually agreeable combined loss and expense ratio, I.C.H. would, on Pre-Paid's request, exercise as much of the option as may be necessary to meet Pre-Paid's funding needs. The company said I.C.H. has requested the right to buy 90,909 Pre-Paid shares from Pre-Paid chairman Harland C. Stoneciphjer for 11 dlrs each. Stonecipher now owns or has the right to acquire 1,965,269 Pre-Paid shares and will agree to restrictions on the sale of his remaining shares, it said. The company saiod Stonecipher will remain chairman. Pre-Paid said the transactions are subject to approval by boards of both comnpanies and regulatory agencies. Reuter 

ASHTON-TATE <TATE> 4TH QTR NET

Shr 43 cts vs 30 cts Net 10.6 mln vs 5,967,000 Revs 62.9 mln vs 41.5 mln Avg shrs 200.7 mln vs 20.2 mln Year Shr 1.26 dlrs vs 85 cts Net 30.1 mln vs 16.6 mln Revs 210.8 mln vs 121.6 mln Avg shrs 23.9 mln vs 19.4 mln NOTE: Share adjusted for January 1987 two-for-one split. Reuter 

NEITHER SIDE OPTIMISTIC ON ROTTERDAM PORT ISSUES

Employers and the port union, FNV, are to meet again this afternoon to attempt a settlement of the six-week-old dispute in Rotterdam's general cargo sector, but neither side is optimistic, spokesmen for both sides told Reuters. Little progress was made in last night's three hours of talks, with both sides largely reiterating their positions. "There is still a very large gap between the employers and the FNV, and I can't say that we expect to reach any agreement. But at least we are still talking," a union spokesman said. Employers organization chairman, Jacques Schoufour, accused the FNV of intransigence in refusing to alter its stance at all over the past two months. "The FNV is not serious about our discussions and I am really not optimistic about it changing its point of view at all." "If we find this afternoon that the FNV still refuses to accept the necessary redundancies in the general cargo sector, then we will break off the talks and the redundancies may begin later this month," Schoufour said. The series of strikes, which employers say has cost them more than seven mln guilders in lost import business in the past six weeks, began on January 19 in protest at plans for 800 redundancies from the sector's 4,000 workforce starting with 350 this year. Late last month Social Affairs minister Louw de Graaf said unless the dispute was settled by yesterday he would withdraw the sector's 10 mln guilder annual labour subsidy. Both sides wrote to the minister yesterday setting out their cases, but Schoufour said he did not expect to hear from him before Wednesday at the earliest. Reuter 

AMR <AMR> TO HOLD PRESS CONFERENCE THIS MORNING

AMR Corp will hold a press conference this morning in New York at 0900 EST, a company spokesman said. He would not comment on the subject of the press conference, or would he confirm published reports that AMR will today announce a 2.5 billion dlr purchase of aircraft and engines. According to a New York Times report, AMR is expected to announce the purchase of 25 widebodied longrange A300's from <Airbus Industrie> and 15 Boeing Co <BA> 767's and the choice of General Electric Co <GE> to supply all 80 engines for the craft. The engine order alone, for 80 CF80C-2's, would be worth about 500 mln dlrs. The Airbus plane order would be worth about 1.25 billion dlrs and the Boeing order about 750 mln dlrs, according to the report. Reuter 

UNILEVER IMPROVES IN MOST SECTORS DURING 1986

The Unilever Plc and NV <UN.A> group saw improved performance in almost all sectors during 1986, the Anglo-Dutch group said in its results statement. Very good progress was made last year, while the recent acquisition of Chesebrough-Pond's Inc <CBM.N> was a significant addition which will greatly benefit the group in the years to come. Earlier, Unilever reported combined fourth quarter pre-tax profit of 276 mln stg, level with the year earlier period, making 1.14 billion stg compared with 953 mln for the 1986 full year. Unilever said it plans to change its depreciation policy to the more conventional practice of depreciating assets individually rather than depreciating fixed assets at average rates. The new method is expected to lead to a reduction in the accumulated provision for depreciation and thereby increase the net book value of tangible asssets by about 300 mln stg as at January 1, 1987. Unilever Plc shares are up 25p since yesterday at 2,575p in buoyant response to the results and share split proposal, though 1986 profits were not ahead of market forecasts, dealers added. REUTER 

U.S. LEADING INDICATORS FELL 1.0 PCT IN JAN AFTER REVISED 2.3 PCT DEC RISE

AMR CORP ORDERS 40 JETS FROM AIRBUS AND BOEING

U.S. LEADING INDEX FELL 1.0 PCT IN JANUARY

The U.S. index of leading indicators fell a seasonally adjusted 1.0 pct in January after a revised 2.3 pct December gain, the Commerce Department said. The department previously said the index rose 2.1 pct in December. The decline in January was the biggest for any month since July, 1984, when the index fell 1.7 pct. The January decrease left the index at 183.8 over its 1967 base of 100, and was led by a fall in contracts and orders for plant and equipment. A total of six of 10 indicators available for January contributed to the decline. Besides contracts and orders for plant and equipment, they were building permits, manufacturers' new orders for consumer goods, a change in sensitive materials prices, slower deliveries from vendors and higher average weekly claims for state unemployment insurance. Four of 10 indicators were positive, including stock prices, new business formation, average work week and money supply. The main factor for the December upward revision was new business formation. There was no revision in the 0.9 pct increase in the leading indicators index for November. The index of coincident indicators, which measures the current economy, fell 0.1 pct in January after increases of 0.7 pct in December and 0.2 pct in November. The index of lagging indicators, which measures past economic activity, rose 0.5 pct in January after a decrease of 0.5 pct in December and an increase of 0.2 pct in November. Reuter 

BRAZIL FINANCE MINISTER MEETS FRENCH OFFICIALS

Brazilian Finance Minister Dilson Funaro held separate meetings with French Finance Minister Edouard Balladur and Bank of France Governor Jacques de Larosiere on the second stage of a European mission to explain his country's latest debt crisis, French officials said. They declined to disclose details of the talks. Monetary sources described them as a preliminary diplomatic effort to see if France could help to negotiate financial concessions sought by Brazil from Western banks, governments and official lending agencies. REUTER 

BURLINGTON COAT FACTORY WAREHOUSE CORP <BCF> NET

Jan 31 end Shr 1.40 dlrs vs 1.10 dlrs Net 16.4 mln vs 12.9 mln Revs 196.2 mln vs 157.5 mln Reuter 

COFFEE PRICE FALL SHORT TERM - DUTCH ROASTERS

This morning's sharp decline in coffee prices, following the breakdown late last night of negotiations in London to reintroduce International Coffee Organization, ICO, quotas, will be short-lived, Dutch roasters said. "The fall is a technical and emotional reaction to the failure to agree on reintroduction of ICO export quotas, but it will not be long before reality reasserts itself and prices rise again," a spokesman for one of the major Dutch roasters said. "The fact is that while there are ample supplies of coffee available at present, there is a shortage of quality," he said. "Average prices fell to around 110 cents a lb following the news of the breakdown but we expect them to move back again to around 120 cents within a few weeks," the roaster added. Dutch Coffee Roasters' Association secretary Jan de Vries said although the roasters were disappointed at the failure of consumer and producer ICO representatives to agree on quota reintroduction, it was equally important that quotas be reallocated on a more equitable basis. "There is no absolute need for quotas at this moment because the market is well balanced and we must not lose this opportunity to renegotiate the coffee agreement," he said. "There is still a lot of work to be done on a number of clauses of the International Coffee Agreement and we would not welcome quota reintroduction until we have a complete renegotiation," de Vries added. With this in mind, and with Dutch roasters claiming to have fairly good forward cover, the buying strategy for the foreseeable future would probably be to buy coffee on a hand-to-mouth basis and on a sliding scale when market prices were below 120 cents a lb, roasters said. Reuter 

GREENWOOD RESOURCES <GRRL> SELLS COMPANY STAKE

Greenwood Resources Inc said it has sold its 4,300,000 common share majority holding in <New London Oil Ltd> of London to an affiliate of <Guinness Peat Group PLC> of London and an affiliate of <Sidro SA> of Belgium for a total of 1,700,0000 dlrs in cash. The company said it will apply the proceeds of the sale to support its line of credit and as part of a proposed debt restructuring with Colorado National Bancshares <COLC> and Greenwood shareholders. It said it will retain a seat on the New London board. Reuter 

AMR <AMR> TO ACQUIRE 40 LONG-RANGE JET AIRCRAFT

AMR Corp's American Airlines said it will buy 40 long-range jet aircraft to support international expansion, including routes in the Caribbean. Under one agreement, the airline said, it will acquire 15 Boeing Co <BA> 767-300 planes. Under a separate agreement, American will acquire A-300-600 aircraft from <Airbus Industrie>, a European consortium. The company's announcement included no value for the order. Published reports put the value of the aircraft order, including engines, at 2.5 billion dlrs. A total of 98 General Electric Co <GE> CF6-80C2 engines is involved in the orders, American Airlines said. The published reports valued the engines at five mln dlrs each. The company said it will acquire the planes and engines using rental leases that can be terminated on relatively short notice. The arrangement allows the airline to acquire the planes without adding to its debt, it explained. The Boeing 767s, to be delivered from February 1988 to October 1988, will be used on routes between the U.S. and Europe, American said. It said the Airbus A300s, scheduled for delivery from April 1988 through June 1989, will be assigned to the Caribbean, where American has developed a major new hub at San Juan, Puerto Rico. Reuter 

VDO UNIT AND THOMSON-CSF IN JOINT VENTURE

<VDO Luftfahrtgeraete Werk Adolf Schindling GmbH>, 75 pct owned by autoparts maker <VDO Adolf Schindling AG>, said it set up a joint venture with Thomson-CSF <TCSF.PA> of France to produce liquid crystal displays. It said in a statment that it held 20 pct of the new company called Eurodisplay and Thomson-CSF the remaining 80 pct. Thomson owns the remaining 25 pct of VDO Luftfahrtgeraete. The two companies have also agreed to pool their research on development, construction and assembly of the systems, for use in vehicles and aircraft, with General Electric Company <GEN> of the U.S. Reuter 

F.W. WOOLWORTH CO 4TH QTR SHR 1.78 DLRS VS 1.64 DLRS

HEINZ INTERESTED IN BUYING GUINNESS BREWING

H.J. Heinz <HNZ.N> chairman Tony O'Reilly would be interested in buying Guinness PLC <GUIN.L>'s brewery division if it were for sale, a spokesman said. The spokesman, reacting to Irish and British press reports, said "He continues to be interested were the group to offer the brewery side of Guinness for sale. But he has not put together a consortium, nor has he been buying shares." He was quoted by the Irish magazine Business and Finance as saying he would be interested if it came on the market and that he had the support of two international banks if he decided such a purchase might be worthwhile. In the magazine article, he suggested that if brewing profits were calculated to be in the region of 80 mln punts, the asking price would not be higher than 800 mln punts. "A multiple of ten times earnings would be the top whack for the brewing division in the current Guinness situation," he said. "This would mean an expensive exercise, right on the edge, but not impossible," he added. The deal would mean buying the Dublin, London, Nigerian and Malaysian breweries because "It could only be sold as an integral unit if it was going to be sold at all," O'Reilly said. Reuter 

EQUATORIAL COMMUNICATIONS <EQUA> TO HAVE LOSSES

Equatorial Communications Co said it expects to report losses of about 57 mln dlrs for the fourth quarter and 68 mln dlrs for the full year 1986 on revenues of about 10 mln dlrs for the quarter and 52 mln dlrs for the year. Equatorial said the losses will include a charge of about 45 mln dlrs from costs associated with the restructuring of its business, including adjustments to reflect the market value of transponders owned and leased by Equatorial and other reserves for inventory, receivables and excess facilities. Equatorial said the fourth quarter operating results will also include restructuring costs of about 5,500,000 dlrs, in addition to the 45 mln dlr charge. Equitorial also said that as of March One it is operating in technical default under its lease of transponders on the Galaxy III satellite due to its inabiliuty to maintain agreed-upon financial ratios. It said it is in talks with the lessors in an attempt to restructure lease obligations. Further, Equitorial said it is in default of two other oblitations in connection with the purchase or lease of transponders as a result of cross-default provisions. Equatorial said it has signed a memorandum of understanding for Contel Corp <CTC> to purchase 10 mln dlrs of Equatorial master earth stations, micro earth stations and associated equipment and loan Equatorial six mln dlrs over a six-month period for repayment starting in December 1988. The company said Conteol, under the agreement, would assume a portion of Equatorial's rights and obligations under the Galaxy III transponder lease with <Burnham Leasing> on the occurrence of certain events. Equatorial said it would grant Contel an option to buy about 3,600,000 common shares at 3.25 dlrs each. Equatorial said its understandings with Contel are subject to Equatorial's ability to restructure a significant portion of its obligations and to obtain concessions from lenders and lessors, in particular under its Galaxy III transponder lease. It said it hopes to finalize a Contel agreement by April 15. Equatorial in 1985 earned 1,807,000 dlrs after a 3,197,000 dlr gain from early debt retirement on revenues of 56.1 mln dlrs. For the first nine months of 1986, the company lost 9,476,000 dlrs on revenues of 45.4 mln dlrs, compared with a 1,784,000 dlr profit after the early retirement gain on revenues of 38.5 mln dlrs. Reuter 

TRANSAMERICA <TA> TO HAVE AUSTRALIAN SALE GAIN

Transamerica Corp said it will have an after-tax gain of about 10 mln U.S. dlrs on the sale of its Occidental Life Insurance Co of Australia Ltd affiliate to <Pratt and Co Financial Services Pty Ltd> of Melbourne for 105 mln Australian dlrs. The sale was announced earlier today in Australia. Proceeds will be used to enhance the growth of North American operations of its Transamerica Occidental Life subsidiary, the company said. Reuter 

VIACOM INTERNATIONAL INC GETS ANOTHER NEW NATIONAL AMUSEMENTS BID

F.W. WOOLWORTH CO <Z> 4TH QTR JAN 31 NET

Shr 1.78 dlrs vs 1.64 dlrs Net 117 mln vs 106 mln Sales 2.02 billion vs 1.85 billion Avg shrs 65.6 mln vs 63.9 mln Year Shr 3.25 dlrs vs 2.75 dlrs Net 214 mln vs 177 mln Sales 6.50 billion vs 5.96 billion Avg shrs 65.6 mln vs 63.9 mln NOTE: Share data restated to reflect two for one stock split in May 1986 Reuter 

GM <GM> CUTTING SALARIED MERIT RAISES

General Motors Corp told employees it was reducing the funds available for merit-raises for 109,000 salaried workers. GM, which has been taking wide-ranging steps to cut costs, said in a letter it cut the amount available for raises to 3.5 pct of the payroll from 5.5 pct in 1986. The letter also said raises will be given in one annual lump-sum payment from April rather than being folded into salaries and thus increasing the base for benefit payments. Reuter 

BP OIL RAISES OPERATING PROFIT

<BP Oil Ltd>, the U.K. Marketing and refining arm of British Petroleum Co Plc <BP.L>, raised its pretax operating profit on a replacement cost basis to 182 mln stg in calendar 1986, compared with 66 mln stg in 1985. Sales and operating revenue fell to 3.1 billion stg from 4.2 billion on a replacement cost basis. Historical cost operating profit was 61 mln stg, up from 16 mln. BP Oil said 1985 profits had been depressed by exceptional items. Its profit figures were stated before interest charges. Chief executive David Kendall said improved results mirrored benefits of a restructuring program undertaken in recent years. However, he warned future financial pressure on the industry will be severe. "The U.K. Oil marketing and refining industry will need to invest larger sums - probably around 500 mln stg a year - for a good many years," he said in a statement. Reuter 

CANADA PRICES 1.2 BILLION DLR BOND ISSUE

The finance department announced the new 1.2 billion dlr, four-part bond issue, to be dated March 15 and delivered March 16, will be priced as follows. - 8 pct bonds due July 1, 1990 at a price of 100.30 pct todmpB]w about 7.89 pct to maturity - 8-1/4 pct bonds due March 1, 1994 at a price of 100.25 pct to yield about 8.20 pct to maturity. - 8-1/4 pct bonds due March 1, 1997 at a price of 99.50 pct to yield about 8.32 pct to maturity. - 8-1/2 pct bonds due June 1, 2011 at a price of 98.625 pct to yield about 8.63 pct to maturity. The 2011 maturity will be issued to a maximum of 375 mln dlrs. The Bank of Canada will buy 100 mln dlrs of the new issue, including a minimum of 10 mln dlrs of the 2011 maturity. Reuter 

EARTHQUAKES CONTINUE IN NORTHERN NEW ZEALAND

Earthquakes and aftershocks are still shaking areas of northern New Zealand following yesterday's strong tremor which left 3,000 people homeless. Four earthquakes measuring up to 4.5 on the Richter scale have hit the Bay of Plenty and Waikato region in the north-east since midnight yesterday (1200 GMT). No casualties have been reported and no further major damage, civil defence sources said. A government seismologist said from Rotorua in the North Island some five tremors were being recorded every 10 minutes. The seismologist said if the pattern of other large earthquakes was followed the shocks would continue for one to several weeks, declining in frequency and magnitude. But the chance of a further large shock could not be ruled out. Reuter 

U.S. ASKS JAPAN END AGRICULTURE IMPORT CONTROLS

The U.S. Wants Japan to eliminate import controls on agricultural products within three years, visiting U.S. Under-Secretary of State for Economic Affairs Allen Wallis told Eishiro Saito, Chairman of the Federation of Economic Organisations (Keidanren), a spokesman for Keidanren said. The spokesman quoted Wallis as saying drastic measures would be needed to stave off protectionist legislation by Congress. Wallis, who is attending a sub-cabinet-level bilateral trade meeting, made the remark yesterday in talks with Saito. Wallis was quoted as saying the Reagan Administration wants Japanese cooperation so the White House can ensure any U.S. Trade bill is a moderate one, rather than containing retaliatory measures or antagonising any particular country. He was also quoted as saying the U.S. Would be pleased were Japan to halve restrictions on agricultural imports within five years if the country cannot cope with abolition within three, the spokesman said. Japan currently restricts imports of 22 agricultural products. A ban on rice imports triggered recent U.S. Complaints about Japan's agricultural policy. Reuter 

U.S. FINANCIAL ANALYSTS - March 3

New York Sarich Technologies Trust - New York Health Management Associates - New York Reuter 

FIRSTCORP <FCR> SEES GAIN ON CONDEMNATION

Firstcorp Inc said it weill report an after-tax gain of 1,827,000 dlrs or 56 cts per share primary and 42 cts fully diluted from the proposed condemnation and acquisition of a parking deck it operates by Wake County. The company said if it reinvested proceeds in a similar property within 24 months, the gain on the sale would be deferred for tax purposes. Reuter 

ASHTON-TATE <TATE> TO OFFER COMMON SHARES

Ashton-Tate said it intends to file for an offering of about two mln shares within the next 30 days. It said proceeds would be used for working capital and other general corporate purposes, including the possible acquisition of other businesses or additional technology. Ashton-Tate now has about 23.6 mln shares outstanding. Reuter 

KEYCORP <KEY> REGISTERS SUBORDINATED NOTES

KeyCorp said it has filed with the Securities and Exchange Commission for the offering of 75 mln dlrs of subordinated capital notes due March 1, 1999. The company said it is anticipated the notes will be offered this week through underwriters led by First Boston Corp. Proceeds will be used for general corporate purposes, including the acquisition of <Seattle Trust and Savings Bank>, which is scheduled for July one, KeyCorp said. Reuter 

<NATIONAL SEA PRODUCTS LTD> 4TH QTR NET

Oper shr 43 cts vs 21 cts Oper net 6,846,000 vs 3,386,000 Revs 137.1 mln vs 107.6 mln Year Oper shr 1.36 dlrs vs 42 cts Oper net 21,764,000 vs 7,239,000 Revs 516.4 mln vs 454.7 mln Note: 1986 qtr excludes extraordinary gain of 784,000 dlrs or five cts share, versus extraordinary loss of 110,000 dlrs or shr nil in 1985 qtr Note continued: 1986 year excludes extraordinary gain of 14,360,000 dlrs or 94 cts share, versus extraordinary gain of 2,883,000 dlrs or 19 cts share in prior year Reuter 

U.K. MONEY MARKET SHORTAGE FORECAST REVISED DOWN

The Bank of England said it had revised its forecast of the shortage in the money market down to 450 mln stg before taking account of its morning operations. At noon the bank had estimated the shortfall at 500 mln stg. REUTER 

NATIONAL AMUSEMENTS AGAIN UPS VIACOM <VIA> BID

Viacom International Inc said <National Amusements Inc> has again raised the value of its offer for Viacom's publicly held stock. The company said the special committee of its board plans to meet later today to consider this offer and the one submitted March one by <MCV Holdings Inc>. A spokeswoman was unable to say if the committee met as planned yesterday. Viacom said National Amusements' Arsenal Holdings Inc subsidiary has raised the amount of cash it is offering for each Viacom share by 75 cts to 42.75 dlrs while the value of the fraction of a share of exchangeable Arsenal Holdings preferred to be included was raised 25 cts to 7.75 dlrs. National Amusements already owns 19.6 pct of Viacom's stock. Reuter