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CHELSEA <CHD> SEES LOWER 2ND QTR NET
| Chelsea Industries Inc said earnings for
its fiscal second quarter ended March 30 will be "sharply
lower" than the 1,414,000 dlrs or 55 cts a share it earned for
the same quarter last year.
It also said it lowered its earnings forecasts for the
remainder of the fiscal year. In fiscal 1986, the company
earned 7,206,000 dlrs or 2.78 dlrs a share.
The company cited intensely competitive market conditions
in its polyethelyne trash liner business and startup costs
related to its acquisition of Artisan Plastic for the reduced
earnings outlook.
| Financial Reports |
DOME PETE<DMP> TAKES 2.08 BILLION DLR WRITEDOWN
| Dome Petroleum Ltd, earlier
reporting a 2.20 billion dlr 1986 loss compared to year-earlier
profit of 7.0 mln dlrs, said the loss was mainly due to write
downs totalling 2.084 billion dlrs before a reduction in
deferred income taxes of 571 mln dlrs.
The loss also includes 214 mln dlrs in accumulated foreign
exchange losses, the company said.
"The dramatic drop in energy prices in early 1986 reverses
much of the progress the company has made in the two previous
years," Dome chairman J. Howard Macdonald said in a statement.
"But even a net loss of this magnitude has very little
bearing on the day-to-day operations of Dome," chairman
Macdonald said.
"It merely reflects the realistic carrying value of the
company's assets in today's economic environment, and the
absolute need for reaching a timely agreement with our lenders
on a debt restructuring plan to assure the company's continued
existence," he added.
Dome is now trying to reach agreement on a complex plan for
restructuring debt of more than 6.10 billion dlrs.
Dome said it charged the 214 mln dlrs in accumulated
foreign exchange losses to current expenses because of the
uncertainty arising from its proposed restructuring plan.
Normally the expenses would be amortized over the remaining
period of the loans to which they apply, it said.
Dome also said the write downs included a fourth quarter
reduction in the value of its oil and gas properties of 1.20
billion dlrs, before a reduction in deferred income taxes of
305 mln dlrs. The fourth quarter writedown was in addition to a
charge of 880 mln dlrs on certain other assets, taken mainly in
the third quarter.
Dome said the 1.20 billion dlr fourth quarter charge
resulted from a year-end accounting change made under new full
cost accounting guidelines by the Canadian Institute of
Chartered Accountants.
The company said it previously determined a write down of
conventional oil and gas properties was not required at
September 30, under the previous method of calculating the
limitation of oil and gas values.
Dome said the most significant accounting change under the
new guidelines is using current oil and gas prices in
calculations instead of escalating price forecasts.
Terms of Dome's proposed debt restructuring plan preclude
the company from making an accurate estimate of future
financing costs, which are used in the new accounting
calculations, it said.
As a result, Dome adopted current prices and costs and a 10
pct discount factor in the calculations, which substantially
conform with accounting rules prescribed by the U.S. Securities
and Exchange Commission, the company said.
Dome said operating income from its crude oil and natural
gas segments fell by 2.50 billion dlrs to a 1986 loss of 1.71
billion dlrs from prior year earnings of 737.0 mln dlrs.
Dome said the steep drop in crude oil and natural gas
operating income was due to write downs totalling 1.93 billion
dlrs and lower energy prices that sharply reduced revenue.
Reduced production of natural gas and lower utilization of
Dome's offshore drilling fleet in the Beaufort Sea also
contributed to the decline, it said.
Earnings from its natural gas liquids business fell by 79
pct to 42.0 mln dlrs from 199 mln dlrs in 1985.
Cash from operations dropped to 5.0 mln dlrs from year-ago
542.0 mln dlrs and unrestricted cash balance declined to 202.0
mln dlrs from 466.0 mln dlrs.
Dome said 1986 crude oil production in 1986 was maintained
at prior year's levels through new drilling activity and
improvements in productivity.
Natural gas production fell by nine pct as a result of
lower domestic and export sales, it said.
Oil and field natural gas liquids production totalled
86,000 barrels a day, compared to 87,000 bpd in the prior year.
Natural gas production fell to 536.0 mln cubic feet a day
from 591.0 mcf a day.
| Corporate News |
ORION CAPITAL CORP <OC> 4TH QTR LOSS
| Shr loss 9.42 dlrs vs loss 3.85 dlrs
Net loss 55.5 mln vs loss 21.4 mln
Revs 114.9 mln vs 120.0 mln
Avg shrs 6,460,000 vs 5,719,000
Year
Shr loss 6.80 dlrs vs loss 4.77 dlrs
Net loss 36.0 mln vs loss 26.2 mln
Revs 478.9 mln vs 437.9 mln
Avg shrs 6,016,000 vs 5,713,000
Note: Net includes realized capital gains of 2,610,000 vs
2,442,000 for qtr and 18.1 mln vs 13.6 mln for year.
1986 net also includes gain on termination of pension plan
of 2,614,000 for qtr and year, and tax loss of 3,605,000 for
qtr. Includes pretax gain from sale of common stock in Guaranty
National Corp of 5,722,000 for year.
Revised estimated calculation of workers compensation
earned premiums decreased 1986 earned premiums by 10 mln.
Year-ago results restated to reflect deconsolidation of
Guaranty National.
| Financial Reports |
AVON PRODUCTS <AVP> SEES HIGHER 1987 EARNINGS
| Avon Products Inc, the diversifed
conglomerate that had a strong turn around in 1986, said it
expects sales and earnings to climb higher this year.
In its annual report, the company also said it expects to
maintain its current annual two dlr dividend on the basis of
continued upward earnings.
In 1986, Avon's operational earnings rose 24 pct to 158.7
mln dlrs from 128.2 mln dlrs a year earlier, and sales rose 17
pct to 2.88 billion dlrs. It said the 2.23 dlrs a share earned
last year was the highest in five years, but still well below
the company's all-time high of 4.06 dlrs a share in 1979.
| Financial Reports |
CHASE MANHATTAN RAISES PRIME RATE TO 7-3/4 PCT FROM 7-1/2, EFFECTIVE TODAY
|
CHASE MANHATTAN RAISES PRIME RATE TO 7-3/4 PCT FROM 7-1/2, EFFECTIVE TODAY
| Financial Reports |
PACIFIC GAS <PCG> ACCOUNTING CHANGE TO CUT NET
| Pacific Gas and Electric Co said
it expects to record a 470 mln dlr, or 1.25 dlr per share,
reduction in 1987 earnings because of the company's decision to
change the method used to record Diablo Canyon Nuclear Power
Plant revenues.
The accounting change will not affect the company's cash
position and the company intends to continue paying its
dividend at the annual rate of 1.92 dlrs per share.
Last year Pacific Gas reported earnings of 925 mln dlrs, or
2.60 dlrs per share.
Pacific Gas said the accounting change was prompted by
delays in the receipt of a California Public Utilities
Commission decision on the company's 1984 application for rate
relief to recover the 5.8 billion dlr cost of constructing
units one and two of the Diablo Canyon Nuclear Power Project.
It said the commission is currently allowing the company to
recover 40 pct of the cost of owning and operating the plants.
As a result, 63 mln dlrs has been accumulating each month
as deferred non-cash account receivable, which has been
included in current income.
But the accounting change, effective January 1, will
reflect only cash received through interim rates approved by
the commission, Pacific Gas and Electric said.
It also said the commission is now awaiting its Public
Staff Division's report which will recommend how much of the
5.8 billion dlr investment Pacific Gas should be allowed to
recover in rates.
The company further stated that it is confident it will
receive an objective review of the facts.
It also said it intends to seek additional interim rates.
Pacific Gas began construction of the two nuclear power
units in 1969. After a number of construction delays, unit one
went into operation in May 1985 and unit two went on line in
March last year.
| Financial Reports |
GIANT FOOD INC <GFS.A> 4TH QTR FEB 28 NET
| Shr 50 cts vs 66 cts
Net 15.0 mln vs 20.0 mln
Revs 861.2 mln vs 725.9 mln
Year
Shr 1.55 dlrs vsd 1.90 dlrs
Net 46.5 mln vs 57.0 mln
Revs 2.53 billion vs 2.25 billion
Note: 1986 had 53 weeks vs 52 weeks in 1985. 4th qtr 1986
had 17 weeks vs 16 weeks in 1985.
| Corporate News |
INNOVEX <INVX> COMPLETES PURCHASE OF LUCHT
| Innovex Inc said it has completed
the purchase of substantially of the interest in Lucht
Engineering Inc that it did not already own.
Prior to this move Innovex owned 79 pct of Lucht, the
company said.
Innovex said it bought the shares by exchanging 293,101
shares of unregistered Innovex common stock. Innovex president,
Thomas Haley, said the exchange is non-dilutive and will cause
a slight increase in Innovex's fully diluted earnings per share
during the last half of fiscal 1987.
Lucht will continue to function as a unit of Innovex,
Innovex said.
| Financial Reports |
OIL PRICES SAID NOW BASED ON FUTURES PRICE
| Energy futures now set the
standard for oil pricing, said Arnold Safer, president of The
Energy Futures Group Inc, a consulting firm.
"Petroleum futures trading at the New York Mercantile
Exchange literally set spot market prices in the U.S.," he
said, adding that some oil products sellers now offer contracts
based on a daily average of NYMEX prices.
He also said that petroleum futures are a major market for
oil companies as well as for commodity traders. His remarks
were made at the National Petroleum Refiners Association.
| Financial Reports |
MCO RESOURCES INC <MCR> 4TH QTR LOSS
| Shr loss 1.37 dlrs vs 1.59 dlrs
Net loss 38.6 mln vs 42.5 mln
Revs 31.4 mln vs 59.4 mln
Note: 1986 net includes pretax writedown of 23 mln on oil
and gas properties and a 30.3 mln non-cash provision for
impairment of geothermal property.
| Financial Reports |
LINEAR FILMS <LNER> SEES LOWER FOURTH QTR NET
| Linear Films Inc said it sees lower
earnings in the fourth quarter ending March 31 compared with a
year ago due to lower profit margins on stretch film from price
increases of polyethelene resin, a key raw material.
In last year's fourth quarter it earned 1,235,000 dlrs or
19 cts a share, a spokesman said.
The company said it is raising its stretch film prices by
six pct as of April 15 to reflect the higher costs of
polyethelene resin. It also said sale volume of stretch film in
the fourth quarter was lower than anticipated, although it has
returned to normal in recent weeks.
| Other |
AUDITORS QUALIFY MCO RESOURCES <MCR> REPORT
| MCO Resources Inc said its independent
auditors have qualified their opinion on the company financial
statements for 1986, in which it posted a net loss of 38.6 mln
dlrs or 1.37 dlrs a share on revenues of 31.4 mln.
MCO said the qualfied opinion related to its realization of
the carrying amount of its geothermal property and its ability
to continue as an ongoing concern, which is dependent upon the
restructuring of the company's bank debt and other obligations,
resolution of the uncertainties surrounding its geothermal
operations and the success of future operations.
The company said its capital spending for 1987 has been
virtually eliminated and that an additional staff reduction of
about 20 pct is being implemented today.
| Commodities and Trade |
INTERNATIONAL LEASE FINANCE <ILFC> 1ST QTR NET
| Shr 22 cts vs 13 cts
Net 7,121,000 vs 4,481,000
Revs 37.4 mln vs 22.8 mln
Avg shrs primary 30,067,000 vs 29,735,000
| Commodities and Trade |
ARCO <ARC> SAYS NET TO COVER DIVIDEND PAYOUT
| Atlantic Richfield Oil Co said it
expects first quarter net income to cover its dividend
requirements in the quarter.
The company paid a quarterly dividend of one dlr a share
earlier this month.
| Commodities and Trade |
EGYPT TENDERS THURSDAY FOR OPTIONAL ORIGIN CORN
| Egypt will tender Thursday for
200,000 tonnes of optional origin corn, U.S. number two or
equivalent, 14.5 pct moisture, for late April shipment, private
export sources said.
Shipment will be from the Gulf or Great Lakes if U.S.
origin, they said.
| Financial Reports |
KNUTSON MORTGAGE <KNMC> SEES STRONG SECOND QTR
| Knutson Mortgage Corp said it
expects strong earnings performance for its initial fiscal
second quarter earnings ending March 31 since going public in
September 1986.
Albert Holderson, Knutson chairman, said he expects
earnings of about 40 cts per share for the quarter as a result
of a strong mortgage business during the quarter.
Knutson earlier declared a quarterly dividend of 10 cts a
share, versus 10 cts a share prior, payable April 13 to
shareholders of record March 13.
| Commodities and Trade |
SERVOTRONICS <SVT> SETS 10 PCT STOCK DIVIDEND
| Servotronics Inc said it declared
a 10 pct stock dividend, payable May 15 to shareholders of
record April 21.
The company last declared a stock dividend, also 10 pct, in
March 1986.
| Commodities and Trade |
STANDARD OIL RAISES ALASKA NORTH SLOPE BY 1.50 DLRS, effective APRIL ONE
|
STANDARD OIL RAISES ALASKA NORTH SLOPE BY 1.50 DLRS, effective APRIL ONE
| Financial Reports |
SERVOTRONICS INC <SVT> YEAR NET
| Oper shr 50.4 cts vs 48.7 cts
Oper net 688,000 vs 665,000
Revs 12.3 mln vs 10.7 mln
Note: Oper excludes tax credits of 559,000 vs 537,000
| Corporate News |
CURRENCY FUTURES CLIMB LIKELY TO BE CHECKED
| The surge in currency futures since
Friday on the heels of the Reagan administration's proposed
tariffs on Japanese imports is likely to be curtailed in the
coming week, financial analysts said.
"The market is taking a breather now, and I would expect it
to last a little longer," said Craig Sloane, a currency analyst
with Smith Barney, Harris, Upham and Co.
Profit-taking, which robbed the currency futures of some
momentum today, is likely to continue, he said.
Central banks are likely to play a role in halting the
advance in currencies through intervention, the analysts said,
even though the dollar fell to a 40-year low against the
Japanese yen on Monday despite Bank of Japan intervention.
Treasury Secretary James Baker's comments that the G-6
nations remain committed to the Paris accord, coupled with his
refusal to give any targets for exchange rates, provided a note
of stability to the market Tuesday, the analysts said.
Furthermore, Merrill Lynch Economics analyst David Horner
said G-6 central banks haven't yet shown the full force of
their commitment to the Paris accord.
"I'm among those who believe the G-6 have a plan behind the
scenes," Horner said.
Horner said more forceful central bank intervention will
firm the dollar and cap the rise in currency futures.
"Coordinated, punishing intervention" by the central banks
-- in contrast to the recent rolling intervention which has
only smoothed out the market -- is in the offing, according to
Horner.
"I think we're near the top of the range in the Europeans
(currencies)," he said.
On the other hand, the upside target for the yen, which
set a new contract high today at 0.006916 in the June contract,
is at 0.007050, Horner said.
Still, other analysts believe currency futures have yet to
peak.
"The basic trend in the currencies is higher," said Anne
Parker Mills, currency analyst with Shearson Lehman Brothers
Inc. "The market wants to take the dollar lower."
Uncertainty over central bank action and nervousness over a
G-5 meeting next week in advance of a meeting of the
International Monetary Fund could make for choppy price
activity the remainder of the week, Mills said.
In addition, although the market shrugged off relatively
healthy gains in February U.S. leading economic indicators and
factory orders Tuesday, economic data could play a larger role
in coming sessions, the analysts said.
Friday's employment statistics in particular will be
closely watched, Sloane said, adding that a forecast rise of
250,000 in non-farm payroll jobs should underpin the dollar.
| Corporate News |
<POCO PETROLEUMS LTD> 1ST QTR JAN 31 NET
| Shr eight cts vs 30 cts
Net 1,100,000 vs 3,900,000
Revs 14.9 mln vs 20.7 mln
| Financial Reports |
LILLY <LLY> CUTS LIPOSOME CO <LIPO> STAKE
| Eli Lilly and Co told the Securities
and Exchange Commission it cut its stake in Liposome Co Inc to
500,000 shares, or 4.0 pct of the total outstanding common
stock, from 900,000 shares or 7.3 pct.
Lilly said it sold 400,000 Liposome common shares on March
17 at eight dlrs each.
As long as Lilly's stake in Liposome is below five pct, it
is not required to report any further dealings it has in the
company's stock.
| Commodities and Trade |
GRAIN REPORTS IMPROVE U.S. FARM OUTLOOK-ANALYSTS
| The U.S. grain planting intentions and
stocks reports bear optimistic news for U.S agriculture, a
grain analyst on a Chicago Board of Trade panel said.
The decline in intended soybean acreage and lower stocks
are "the first report we've had for a long time that shows any
optimism for anybody," said John "Bud" Frazier, grain analyst
and executive vice president for Balfour MacLaine, Inc.
"I'm really excited about it," Frazier said.
The U.S. Department of Agriculture said farmers intend to
plant 67.6 mln acres of corn, down from 76.7 mln planted last
year, and 56.8 mln acres of soybeans, down from 61.5 mln.
The report showed March 1 stocks of 1.4 billion bushels of
soybeans, 8.3 billion bushels of corn, and 2.3 billion bushels
of wheat, all below trade guesses.
Frazier was joined by Susan Hackmann, senior grain analyst
with AgriAnalysis, and Mark Meyer, a grain analyst with
Shearson Lehman Brothers, Inc., on a Chicago Board of Trade
panel to discuss the reports.
Frazier said the stocks reports in particular were friendly
for the market, and soybean prices would jump three to five
cents a bushel "if the bell rang right now."
"We're getting our disappearance up. We have less (corn and
soybeans) than we thought we had," he said, noting that hog and
poultry production is up.
"We're seeing low prices generate some interest in demand,"
said Meyer, adding that feed use was up 13 pct last quarter and
15 pct in the preceding quarter.
However, Hackmann said production could continue to exceed
consumption.
She noted that most of the reductions in soybean acres came
in southeastern states, where yields are usually low.
"We have the potential for record breaking soybean yields
this year, (which) will temper the enthusiasm on tomorrow's
opening," she said.
Hackmann said record corn yields also are possible, and the
crop could reach 7.1 billion bushels, which would be down from
last year's 8.25 billion bushels.
"We'll need very good disappearance next year to reduce
stocks," she said. The USDA estimated disappearance last year
at 6.7 billion bushels.
Hackmann said the stocks report was positive for the long
term, "But we still have a long way to go to bring stocks down
to where we could start rebuilding prices."
Frazier also cautioned that the soybean acreage report
could prompt farmers to change their plans and plant more
soybeans.
The panelists agreed that the reports should discourage
talk of revising the 1985 farm bill.
"There seems to be no desire ... to change the farm law
we're working under today, and this report should reinforce
that," Frazier said.
"We are seeing the program beginning to work," said Meyer.
| Other |
DANISH RESERVES RISE IN FEBRUARY
| Denmark's net official reserves rose
to 36.34 billion crowns in February from 28.00 billion in
January, against a revised 45.85 billion in February 1986, the
central bank said in its monthly balance sheet report.
Total net reserves, including reserves held by commercial
and major savings banks, rose to 38.26 billion crowns from
30.11 billion in January compared with a revised 35.99 billion
in February last year.
The bank said provisional figures showed net registered
private and public capital imports of 10.3 billion crowns in
February.
| Commodities and Trade |
ACCELERATION <ACLE> CUTS STAKE IN UNITED COASTS
| Acceleration Corp said it sold a
24.9 pct stake in the common stock of <United Coasts Corp> to
the <Sheet Metal Workers' National Pension Fund>.
The company said it agreed to sell the fund an additional
5.1 pct of Hartford, Conn.-based United when the fund receives
approval from the director of insurance of the state of
Arizona.
The company said today's sale reduced its holdings in United
to 25 pct. The second sale, when completed, will lower its
stake to 19.9 pct, Acceleration said.
The company said the proceeds from both sales will be
roughly equal to the 3,330,000 dlrs it originally invested in
United Coasts in late 1985 even though it will retain a 19.9
pct stake.
Acceleration said it plans to include gains from the stock
sales in its results for the first and second quarters of 1987.
| Financial Reports |
OPPENHEIMER SELLS SIX PCT CYCLOPS <CYL> STAKE
| Oppenheimer, the brokerage and
investment subsidiary of Oppenheimer Group Inc, told the
Securities and Exchange Commission it sold its entire 6.0 pct,
stake of Cyclops Corp.
Oppenheimer said it sold the 243,400-share stake on March
27 at 95.00 dlrs a share.
It said it initially bought the stock in connection with
risk arbitrage and other investment activities in the ordinary
course of its business.
| Corporate News |
ANALYSTS SEE SLOW MOVE TO HIGHER U.S. PRIME RATE
| Quarter-point prime rate increases to
7-3/4 pct by Citibank and Chase Manhattan Bank today will be
followed by other banks only after they see clearer signs of
the Federal Reserve's policy intentions, economists said.
"Based on the spread between banks' cost of funds and the
prime rate, it probably makes sense for others to follow, but
no rush is likely," said Paul McCulley of E.F. Hutton and Co.
Citibank's surprise base rate increase, quickly followed by
Chase, sent U.S. bond prices lower and the dollar higher.
McCulley said that once the spread between three-month
certificates of deposit and the prime rate narrows to less than
1-1/2 percentage points, there is a strong chance of a prime
rate increase. It has been under 1-1/4 points recently.
However, banks are likely to hold rate increases until they
see what the Fed intends to do about interest rates in the near
term, analysts said. They noted that banks historically like to
follow Fed rate movements, rather than lead them. For example,
the last prime rate increase occurred in June 1984 when banks
lifted the rate to 13 pct from 12-1/2 pct after a Fed discount
rate increase in April of that year.
Major banks had been posting a 7-1/2 pct prime rate since
last August 26/27, when they lowered the rate from eight pct
shortly after the Fed's half-point discount rate cut to the
current 5-1/2 pct level on August 20.
"The banks will not rush to raise their prime rates. There
should be a split prime for a while with some posting a 7-1/2
pct rate and others 7-3/4 pct," said David Jones of Aubrey G.
Lanston and Co.
Jones said the Federal Open Market Committee at today's
meeting voted no change in Fed policy. But he said the Fed may
well foster higher interest rates soon.
Jones said that, while the FOMC probably voted no policy
change today, it may have decided to apply slight upward rate
pressure later if the dollar weakens, inflation pressures heat
up or the economy shows sign of strong recovery.
"The Fed clearly indicated that they did not intend to
tighten policy when they did today's coupon pass," said Joseph
Liro of S.G. Warburg and Co.
In a move that came a day earlier than most expected, the
Fed today supplied permanent reserves to the banking system by
offering to buy all maturities of Treasury notes and bonds for
its own account. This seasonal reserve add is called a "pass."
"The Fed demonstrated that there has been no policy
change," said Elizabeth Reiners, economist at Dean Witter
Reynolds Inc.
She said the spread between banks' cost of funds and the
prime rate is now around 137 basis points compared with a 153
basis point average in 1986. Reiners said the spread is not
really narrow enough to present a clear need for a prime rate
increase.
The Dean Witter economist said that today's prime rate rise
"may have been less a response to interest rates than an
attempt to enhance the (balance sheet) bottom line."
Reiners said that, given recent problems with loans to
developing countries, large money center banks with heavy
exposures might be the first to match the higher prime rate in
an effort to get more profitable spreads on other loans.
The Federal funds rate at which banks lend overnight money
to one another could help determine how many banks match the
higher prime rate and also how quickly they move.
In raising their prime rates, banks cited a higher cost of
funds. In the three business days through Monday, the Federal
funds rate at which banks lend to one another averaged nearly
6-1/4 pct. But quarter end pressures helped push up funds.
The Fed funds rate was extremely volatile today, reflecting
demand pressure associated with the end of the quarter and the
close of the Japanese fiscal year. Funds traded between five
and 6-3/4 pct.
Once the special distortions end, analysts said the funds
rate probably will return to its recent trading level in the
6-1/8 pct area. They said that, if it stabilizes near there,
banks may not quickly boost their prime rates.
But a consistently higher funds rates would suggest to many
that the Fed was fostering somewhat higher interest rates to
help the dollar. Then banks would lift prime rates quickly.
| Commodities and Trade |
TISCH BROTHERS LOWER TOSCO <TOS> STAKE
| An investment partnership led by
four sons of Loews Corp <LTR> Chairman Lawrence Tisch said it
cut its Tosco Corp stake to the equivalent of 1,499,985 shares,
or 4.95 pct of the total, from 1,666,650 shares, or 5.5 pct.
In a filing with the Securities and Exchange Commission,
the partnership, FLF Associates, said it sold 10,000 shares of
Serier E convertible preferred stock on March 26 for 34.125
dlrs each and 5,000 shares of preferred stock on March 27 at
35.25 dlrs each. The sales leave the Tisch brothers with
135,000 shares of preferred stock which can be converted into
1,499,985 shares of common stock.
| Corporate News |
NATURE'S BOUNTY INC <NBTY> YEAR LOSS
| Shr loss 10 cts vs loss 38 cts
Net loss 393,241 vs loss 1,384,334
Revs 43.6 mln vs 40.3 mln
| Financial Reports |
COMINCO <CLT> SELLS STAKE IN CANADA METAL
| Cominco Ltd said it
sold its 50 pct stake in Canada Metal Co Ltd to Canada Metal
senior management for an undisclosed sum.
Cominco said the sale was part of its previously announced
policy of divesting non-core businesses.
Canada Metal is a Toronto-based producer of lead alloys and
engineered lead products.
Canada Metal production figures were not immediately
available.
| Commodities and Trade |
AUDITORS GIVE FIRST CITY <FBT> QUALIFIED OPINION
| First City Bancorp of Texas, which lost
a record 402 mln dlrs in 1986, said in its annual report it
expected operating losses to continue "for the foreseeable
future" as it continues to search for additional capital or a
merger partner.
The Houston-based bank's 1986 financial statements received
a qualified opinion from its auditors, Arthur Andersen and Co.
The auditors said their opinion was subject to First City
eventually obtaining additional capital.
"The company believes that in order to address its
long-term needs and return to a satisfactory level of
operations, it will ultimately need several hundred million
dollars of additional capital, or a combination with a more
strongly capitalized entity," First City said in a note to its
financial statements included in the annual report.
"Management believes that sufficient resources should be
available to cover interim capital concerns while additional
capital is being sought," the bank said.
To raise cash in the near-term, First City said it may sell
or mortgage non-strategic assets, recover excess contributions
to its pension plan and obtain special dividends from some of
its member banks.
"The losses for 1987 are expected to be substantially less
than in 1986," First City chairman J.A. Elkins said in a letter
included in the annual report. "However, the ultimate return to
satisfactory operating conditions is dependent on the
successful resolution of the related problems of credit
quality, funding and the eventual need for substantial
additional capital."
First City said it anticipated that certain covenants of a
credit agreement with unaffiliated banks requiring most of
First City's excess cash to be applied to debt repayments would
be modified by the end of the first quarter in order to avoid
default.
The banks agreed to similar amendments to the covenants
last year and First City has reduced its borrowings from 120
mln dlrs at 1986 yearend to 68.5 mln dlrs in recent weeks.
Although the parent company's capital adequacy ratios
exceeded regulatory minimum requirements at the end of 1986,
First City said its two largest subsidiaries did not. First
City National Bank of Houston had a primary capital ratio of
5.34 pct and First City Bank of Dallas had a 4.75 pct ratio.
Hard-hit by the collapse in oil and Texas real estate
prices, First City's net loan chargeoffs totaled 366 mln dlrs
last year, up from 261 mln dlrs in 1985. The bank more than
doubled its loan loss provision to 497 mln dlrs at the end of
1986.
First City said chargeoffs and paydowns reduced its total
energy loan portfolio by 32 pct during 1986, to 1.4 billion
dlrs at year-end, adding that future energy chargeoffs "should
be more modest." The amount represented 15 pct of First City's
total loans.
In real estate, First City said its nonperforming assets
nearly doubled last year to 347 mln dlrs at year-end.
Chargeoffs of real estate loans rose to 32 mln dlrs, or nine
pct of total loan chargeoffs, and the bank said the amount
could go higher.
"The company still faces uncertainties in the real estate
market and anticipates further deterioration in the pportfolio
so long as the regional recession persists," First City said.
"Because the carrying value of many of these loans is
collateral dependent, a further decline in the overall value of
the collateral base could cause an increase in the level of
real estate-related chargeoffs."
| Financial Reports |
U.S. FED EXPLORES COMMODITY BASKET INDEX
| The complex task of wielding control
over monetary policy in an increasingly fast-moving global
economy could be aided by tying policy to commodity prices, the
newest member of the Federal Reserve Board says.
Commodity prices are already considered by the Fed in the
making of monetary policy. But they would be given a much
greater role under an idea being floated by Governor Robert
Heller, who joined the board last August.
He conceeds that much more study of the idea is needed, but
argues that such an arrangement, particularly if it were
adopted by other major industrial countries, could reduce the
volatility of exchange rates.
Moreover, it could help stabilize of the prices of
commodities themselves, slowing changes in inflation.
His idea, which many conservative economists find
appealing, has some backing among board members appointed in
recent years by President Reagan.
It would complement the present system of opening or
closing the monetary screws based on the pattern of inflation,
key indicators such as unemployment, and the rise or fall of
the money supply. Changes in the money supply can lead to
changes in interest rates and affect economic activity
directly.
Discussed on and off for a long time, the commodity concept
is part of a growing search for a system that anchors monetary
policy and widely-fluxtuating currency prices to a more solid
base.
"What is needed is an anchor or reference point that can
serve as a guide for both domestic and international monetary
purposes," says Heller.
In the past, this anchor was gold but the United States
went off the gold standard because the global economy had
vastly outstripped gold supplies.
A return to the gold standard is generally dismissed out of
hand by most policymakers on the grounds that the largest
producers of gold are the Soviet Union and South Africa.
The so-called fixed rate system, scuttled in the early
1970s, is still considered unworkable in the present world.
But the current system of floating currencies in which
currencies can fluxtuate widely, adding vast pressures to the
monetary system, is also being widely questioned.
Some have suggested that the system might benefit from a
formal approach that mandates intervention by countries when
currencies wander above or below agreed to levels but there are
major problems with this also.
For one thing, there is justifiable concern that countries
might be relunctant to intervene if they felt it might be
detrimental to their own domestic economy.
Moreover, some question whether concerted intervention can
make much of an inpact if the overall market does not agree
with the fundamental judgement.
The poorest countries have called for a monetary conference
to work out a new system that, not surprisingly, helps them
cope with their overpowering debt problems.
Treasury Secretary James Baker, the Reagan administration's
chief economic architect, has preferred to use the so-called
Group of Five industrial countries or sometimes, Seven, as a
forum to work out cooperative agreements on currency and other
economic matters.
He appears convinced that officials from West Germany,
France, Britain, Japan, Italy and Canada talking quietly behind
closed doors can reached reasoned decisions away from public
posturing.
The Heller approach, while extremely complex, could have a
profound impact on the system, ideally stabalizing prices and
international exchange rates.
As envisioned by Heller, a basket of say, 30 major
commodities ranging from wheat to oil, would be put together
and prices would be measured on a regular basis.
"In times of rising commodity prices, monetary policy might
be tightened and in times of falling commodity prices, montary
policy might be eased," he says.
He notes that commodity prices are traded daily in auction
markets, and a commodity price index can be calculated on a
virtually continuous basis.
Moreover, most commodity prices are produced, consumed and
traded on a world-wide basis, so "that an index has a relevance
for the entire world," he says.
In addition, commodity prices are at the beginning of the
production chain and serve as an imput into virtually all
production processes.
"Focusing on commodity prices as an early and sensitive
indicator of current and perhaps also future prices pressures,
the monetary authorities may take such an index into account in
making their monetary policy decisions," he says.
However, he says that any major change in a basic commodity
such as occurred in oil during the 1970s because of action by
the OPEC cartel, would have to be discounted in such a system.
He says the worst thing that could happen is to allow
monetary policy to spread a freakish increase in one commodity
to the rest of the system and to other commodities.
| Other |
MICROBIOLOGICAL SCIENCES INC <MBLS>4TH QTR LOSS
| Oper shr loss 10 cts vs profit nine cts
Oper net loss 387,000 vs profit 313,000
Revs 6,486,000 vs 5,613,000
Year
Oper shr loss two cts vs profit four cts
Oper net loss 96,000 vs profit 120,000
Revs 23.8 mln vs 21.3 mln
Note: 1986 oper excludes extraordinary gains of 299,000 for
qtr and year.
| Financial Reports |
INVESTOR GROUP CUTS DBA SYSTEMS <DBAS> STAKE
| A group led by New York investors
David Bellet and Chester Siuda said it lowered its stake in DBA
Systems Inc to 100,000 shares, or 3.7 pct of the total
outstanding, from 170,000 shares, or 6.3 pct.
In a filing with the Securities and Exchange Commission,
the group said it sold 70,000 DBA common shares between Feb 13
and March 23 at prices ranging from 18.25 to 20.00 dlrs a
share.
So long as the group's stake in DBA is below five pct, it
is no longer required to report its further dealings in the
company's common stock.
| Corporate News |
LOWELL INSTITUTION FOR SAVINGS <LIFS> QTLY DIV
| Qtly div 7.5 cts vs 7.5 cts prior
Pay May 19
Record April 24
| Financial Reports |
EARTHWORM TRACTOR CO INC <WORM> YEAR LOSS
| Oper shr loss 11 cts vs profit two cts
Oper net loss 1,058,585 vs profit 282,998
Revs 24.4 mln vs 23.7 mln
Note: 1986 oper includes accrued interest of 686,914 from
financing of capital goods transaction with Prudential Bache
Trade Corp.
Year-ago oper excludes extraordinary gain of 121,000.
| Financial Reports |
INTERMEDICS INC <ITM> 1ST QTR FEB ONE NET
| Oper shr 26 cts vs 18 cts
Oper net 2,877,000 vs 1,838,000
Revs 44.3 mln vs 40.8 mln
NOTE: Current 1st qtr oper net excludes operating loss
carryforward of 1,694,000 or 16 cts per share. 1986 1st qtr
oper net excludes loss carryforward of 78,000 dlrs or one ct
per share and loss from discontinued operations of 475,000
dlrs.
| Commodities and Trade |
EMERY AIR FREIGHT CORP TO OFFER 40 DLRS/SHR FOR PUROLATOR COURIER CORP
|
EMERY AIR FREIGHT CORP TO OFFER 40 DLRS/SHR FOR PUROLATOR COURIER CORP
| Corporate News |
EMERY AIR <EAF> TO BID FOR PUROLATOR <PCC>
| Emery Air Freight Corp said it
plans to begin tomorrow a 40 dlr a share tender offer for 83
pct of the outstanding common stock of Purolator Courier Corp.
The company said the tender offer is the first step in a
plan to buy 100 pct of the Purolator shares.
Following the tender offer, Emery said it would offer 40
dlrs of junior subordinated debentures for each remaining
Purolator share outstanding.
On March one, Purolator agreed to a 35 dlr a share
leveraged buyout by eight Purolator executives and EF Hutton
LBO Inc, a unit of EF Hutton Group Inc.
Emery said it had tried unsuccessfully to open merger
discussions with Purolator before the company accepted the
management-led buyout offer.
In a letter to Purolator's chairman, Nicholas F. Brady,
Emery's chairman, John C. Emery, said the company would still
prefer to negotiate with Purolator.
But he said the imminent expiration of the leveraged buyout
group's offer has forced the company to make an unsolicited
tender offer of its own.
Emery said its offer is scheduled to expire at 2400 EST on
April 28, unless extended.
The company said conditions of the offer include the
receipt of at least two-thirds of Purolator's shares
outstanding, on a fully diluted basis, and the repeal of its
share purchase rights plan.
Emery said the offer is also subject to completion of the
previously announced sale of Purolator's Canadian operations.
Emery said Chemical Bank, Bankers Trust, Morgan Guaranty
Trust Co and Salomon Bros had agreed to provide financing for
the tender offer.
It said the junior subordinated debentures to be issued in
the subsequent merger will carry a 13 pct annual interest rate,
payable twice a year.
For the first three years after the notes are issued,
interest will be paid, at Emery's option, in cash or in
additional notes, Emery said.
It added that the notes will not be subject to redemption
for one year after they are issued.
Emery said Purolator would operate as a wholly owned unit
of the company after the merger. It said it hoped Purolator's
management would continue with the company.
"We believe that our two companies provide an excellent fit
with each other and that the combination will enable each of us
to better serve our existing customers and meet the challenges
of the future," Emery's chairman said in his letter.
He said a merger would significantly enhance the financial
turnaround that Purolator's management had previously forecast.
Officials at Purolator could not immediately be reached for
comment on the offer, which was released several hours after
the stock market had closed.
Emery's stock closed up 1/2 at 12-5/8.
Purolator closed at 34-7/8, off 5/8.
| Financial Reports |
Bank of Japan buys dollars around 146.30 yen, dealers say
|
Bank of Japan buys dollars around 146.30 yen, dealers say
| Financial Reports |
AUSTRALIAN BROAD MONEY GROWTH 10.3 PCT IN FEBRUARY
| Australian annual broad money growth rose
10.3 pct in February, unchanged from January, but down from the
corresponding February growth rate of 13.9 pct, the Reserve
Bank said.
February broad money growth was steady at 0.7 pct from the
previous month and unchanged from February last year.
Borrowings from the private sector by non-bank financial
intermediaries rose by 8.8 pct in the February year from
January's 9.5 pct rise, compared with a 13.6 pct increase in
the previous February year.
In February, borrowings from the private sector by non-bank
financial intermediaries rose by 1.0 pct compared with
January's 0.2 pct increase and the previous February rise of
1.7 pct.
At the end of February, broad money stood at 177.1 billion
dlrs up from January's 175.84 billion and compared with the
previous February level of 160.60 billion.
The Reserve Bank last week reported a February M3 growth
rate of 11.2 pct from January's 10.7 pct rise and a previous
annual February increase of 14.0 pct.
| Financial Reports |
ALCAN AUSTRALIA LIFTS ALUMINIUM INGOT PRICE
| Alcan Australia Ltd said it increased the
list price of 99.5 pct purity aluminium ingot to 2,050 dlrs a
tonne from 1,950 dlrs, effective immediately.
| Financial Reports |
ECONOMIC SPOTLIGHT - CHINA MUST PRESERVE FARMLAND
| "If we go on using up
farmland as we have done since 1980, there will be none left in
20 years to grow grain on."
Xu Jinfeng, a middle-aged official in Fengbang village on
the edge of Shanghai, sums up the dilemma China faces as it
tries to feed its more than one billion people and at the same
time let them get richer by building factories and new homes.
China has to feed one quarter of the world's population,
but only one seventh of its land is arable.
Sharp increases in farm output since 1979 turned China into
a net grain exporter for the first time in 1985, and again in
1986.
But the rapid industrialisation of the countryside which
has occurred at the same time, has gobbled up arable land for
factories and homes for peasants who can now afford them.
Official figures show that China lost just under one pct of
its arable land to other uses in 1985 and a slightly smaller
amount last year. It gained 26 mln new mouths to feed during
the two years.
"We lost very little land prior to 1980 when the
industrialisation began," official Xu said. "Since then, nearly
all the families in the county have built new homes and many
factories have gone up."
"Last year we lost land to a new railway line," Xu said. But
land losses in future should fall because nearly all families
already have new houses, she added.
The issue of land loss is a matter of major concern to the
Peking leadership, which announced earlier this month that
China will issue nationwide quotas for conversion of grain land
for the first time this year.
"The present situation of abusing, occupying unlawfully,
wasting and destroying land and land resources is serious," said
an article in the official press explaining the new measures.
"It has resulted in great losses of cultivated farmland," it
said. "China has a large population and its land resources are
badly deficient."
An official of the Shanghai city government said county
authorities could approve conversion of only 0.3 hectares of
arable land to other uses, while anything more than that must
be approved by the city government.
The Peking government faces another major obstacle in its
efforts to ensure China's people get enough grain to eat. The
prices the state pays to farmers for grain are too low, making
it more profitable for them to grow other crops.
To offset this, the state offers farmers cheap fertiliser
and diesel oil and payment in advance for grain it contracts to
buy. The state then sells the grain at subsidised prices to
China's 200 mln city residents. Rural factories also subsidise
grain output, paying farmers bonuses to grow it.
Some officials argue that the simplest solution to the
problem would be for the state to raise city grain prices.
Chen Zuyuan, Communist Party secretary of a village in the
eastern province of Zhejiang, said the government listened too
much to the demands of "selfish city people" and could raise city
grain prices without any problem.
But the government has ruled out a price rise. "Raising the
price of grain would directly conflict with the goal of social
stability," said a China Daily editorial this month.
The Shanghai official said prices must be reformed over the
long term. "We must be very careful. We have a very large
population which is used to price stability and will object to
price rises," he said. "The problem is how to do it."
The Shanghai official said a rise in grain prices might
also affect the prices of hundreds of food products made with
grain and consumed by city residents.
In addition, the state faces the problem of inadequate
investment by farmers in land and in grain in particular.
The official press has reported that farmers fear farm
policy may change and they are putting their new wealth into
building graves, memorial halls for ancestors and homes.
Under reforms introduced in the late 1970s, farmers sign
contracts with the state requiring them to grow certain crops,
but they have considerable freedom in how to use their land.
"As the expiration date of the 15-year contract is almost at
the halfway mark, farmers are beginning to worry about the
future," the China Daily said in an editorial last month.
Their anxieties stem from the fact that they are allowed to
use the land but not own it. For most of the period of
Communist rule, the land was organised into collectives where
there was little room for individual initiative.
"New measures are needed to reassure them of the consistency
of government policies and make them interested in long-term
investment," the newspaper said.
| Commodities and Trade |
CHINA OFFICIAL CONDEMNS GOVERNMENT GRAIN POLICY
| The grain output of a major Chinese
grain-producing province is not increasing, because farmers
lack incentives, production costs are rising, storage
facilities are poor and there is not enough state investment in
grain, the province's vice-governor said.
The China Daily quoted Yang Jike, vice-governor of Anhui,
as saying farmers could earn twice as much growing cotton as
they could growing grain, and three times as much growing cash
crops like flax. He said production costs had risen to 40 pct
of farmers' earnings, from 20 pct in 1982, and lower investment
had caused the area of irrigated land to fall.
Yang said investment in agriculture fell in 1985 to 9.9 pct
of the province's total investment, from 26 pct in 1978.
He said an estimated 1.5 billion yuan worth of grain was
hit by mildew or rot in state granaries every year, and a
further 1.5 mln tonnes was eaten annually by rats.
He said government measures to deal with the problem dealt
with trifles, rather than the essentials. He called for more
investment in grain production, an immediate ban on illegal use
of or damage to farmland and a reversal of what he called the
tendency to rely on grain imports.
The New China News Agency quoted Zhang Yan, a delegate to
the National People's Congress, attacking grain policy. He said
the government had cut agricultural investment to three to four
pct from 11 pct.
"With the abundance of grain and cotton in the past few
years, some people got carried away, relaxing their attention
to grain and cotton production," he said.
On Saturday, vice-premier Tian Jiyun said China aimed to be
self-sufficient in grain. Now it exports corn from the
northeast, but it imports wheat.
"Grain consumption is rising every year. Even if we reach
the 1987 target of (405 mln tonnes), it cannot be considered
adequate," Tian said.
| Corporate News |
CARME INC <CAME> 2ND QTR JAN 31 NET
| Shr nine cts vs one ct
Net 247,489 vs 27,301
Sales 1,933,107 vs 796,613
Six mths
Shr 21 cts vs five cts
Net 565,106 vs 121,997
Sales 3,781,970 vs 1,778,110
| Corporate News |
TAIWAN'S SECOND QUARTER IMPORTS SEEN RISING
| Taiwan's imports in the second quarter of
1987 are expected to rise to 7.75 billion U.S. Dlrs from 5.82
billion a year earlier and from 6.95 billion in the first
quarter of this year, the statistics department said.
A department official attributed the increase to growing
domestic investment by the private and public sectors. It is
expected to rise to 4.68 billion U.S. Dlrs from 3.79 billion a
year earlier and 3.41 billion during the first quarter.
Taiwan's exports in the April-June quarter are expected to
rise to 12.03 billion U.S. Dlrs from 9.63 billion a year
earlier and 11.28 billion in the first quarter.
The official said Taiwan's trade surplus is expected to
climb to 4.28 billion U.S. Dlrs in the second quarter of 1987
from 3.81 billion a year earlier. It was 4.33 billion in the
first quarter of this year.
Most of the surplus is expected to come from trade with the
U.S., Taiwan's largest trading partner and importer of nearly
50 pct of Taiwan's total exports, he said.
He said he expected Taiwan's imports, including grains,
machinery and power plant equipment, from the U.S. To rise
sharply because of government efforts to balance trade with
Washington. He declined to give figures.
| Financial Reports |
Bank of Japan intervenes buying dollars at around 147.30 yen - dealers
|
Bank of Japan intervenes buying dollars at around 147.30 yen - dealers
| Commodities and Trade |
COMMERZBANK SEES LOWER OPERATING PROFIT THIS YEAR
| Commerzbank AG <CBKG.F> management
board chairman Walter Seipp said that from the present
viewpoint the bank must expect 1987 full operating profit to be
lower than in 1986.
In the first two months of the year, partial operating
profit -- excluding trading on the bank's own account -
declined, he said, without giving details.
The interest surplus fell 2.8 pct compared with 2/12ths of
1986 results, while the commission surplus, because of the
quiet stock exchange business, fell back still more strongly.
By contrast the personnel and fixed asset expenses increased.
German banks do not report full operating profit. But Seipp
said last year the figure for the first time had topped one
billion marks for the parent bank, and the group result was
around 50 pct higher than this.
Commenting on 1986, Seipp said, "we were able to raise the
full operating profit...Slightly above the record result of
1985 because own account profits increased slightly."
He gave no concrete details but added that in January and
February, good own account trading profits meant that the drop
in full operating earnings was more modest than that in the
partial operating figure.
The bank would, as a result, be more profit-oriented in
future, developing, for example, more into investment banking,
keeping a tight rein on personnel costs and dampening
expenditures on fixed assets.
Turning to 1986 results, Seipp said by year end there had
been a strong growth in business volume.
Over the year business volume rose by 9.9 pct to 93.2
billion marks compared with 1985, Seipp added.
Group balance sheet volume rose by 8.0 pct to 148.15
billion. It would have been around five billion marks higher
still if currency relationships had remained unchanged.
In the parent bank, the interest surplus rose nine pct in
the year, while the interest margin held roughly at 1985's 2.56
pct despite pressure on credit rates.
The surplus on commission business, which had soared by a
quarter in 1985, rose by 11.6 pct last year thanks almost
exclusively to growth in securities commissions, Seipp said.
Personnel expenditure was up 11.9 pct last year, at more
than 1.5 billion marks. Fixed asset expenditure rose by 9.6 pct
to more than 650 mln.
As a result, the parent bank partial operating profit rose
by 3.2 pct to 752 mln marks.
Parent bank tax payment rose to 244 mln marks last year
from 233 mln in 1985.
Seipp said extraordinary earnings included a "high
two-figure million" in profit from the sale of the bank's AEG AG
<AEGG.F> shares to Daimler-Benz AG <DAIG.F> during the latter's
majority stake purchase booked last year.
The ability of the bank to write off depreciations in
credit business against profits from securities trading and
earnings on the sale of stakes had been utilised, as in prior
years, to its full extent.
Because of numerous insolvencies at home, by far the
largest part of the provisions were set aside for individual
write-downs from domestic business. Abroad, the circle of
problem debtor countries rose last year, although the ratio of
credit exposure to provisions improved further.
Seipp said that because about half the group's exposure to
problem nations was in dollars, the bank had swapped into
dollars individual provisions hitherto held primarily in marks.
"This means that no open currency positions exist any longer
on the amount of the provision that is made against an actual
default," he added.
Despite the increase in concern over debtor nations in the
last few weeks, he said, the international banking community is
better armed than it was against payment problems.
All banks had significantly strengthened their capital
base, most European banks had made considerable provisions
against bad debts while goverments and central banks were
better prepared for unforseen difficulties.
He described debt-equity swaps as a very interesting new
approach to indebted nations' problems. There was a lot of
interest in direct investment via an equity participation in
Latin America, particularly from West German firms.
| Corporate News |
BANK OF JAPAN INTERVENES IN EARLY TOKYO AFTERNOON
| The Bank of Japan intervened in the market
in the early afternoon, buying dollars around 147.30 yen and
continuing to buy them as high as 147.50 yen, dealers said.
The Bank intervened just after the dollar started rising on
buying by securities houses at around 147.05 yen, and hoped to
accelerate the dollar's advance, they said.
The dollar rose as high as 147.50 yen.
| Corporate News |
MALAYSIA CUTS GAZETTED RUBBER PRICE
| Malaysia said it cut the gazetted
price of rubber to 202-7/8 cents per kg from 213-1/2 cents in
March, effective immediately.
No export duty is applicable at this level, against 3/8
cent per kg last month, because the government raised the
export duty threshold price to 210 cents per kg in early 1985.
The cess for rubber research and replanting remained
unchanged at 3.85 and 9.92 cents per kg respectively.
| Other |
SEIPP SAYS GERMAN INTEREST RATES SHOULD FALL
| The Bundesbank should take further
steps to reduce German interest rates to protect the mark from
further appreciation and to persuade investors to bring
long-term yields lower, Commerzbank AG <CBKG.F> management
board chairman Walter Seipp said.
But he told the bank's annual news conference this did not
mean a cut in leading interest rates, rather a reduction in
money market rates through bringing the allocation rates down
for Bundesbank securities repurchase agreements.
"Leading interest rates are not the decisive rates," he said.
"The money market rates are the important ones."
Seipp said the Bundesbank should move away from allocating
money market liquidity at a fixed 3.8 pct as it has in recent
tender allocations.
An easier monetary policy would not mean a loss of
credibility for the Bundesbank in its containment of monetary
growth. A fall in short rates would make the public aware of
the high yields in bonds and lead to a longer-term capital
formation, braking the expansion of money supply.
"Thus, you can have lower rates and also a normalisation of
monetary growth both at the same time," he added.
Seipp said there were no grounds to paint too black a
picture of the German economy, since company profitability had
improved over recent years and domestic oriented firms were
profiting from cheaper imports because of the rise in the mark.
Growth this year should be at least one pct, he said,
describing the downturn in production in the first months as a
false start, unrepresentative of the rest of the year.
After an economic contraction in the first quarter, the
economy should show an uptrend in the last three. "We don't
believe that the economy has tipped over, but see it more as a
'growth dip,'" Seipp said.
But Seipp also called for support for growth from fiscal
policy, saying the top rate of income and corporate tax should
be brought down to 49 pct. The current peak rate is 56 pct.
The additional tax cuts brought forward to next January
were no substitute for support for growth.
Seipp added the federal government should make "further
courageous steps to decrease the state's proportion of the
German economy and to increase its flexibility."
| Financial Reports |
MALAYSIA RAISES PALM OIL EXPORT DUTIES
| The Malaysian government said it
raised the export duty on processed palm oil (ppo) to 70.90
ringgit per tonne from 64.06 in March, effective today.
Export duty on crude palm oil (cpo) rose to 38.30 ringgit
per tonne from 16.06 last month.
The gazetted price for ppo rose to 819.6600 ringgit per
tonne from 796.8604 a month earlier and that on cpo to 711.0037
ringgit from 617.8238.
The export duty and gazetted price of palm kernel stood
unchanged at 191.15 and 955.75 ringgit per tonne respectively.
| Financial Reports |
WILLCOX AND GIBBS INC <WG> 4TH QTR NET
| Shr 42 cts vs 76 cts
Net 2.3 mln vs 3.3 mln
Revs 72.3 mln vs 59.8 mln
Year
Shr 1.48 dlrs vs 2.59 dlrs
Net 7.6 mln vs 11.1 mln
Revs 261.7 mln vs 224.7 mln
NOTE: 1985 net includes extraordinary gain of 1.5 mln dlrs
or 35 cts per share in 4th qtr and 5.1 mln or 1.19 dlrs for the
year.
| Financial Reports |
CURRENCY INSTABILITY WILL NOT LAST - SUMITA
| Bank of Japan Governor Satoshi Sumita said
the present foreign exchange market instability will not last
long as there is caution in the market regarding the rapid
decline of the U.S. Unit.
He told reporters the major currency nations are determined
to continue their concerted intervention whenever necessary to
stave off speculative dollar selling in line with their
February 22 currency stability agreement in Paris.
Sumita also said he did not see the recent dollar drop as
anything like a free-fall.
| Commodities and Trade |
SKYLARK CO LTD <SKLK.T> 1986 YEAR
| Group shr 65.44 yen vs 73.30
Net 4.48 billion vs 4.19 billion
Current 10.85 billion vs 9.77 billion
Operating 9.65 billion vs 9.54 billion
Sales 103.53 billion vs 94.39 billion
NOTE - Company forecast for current year is group shr 70.05
yen, net 4.80 billion, current 11.20 billion and sales 113
billion.
| Commodities and Trade |
GERMAN 2.2 PCT GROWTH AVERAGE SEEN TO 1991
| The economy will grow by an average
rate of 2.2 pct a year in real terms between now and the end of
1991, Westdeutsche Landesbank Girozentrale (WestLB) said in an
annual report.
A year ago WestLB had forecast average growth of just under
three pct for 1986-1990.
The 1987 report said gross national product would only
expand a real 1.7 pct this year -- below previous expectations
-- because of weaker exports. Growth rates will pick up later,
however, producing a 2.2 pct increase on average for the
five-year period.
MORE
| Financial Reports |
SWEDEN'S BOLIDEN TO ANNOUNCE MAJOR CORPORATE TAKEOVER
| TODAY - OFFICIAL.
SWEDEN'S BOLIDEN TO ANNOUNCE MAJOR CORPORATE TAKEOVER
TODAY - OFFICIAL.
| Financial Reports |
COURT BLOCKS DELTA-WESTERN AIRLINES MERGER
| A U.S. Appeals court last night
blocked the 860 mln dlr merger of Delta Airlines Inc <DAL.N>
and <Western Airlines> just hours before it was to go into
effect because of a dispute over union representation.
The ruling came in a lawsuit in which the Air Transport
Employees union said Western's management should fulfil a
promise to honour union contracts if a merger took place.
The airlines argued that Western's promise could not be
enforced in a takeover by a larger company. Airlines officials
could not be reached for comment on the ruling, which halts the
merger until arbitration on the dispute is completed.
| Corporate News |
BOLIDEN TO ANNOUNCE MAJOR CORPORATE TAKEOVER - OFFICIAL
| Boliden AB <BLDS ST> mining and metals
group said it will announce a major foreign corporate takeover
today involving a company with an annual turnover of two
billion crowns.
A Boliden spokesman told Reuters details of the
announcement would be given at a news conference by chairman
Rune Andersson at 1030 gmt today. He said the company involved
employed 4,000 people, but declined to name the takeover price
or say what field the firm operated in.
Share analysts said they expected Boliden to announce it
will be taking over the U.S. Allis-Chalmers Corp <AH.O> but
company officials refused to confirm the reports ahead of the
news conference.
| Financial Reports |
U.K. MONEY MARKET OFFERED EARLY ASSISTANCE
| The Bank of England said it had invited
an early round of bill offers from the discount houses after
forecasting a shortage of around 1.2 billion stg in the money
market today.
Among the main factors affecting liquidity, bills for
repurchase by the market will drain some 526 mln stg while
bills maturing in official hands and the take-up of treasury
bills will remove around 1.79 billion stg. A rise in note
circulation will take out a further 105 mln stg.
Partly offsetting these outflows, exchequer transactions
will add around 1.01 billion stg and bankers' balances above
target some 185 mln stg.
| Commodities and Trade |
TURKEY ESTIMATES 1986 GROWTH AT EIGHT PCT
| Turkey's Gross National Product grew an
estimated 8.0 pct in 1986 at fixed 1968 prices, compared with
5.1 pct in 1985, the State Statistics Institute said.
Reporting full-year data, it also said Gross Domestic
Product rose 8.3 pct compared with 5.1 pct in 1985. An earlier
estimate from nine-month data put full-year GNP and GDP growth
both at 7.9 pct.
The government's GNP growth target for 1987 is five pct,
the same level it had set for 1986.
The institute estimated per capita GNP for 1986 at 1,116.6
dlrs, up from 1,045.3 dlrs in 1985.
Officials blame the high 1986 GNP growth on a surge in
domestic demand stemming partly from poorly controlled
municipal expenditures in the early part of the year.
Industry grew at 11.1 pct in real terms in 1986 compared
with 6.6 pct in 1985 while agriculture expanded 7.4 pct
compared with 2.8 pct.
| Corporate News |
U.K. MONEY MARKET GIVEN 689 MLN STG EARLY HELP
| The Bank of England said it had provided
the money market with early assistance of 689 mln stg in
response to an early round of bill offers from the discount
houses. This compares with the Bank's estimate that the system
would face a shortage of around 1.2 billion stg today.
The central bank made outright purchases of bank bills
comprising 347 mln stg in band one at 9-7/8 pct, 207 mln stg in
band two at 9-13/16 pct and 135 mln stg in band three at 9-3/4
pct.
| Corporate News |
MALAYSIAN MINERS SAY U.S. SELLING TOO MUCH TIN
| Malaysian miners criticised the
U.S. For violating an agreement with Southeast Asian producers
by selling more stockpiled tin in 1986 than agreed.
The U.S. General Services Administration sold 5,490 tonnes
of tin in 1986, well above an agreed upon annual limit of 3,000
tonnes, the States of Malaya Chamber of Mines said.
In its latest annual report, it said the U.S. Had promised
to limit sales of tin in a memorandum of understanding signed
with the six-member Association of Southeast Asian Nations
(ASEAN) in December 1983.
"The U.S. Appears to have lost sight of the U.S./ASEAN
Memorandum of Understanding," the Chamber said.
The Chamber estimated the U.S. Strategic stockpile held
180,444 tonnes of tin in December 1986, 137,744 tonnes in
excess of of its original stockpile goal of 42,700.
The main ASEAN tin producers are Malaysia, Indonesia and
Thailand, which produce the bulk of the world's tin.
| Commodities and Trade |
GROUPE BRUXELLES LAMBERT PROFIT UP
| Net consolidated profit after deduction
for minorities 6.52 billion francs vs 5.40 billion.
Non-consolidated net profit 3.46 billion francs vs 3.05
billion.
Note - Results for year 1986. Company's full name is Groupe
Bruxelles Lambert SA <LAMB.BR>.
Proposed net final dividend on ordinary shares 70 francs vs
65 to take total net payment for year to 120 francs vs 110.
| Corporate News |
AJINOMOTO TO BUY OUT JOINT FOOD VENTURE PARTNER
| Ajinomoto Co Inc <AJIN.T> said it will
sign around end-April to buy the 50 pct of <Knorr Foods Co
Ltd>, capitalised at four billion yen, that it does not already
own from its U.S. Partner <CPC International Inc>.
Ajinomoto will also acquire 50 pct each of CPC's two sales
subsidiaries and six production units in Hong Kong, the
Philippines, Singapore, Malaysia, Taiwan and Thailand, he said.
The total cost of the acquisition is 340 mln dlrs, the
spokesman said.
| Financial Reports |
OMNICOM GROUP INC <OMCM> 4TH QTR NET
| Shr profit 27 cts vs profit 51 cts
Net profit 6,600,000 vs profit 12.2 mln
Revs 211.7 mln vs 193.4 mln
Qtly div 24.5 cts vs 24.5 cts
Avg shrs 24.2 mln vs 23.8 mln
Year
Shr loss 17 cts vs profit 1.27 dlrs
Net loss 4,077,000 vs profit 30.1 mln
Revs 753.5 mln vs 673.4 mln
Avg shrs 24.4 mln vs 23.7 mln
NOTE: Qtly div payable April six to holders of record March
16.
1986 4th qtr and year net includes a charge of 5.9 mln dlrs
and 31.4 mln dlrs, respectively, for corporate restructuring.
| Corporate News |
GHANA COCOA PURCHASES SLOW
| The Ghana Cocoa Board said it purchased
214 tonnes of cocoa in the 24th week, ended March 19, of the
1986/87 main crop season, compared with 456 tonnes the previous
week and 372 tonnes in the 24th week ended March 27 of the
1985/86 season.
Cumulative purchases so far this season stand at 217,449
tonnes, ahead of the 204,256 tonnes purchased by the 24th week
of last season.
| Financial Reports |
U.K. MERGER CLEARANCES
| The Secretary of State for Trade and
Industry said he had decided not to refer the proposed
acquisition by Reed International Plc <REED.L> of <Technical
Publishing Company Inc> to the Monopolies and Mergers
Commission.
The proposed acquisition by <Rosehaugh Plc> of <The General
Funds Investment Trust Plc> was also cleared.
| Financial Reports |
TAIWAN SEES SHARP DECLINE IN SHIPBREAKING
| Taiwan's shipbreaking industry is
expected to decline sharply this year despite the boom in 1986
because of keener competition from South Korea and China, the
rising Taiwan dollar and U.S. Import curbs on steel products,
industry sources said.
Last year, Taiwanese breakers demolished a record 344
vessels totalling 3.69 million light displacement tons (ldt),
up on 165 of 2.97 million ldt in 1985, Lin Chung-jung, a Taiwan
Shipbreaking Industry Association (TSIA) spokesman, told
Reuters.
China scrapped vessels of some 1.1 mln ldt last year while
South Korea demolished ships of 910,000 ldt, he said.
Yao Liu, president of Chi Shun Hwa Steel Co, a leading
shipbreaker and steel producer in Kaohsiung, told Reuters, "We
expect to scrap fewer ships this year because of an expected
decline in our steel product exports."
Lin said many breakers predicted a 20 pct decline in
scrapping operations this year due to falling demand from the
U.S., Japan and Southeast Asia for Taiwanese steel.
Taiwan agreed last year to voluntarily limit its steel
product exports to the U.S. To 120,000 tonnes in the first half
of 1987 from about 260,000 tonnes in the first half of 1986, a
Taiwan Steel and Iron Association official said.
Yao said the rising Taiwan dollar means Taiwan's steel
exports are more expensive than South Korea's and China's.
The Taiwan dollar has strengthened by some 16 pct against
the U.S. Unit since September 1985 and some bankers and
economists said it could appreciate to 32 to the U.S. Dollar by
the end of the year from 34.23 today, Yao said.
In comparison, the won rose by about five pct and yuan
remained stable during the same period, he added.
"We have lost some orders to South Korea and mainland China
because foreign importers have switched their purchases," he
said.
Taiwan's steel exports to the U.S., Japan and Southeast
Asia slipped to 148,000 tonnes in the first two months of 1987
from about 220,000 tonnes a year earlier, the Taiwan Steel and
Iron Association official said.
He said he expected further declines in later months but
did not give figures.
| Corporate News |
U.K. INTERVENTION FEED WHEAT TENDER RESULT AWAITED
| Grain traders said they were still
awaiting results of yesterday's U.K. Intervention feed wheat
tender for the home market.
The market sought to buy 340,000 tonnes, more than double
the remaining 150,000 tonnes available under the current
tender. However, some of the tonnage included duplicate bids
for supplies in the same stores.
Since the tenders started last July 861,000 tonnes of
British feed wheat have been sold back to the home market.
| Financial Reports |
SINGAPORE'S UIC TO BUY INTO TECK HOCK COFFEE FIRM
| Singapore's United Industrial Corp Ltd
(UIC) has agreed in principle to inject 16 mln dlrs in
convertible loan stock into <Teck Hock and Co (Pte) Ltd>, a
creditor bank official said.
UIC is likely to take a controlling stake in the troubled
international coffee trading firm, but plans are not finalised
and negotiations will continue for another two weeks, he said.
Teck Hock's nine creditor banks have agreed to extend the
company's loan repayment period for 10 years although a
percentage of the new capital injection will be used to pay off
part of the debt.
Teck Hock owes more than 100 mln Singapore dlrs and since
last December the banks have been allowing the company to
postpone loan repayments while they try to find an investor.
The nine banks are Oversea-Chinese Banking Corp Ltd, United
Overseas Bank Ltd, Banque Paribas, Bangkok Bank Ltd, Citibank
N.A., Standard Chartered Bank Ltd, Algemene Bank Nederland NV,
Banque Nationale de Paris and Chase Manhattan Bank NA.
| Financial Reports |
H.K. BANKS TO RAISE PRIME RATES SOON, DEALERS SAY
| Banks in Hong Kong are likely to raise
prime rates by half a percentage point to 6-1/2 pct following a
one-quarter point prime rate increase by two major U.S. Banks
yesterday, dealers said.
They told Reuters local banks may decide on the increase at
this weekend's routine meeting of the Hong Kong Association of
Banks.
G.C. Goh, chief dealer of the Standard Chartered Bank, said
prime rate increases by Citibank and Chase Manhattan Bank to
7-3/4 pct from 7-1/2 may prompt Hong Kong banks to follow suit.
Goh said local banks want to restore the prime to 6-1/2
pct, the level at beginning of 1987.
The banks raised the prime to the current six pct from five
pct on February 28 after cutting it 1-1/2 points from 6-1/2 on
January 15 in response to upside pressure on the Hong Kong
dollar, he said.
The medium and longer term interbank rates firmed today,
with three months ending at 5-1/16 to 4-7/8 pct against
yesterday's five to 4-13/16 close. The overnight rate, however,
fell to 3-1/2 to three pct from 4-1/2 to four because of
increased liquidity for a local stock issue.
| Commodities and Trade |
FORD MOTOR CO OF CANADA LTD<FC> CUTS ANNUAL DIV
| Annual div six dlrs vs 12 dlrs prior
Pay March 19
Record March 13
Note: 1986 payout includes two dlrs a share extra dividend
1985 payout includes four dlrs a share extra dividend
| Financial Reports |
GERMAN CALL MONEY DROPS BACK AT MONTH START
| Call money rates fell to 3.85/95 pct
from five pct yesterday in moderate trading as month end
tightness disappeared and operators took positions for April.
Dealers said they expected rates to remain within a 3.70 to
four pct range this month. A minor tax payment period on behalf
of customers mid-month, the long Easter weekend and pension
payments were unlikely to tighten rates significantly.
Next Wednesday, 14.9 billion marks are leaving the system
on the expiry of a securities repurchase pact. But dealers said
they expected the Bundesbank to fully replace the outflow with
a new tender at a fixed rate of 3.80 pct.
Commerzbank AG's management board chairman Walter Seipp
called on the Bundesbank to reduce interest rates to protect
the mark through bringing the allocation rate for securities
repurchase agreements down.
But dealers said the Bundesbank was unlikely to ease credit
policies at the moment. There was little domestic and foreign
pressure for lower rates and no signs of a change.
Yesterday one or two large West German banks effectively
drained the domestic money market of liquidity in order to
achieve higher rates from their overnight deposits, dealers
said.
Bundesbank figures showed banks held an average daily 50.7
billion marks in minimum reserves at the central bank over the
first 30 days of March, the exact requirement needed just one
day before the end of the month.
Actual holdings on Monday were 42.0 billion marks.
Because rates soared to the level of the Lombard emergency
funding rate yesterday, banks fell back on the loan facility to
draw down a high 5.3 billion marks in an attempt to meet
Bundesbank needs, the data showed.
| Financial Reports |
SWEDEN'S BOLIDEN AB TAKES OVER U.S. ALLIS-CHALMERS CORP FOR
| 600 MLN CROWNS - OFFICIAL
SWEDEN'S BOLIDEN AB TAKES OVER U.S. ALLIS-CHALMERS CORP FOR
600 MLN CROWNS - OFFICIAL
| Corporate News |
MITSUBISHI HEAVY, C. ITOH TO SELL TRIGUNA STAKES
| Mitsubishi Heavy Industries Ltd <MITH.T>
(MHI) and C. Itoh and Co Ltd <CITT.T> have decided to sell
their combined 65 pct stake in Indonesia's <Pt Triguna Utama
Machinery Industries> to <Caterpillar Tractor Co>, spokesmen
for the two Japanese companies said.
Triguna, set up in 1982, is owned 40 pct by MHI and 25 pct
by C. Itoh and 35 pct by an Indonesian company. It makes about
10 forklift trucks and a similar number of excavators each
month in technological cooperation with MHI.
The spokesmen said the sale results from an expected
restructuring later this year of the 50/50 Caterpillar/MHI
joint venture Japanese company <Caterpillar Mitsubishi Ltd>,
formed in 1963.
They said the venture will be renamed <Shin Caterpillar
Mitsubishi Ltd> and capitalised at 23 billion yen. It will
still be owned equally by MHI and Caterpillar and will be set
up with the aim of centralising MHI's excavator business.
| Other |
SWEDEN'S BOLIDEN AB TAKES OVER MINING GEAR UNITS OF
| ALLIS-CHALMERS CORP FOR 600 MLN CROWNS
SWEDEN'S BOLIDEN AB TAKES OVER MINING GEAR UNITS OF
ALLIS-CHALMERS CORP FOR 600 MLN CROWNS
| Financial Reports |
SUGAR TRADERS FORECAST LIKELY EC SUGAR REBATE
| London traders say the European Community
is likely to award a maximum rebate of 46.80 European currency
units per 100 kilos at today's tender, while traders in Paris
predict a maximum award of 46.40 Ecus.
Last week the EC awarded licences for 59,000 tonnes at a
rebate of 45.678 Ecus.
Trade views differed on the amount of sugar likely to be
released today.
London traders said the EC Commission will probably
endeavour to release a large tonnage, and as much as 100,000
tonnes may be authorised for export under licences up to
end-September.
Paris traders put the likely tonnage at around 60,000.
| Corporate News |
BOLIDEN TAKES OVER ALLIS-CHALMERS DIVISION
| Swedish mining and metals group
Boliden AB <BLDS ST> said it would buy the mining equipment
operations of the U.S. Allis-Chalmers Corp <AH.O>, amounting to
more than 50 pct of group sales, for 600 mln crowns.
Boliden president Kjell Nilsson told a news conference the
acquisition of the Allis-Chalmers unit, which he described as
the world's leading producer of equipment for the mineral
processing industry, would yield positive synergy effects for
Boliden mining, metals and engineering operations.
Nilsson said the takeover also will provide opportunities
to cooperate with the mining and materials handling operations
of Boliden's parent company, <Trelleborg AB>.
He said Allis-Chalmers was selling out because it needed
new cash after suffering big losses in its farm equipment
operation.
The deal is subject to approval by Allis-Chalmers' annual
meeting, company officials said.
| Financial Reports |
PROPOSED JAPAN TAX MAY DAMPEN TOKYO GOLD TRADING
| A proposed sales tax on gold transactions
could put a damper on the Tokyo market and encourage a shift of
trading to Hong Kong and Singapore, senior vice president and
Tokyo branch manager of Credit Suisse Paul Hofer told a press
conference.
"If you impose five pct on both buy and sell transactions,
Tokyo participants in the gold market could be out of business,"
he said. The tax would create such a spread that Japanese would
be unable to compete in the international market, he added.
"How can the government really raise taxes if the system
they impose is prohibitive of generating business?" he said.
The government now imposes a 15 pct tax on physical trades
exceeding 37,500 yen for gold jewellery and coins and a 2.5 yen
tax per 10,000 yen on futures transactions, gold dealers said.
The new five pct tax would be imposed on companies trading
more than 100 mln yen a year and apply to paper gold trades,
gold deposits with banks and trading of gold bars as well as
that of jewellery and coins, dealers said.
However, the tax would lower the rate on jewellery and
coins to only five pct from the current 15 pct, they said.
Hofer said in 1982 Switzerland had imposed a 5.6 pct gold
turnover tax on Jan 1, 1980, but abolished it on Oct 1, 1986.
A study by one of the Swiss banks showed that in early
1980, the first year of the tax, the volume for all Swiss banks
fell by up to 25 pct compared with 1978 and 1979, Hofer said.
Transactions of paper gold also fell up to 75 pct of the
volume prior to imposition of the tax, he said.
While gold transactions in Switzerland decreased, the
volume of trades outside the country, particularly in London
and Luxembourg, increased between 10-25 pct, Hofer said.
Japan is a major importer of gold, buying a yearly average
just under 200 tonnes, gold dealers said.
Last year Japan imported about 600 tonnes of gold, but the
government had bought about 300 tonnes for minting coins to
commemorate the 60th year of Emperor Hirohito's reign, dealers
said.
Gold trading in Tokyo is dominated mainly by Japanese
trading companies, while Credit Suisse is the major foreign
participant.
Daily turnover in the Tokyo spot market ranges between one
and 10 tonnes with the average around three tonnes, while
futures turnover amounts to about four tonnes, gold dealers
said.
"All of us are concerned daily with the fact that the Tokyo
market is growing, that Japan is becoming one of the three
major financial markets in the world ... And in my personal
opinion I think it would be a very big mistake to put a damper
on this positive growth or developments by imposing such a tax,"
Hofer said.
"I don't think it fits the philosophy of an
internationalising market," he added.
Officials of several major Japanese trading houses,
attending the press conference, said they supported Credit
Suisse's call for the government not to impose the gold tax.
| Financial Reports |
INDIAN RATE CUTS TO SPARK INDUSTRY, AGRICULTURE
| The Indian Finance Ministry's
announcement in Parliament yesterday, changing the nation's
interest rate structure, will benefit industry and agriculture
by providing loans at lower interest, bankers and brokers said.
The changes, effective today, included reducing commercial
bank lending rates that have ranged between 15 pct and 17.5 pct
by one percentage point.
New rates, which affect both Indian and foreign banks, also
include a one percentage point gain, to an annual 10 pct, on
deposits of two years or more but less than five.
Bank deposits of five years or more carrying 11 pct
interest have been abolished.
Bankers said the interest rate modifications reflect the
government's concern to reduce the costs of borrowing and help
improve world competitiveness of Indian goods.
There is likely to be a shift to short-term bank deposits
by long-term depositors, bankers predicted. This will create
the flexibility to draw and re-invest funds in either equity
shares or short-term bank deposits, they said.
A merchant banker also said reduced manufacturing costs due
to lower lending rates are likely to boost the share market.
Tata Steel, a trend setter on the Bombay Stock Exchange,
opened today higher at 1,040 rupees against yesterday's closing
of 1,012.50 rupees.
A stockbroker said investors may be less enthusiastic now
to buy convertible and non-convertible debentures because the
Finance Ministry has reduced the annual interest rate to 12.5
pct and 14 pct respectively from 13.5 and 15 pct respectively.
"But overall debenture prospects remain bright because the
rates of interest on them will still be higher than what banks
pay for deposits of similar maturity," a merchant banker said.
| Financial Reports |
U.K. MONEY MARKET SHORTAGE FORECAST REVISED UP
| The Bank of England said it had revised
its estimate of the shortage in the money market up to 1.3
billion stg from 1.2 billion before taking account of its early
operations.
The Bank has provided 689 mln stg assistance so far today.
| Other |
INTERNATIO-MUELLER ACQUIRES CANADIAN COMPANY
| Internatio-Mueller NV <INTN.AS> said it
will acquire <Promac Controls Inc> of Canada but declined to
comment on the amount of the payment, which will be in cash.
Promac, which produces measurement and regulating
equipment, has a work force of 50 and had 1986 turnover of five
mln guilders, an Internatio spokesman said.
He said the takeover fits into the company's drive for
expansion in the U.S and Canada and further acquisitions are
possible.
Promac Controls will be part of Internatio's
electrotechnical sector.
| Financial Reports |
U.K. INTERVENTION FEED WHEAT SOLD TO HOME MARKET
| A total of 126,031 tonnes of U.K.
Intervention feed wheat was sold to the home market at this
week's tender, provisional results show, the Home Grown Cereals
Authority (HGCA), said.
Actual prices were not reported but the wheat was sold at,
or above, the March intervention price of 119.17 stg per tonne.
Grain traders sought to buy about 340,000 tonnes.
| Corporate News |
SRI LANKA TO UPGRADE QUALITY OF COCONUT PRODUCTS
| The Sri Lankan cabinet approved
recommendations to upgrade the quality of coconut fibre
products, the government said.
It said the recommendations also suggested that
encouragement be given for the manufacture of value-added
products from coconut fibre and a market development programme
be launched for traditional and value-added products.
It also suggested the setting up of a marketing mission on
coconut fibre to be sent this month to principal target
markets.
Sri Lanka is the world's second largest exporter of
dessicated coconut after the Philippines.
| Corporate News |
HOOGOVENS CONCLUDES TAKEOVER OF PHILIPS CIREX UNIT
| Dutch steel concern
<Hoogovens Groep BV> said it had reached agreement with NV
Philips Gloeielampenfabrieken <PGLO.AS> on its takeover of
Cirex, a specialised Philips precision wax moulding unit.
Neither party would reveal financial details of the deal,
initially announced in October.
Hoogovens said Cirex turnover had grown in recent years to
30 mln guilders in 1986 and it expected further expansion.
The unit delivers mainly to the car industry.
Hoogovens said the acquisition would strengthen its
position as a supplier to industry of high-value metal
products.
| Financial Reports |
PRECIOUS METALS CLIMATE IMPROVING, SAYS MONTAGU
| The climate for precious metals is
improving with prices benefiting from renewed inflation fears
and the switching of funds from dollar and stock markets,
brokers Samuel Montagu and Co Ltd said.
Silver prices in March gained some 15 pct in dlr terms due
to a weak dollar and silver is felt to be fairly cheap relative
to gold, Montagu said in its monthly silver newsletter. In
March the gold/silver ratio narrowed from 74 to less than 67.
The supply/demand position has improved in the past year,
and despite a silver market surplus, the quantity of silver is
modest enough to be absorbed by investors, it added.
The report said the firmness in oil prices was likely to
continue in the short term.
A period of consolidation might be necessary before prices
attempted to move significantly higher,it said, but so long as
the dollar remains under pressure then the outlook for silver
was positive.
However silver was less likely to continue to outpace the
other metals by such a margin, Montagu said.
| Corporate News |
TOTAL U.S. COPPER STOCKS LOWER IN JANUARY
| Total copper stocks held by U.S. rod
mills and refiners (including wirebars, cathodes, scrap, rod
and in-process material) dropped to 155,467,000 lbs at the end
of January from 203,513,000 lbs at the end of December, the
American Bureau of Metal Statistics said.
Rod stocks held by refiners and rod mills decreased to
61,384,000 lbs in January from 69,986,000 lbs in December.
Cathode inventories at rod mills fell to 86,456,000 lbs in
January from 124,409,000 lbs in December, while wirebar stocks
were lower at 3,508,000 lbs versus 4,913,000 lbs in December.
December rod mill wirebar use nearly doubled to 3,148,000
lbs in January from 1,540,000 lbs in December. Cathode use by
mills and refiners increased to 255,266,000 lbs in January from
238,821,000 lbs in December.
| Corporate News |
ROTTERDAM GRAIN HANDLERS STAGE LIGHTNING STRIKES
| Lightning strikes hit the grain sector
of the port of Rotterdam today after employers turned down
union demands for shorter working hours in a new labour
agreement, transport union FNV spokesman Bert Duim said.
Around 140 grain handlers stopped work, 125 of them at the
two Europoort locations of Graan Elevator Mij (GEM), which
handles about 95 pct of grain, oilseeds and derivatives passing
through Rotterdam.
GEM managing director Pieter van der Vorm said the
facilities were 40 pct operational.
The employers had invited the unions for talks later today,
but details of the labour agreement would not be on the agenda,
Van der Vorm said.
It is barely one month since the end of an eight-week
campaign of lightning strikes against redundancies in
Rotterdam's general cargo sector, which stevedoring companies
said cost them millions of guilders.
| Financial Reports |
BOLIDEN TAKES OVER ALLIS-CHALMERS DIVISION
| Swedish mining and metals group
Boliden AB said it would buy the mining equipment operations of
the U.S. Allis-Chalmers Corp, amounting to more than 50 pct of
group sales, for 600 mln crowns.
Boliden president Kjell Nilsson told a news conference the
acquisition of the Allis-Chalmers unit, which he described as
the world's leading producer of equipment for the mineral
processing industry, would yield positive synergy effects for
Boliden mining, metals and engineering operations.
Nilsson said the takeover will provide opportunities to
cooperate with the mining and materials handling operations of
Boliden's parent company, Trelleborg AB.
He said Allis-Chalmers was selling out because it needed
new cash after suffering big losses in its farm equipment
operation.
The deal is subject to approval by Allis-Chalmers' annual
meeting, company officials said.
| Corporate News |
MALAYSIA DECLINES TO STATE POSITION ON COCOA PACT
| Government officials in Malaysia, a
major cocoa producer, have declined to say whether it will join
the International Cocoa Agreement (ICCA) for which buffer stock
rules were agreed in London last week.
Ministry of Primary Industries officials said in January
the cabinet would decide on Malaysia's participation, but so
far a decision has not been announced. The government is said
to be in favour of joining the pact, but local cocoa growers
and traders told Reuters they are against the idea because
certain provisions in it may be to their disadvantage.
Malaysia is the world's fourth largest cocoa producer. The
government feels that the pact, through its buffer stock
mechanism, can help stabilise prices in a market which is
labouring under surpluses, officials said.
But growers and traders are concerned Malaysia's
participation in the pact will require them to pay a levy for
exports of cocoa to non-member countries of the ICCA.
They estimate the levy at around 100 ringgit a tonne at
current prices and said they are not prepared to accept it
because a big portion of Malaysia's cocoa exports, officially
estimated at 112,000 tonnes in 1986, goes to non-members.
Most growers and traders added they are also against a
buffer stock measure under the agreement which requires
withholding of cocoa stocks when prices slump.
Malaysia, which produced 117,000 tonnes of cocoa last year,
might be forced to withhold up to 70,000 tonnes worth some 30
mln ringgit under such a measure in the long-term, and this
might affect their economic viability, they said.
"The cost of maintaining such a stock can be high and it
will be a real messy business for the government and the trade
if it ever occurs," an industry source said.
The growers and traders also said that under new buffer
stock rules Malaysia can continue to benefit even if it is not
a member of the pact, as the buffer stock manager is also
allowed to buy from non-members for the stockpile.
Under the new rules purchases from non-members, such as
Malaysia, will be limited to 15 pct of the total stock.
Malaysia has come under pressure from some producers to
join the pact soon, officials said, but they noted that it need
not rush to do so as there are provisions which allow countries
to join the agreement even at a later date.
| Financial Reports |
CURRENCY INSTABILITY WILL NOT LAST - SUMITA
| Bank of Japan Governor Satoshi Sumita said
the present foreign exchange market instability will not last
long as there is caution in the market regarding the rapid
decline of the U.S. Unit.
He told reporters the major currency nations are determined
to continue their concerted intervention whenever necessary to
stave off speculative dollar selling in line with their
February 22 currency stability agreement in Paris.
Sumita also said he did not see the recent dollar drop as
anything like a free-fall.
| Financial Reports |
BOND CORP COMPLETES CONSOLIDATED PRESS PURCHASE
| Bond Corp Holdings Ltd <BONA.S> said it
has completed the 1.05 billion dlr purchase of the electronic
media interests of unlisted <Consolidated Press Holdings Ltd>.
The new company <Bond Media Ltd> now holds the television,
broadcasting and associated businesses previously held by Kerry
Packer's Consolidated, Bond Corp said in a statement.
Packer, who made the sale in January, will be a director of
Bond Media. As previously reported, Bond Media will be publicly
floated with a rights issue to Bond Corp shareholders. Bond
Media will be 50 pct owned by Bond Corp and is expected to be
listed by the end of May, it said.
| Financial Reports |
H.K. BANKS TO RAISE PRIME RATES SOON, DEALERS SAY
| Banks in Hong Kong are likely to raise
prime rates by half a percentage point to 6-1/2 pct following a
one-quarter point prime rate increase by two major U.S. Banks
yesterday, dealers said.
They told Reuters local banks may decide on the increase at
this weekend's routine meeting of the Hong Kong Association of
Banks.
G.C. Goh, chief dealer of the Standard Chartered Bank, said
prime rate increases by Citibank and Chase Manhattan Bank to
7-3/4 pct from 7-1/2 may prompt Hong Kong banks to follow suit.
Goh said local banks want to restore the prime to 6-1/2
pct, the level at beginning of 1987.
The banks raised the prime to the current six pct from five
pct on February 28 after cutting it 1-1/2 points from 6-1/2 on
January 15 in response to upside pressure on the Hong Kong
dollar, he said.
The medium and longer term interbank rates firmed today,
with three months ending at 5-1/16 to 4-7/8 pct against
yesterday's five to 4-13/16 close. The overnight rate, however,
fell to 3-1/2 to three pct from 4-1/2 to four because of
increased liquidity for a local stock issue.
| Financial Reports |
ONE OFFER FOR SRW WHEAT ON CALL SESSION, NO MILO
| One offer but no bid was posted for SRW
wheat on the call session at the St Louis Merchants Exchange
today. There were no bids or offers for milo.
June 15-July 15 bill of lading for wheat was offered at 17
over July, no comparison, no bid.
| Financial Reports |
GUARDIAN ROYAL PROFIT UP SHARPLY AT 143.8 MLN STG
| Year to Dec 31
Shr profit 63.6p vs loss 8.7p
Final div 24p making 34p vs total 28.75p
Pretax profit 143.8 mln stg vs 3.5 mln
General underwriting loss on short-term business 79.8 vs
154.3
NOTE - Company's full name is Guardian Royal Assuance Plc
<GREX.L>
Underwriting profit on long-term insurance business 21.6
mln stg vs 19.1 mln
Loss on discontinued international professional indemnity
business nil vs 40.6 mln stg
Investment income 213.8 mln stg vs 193.6 mln
Less interest payable 11.8 mln stg vs 14.3 mln
Tax 38.8 mln stg vs 15.0 mln Minorities 3.3 mln stg vs 2.3
mln
Extraordinary item - contingency claims provisions on
discontinued international business nil vs 55.0 mln stg
| Industrial and Sector News |
PRECIOUS METALS CLIMATE IMPROVING, SAYS MONTAGU
| The climate for precious metals is
improving with prices benefiting from renewed inflation fears
and the switching of funds from dollar and stock markets,
brokers Samuel Montagu and Co Ltd said.
Silver prices in March gained some 15 pct in dlr terms due
to a weak dollar and silver is felt to be fairly cheap relative
to gold, Montagu said in its monthly silver newsletter. In
March the gold/silver ratio narrowed from 74 to less than 67.
The supply/demand position has improved in the past year,
and despite a silver market surplus, the quantity of silver is
modest enough to be absorbed by investors, it added.
The report said the firmness in oil prices was likely to
continue in the short term.
A period of consolidation might be necessary before prices
attempted to move significantly higher,it said, but so long as
the dollar remains under pressure then the outlook for silver
was positive.
However silver was less likely to continue to outpace the
other metals by such a margin, Montagu said.
| Financial Reports |
SWEDISH MATCH SELLS PORTUGUESE UNIT
| Swedish Match AB <SMBS.ST> said it was
selling one of its Portuguese subsidiaries, <Sociedade de
Iniciativa e Aproveitamentos Florestais Sarl> (SIAF), to the
Porto-based <Sonae Group> for an undisclosed price.
SIAF, a subsidiary of Swedish Match since 1946, had a
turnover last year of 62 mln crowns, the Swedish group said in
a statement.
| Financial Reports |
SUN LIFE ASSURANCE profit up
| Year 1986
DIV 18.1p making 28.5p vs 23.74p
PROFIT AFTER TAX 17.4 mln stg vs 14.1 mln
TAX 0.7 mln stg vs 0.2 mln
Bonus distribution rose to new record level of 125.1 mln
stg vs 114.9 mln in 1985
Full name of company is Sun Life Assurance Society Plc
<SULL.L>.
| Financial Reports |
SUN ALLIANCE PRETAX PROFIT 180.4 MLN STG VS 37.7 MLN FOR
| 1986
SUN ALLIANCE PRETAX PROFIT 180.4 MLN STG VS 37.7 MLN FOR
1986
| Corporate News |