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MERRILL LYNCH ISSUES 100 MLN ECU EUROBOND

Merrill Lynch and Co is issuing a 100 mln Ecu eurobond due March 30, 1990, paying 7-3/8 pct and priced at 101 pct, lead manager Banque Paribas Capital Markets said. Merrill Lynch Capital Markets is co-lead manager. The issue is available in denominations of 1,000 and 10,00 Ecus and will be listed in Luxembourg. The payment date is March 30, 1990. The selling concession is 1-3/8 pct while management and underwriting combined pays 1/2 pct. REUTER 

WALLENBERGS FIGHT BID FOR SWEDISH MATCH STAKE

Sweden's Wallenberg group fought back a bid by the London-based Swedish financier Erik Penser to secure a large stake in Swedish Match <SMBS ST>, one of the companies at the core of their business empire. A statement issued by the Wallenberg holding companies AB Investor and Forvaltnings AB Providentia said they had taken over an option held by Nobel Industrier Sweden AB to acquire 33 pct of the voting rights in Swedish Match. Thre Wallenbergs paid Nobel Industrier <NOBL ST>, in which Penser group has a 72 pct stake, about 20 pct over the market price for the Swedish Match option, the statement said. Swedish Match's B shares open to foreign buyers closed at 424 crowns on Friday. The A shares -- with increased voting rights -- closed at 450 crowns for the restricted and 455 for the free shares. The statement said the deal increased Investor's stake to 49.4 pct of the voting rights and 14.8 pct of the share capital while Providentia is left holding 34.1 pct of the voting rights and 14.5 pct of the share capital in Swedish Match. The Wallenbergs' stake in Swedish Match had previously amounted to 52 pct of the voting rights in the company. The Swedish Match deal will cost the Wallenbergs about 400 mln crowns, share analysts said, making it one of the most expensise moves the group has undertaken in the last four years to defend its far-flung interests from outside predators. The Wallenbergs originally sold Nobel Industrier, an arms and chemicals group, to Penser in 1984 to pay for buying Volvo <VOLV ST> out of two other key group companies, Atlas Copco <ASTS ST> and Stora Koppabergs <SKPS ST>. Since then, the Wallenbergs were ousted as the largest shareholders in SKF (SKFR ST> by Skanska AB <SKBS ST> and Frederik Lundberg wrested control of Incentive AB from them. Lundberg, a Zurich-based Swedish property tycoon, also managed to acquire a 25 pct stake in another Wallenberg company, the diary equipment firm Alfa -Laval AB <ALFS ST>. During 1986, the Wallenbergs have been concentrating on building up their stake in Investor and Providentia to prevent any raid on the heart of their business empire. But analysts say the Wallenbergs' position in the electrical engineering firm ASEA AB <ASEA ST> is also too small at 12.6 pct of the voting rights and there has been growing speculation that the group will be forced to sell off fringe interests to protect its core activities. REUTER 

INDONESIAN SOYBEAN IMPORTS FORECAST TO RISE

Soybean imports are forecast to rise to 425,000 tonnes in 1987/88 (October/September) from an estimated 300,000 in 1986/87 and 375,000 in 1985/86, the U.S. Embassy said in its annual report on Indonesia's agriculture. It said Indonesia did not achieve its goal of self-sufficiency in soybean output in calendar 1986 because it did not meet a planned increase in area planted and because yields have remained below target. Soybean meal imports are forecast to fall to around 190,000 tonnes in 1987/88 from 270,000 tonnes in 1986/87 and 295,000 tonnes in 1985/86. Domestic soybean production is forecast to rise steadily to 1.08 mln tonnes in 1987/88 from 980,000 in the current year and 890,000 in 1985/86, the report said. Imports are forecast to fall in the current year but to rise in 1987/88 because of a new soybean crushing plant due to come on stream in early 1988. China is the main supplier with a 79 pct share, while the U.S. Provides the rest, it said. "This pattern will likely continue during 1986/87 since domestic soyfood processors prefer Chinese beans and are willing to pay a premium for them," it said. Area planted is expected to increase by 10 pct in both 1986/87 and 1987/88. "Yield increases continue to be hampered by an insufficient supply of quality seeds, along with pest and disease problems," the report said. REUTER 

SHV SAYS IT MAKING TENDER OFFER FOR IC GAS

<SHV (United Kingdom) Holding Co Ltd> said it was making a tender offer for up to 33 mln ordinary shares in Imperial Continental Gas Association.<ICGS.L>. It said in a statement the offer was on the basis of 700p for each IC Gas ordinary and 252p for every one stg nominal of IC Gas loan stock. SHV already holds 6.8 mln IC Gas ordinary stock units representing around 4.9 pct of the current issued share capital. Successful completion of the offer would increase SHV's stake in IC Gas to 39.8 mln shares, representing around 27.9 pct of issued share capital, it said. The offer capitalises IC Gas at around one billion stg. It said it was tendering for both ordinary stock and loan stock, which when fully converted, gave a total of 33 mln IC Gas ordinary. It is making the tender offer through N.M. Rothschilds. IC Gas said in a statement it noted the SHV tender offer and the terms were being considered. It said a further statement would be made as soon as possible. REUTER... 

NOBEL/FINANCIERE ROBUR ISSUE FRENCH FRANC BONDS

Nobel and Financiere Robur are issuing French franc domestic bonds with share warrants, according to announcements in the Official Bulletin (BALO). Nobel is issuing a 200 mln franc 10-year bond with a 5.5 pct coupon in 1,000 franc denominations, to which existing shareholders will have subscription rights in the ratio of one bond for every 120 shares held with a nominal 10 franc value. The bonds will each carry eight warrants, each giving the right to subscribe to one 100-franc Nobel share at 140 francs between June 1 1987 and May 31 1994. Payment date is April 28. In a second stage of the operation, the company will issue 3.63 mln new 100-franc nominal shares at a price of 120 francs, in the ratio of three new shares for 20 existing 10-franc nominal shares. This will take the company's capital to 677.6 mln francs from the present 242 mln. In a separate operation, Financiere Robur is issuing a 147.73 mln French franc eight-year bond with a six pct coupon, denominated in 1,100 franc units and priced at par. Payment date will be April 13 and existing shareholders will have a preferential right to subscribe to the issue in the ratio of one bond for every 10 shares held, between March 9 and March 30 1987. Each bond will carry two warrants, each giving the right to subscribe between January 1 1988 and March 31 1992 to one Financiere Robur share at a price of 210 francs. REUTER 

JAPANESE BANKS COOL ON NIGERIAN DEBT TALKS

Japanese banks are expected to give Nigerian debt negotiators a cool response when they arrive here tomorrow for talks, banking sources said. "We're not very enthusiastic about Nigeria's debt rescheduling," said a senior official at a leading Japanese bank. A team of Nigerian officials will meet with Japanese creditor banks here later this week to seek Japanese support for a proposed refinancing of part of Nigeria's 19 billion dlr foreign debt, bankers said. The senior bank official said a majority of Japanese bank creditors are unwilling to provide any new credits to Nigeria although about 80 pct have reluctantly agreed to accept rescheduling of part of their existing loans. "The problem is Nigeria has so far neglected us Japanese creditors and we have yet to receive a clear-cut picture of the nation's debt situation," said another Japanese bank official. He said Japanese bankers were unaware of the exact extent of Western commercial bank exposure to Nigeria and were uncertain about the proposed refinancing package details. Some 21 Japanese banks have loans outstanding to Nigeria, representing about four pct of the credit extended by Western commercial institutions, banking sources said. They said Nigeria would probably request about 320 mln dlrs in fresh private bank money and rescheduling of some 1.4 to 1.5 billion dlrs in existing loans due in 1986 and 1987. Japanese banks want Nigeria to make clear its debt repayment scheme as well as its economic reconstruction plans during the two-day meeting here, the sources added. "Otherwise, our response will be very negative," the senior official said. Banking sources said some 80 pct of international creditor banks involved have responded positively to the Nigerian debt proposal. Bank of Japan officials said they hope Japanese commercial banks will help Nigeria overcome its debt problems. Barclays Bank plc <BCS.L> has the most exposure to Nigeria's debt and is chairing a bank steering committee looking at the problem, the banking sources said. BankAmerica Corp <BAC.N> is coordinating private bank creditors in the Far East and representing them on the committee, they added. REUTER 

U.K. MONEY MARKET DEFICIT FORECAST AT 800 MLN STG

The Bank of England said it forecast a shortage of around 800 mln stg in the money market today. Among the main factors affecting liquidity, bills maturing in official hands and the take-up of treasury bills will drain some 1.61 billion stg. Partly offsetting this outflow, exchequer transactions and a fall in note circulation will add around 425 mln stg and 360 mln stg respectively. In addition, bankers' balances above target will add some 20 mln stg to the system today. REUTER 

JAPAN SALES TAX MAY FORCE NAKASONE OUT OF OFFICE

Prime Minister Yasuhiro Nakasone is likely to leave office this summer amid opposition to his controversial tax-reform package, political analysts said. They said Nakasone's reputation as a skilled politician has suffered irreparable damage from his support of a five pct sales tax planned for January 1988. "Nakasone is trying to carry out a drastic tax reform at the end of his administration, which is not only impossible but also is very irresponsible as a politican," Rei Shiratori, professor of politics at Dokkyo University, told Reuters. "Nakasone will almost certainly step down as soon as parliament approves the sales tax, probably in the summer," Shiratori said. Some ruling Liberal Democratic Party (LDP) members of parliament have spoken against the tax, which Nakasone says is needed to balance planned cuts in income and corporate taxes. Nakasone today called for disciplinary action against LDP members who oppose the tax. "There are some who are objecting because of their constituencies," he told a meeting of government and party leaders. "If the party discipline is broken, I would like to see punishment considered." "A proposed sales tax has become a political issue, partly because Nakasone breached his election pledge against introducing it," Shiratori said. "Moreover, the tax is being introduced when the public feels uncertainty about the sluggish economy stemming from the yen's appreciation and about the future when the Japanese society is rapidly aging," he said. Political analysts said the controversial tax could affect the more than 2,500 local elections scheduled for April, involving governors, mayors, town and village heads and assemblies at all levels. But the situation is complicated, since opposition parties excluding the communists sometimes put up joint candidates with the LDP, the political analysts added. Shiratori said, "In the worst case, implementation of the sales tax, now scheduled for next January, may be put off for some time before the government makes a final decision. "Another alternative is to modify the planned five pct to perhaps three pct. "A third alternative for the government is to ram through the bills only with the attendance of LDP MPs," he said. Seizaburo Sato, professor of politics at Tokyo University, thought the last possibility most likely. "I think the LDP alone will take a vote on the tax bills," he said. The LDP now holds 304 seats in the 512-seat Lower House and 143 in the 252-seat Upper House. To lure opposition parties back to parliament after the LDP pushes through the tax bills, the Nakasone cabinet will have to resign, Sato said. "Boycotting opposition members will be more willing to return to parliament if a new cabinet has been formed," he said. REUTER 

BLACK MINERS SUPPORT S. AFRICAN MINES TAKEOVER

Thousands of black mineworkers roared support for a union proposal to seize control of South Africa's gold, uranium, platinum and coal mines if the owners refuse to improve conditions for migrant black workers. About 15,000 miners attended a rally here to endorse moves proposed by last week's annual meeting of the 200,000 strong National Union of Mineworkers (NUM). They also supported a proposal for a national strike at the end of this month if the owners refused to begin negotiations. Migrant workers from surrounding countries make up more than half of the labour force in the mines. It was not stated how the union would "seize control." The miners' leaders also demanded an end to the system of single sex hostels for migrant workers, to be replaced by housing schemes so that workers could live with their families. The crowd, one of the largest to attend a meeting since South Africa declared a state of emergency last June, also shouted approval of a proposal to work closely with anti-apartheid movements such as the United Democratic Front (UDF) which claims two mln members. They also shouted their support for a demand that jailed black nationalist leader Nelson Mandela be released. REUTER 

THAILAND ANNOUNCES THIRD TAPIOCA QUOTA FOR EC

Thailand's Commerce Ministry announced a new tapioca export quota of 737,987 tonnes for the European Community against 762,860 tonnes for the previous allocation. The ministry said the fresh allocation, for the February 27-July 7 shipment period, is the third under a maximum 5.5 mln tonne overall quota that Thailand obtained from the EC for calendar 1987. It said the quota allocation was based on a national tapioca pellet stock of 4.34 mln tonnes surveyed last week, up from 3.05 mln in mid-January. REUTER 

ATPC MEMBERS FIND WAYS TO CURB TIN EXPORTS

Mine and industry officials from most member states of the Association of Tin Producing Countries (ATPC) say they have found ways to limit group exports to 96,000 tonnes in the year started March 1, according to views polled by Reuter correspondents. The plan to curb exports, agreed in January, is aimed at cutting the world surplus to 50,000 tonnes from 70,000 now and boosting prices to about 19 ringgit a kilo from just over 16. Members of the seven-member Kuala Lumpur-based ATPC account for some 65 pct of the world's tin output. Under the ATPC plan, Malaysia has been allocated an export quota of 28,526 tonnes, Indonesia 24,516, Thailand 19,000, Bolivia 13,761, Zaire 1,736 and Nigeria 1,461. Australia has said it is not setting any export quota. However, the tonnage allocated to it, 7,000 tonnes, is roughly equal to its expected output this year. Comment from officials in Zaire was unavailable. Mine officials in Malaysia, the world's leading producer, said only 188 mines will be allowed to operate to ensure that output is limited to around 31,500 tonnes in the year started March 1. Chief Inspector of Mines Redzuan Sumun told Reuters that excess output of some 3,000 tonnes after exports of 28,500 in the one-year quota period would be kept in the national stock. Mine owners in Malaysia have welcomed the ATPC export curb and asked the government not to issue new mining licences. More than 100 applications for licences are pending. Redzuan said the Mines Department would approve new mining licences only if a six-month review of production trends showed that local mines were not overproducing. ATPC chairman and Indonesia's Mining and Energy Minister Subroto has pledged his country's support for the export curb. A spokesman for the state-owned tin mining company PT Tambang Timah told Reuters it would be easy for Indonesia to stick to an export quota of 24,516 tonnes because this was close to exports in calendar 1986 of 24,636. In Bangkok, Thai Industry Minister Pramual Sabhavasu said Thailand would keep to its 19,000 tonne quota and added this would not cause the local industry hardship at current prices. To insure adherence, the industry ministry and sole tin exporter Thailand Smelting and Refining Co would encourage bigger stockpiles, and income tax exemptions would be permitted, he said. The Thai Mineral Resources Department is expected to disallow new tin mines opening this year to prevent excessive production, industry sources said. But Mining Industry Council President Dam Teutong told Reuters that if the tin price rose above 18 ringgit a kilo, Thai miners would press for the opening of more new mines. Thailand exported 18,367 tonnes in 1986, up from 17,359 in 1985, Pramual said. Bolivia said it expects to export less tin this year than its allocated 13,761 tonne quota. Mining Minister Jaimie Villalobos told Reuters in La Paz that Bolivia expected to export about 9,000 tonnes of tin in calendar 1987. He said this was due to the sacking after the tin crisis of October 1985 of about 20,000 of the 28,000 workers at the state mining company Comibol, which produces more than 80 pct of Bolivia's total exports. He said there were risks in the ATPC plan to cut exports but added he was confident the goals set by the plan would be achieved. He did not elaborate. Mines, Power and Steel Minister Bunu Sheriff Musa said in Lagos that Nigeria would have no difficulty keeping within its ATPC quota of 1,461 tonnes because its metals output had declined due to poor demand and high production costs. Industry sources told Reuters that Nigeria's output was less than 1,000 tonnes last year. ATPC officials said they would monitor member countries' export figures every three months using customs documents and make projections from such data to see if quotas were likely to be breached within the year-long quota period. The ATPC officials said members that appeared likely to breach their quotas would be told to take remedial measures. They added that if member countries were unable to fulfil their quotas their extra tonnage would be reallocated to other members at the ATPC's discretion. The ATPC would have produced and exported an estimated 106,000 tonnes of tin in 1987 without the plan. Non-members Brazil and China have pledged to cooperate with the ATPC and limit their exports to 21,000 and 7,000 tonnes respectively during the quota period. REUTER 

SOUTH KOREA TO HOLD CURRENT ACCOUNT SURPLUS DOWN

South Korea plans to take steps to keep its 1987 current account surplus below five billion dlrs, Economic Planning Board Minister Kim Mahn-je said. Kim told reporters the government would repay loans ahead of schedule and encourage firms to increase imports and investment abroad to prevent the current account surplus from rising too quickly. Last year South Korea's current account surplus was 4.65 billion dlrs. It widened to 622 mln dlrs in January from 484 mln in December and compared with a deficit of 334 mln in January 1986, Bank of Korea figures show. REUTER 

DUTCH OILSEEDS/FATS IMPORTS ROSE IN 1986

and oil-bearing raw materials, fats and oils rose to 2.16 mln tonnes on a fat/oil basis in 1986 from 2.12 mln tonnes in 1985, the Commodity Board for Margarine, Fats and Oils said. Exports of the same commodities fell to 1.35 mln tonnes from 1.38 mln on a fat-oil basis. Fat- and oil-bearing raw materials imports rose to 760,000 from 709,200 tonnes on a fat/oil basis and to 3.47 mln tonnes actual weight from 3.32 mln. Soyabeans were the main component, with imports rising to 2.82 mln tonnes actual weight from 2.75 mln. Sunflowerseed imports fell to 308,200 from 342,900 tonnes while rapeseed imports rose to 292,000 from 201,400 tonnes. Exports of fat- and oil-bearing raw materials rose to 28,700 tonnes from 19,800 on a fat/oil basis and to 137,200 from 89,900 tonnes actual weight. Soyabean exports rose to 119,400 tonnes actual weight from 73,200 tonnes. Imports of vegetable fats, including palm oil, rose to 445,400 tonnes from 362,500 and exports to 151,500 from 139,800. Vegetable oil imports fell to 227,500 tonnes in 1986 from 286,300 in 1985, and exports to 661,400 from 683,400 tonnes. Soyabean oil imports were 32,000 (48,200), sunflower oil 61,600 (92,800), rape oil 82,900 (94,900) and groundnut oil 9,300 (12,200). Exports of soybean oil were 325,900 (338,800), sun oil 172,100 (189,800), rape oil 114,300 (103,400) and groundnut oil 7,000 (10,400). Animal fat imports rose to 371,700 from 345,800 tonnes and exports to 124,100 tonnes from 113,000. Fishoil imports fell to 190,600 from 265,600 and exports to 56,500 from 85,500 tonnes. reuter... 

CHINA'S HEILONGJIANG PROVINCE BOOSTS GOLD OUTPUT

Gold output in the northeast China province of Heilongjiang rose 22.7 pct in 1986 from 1985's level, the New China News Agency said. It gave no figures. It said the province, China's second largest gold producer after Shandong, plans to double gold output by 1990 from the 1986 level. China does not publish gold production figures. However, industry sources estimate output at about 65 tonnes a year, with exports put between 11 and 31 tonnes. China is selling more gold abroad to offset large trade deficits in recent years, western diplomats said. REUTER 

SALE TILNEY BUYS STAKE IN U.S. INSURANCE BROKER

<Sale Tilney Plc> said it has purchased 80 pct of the ordinary share capital of <B and R International Inc.>, a U.S. Insurance broker, for 5.6 mln dlrs. Sale is paying 3.6 mln dlrs in cash on completion, with the balance plus interest to be paid in equal instalments over the next six years. B and R posted pretax profit of 855,000 dlrs in the year to Dec 31, 1986 when it had net tangible assets of 563,000 dlrs. REUTER 

SAN MIGUEL BOARD APPOINTMENT MAY MEAN CHANGES

Disagreement over management of <San Miguel Corp> (SMC) may follow the Philippine government's appointment of a well-known banker to the SMC board, investment analysts said. They told Reuters the presence of <United Coconut Planters Bank> (UCPB) president Ramon Sy to the board of SMC may mean changes in SMC management, which for decades was controlled by the family of its president, Andres Soriano. Sy was appointed by a government commission that controls 51 pct of San Miguel's stock, after another nominee resigned. The Presidential Commission on Good Government (PCGG) holds six seats on the 15-member SMC board, which represent 33.13 mln sequestered shares. The stocks were seized on suspicion that they were owned by Eduardo Cojuangco, then chairman of UCPB and San Miguel. He was a close associate of deposed president Ferdinand Marcos, and he left the country after Marcos's fall. Before the seizure, Soriano led a 3.3 billion peso bid for the shares, paying UCPB a 500 mln peso deposit. The bid valued the shares at about 100 pesos. They traded at 93 pesos today, down from 95.50 at Friday's close. Finance Secretary Jaime Ongpin told reporters on Saturday that Sy would definitely sit on the SMC board despite the objections of some directors associated with Soriano. "I don't think there is a conflict of interest as such," he said. "I was potentially concerned with seeing a situation where you have a contentious atmosphere on the board. But Sy has assured (the government) that he does not intend to behave in a contentious manner," Ongpin added. The Soriano group cited conflict of interest in opposing Sy's directorship. Its lawyer said in a letter to the PCGG that a pending suit seeking forfeiture of SMC's 500 mln peso deposit and major undisclosed damages against the brewery represented a clear conflict. UCPB, however, sought board representation before Sy's appointment, petitioning the PCGG "so that the interests of the owners of the 33 mln shares would be adequately protected." Investment analysts polled by Reuters said the UCPB had a right to a slot on the SMC board as trustee for coconut farmers who claim ownership of the disputed shares. The analysts said Sy, backed by the government, would probably suggest replacements for PCGG nominees expected to resign soon in keeping with a new law prohibiting government officials from working for private companies. SMC's annual election is scheduled for May. A UCPB spokesman declined to comment, saying it was up to the PCGG to decide whom to appoint. One analyst said objections were understandable from the family that founded the company 97 years ago. "It is a natural instinct of self-preservation for Soriano," he said. SMC posted a net income of 448.8 mln pesos in 1985 on net sales of 10.99 billion pesos against 422.3 mln in 1984 on sales of 10.36 billion. REUTER 

ESTIMATED DROP IN JAPAN CORPORATE PROFITS TRIMMED

The combined profits of Japan's major corporations, excluding financial institutions, are forecast to fall 19.2 pct in the 1986/87 year ending March 31, compared to the 19.9 pct decline projected in late November, Wako Research Institute of Economics said. The private research body also said in a statement that 437 of the 1,084 firms listed on the first section of the Tokyo Stock Exchange foresee an 11.6 pct fall in sales in the year against an 11.4 pct fall estimated last November. Current profits are projected to fall 4.4 pct in 1987/88 on sales seen increasing by 4.2 pct, it said. Rationalisation measures taken by manufacturing industries to cope with the yen's sharp rise are beginning to brighten their business outlook, the institute said. It said lower interest rates, which are expected to reduce corporate borrowing costs, are also behind the improved performance outlook. Earnings performance in the non-manufacturing sector will be supported by firm demand in the real estate and construction businesses, it said. The forecast was based on average exchange rate estimates of 160 yen to the dollar in 1986/87 and 155 yen in 1987/88. REUTER 

LEBANESE PRESIDENT AGREES NEW PEACE MOVES

Lebanese President Amin Gemayel has agreed to three key points in a new Syrian-brokered plan aimed at ending civil war in Lebanon, official sources said. They said the Maronite Christian leader has agreed to give up Cabinet voting rights, to ensure that the Prime Minister is elected by parliament and to the abolition in principle of Lebanon's current power-sharing system. Gemayel had agreed to the proposals in two months of indirect negotiations with Syrian leaders, the sources said. REUTER 

INDIAN BUDGET DEFICIT SEEN FUELING INFLATION

Prime Minister Rajiv Gandhi's fiscal 1987/88 budget has sparked speculation that a large deficit will push up India's moderate inflation rate and that the country's stock markets will experience prolonged uncertainty, economists, politicians and stockbrokers told Reuters. The projected deficit for fiscal 1987/88, ending March, is 56.88 billion rupees, down from an upwardly revised estimate of a record 82.85 billion in fiscal 1986/87. The projected inflation rate for fiscal 1986/87, based on wholesale prices, is 6.5 pct against 3.8 pct in 1985/86. Economists pointed out that the government itself had expressed concern about inflation in its most recent 1986/87 economic survey report published last week. Presenting the budget to parliament on Saturday, Prime Minister Gandhi said a cabinet committee would be appointed to trim large non-development expenditures. The deficit for 1987/88 will not be allowed to exceed the budgeted figure, he said. But few analysts have taken Gandhi's assurance seriously. They say the deficit more than doubled in 1986/87 from an initial estimate of 36.5 billion rupees. Lal Krishna Advani, president of the opposition Bharatiya Janata party, said Gandhi's failure to mention specific measures to cut non-development expenses will push up prices. Economists said increased liquidity in the economy, as reflected by expansion of the M3 aggregate money supply, may cause prices to rise. The survey report showed the M3 rose by 15.7 pct or 185.78 billion rupees in the first nine months of 1986/87 against 13.37 pct or 136.42 billion in the same 1985/86 period. Economists also said uncertain monsoon rain prospects, after bad weather last year, may strain prices further. Economists said the deficit would also cause the government to rely increasingly on internal borrowing. Market loans and bonds were projected at 981.50 billion rupees for 1987/88, up from the 1986/87 estimate of 852.13 billion. No reduction has been proposed in personal income taxes, which will discourage savings, economists said. Avinash Purulkar, chief manager of the state-owned Union Bank of India, said the annual inflation rate may double to around 15 pct in 1987/88 as the government prints more currency notes to cover the deficit. Brokers said stock market investors have started selling long-term portfolios to take advantage of a proposal in the budget that reduces the holding period required to claim exemption from the capital gains tax to one year from three. Delhi stockbroker B. D. Aggarwal said, "There is uncertainty in the market. There is going to be growing selling pressure." But Bombay broker Dinesh Walji said the present hectic selling of shares will slow when more buyers appear on the scene. "Just now there is acute nervousness in the market," he said. Brokers said proposals to set up a mutual fund to help small investors buy equity shares and relaxations in the capital gains tax will inject further buoyancy into the market on a long-term basis. New equity and debenture issues, both convertible and non-convertible, rose to an officially estimated 50.70 billion rupees in April/January 1986/87 from an estimated 36.95 billion in all 1985/86 and 20 billion in all 1984/85. REUTER 

INDIA BUYS 46,000 TONNES OF VEGETABLE OILS

The Indian State Trading Corporation purchased 46,000 tonnes of vegetable oils at its import tender on Friday, market sources said. The business was for April shipments and comprised 20,000 tonnes of European rapeseed oil at 318 dlrs, 20,000 tonnes of soyoil, believed South American origin, at 314, and 6,000 tonnes of Malaysian rbd palm olein at 347 dlrs, all per tonne cif. Palm oil sellers were disappointed at the light purchase of rbd olein and early trading saw the market ease nearly 10 dlrs under Malaysian refiner and dealer selling. April shipments traded down to 326 dlrs per tonne, fob. REUTER 

BEECHAM UNIT LAUNCHES ARTHRITIS DRUG

Beecham Group Plc <BHAM.L> said its subsidiary <Beecham Pharmaceuticals> launched a new once-a-day, prescription only medicine for the reduction of pain and inflammation caused by rheumatoid and osteoarthritis. The launch took place simultaneously in the U.K. And West Germany. The drug, which has the approved name Nabumetone, will be introduced to doctors in the U.K. Under the brand name of Relifex and will be known as Arthaxan in West Germany. REUTER 

JAPAN TO PROMOTE INTEREST RATE LIBERALISATION

The Bank of Japan decided at a policy board meeting to promote further interest rate liberalisation by lowering the minimum denomination of regulation-free large deposits and by raising the interest rate ceiling on money market certificates (MMCs), a central bank official said. The new guideline will go into effect on April 6, the bank said. Under the guideline, the minimum denomination of regulation-free large deposits will be lowered to 100 mln yen from 300 mln. The interest rate ceiling of MMCs with maturities of between one year and two years will be set at 0.5 percentage point below the prevailing certificate of deposit rate, the bank said. But the ceiling on MMCs with maturities of one year or less will remain the same, or 0.75 percentage point below the CD rates. The minimum denomination of MMCs will be lowered to 10 mln yen from 30 mln. The bank also said time deposit rates will be lowered by 0.37 point, effective March 16, in line with the half-point cut in the official discount rate on February 23. New interest rates on two-year and one-year deposits at banks, for example, will be 3.64 pct and 3.39 pct per annum, respectively. Demand deposit rates, however, will remain the same. REUTER 

TAIWAN POWER FIRM PLANS MORE FOREIGN DEBT CUTS

State-owned (Taiwan Power co) will boost its domestic borrowings to further cut its foreign debt in line with a government policy to trim the island's huge foreign exchange reserves, a company official said. The company's foreign debt, mainly from the Japanese and U.S. Banks, was cut nearly by half to 66.2 billion taiwan dlrs equivalent in calendar 1986 from 124.6 billion in 1985, he said. Its domestic borrowings however rose to 105.2 billion taiwan dlrs from 80.6 billion in the same period, he added. Taiwan's foreign exchange reserves now stood at 50 billion U.S. Dlrs, due to its 1986 record trade surplus of 15.6 billion. REUTER 

CREDITORS ALLOW TECK HOCK TO FULFIL CONTRACTS

The nine creditor banks of international coffee trader <Teck Hock and Co Pte Ltd> met today to discuss ways of letting it fulfil profitable contracts which would help it balance earlier losses, a creditor bank official said. No statement was made after the meeting and officials declined to comment on any decisions made. An unidentified foreign commodities company is pursuing its offer to buy the company and a subsidiary <Coffee Industries Singapore>, banking sources said. The nine creditor banks have the buyer's detailed proposals covering the injection of new capital and payment of some outstanding debt to the creditor banks and are now discussing individual bank counterproposals to increase debt repayments. Teck Hock owes over 100 mln Singapore dlrs and the nine banks have been extending debt repayments since December 23. They are Oversea-Chinese Banking Corp Ltd <OCBM.S>, United Overseas Bank Ltd <UOBM.S>, <Banque Paribas>, <Bangkok Bank Ltd>, <Citibank NA>, <Standard Chartered Bank Ltd>, Algemene Bank Nederland NV <ABNN.A>, Banque Nationale De Paris <BNPP.P> and <Chase Manhattan Bank NA>. REUTER 

TESCO ISSUES 100 MLN STG CONVERTIBLE BOND

Tesco Plc <TSCO.L> is issuing a 100 mln stg convertible eurobond due February 20, 2002 paying an indicated coupon of four to 4-1/4 pct and priced at par, lead manager Credit Suisse First Boston Ltd said. The issue is callable after 90 days at 106 pct declining by one pct per annum to par thereafter. It is not callable until 1992 unless the share price exceeds 130 pct of the conversion price. Final terms will be set on, or before, March 9. The deal has an investor put option after five years, which will be priced to give the investor an annual yield to the put of 8-3/4 to nine pct. The selling concession is 1-1/2 pct while management and underwriting each pay 1/2 pct. The payment date is March 25 and there will be a short first coupon period. The issue is available in denominations of 1,000 and 5,000 stg and will be listed in London. REUTER 

SNCF ISSUING THREE BILLION FRANC DOMESTIC BOND

The French state railway company, the Ste Nationale des Chemins de Fer Francaise (SNCF), is issuing a three billion French franc domestic bond in two tranches, the bond issuing committee said. Details of the issue will be announced later and it will be listed in the Official Bulletin (BALO) of March 9. The issue will be co-led by Banque Nationale de Paris, Caisse Nationale de Credit Agricole and the Societe Marseillaise de Credit. REUTER 

DUTCH ANIMAL FEED USAGE DOWN IN FIRST HALF SEASON

Dutch animal feed usage in the first half of the current season from July through December 1986 fell 7.6 pct to 6.5 mln tonnes from 7.1 mln in the same period of 1985, figures in the latest newsletter from the co-operative Cebeco-Handelsraad show. Tapioca usage fell 9.1 pct to 1.4 mln tonnes from 1.6 mln in the first half of the 1985/86 season. Grain usage fell 6.1 pct to 1.1 mln tonnes from 1.2 mln, while soymeal usage fell 10 pct to 967,000 tonnes from 1.1 mln. Cornglutenfeed usage fell 17.8 pct to 729,000 tonnes from 887,000, but cornfeedmeal usage nearly doubled to 399,000 tonnes from 201,000. Citruspulp usage dropped 62.8 pct to 149,000 tonnes from 400,000 tonnes, while rapeseed and meal usage rose 9.6 pct to 217,000 tonnes from 198,000 and sunmeal rose 25.6 pct to 216,000 tonnes from 172,000 tonnes. During the whole of the season from July 1985 to June 1986, Dutch soymeal usage fell 12 pct to 1.9 mln tonnes from 2.1 mln the previous season, while sunmeal usage rose 25 pct to 408,000 tonnes from 325,000. Rapeseed and meal usage during the season also rose 14 pct to 409,000 tonnes from 360,000, but citruspulp fell 37 pct to 516,000 tonnes from 826,000. Meanwhile, the value of exports of agricultural products from the Netherlands in calendar 1986 fell 5.4 pct to 48.7 billion guilders from 51.5 billion in calendar 1985, figures from the Ministry of Agriculture show. During the same period imports of agricultural products dropped 13.1 pct to 31.2 billion guilders from 35.8 billion. REUTER 

REUTERS TO CARRY JIJI FINANCIAL SERVICES

Reuters Holdings Plc <RTRS.L> said it would display an English language financial news service provided by the Japanese Jiji Press from the second quarter of 1987. The service, which will be provided through the Reuter Monitor and Composite Information Service (CIS), will offer 24-hour reports on Japanese economic and political developments as well as specialised news on money markets and rates, securities and technology. Another Jiji service, offering information on Japanese equity, bond and money markets, is also available on CIS. REUTER 

FIAT UNIT ISSUES 100 MLN DLR BOND AND WARRANTS

Fiat Finance and Trade Ltd is issuing a 100 mln dlr eurobond due April 2, 1991 at 7-1/4 pct and 101-1/8 pct, lead manager Morgan Stanley International said. The issue is guaranteed by Internazionale Fiat Holding SA and is accompanied by a 200,000 currency warrant package. The bond is available in denominations of 5,000 dlrs and will be listed in Luxembourg. Payment date for bond and warrants is April 2, 1987. The selling concession is 1-1/8 pct while management and underwriting combined pays 1/2 pct. The warrants indicated at 45 dlrs entitle the holder to buy a minimum of 500 dlrs at a rate of 1.79 marks per dlr. The warrants are exercisable from the April 2 payment date until March 2, 1989. A minimum of 200 warrants must be exercised. They will also be listed in Luxembourg. REUTER 

U.K. CONFIRMS JANUARY STERLING M3 RISE

The Bank of England said the broad measure of U.K. Money supply, Sterling M3, rose a seasonally adjusted 1.1 pct in January after a 0.2 pct rise in December. The unadjusted year-on-year rise was 17.6 pct after 18.1 pct in the year to December. The narrow measure of money supply, M0, fell by a seasonally adjusted 0.6 pct in January, and rose by a non-adjusted 4.1 pct year-on-year, the Bank said. The figures confirm provisional data issued by the Bank two weks ago. In December, M0 grew by a seasonally adjusted 1.4 pct and by a non-seasonally adjusted 5.2 pct year-on-year. The Bank said sterling bank lending grew by a non-seasonally adjusted 1.75 billion stg in January. This also confirmed provisional figures issued in February. The measure of private sector liquidity, PSL2, fell 0.2 pct in January, but after seasonal adjustment rose 0.6 pct, the Bank said. The Bank said the public sector contribution to the growth in Sterling M3 was contractionary by about 2.3 billion stg. Within this, the Public Sector Borrowing Requirement (PSBR) showed a repayment of 3.7 billion stg, while the non-bank private sector's holdings of government debt fell by about 1.1 billion stg. There was a fall of 290 mln stg in notes and coin in January, a fall of 1.5 billion stg in non-interest bearing sight deposits, and a rise of 1.6 billion stg in interest bearing sight deposits, the Bank said. REUTER 

EXCO BUYS U.S. GOVERNMENT SECURITIES BROKER

<Exco International Plc>, a subsidiary of British and Commonwealth Shipping Co Plc <BCOM.L>, said it had agreed in principle to buy an 80 pct stake in <RMJ Holdings Corp> for about 79 mln dlrs. Exco Chairman Richard Lacy told Reuters the acquisition was being made from Bank of New York Co Inc <BK.N>, which currently holds a 50.1 pct, and from RMJ partners who hold the remainder. Bank of New York and the partners will retain about 10 pct each and these stakes will be bought over the next six years. RMJ is the holding company of RMJ Securities, one of the largest U.S. Government securities brokers. It is also involved in broking notes, obligations and other instruments sponsored by U.S. Federal agencies. Lacy said Exco had been considering buying a U.S. Government securities broker for the past four years and had made an offer for RMJ when it was sold by Security Pacific Corp <SPC.N> in 1985. RMJ was then valued at about 50 mln dlrs. B and C managing director Peter Goldie said RMJ would be bought at about the same multiple as Exco, suggesting net income of around 16 mln dlrs. The company's earnings had not been hit by the halving of brokerage fees some 14 months ago as volumes had since doubled. Lacy said that RMJ employed some 300 people, with 200 in the brokerage business and about 70 in its <SMS> unit, which provided computer software for the financial services community. RMJ Securities had offices in New York, where total market turnover of U.S. Government securities was 110 billion dlrs a day, and in London where it has 15 billion. It was also given permission last week to open an office in Tokyo where total market turnover had lifted rapidly to about five billion dlrs a day. The acquisition would contribute between five and 10 pct of B and C's share earnings in 1987 on a proforma basis. REUTER 

PAKISTAN TO TENDER FOR RBD PALM OIL

Pakistan will hold an import tender tomorrow for 6,000 tonnes of refined bleached deodorised palm oil for second half March shipments, traders said. REUTER 

HOECHST TO RESEARCH DISCS WITH U.S., JAPAN FIRMS

Hoechst AG <HFAG.F>, <Kerdix Inc.>, Boulder, Colorado, and <Nakamichi Corp>, Tokyo, have agreed to pool their research and development on magneto-optical memory discs, Hoechst said in a statement. Research will be carried out at each company and Hoechst will start to produce the discs by mid-1988 and distribute them worldwide under the brand name Ozadisc. A Hoechst spokesman said an eventual joint venture was likely but could give no details. REUTER 

COLOROLL AGREES TO BUY U.S. WALLCOVERINGS COMPANY

<Coloroll Group Plc> said it has entered into a conditional agreement to acquire the business and assets of <Wallco Inc> and related companies for 14.5 mln dlrs. Miami-based Wallco manufactures and distributes wallcoverings and showed a pretax profit of 1.5 mln dlrs on turnover of 37 mln in the year ending June 1986. The total U.S. Market was estimated to be worth 840 mln dlrs in 1986, having grown by 47 pct in the previous five years, Coloroll said. The combined sales and profit of the enlarged Coloroll U.S. Business would be 67 mln and four mln dlrs respectively. REUTER 

ECONOMIC SPOTLIGHT - AUSTERITY MEASURES IN HUNGARY

Hungary is to embark on a new series of austerity measures to tackle a budget deficit which tripled last year after quadrupling in 1985. The target deficit in the 1987 budget approved by Parliament last December was 43.8 billion forints. But Zoltan Boesze, chief of the Finance Ministry's budget financing division, told Reuters the government now saw this as too high and had decided "quite severe" measures were needed. "All the organizations of economic management have been charged with elaborating further (savings) measures," he said. Asked if these measures were being taken under pressure from the International Monetary Fund (IMF), Boesze said: "The Fund suggested it would be good to improve monetary results, and of course the Fund would support these efforts." IMF teams spent several weeks in Budapest late last year. Boesze said preliminary figures showed that Hungary's state budget deficit rose to a preliminary 47 billion forints last year from 15.8 billion in 1985 and 3.7 billion in 1984. The economy overshot a target deficit of 23 billion forints because of poor performance by state firms, which needed subsidies and tax incentives to export and earn hard currency. The exact extent and nature of savings are still under discussion but subsidies to state enterprises -- the largest budget item -- must definitely fall, Boesze said. Subsidies to state firms, including grants to maintain low consumer prices, exceeded the plan by nine billion to reach 164 billion forints in 1986, up from 152.9 billion in 1985. Parliament approved 1987 subsidies of 170 billion forints. "I think that in 1987 it is quite impossible to keep up the former situation and we will be obliged to reduce subsidies," Boesze said. "The central administration must be hard. ... If we are not hard then we will not be successful." Boesze said the budget could also make savings from reserve provisions of two billion forints for central expenditure and 800 mln forints for transfers to local authorities. "I believe these reserves should not be used at all," he said. Wage growth last year outstripped that of gross domestic product, which expanded one pct instead of a planned 2.5 pct. The authorities had already signalled a small fall in real wages for 1987, but Boesze said firms will suffer severe tax penalties if they award nominal rises of over one or two pct. This would mean a severe cut in living standards, as retail price inflation is forecast at seven pct after 5.3 pct in 1986. A four-month basic wage freeze expires on April 1. About 40 pct of the 1986 subsidies to state enterprises and 33 pct in 1985 were made to maintain low consumer prices. Boesze said pure economic policy would dictate significant cuts in price subsidies, but that social considerations made this difficult. But he added: "I think ultimately we will be able to make curtailments in subsidies in this area as well." He said Hungary plans to introduce price reform at the beginning of 1988 at the same time as personal taxation and value added tax. The IMF supports these aims. Hungary introduced a bankrupcty law last September in an attempt to shake out surplus labour from inefficient firms. Between 100,000 and 150,000 workers are expected to be unemployed at least temporarily by 1990. Labour discipline is being tightened and firms may fire workers more easily. Boesze said the per capita employment tax paid to the state by firms was being raised this year to encourage enterprises to shed labour. He gave no exact figures. Istvan Nagy, a senior Finance Ministry official responsible for drafting the bankrupcy law, told Reuters last year he hoped the law would cut state subsidies to enterprises by 50 pct. After subsidies to state enterprises, the largest single budget items are social insurance (153 billion forints approved for 1987) and transfers to local councils (80 billion). Interest payments on international debt are set to rise to more than 10 billion forints in 1987 from between six and seven billion in 1986, Boesze said. Hungary's net hard currency debt leapt by 54 pct last year to 7.7 billion dlrs, according to provisional figures, while trade with Western countries plunged into a deficit of more than 400 mln dlrs from a 1.2 billion dlr surplus just two years earlier. Boesze said last year's budget deficit was financed 90 pct by credits from the National Bank, mostly from abroad, and 10 pct by the issue of domestic state bonds. Deputy Prime Minister Frigyes Berecz told Hungarian economists in a speech this month that the country's economy was in a "very difficult" situation, but not in crisis. There would have to be a turnround with tangible results this year, however, and borrowing must be used more effectively. "Any rise in our present loans may prove to be dangerous," Berecz said. REUTER 

U.K. MONEY MARKET SHORTAGE FORECAST REVISED DOWN

The Bank of England said it revised its forecast of the shortage in the money market down to around 700 mln stg from its original estimate of 800 mln. REUTER 

ALASKA HOUSING HAS 150 MLN DLR SYNDICATED LOAN

Alaska Housing Finance Corp, a local U.S. Government agency, has become the first municipal entity to tap the syndicated loan market, receiving a 150 mln dlr, seven-year revolving loan, said Merrill Lynch Capital Markets as arranger. Merrill said the loan is a back-up to a proposed euro-commercial paper program. The syndicated loan, which is unsecured, carries a commitment fee of 0.10 pct per year. Advances will be priced at 31-1/4 basis points over the London Interbank Offered Rate while notes, which need only be purchased by banks if third party investors agree to buy them as well, will be priced at offering. Alaska Housing Finance was established by the legislature of the state of Alaska in 1971, and has so far acquired 6.1 billion dlrs of mortgages originated in Alaska. REUTER 

SWEDEN TO GO AHEAD WITH S. AFRICAN TRADE SANCTIONS

Sweden's ruling Social Democratic Party gave full power to the government to decree unilateral trade sanctions against South Africa, Prime Minister Ingvar Calrsson said. Carlsson told a news conference the party decided the fight against apartheid took priority over Sweden's traditional policy of only adopting sanctions with the backing of the U.N. Security Council. The government will decide later what form the trade boycott will take and when it will come into force. REUTER 

DIGITAL AUDIO TAPE PLAYERS GO ON SALE IN JAPAN

Japanese consumers hesitated about buying the controversial digital audio tape player (DAT) as it went on sale in Tokyo today, but said the DAT player's near-perfect sound will make it a success once it becomes cheaper. "The sound is great, but I'll wait until more machines hit the market and prices fall to about 100,000 yen before buying one," said Terumi Fujitsuka, 35, a steel firm employee. Aiwa, Sharp and Matsushita displayed their DAT players today although delivery will take about two weeks, retailers said. Aiwa's machine, the cheapest, is listed at 188,000 yen. Machines by Sony, Hitachi, Toshiba and others will appear as early as the end of March, industry sources said. DAT players can play back and record with fidelity superior to even a compact disc. They use a cassette half the size of the standard audio cassette and unlike conventional analogue machines, they can make copies an infinite number of times with almost no loss of sound quality. This aroused fears in the music industry of widespread tape piracy and loss of royalties. In negotiations that delayed the DAT player's debut, the industry demanded anti-piracy circuitry be built into the machines. Machines sold in Japan are fitted with a computer chip to prevent copying through a digital signal. But copies can still be made if the signal is routed through a regular amplifier. "Nobody can tell the difference," one salesman said. DAT players have been kept off Western markets and some countries are considering banning them or imposing heavy duties unless tougher anti-piracy circuitry is added. But Japanese hardware makers, hard pressed for profits in the era of the high yen and growing competition, are eager to carve out a profitable niche. Prices of DAT players will probably fall quickly, possibly to around 70,000 yen by next year as other makers put their products on the market, industry analysts said. They said by 1990, sales could reach six mln units per year. Philips of the Netherlands has said it will launch its DAT player on the world market later this year. REUTER 

ECONOMIC SPOTLIGHT - ITALIAN BOOM

Italy's strong economic revival has led some observers to talk of miracles and created euphoria in some quarters about future growth prospects, but many Italian experts warn that the current wave of optimism is excessive. "I think all this foreign interest in the so-called Italian miracle is really exaggerated...Foreign observers always oscillate in the case of Italy between complete pessimism and unwarranted optimism," says Luigi Spaventa, one of Italy's leading economists and a professor at Rome University. According to Spaventa, these violent swings of mood have been occurring for the last 15 years, with Italy one minute seen as the "bad boy of Europe" and unable to raise a dollar and the next a worker of miracles and basking in admiration, "I think there's a lot of exaggeration...Once it used to be the underground economy and all the correspondents of foreign newspapers flocked to Italy to study this. That was another story about nothing - like writing about a black cat in a dark room." Spaventa, in tune with other economists and industrialists here, stress Italy's recent achievements, particularly the dramatic and solid recovery in the fortunes of industrial enterprises, but warns that the economy is still vulnerable. Profits of private sector firms such as Fiat S.P.A., <FIAT.M> and <ING. C. Olivetti and C. S.P.A.> are booming, the major state industries are back in the black after years of losses, inflation has nosedived and the trade and balance of payments deficits have been slashed. Expectations by some experts that Italy is poised to replace Britain as the world's fifth largest economy have also boosted optimism. Italy itself has made it clear it is not happy with what it feels to be its second-rate status among the major industrialised countries. Only this week, it angrily demanded clarification of this status after being excluded from a meeting of finance ministers from the Group of Five (G-5) - comprising the United States, Japan, West Germany, France and Britain. Italy said its exclusion from the meeting violated an agreement reached in Tokyo last year to let Italy and Canada attend meetings held by the five whenever discussions concerned managing the international monetary system. But Italy needs first to tackle some fundamental problems still facing its economy, economists and industrialists say. "We must not forget that ours is still a vulnerable economy," warns Fiat managing director Cesare Romiti. He says that while Italy's recent achievements are indeed cause for satisfaction and optimism, the focus now should be on the problems still remaining rather than those already solved. The country's huge state sector deficit, high unemployment and a heavy dependence on imported oil are among the most worrying problems, experts say. The size of the state spending deficit -- estimated at 109,561 billion lire in 1986 and targetted at 100,000 billion lire this year -- means there is a risk inflation could spiral again, says Carlo Scognamiglio, head of the private Luiss university in Rome. Inflation fell into single digits for the first time in a decade in September 1984 and by January this year was running at 4.5 pct, but it is still not low enough to guarantee international competiveness, economists and industrialists say. And unemployment was running at 11.6 pct nationally last October according to the latest official data. Recent official data showed that of a total 2.77 million people seeking work in October 1986, almost 73 pct were aged between 14 and 29. Unemployment in the south was running at 17.7 pct, more than double that in the industrial north. The Organisation for Economic Cooperation and Development (OECD) recently forecast that Italian gross domestic product (GDP) would rise rise three pct in 1987 after expanding 2.5 pct in 1986. But it warned that growth was unlikely to be enough to check rising unemployment. Another problem is Italy's reliance on imported raw materials. The country imports around 80 pct of its fuel needs. This factor actually worked sharply in Italy's favour last year, when lower energy costs helped slash the country's trade deficit to 3,717 billion lire by year end from 23,085 billion lire in 1985. But economists say the improvement owes little to any structural change in the Italian economy and that any reversal of the trend in costs could have serious consequences. If Italy truly wants to be counted among the world's top industrialised nations, it also needs to tighten up stockmarket operating procedures and encourage firms to supply more quality information about their activities, economists say. Italy has no controls on insider trading. The country also needs to shed its rigid capital movements controls -- a European Community directive calls for these to be dismantled by 1992 -- but this too will require a less blinkered attitude and a change in traditional operating procedures, economists say. "Even today, if I wanted to invest in the Tokyo bourse, I doubt I'd find the expertise in a brokerage firm or in banks which would allow me to do that," says Spaventa. REUTER 

U.K. MONEY MARKET RECEIVES 37 MLN STG ASSISTANCE

The Bank of England said it had provided the money market with 37 mln stg assistance in the morning session. This compares with the Bank's downward revised estimate of the shortfall in the system today of around 700 mln stg. The central bank purchased bank bills outright comprising four mln stg in band one at 10-7/8 pct and 33 mln stg in band two at 10-13/16 pct. REUTER 

JAPAN, U.S. SET TO BEGIN HIGH-LEVEL TRADE TALKS

Japan and the U.S. Kick off top-level trade talks tomorrow amid signs officials from both sides are growing increasingly irritated with each other. The talks, held annually at sub-cabinet level to review the whole gamut of U.S./Japan economic relations, will pave the way for American Secretary of State George Schultz's one day stop-over here at end-week on his way home from China. Faced with growing Congressional protectionist pressure, the U.S. Administration is pressing Japan for speedy action to reduce its still huge trade surplus, U.S. Officials said. "We appreciate their frustration," a senior Japanese government official said. "But we are also frustrated." The official said the 40 pct rise of the yen over the last 18 months has hit Japan hard, forcing exporters to slash spending and lay off workers to make up for lost sales abroad. That has not yet shown up in dollar-based statistics on trade, but it will, he said. He said the U.S. Administration was ignoring the progress that has been made and instead emphasizing the problems that remain when it talks with Congress. "It would only take five minutes to list their accomplishments," a senior U.S. Official replied. The talks begin tomorrow with high-level discussions on the economic structures of both countries and how they affect the bilateral trade imbalance, which last year amounted to 51.48 billion dlrs in Japan's favour. On the following two days, the topics will range from multilateral trade talks under the auspices of the General Agreement on Tariffs and Trade (GATT) to such bilateral trade problems as super computers. The structural talks are intended to be free-wheeling discussions among senior officials. Tomorrow's topics include savings and investment issues such as consumer credit and housing, and the implications of government budget deficits. These talks come at a particularly delicate time for the Japanese government, which is facing increasing domestic pressure to abandon its tight-fisted fiscal policy and stimulate the sagging economy by spending more. Some U.S. Officials complained Japan has no intention of boosting domestic demand and imports, as Washington wants. Japanese officials in turn pointed the finger at the huge U.S. Budget deficit as one of the main culprits for the trade imbalance. That budget deficit has meant that the U.S. Is buying more imports. Japan seems particularly peeved at being singled in a draft trade bill before the Senate as a nation following adverserial trade practices. "It condemns Japan without due process," one Japanese official said. That reference spoils what is otherwise a well-thought-out bill introduced by Democratic Senator Lloyd Bentsen, he said. Japan is also not totally happy with the administration's trade bill, particularly its proposal to establish reciprocal access to foreign markets as one criteria for retaliatory trade action by the U.S., Officials said. Nevertheless, Japanese officials said they remain in a weak bargaining position, especially with the threat of a trade bill overhanging them. "We have no leverage," one official admitted. As a result, Tokyo is striving to meet U.S. Complaints about its trade practices in a variety of fields, including super computers. The U.S. Is pressing for greater access to the Japanese super computer market. The Japanese government has sent a long questionnaire to public institutions like universities which buy the sophisticated machines in hopes of eventually setting up informal bidding procedures easily understood by all potential sellers, officials said. REUTER 

INDIA TO HOLD WHITE SUGAR BUYING TENDER

India will hold a buying tender on Wednesday, March 4, for two to three cargoes of white sugar for March/April shipment, traders said. REUTER 

QANTAS TO BUY FOUR 747-400'S FOR ONE BILLION DLRS

<Qantas Airways Ltd> has placed a firm order with Boeing Co <BA> for four 747-400 aircraft at a cost of 250 mln Australian dlrs each, chairman Jim Leslie said. The first is due for delivery in April 1989 with the others arriving in May, June and September of that year, he said in a statement. The 400 series is the latest model of the Boeing 747 family, he said. The purchase will take government-owned Qantas's 747 fleet to 28, he said. Leslie said Qantas is talking to three engine makers who are all offering engines for the Boeing 747-400 and it will announce a decision on engine purchases later this year. He said they are <Pratt and Whitney> and General Electric Co <GE>, a unit of United Technologies Corp <UTX>, and Britain's <Rolls-Royce Ltd>. He said the 747-400, which incorporates new technology such as extended wings with six-feet high winglets and enhanced electronics, should have its first flight next February. The 400 series has a designed range of 12,500 kms, 2,140 kms further than the current Qantas 747-300's, he said. The aircraft will be financed by foreign borrowings and foreign exchange earnings, and Qantas believes they will pay for themselves in four to five years, Leslie said. The 747-400 has a take-off weight of 870,000 pounds, up from 833,000 for the 300 series, and offers an eight pct fuel saving, he said. The higher range and payload means they will first be used on the route to Britain and Europe via Asia. They will also be used on non-stop flights between Sydney and Los Angeles. REUTER 

CARLTON COMMUNICATIONS OPTIMISTIC FOR 1987

<Carlton Communications Plc> has started the current financial year well, with accounts for the first four months showing a healthy increase on the same period last year, and Chairman M.P. Green told the annual meeting he looked forward to 1987 with optimism. The issue of 4.6 mln shares in ADR form had now been successfully completed, he added. Carlton intended to increase its presence in the U.S. Which represented 50 pct of the world television market. Conditions worldwide in the television industry continued to look buoyant, the Chairman noted. REUTER 

EC OPENS ANTI-DUMPING ENQUIRY INTO SOVIET MERCURY

The European Community Commission said it has opened an enquiry into allegations that the Soviet Union is dumping mercury on the European market at below-cost prices. The Commission said its decision follows a complaint from EC non-ferrous metals producers that the sales of Soviet mercury were harming their business and threatening jobs in the European industry. According to the complaint, Soviet mercury sales in the EC had risen from zero in recent years to 100 tonnes between August and October last year and threaten to capture 25 pct of the EC market if they continue at the same pace. The industry said the mercury was being sold at more than 40 pct below prices charged by EC producers, forcing them to cut their prices to levels that no longer covered costs. The imports had caused producers heavy financial losses, it said. The Commission said the industry would probably be unable to hold prices at current levels and that any increase would result in loss of sales and jobs. The so-called anti-dumping procedure opened by the Commission will allow all interested parties to state their cases to the authority. REUTER 

MANILA SAID TO OFFER DEBT BONDS TO BANKS

The Philippines will offer commercial bank creditors an innovative pricing plan that will make debt payments through certificates of indebtedness instead of cash, the authoritative Business Day newspaper said. Finance Secretary Jaime Ongpin told reporters Saturday that the alternative proposal is designed to avoid an impasse when debt rescheduling talks reopen in New York on Tuesday. He did not give details but said, "It is a very useful alternative and in the end will permit the banks to say that they achieved their pricing target and will likewise permit the Philippines to say exactly the same thing." Quoting negotiation documents to be presented to the country's 12-bank advisory committee, Business Day said the debt certificates will carry maturities of five or six years. It said the certificates will be classified as zero-coupon bonds or promissory notes with no interest but priced at a considerable discount from their redemption price. It said the debt bonds will entitle holder banks to a guaranteed return on both interest and principal since no payment of any kind is made until the bond matures. It said a bank can sell the bonds on the secondary bond market for either dlrs or pesos depending on its requirement. The peso proceeds can be invested in selected industries under the Philippines' debt/equity program. Ongpin said Manila is sticking to its demand of a spread of 5/8 percentage points over London interbank offered Rates (LIBOR) for restructuring 3.6 billion dlrs of debt repayments. "(The proposal) will give the banks a choice of 5/8ths or the alternative," Ongpin said. "Our representatives have gone to Washington to the (International Monetary) Fund, the (World) Bank, the Fed (Federal Reserve Board) and the (U.S.) Treasury to brief them in advance on this alternative and it has generally been positively received." "We don't believe that there is going to be a problem on the accounting side," Ongpin said. "We have run this alternative proposal to the accounting firms. Neither have the government regulators indicated that there will be a problem." Reuter 

ARGENTINE DEBT NEGOTIATOR CONFIDENT OF ACCORD

Argentina's chief debt negotiator said he was confident of a prompt accord with international creditor banks for rescheduling the country's foreign debt. "I'm quite optimistic about carrying out a serious and quick negotiation," Treasury Secretary Mario Brodersohn said on return from talks in New York with leading U.S. and world financial officials. Argentina is currently negotiating terms with the steering committee for its creditor banks that will allow it to meet four pct economic growth targets in 1987. It has also asked for a reduction in interest rates and fresh credit. Brodersohn said the growth targets were not negotiable, but Argentina did not want to follow Brazil in suspending payments on its foreign debt. He said Argentina was seeking 2.15 billion dlrs credit to meet the targets, adding that the banks' attitude had improved following Brazil's decision. The United States and a group of other industrial nations on Thursday granted Argentina a 500 mln dlr bridge loan. Brodersohn held talks in New York with U.S. Treasury Secretary James Baker, Federal Reserve chief Paul Volcker and International Monetary Fund (IMF) head Michel Camdessus. Reuter 

GULF ARAB DEPUTY OIL MINISTERS TO MEET IN BAHRAIN

Deputy oil ministers from six Gulf Arab states will meet in Bahrain today to discuss coordination of crude oil marketing, the official Emirates news agency WAM reported. WAM said the officials would be discussing implementation of last Sunday's agreement in Doha by Gulf Cooperation Council (GCC) oil ministers to help each other market their crude oil. Four of the GCC states - Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Qatar - are members of the Organiaation of Petroleum Exporting Countries (OPEC) and some face stiff buyer resistance to official OPEC prices. Reuter 

MANILA OFFICIALS SPLIT OVER DEBT STRATEGY

A rift has occured among Philippine officials over debt talks opening tomorrow in New York with Economic Planning Secretary Solita Monsod accusing the chief negotiator of softening his stand to gain a quick agreement. Monsod told Reuters Finance Secretary Jaime Ongpin had decided not to insist on Manila's creditor banks pledging to fund half of a projected 1988/92 financing gap of seven billion dlrs. "He (Ongpin) wants to finish the negotiations as fast as possible. I'm saying that's very short-sighted," Monsod said. Monsod said any pricing agreement on rescheduling 3.6 billion dlrs of the Philippines' total foreign debt of 27.8 billion dlrs would ignore a looming 14 billion dlr net resource transfer in the same period. Manila is seeking a spread of 5/8 percentage points over the London Interbank Offered Rates (LIBOR). Monsod said, "Right now we are saying to the banks, let's share the financing burden." Ongpin said last month the country's consultative group of multilateral and bilateral aid donors had endorsed a growth facility to bridge the funding gap. He said the government and the consultative group would meet annually to gauge financing needs for each year. The aid donors and commercial bank creditors would then be asked to finance any gap on a shared basis. He told reporters on Saturday it would be unwise to try to pin the banks down on Monsod's proposed growth facility. Ongpin acknowledged there was a dispute over tactics. "Secretary Monsod and I get along famously," he said. "She talks and I listen but I don't necessarily agree." Monsod said a firm commitment from the banks on bridging the financing gap would have aided the government's pump-priming program and 1987/92 medium-term development plan. She said if private sector investment continued to be held back by the fear of a balance of payments crisis and rising interest rates, the country would fail to achieve its gross national product (GNP) growth target of an average 6.5 pct over the next six years. "If you don't get those seven billion dlrs there is no plan. How can there be a program if there is no finance?" she said, adding Ongpin's stand was not good for the economy. "It (Ongpin's stand) is going to make it much more difficult for the economy to attain its growth targets," Monsod said. "Considering what the Philippine negotiating team is going to press for there is absolutely no reason why they should not be able to come back (from New York) in a day," she said. Monsod, the government's chief economic planner, stressed Manila's policy was growth before debt. She said if the banks refused to lend the new money, the Philippines should copy Brazil's action last week in freezing all debt repayments. "If the banks do not cooperate by lending you back some of the money that you are sending abroad, then of course you have an option," Monsod said. "You just don't send it abroad. You do a Brazil." REUTER 

OECD SAYS JAPAN RESOLVED TO STIMULATE DEMAND

Japan appears resolved to encourage domestic demand for its goods instead of relying on exports to support its economy, Jean-Claude Paye, Director General of the Organization for Economic Cooperation and Development (OECD), told a news conference. Paye has been in Japan exchanging views on problems confronting the world economy and the role of the OECD. He met with Prime Minister Yasuhiro Nakasone, Foreign Minister Tadashi Kuranari, Bank of Japan Governor Satoshi Sumita and other high-ranking Japanese officials. Reuter 

SAUDI ARABIA REITERATES COMMITMENT TO OPEC ACCORD

Saudi Arabian Oil Minister Hisham Nazer reiterated the kingdom's commitment to last December's OPEC accord to boost world oil prices and stabilize the market, the official Saudi Press Agency SPA said. Asked by the agency about the recent fall in free market oil prices, Nazer said Saudi Arabia "is fully adhering by the ... accord and it will never sell its oil at prices below the pronounced prices under any circumstance." Saudi Arabia was a main architect of December pact under which OPEC agreed to cut its total oil output ceiling by 7.25 pct and return to fixed prices of around 18 dollars a barrel. Reuter 

KUWAIT MINISTER SAYS NO EMERGENCY OPEC TALKS SET

Kuwait's oil minister said in a newspaper interview that there were no plans for an emergency OPEC meeting after the recent weakness in world oil prices. Sheikh Ali al-Khalifa al-Sabah was quoted by the local daily al-Qabas as saying that "none of the OPEC members has asked for such a meeting." He also denied that Kuwait was pumping above its OPEC quota of 948,000 barrels of crude daily (bpd). Crude oil prices fell sharply last week as international oil traders and analysts estimated the 13-nation OPEC was pumping up to one million bpd over its self-imposed limits. Reuter 

TAIWAN PLANS NEW TARIFF CUTS

Taiwan plans another round of deep tariff cuts this year to help narrow its trade surplus with the U.S., A senior economic planner said. Wang Chao-Ming, vice-chairman of the council for economic planning and development, told Reuters Taiwan would further reduce import tariffs on 1,700 products sometime in the second half of this year. Cuts of up to 50 pct on those items were made last year and Wang said further cuts would go much deeper. "We have to speed up liberalisation and cut import tariffs faster and more substantially," he said. The United States, Taiwan's main trading partner, has said the island's import tariffs, still ranging from a high of almost 60 pct, were unacceptable. It has criticised the cuts as too selective. Taiwan's trade surplus with the United States hit 13.6 billion dlrs last year. The surplus has boosted foreign exchange reserves to 50 billion dlrs, which Wang said made Taiwan a target for U.S. Protectionism. Wang said the trade surplus and the reserves weakened Taiwan's position in talks with Washington over export quotas, particularly for shoes, textiles and machine tools which are among the island's main export-earners. A special Taiwanese trade delegation leaves for Washington tomorrow to try to renegotiate an agreement signed last year limiting exports of Taiwan textiles. Under the accord, Taiwan's textile export growth was limited to 0.5 pct each year until 1988. Taipei has said it is losing markets to South Korea and Hong Kong which were given more generous terms. REUTER... 

RHONE-POULENC TO LAUNCH INVESTMENT CERTIFICATES

French state-owned chemicals group Rhone-Poulenc <RHON.PA> said it will increase its capital with a 2.5 billion franc issue of preferential investment certificates on March 9. Company chairman Jean-Rene Fourtou said 500 mln francs of the issue will be placed in the U.S. Details of the issue will be announced by Finance Minister Edouard Balladur on March 6. The group, due to be privatised at an unspecified date, said in January it was planning a capital increase to pursue its development strategy and make further acquisitions. Rhone-Poulenc shares were suspended from trading on the Paris Bourse last Thursday ahead of the capital increase. The group's capital currently stands at 4.03 billion francs. Fourtou, speaking at a news conference, did not give details of acquisitions the company planned for 1987. He said acquisitions in 1987 would complement an industrial investment program of around five billion francs, and research spending of about 3.5 billion francs. Rhone-Poulenc spent 5.5 billion francs on acquisitions last year. "Chemistry is on the move and we face opportunities that must be seized," Fourtou said. REUTER 

HUTCHISON SEES HIGHER PAYOUT, SATISFACTORY PROFITS

Hutchison Whampoa Ltd <HWHH.HK> expects satisfactory profits in 1987 and will pay a higher dividend for the year, chairman Li Ka-shing said. He did not make any specific projections for the company's earnings this year but he said the firm will pay a dividend of not less than 32.5 cents per share after a proposed four-for-one stock split and a one-for-four bonus issue. It paid total dividends of 1.30 dlrs per share last year, equal to 26 cents per share, adjusting for the bonus and share split. Hutchison, which has operations ranging from trading to property and container terminals, earlier reported after-tax profits of 1.62 billion dlrs against 1.19 billion dlrs in 1985. The 1986 total excluded extraordinary gains of 563 mln dlrs, partly from the sale of some of its stake in the South China Morning Post, the leading English language newspaper, compared with 369 mln dlrs the previous year. It said it expects another 277 mln dlr gain in 1987 from the sale of the remaining shares. Li said Hong Kong's property market remains strong while its economy is performing better than forecast with its largely export-led growth. Gross domestic product grew by nearly nine pct last year against an initial government projection of 4.5 pct. But he said Hong Kong's large trade deficit with the U.S. May result in protectionist measures that will adversely affect the British colony. He said all of the company's major operations showed improved results in 1986. Hutchison said earlier it will sell its entire 23.5 pct interest in Hongkong Electric Holdings Ltd <HKEH.HK> to <Cavendish International Holdings Ltd>, itself a spin-off from Hongkong Electric. Under a reorganisation announced separately, Hongkong Electric will spin off all its non-electricity related activities into Cavendish, which will be listed on the local stock exchange. Hongkong Electric shareholders will receive one share in Cavendish for every Hongkong Electric share. Cavendish will buy the 348.2 mln Hongkong Electric shares from Hutchison by issuing 975 mln new shares. The spin-off and the sale of Hongkong Electric shares will give Hutchison a 53 pct stake in Cavendish. Li said the decision to spin-off Cavendish is to relieve Hongkong Electric of public criticism of the power company for making risky investments. But he denied there was pressure from the government for the spin-off. He said Cavendish will have seven billion dlrs of assets and will be almost debt free, with 340 mln dlrs of liabilites. Its major assets are the Hong Kong Hilton Hotel, property development, and interests in Husky Oil Ltd <HYO.TO> of Canada and Pearson Plc <PSON.L> of Britain. REUTER 

BALLADUR EXPECTS IMPROVED FEBRUARY INFLATION DATA

The French inflation rate is expected to show a substantial improvement in February after January's very high 0.9 pct monthly rate, Finance Minister Edouard Balladur said. He told a French television interviewer that half of the high January rise, which took year on year inflation that month to three pct, was due to higher oil prices. "Now, taking account of this inflation index, our forecast for price rises this year is two and a half pct," he said. Balladur said the upward revision of the inflation target, which the government had initially set at two pct for this year, should not affect wage expectations for this year. "There is no reason to envisage a change in our wage policy," he said, referring to the government's aim of holding public sector wage increases to three pct this year. Price inflation last year fell to 2.1 pct from 4.7 pct in 1985. REUTER 

FEBRUARY U.S. PURCHASING MANAGER INDEX FALLS

The U.S. economy continued to expand in February, but at a slower pace than in January which saw a spurt of activity, the National Association of Purchasing Management (NAPM) said in a report. The Association's composite survey index declined to 51.9 pct in February from 55.8 pct in January, the NAPM said. It was the seventh consecutive month in which this leading indicator was over 50 pct. A reading above 50 pct generally indicates that the economy is in an expanding phase. One below 50 pct implies a declining economy. The report, based on questions asked of purchasing managers at 250 U.S. industrial companies, also found that the growth rate in new orders and production slowed in February. However, production remained vigorous as more than three times as many members reported it better rather than worse. Vendor deliveries improved slightly last month, but members reported that steel supplies were tight as U.S. Steel <X> gradually resumed production. An equal number of members reported inventories were higher and lower. The NAPM said that had not happened since August 1984. For a sixth month, more purchasers reported paying higher rather than lower prices, this time by a ratio of nine to one. Robert Bretz, chairman of the NAPM's business survey committee and director of materials management at Pitney Bowes Inc <PBI> said "the economy continued to expand in February, but at a more subdued rate than in January. The slowing of new orders should not be significant enough to dampen prospects for a respectable first quarter." The composite index is a seasonally adjusted figure, based on five components of the NAPM business survey - new orders, production, vendor deliveries, inventories and employment. Reuter 

FUNARO SAYS BRAZIL NEEDS MORE, FASTER FINANCE

Brazil would not have suspended payments on debt owed to foreign banks if it had received more and faster financing from official lending agencies, Finance Minister Dilson Funaro said. He said he would not seek more money from the International Monetary Fund to which Brazil paid 922 mln dlrs last year and said Brazil's problems could not be solved by IMF intervention. "It's a question of why the official lending agencies don't finance a little bit more quickly and easily," Funaro told reporters at the Brazilian Embassy. Asked if Brazil would have continued making payments of monthly interest to its foreign commercial bank lenders if official lending agencies had provided more funds, he replied, "Yes, because our country did not receive financing from these agencies." Asked how long the payment suspension would last, Funaro said "It all depends on what kind of financing we are going to receive from the other side." Brazil, with foreign debt totaling 108 billion dlrs, stunned the banking community last week by suspending payments on some 68 billion dlrs owed to private banks. Funaro said Brazil had paid 44 billion dollars to the World Bank and other lending agencies and commercial banks in the past four years and got only 11 billion dlrs in loans. He said the net transfer was hurting the country's continued growth and capacity to import goods. "Something is wrong with the system. Some mechanism has to be found to finance a country like Brazil," Funaro said. He did not specify what steps he had in mind but said he would like to see "automatic" official lending when needed so that Brazil would not have to dip into its dwindling reserves, now reported to be below four billion dlrs. Funaro said Brazil had the world's third-largest trade surplus and estimated the 1987 surplus would be at least eight billion dlrs. But he said that without increased and faster lending from official institutions, the nation could not rely on its export earnings to finance development and imports and also service its debt. "We must find an equilibrium between foreign adjustment and internal adjustment," Funaro said. He complained that official lending agencies had imposed tight control on credit over the past four years, leaving commercial bank refinancing as the only credit available. Funaro said U.S officials understand his position "but they don't like it." Later he left Washington for a tour of Europe and debt discussions with officials in Britain, West Germany, France, Switzerland and Italy. Brazil's central cank President Francisco Gros said he sent a telex to creditor banks Friday to clarify confusion over Brazil's request that banks expedite procedures for renewal of short-term interbank credit and trade credit lines. Reuter 

AMERICAN MOTORS <AMO> BREAKS OFF TALKS ON PLANT

American Motors Corp said that it broke off talks aimed at extending the life of its only U.S. car assembly plant after the union rejected its final proposal for wage concessions. Negotiations, which continued past a midnight Friday deadline, ended Saturday after United Auto Workers negotiators voted to reject the unspecified concessions, an AMC spokesman said by telephone from Milwaukee, site of the talks. Without a new agreement containing lower labor costs, AMC said it would phase out vehicle production at the complex in Kenosha, Wisconsin, by 1989. Reuter 

SCIENTIFIC MICRO SYSTEMS <SMSI> ACUIRES SUPERMAC

Scientific Micro Systems Inc said it has acquired Supermac Technology, a rapidly growing supplier of enhancement products and disc drive subsystems for the Apple personal computer market. Scientific Micro said it acquired all the common stock of Supermac in exchange for 1.05 mln shares of its own common stock. The stock closed at 5.50 dlrs bid on Friday. Supermac, a privately held firm based in Mountain View, California, as is Scientific Micro, reported a net profit of 300,000 dlrs on revenue of 9.5 mln dlrs in fiscal 1986. It expects its revenue to approximately double in 1987. Reuter 

AMERICAN EXPRESS <AXP> VIEWING SHEARSON OPTIONS

American Express Co, rumored to be considering a spinoff of part of Shearson Lehman Brothers Inc, said it is studying a range of options for its brokerage unit that could improve Shearon's access to capital and help it meet broadening international competition. In a joint statement, American Express and Shearson said the actions under consideration are an integral part of American Express' worldwide financial services strategy and that the two companies have been having both internal and external discussions on the matters. American Express said no decision has been reached on the strategic options and that it and Shearson could ultimately decide to follow growth plans already in place. Last week, rumors circulated on Wall Street that the financial services giant was considering a spinoff of part of Shearson and there was speculation it may be considering selling a stake to a Japanese firm. Analysts said the speculation also focused on American Express selling 20 pct of the profitable brokerage firm to the public. There was some speculation that American Express had also considered a total spinoff of Shearson, but the plan was considered highly unlikely, analysts said. American Express said in the statement on Sunday that it will not comment on rumors and speculation and a spokesman would not go beyond the statement. The company also remained silent last Thursday and Friday, as rumors drove American Express stock up a total of 5-1/2 dlrs in two days to bring it to a Friday close at 74. It said it issued the statement on Sunday because a similar statement was being circulated to employees. Analysts have been divided on whether it makes sense for American Express to give up a stake in the wholly-owned brokerage, which improved its after-tax earnings by about 50 pct in the last year. Some analysts said American Express may consider spinning off part of Shearson because it is concerned that its stock price does not fully reflect the value of the brokerage firm. Shearson contributed 316 mln dlrs of American Express' 1.25 billion dlr net in 1986. American Express' ambitious plans for international growth may be also enhanced by the added cash that spinning out part of Shearson would bring. Analysts speculated that all of Shearson would have a market value of about 3.5 billion dlrs. To some however, the need for added capital is puzzling. "(American) Express is in a position where they can raise capital if they need to," said Larry Eckenfelder of Prudential-Bache Securities. Analysts said rumors were fed by the reorganization of Shearson management Wednesday. Chief operating officer Jeffrey Lane got the added, previously vacant, post of president. The reorganization also created four new positions for chairmen of Shearson's operating divisions, a move analysts speculated would allow Shearson to be a stand alone company. Analysts, contacted on Sunday said the statement does little to clarify last week's market speculation. It does confirm, however, that the financial services firm, which unsuccessfully attempted to expand Shearson with a major acquisition last year, is looking beyond its own walls for growth and positioning in the global market competition. Late last year, Shearson's takeover offer to the E.F. Hutton Group Inc was rejected by Hutton, and analysts said there had been speculation that Shearson also was rebuffed when it approached another major Wall Street brokerage. Reuter 

SPANISH FARMERS PROTEST, THEN CALL TRUCE

Spanish farmers demanding a better deal from the European Community blocked roads and staged protest rallies this weekend before their leaders announced a truce to negotiate with the government. Spain joined the community at the start of last year and farmers say they have suffered competition from EC imports without sufficient compensation. Leaders of three of the farmers' organisations announced at a press conference in Madrid yesterday they were suspending protests to allow time for negotiations with the government on their grievances. Reuter 

SWISS HAVE NET GAIN IN 1985 GOVERNMENT FINANCES

Switzerland recorded last year its first overall surplus in government finances since 1974, ending with a net gain worth 905 mln Swiss francs, the Finance Ministry said. The surplus, including cash transactions and long-term investments, contrasted with the 1985 shortfall of 1.06 billion francs and the 297 mln franc deficit proposed in the 1986 budget. All categories of revenues were higher than forecast, and expenditures were 433 mln francs under forecast. The Finance Ministry said expenditures totalled 23.18 billion francs against 22.88 billion in 1985 and the 23.61 billion proposed in the original 1986 budget. Tax receipts, at 25.11 billion, were well above the 1985 figure of 22.19 billion and the forecast for 1986 of 23.71 billion. This left a surplus on cash transactions totalling 1.94 billion francs against a forecast 102 mln and the 1985 deficit of 696 mln. Income and wealth taxes ended 749 mln francs above forecast, 378 mln of which came from higher than expected receipts on the stamp duty on financial market transactions. Taxes on comsumption brought in 638 mln francs more than planned and other taxes 16 mln francs more, the ministry said. The ministry said the improvement in the overall account reflected years of efforts by the government and parliament to introduce saving and the acceptance by people of necessary tax increases. But economic factors, including the low rate of inflation, the weak dollar, falling interest rates and low oil prices were also important factors. A spokesman for the ministry said the government had used its improved cash position to retire about one billion francs of government debt, which accounted for the difference between the 1.94 billion surplus on cash transactions and the 905 mln franc overall surplus. REUTER 

TWO S/L FAILURES RAISE U.S. 1987 TOLL TO 10

The Federal Home Loan Bank Board (FHLBB) announced savings and loan association failures in Kansas and Colorado, raising the U.S. 1987 total to 10. The FHLBB said it closed the First Federal Savings and Loan Association of Beloit, Kansas, and transferred its desposits and some other assets to Home Savings Association. It said First Federal, with 82.9 mln dlrs in assets, was closed because he was insolvent The FHLBB said that, due to insolvency, it put Key S and L of Englewood, Colo, into receivorship and replaced it with a new Key Savings and Loan Association with new management. Reuter 

ROPAK <ROPK> HAS 34 PCT OF BUCKHORN <BKN>

Ropak Corp said it received and accepted about 456,968 common shares and 527,035 Series A convertible preferred shares of Buckhorn Inc at four dlrs and 5.75 dlrs each respectively in response to its tender offer that expired Friday, and it now owns 34.4 pct of Buckhorn voting power. The company had owned 63,000 common and 25,100 preferred shares before starting the hostile tender. Ropak said it is borrowing the funds needed to buy the Buckhorn shares from its bank lender and will not need to use any funds that another bank had committed to provide under a margin loan. Ropak said it waived minimum acceptance requirements to buy the shares and intends to evaluate a number of possible ways of completing an acquisition of Buckhorn. It said it hopes that Buckhorn's board will reevaluate its position and enter into meaningful negotiations. Reuter 

APPLE COMPUTER <AAPL> UPGRADES MACINTOSH LINE

Apple Computer Inc today will announce the addition of two new machines to its profitable Macintosh line of personal computers, both aimed at the business market. The Macintosh was first introduced in January 1984 and has been upgraded several times since then. Both of the new machines, the Macintosh SE and the Macintosh II, will be faster and more versatile, but considerably more expensive than earlier models. The Mac SE (SE stands for "system expansion"), which Apple says will operate 15-20 pct faster than its current Mac Plus, goes on sale today. It carries a suggested retail price ranging from 2,899 to 3,699 dlrs depending on its features. The Mac II, designed to run about four times faster than the Mac Plus, is to be ready for shipping in May and priced between 4,798 and 6,998 dlrs. Mac Plus, which went on the market one year ago, sells for about 2,200 dlrs. Both new computers are to be unveiled at the AppleWorld Conference in Los Angeles. Company officials expressed high hopes for both computers at a press briefing on Friday, especially the high-performance Mac II which is designed to give Apple an entree to the expanding market for science and engineering workstations. John Sculley, Apple chairman and chief executive officer, declined to estimate anticipated sales, but he said the Mac SE should contribute significantly to Apple's bottom line this year. He said it would appeal to the mainstream of PC users. "I believe the Mac SE will be the product of choice for most people," he said. "My sense is that it will be a real power product for revenue." Bruce Lupatkin, senior technology analyst with Hambrecht & Quist in San Francisco, said he had not seen the new computers but expected the new products to do well. "Apple has recognized the need for a convergence of computer functions into one general all-purpose workstation," he told Reuters. "The graphics interface on the Mac products is significantly better than anything IBM has to date." International Business Machines is expected to announce updated personal computers this spring. The Mac II uses the new Motorola 68020 microprocessor, an "open architecture" that allows for the addition of numerous peripheral devices, a built-in hard disk and one megabyte of memory, expandable to eight megabytes. It can be equipped with a 12-inch monochrome or a 13-inch color monitor. In a demonstration of its speed and power, company executives said they thought the Mac II would push the development of software for Apple computers in new directions that could include sophisticated video editing, electronic mail systems and sound reproduction suitable for studio use. The Mac II can be upgraded so that its monitor displays 256 colors or shades of gray. The Mac SE is built around the 68000 microprocessor and will be shipped with one megabyte RAM, expandable to four megabytes, and a nine-inch monochrome screen. Both new computers have two optional keyboards, a new feature in the Apple line of products. Reuter 

PHILADELPHIA PORT CLOSED BY TANKER CRASH

The port of Philadelphia was closed when a Cypriot oil tanker, Seapride II, ran aground after hitting a 200-foot tower supporting power lines across the river, a Coast Guard spokesman said. He said there was no oil spill but the ship is lodged on rocks opposite the Hope Creek nuclear power plant in New Jersey. He said the port would be closed until today when they hoped to refloat the ship on the high tide. After delivering oil to a refinery in Paulsboro, New Jersey, the ship apparently lost its steering and hit the power transmission line carrying power from the nuclear plant to the state of Delaware. Reuter 

PENRIL <PNL> SEEKS TO SELL TWO UNITS

Penril Corp said it is seeking to sell its Triplett Electrical Instrument Corp subsidiary in Bluffton, Ohio, and Triplett's Alltest division in Hoffman Estates, Ill., as part of a plan to concentrate on its three profitable division and reduce its debt load. The company also said it is evaluating a plan to satisfy its obligations under its 10-7/8 pct subordinated notes but gave no details. Interest on the notes is due today. Penril further said director Clifford L. Alexander Jr. has resigned from the board. It gave no reason. Penril said shareholders at the annual meeting approved the limitation of directors' liability. Reuter 

LL/E ROYALTY <LRT> REVENUES MAY BE ESCROWED

LL and E Royalty Trust said Louisiana Land and Exploration Co <LLX>, the working interest owner for its oil and natural gas properties, is entitled to start placing all or part of the revenues that would otherwise accrue to the trust. LL and E said Louisiana Land has not yet escrowed any amounts and will monitor the siutuation to determine the necessity of doing so. The trust said "If the working interest owner does begin to escrow funds, the effect on the royalties paid to the trust would be significant." Royalties from the properties are the trust's only source of income. The trust said independent petroleum engineers' preliminary annual estimates of future net revenues and the discounted present value of future net revenues from proved oil and natural gas reserves attributable to properties in which the trust has an interest are off 64 pct and 56 pct respectively from those estimated in 1986 due to the drop in oil and natural gas prices. It said, however, that oil and natural gas reserves have actually increased in physical amount. The cost estimates reflect prices and costs only through September 30. The trust said using the September figures, the engineers determined estimated future net revenues to the trust from total proved reserves of about 57 mln dlrs. Usingprices received in January 1987, however, it said the estimate would have been about 87 mln dlrs. LL and E noted that there has been some weakening in prices since January. The trust said the most significant portion of the drop in estimated future revenues cale from the Jay Field in Alabama and Florida, a fall to seven mln dlrs from 92 mln dlrs in 1986, as prices recieved from Jay in September were near production costs after expenses of nitrogen injection. Reuter 

<DALE BURDETT INC> FACES DAMAGE CLAIM

Dale Burdett Inc said it faces damages claims totalling about 420,000 dlrs from the former owners of Burdett Publications Inc. The company said on February 20, 1986, its predecessor Nolex Development Inc acquired Burdett Publications Inc in an exchange of 17 mln common shares for all Burdett Publications shares, but the transaction was not qualified with the California Department of Corporations. As a result, it said, the former Burdett Publications owners have a claim for damages against Dale Burdett as successor to Nolex for one yuear starting January 21, 1987, with the damages measured by the difference in values of shares exchanged plus interest from February 20, 1986. Reuter 

PUROLATOR <PCC> IN BUYOUT WITH HUTTON <EFH>

New Jersey-based overnight messenger Purolator Courier Corp said it has agreed to be acquired for about 265 mln dlrs by a company formed by E.F. Hutton LBO Inc and certain managers of Purolator's U.S. courier business. Analysts have said that Purolator has been for sale for some time. Purolator announced earlier it was mulling a takeover bid, but analysts wrongly predicted the offer was from another courier company. Hutton LBO, a wholly owned subsidiary of E.F. Hutton Group Inc, will be majority owner of the company. Hutton said the acquiring company, PC Acquisition Inc, is paying 35 dlrs cash per share for 83 pct of Purolator's stock in a tender offer to begin Thursday. The rest of the shares will be purchased for securities and warrants to buy stock in a subsidiary of PC Acquisition, containing Purolator's U.S. courier operations. If all the shares of Purolator are tendered, shareholders would receive for each share 29 dlrs cash, six dlrs in debentures, and a warrant to buy shares in a subsidiary of PC Acquisition containing the U.S. courier operations. Hutton said in the merger shareholders would get 46 mln dlrs aggregate amount of guaranteed debentures due 2002 of PC Acquisition and warrants to buy 15 pct of the common stock of the PC courier subsidiary. Hutton said the company has valued the warrants at two to three dlrs per share. Purolator's stock price closed at 35.125 dlrs on Friday. While some analysts estimated the company was worth in the mid 30s, at least one said it would be worth 38 to 42 dlrs. This follows sales of two other Purolator units. It agreed recently to sell its Canadian Courier unit to Onex Capital for 170 mln dlrs, and previously sold its auto filters business. Purolator retains its Stant division, which makes closure caps for radiators and gas tanks. A Hutton spokesman said the firm is reviewing its options on Stant. Purolator's courier business has been lagging that of its U.S. rivals because of the high price it paid in the past several years to add air delivery to its ground fleet. E.F. Hutton will provide 279 mln dlrs of its funds to complete the transaction. This so-called "bridge" financing will be replaced later with long-term debt most likely in the form of bank loans, Hutton said. Hutton LBO is committed to keeping the courier business, its president Warren Idsal said. "Purolator lost 120 mln dlrs over the last two years largely due to U.S. courier operations, which we believe the management is turning around. We belive it will be a very serious competitor in the future," said Idsal. William Taggart, chief executive officer of U.S. Courier division, will be chief executive officer of the new company. The tender offer will be conditioned on a minimum of two thirds of the common stock being tendered and not withdrawn to the expiration of the offer as well as certain other conditions. The offer will begin Thursday, subject to clearances from the staff of the Interstate Commerce Commission and will expire 20 business days after commencement unless extended. Reuter 

NCR <NCR> SIGNS LICENSE AGREEMENT

<Willemijn Holding BV> of Rotterdam said it has licensed NCR Corp to produce and sell products and services using token ring technology. Reuter 

PAKISTAN COTTON OUTPUT REACHES 7.7 MLN BALES

Pakistan cotton production during the current crop season (Sept/March) reached 7.7 mln bales of 375 pounds each, up 500,000 from last season, Shafi Niaz, Chairman of the Agricultural Prices Commission, said. Official sources said Pakistan was likely to use 3.4 mln bales of cotton during the current financial year ending June after 2.96 mln in 1985/86 and 2.70 mln in 1984/85. They said consumption would increase due to a rise in demand for cotton yarn in domestic markets and abroad. Pakistan produced 540 mln kilos of yarn in fiscal year 1985/86 and exported 157 mln. The State-owned cotton export corporation was likely to export 3.8 mln bales of cotton during the current fiscal year compared with 3.86 mln last year, cotton traders said. The traders said there would be 1.3 mln bales of cotton carryover this fiscal year compared with just over a mln bales last year. Reuter 

IMPERIAL CHEMICAL <IMP> FORMS NEW UNIT

Imperial Chemical Industries PLC said it is forming a new U.S. pharmaceuticals unit called ICI Pharma. Combined sales of Imperial's existing Stuart Pharmaceuticals unit and the new ICI Pharma are projected to be 1.1 billion dlrs in 1990, the company said. Stuart had 1986 sales of 582 mln dlrs. Imperial said it plans to introduce several new drugs, including diprivan, an anaesthetic, and zestril, a heart drug, over the next three years. ICI Pharma and Stuart will operate as separate units of ICI Pharmaceuticals Group, it said. Stuart Pharmaceuticals and ICI Pharma will have 1987 sales of approximately 700 mln dlrs, about 450 mln dlrs from the new ICI Pharma and 250 mln dlrs from Stuart, officials said. The combined sales force of about 900 sales people, split about equally between the two units, will be slightly larger than the existing sales force at Stuart. Regulatory approval for the annesthetic diprivan is expected in late 1987, while zestril, a hypertension and heart drug, should be approved in mid or late 1988, company officials said. Approval for oth new drugs, including, statil, a treatment for diabetic complications, is not expected until 1989 and 1990, the officials said. Reuter 

FINANCIAL SANTA BARBARA <FSB> TO MAKE PURCHASE

Financial Corp of Santa Barbara said it has signed a definitive agreement to purchase Stanwell Financial, the lending operations unit of mortgage banking company <Stanwell Mortgage>, for undisclosed terms. Reuter 

ALCAN TO CLOSE WEST GERMAN ALUMINIUM SMELTER

<Alcan Aluminiumwerke GmbH>, a subsidiary of Alcan Aluminium Ltd <AL.N> of Canada, said it plans to close its aluminium smelter in Ludwigshafen at the end of June. A spokesman said Alcan was closing the smelter, with annual capacity of 44,000 tonnes and 320 employees, because of high electricity costs and the low world market price of aluminium. Alkan had said earlier this year it would close half the plant's capacity but decided to shut down completely when talks with potential cooperation partners failed, the spokesman said. He declined to name the other companies involved in the talks. REUTER 

BBC AG BROWN BOVERI UND CIE <BBCZ.Z> 1986 YEAR

Parent Company net profit 12.8 mln Swiss francs vs 7.5 mln. Orders received 2.21 billion francs vs 2.61 billion. Sales 2.25 billion francs vs 2.49 billion. Group sales 13.83 billion francs vs 13.88 billion. Group orders 11.03 billion francs vs 13.00 billion. REUTE 

MARRIOTT <MHS> TO SELL HOTEL

<Four Seasons Hotels> said it and <VMS Realty Partners> of Chicago have agreed to purchase the Santa Barbara Biltmore Hotel from Marriott Corp for an undisclosed amount. It said the venture will rename the hotel the Four Seasons Biltmore at Santa Barbara and invest over 13 mln dlrs in improvements on the 228-room property. Reuter 

DH TECHNOLOGY <DHTK> CHAIRMAN SELLS SHARES

DH Technology Inc said it has repurchased 500,000 of its shares from cofounder Helmut Falk at 4.25 dlrs each and Falks has sold another 500,000 shares to venture capital firm TA Associates at the same price. The company said Falk has resigned as chairman of DHL and now owns 213,567 shares. It said TA now owns 928,0000 shares. The company said Falk, who will remain on the board, has agreed to sell no more than 75,000 of his remaining shares in the next year without company consent. It said president and chief executive officer William H. Gibb has assumed the added post of chairman. Reuter 

BROWN BOVERI OMITS DIVIDEND, PLANS WARRANT BOND

BBC AG Brown Boveri und Cie <BBCZ.Z> said it will omit dividend in 1986 for the second consecutive year. It said it planned to invite shareholders and non-voting stockholders to subscribe to a warrant bond issue of around 150 mln Swiss francs to be made after the June 2 annual meeting. The value of the stock subscription rights should correspond roughly to the dividend of 30 francs per share paid in 1984. The company also plans to issue participation certificates with a par value of 70 mln Swiss francs, from which existing shareholders are excluded. Reuter 

U.S. CORPORATE FINANCE - ASSET-BACK MARKET GROWS

The U.S. asset-backed debt securities market, which grew explosively last year, is broadening and investment bankers say 1987 could see a variety of issuers. "It is interesting to note that the first two asset-backed deals of the year were done by commercial banks," said Anthony Dub, who heads First Boston Corp's asset-backed group. BankAmerica Corp's <BAC> Bank of America unit last week issued 400 mln dlrs of securities backed by credit card receivables via sole manager First Boston. Dub said the offering sold out quickly, mostly to institutional investors. The Bank of America offering followed a January 16 issue of 200 mln dlrs of similar debt by RepublicBank Corp's <RPT> RepublicBank Delaware unit. Goldman, Sachs and Co ran the books on that deal, with First Boston acting as co-manager. However, Dub said the Bank of America securities were more closely related to the so-called "cars deals" that raced to market last year than were the RepublicBank securities. "The RepublicBank issue was secured by credit card receivables. In contrast, the Bank of America deal was the first public offering of credit card receivables because we used a grantor trust vehicle," he said. In a grantor trust, investors buy asset-backed certificates that represent a specified percentage of an undivided interest in the trust, analysts explained. The Bank of America certificates were issued by California Credit Card Trust A, which the bank established for that single purpose, investment bankers pointed out. The debt has an average life of 1.79 years and matures in 1992. First Boston gave the issue a 6.90 pct coupon and priced it at 99.8125 to yield 6.95 pct, or 65 basis points over comparable Treasury securities. Non-callable for life, the deal was rated AAA by both Moody's and Standard and Poor's. Underwriters away from the syndicate said they believed the Bank of America deal was priced too aggressively. "AAA-rated auto paper was trading about 75 basis points over Treasuries when First Boston priced the deal," one said. However, Dub said the offering sold out quickly anyway. The First Boston executive attributed this to the deal's top-flight rating by both agencies, unlike many of last year's cars deals, which were rated by S and P alone. "Investors receive interest only payments for the first 18 months and then interest and principal payments for the remaining five to seven months," Dub detailed. Investment bankers pointed out that because the Bank of America deal did not pay principal for a year and a half, the issue had a longer average life than some of the cars deals that were brought to market late last year. The collateral for the trust includes a pool of VISA credit card receivables, backed by a letter of credit. Bank of America has about four billion dlrs of credit card receivables, making it one of the biggest in the U.S., analysts said. Last week's deal was Bank of America's second foray into the young asset-backed securities market, analysts noted. In mid-December 1986 Bank of America sold, via California Cars Grantor Trust 1986-A, 514 mln dlrs of certificates backed by automobile receivables through Salomon Brothers Inc. Upcoming asset-backed issues include 200 mln dlrs of notes backed by the car leases of Volvo 1986 Lease Finance Corp, a unit of Volvo Finance North America Inc, via First Boston, and 450 mln dlrs of notes secured by sales contracts of Mack Trucks Receivables Corp, a unit of Mack Trucks Inc <MACK>, via Shearson Lehmand Brothers Inc. The asset backed market, which began in March 1985, totals an estimated 11.9 billion dlrs. Reuter 

VIACOM SAID IT HAS NEW NATIONAL AMUSEMENTS, MCV HOLDINGS BIDS

ILC TECHNOLOGY <ILCT> OFFICER REMOVED

ILC Technology Inc said Raymond Montoya, vice president of finance, has been removed as an officer and terminated as an employee of the company, and ILC has filed a civil action against him to recover alleged improprer disbursements of company funds. The company said Montoya has been arrested by police in Hawthorne, Calif., and charged with grand theft and embezzlement. It said the extent of the disbursements has not yet been determined. In independent auditor is helping assess the alleged irregularities, the company said. Reuter 

APPLE COMPUTER <AAPL> HAS NEW MACINTOSH MODELS

Apple Computer Inc said it has introduced two new models of its Macintosh personal computer, the Macintosh II and SE, offering users the ability to flexibly configure systems to suit their needs or expand the systems as their needs grow. Apple said the Macintosh II features high-performance, open architecture designed for advanced applications. The Macintosh II, which is priced from 3,898 dlrs to 5,498 dlrs, also has six internal printed circuit card slots for adding multiple functions, including an optional color display, network connections and MS-DOS compatibility, the company said. Apple said the Macintosh SE, priced from 2,898 dlrs to 3,698 dlrs, has internal storage capacity and an additional slot for added functions. Reuter 

REAGAN AND BAKER BEGIN TASK OF REBUILDING

After a week that left his presidency shaken and his popularity at a new low, Ronald Reagan and his new chief of staff today begin trying to revive an administration tattered by the Iran-contra arms scandal. Reagan and former Senate Republican leader Howard Baker, whose appointment as White House chief of staff won bipartisan praise, will begin mapping strategy to deal with scathing criticism by a report on his failed bid to trade U.S. arms with Iran for help in freeing Ameican hostages in Lebanon. Among the chores facing Reagan's new inner circle is assessing the damage the 300-page Tower commission report has done to the nomination of Robert Gates to succeed William Casey as the new head of the Central Intelligence Agency. White House officials are checking to see how much support Gates, a 43-year old career spy agency bureaucrat, would have if his nomination is submitted to the full Senate for a vote, Senate Republican leader Robert Dole said. Appearing on the NBC News program, "Meet the Press," the Kansas senator said the Gates nomination "could be in some difficulty." Aides said that Gates' future would be given high priority by Baker. Even though he was not deeply implicated in the arms sale scandal, lawmakers said Senate confirmation of the Gates nomination is not assured and, even if won, would come only after months of congressional probes into the affair. "He has the smell of Iran on him," said former Nevada Sen. and Reagan confidant Paul Laxalt. "He is a victim." Laxalt, appearing on the ABC News program, "This Week With David Brinkley," bluntly admitted "the Gates nomination is in trouble." Senate Armed Services Committee Chairman Sam Nunn said the odds are now slightly against confirmation of Gates. When asked on the syndicated television program, "John McLaughlin: One on One," if he thought Gates would be confirmed, the Georgia Democrat shot back: "I wouldn't bet any money on it. "I think this report hurts that," Nunn said. "It indicates that the National Security Council had policy-type influence over intelligence-type activities and we're going to go into that with Mr. Gates. Only a day after it was issued last week, the Tower report prompted the abrupt exit of Donald Regan as White House chief of staff. Regan, the former Wall Street executive and Treasury secretary who has been the president's top aide for the past two years, was assigned the lion's share of the blame for the botched handling of the Iran arms sale. The report blamed Regan for the "chaos that descended on the White House" since it was first revealed last November that profits from the Iran arms sales had been diverted to contra rebels fighting the leftist Nicaraguan government. The two other victims of the scandal are former National Security Adviser Vice Adm. John Poindexter who resigned and Marine Lt. Col. Oliver North who was fired after it was disclosed last November 23 that profits from the Iran arms sale were diverted to the contras. The two, pictured by the Tower commission as the key operators of the Iran arms deal, have refused to testify. Reagan, who freely admits disliking details, is portrayed in the Tower report as a befuddled chief executive whose inattention let his aides run away with his foreign policy. That perception has wrecked Reagan's popularity and threatened to condemn him to lame duck status until he leaves office in January 1989. A recent Newsweek magazine poll found that just 40 pct of Americans approved of Reagan's leadership, a record low, and a third believed he should consider resignation. After meeting with aides over the weekend and poring over the meaty report of the commission headed by former Texas Sen. John Tower, Reagan is now preparing for a nationwide television address this week to respond to the criticisms of his presidency. Reuter 

LAROCHE STARTS BID FOR NECO <NPT> SHARES

Investor David F. La Roche of North Kingstown, R.I., said he is offering to purchase 170,000 common shares of NECO Enterprises Inc at 26 dlrs each. He said the successful completion of the offer, plus shares he already owns, would give him 50.5 pct of NECO's 962,016 common shares. La Roche said he may buy more, and possible all NECO shares. He said the offer and withdrawal rights will expire at 1630 EST/2130 gmt, March 30, 1987. Reuter 

<SDC SYDNEY DEVELOPMENT CORP> NINE MTHS LOSS

Period ended December 31, 1986 Oper shr loss 1.08 dlrs vs loss 84 cts Oper loss 7,700,000 vs loss 1,700,000 Revs 11,800,000 vs 9,800,000 Note: Current shr and net exclude extraordinary gain of 300,000 dlrs or five cts shr, versus extraordinary gain of 200,000 dlrs or four cts shr Reuter 

SENIOR ENGINEERING MAKES 12.5 MLN DLR US PURCHASE

<Senior Engineering Group Plc> said it reached agreement with <Cronus Industries Inc> to acquire the whole share capital of <South Western Engineering Co> for 12.5 mln dlrs cash. This sum is being financed by a term loan. South Western is one of the U.S.'s leading manufacturers of heat transfer equipment, with a turnover of 54.86 mln dlrs and pre-tax profits of 1.72 mln in 1986. Completion of the deal is conditional on approval under U.S. Hart-Scott-Rodino regulations which is expected within 30 days. Some 350,000 dlrs is payable immediately, 12 mln dlrs payable on completion with the balance due by June 30, 1987. Reuter 

CHEUNG KONG CHAIRMAN SEES STRONG RESULTS IN 1987

Cheung Kong (Holdings) Ltd <CKGH.HK> is expecting strong results this year after reporting better than expected profits in 1986, chairman Li Ka-shing said. He did not give a specific earnings projection but he told reporters the firm will pay total dividends of not less than 19 cents a share this year after a one-for-four bonus issue and a four-for-one stock split. The company earlier declared total dividends equal to 15 cents a share for 1986, adjusting for the stock split and bonus issue. Cheung Kong's earnings rose to 1.28 billion H.K. Dlrs in 1986, well above market expectations of 920 mln to one billion dlrs. They compared with profits of 551.7 mln dlrs in 1985. Cheung Kong also reported extraordinary gains of 983.6 mln dlrs mainly from the firm's sale of the Hong Kong Hilton Hotel to Hongkong Electric Holdings Ltd <HKEH.HK> for one billion dlrs. It had gains of 81.3 mln dlrs in 1985. Li attributed the surge in 1986 earnings to a buoyant local property market and substantial increases in contributions from associated companies. "Looking ahead, 1987 should be another year of stability for the property market," Li said. "The growth in (Hong Kong's) exports is expected to stimulate the demand for industrial buildings." Cheung Kong is cash rich and is looking for new projects in the British colony, Li said, noting the firm is interested in a land reclamation project along the Hong Kong harbour and is exchanging views with the government on a proposal to build a second airport. Reuter 

OCCIDENTAL <OXY> UNIT TO REDEEM DEBENTURES

Occidental Petroleum Corp said its MidCon Corp subsidiary will redeem on March 31 all 269,000 dlrs of its outstanding 10-1/4 pct convertible subordinated debentures due 2009 at 107.18 pct of par. It said interest payable March 31 will be paid in the usual manner to holders of record on March 15. The debentures convert to common stock at 14.168319 dlrs per share, or 70.58 shares per 1,000 dlrs principal amount, through March 31. Holders converting through March 17 will be entitled to receive Occidental's regular quarterly dividend of 62-1/2 cts per share on common stock that is payable April 15. The company said any holders surrendering debentures for conversion after March 15, other than those surrendering for conversion on March 31, will be required to pay to the conversion agent an amount equal to the interest paytable on the debentures on March 31. Reuter 

WHITTAKER CORP 1ST QTR OPER SHR 17 CTS VS 25 CTS

VIACOM <VIA> RECEIVES TWO REVISED OFFERS

Viacom International Inc said it received revised merger offers from <National Amusements Inc> and <MCV Holdings Inc>. The company said the special committee plans to meet later today to review both offers. Viacom said National Amusements' Arsenal Holdings Inc raised the value of its offer for the Viacom shares not held by National Amusements in three areas. National Amusements holds 19.6 pct of Viacom's stock. The cash value of the offer was raised to 42.00 dlrs from the 40.50 dlrs a Viacom share offered February 23 while the value of the fraction of a share of exchangeable preferred being offered was increased to 7.50 dlrs a share from six dlrs. The interest rate to be used to increase the cash value of the merger, if delayed beyond April 30, was raised to nine pct from eight pct and 12 pct after May 31. A Viacom spokesman said the Arsenal Holdings's offer continues to include a 20 pct interest in Arsenal for present Viacom shareholders. Viacom said MCV Holdings, a group which includes the company's senior management and the Equitable Life Assurance Society of the United States, raised the value of its offer by increasing the value of the preferred being offered to 8.50 dlrs from 8.00 dlrs a share and raising the ownership in the new company to be held by present Viacom shareholders to 45 pct from 25 pct. MCV called its previous offer, made February 26, the "final" proposed revision of its agreement with Viacom. Reuter 

DOW <DOW> TO OFFER 130 MLN DLRS IN SWISS NOTES

Dow Chemical Co said it will issue 200 mln Swiss franc-denominated bonds worth about 130 mln dlrs U.S. at current exchange rates. The 12-year bonds will carry a coupon of 4-3/4 pct and will be sold primarily to European investors for 100.25 pct of face value, Dow said. Proceeds from the offering will be used to refinance existing debt, it said. Underwriters are led by Union Bank of Switzerland. The bonds will be listed on stock exchanges in Basle, Berne, Geneva, Lausanne and Zurich. Reuter 

FRENCH ESTIMATE 86/87 WHEAT DELIVERIES UNCHANGED

The French Cereals Intervention Board, ONIC, left its estimate of French 1986/87 (July/June) soft wheat deliveries unchanged from its last forecast at 21.98 mln tonnes. This compared with deliveries of 24.38 mln tonnes in 1985/86 (August/July). Estimated 1986/87 maize deliveries were also left unchanged from ONIC's previous forecast at the beginning of February at 9.91 mln tonnes against 10.77 mln the previous season. Barley deliveries were also unchanged at 6.62 mln tonnes against 7.7 mln in 1985/86. Reuter 

WASTE MANAGEMENT CORP VOTES TWO FOR ONE STOCK SPLIT AND BOOSTS QTLY DIVIDEND TO 18 CTS

WRITERS GUILD OF AMERICA STRIKES TWO NETWORKS

The Writers Guild of America said its members have struck the news staffs of CBS Inc <CBS> and Capital Cities/ABC Inc <CCB> this morning after negotiations for a new contract broke down. The guild said there had been extensions prior to the strike deadline this morning, but said the strike was called after the companies refused to negotiate. The guild said the companies failed to put a final offer on the table, made no money offer at all, and did not deviate substantially from their original proposals, which, the guild said, would have gutted the union contract. The guild said the networks demanded the right to terminate employees at will and lay them off without the arbitration, and the hiring of temporary employees to replace staffer employees. The guild represents newswriters, editors, desk assistants, researchers, production assistants, promotion writers and graphic artists. The strike affects unions in New York, Chicago, Washington and Los Angeles. Picketing will commence at corporate headquarters in New York and other locations, the guild said. Reuter 

PITTSTON AGREES TO ACQUIRE WTC INTERNATIONAL IN EXCHANGE OF STOCK

TUESDAY MORNING INC <TUES> 4TH QTR NET

Shr 1.19 dlrs vs 1.46 dlrs Net 3,150,185 vs 2,665,284 Revs 27.9 mln vs 24.1 mln Avg shrs 2,653,646 vs 1,826,858 Year Shr 1.45 dlrs vs 1.37 dlrs Net 3,611,802 vs 2,502,443 Sales 62.2 mln vs 52.8 mln Avg shrs 2,489,978 vs 1,826,858 Reuter 

DIAGNOSTIC/RETRIEVAL SYSTEMS INC MAKES 53 MLN DLR BID FOR ROSPATCH CORP