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CHINA LIGHT UNIT RENEWS COMMERCIAL PAPER FACILITY | <Kowloon Electricity Supply Co Ltd>, a
joint venture of China Light and Power Co Ltd <CLPH.HK> and
Exxon Corp <XON>, has renewed and increased an existing
commercial paper program, arranger <Schroders Asia Ltd> said.
The fully underwritten program, which expires this month,
has been extended to December 1990 and increased to 540 mln
H.K. Dlrs from the original 500 mln dlrs, it said.
The underwriting fee is 1/8 of a percentage point over the
Hong Kong interbank offered rate.
Commercial paper in tenures of one to three months will be
issued in denominations of one mln dlrs, it said.
The program offers a U.S. Dlr option whereby commercial
paper in denominations of 100,000 U.S. Dlrs will be issued
subject to the same underwriting margin.
Joining Schroders as underwriters are Barclays Bank Plc,
Citicorp International Ltd, Paribas Asia Ltd, Sanwa
International Finance Ltd and Sumitomo Finance (Asia) Ltd.
The six underwriters will be joined by 11 other financial
institutions in the tender panel.
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SANKEI BUILDING ISSUES EQUITY WARRANT EUROBOND | Sankei Building Co Ltd is issuing a 60
mln dlr equity warrant eurobond due May 7, 1992 paying an
indicated coupon of 2-1/8 pct and priced at par, lead manager
Nomura International Ltd said.
The issue is guaranteed by Sumitomo Bank Ltd and is
available in denominations of 5,000 dlrs. The selling
concession is 1-1/2 pct while management and underwriting
combined pays 3/4 pct. The payment date is May 7 and listing
will be in Luxembourg.
Final terms will be fixed on April 15. The warrants are
exercisable from May 21, 1987 until April 23, 1992.
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CBOT SEES YEN BOND FUTURES LISTING IN SIX MONTHS | The Chicago Board of Trade (CBOT) will
list yen bond futures contracts once the U.S. Commodity Futures
Trading Commission gives its approval, which could come within
six months, CBOT chairman Karsten Mahlmann said.
Mahlmann earlier told a press conference he would visit
Kyoji Kitamura, director-general of the Finance Ministry's
Securities Bureau, to express the CBOT's concern that Japanese
financial institutions and individuals are not permitted to
trade on the CBOT. Mahlmann is on a two-week tour of Hong Kong,
Tokyo and Sydney.
Mahlmann urged Japan to boost Tokyo's status as a world
financial center by promoting the internationalisation of its
financial industry.
The Finance Ministry is expected to allow local banks,
securities houses and insurance companies to use overseas
markets from this month, bond market sources said, but
officials would only say the issue was under study.
Initially, the ministry is likely to bar corporate and
individual investors due to their relative inexperience, and to
limit trading to instruments like currency, stock indexes, time
deposits and government debt futures, the sources said.
Mahlmann told reporters the CBOT will start evening trading
to coincide with Far East morning activity on April 30. But he
added night sessions would not preclude the CBOT from forming
links with Far Eastern exchanges, although nothing had been
decided.
Asked what type of financial futures would be appropriate,
he cited products concerning debt and equity.
The CBOT evening session will run from 6:00 to 9:00 P.M.
Chicago time (2300 to 0200 GMT), which is 8:00 to 11:00 A.M. In
Tokyo, and trading will be limited to four contracts -- U.S.
Treasury note and bond futures and options, he said.
Yen bond dealers said a proposed link between CBOT and the
London International Financial Futures Exchange (LIFFE),
combined with yen bond futures listings on both, would multiply
volume if trade was encouraged by Tokyo-based orders.
Healthy liquidity growth in cash yen bond markets overseas
is a prerequisite for expanded futures trading, traders said.
LIFFE plans to list yen bond futures should go ahead from
September, possibly coinciding with the CBOT, traders said.
The CBOT applied for permission to offer a long-term
Japanese government bond futures contract on March 17, and the
authorities must rule on the request within a year.
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PERGAMON HOLDINGS REDUCES BPCC AND HOLLIS STAKES | <Pergamon Holdings Ltd> and its associate
companies said that they had sold 30 mln ordinary shares in the
British Printing and Communication Corp Plc <BPCL.L> and 10.5
mln in <Hollis Plc> together with other securities.
No total price was given but the company said the proceeds
of the sales would be used to fund Pergamon's expansion
programme and worldwide acquisition stategy. The company said
that following these sales Pergamon's ordinary shareholdings in
both BPCC and Hollis remained above 51 pct. It said it had no
intention of further reducing its holdings in either company.
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BRITAIN, U.S. TO DISCUSS JAPAN TRADE RELATIONS | British Foreign Secretary Sir Geoffrey
Howe and U.S. Secretary of State George Shultz plan to discuss
the growing crisis in trade relations with Japan in talks in
Washington, government officials said.
Howe views the apparent deadlock in British attempts to
secure a greater share in Japanese domestic markets very
seriously, said an official travelling with him.
Britain has threatened to impose retaliatory restrictions
on Japanese finance houses in London if Japan does not open up
its markets. The U.S. Has already imposed higher tariffs on
computer microchips imported from Japan.
Michael Howard, the British minister for consumer and
corporate affairs, repeated the threat of sanctions before
leaving Tokyo yesterday at the end of a four-day visit during
which he failed to secure major concessions from the Japanese.
Howe's main mission in Washington was to brief Shultz on
Prime Minister Margaret Thatcher's visit to the Soviet Union
last week. Shultz is due to fly to Moscow next week.
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NATIONALE NEDERLANDEN PROFITS, SALES STEADY | Year 1986
Net profit 635.5 mln guilders vs 603.4 mln.
Revenues 17.35 billion guilders vs 17.27 billion.
Net profit per nominal 2.50 guilder share 5.79 guilders vs
5.67, corrected for capital increase. (1985 uncorrected figure
5.73).
Dividend 2.50 guilders vs 2.38, corrected. (2.40
uncorrected.)
Note - Full name is Nationale Nederlanden NV <NTNN.AS>
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BOND INTERNATIONAL SELLS H.K. RESIDENTIAL BUILDING | <Bond Corp International Ltd> said it
has sold a residential block at Hong Kong's mid-levels to a
joint venture between Sun Hung Kai Properties Ltd <SHKP.HK> and
<New Town (N.T.) Properties Ltd> for 138 mln H.K. Dlrs.
Bond International, a subsidiary of the Australia based
Bond Corp Holdings Ltd <BONA.S>, will receive net profits of
about 16 mln dlrs from the deal.
The firm bought the building, which has total floor spaces
of 110,580 sq ft and is now fully let, as part of a parcel of
properties which it acquired from Hongkong Land Co Ltd
<HKLD.HK> for 1.43 billion dlrs late last year.
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G-7 COMMITMENT TESTS JAPAN'S WILL TO BOOST ECONOMY | The statement issued today by the Group of
Seven (G-7) industrialised nations has put Japan under greater
international pressure to stimulate its economy or face a
further rise in the yen, private economists and analysts said.
They said the communique reflected increased foreign
frustration with Japan's burgeoning trade surplus and its
tight-fisted fiscal policies in the past.
Unless Japan implements economic measures included in the
statement, foreign protectionist sentiment would grow and the
yen would come under renewed upward pressure, they said.
The G-7 -- grouping the U.S., Japan, West Germany, Britain,
France, Italy and Canada -- said in the statement they welcomed
proposals announced by Japan's ruling Liberal Democratic Party
(LDP) for extraordinary and urgent measures to stimulate its
economy and that Japan reaffirmed its intention to further open
its domestic markets.
"It's rather unusual that only Japan was mentioned in the
communique and promised something," said Takeshi Saito, general
manager of Fuji Bank Ltd's research division. This showed how
strongly other nations want Japan to take concrete and
effective steps to redress its trade surplus, he said.
The statement referred to some details of Japan's proposed
economic measures, such as early implementation of a large
supplementary budget exceeding those of previous years and
unprecedented front-end loading of public works expenditures.
It did not mention any figure for the projected
supplementary budget but LDP officials have said it will amount
to more than 5,000 billion yen for fiscal 1987, which compares
with 2,000 billion provided for the previous year.
"It signalled a clear shift away from the conservative
fiscal policies of the past," said Kazuaki Harada, senior
managing director of Sanwa Research Institute.
For the last five years the government has stuck to a
tight-fisted fiscal policy in its attempt to stop issuing
deficit financing bonds by 1990.
But mounting foreign pressure for Japan to boost its
economy, hurt by the yen's extended rise, hurried the
government to hammer out a draft economic package and bring it
to the latest G-7 meeting.
Harada said Japan should not view expansion of its economy
as the result of pressure but as an opportunity to lead world
economic growth.
"The Japanese economy has the potential to take a leadership
role and we should recognize it," Harada said.
If Japan fails to meet such international expectations it
will invite some retaliatory moves, especially from the U.S.,
Which may result in a further rise of the yen, analysts said.
The G-7 communique represented a test for Japan's
commitment to domestically-generated economic growth and to a
more balanced world trade structure, they said.
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SHANGHAI TYREb FACTORY TO RAISE 30 MLN U.S. DLRS | Ta Chung Hua Rubber Factory of
Shanghai will raise a 30 to 35 mln U.S. Dlr loan to expand and
modernise its plant, arranger CCIC Finance Ltd said.
The loan, to be lead managed by the Bank of China, is
expected to mature in eight to nine years, but terms have not
been finalized.
The money will be used to import manufacturing equipment
including technology transfer for the production of truck
radial tyres. Part of the output will be exported.
The expansion program is expected to cost a total 54 mln
dlrs. The shortfall will be financed domestically.
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SAUDI RATES RISE AS BAHRAIN BANKS CAUGHT SHORT | Saudi riyal interest rates rose as
Bahrain-based banks scrambled to cover short positions, dealers
said.
Several Bahrain banks had been lending in the fixed periods
and borrowing in the short dates, but today they found the
day-to-day money in short supply, dealers said.
"Everybody's stuck in the spot-next," one trader said.
Spot-next rose to as high as 6-1/4, six pct from 5-1/4,
five pct yesterday, and the borrowing interest spilled over
into the periods, with one month rising to around 6-3/16,
5-15/16 pct from 5-15/16, 7/8 pct yesterday.
Three months edged up to around 6-9/16, 5/16 pct from
6-7/16, 1/4 pct, while six months was quoted a touch firmer by
some banks at seven, 6-3/4 pct.
Commercial banks quoted the spot riyal at 3.7500/04 to the
dollar after 3.7507/09 yesterday.
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BELGIUM TO ISSUE GOLD WARRANTS, SOURCES SAY | Belgium plans to issue Swiss franc
warrants to buy gold, with Credit Suisse as lead manager,
market sources said.
No confirmation or further details were immediately
available.
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TABUCHI ELECTRIC ISSUES 30 MLN SWISS FRANC NOTES | Tabuchi Electric Co is launching 30 mln
Swiss francs of five-year straight notes with a 4-3/4 pct
coupon and par issue price, lead mananger Swiss Bank Corp said.
Payment is due April 22.
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PHILIPPINE TELEPHONE FIRM PLANS STOCK SPLIT | The Philippine Long Distance Telephone Co
<PLDT.MN> is planning a two-for-one stock split and a 20 pct
stock dividend later this year to reduce excess market
buoyancy, Vice-President Sennen Lazo told Reuters.
Lazo said the stock split would reduce the par value of the
company's common stock from 10 to five pesos.
He said the stock split would apply to holders of about 18
mln common shares of stock on the record date of September 15
1987. "The exercise should make our stock more marketable," Lazo
said. "Now it is beyond the reach of many small investors."
PLDT common stock surged from a low of 37 pesos in February
1986 to 367.50 at close of trading yesterday on the Manila
Stock Exchange.
Lazo said the 20 pct stock dividend, payable on October 15,
would also apply to stockholders on record as of September 15.
PLDT reported 1986 net income of 1.89 billion pesos, up 68
pct from 778.9 mln pesos in 1985, on operating revenues of six
billion pesos, up from 4.7 billion pesos in 1985.
At end December 1986 the company had 417,100 stockholders.
A PLDT spokesman said the company's profits are likely to
be substantial since the government raised its franchise tax to
three pct from two and to impose a 35 pct corporate income tax
from which it was previously exempt.
The government has not so far ordered the implementation of
the tax decision.
PLDT is the largest of 58 telephone companies in the
Philippines. On December 31 1986 the company had 856,014
telephones in operation, representing 94 pct of all instruments
in the country.
In Manila item "Philippine Telephone firm plans stock split"
please read in page 3, first para, "the company's profits are
likely to be substantially cut" (inserting dropped word). This
replaces "the company's profits are likely to be substantial"
|
COUPON CUT ON BANK OF TOKYO SWISS FRANC ISSUE | The coupon on the Bank of Tokyo Ltd's 100
mln Swiss franc convertible has been cut to 7/8 pct from the
indicated 1-1/4 pct, lead manager Swiss Bank Corp said.
The conversion price has been set at 1,590 yen, the same as
today's close.
The exchange rate has been set at 96.84 yen to the franc.
Payment is due April 30. The conversion period is from May
20, 1987 until September 20, 1992.
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CARGILL CONFIRMS WHITE SUGAR SALE TO INDIA | London-based trader Cargill (U.K.) Ltd
confirmed it sold one cargo of white sugar to India for
shipment April 15/May 15 at yesterday's tender.
Price details were not immediately available but some
traders suggested business had been done around 220 dlrs a
tonne cif.
India tendered for one or two cargoes of white sugar. There
was no specific requirement on shipping period.
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MALAYSIA SEEKS 42 BILLION YEN PIPELINE LOAN | Malaysia has asked Japan for a 42
billion yen 25-year loan to finance the construction of gas
pipelines from eastern Trengganu to southern Johor, the
Overseas Economic Cooperation Fund (OECF) said.
OECF's chief representative, Takashi Matsuya, told
reporters the Japanese Government is appraising the loan.
Another OECF official told Reuters Japan is likely to approve
the loan because "it is technically and economically viable."
If approved, the loan would carry a coupon rate of four
pct, a grace period of seven years, Matsuya said. It would be
disbursed over three years, he added.
The pipeline contruction is the second phase of the
Peninsular Gas Utilisation Project by Petronas, Malaysia's
national oil company.
The first phase was the supply of gas to households in and
around the eastern oil town of Kertih.
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CCF REPORTS 34.8 PCT PROFIT BOOST, SHARE SPLIT SEEN | Credit Commercial de France <CCFP.PA>
reported a parent company net profit up 34.8 pct to 140.1 mln
francs from 103.9 mln francs a few weeks before its
denationalisation around the end of this month.
Official sources said the bank, France's sixth largest in
terms of its deposits and seventh in terms of its assets,
planned a share split to increase the number of shares on offer
ahead of the sale of 40 pct of its ordinary share capital to
the public, of 10 pct to staff and 20 pct abroad.
Previously one of France's biggest private banks, it was
nationalised by the Socialists in 1982.
The sources said it was too early to give details of the
planned split or of the share price, but cited April 27 as a
likely date for the flotation launch.
So far 30 pct of the group's capital, currently at 10.33
mln shares of 100 francs nominal, has been offered for sale to
large private investors to constitute a solid core of eight to
ten shareholders before the flotation.
The private tender offer closes on April 16, while a 12 mln
franc advertising campaign for the flotation begins on Sunday.
"The privatisation will be a way of attracting extra clients,"
CCF deputy director-general Rene de la Serre told Reuters.
Market sources put the total value of CCF's privatisation
at between four and five billion francs.
De la Serre said the bank was likely to attract at least
the same number of investors as <Sogenal>, another recently
privatised bank in which 850,000 people bought shares.
The government's sweeping privatisation programme has also
included the sale of Saint-Gobain <SGEP.PA>, and Cie Financiere
de Paribas <PARI.PA>. The sale of <Banque du Batiment et des
Travaux Publics> and <Banque Industrielle et Mobiliere Privee>
should be completed this month, while third largest French bank
Societe Generale <SGEN.PA> will be privatised later this year.
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EIB ISSUES 40 BILLION YEN EUROBOND | The European Investment Bank (EIB) is
issuing a 40 billion yen eurobond due May 6, 1994 paying 4-5/8
pct and priced at 101-1/2, lead Nomura International Ltd said.
The non-callable bond is available in denominations of one
mln yen and will be listed in Luxembourg. The selling
concession is 1-1/8 pct while management and underwriting
combined pays 1/2 pct. The payment date is May 6.
There is a mandatory purchase fund operating in years one
and two, except for the first month after the payment date,
whereby the EIB can purchase up to five pct of the issue each
year if it is trading below par.
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IDA GIVES 18.6 MLN DLR LOAN TO SRI LANKA | The International Development
Association (IDA) is lending 18.6 mln dlrs to Sri Lanka for
agricultural research and development, the World Bank said in a
statement.
The loan is part of a 26.5 mln dlr project to improve
production of commodities, mainly rice, and raise farmer
incomes. Other financing for the project will come from Sri
Lanka (7.1 mln dlrs) and West Germany (800,000 dlrs).
The IDA credit is interest-free and for 50 years. It
includes a 10-year grace period but has annual charges of 0.5
pct on the undisbursed balance, and 0.75 pct on the disbursed
balance, the Bank statement said.
The project envisages the creation of a Council of
Agricultural Research to formulate a national agricultural
strategy and introduce a contract research programme to finance
research activities, the Bank said.
The Washington-based IDA is the World Bank's affiliate for
concessionary lending.
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JOHNSON MATTHEY'S PLATINUM GROUP PRICES | Johnson Matthey today issued the
following Platinum group base prices (unfabricated), all U.S.
Dlrs per troy ounce.
Previous prices in parentheses.
PLATINUM - 562 (567)
PALLADIUM - 130 (130)
IRIDIUM - 400 (400)
RHODIUM 1,230 (1,230)
RUTHENIUM - 80 (80)
|
LEX SERVICE BUYS SEARS MOTOR GROUP | Lex Service Plc <LEXL.L> said it had
acquired <Sears Motor Group Ltd>, the retail motor distribution
arm of Sears Plc < SEHL.L>, and an 11.9 mln stg loan note
payable by Sears Motor for 33.4 mln stg.
The purchase will be through 1.4 mln stg in cash and the
issue to Sears Plc of 8.0 mln new Lex ordinary shares.
The company said in a statement that immediately following
the acquisition of the motor group, its car and commercial
vehicle contract hire fleet of some 3,000 vehicles was sold to
<Lex Vehicle Leasing Ltd> for 14.3 mln stg in cash, a sum equal
to the net book value of the vehicles transferred.
Lex Vehicle is owned equally by Lex Services and <Lombard
North Central Plc>.
Lex said the shares involved in the transaction were today
being placed for Sears Plc with institutions at 400p. These
shares will not qualify for the final Lex dividend on 10 April.
Lex said in a statement that its acquisition of Sears Motor
Group represents a major development for its automotive
activities. The enlarged retailing operations of the Lex
Automotive group now have a turnover of 530 mln stg. Lex's
existing automotive interests include Volvo Concessionaires,
the sole importer of Volvo cars and parts into the U.K.
Lex said the turnover for Sears Motor Group in the year to
31 December 1986 was 242 mln stg and that at the date of the
acquisition the group had about 50 mln stg in external
borrowings.
Lex shares fell on the announcement to trade around 409p
from a 419p close yesterday.
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PHILIPPINES TO IMPORT CEMENT FROM INDONESIA | The Philippines will import 250,000 bags
of cement worth 375,000 dlrs from Indonesia by the end of the
month to meet growing demand from the construction sector,
Trade and Industry Secretary Jose Concepcion said.
He told reporters that local cement manufacturers had
stepped up production but were falling short of demand. "The
only solution is to import," he added.
Concepcion said average monthly requirements of cement in
1986 were 6.7 mln bags while supply hovered around 9.3 mln
bags, but this year demand had grown to 10.4 mln bags per
month.
Trade and Industry sources said construction sector
representatives estimated an additional 70,000 bags would be
required daily to meet demand.
Cement is officially priced at 48.50 pesos per bag, but
construction industry sources said it was selling at black
market rates of up to 65 pesos a bag in some areas.
The sources said falling interest rates as well as a
government budget of four billion pesos in 1987 for low-cost
housing had fuelled a construction boom.
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JAPAN DEVELOPMENT BANK ISSUES 150 MLN DLR EUROBOND | The Japan Development Bank is issuing a
150 mln dlr eurobond due May 20, 1994 paying eight pct and
priced at 101-1/8 pct, lead manager Bank of Tokyo International
Ltd said.
The non-callable bond is guaranteed by Japan and is
available in denominations of 5,000 dlrs.
The selling concession is 1-1/4 pct while management and
underwriting combined pays 5/8 pct.
The payment date is May 20. Listing will be in London.
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MAJOR RUBBER PRODUCERS TO MEET IN SINGAPORE | Officials from Indonesia, Malaysia,
Singapore and, perhaps, Thailand will meet here tomorrow to
discuss increased regional cooperation on rubber marketing and
ways to raise rubber prices, industry sources said.
The officials will discuss linking rubber markets in the
four countries to improve price transparency, the sources said.
This is the first time Indonesia is attending such a
meeting, they said, but representatives from Thailand may not
be able to attend because of their tight schedule. Malaysia,
Indonesia and Thailand account for 90 pct of world rubber
exports and Singapore is a major regional rubber trading
centre.
The Malaysian Rubber Futures market, freighting and
contracts for rubber are among other issues expected to be
discussed.
Last month, rubber importing and exporting countries
adopted a new International Natural Rubber Agreement in Geneva.
The new pact is more responsive to market trends than its
predecessor, the sources said, and earlier provisions allowing
the buffer stock to borrow from banks have been eliminated.
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MEPC EXTENDS OFFER FOR OLDHAM | MEPC Plc <MEPC.L> said that its offer for
<Oldham Estates Ltd> would remain open until further notice.
On February 26 MEPC made an agreed bid for Oldham based on
a formula reflecting its asset value at 30 September 1986. A
year earlier Oldham's net asset value was put at 531.4 mln stg.
As of 1 April the valuation used under the formula had
still to be agreed so Oldham had yet to give a firm
recommendation to its shareholders regarding the value of the
the offer.
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TORONTO DOMINION AUSTRALIA DOLLAR BOND INCREASED | Toronto Dominion Bank, Nassau Branch, has
increased its eurobond offering to 50 mln Australian <dlrs from
40 mln, lead manager Hambros Bank Ltd said.
All other terms remain the same.
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GEORGE WIMPEY PROFITS UP 42 PCT TO 66.5 MLN STG | Year to December 31, 1986.
Shr 18.35p vs 14.95p
Div 3.75p vs 2.9p making 4.75p vs 3.75p
Pretax profit 66.5 mln stg vs 46.9 mln
Tax 14.6 mln stg vs 4.5 mln
Net profit 51.9 mln stg vs 42.4 mln
Turnover 1.44 billion stg vs 1.58 billion
Note - Full name of company is George Wimpey Plc <WMPY.L>.
Operating profit before exceptional items 88.9 mln stg vs
80.5 mln
Exceptional debits 3.0 mln stg vs 11.6 mln
Operating profit 85.9 mln stg vs 68.9 mln
Share of profits less losses of associated companies 1.4
mln stg vs 2.4 mln loss
Interest - net payable 20.8 mln stg vs 19.6 mln
Attributable minority profits debits 0.2 mln stg vs 0.3 mln
Extraordinary items debit 3.4 mln stg vs 4.3 mln credit
Net borrowings 195.1 mln stg vs 193.5 mln
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CANADA FEBRUARY TRADE SURPLUS 1.25 BILLION DLRS AFTER
JANUARY 623 MLN DLRS SURPLUS
| |
AEGON 1986 NET PROFIT RISES 6.4 PCT | Net profit 327.1 mln guilders vs
307.5.
Total revenue 7.97 billion guilders vs 8.7 billion.
Net profit per five guilder nominal share 9.33 guilder vs
9.25 (corrected for capital increase).
Final dividend 1.30 guilders and 2.4 pct stock vs 1.30
guilders and 2.2 pct in stock. Interim dividend already paid
was 1.30 guilders.
Note : full name of company is AEGON NV <AEGN.AS>
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CANADA FEBRUARY TRADE SURPLUS 1.2 BILLION DLRS | Canada had a trade surplus of 1.25
billion dlrs in February compared with an upward revised 623
mln dlrs surplus in January, Statistics Canada said.
The January surplus originally was reported at 533 mln
dlrs. The February surplus last year was 189 mln dlrs.
February exports, seasonally adjusted, were 10.44 billion
dlrs against 9.85 billion in January and 10.05 billion in
February, 1986.
February imports were 9.19 billion dlrs against 9.23
billion in January and 9.86 billion in February, 1986.
Reuter
|
BANK OF JAPAN BUYS DOLLARS IN TOKYO, DEALERS SAY | The Bank of Japan bought a modest amount
of dollars at around 145.10 yen just after the market here
opened, dealers said.
Just before the opening, the dollar dropped swiftly as
speculators concluded the Group of Seven (G-7) comminuique
issued in Washington contained nothing basically new, they
said. It fell about a half yen, to around 145.
The G-7 reaffirmed that their currencies around current
levels reflect economic fundamentals.
One dealer said the Bank of Japan probably intervened in
Australia before the opening here, but could not confirm this.
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MIYAZAWA SAYS YEN STILL INSIDE PARIS RANGE | Japanese Finance Minister Kiichi
Miyazawa said the strengthening of the yen against the dollar
that has occurred since the Paris Agreement was within the
range agreed on in the Louvre discussions.
"I would say that what has happened (to the yen) in the past
several weeks was not outside the range we agreed to in the
discussions in Paris," Miyazawa told a press conference
following the Group of Seven meeting here.
He added that the current discussions were a "reaffirmation"
of that agreement, indicating that the "solidarity" that occurred
in Paris was still in place.
reuter
|
THREE BRAZILIAN GOVERNORS SEEK REMOVAL OF FUNARO | Brazil's three most powerful state
governors have joined forces to seek the removal of Finance
Minister Dilson Funaro.
The governors of Sao Paulo, Rio de Janeiro and Minas Gerais
told a news conference they want changes in the cabinet and in
the shaping of economic policy, with Funaro singled out for
criticism by Sao Paulo governor Orestes Quercia.
They made their call while Funaro is in Washington holding
talks with creditors on rescheduling Brazil's 111 billion dlr
foreign debt.
reuter^M
|
THREE KILLED IN BOTSWANA BLAST | Three people were killed and two others
injured when a huge explosion, believed to be a bomb, went off
in a suburb of Botswana's capital Gaborone.
Witnesses told Reuters the blast, near the headquarters of
the Botswana Defence Force, occurred at about 2 A.M. (1200 GMT)
and flattened several houses.
Minutes after the explosion Botswana soldiers sealed off
the scene, which is near where South African troops last May
launched a military attack against alleged guerrilla targets.
Reuter
|
COUPON CUT ON BANK OF TOKYO DOLLAR CONVERTIBLE | The coupon on the 100 mln dlr, 15-year,
convertible eurobond for the Bank of Tokyo Ltd has been cut to
1-3/4 pct from the two pct initially indicated, lead manager
Bank of Tokyo International Ltd said.
The foreign exchange rate has been set at 146.40 yen to the
dollar but details of the conversion price were not immediately
available.
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U.K. MONEY MARKET GETS 103 MLN STG HELP | The Bank of England said it operated in
the money market this morning, buying 103 mln stg bank bills.
The central bank bought in band one 60 mln stg at 9-7/8, in
band two eight mln at 9-13/16, in band three 26 mln at 9-3/4
and in band four nine mln stg at 9-11/16 pct.
This compares with the bank's forecast of a 400 mln stg
shortfall today.
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JAPAN CRITICISED FOR "DUMPING" OF BANK SERVICES | Japan, which has been accused of dumping
everything from steel to computer microchips on world markets,
is now under attack for alleged cut-throat selling of a product
of a different sort -- banking services.
At meetings here this week, Bank of England officials
pressed their Japanese counterparts to change regulations that
foreign bankers say give their Japanese rivals an unfair
advantage in world financial markets.
The technical banking talks coincided with, but were
separate from, discussions between Japanese officials and
British corporate affairs minister Michael Howard, who left
Tokyo yesterday for South Korea.
At the crux of the talks was the way regulators in various
countries measure bank capital and how much capital banks must
put up to back up their loans.
It is generally agreed that shareholders' equity forms the
bulwark of bank capital but there is disagreement about what
else should be included.
Some foreign bankers contend that their Japanese rivals can
undercut them on loans and other banking services because
Tokyo's capital regulations are easier to meet.
The Japanese banks have an unfair advantage, Paul Hofer,
head of the Foreign Bankers Association of Japan, told Reuters.
Sumitomo Bank Ltd chief economist Masahiko Koido said, "They
see us as very aggressive. We say we are just trying to catch
up with them."
Earlier this year, the United States and Britain agreed to
adopt common regulations requiring banks to put up capital
equivalent to at least six pct of total assets. The two
countries urged others to follow suit, notably Japan.
But Japanese Finance Ministry officials held out little
hope that would happen soon as they just introduced new
regulations governing capital ratios last May.
Under those regulations, banks have until 1990 to attain a
capital ratio of four pct. But, in tacit recognition of
overseas pressure, the ministry set a six pct target for
Japanese banks with overseas branches.
But foreign bankers say the rub was that it allowed Japan's
banks to count 70 pct of the value of their massive holdings of
Japanese shares - their so-called hidden reserves - as capital.
Without the shares, big Japanese banks would only have
capital ratios of around three pct. With them, their ratios are
well above six pct, especially after the recent record-breaking
climb of Tokyo share prices.
Western diplomats argue that the shares are valued far too
high by the ministry. Japanese banks would never be able to
realize anywhere near that amount if they were forced to sell
the shares to raise funds in an emergency, they say.
Finance Ministry officials defended their stance by saying
that studies of the stock market over the last 30 years show
that prices have rarely fallen below the 70 pct value level.
But the U.S. Federal Reserve seems to think otherwise.
Japanese officials say the Fed has effectively held up
applications for bank licenses by Japanese financial
institutions by asking them for a very detailed accounting of
their hidden reserves.
The officials say Japan recently raised the issue with the
Fed through its embassy in Washington and is hoping for talks
on the subject.
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NATNED FORECASTS 1987 RESULTS IN LINE WITH 1986 | The Netherlands' largest insurer
Nationale Nederlanden NV <NTTN.AS> (NatNed) said it expected at
least unchanged results in 1987 after reporting 1986 net
profits up 5.3 pct to 635.5 mln guilders from 603.4 mln in
1985,
Revenues increased by 0.5 pct to 17.35 billion guilders
after 17.27 billion the previous year, and the dividend was
raised to 2.50 guilders per share from 2.38 guilders in 1985,
corrected on a capital increase.
The company said guilder revenue and profit were pressured
by falls in exchange rates, particularly in the US and
Australian dollar and sterling.
Without these currency fluctuations, net profit would have
been 30.7 mln guilders higher and revenue 1.97 billion higher,
NatNed said.
The international share in turnover was 50 pct in 1986
compared with 52 pct in 1985.
The company's life insurance result fell to 365.7 mln
guilders after 428.4 mln in 1985 due to currency influences,
tighter interest margins and increased investment.
Claim payouts fell to 9.9 mln guilders after 66.6 mln the
previous year.
The company's total assets reached 69.87 billion guilders
in 1986 against 67 billion the year before.
Assets per share equalled 65.68 guilders against 65.53.
Without these currency fluctuations, net profit would have
been 30.7 mln guilders higher and revenue 1.97 billion higher,
NatNed said.
The international share in turnover was 50 pct in 1986
compared with 52 pct in 1985.
The company's life insurance result fell to 365.7 mln
guilders aft
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BRITAIN, U.S. TO DISCUSS JAPAN TRADE RELATIONS | British Foreign Secretary Sir Geoffrey
Howe and U.S. Secretary of State George Shultz plan to discuss
the growing crisis in trade relations with Japan in talks in
Washington, government officials said.
Howe views the apparent deadlock in British attempts to
secure a greater share in Japanese domestic markets very
seriously, said an official travelling with him.
Britain has threatened to impose retaliatory restrictions
on Japanese finance houses in London if Japan does not open up
its markets. The U.S. Has already imposed higher tariffs on
computer microchips imported from Japan.
Michael Howard, the British minister for consumer and
corporate affairs, repeated the threat of sanctions before
leaving Tokyo yesterday at the end of a four-day visit during
which he failed to secure major concessions from the Japanese.
Howe's main mission in Washington was to brief Shultz on
Prime Minister Margaret Thatcher's visit to the Soviet Union
last week. Shultz is due to fly to Moscow next week.
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CONTI SHARES OPEN HIGHER ON GOOD NEW TYRE REVIEWS | Shares of Continental Gummi-Werke AG
<CONG.F> opened eight marks stronger in an otherwise mixed
Frankfurt market and dealers attributed the trend to favourable
press reports about a new tyre system the company is
developing.
The shares later eased to 344.50.
A spokesman for the West German Automobile Association,
ADAC, said the ADAC magazine in a recent edition described
advantages of the new tyre.
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EUROPEAN MARKETS REACT QUIETLY TO G-7 COMMUNIQUE | European currency markets reacted quietly
to the G-7 communique, with comments from bankers and dealers
ranging from disappointment that it was not more concrete to
surprise that the markets should have expected so much.
The dollar opened lower against virtually all currencies
and traded in a narrow range after the communique, which
reaffirmed support for the Paris accord on currency
stabilisation but contained no moves to strengthen it.
Dealers in Frankfurt and Zurich saw the dollar remaining
broadly entrenched in its current trading range.
"The dollar is likely to stay within a range of 1.80 to 1.84
marks," said Gisela Steinhaeuser, senior dealer at Chase Bank
AG. She said there was some resistance to further climbs.
However, she said the dollar could break out of the range
with major surprises such as a worse-than-expected U.S.
Merchandise trade deficit, due next Tuesday.
Theodor Stadelmann, dealer with Bank Julius Baer and Co Ltd
in Zurich, said he expects the dollar to hold steady against
the mark and Swiss franc but to weaken further against the yen,
possibly to 140 yen.
A Milan banker shared Stadelmann's view, saying he expects
a dollar-yen range of 140-150 in the short term.
London traders said the G-7 communique failed to curb
underlying bearishness toward the dollar but this negative
sentiment was not yet strong enough to tempt interbank
operators to test the downside.
Concern that finance ministers and officials still in
Washington could issue more concrete statements in favour of
currency stabilisation kept players sidelined, along with
worries about provoking fresh central bank intervention in the
near term, the traders said.
Most Paris dealers expressed disappointment at the
communique, saying nothing has changed to reverse the dollar's
downward trend.
Traders in several centres said the market would look for
fresh opportunities to test the willingness of central banks to
defend current ranges, which the communique said were "broadly
consistent with economic fundamentals and the basic policy
intentions outlined at the Louvre meeting."
Dave Jouhin, senior dealer at Midland Bank in London, said
"They're going to put somebody's resolve to the test soon." The
U.S. February trade data may provide the trigger, dealers said.
However, some dealers said London-based operators would be
unlikely to open major positions next week ahead of the long
Easter weekend. They saw near-term technical support at 1.825
marks and 145 yen and resistance about 1.83 marks and 146 yen.
Chase Bank's Steinhaeuser and other Frankfurt dealers said
the G-7 communique guaranteed a relatively calm and stable
market for the foreseeable future compared with the extreme
volatility seen in the first few months of this year.
One dealer at a German bank said the wording of the
communique made clear the leading nations did not want a
further dollar drop, and this was supporting the dollar.
The German dealer saw the dollar gradually appreciating to
1.87 marks, broadly seen as its upper limit within the Louvre
accord's supposed currency target range.
A Swiss bank economist said he believed the markets were
ready for a period of "mainly sideways movement."
But Milan dealers were sceptical about the communique
contributing to greater stability.
"Nothing has changed substantially to give the dollar a big
boost," said one dealer, while another Italian banker said he
expects the dollar to trade between 1.77 and 1.87 German marks
in the next three months.
A Swiss monetary source, who asked not to be named, said
the communique had been in line with realistic expectations and
should not have produced disappointment.
"The problem is that the changes needed in fiscal and trade
policies to redress current imbalances are of a different
timescale than currency markets operate on," the source told
Reuters, "This is a political process which takes time."
Alois Schwietert, chief economist at Swiss Bank Corp in
Basle, also questioned the tone of disappointment evident on
currency markets today. "Did people really expect a patent
remedy?" he asked.
Bank economists in Paris noted yesterday's meeting was only
the first in a series and said the market would watch carefully
in the next few weeks for any changes in positions.
A senior economist with Banque Indosuez said the focus was
now on trade and growth rather than interest rates. Any move by
Japan and West Germany to boost their economic growth could
lead to a quick change in the U.S. Position.
Dealers in all centres agreed that markets would be wary in
pushing the dollar too far too quickly in the coming months
while central banks appear resolved to use their muscle to
support the Paris accord.
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SOVIET UNION ACCUSES U.S. OF SPYING | The Soviet Union displayed spying
equipment it said had been placed by American agents in five
different Soviet buildings in the United States.
A Foreign Ministry spokesman told a news conference the
equipment demonstrated "the widespread, illegal activities
against Soviet people and missions in the United States by
American special services."
Diagrams and photographs displayed at the news conference
showed devices allegedly found in the Soviet embassy in
Washington, the consulate in San Francisco and in other
locations.
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GERMAN MONEY MARKET SPLIT ON LOWER RATE PROSPECTS | Remarks by central bankers raised some
hopes the Bundesbank will cut rates on securities repurchase
pacts, but operators remained divided on the likelihood of a
move in the near term, money market dealers said.
Comments by Bundesbank board member Claus Koehler yesterday
that rate cuts were needed to curb money supply growth from
speculative capital inflows, and by West Berlin state central
bank president Dieter Hiss that there was no natural lower
limit to the discount rate had, however, no immediate impact.
Call money declined to 3.65/75 pct from 3.75/85 pct but the
drop was tied to extra liquidity in the market, dealers said.
Dealers said the Bundesbank's latest liquidity allotment
this week dashed some hopes of lower rates.
The Bundesbank allotted only 6.1 billion marks yesterday in
new liquidity in a repurchase pact at an unchanged rate of 3.80
pct, thus subtracting some 8.8 billion marks from the market,
as an outgoing 14.9 billion pact expired.
But some dealers said the smaller volume awarded by the
pact was in line with present liquid money market conditions,
and did not exlude a cut in the repurchase pact rate soon to
3.70 pct if money market rates continue at present levels.
The next opportunity for the Bundesbank to lower rates on
repurchase pacts will be in a tender expected next Tuesday.
Bundesbank officials have already said they favour more
discreet rate adjustments through repurchase pacts, rather than
the more public adjustment of leading rates.
The Bundesbank may either set a fixed allocation rate and
allow banks to tender for the volume, as has been the case
since it lowered its discount rate January 22, or else it may
allow banks to tender for the rate and set the volume itself.
Dealers expect volume of the tender to be lower than the
15.2 billion marks flowing out, to offset other incoming funds.
Some seven billion marks is expected to flow in next week.
This should then flow back into the market as it is deposited
with banks.
Banks were well supplied with liquidity, holding 61.5
billion marks in reserves at the Bundesbank on Tuesday.
Holdings of average daily reserves over the first seven
days of April stood at 59.6 billion marks, still above the
estimated 51 billion required for all of April.
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SWEDISH DRUG FIRM ASTRA RISE ON AIDS HOPES | Swedish drug firm AB Astra <ASTS.ST>
shares rose 48 crowns to 690 in the first two hours of trading
on the Stockholm Bourse, amid hopes its research into
anti-viral drugs may have promising results in the treatment of
Acquired Immune Deficiency Syndrome (AIDS).
Stockbrokers said the shares, which climbed amid heavy
institutional buying, also rose in reaction to an optimistic
assessment of future products in the firm's annual report which
was released this week.
Brokers Enskilda Fondkommission said in a report this month
that Astra was a world leader in anti-viral drugs.
Although Enskilda said Astra had not made any breakthrough
in developing a specific drug to treat the Acquired Immune
Deficiency Syndrome it noted that investors were only now
discovering that the firm's approach in the area was promising.
"It is clear that Astra has a tradition in anti-viral
research which should prove valuable in fighting this disease,"
the report by Enskilda, the investment banking unit of
Skandinaviska Enskilda Banken <SEBS.ST>, said.
Company officials could not be reached for comment on the
causes of today's share rise.
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THAILAND TO RENEW LONG TERM SUGAR CONTRACTS -TRADE | Thailand is to negotiate tomorrow with
selected trade houses for renewal of long term raw sugar sales
contracts, to cover the next five years at a rate of 60,000
tonnes annually, traders said.
They also reported vague talk Algeria may be seeking 50,000
tonnes of raws tomorrow but details are unclear.
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EC LAUNCHES ANTI-DUMPING PROBE ON JAPANESE CHIPS | The European Community launched an
investigation into allegations of dumping by Japanese
semiconductor makers in a move which diplomats said could mark
an intensification of world trade strains.
Tokyo already faces a deadline of April 17 from Washington
for the imposition of 300 mln dlrs worth of tariffs on chips it
imports into the U.S.
The EC Executive Commission said today the European
Electrical Component Manufacturers Association complained that
Japanese firms were selling high capacity EPROM type (erasable
programmable read only memory) chips at unfairly low prices.
Japan last year took 78 pct of the 170 mln dlr EC EPROM
market, up from 60 pct in 1984. The EC firms said they had been
forced to offer their products at a discount of up to 30 pct in
order to compete with the Japanese.
The Commission said it believed the Association had given
sufficient elements of proof for dumping to warrant an
investigation, which could lead it to impose duties if it found
the complaints were justified.
The Commission claims last year's accord between the U.S.
And Japan on microchip pricing gives U.S. Firms privileged
access to the Japanese market.
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SWISS TO LAUNCH NEW SERIES OF MONEY MARKET PAPER | The Swiss Federal Government will launch
a new series of three month money market certificates totalling
around 150 mln Swiss francs, the National Bank said.
Subscriptions close April 14 and payment date is April 16.
The last series of three month paper issued in March raised
147.3 mln francs at an issue price of 99.142 pct, giving an
average annual yield of 3.501 pct.
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EUROPEAN MARKETS REACT QUIETLY TO G-7 COMMUNIQUE | European currency markets reacted quietly
to the G-7 communique, with comments from bankers and dealers
ranging from disappointment that it was not more concrete to
surprise that the markets should have expected so much.
The dollar opened lower against virtually all currencies
and traded in a narrow range after the communique, which
reaffirmed support for the Paris accord on currency
stabilisation but contained no moves to strengthen it.
Frankfurt and Zurich dealers saw the dollar staying broadly
entrenched in its current trading range.
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FINANCE MINISTERS AGREE ON NEED FOR STABILITY | Finance ministers from seven major
industrialized nations agreed on the need to stabilize
currencies at current levels but said more action was needed to
reduce trade imbalances and sustain economic growth.
In a communique issued after a four-hour meeting at the
U.S. Treasury that ended last night, the ministers said the
value of the dollar and other currencies was basically correct
now, and they welcomed new measures planned by the Japanese to
boost their economy.
West German Finance Minister Gerhard Stoltenberg called it
a "good meeting" and in brief remarks exchanged with reporters
other ministers seemed pleased with its outcome.
Shortly after the communique was issued and just as foreign
exchange trading opened in Tokyo, the Bank of Japan intervened
again to prevent the yen rising too quickly.
The communique said, "The ministers and governors reaffirmed
the commitment to the cooperative approach agreed at the recent
Paris meeting. They agreed, however, that further actions will
be essential to resist rising protectionist pressures, sustain
global economic expansion and reduce trade imbalances."
It welcomed the plans set this week by the Japan's ruling
Liberal Democratic Party to stimulate its economy with what the
communique termed "extraordinary and urgent measures" including
an "unprecedented front-end loading of public works
expenditures."
The meeting of the so-called Group of Seven brought
together ministers and central bank governors of the seven
major industrial democracies, the United States, Japan, West
Germany, France, Britain, Italy and Canada.
The communique said the ministers reaffirmed the commitment
on cooperation reached in a meeting on February 22 in Paris
when they had agreed to stabilize foreign exchange rates at the
then-current levels.
In the weeks that followed, the dollar continued to fall
against the Japanese yen despite massive dollar purchases by
the Bank of Japan and other central banks and is now trading at
around postwar lows.
Japan has come under growing criticism from both the United
States and European countries for its only modest efforts to
open its markets to outside competition and to reduce its
exports.
The communique said Japan affirmed its intention to open
domestic markets to foreign goods and services but did not
elaborate.
It said the officials "reaffirmed the view that around
current levels their currencies are within ranges broadly
consistent with economic fundamentals and the basic policy
intentions outlined at the Louvre meeting."
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AEGON EXPECTS MODERATE RISE IN 1987 PROFITS | Dutch insurer AEGON NV <AEGN.AS>
reported a 6.4 pct increase in 1986 net profits to 327.1 mln
guilders and said it expected a moderate increase in profits
for 1987.
Total revenue was eight pct lower in 1986 at 7.97 billion
guilders vs 8.7 billion guilders in 1985. The company said its
revenues were down due to lower foreign exchange rates and a
change in accounting practice. It added that revenues would
have risen by about seven pct had those changes not occurred.
Revenue from Dutch operations rose five pct in 1986, mainly
due to its life insurance business.
Health insurance revenues in the Netherlands also rose
despite a notable shift to insurances with lower premiums and
higher personal risks.
Damage insurances made losses, mainly due to car damage
insurances. AEGON did not specify the loss.
In the United States, revenue in guilders from health and
life insurance was lower. AEGON said this was due to a change
in accounting for U.S. Annuities.
AEGON said annuities are subject to such strong personal
investment influences that it should be accounted differently
from the more traditional insurances.
This change in accounting practice and another change to
account for profits made on fixed interest investments,
resulted in an incidental rise in net profits of 31 mln
guilders.
AEGON said incidental negative influences on net profits
were slightly higher, being the lower dollar rate, high initial
costs for new products, and the cost of new headquarters in The
Hague.
In 1986, a large number of new insurance products emerged
in the Netherlands and the U.S., AEGON said. Large initial
costs for these products have depressed net profits somewhat.
Monumental Corp, a U.S. Insurer which merged with AEGON in
May 1986, saw its profits almost completely eroded by these
costs and made only a small contribution to the group's
profits.
AEGON said it has written-off 657 mln guilders in goodwill
for Monumental Corp.
AEGON's net equity was 2.71 billion guilders in December
1986, against 3.46 billion the year before.
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G-7 ISSUES STATEMENT AFTER MEETING | Following is the text of a statement
by the Group of Seven -- the U.S., Japan, West Germany, France,
Britain, Italy and Canada -- issued after a Washington meeting
yesterday.
1. The finance ministers and central bank governors of
seven major industrial countries met today.
They continued the process of multilateral surveillance of
their economies pursuant to the arrangements for strengthened
economic policy coordination agreed at the 1986 Tokyo summit of
their heads of state or government.
The managing director of the International Monetary Fund
also participated in the meeting.
2. The ministers and governors reaffirmed the commitment to
the cooperative approach agreed at the recent Paris meeting,
and noted the progress achieved in implementing the
undertakings embodied in the Louvre Agreement.
They agreed, however, that further actions will be
essential to resist rising protectionist pressures, sustain
global economic expansion, and reduce trade imbalances.
In this connection they welcomed the proposals just
announced by the governing Liberal Democratic Party in Japan
for extraordinary and urgent measures to stimulate Japan's
economy through early implementation of a large supplementary
budget exceeding those of previous years, as well as
unprecedented front-end loading of public works expenditures.
The government of Japan reaffirmed its intention to further
open up its domestic markets to foreign goods and services.
3. The ministers and governors reaffirmed the view that
around current levels their currencies are within ranges
broadly consistent with economic fundamentals and the basic
policy intentions outlined at the Louvre meeting.
In that connection they welcomed the strong implementation
of the Louvre Agreement.
They concluded that present and prospective progress in
implementing the policy undertakings at the Louvre and in this
statement provided a basis for continuing close cooperation to
foster the stability of exchange rates.
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G-7 WANTS TO SHOW MARKETS ITS RESOLVE - MIYAZAWA | Japanese Finance Minister Kiichi
Miyazawa said the Group of Seven (G-7) countries reaffirmed
their Paris accord on stabilising currencies to convince the
market of their resolve.
At a news conference after today's G-7 meeting, Miyazawa
said the ministers and central bank governors did not believe a
totally new statement was needed.
The speculative selling did not reflect economic
fundamentals, and since the fundamentals had not changed only a
reaffirmation of the goals of the Paris accord was needed, he
said.
He also noted that this test of the G-7 nations resolve had
concentrated on the yen, while other currencies, especially the
mark, had remained stable.
Miyazawa said any change in economic conditions since the
Paris accord was not worth being called fundamental.
"As I said at a time of Louvre (agreement), the expression
of 'current level' is rather vague idea," he said.
The yen's movement in the past several weeks is within the
range agreed in Paris in Febraury, he said.
It was better to give a vague expression than pin-pointing
a level, which could have an adverse impact on the market,
Miyazawa said.
Asked why only Japan was committed to fresh measures in the
statement, he said Japan was exceptional among the seven
because the yen appreciated against the dollar while other
major currencies largely have been stable.
He also said Japan's ruling Liberal Democratic Party has
justed adoped a package to reflate the economy while other
nations are not supposed to produce new measures in a short
period since the Paris agreement.
Miyazawa also said the U.S. sanctions against Japanese
semiconductor products was not discussed through the G-7
meeting and did not affect the currency talks.
The seven nations discussed the debt problems of developing
countries and ways to proceed in line with the debt initiative
outlined by U.S. Treasury Secretary James Baker 18 months ago.
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YEN SEEN RISING AFTER G-7 COMMUNIQUE | The yen is likely to start another
uneven rise against the dollar and other major currencies
because the Group of Seven communique contained nothing new,
currency and bond analysts here said.
"Is that it? I was expecting something more than that," said
one trader at a major Wall Street securities company.
Marc Cohen of Republic National Bank of New York said: "The
market now has the impetus to drive the dollar lower again."
The dollar hovered between 145.50 and 147 yen in the days
just before the talks. Dealers restrained their underlying
bearishness and squared positions ahead of Wednesday's meeting
of the finance ministers and central bankers of the top seven
industrialized nations in Washington.
After more than four hours of talks, the G-7 issued a
communique which merely reaffirmed the recent Paris agreement's
view that prevailing currency levels were broadly consistent
with economic fundamentals and that exchange rate stability
should be fostered around these levels.
The dollar sank to 144.75 yen in early Tokyo trading.
"They said that the dollar/yen rate was broadly in line with
fundamentals when it was 154. Now they are saying it's in line
when it's at 146. Will this still be so at 138 or 130?," asked
Republic's Cohen.
Japanese Finance Minister Kiichi Miyazawa fuelled
speculation about the amount of fluctuation the authorities are
prepared to tolerate by saying that the current yen level is
still inside the range agreed on in Paris in late February.
Official statements in recent weeks had indicated that the
key psychological level of 150 yen was at the lower end of the
authorities' permissible range.
Dealers and analysts warned that the dollar's decline would
probably be uneven. They anticipated a concerted effort to prop
up the dollar and restrain the yen via a mixture of open market
intervention and public comments.
Shortly after the Tokyo market opened today the Bank of
Japan was detected by local dealers buying moderate amounts of
dollars. The dollar rebounded to about 145.20 yen.
The sources said the market may also be wary of agressively
selling dollars for yen before Tuesday's February U.S. Trade
data. The figures are expected to show a deficit of 13 billion
dlrs, from a provisional 14.8 billion in January.
|
JAPAN BUSINESS LEADERS SAY G-7 ACCORD IS WORRYING | The leaders of two of Japan's top business
groups said in separate statements the Group of Seven (G-7)
accord reached in Washington yesterday is of deep concern to
Japan because it shows the major industrial nations regard the
yen's current level as appropriate.
Eishiro Saito, chairman of the Federation of Economic
Organizations (Keidanren), said the yen's present rate is well
above adequate levels. He did not elaborate.
Takashi Ishihara, chairman of the Japan Committee for
Economic Development, said the accord will not prevent the yen
from rising further.
"We do not understand why the G-7 approved present rates as
the yen has risen excessively since the Paris accord," Ishihara
said.
G-7 members Britain, Canada, France, Italy, Japan, the U.S.
And West Germany said in a statement they consider their
currencies are now within ranges broadly consistent with
economic fundamentals.
Saito called on each G-7 member nation to prepare to
intervene in the market strongly enough to ensure exchange
rates are stabilised at appropriate levels.
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G-7 COMMITMENT TESTS JAPAN'S WILL TO BOOST ECONOMY | The statement issued today by the Group of
Seven (G-7) industrialised nations has put Japan under greater
international pressure to stimulate its economy or face a
further rise in the yen, private economists and analysts said.
They said the communique reflected increased foreign
frustration with Japan's burgeoning trade surplus and its
tight-fisted fiscal policies in the past.
Unless Japan implements economic measures included in the
statement, foreign protectionist sentiment would grow and the
yen would come under renewed upward pressure, they said.
The G-7 -- grouping the U.S., Japan, West Germany, Britain,
France, Italy and Canada -- said in the statement they welcomed
proposals announced by Japan's ruling Liberal Democratic Party
(LDP) for extraordinary and urgent measures to stimulate its
economy and that Japan reaffirmed its intention to further open
its domestic markets.
"It's rather unusual that only Japan was mentioned in the
communique and promised something," said Takeshi Saito, general
manager of Fuji Bank Ltd's research division. This showed how
strongly other nations want Japan to take concrete and
effective steps to redress its trade surplus, he said.
The statement referred to some details of Japan's proposed
economic measures, such as early implementation of a large
supplementary budget exceeding those of previous years and
unprecedented front-end loading of public works expenditures.
It did not mention any figure for the projected
supplementary budget but LDP officials have said it will amount
to more than 5,000 billion yen for fiscal 1987, which compares
with 2,000 billion provided for the previous year.
"It signalled a clear shift away from the conservative
fiscal policies of the past," said Kazuaki Harada, senior
managing director of Sanwa Research Institute.
For the last five years the government has stuck to a
tight-fisted fiscal policy in its attempt to stop issuing
deficit financing bonds by 1990.
But mounting foreign pressure for Japan to boost its
economy, hurt by the yen's extended rise, hurried the
government to hammer out a draft economic package and bring it
to the latest G-7 meeting.
Harada said Japan should not view expansion of its economy
as the result of pressure but as an opportunity to lead world
economic growth.
"The Japanese economy has the potential to take a leadership
role and we should recognize it," Harada said.
If Japan fails to meet such international expectations it
will invite some retaliatory moves, especially from the U.S.,
Which may result in a further rise of the yen, analysts said.
The G-7 communique represented a test for Japan's
commitment to domestically-generated economic growth and to a
more balanced world trade structure, they said.
REUTER
|
UNIFIRST CORP <UNF> SETS QUARTERLY | Qtly div five cts vs five cts prior
Pay July One
Record June 17
Reuter
|
ARUS <ARSCC> GETS 5.2 MLN DLR ORDER | Arus Corp said it has received a
letter of intent from Winston Financial Corp for the purchase
of over 5,200,000 dlrs in telephone diagnostic testing
equipment.
It said it expects to negotiate a firm order in May.
The company said the total value of the order is at least
5,200,000 dlrs and could be more, depending on circuit
configurations required.
Reuter
|
<TRUMP PLAZA> 4TH QTR NET | Net profit 2,529,000 vs loss 1,066,000
Revs 59.0 mln vs 52.6 mln
Year
Net profit 15.4 mln vs profit 865,000
Revs 247.0 mln vs 231.1 mln
NOTE: Company became wholly owned and operated by Donald
Trump in May 1986, when he acquired 50 pct interest that had
been owned by former operator Holiday Corp <HIA>.
Reuter
|
EUROPEAN MARKETS REACT QUIETLY TO G-7 COMMUNIQUE | European currency markets reacted quietly
to the G-7 communique, with comments from bankers and dealers
ranging from disappointment that it was not more concrete to
surprise that the markets should have expected so much.
The dollar opened lower against virtually all currencies
and traded in a narrow range after the communique, which
reaffirmed support for the Paris accord on currency
stabilisation but contained no moves to strengthen it.
Dealers in Frankfurt and Zurich saw the dollar remaining
broadly entrenched in its current trading range.
"The dollar is likely to stay within a range of 1.80 to 1.84
marks," said Gisela Steinhaeuser, senior dealer at Chase Bank
AG. She said there was some resistance to further climbs.
However, she said the dollar could break out of the range
with major surprises such as a worse-than-expected U.S.
Merchandise trade deficit, due next Tuesday.
Theodor Stadelmann, dealer with Bank Julius Baer and Co Ltd
in Zurich, said he expects the dollar to hold steady against
the mark and Swiss franc but to weaken further against the yen,
possibly to 140 yen.
A Milan banker shared Stadelmann's view, saying he expects
a dollar-yen range of 140-150 in the short term.
London traders said the G-7 communique failed to curb
underlying bearishness toward the dollar but this negative
sentiment was not yet strong enough to tempt interbank
operators to test the downside.
Concern that finance ministers and officials still in
Washington could issue more concrete statements in favour of
currency stabilisation kept players sidelined, along with
worries about provoking fresh central bank intervention in the
long term, the traders said.
Most Paris dealers expressed disappointment at the
communique, saying nothing has changed to reverse the dollar's
downward trend.
Traders in several centres said the market would look for
fresh opportunities to test the willingness of central banks to
defend current ranges, which the communique said were "broadly
consistent with economic fundamentals and the basic policy
intentions outlined at the Louvre meeting."
Dave Jouhin, senior dealer at Midland Bank in London, said
"They're going to put somebody's resolve to the test soon." The
U.S. February trade data may provide the trigger, dealers said.
However, some dealers said London-based operators would be
unlikely to open major positions next week ahead of the long
Easter weekend. They saw near-term technical support at 1.825
marks and 145 yen and resistance about 1.83 marks and 146 yen.
Chase Bank's Steinhaeuser and other Frankfurt dealers said
the G-7 communique guaranteed a relatively calm and stable
market for the foreseeable future compared with the extreme
volatility seen in the first few months of this year.
One dealer at a German bank said the wording of the
communique made clear the leading nations did not want a
further dollar drop, and this was supporting the dollar.
The German dealer saw the dollar gradually appreciating to
1.87 marks, broadly seen as its upper limit within the Louvre
accord's supposed currency target range.
A Swiss bank economist said he believed the markets were
ready for a period of "mainly sideways movement."
But Milan dealers were sceptical about the communique
contributing to greater stability.
"Nothing has changed substantially to give the dollar a big
boost," said one dealer, while another Italian banker said he
expects the dollar to trade between 1.77 and 1.87 German marks
in the next three months.
Reuter
|
WESTRONIX <WSTX> COMPLETES STOCK SALE | Westronix Inc said it has
completed the private sale of 2,500,000 common shares at 2.30
dlrs each.
Reuter
|
WEST GERMAN BEET PLANTINGS DELAYED THREE WEEKS | Unseasonal cold weather has delayed
sugar beet plantings in West Germany by up to three weeks, the
agriculture ministry said.
A ministry spokesman said in some central areas, especially
in the Rhineland, farmers have taken advantage of warmer
weather and started plantings in the past two days.
West German planting intentions this year are put at
381,000 hectares, down from 390,500 ha last year, he said,
adding that the 1980/1985 average was 405,000 ha.
REUTER
|
SOUTHWEST REALTY <SWL> IN RIGHTS OFFERING | Southwest Realty Ltd said it has filed
for a rights offering.
It said for each three shares owned, a shareholder will
receive a transferable right to purchase one additional share
at 2.50 dlrs.
The company said the offering is expected to be made on
June 15.
Reuter
|
STEP-SAVER <CODA> SAYS WARRANT EXERCISED | Step-Saver Data Systems Inc
said Bergen-Richards Corp has exercised a warrant to buy
450,000 Step-Saver shares at two dlrs each.
It said warrants issued to the underwriter in its initial
public offering were exercised in March for an aggregate of
169,200 dlrs.
Reuter
|
GALAXY OIL <GOX> BEING DELISTED BY AMEX | Galaxy Oil Co said its
common stock and nine pct convertible subordinated debentures
due 1994 are being delisted from the <American Stock Exchange>
because the company no longer meets listing criteria.
Galaxy filed Chapter 11 bankruptcy on April Six.
The company said trading in both issues will be suspended
by the Amex at the close on May One but is expected to start
elsewhere on May Four.
Reuter
|
TRANSCAPITAL <TFC> UNIT CLOSING 12 OFFICES | TransCapital Financial Corp's
TRANSOHIO Savings Bank subsidiary said it plans to close 11
offices in the Cleveland area and one in Columbus, Ohio,
reducing its total number of offices to 81 statewide.
The company said accounts will be moved into other
TRANSOHIO offices. Four closings are set for May 23 and four
for June 20 and the rest are tentatively set for September 19.
It said it is closing branches were overlaps exist
following its August 1986 acquisitions of Citizens Federal
Savings and Loan Association of Cleveland and Dollar Savings
Bank of Columbus or where efficiencies could be improved.
Reuter
|
COAST SAVINGS <CSA> IN TALKS ON BUYING BANK | Coast Savings and Loan Association
said it is in talks with the Federal Savings and Loan Insurance
Corp on the acquisition of Central Savings and Loan Association
of San Diego.
Central, which operates 46 branches, has been under
management guidance of the FSLIC since May 1985.
Coast said the acquisition would give it an entry into the
San Joaquin Valley market besides strengthening its presence in
the San Diego, Los Angeles and Orange Counties areas.
Reuter
|
BRAMALL TO ACQUIRE GELCO FOR UP TO 26.3 MLN DLRS | <C.D. Bramall Plc> said in a statement
accompanying its annual results that it proposed to acquire
Gelco U.K. For some 26.3 mln dlrs.
Part of the cost will be met by the issue of 2.14 mln new
ordinary Bramall shares which are being placed at 265p each.
The acquisition will be satisfied by an initial payment of
some 25.3 mln dlrs in cash with further payments of 500,000
dlrs up to a maximum 26.3 mln dlrs. These further payments will
only be made if profits achieved by Gelco for the year ending
July 31, 1987 reach a certain level.
Bramall shares were trading 6p lower at 278p.
REUTER
|
<SAPC INC> SUES LOTUS <LOTS> OVER COPYRIGHT | Privately-held software
developer SAPC Inc said it has filed suit in U.S. District
Court in Boston against Lotus Development Corp, alleging the
infringement of a copyright and the misappropriation of trade
secrets and is seeking 100 mln dlrs in damages.
The firm's suit alleges that Lotus' spreadsheet program
1-2-3 violates the copyright of VisiCalc, which was developed
by SAPC several years ago, before 1-2-3 was introduced, when
the firm was known as Software Arts Inc. Software Arts sold
rights to VisiCalc to Lotus in 1985 and changed its name.
The suit also alleges that Lotus founder Mitchell D. Kapor,
who resigned as chairman in July 1986, breached a
confidentiality agreement with SAPC. Kapor, also named as a
defendant, had worked for a firm that had marketing rights to
VisiCalc before founding Lotus.
The suit alleges that Lotus and Kapor deliberately sought
to make 1-2-3 look and feel like VisiCalc by copying a number
of commands, keystrokes and screen displays.
Lotus, in response, said it feels the suit is without merit.
Reuter
|
U.S. SAID TO VIEW G-7 MEETING AS MAJOR SUCCESS | The United States, which has long
sought Japanese action to stimulate its economy, appears to be
satisfied Tokyo's latest package is a major development and
allows leading industrial nations to reaffirm their agreement
to stabilize currencies.
Monetary sources said they believed that U.S. Treasury
Secretary James Baker considered Tokyo's package, announced
yesterday, to be a major stimulation of the Japanese economy.
But yesterday's statement by seven leading industrial
powers endorses the yen's rise from around 153 to the dollar,
the level at the February 22 Paris Accord, to about 145 today.
The supplementary budget worth about 34.48 billion dlrs was
announced by the ruling Liberal Democratic Party on the eve of
Miyazawa's departure for Washington, to attend yesterday's
meetings of leading industrial nations.
In a strongly worded statement terming the Japanese action
"extraordinary and urgent", the meeting reaffirmed the Paris
Accord by noting that current exchange rates are within ranges
broadly consistent with fundamentals, or economic reality.
The Group of Seven -- the United States, Japan, West
Germany, France, Britain, Italy and Canada -- therefore
repeated their willingness to continue close cooperation to
foster exchange rate stability.
The cooperation agreement has resulted in concerted central
bank intervention of 8 billion to 9 billion dlrs to halt the
dollar's fall. While relatively unsuccessful, the scale of
intervention between so many nations is unprecedented in recent
years.
Monetary sources also said they understood that Secretary
Baker considered the meeting to be extremely successful in the
light of the Japanese announcement.
They also said there was a growing feeling among the
finance ministers and central bankers that cooperation over
medium-term policies has replaced the bickering over short-term
differences in past meetings.
West Germany, whose currency has not risen anything like
the yen since the Paris Agreement, appears from the face of
yesterday's statement to have won acceptance from other
countries that its exchange rate is acceptable.
Bonn's finance minister Gerhard Stoltenberg argues that
major currency shifts needed to remedy the huge imbalance
between West Germany and Japan's trade surpluses and America's
trade deficit have already taken place.
No mention was made, however, of the U.S. commitment to cut
the budget deficit even though it is implied in the
reafffirmation of Paris.
European nations and Japan believe deficit cuts are
essential to curbing the record U.S. trade shortfall that
reached nearly 170 billion dlrs last year.
A similar argument was made on Capitol Hill earlier this
week by Federal Reserve Board chairman Paul Volcker. A further
sharp fall to redress trade imbalances would "clearly pose
substantial risks of renewed inflationary momentum and could
undermine confidence in future financial stability," he said.
Volcker warned a further dollar fall might force the
politically independent Fed to drive up interest rates.
Monetary sources said that, privately, West Germany
welcomed the rise in the yen against the dollar while its own
currency remained relatively stable against the U.S. unit.
Bonn and other European nations worry that once the weak
dollar blunts Tokyo's export drive to the United States, the
Japanese monolith will concentrate on European markets.
The ministers, meanwhile, also continued talks on making
their policy coordination more binding and one, Canadian
Finance Minister Michael Wilson, said good progress was made.
Wilson said they will meet before the June Economic Summit
to prepare a report for the leaders of the seven nations.
The United States and France, backed by the International
Monetary Fund, want the seven to agree on ranges or "norms" for a
limited number of economic objectives such as growth,
inflation, monetary conditions, trade balances and current
account balances.
Sharp deviations from these guidelines would result in
consultations between the countries on whether corrective
action should be required.
But the inclusion of currencies as one of the objectives
has Bonn and London worried, monetary sources say, because it
implies Washington is moving in the direction of target zones.
The sources said the Reagan administration unsuccessfully
sounded out its allies on a system of target zones to limit
currency fluctuations just before the February meeting.
The concept is a much more rigid one than the secret ranges
of the Paris Accord and would mark a sharp departure from the
relatively free currency markets of recent years.
Reuter
|
BELGIUM LAUNCHES BONDS WITH GOLD WARRANTS | The Kingdom of Belgium is launching 100
mln Swiss francs of seven year notes with warrants attached to
buy gold, lead mananger Credit Suisse said.
The notes themselves have a 3-3/8 pct coupon and are priced
at par. Payment is due April 30, 1987 and final maturity April
30, 1994.
Each 50,000 franc note carries 15 warrants. Two warrants
are required to allow the holder to buy 100 grammes of gold at
a price of 2,450 francs, during the entire life of the bond.
The latest gold price in Zurich was 2,045/2,070 francs per
100 grammes.
REUTER
|
FAO SEES LOWER GLOBAL WHEAT, GRAIN OUTPUT IN 1987 | The U.N. Food and Agriculture Organisation
(FAO) said global wheat and coarse grain output was likely to
fall in 1987 but supplies would remain adequate to meet demand.
FAO said in its monthly food outlook bulletin total world
grain output was expected to fall 38 mln tonnes to 1,353 mln in
1987, due mainly to unusually high winter losses in the Soviet
Union, drought in China and reduced plantings in North America.
World cereal stocks at the end of 1986/87 were forecast to
rise 47 mln tonnes to a record 452 mln tonnes, softening the
impact of reduced production. But stocks are unevenly
distributed, with about 50 pct held by the U.S.
"Thus the food security prospects in 1987/88 for many
developing countries, particularly in Africa, depend crucially
on the outcome of this year's harvests," FAO said.
FAO said world cereal supplies in 1986/87 were estimated at
a record 2,113 mln tonnes, about five pct higher than last
season and due mainly to large stocks and a record 1986
harvest, estimated at 1,865 mln tonnes.
FAO's forecast of 1986/87 world cereals trade was revised
upwards by eight mln tonnes to 179 mln due to the likelihood of
substantial buying by China and the Soviet Union.
REUTER
|
CATER HAWLEY HALE <CHH> MARCH SALES UP 7.8 PCT | Carter Hawley Hale Stores Inc said
sales for the five weeks ended April Four were up 7.8 pct to
314.0 mln dlrs from 291.3 mln dlrs a year earlier, with
same-store sales up 5.5 pct.
The company said sales for the first two months of its
fiscal year were up 7.7 pct to 554.7 mln dlrs from 515.1 mln
dlrs a year earlier, with same-store sales up 5.6 pct.
Carter Hawley said sales were helped by shifting some
promotions to March from April to compensate for the later
Easter this year.
Reuter
|
INDEPENDENT AIR <IAIR> EXTENDS WARRANTS | Independent Air Inc said its board
has extended the expiration of its Class A warrants to June 30
from April 11 and left the exercise price unchanged at 18 cts
per common share.
Reuter
|
XICOR <XICO> SEES END OF INTEL <INTC> PROGRAM | Xicor Inc said based on recent
talks with Intel Corp, it expects its joint research program
with Intel on the development of advanced memory devices to be
ending shortly.
The company said it will reallocate personnel presently
assigned to the program to its one megabit CMOS E2 PROM program
and other development programs.
Reasons for the end of the Intel venture were not given.
Reuter
|
CB AND T BANCSHARES INC <CBTB> 1ST QTR NET | Shr 27 cts vs 24 cts
Net 5,223,000 vs 4,682,000
Avg shrs 19.7 mln vs 19.4 mln
NOTE: Results reflected pooled acquisition of First
Community Bancshares Inc on March 31, 1987 and include Camden
Bancorp from January 31, 1987 purchase.
Reuter
|
XICOR INC <XICO> 1ST QTR MARCH 22 NET | Shr profit five cts vs loss 16 cts
Net profit 689,000 vs loss 1,910,000
Revs 12.3 mln vs 9,432,000
NOTE: 1987 net includes 276,000 dlr tax credit.
Reuter
|
GEORGE WIMPEY SAYS BENEFITS OF RESTRUCTURING SEEN | George Wimpey Plc <WMPY.L> said the
outlook for 1987 looked encouraging as the company realised the
continuing benefits of restructuring.
It said its overall financial position showed further
improvement in 1986 and the reshaping of its U.K. Business into
clearly defined and activity related divisions had been
successfully achieved.
Wimpey was commenting in a statement on its 1986 results
which showed pretax profits up 42 pct to 66.5 mln stg.
The group had a good overall year in North America, the
company said in a statement.
Reuter
|
C.O.M.B. <CMCO> MAKES ACQUISITION | C.O.M.B. Co said it has acquired
the principal assets of National Tech Industries Inc and Telkom
Corp, which are engaged in the sale and telemarketing of
consumer electronic merchandise and do business as House of
Imports and N.L. Industries respectively.
The company said it paid a total of 8,700,000 dlrs,
including the assumption of liabilities.
National Tech had sales of about 23 mln dlrs for 1986, it
said.
Reuter
|
EC SHELVES LEGAL ACTION AGAINST THREE AIRLINES | The European Community Commission said
today it has shelved threatened legal action against West
Germany's Lufthansa <LHAG.F>, Alitalia of Italy <AERI.MI> and
Olympic Airways of Greece after they agreed to change practices
that restrict competition in the heavily-protected EC sector.
The Commission had also written to seven other Community
airlines, including British Airways <BAB.L> and Air France,
last summer warning them that agreements such as capacity and
revenue sharing accords broke EC competition rules. The seven
have already agreed to hold talks with the Commission on
bringing such practices into line with the rules.
In a statement, the EC's executive authority also spelled
out tough demands it will be putting to carriers in talks on
liberalising EC air transport and bringing down airfares,
warning that new legal moves were possible if they refused to
comply.
As a first step, the Commission wanted the 10 carriers to
eliminate the most serious distortions of competition caused by
the current practices and agreements.
The latest demands go further towards liberalisation than
proposals that are currently the subject of difficult
negotiations between by EC Transport Ministers. REUTER
|
BELGIUM LAUNCHES BONDS WITH GOLD WARRANTS | The Kingdom of Belgium is launching 100
mln Swiss francs of seven year notes with warrants attached to
buy gold, lead manager Credit Suisse said.
The notes themselves have a 3-3/8 pct coupon and are priced
at par. Payment is due April 30, 1987, and final maturity April
30, 1994.
Each 50,000 franc note carries 15 warrants. Two warrants
are required to allow the holder to buy 100 grammes of gold at
a price of 2,450 francs, during the entire life of the bond.
The latest gold price in Zurich was 2,045/2,070 francs per
100 grammes.
Reuter
|
DATATRAK INC <DTRK> 3RD QTR FEB 28 NET | Shr profit nil vs profit nil
Net profit 27,622 vs profit 5,556
Sales 1,031,306 vs 840,906
Nine mths
Shr loss one ct vs loss two cts
Net loss 195,095 vs loss 445,379
Sales 2,702,085 vs 2,219,961
Reuter
|
MIYAZAWA SAYS YEN STILL INSIDE PARIS RANGE | Japanese Finance Minister Kiichi
Miyazawa said the strengthening of the yen against the dollar
since the Paris Agreement was within the range agreed in the
Louvre discussions.
"I would say that what has happened (to the yen) in the past
several weeks was not outside the range we agreed to in the
discussions in Paris," Miyazawa told a press conference
following the Group of Seven meeting here.
He said the current discussions were a "reaffirmation" of
that agreement, saying the "solidarity" that occurred in Paris
was still in place.
Reuter
|
TODD SHIPYARDS <TOD> STRUCK ON WEST COAST | Todd Shipyards Corp said
production workers represented by the multi-union Pacific Coast
Metal Trades District Council at its San Francisco division
struck on April Six.
It said negotiations are expected to resume at the end of
this month.
Todd also said the collective bargaining division in effect
at its Galveston Division expires April 17, and negotiations
with the Galveston Metal Trades Council are continuing.
The company said results of balloting on a new collective
bargaining agreement proposal in its Seattle Division are
expected to be tabulated at the close of business tomorrow.
The Pacific Coast Council has recommended acceptance of
that proposal by membership, Todd said.
Reuter
|
U.S. FIRST TIME JOBLESS CLAIMS FELL IN WEEK | New applications for unemployment
insurance benefits fell to a seasonally adjusted 338,000 in the
week ended March 28 from 355,000 in the prior week, the Labor
Department said.
The number of people actually receiving benefits under
regular state programs totaled 2,436,000 in the week ended
March 21, the latest period for which that figure was
available.
That was down from 2,480,000 the previous week.
Reuter
|
G-7 WANTS TO SHOW MARKETS ITS RESOLVE - MIYAZAWA | Japanese Finance Minister Kiichi
Miyazawa said the Group of Seven (G-7) countries reaffirmed
their Paris accord on stabilising currencies to convince the
market of their resolve.
At a news conference after yesterday's G-7 meeting,
Miyazawa said the ministers and central bank governors did not
believe a totally new statement was needed. The speculative
selling did not reflect economic fundamentals, and since the
fundamentals had not changed only a reaffirmation of the goals
of the Paris accord was needed, he said.
He said this test of the G-7 nations' resolve had
concentrated on the yen, while other currencies, especially the
mark, had remained stable.
Reuter
|
CLEVITE INDUSTRIES SAYS J.P. INDUSTRIES OFFERED 13.50
DLRS A SHARE TO BUY COMPANY
| |
INDIAN STATE COMPANY BONDS PROVOKE COMPLAINTS | India's private businessmen say they
have been placed on an unequal footing in raising money from
the capital market because government companies are wooing
investors by issuing more attractive tax-free bonds.
Stock brokers and bankers polled by Reuters said although
equity shares or debenture issues floated by private firms
provide a higher return and shorter maturity, they are fast
losing their popular appeal as they are liable to both wealth
and income taxes.
Brokers said many investors are transferring funds into
government company bonds because of their tax-free status and
easy transferability.
About 100 private companies have postponed plans to issue
equity shares and debentures in the first quarter of fiscal
1987/88 partly on account of fierce competition from public
sector bonds, a merchant banker said.
They included equity shares and rights issue worth one
billion rupees planned to be issued this month by Tata
Fertilisers Ltd, he said, adding the issue has been postponed
indefinitely.
"The government bonds are making serious inroads on the
private sector companies' resources," said R. P. Goenka,
president of the Federation of Indian Chambers of Commerce and
Industry.
"The discriminatory tax treatment should be done away with
and equal facilities be provided to the two sectors to mobilise
resources from the market which is common to both," Goenka said.
A senior Finance Ministry official said government and
private firms were free to compete to raise resources, adding
it was not correct that public sector-issued bonds were
preventing private firms from raising money on the stock
market.
"Debentures and equity shares floated by private companies
still account for at least 60 pct of total capital raised in
stock exchanges," the ministry official said.
A spokesman at Bombay stock brokers Batliwala and Karani
said government bonds were valued at about 20 billion rupees or
about 40 pct of 50 billion rupees raised by both government and
non-government firms in the domestic capital market in 1986/87.
The share was 35 to 40 pct of about 36.95 billion rupees
mobilised in 1985/86, he said. "To save taxes, commercial banks,
mainly foreign banks, and some private companies, are investing
their surplus funds in the tax free bonds," he said.
"Individuals who are very well off are also investing in the
bonds to gain tax benefits while only small investors are going
for equities or debentures floated by private companies on a
selective basis," the spokesman said.
The maturity period of government company bonds varies
between seven and 10 years. No wealth or income taxes are
payable on nine pct seven-year bonds but those carrying 13 pct
interest on 10-year bonds are subjected to income tax if interest amount^M
exceeds 7,000 rupees a year.
Equity shares, the 14 pct non-convertible debentures and
12.5 to 14 pct convertible debentures issued by private
companies are not exempted from either the wealth tax or from
the tax on income earned from them.
The government bonds are listed as securities but traded on
India's four major stock exchanges. They can be sold freely on
the stock market by simple endorsement while debentures can
only be sold to the company after one year, brokers said.
Government companies are trying to capitalise on a boom in
the stock market since 1984/85 sparked by liberal tax
concessions and reforms in exchange operations, brokers said.
The National Thermal Power Corp, NTPC, was the first
government company to issue the bonds to raise one billion
rupees in January last year, breaking the monopoly of private
companies on the capital market. The seven-year NTPC bond was
oversubscribed three times, brokers said.
Official figures show bonds floated by government companies
have been heavily oversubscribed. More state companies have
sought the Ministry's permission to issue them in coming
months.
NTPC's second bond issue at the end of 1986 raised 4.51
billion rupees against 1.2 billion originally permitted by the
Finance Ministry.
The Mahanagar Telephone Nigam mobilised 3.83 billion rupees
last year against authorised 1.5 billion and last month the
Indian Railway Finance Corporation's record susbcription
totalled 5.5 billion rupees against authorised 2.5 billion.
In most cases, the government has allowed the companies to
maintain the oversubscribed amount, brokers said.
Goenka said that government bonds are making it
increasingly difficult for private companies to launch new
equity or debenture issues. He said the government could at
least "fix a suitable limit on the funds to be raised through
such bonds by the public sector."
Merchant bankers said the government is pressing state
companies to borrow from the public by reducing financial
support to them.
To ease its internal debt burden, the government has
reduced the budgetary support to development investment in
about 120 public sector companies to 69.92 billion rupees in
1987/88 from 77.92 billion a year earlier, official figures
show.
REUTER
|
SUNTRUST BANKS INC <STI> 1ST QTR NET | Shr 54 cts vs 49 cts
Net 70.2 mln vs 64.0 mln
NOTE: Share adjusted for two-for-one split in July 1986.
Results restated for pooled acquisition of Third NAtional
Corp in December 1986.
Net chargeoffs 15.0 mln dlrs vs 14.2 mln dlrs.
Assets 25.8 billion dlrs, up 7.2 pct from a year earlier,
deposits 21.1 billion, up 9.4 pct, and loans 17.1 billion dlrs,
up 17.2 pct.
Reuter
|
SUNTRUST <STI> PUTS LOANS ON NONACCRUAL | SunTrust Banks Inc said in the first
quarter it placed about 20.2 mln dlrs of loans to Brazil and
21.6 mln dlrs of loans to Ecuador on nonaccrual status.
The company made the disclosure in reporting that first
quarter earnings rose to 70.2 mln dlrs from 64.0 mln dlrs a
year earlier.
Reuter
|
ROPAK <ROPK> FORMS JAPANESE UNIT | Ropak corp said it has formed
a new Tokyo-based subsidiary called Ropak Nippon Ltd to market
its North American products in Japan.
It said the new unit has started importing plastic pans and
other products for the packaging of seafood and will also
market rigid-plastic shipping pails for a variety of packaging
uses.
Reuter
|
BURLINGTON INDUSTRIES <BUR> SELLS CONVERTIBLES | Burlington Industries Inc is raising 75
mln dlrs through an offering of convertible subordinated
debentures due 2012 with a 6-1/4 pct coupon and par pricing,
said lead manager Kidder, Peabody and Co Inc.
The debentures are convertible into the company's common
stock at 63.50 dlrs per share, representing a premium of 18.1
pct over the stock price when terms on the debt were set.
Non-callable for three years, the issue is rated Ba-2 by
Moody's Investors Service Inc and BBB by Standard and Poor's
Corp. Merrill Lynch Capital Markets and Salomon Brothers Inc
co-managed the deal.
Reuter
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PSE TO START OPTION TRADE ON BAKER HUGHES <BHI> | The Pacific Stock Exchange said it
will start options trading on Baker Hughes Inc today.
Expirations will be January, May, July and October.
Reuter
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INTERNATIONAL THOMSON TO REPORT IN U.S. FUNDS | <International Thomson Organisation Ltd>
said it will report financial results in U.S. funds rather than
sterling, beginning from Jan 1, 1987.
It said the change will not be applied retroactively to
prior financial periods.
The company said as a result of recent investments, most of
its assets now are located in the United States.
Reuter
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PHILIP CROSBY ASSOCIATES INC <PCRO> 4TH QTR NET | Shr three cts vs 18 cts
Net 220,000 vs 1,250,000
Revs 11.8 mln vs 9,430,000
Year
Shr 45 cts vs 69 cts
Net 3,400,000 vs 4,037,274
Revs 45.1 mln vs 34.3 mln
Reuter
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COLONIAL AMERICAN BANKSHARES CORP <CABK> 1ST QTR | Shr 52 cts vs 40 cts
Qtly div 18 cts vs 15 cts prior
Net 793,740 vs 603,661
NOTE: Share adjusted for 10 pct stock dividend in November
1986.
Dividend pay May One, record April 25.
Reuter
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BIOSYSTEMS RESEARCH TESTS TECHNOLOGY FOR AIDS | <Biosystems Research Inc> said
its new technique for a treatment for Acquired Immune
Deficiency Syndrome showed good results on subjects who were
treated.
Called biostimulation, the non-drug approach to the
treatment of those with AIDS and AIDS related complex involves
exposure to low-level magnetic and electrical stimulation in
combination with phototherapy from the visible light spectrum,
the company said.
Biosystems said it tested its technique in two studies with
eight subjects since January 1986, for periods of five to 60
weeks. It said the treatments have not produced any adverse
effects in the subjects.
Reuter
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CHICAGO PACIFIC <CPAC> SELLS CONVERTIBLE DEBT | Chicago Pacific Corp is raising 150 mln
dlrs through an offering of convertible subordinated debentures
due 2012 with a 6-1/2 pct coupon and par pricing, said lead
manager Goldman, Sachs and Co.
The debentures are convertible into the company's common
stock at 62.50 dlrs per share, representing a premium of 25.63
pct over the stock price when terms on the debt were set.
Non-callable for two years, the issue is rated B-1 by
Moody's Investors Service Inc and B by Standard and Poor's
Corp. First Boston Corp and Lazard Freres and Co co-managed the
deal.
Reuter
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DURAKON <DRKN> PRODUCT SOLD BY CANADIAN TIRE | Durakon Industries Inc said
Canadian Tire Corp, the large Canadian auto retailer, has
selected Durakon's All Star Liner as its exclusive pickup truck
bed liner, to be sold in the 400 Associate Stores across Canada.
Reuter
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RPT - ARGENTINE GRAIN/OILSEED EXPORT PRICES ADJUSTED | The Argentine Grain Board adjusted
minimum export prices of grain and oilseed products in dlrs per
tonne FOB, previous in brackets, as follows:
Sorghum 64 (63), sunflowerseed cake and expellers 103 (102)
, pellets 101 (100), meal 99 (98), linseed oil 274 (264),
groundnutseed oil 450 (445), soybean oil 300 (290), rapeseed
oil 290 (280).
Sunflowerseed oil for shipment through May 323 (313) and
june onwards 330 (320).
The board also adjusted export prices at which export taxes
are levied in dlrs per tonne FOB, previous in brackets, as
follows:
Bran pollard wheat 40 (42), pellets 42 (44).
REUTER
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