Showers continued throughout the week in the Bahia cocoa zone, alleviating the drought since early January and improving prospects for the coming temporao, although normal humidity levels have not been restored, Comissaria Smith said in its weekly review. The dry period means the temporao will be late this year. Arrivals for the week ended February 22 were 155,221 bags of 60 kilos making a cumulative total for the season of 5.93 mln against 5.81 at the same stage last year. Again it seems that cocoa delivered earlier on consignment was included in the arrivals figures. Comissaria Smith said there is still some doubt as to how much old crop cocoa is still available as harvesting has practically come to an end. With total Bahia crop estimates around 6.4 mln bags and sales standing at almost 6.2 mln there are a few hundred thousand bags still in the hands of farmers, middlemen, exporters and processors. There are doubts as to how much of this cocoa would be fit for export as shippers are now experiencing dificulties in obtaining +Bahia superior+ certificates. In view of the lower quality over recent weeks farmers have sold a good part of their cocoa held on consignment. Comissaria Smith said spot bean prices rose to 340 to 350 cruzados per arroba of 15 kilos. Bean shippers were reluctant to offer nearby shipment and only limited sales were booked for March shipment at 1,750 to 1,780 dlrs per tonne to ports to be named. New crop sales were also light and all to open ports with June/July going at 1,850 and 1,880 dlrs and at 35 and 45 dlrs under New York july, Aug/Sept at 1,870, 1,875 and 1,880 dlrs per tonne FOB. Routine sales of butter were made. March/April sold at 4,340, 4,345 and 4,350 dlrs. April/May butter went at 2.27 times New York May, June/July at 4,400 and 4,415 dlrs, Aug/Sept at 4,351 to 4,450 dlrs and at 2.27 and 2.28 times New York Sept and Oct/Dec at 4,480 dlrs and 2.27 times New York Dec, Comissaria Smith said. Destinations were the U.S., Covertible currency areas, Uruguay and open ports. Cake sales were registered at 785 to 995 dlrs for March/April, 785 dlrs for May, 753 dlrs for Aug and 0.39 times New York Dec for Oct/Dec. Buyers were the U.S., Argentina, Uruguay and convertible currency areas. Liquor sales were limited with March/April selling at 2,325 and 2,380 dlrs, June/July at 2,375 dlrs and at 1.25 times New York July, Aug/Sept at 2,400 dlrs and at 1.25 times New York Sept and Oct/Dec at 1.25 times New York Dec, Comissaria Smith said. Total Bahia sales are currently estimated at 6.13 mln bags against the 1986/87 crop and 1.06 mln bags against the 1987/88 crop. Final figures for the period to February 28 are expected to be published by the Brazilian Cocoa Trade Commission after carnival which ends midday on February 27.
Shr 45 cts vs 58 cts Net 1.1 mln vs 829,000 Sales 7.9 mln vs 9.4 mln Avg shrs 2,332,397 vs 1,428,000 Year Shr 1.22 dlrs vs 1.06 dlrs Net 2.9 mln vs 1.5 mln Sales 25.7 mln vs 22.2 mln Avg shrs 2,332,397 vs 1,428,000
International Coffee Organization, ICO, producing countries will present a proposal for reintroducing export quotas for 12 months from April 1 with a firm undertaking to try to negotiate up to September 30 any future quota distribution on a new basis, ICO delegates said. Distribution from April 1 would be on an unchanged basis as in an earlier producer proposal, which includes shortfall redistributions totalling 1.22 mln bags, they said. Resumption of an ICO contact group meeting with consumers, scheduled for this evening, has been postponed until tomorrow, delegates said.
Sugar imports subject to the U.S. sugar import quota during the week ended January 9, the initial week of the 1987 sugar quota year, totaled 5,988 short tons versus 46,254 tons the previous week, the Agriculture Department said. The sugar import quota for the 1987 quota year (January-December) has been set at 1,001,430 short tons compared with 1,850,000 tons in the 1986 quota year, which was extended three months to December 31. The department said the Customs Service has reported that weekly and cumulative imports are reported on an actual weight basis and when final polarizations are received, cumulative import data are adjusted accordingly.
The Panama Canal Commission, a U.S. government agency, said in its daily operations report that there was a backlog of 39 ships waiting to enter the canal early today. Over the next two days it expects -- 2/26 2/27 Due: 27 35 Scheduled to Transit: 35 41 End-Day Backlog: 31 25 Average waiting time tomorrow -- Super Tankers Regular Vessels North End: 13 hrs 15 hrs South End: 4 hrs 26 hrs
Qtly div 35 cts vs 35 cts prior Payable March 31 Record March nine
The Commodity Credit Corporation (CCC) announced 1.5 mln dlrs in credit guarantees previously earmarked to cover sales of dry edible beans to Honduras have been switched to cover sales of white corn, the U.S. Agriculture Department said. The department said the action reduces coverage for sales of dry edible beans to 500,000 dlrs and creates the new line of 1.5 mln dlrs for sales of white corn. All sales under the credit guarantee line must be registered and shipped by September 30, 1987, it said.
Argentina could suspend payments on its foreign debt if creditor banks reject a 2.15 billion dlr loan request to meet 1987 growth targets, ruling Radical Party Deputy Raul Baglini told a local radio station. "Argentina does not discard the use of (a moratorium) if the negotiations do not produce a result that guarantees the growth of the country," he added. Baglini, an observer at Argentina's negotiations in New York with the steering committee for its 320 creditors banks, told the Radio del Plata in a telephone interview that the banks were divided on the loan request. Baglini said that as a result, today's scheduled second day of talks had been postponed. He said Argentina was prepared to follow the example of Brazil, which last week declared a moratorium on interest payments of a large portion of its 108 billion dlr foreign debt. Argentina's prime objective in renegotiating the debt was to maintain growth, which has been targeted at four pct in 1987, Baglini said. "Debtor nations should not have to take from their own pockets, that is their commercial balance, to meet interest payments," he added.
International Coffee Organization (ICO) exporters will modify their new proposal on quota resumption before presenting it to importers tomorrow, ICO delegates said. The change, which will be discussed tonight informally among producers, follows talks after the formal producer session with the eight-member producer splinter group and will affect the proposed quota distribution for 12 months from April one, they said. The proposed share-out would still include shortfall declarations, they said.
Annual div Class A 14 cts vs 12 cts prior Annual div Class B 12.1 cts vs 10.4 cts prior Payable April one Record March 20 NOTE: full name is BDM International Inc.
A study on grain certificates due out shortly from the Government Accounting Office (GAO) could show that certificates cost the government 10 to 15 pct more than cash outlays, administration and industry sources said. Analysis that the GAO has obtained from the Agriculture Department and the Office of Management and Budget suggests that certificates cost more than cash payments, a GAO official told Reuters. GAO is preparing the certificate study at the specific request of Sen. Jesse Helms (R-N.C.), former chairman of the senate agriculture committee. The report, which will focus on the cost of certificates compared to cash, is scheduled to be released in mid March. The cost of certificates, said the GAO source, depends on the program's impact on the USDA loan program. If GAO determines that certificates encourage more loan entries or cause more loan forfeitures, then the net cost of the program would go up. However, if it is determined that certificates have caused the government grain stockpile to decrease, the cost effect of certificates would be less. GAO will not likely suggest whether the certificates program should be slowed or expanded, the GAO official said. But a negative report on certificates "will fuel the fire against certificates and weigh heavily on at least an increase in the certificate program," an agricultural consultant said. The OMB is said to be against any expansion of the program, while USDA remains firmly committed to it.
Shr profit 10 cts vs loss seven cts Net profit 286,870 vs loss 156,124 Revs 10.0 mln vs 7,577,207 Year Shr profit five cts vs profit 42 cts Net profit 160,109 vs profit 906,034 Revs 38.1 mln vs 31.2 mln Avg shrs 2.9 mln vs 2.2 mln NOTE: 1986 year includes 53 weeks.
Shr 16 cts vs 13 cts Pay April 15 Record March 31
Qtly div ten cts vs ten cts Pay April 1 Record March 9
Qtly div 51 cts vs 51 cts Pay April 9 Record March 25 (Santa Anita Realty Enterprises Inc)
The U.S. Agriculture Department is not actively considering offering subsidized wheat to the Soviet Union under the export enhancement program (EEP), senior USDA officials said. However, grain trade analysts said the proposal has not been ruled out and that an offer might be made, though not in the very near future. "The grain companies are trying to get this fired up again," an aide to Agriculture Secretary Richard Lyng said. "But there just isn't much talk about it, informally or formally." Most analysts interviewed by Reuters were more confident than USDA officials that bonus wheat would be offered to the Soviets, even though U.S. officials did not make such an offer when they held grain talks with Soviet counterparts earlier this week. But administration and private sources agreed that if the Reagan administration did decide to offer subsidized wheat to Moscow, it could take several months. "I just don't see any proposal like that sailing through any interagency process," the aide to Lyng said. "An export enhancement offer is not consummated overnight," said one former USDA official, who noted that the administration took three months to decide in favor of selling China wheat under the subsidy program. An official representing a large grain trade company said deliberations within USDA might be nudged along by members of Congress, a number of whom urged USDA this week to make a wheat subsidy offer to the Soviets. But Lyng's aide said that during a day-long visit to Capitol Hill yesterday, House members did not press the secretary on the subsidy question a single time. The administration's interagency trade policy review group, comprised of subcabinet-level officials, has not been asked to clear a request to offer Moscow wheat under the EEP, officials at the U.S. Trade Representative's Office said. In their talks this week, the two sides discussed the administration's previous EEP offer but did not talk about any new initiative. One USDA official who took part in the consultations this week described them as an exchange of "calm, basic, factual economics." Another USDA official said there was "not even an informal suggestion or hint" that the Soviets would live up to their pledge to buy four mln tonnes of wheat this year if they were granted more favorable terms. USDA and private sources agreed that consideration of an EEP initiative by interagency review groups likely would be delayed because of disarray within the White House stemming from the Iran arms affair.
Circuit Systems Inc said it has bought all of the stock of (Ionic Industries Inc) in exchange for 3,677,272 shares of its common. Following the exchange there will be 4,969,643 shares of Circuit Systems stock outstanding. Ionic holders will own about 74 pct of the outstanding stock of Circuit Systems, it said. Ionic, a maker of circuit boards, had revenues of 8.4 mln dlrs and pretax profits of 232,000 dlrs in 1986, up from revenues of 5.9 mln and pretax profits of 204,000 dlrs in 1985, Circuit Systems said.
The Philippines will offer its commercial bank creditors an innovative pricing plan that will make debt payments through certificates of indebtedness as an alternative to cash, the authoritative Business Day newspaper said. Finance Secretary Jaime Ongpin told reporters yesterday the alternative proposal is designed to avoid an impasse when debt rescheduling talks reopen in New York on Tuesday. He did not give details but said, "It is a very useful alternative and in the end will permit the banks to say that they achieved their pricing target and will likewise permit the Philippines to say exactly the same thing." Quoting negotiation documents to be presented to the country"s 12-bank advisory committee, Business Day said the debt certificates will carry maturities of five or six years. It said the certificates will be classified as zero-coupon bonds or promissory notes with no interest but priced at a considerable discount from their redemption price. It said the debt bonds will entitle holder banks to a guaranteed return on both interest and principal since no payment of any kind is made until the bond matures. It said a bank can sell the bonds on the secondary bond market for either dlrs or pesos depending on its requirement. The documents said peso proceeds can be invested in selected industries under the Philippines" debt/equity program. Ongpin said Manila is sticking to its demand of a spread of 5/8 percentage points over London Interbank Offered Rates (LIBOR) for restructuring 3.6 billion dlrs of debt repayments. "(The proposal) will give the banks a choice of 5/8ths or the alternative," Ongpin said. "Our representatives have gone to Washington to the (International Monetary) Fund, the (World) Bank, the Fed (Federal Reserve Board) and the (U.S.) Treasury to brief them in advance on this alternative and it has generally been positively received." "We don"t believe that there is going to be a problem on the accounting side," Ongpin said. "We have run this alternative proposal to the accounting firms. Neither have the government regulators indicated that there will be a problem."
Talks on the possibility of reintroducing global coffee export quotas have been extended into today, with sparks flying yesterday when a dissident group of exporters was not included in a key negotiating forum. The special meeting of the International Coffee Organization (ICO) council was called to find a way to stop a prolonged slide in coffee prices. However, delegates said no solution to the question of how to implement quotas was yet in sight. World coffee export quotas -- the major device used to regulate coffee prices under the International Coffee Agreement -- were suspended a year ago when prices soared in reaction to a drought which cut Brazil"s output by nearly two thirds. Brazil is the world"s largest coffee producer and exporter. Producers and consumers now are facing off over the question of how quotas should be calculated under any future quota distribution scheme, delegates said. Tempers flared late Saturday when a minority group of eight producing countries was not represented in a contact group of five producer and five consumer delegates plus alternates which was set up to facilitate debate. The big producers "want to have the ball only in their court and it isn"t fair," minority producer spokesman Luis Escalante of Costa Rica said. The majority producer group has proposed resuming quotas April 1, using the previous ad hoc method of carving up quota shares, with a promise to try to negotiate basic quotas before September 30, delegates said. Their plan would perpetuate the status quo, allowing Brazil to retain almost all of its current 30 pct share of the export market, Colombia 17 pct, Ivory Coast seven pct and Indonesia six pct, with the rest divided among smaller exporters. But consuming countries and the dissident producer group have tabled separate proposals requiring quotas be determined by availability, using a formula incorporating exportable production and stocks statistics. Their proposals would give Brazil a smaller quota share and Colombia and Indonesia a larger share, and bring a new quota distribution scheme into effect now rather than later. Brazil has so far been unwilling to accept any proposal that would reduce its quota share, delegates said. Delegates would not speculate on prospects for agreement on a quota package. "Anything is possible at this phase," even adjournment of the meeting until March or April, one said. If the ICO does agree on quotas, the price of coffee on the supermarket shelf is not likely to change sinnificantly as a result, industry sources said. Retail coffee prices over the past year have remained about steady even though coffee market prices have tumbled, so an upswing probably will not be passed onto the consumer either, they said.
Indonesia"s agriculture sector will grow by just 1.0 pct in calendar 1987, against an estimated 2.4 pct in 1986 as the production of some commodities stagnates or declines, the U.S. Embassy said in a report. Production of Indonesia"s staple food, rice, is forecast to fall to around 26.3 mln tonnes from an embassy estimate of 26.58 mln tonnes in 1986, according to the annual report on Indonesia"s agricultural performance. The government officially estimates 1986 rice production at 26.7 mln tonnes, with a forecast 27.3 mln tonnes output in 1987. The report says wheat imports are likely to fall to 1.5 mln tonnes in calendar 1987 from 1.69 mln tonnes in 1986 because of a drawdown on stocks. "Growth prospects for agriculture in 1987 do not look promising as rice production is forecast to decline and the production of sugarcane, rubber and copra show little or no gain," the report says. "The modest overall increase which is expected will be due to significant gains in production of corn soybeans, palm oil and palm kernels." Constraints to significant overall increases in agricultural output include a shortage of disease resistant seeds, limited fertile land, insect pests and a reluctance by farmers to shift from rice production to other crops, the report underlines. The fall in rice production is caused by an outbreak of pests known as "wereng" or brown plant hoppers in 1986 which largely offset gains in yields. The outbreak has forced the government to ban the use of 57 insecticides on rice because it was believed the wereng are now resistant to these varieties, and to use lower-yielding, more resistant rice types. The government is depending on increased production of export commodities such as coffee, tea, rubber, plywood and palm oil to offset revenue losses brought on by falling crude oil prices. Palm oil production is expected to increase by over 7.0 pct in 1987 to 1.45 mln tonnes from 1.35 mln, with exports rising to an estimated 720,000 tonnes from 695,000 tonnes in 1986, the report says. But while production of soybeans in 1987/88 (Oct-Sept) will rise to 1.075 mln tonnes from 980,000 in 1986/87, imports will also rise to supply a new soybean crushing plant. The report says that imports of wheat, soybeans, soybean meal and cotton are not likely to decline as a result of last September"s 31 pct devaluation of the rupiah because of a rise in domestic demand. The report said that Indonesia"s overall economic performance in calendar 1986 was about zero or even a slight negative growth rate, the lowest rate of growth since the mid-1960s. It compares with 1.9 pct growth in 1985 and 6.7 pct in 1984. The dramatic fall in oil prices last year was responsible for the slump.
Bangladesh police mounted a cross-country hunt for defaulters on bank loans, arresting four industrialists and issuing arrest warrants against 50 others for failure to repay overdue obligations. No names were given. Metropolitan police told reporters the four arrested, put under six month pre-trial detention, owed nearly 50.7 mln taka -- the equivalent of about 1.7 mln dlrs -- to Bangladesh Shilpa (Industrial) Bank. President Hossain Mohammad Ershad has said non-payers are crippling the industrial sector. But the Chamber of Commerce and industry said the crackdown would scare away entrepreneurs.
The International Coffee Organization (ICO ) council talks on reintroducing export quotas continued with an extended session lasting late into Sunday night, but delegates said prospects for an accord between producers and consumers were diminishing by the minute. The special meeting, called to stop the prolonged slide in coffee prices, was likely to adjourn sometime tonight without agreement, delegates said. The council is expected to agree to reconvene either within the next six weeks or in September, they said. The talks foundered on Sunday afternoon when it became apparent consumers and producers could not compromise on the formula for calculating any future quota system, delegates said. Coffee export quotas were suspended a year ago when prices soared in response to a drought which cut Brazil's crop by nearly two-thirds. Brazil is the world's largest coffee producer and exporter.
The Reserve Bank said it cancelled the regular weekly treasury bill tender scheduled for March 3. It said in a statement it forecasts a net cash withdrawal from the system over the settlement week. Cash flows to the government are expected to more than offset cash injections, it added. The bank said it expects to conduct open market operations during the week and after these, cash balances should fluctuate around 30 mln N.Z. Dlrs.
Nippon Light Metal Co Ltd
Indonesia's exports of tea and cocoa will continue to rise in calendar 1987 but coffee exports are forecast to dip slightly in 1987/88 (April-March) as the government tries to improve quality, the U.S. Embassy said. The embassy's annual report on Indonesian agriculture forecast coffee output in 1986/87 would be 5.77 mln bags of 60 kilograms each. That is slightly less than the 5.8 mln bags produced in 1985/86. In 1987/88 coffee production is forecast to rise again to 5.8 mln bags, but exports to dip to 4.8 mln from around 5.0 mln in 1986/87. Exports in 1985/86 were 4.67 mln bags. The embassy report says coffee stocks will rise to 1.3 mln tonnes in 1987/88 from 1.15 mln in 1986/87. It bases this on a fall in exports as a result of the "probable" re-introduction of quotas by the International Coffee Organisation. Cocoa production and exports are forecast to rise steadily as the government develops cocoa plantations. Production of cocoa in Indonesia increased to 32,378 tonnes in calendar 1985 from 10,284 tonnes in 1980. It is projected by the government to rise to more than 50,000 tonnes by 1988. Production in 1986 is estimated by the embassy at 35,000 tonnes, as against 38,000 tonnes in 1987. The report forecasts cocoa exports to rise to 35,000 tonnes this year, from 33,000 tonnes in 1986 and 31,000 in 1985. The Netherlands is at present the biggest importer of Indonesian cocoa beans. The report forecasts that in calendar 1987, Indonesia's CTC (crushed, torn and curled) tea exports will increase significantly with the coming on stream of at least eight new CTC processing plants. Indonesia plans to diversify its tea products by producing more CTC tea, the main component of tea bags. Production of black and green teas is forecast in the embassy report to rise to 125,000 tonnes in calendar 1987 from 123,000 tonnes in 1986. Exports of these teas are likely to rise to 95,000 tonnes in 1987 from 85,000 in 1986 and around 90,000 in 1985. The embassy noted the ministry of trade tightened quality controls on tea in October 1986 in an effort to become more competititve in the world market.
Talks on coffee export quotas at the International Coffee Organization (ICO) special council session will resume at noon gmt today, following a last minute decision taken early this morning to extend the meeting 24 hours, ICO officials said. An 18 member contact group will meet at midday to examine new ideas, and the full council is to convene at 1900gmt, they said. The extension resulted from a last ditch effort by Colombia to salvage the talks, which by late yesterday looked perilously close to ending without agreement on quotas, delegates said.
Japanese securities houses will issue new
corporate bonds more quickly, accept issue requests throughout
the month instead of at month-end and introduce a competitive
underwriting method from April 1, to bring Japanese firms back
to the Tokyo bond market, securities managers said.
Domestic issues have slowed to a trickle as more and more
companies turn to more flexible overseas markets for cash, but
the proposed moves are expected to pave the way for a review of
public bond issues, they said.
"Relaxation of issue rules would be better applied not only
to straight corporate bonds, but also convertible bonds and
warrant bonds, to call back issuers effectively from overseas
markets," a Nikko Securities house bond manager said.
Securities houses will launch an issue about 10 days after
a corporate declaration of intent instead of 25 days as now,
the securities managers said.
Underwriters are expected to abolish the lump-sum issuance
system, in which all corporate bonds are issued at month-end,
and accept issue requests during the month, they said.
Securities houses also plan to introduce free competition
among underwriters when negotiating with issuers over terms in
order to better reflect the market, securities managers said.
Market participants expect the new issue methods to be
applied beginning in April, with the projected issue by
The Dutch Central Bank said it has accepted bids totalling 4.8 billion guilders at tender for new seven-day special advances at 5.3 pct covering the period March 2 to 9 aimed at relieving money market tightness. Subscriptions to 300 mln guilders were met in full, amounts above 300 mln at 50 pct. The new facility replaces old five-day advances worth 8.0 billion guilders at the same rate. Dealers expect this week's money market shortage to be around 12 billion guilders.
Nobel and Financiere Robur are issuing French franc domestic bonds with share warrants, according to announcements in the Official Bulletin (BALO). Nobel is issuing a 200 mln franc 10-year bond with a 5.5 pct coupon in 1,000 franc denominations, to which existing shareholders will have subscription rights in the ratio of one bond for every 120 shares held with a nominal 10 franc value. The bonds will each carry eight warrants, each giving the right to subscribe to one 100-franc Nobel share at 140 francs between June 1 1987 and May 31 1994. Payment date is April 28. In a second stage of the operation, the company will issue 3.63 mln new 100-franc nominal shares at a price of 120 francs, in the ratio of three new shares for 20 existing 10-franc nominal shares. This will take the company's capital to 677.6 mln francs from the present 242 mln. In a separate operation, Financiere Robur is issuing a 147.73 mln French franc eight-year bond with a six pct coupon, denominated in 1,100 franc units and priced at par. Payment date will be April 13 and existing shareholders will have a preferential right to subscribe to the issue in the ratio of one bond for every 10 shares held, between March 9 and March 30 1987. Each bond will carry two warrants, each giving the right to subscribe between January 1 1988 and March 31 1992 to one Financiere Robur share at a price of 210 francs.
The Bank of England said it forecast a shortage of around 800 mln stg in the money market today. Among the main factors affecting liquidity, bills maturing in official hands and the take-up of treasury bills will drain some 1.61 billion stg. Partly offsetting this outflow, exchequer transactions and a fall in note circulation will add around 425 mln stg and 360 mln stg respectively. In addition, bankers' balances above target will add some 20 mln stg to the system today.
Fiat Finance and Trade Ltd is issuing a 100 mln dlr eurobond due April 2, 1991 at 7-1/4 pct and 101-1/8 pct, lead manager Morgan Stanley International said. The issue is guaranteed by Internazionale Fiat Holding SA and is accompanied by a 200,000 currency warrant package. The bond is available in denominations of 5,000 dlrs and will be listed in Luxembourg. Payment date for bond and warrants is April 2, 1987. The selling concession is 1-1/8 pct while management and underwriting combined pays 1/2 pct. The warrants indicated at 45 dlrs entitle the holder to buy a minimum of 500 dlrs at a rate of 1.79 marks per dlr. The warrants are exercisable from the April 2 payment date until March 2, 1989. A minimum of 200 warrants must be exercised. They will also be listed in Luxembourg.
The port of Philadelphia was closed when a Cypriot oil tanker, Seapride II, ran aground after hitting a 200-foot tower supporting power lines across the river, a Coast Guard spokesman said. He said there was no oil spill but the ship is lodged on rocks opposite the Hope Creek nuclear power plant in New Jersey. He said the port would be closed until today when they hoped to refloat the ship on the high tide. After delivering oil to a refinery in Paulsboro, New Jersey, the ship apparently lost its steering and hit the power transmission line carrying power from the nuclear plant to the state of Delaware.
Coffee quota talks at the International Coffee Organization council meeting here continued this afternoon, but producers and consumers still had not reached common ground on the key issue of how to estimate export quotas, delegates said. The 54 member contact group was examining a Colombian proposal to resume quotas April 1 under the ad hoc system used historically, with a pledge to meet again in September to discuss how quotas would be worked out in the future, they said. Delegates would not speculate on the prospects for agreement at this time. "Anything could happen," one delegate said.
Bangladesh will receive a grant equivalent to 47 mln U.S. Dlrs from the Netherlands during 1987 under an agreement signed here Saturday, officials said. This raised the amount of Dutch grants to Bangladesh to 759 mln dlrs since 1972, used mainly for commodity imports and implementing development projects, they said.
The volume of contracts traded on the New Zealand Futures Exchange (NZFE) reached a record 25,559 contracts in February, the International Commodities Clearing House (ICCH) said. The previous high was 22,583 contracts in December 1986. The ICCH said the value of the contracts traded in February was 2.90 billion N.Z. Dlrs. The seven contracts currently traded on the NZFE are: five-year government bonds, the share price index, 90-day bank bills, 90-day prime commercial paper, the U.S. Dollar, crossbred wool, and wheat.
Dow Chemical Co has launched a 200 mln Swiss franc, 12-year bond with a 4-3/4 pct coupon priced at 100-1/4 pct, lead manager Union Bank of Switzerland said. The issue carries a call option from 1993 at 102 pct, declining thereafter by 1/2 percentage point per year. Subscriptions close March 18 and payment date is April 2.
World animal health experts called for a campaign to eradicate the lethal cattle disease Rinderpest in Bangladesh, Bhutan, India, Nepal and Pakistan, a statement from a Food and Agriculture Organization (FAO) meeting here said. Some 230 mln dlrs is needed over two years to vaccinate the entire susceptible cattle population in Bangladesh and Pakistan and high-risk areas of the other three countries. In India some 240 mln cattle are estimated to be at risk from the disease. The experts recommended the campaign be funded mostly by the governments of the five nations, with help from the FAO. Similar campaigns are needed in Egypt, Yemen, Iraq and Iran.
Federal Industries Ltd's earlier announced commercial paper issue of up to 440 mln dlrs, will be made only in Canada, a company spokesman said. The issue currently underway is expected to be completed within the next few weeks. The final amount of the issue depends on market conditions, but will likely be close to 400 mln dlrs, the spokesman said.
Semi-annual div from income of 7.3 cts vs 1.0 cent in prior period Payable March 27 Record February 27
Shr loss 20 cts vs profit 96 cts Net loss 499,000 vs profit 2,369,000 Revs 11.5 mln vs 10.3 mln NOTE: Prior year net includes gain on sale of property of 4,557,000 dlrs.
Investor Sumner Redstone, who leads one of the two groups vying for control of Viacom International Inc, offered to sweeten his bid for the company by 1.50 dlrs a share cash and 1.50 dlrs in securities. In a filing with the Securities and Exchange Commission, Redstone, who controls Dedham, Mass.,-based National Amusements Inc, a theater chain operator, offered to raise the cash portion of its Viacom offer to 42 dlrs a share from 40.50 dlrs. Redstone also raised the face value of the preferred stock he is offering to 7.50 dlrs from six dlrs. The Redstone offer, which is being made through Arsenal Holdings Inc, a National Amusements subsidiary set up for that purpose, which also give Viacom shareholders one-fifth of a share of Arsenal common stock after the takeover. Viacom said earlier today it received revised takeover bids from Redstone and MCV Holdings Inc, a group led by Viacom management which is competing with Redstone for control of the company and already has a formal merger agreement with Viacom. The company did not disclose the details of the revised offers, but said a special committee of its board would review them later today. The Redstone group, which has a 19.5 pct stake in Viacom, and the management group, which has a 5.4 pct stake, have both agreed not to buy more shares of the company until a merger is completed, unless the purchases are part of a tender offer for at least half of the outstanding stock. The two rivals also signed confidentiality agreements, which give them access to Viacom's financial records provided they keep the information secret. In his SEC filing, Redstone, who estimated his cost of completing the takeover at 2.95 billion dlrs, said Bank of America is confident it can raise 2.275 billion dlrs. Besides the financing it would raise through a bank syndicate, Bank of America has also agreed to provide a separate 25 mln dlr for the limited purpose of partial financing and has committed to provide another 592 mln dlrs, Redstone said. Merrill Lynch, Pierce Fenner and Smith Inc has increased its underwriting commitment to 175 mln dlrs of subordinated financing debt for the Viacom takeover, from the 150 mln dlrs it agreed to underwrite earlier, Redstone said. Redstone said his group would contribute more than 475 mln dlrs in equity toward the takeover. The Redstone equity contribution to the takeover would consist of all of his group's 6,881,800 Viacom common shares and at least 118 mln dlrs cash, he said. The new offer, the second sweetened deal Redstone has proposed in his month-long bidding war with management, also contains newly drawn up proposed merger documents, he said. Last week, the management group submitted what it called its last offer for the company, valued at 3.1 mln dlrs and consisting of 38.50 dlrs a share cash, preferred stock valued at eight dlrs a share and equity in the new company. Redstone's previous offer had been valued at 3.2 billion dlrs.
A study group said the United States should increase its strategic petroleum reserve to one mln barrels as one way to deal with the present and future impact of low oil prices on the domestic oil industry. U.S. policy now is to raise the strategic reserve to 750 mln barrels, from its present 500 mln, to help protect the economy from an overseas embargo or a sharp price rise. The Aspen Institute for Humanistic Studies, a private group, also called for new research for oil exploration and development techniques. It predicted prices would remain at about 15-18 dlrs a barrel for several years and then rise to the mid 20s, with imports at about 30 pct of U.S. consumption. The study cited two basic policy paths for the nation: to protect the U.S. industry through an import fee or other such device or to accept the full economic benefits of cheap oil. But the group did not strongly back either option, saying there were benefits and drawbacks to both. It said instead that such moves as increasing oil reserves and more exploration and development research would help to guard against or mitigate the risks of increased imports.
Union Carbide Corp is looking to acquisitions and joint ventures to aid its chemicals and plastics growth, according the H.W. Lichtenberger, president of Chemicals and Plastics. Describing this as a major departure in the company's approach to commercial development, he told the annual new business forum of the Commercial Development Association "We are looking to acquisitions and joint ventures when they look like the fastest and most promising routes to the growth markets we've identified." Not very long ago Union Carbide had the attitude "that if we couldn't do it ourselves, it wasn't worth doing. Or, if it was worth doing, we had to go it alone," Lichtenberger explained. He said "there are times when exploiting a profitable market is done best with a partner. Nor do we see any need to plow resources into a technology we may not have if we can link up profitably with someone who is already there." He said Carbide has extended its catalyst business that way and is now extending its specialty chemicals business in the same way.
Semi div 13 cts vs 18 cts prior Pay March 13 Record March Two
The Canadian government is expected to announce later this week its final ruling whether U.S. corn exports to Canada have injured Ontario corn growers, U.S. government and farm group representatives said. The deadline for a final determination is March 7. U.S. officials said they are encouraged by the outcome in a similar case covering European pasta imports. In that case, Canada decided pasta imports, which take about ten pct of the Canadian market, did not injure domestic producers. U.S. corn exports represent only about five pct of the Canadian market. Canada slapped a 1.05 dlrs per bushel duty on U.S. corn imports in November 1986, but reduced the duty to 85 cts last month because the Canadian government said U.S. subsidies to corn producers were less than Canada earlier estimated.
Shr 11 cts vs 13 cts Net 1,037,690 vs 1,270,460 Sales 10.1 mln vs 9,215,836 Six Mths Shr 25 cts vs 31 cts Net 2,319,376 vs 2,930,507 Sales 21.2 mln vs 18.9 mln
Net income 154.7 mln pesos vs 127.5 mln Operating revenues 4.42 billion vs 3.3 billion Operating profit 621.2 mln vs 203.4 mln Earnings per share 4.80 vs 3.95 NOTE: Company statement said gold operations contributed 74 pct of consolidated earnings.
Qtly div four cts vs four cts prior Pay March 27 Record March 13
Talks at the extended special meeting of the International Coffee Organization (ICO) on the reintroduction of export quotas continued, but chances of success were still almost impossible to gauge, delegates said. Producer delegates were meeting to examine a Colombian proposal to resume historical quotas from April 1 to September, with a promise to define specific new criteria by which a new quota system would be calculated in September for the new crop year, they said. Opinions among delegates over the potential for reaching a quota agreement varied widely. Some consumers said the mood of the meeting seemed slightly more optimistic. But Brazil's unwillingness to concede any of its traditional 30.55 pct of its export market share looks likely to preclude any accord, other delegates said. No fresh proposals other than the Colombian initiative had been tabled formally today, delegates said. A full council meeting was set for 1900 hours for a progress report, delegates said.
Canada's decision to raise the issue of a free trade pact with the U.S. was a sign of what many see as a new spirit of Canadian self-confidence, a public policy study group said "It suggests the Canada of the immediate post-war period, when it was a major player in the process of building a postwar world," the Washington-based Atlantic Council said. U.S. and Canadian negotiators opened talks last summer aimed at dismantling trade barriers between the two countries, the world's biggest trading partners with crossborder shipments of about 150 billion dlrs annually. The council's study said the trade talks, with a deadline of October for an agreement, are the biggest issue in U.S.-Canadian relations. The study said liberalized trade between the two countries would improve the competitiveness of their economies in world markets and lessen trade irritants which now mar their ties. The council said "in the past most Canadians have shied away from the notion of a free-trade arrangement, fearing to be overwhelmed economically and politically by a closer association with a country 10 times their size in population." But at the same time, it added, Canadians realized their domestic market was too small to permit the mass production and sales needed to raise productivity to the level demanded by an increasingly competitive world. The council said that in the talks, Canada is chiefly interested in minimizing the imposing of U.S. duties against allegedly subsidized exports. A recent example was the 15 per cent duty the U.S. imposed on Canadian lumber exports on grounds the shipments were being subsidized. The council said the chief U.S. concerns included ending curbs against U.S. banking, insurance, telecommunications, and the so-called "cultural industries" - publishing, broadcasting and films. It said other major U.S.-Canadian issues were defense cooperation, "acid rain" and the U.S. rejection of a Canadian assertion of sovereignty over waters of the Northwest Passage.
Oper shr profit six cts vs loss 20 cts Oper net profit 734,000 vs loss 2,312,000 Revs 16.8 mln vs 13.9 mln Year Oper shr profit 30 cts vs profit three cts Oper net profit 3,342,0000 vs profit 318,000 Revs 67.5 mln vs 52.6 mln NOTE: Excludes loss of 41,000 dlrs or nil vs gain 7,000 dlrs or nil in qtr and gain 247,000 dlrs or two cts vs gain 88,000 dlrs or one ct in year from net operating loss carryforwards.
Efforts to break an impasse between coffee exporting and importing countries over regulating the world coffee market in the face of falling prices appear to have failed, senior delegates said after a contact group meeting. The full ICO council is due to meet this evening. President of the Brazilian Coffee Institute (IBC) Jorio Dauster told Reuters after the contact group meeting there had been no agreement on quotas as consumers had tried to dictate market shares rather than negotiate them. Dauster said there are no plans yet to renew negotiations at a later date.
A special meeting of the International Coffee Organization (ICO) council failed to agree on how to set coffee export quotas, ICO delegates said. Producers and consumers could not find common ground on the issue of quota distribution in eight days of arduous, often heated talks, delegates said. Export quotas -- the major device of the International Coffee Agreement to stabilise prices -- were suspended a year ago after coffee prices soared in reaction to a drought in Brazil which cut its output by two thirds. Delegates and industry representatives predicted coffee prices could plummet more than 100 stg a tonne to new four year lows tomorrow in response to the results of the meeting.
Shr 32 cts vs 22 cts Net 3,454,000 vs 2,224,000 Revs 33.2 mln vs 28.1 mln Nine mths Shr 64 cts vs 38 cts Net 6,935,000 vs 3,877,000 Revs 86.8 mln vs 70.9 mln
The failure of the International Coffee Organization (ICO) to reach agreement on coffee export quotas could trigger a massive selloff in London coffee futures of at least 100 stg per tonne today, coffee trade sources said. Prices could easily drop to as low as 1.00 dlr or even 80 cents a lb this year from around 1.25 dlrs now, they said. A special meeting between importing and exporting countries ended in a deadlock late yesterday after eight days of talks over how to set the quotas. No further meeting to discuss quotas was set, delegates said. Quotas, the major device used to stabilize prices under the International Coffee Agreement, were suspended a year ago after prices soared following a damaging drought in Brazil. With no propects for quotas in sight, heavy producer selling initially and a price war among commercial coffee roasting companies will ensue, the trade sources predicted. Lower prices are sure to trickle down to the supermarket shelf this spring, coffee dealers said. The U.S. And Brazil, the largest coffee importer and exporter respectively, each laid the blame on the other for the breakdown of the talks. Jon Rosenbaum, U.S. Assistant trade representative and delegate to the talks, said in a statement after the council adjourned, "A majority of producers, led by Brazil, were not prepared to negotiate a new distribution based on objective criteria. "We want to insure that countries receive export quotas based on their ability to supply the market, instead of their political influence in the ICO." Brazilian Coffee Institute (IBC) President Jorio Dauster countered, "Negotiations failed because consumers tried to dictate quotas, not negotiate them." Previously, quotas were determined by historical amounts exported, which gave Brazil a 30 pct share of a global market of about 58 mln 60-kilo bags. A majority of producers wanted quotas to continue under this basic scheme. But most consumers and a maverick group of eight producers proposed carving up the export market on the basis of exportable production and stocks, which would reduce Brazil's share to 28.8 pct. Consumer delegates said this method would reflect changes in many countries' export capabilities and make coffee more readily available to consumers when they need it. A last-minute attempt by Colombia, the second largest exporter, to rescue the talks with a compromise interim proposal could not bring the two sides together. Delegates speculated Brazil's financial problems, illustrated by its recent suspension of interest payments on bank debt, have increased political pressure on the country to protect its coffee export earnings. Developing coffee-producing countries that depend heavily on coffee earnings, particularly some African nations and Colombia, are likely to be hurt the most by the ICO's failure to agree quotas, analysts said. The expected drop in prices could result in losses of as much as three billion dlrs in a year, producer delegates forecast. The ICO executive board will meet March 31, but the full council is not due to meet again until September, delegates said.
The Philippines must devalue the peso if it wants its exports to remain competitive, Economic Planning Secretary Solita Monsod told Reuters. "The peso/dollar rate has to be undercut to make our exports more competitive," Monsod said an interview. "No question about it. I'm saying you cannot argue with success. Taiwan, South Korea, West Germany, Japan, all those miracle economies deliberately undervalued their currencies." The peso has been free-floating since June 1984. It is currently at about 20.50 to the U.S. Dollar. Finance Secretary Jaime Ongpin has said the government does not intend to devalue the peso and wants it to be flexible and able to continue to respond to market conditions. Monsod said Ongpin was looking at the exchange rate from the point of view of finance. "If the dollar rate goes higher, our debt service in terms of pesos gets higher, so the financing is very difficult," she said. "But I am looking at it in terms of the economy." She said she was not trying to oppose official policy. "I'm just saying, keep it competitive. I do not want it to become uncompetitive because then we are dead." Monsod said, "The ideal movement in the peso/dollar rate is a movement that will reflect differences in inflation (rates) of the Philippines versus the other country. It's an arithmetic thing." Official figures show Philippine inflation averaged 0.8 pct in calendar 1986. Ongpin told reporters on Saturday it was expected to touch five pct this year. He said the government and the International Monetary Fund had set the peso/dollar 1987 target rate at 20.80. The peso lost 22.2 pct in value to slump to 18.002 to the dollar when it was floated in 1984.
Japan's major commercial banks plan to set up a joint company to which they will transfer assets acquired by lending to developing countries to build up a reserve against possible bad loans, a senior official of a major bank told Reuters. He said about 10 banks are likely to finish details of the project in a few weeks. The intent is to avoid risk arising from unrecoverable debt owed by Third World countries, he said.
The French Treasury will issue between eight and 12 billion francs worth of tap stock depending on market conditions at its monthly tender on Thursday, the Bank of France said. The planned issue will be of two fixed-rate tranches, of the 8.50 pct June 1997 and the 8.50 pct December 2012 stock, and one tranche of the variable-rate January 1999 stock. The minimum amount of each tranche to be sold will be one billion francs.
The Government broker's supplies of a 400 mln stg issue of two pct Treasury index-linked stock due 1992 were exhausted in early trading on the U.K. Government bond market this morning, the Bank of England said. The Bank said that the issue was no longer operating as a tap, having been supplied at a price of 94 stg pct this morning. The issue was undersubscribed at a tender on February 18, but the Government broker has supplied amounts of the stock on a number of occasions since then. The relatively small quantity remaining in the authorities' hands was quickly sold out on a small upturn in demand early today.
China called on the United States to remove curbs on its exports, to give it favourable trading status and ease restrictions on exports of high technology. But the U.S. Embassy replied that Chinese figures showing 13 years of trade deficits with the U.S. Out of the last 15 are inaccurate and said Peking itself would have to persuade Congress to change laws which limit its exports. The official International Business newspaper today published China's demands in a editorial to coincide with the visit of U.S. Secretary of State George Shultz. "It is extremely important that the U.S. Market reduce its restrictions on Chinese imports, provide the needed facilities for them and businessmen from both sides help to expand Chinese exports," the editorial said. "The U.S. Should quickly discard its prejudice against favourable tariff treatment for Chinese goods and admit China into the Generalised System of Preference (GSP). "Despite easing of curbs on U.S. Technology exports in recent years, control of them is still extremely strict and influences normal trade between the two countries," it added The paper also printed an article by China's commercial counsellor in its Washington embassy, Chen Shibiao, who said that "all kinds of difficulties and restrictions" were preventing bilateral trade fulfilling its full potential. He named them as U.S. Protectionist behaviour, curbs on technology transfer and out-of-date trade legislation. The paper also printed a table showing that, since bilateral trade began in 1972, China has had a deficit every year except 1972 and 1977. It shows the 1986 and 1985 deficits at 2.09 billion and 1.722 billion dlrs. A U.S. Embassy official said the U.S. Did not accept Peking's trade figures at all, mainly because they exclude goods shipped to Hong Kong and then trans-shipped to U.S. While U.S. Figures are based on country of origin. He said that, if China wants to obtain GSP status, it will have to lobby Congress itself to persaude it to amend several laws which currently prevent Peking getting such status. The U.S. Trade Act of 1974 says that to qualify for GSP, China must be a member of the General Agreement of Tariffs and Trade (GATT), for which it applied in July 1986, and "not be dominated or controlled by international Communism." The official said China was well aware of the laws, some of which date to the anti-Communist early 1950's, but that there is not sufficient political will in the U.S. To change them. China has been the subject of about a dozen cases involving anti-dumping in the U.S. Within the last two years, which the U.S. Side won, he said. But, for the first time, China signed last week an agreement which it itself initiated to voluntarily restrain exports of at least two categories of steel goods, which may lead the U.S. Side to withdraw the anti-dumping case, he added. Another diplomat said willingness to provide such voluntary export restraints would be an important issue in bilateral trade issues and in Peking's application to GATT. "China has the potential to disrupt world markets, especially in textiles. Other GATT countries will be nervous about China in this respect. But there is a precedent for other centralled planned economies in GATT," the diplomat said. Poland, Czechoslovakia, Hungary and Romania are members of GATT but none has China's massive market potential for imports or its vast labour pool to produce cheap exports. In a speech today in the northeast city of Dalian, U.S. Secretary of State George Shultz said his country welcomed China's interest in participating in GATT. "The process of Chinese accession will not be accomplished overnight -- the GATT rules were not designed for a large economy of the Chinese type," Shultz said. "China can play an important role by actively joining GATT discussions seeking to expand general trading opportunities and enhance market access for exports worldwide. China can further develop its foreign trade system so as to gain the maximum benefit from its GATT participation," he said. The problems facing U.S.-China trade and GATT membership are similar -- a pricing system which many foreign businessmen regard as arbitrary and not related to actual costs, especially for exports, and a de facto dual currency system. In a memorandum backing its application presented to GATT last month, China said it was gradually reforming its economic system and replacing mandatory instruction with "guidance planning" and economic levers. The diplomat said that, to join GATT, China had much to do.
Mobil Corp
Jan 31 end Shr 1.40 dlrs vs 1.10 dlrs Net 16.4 mln vs 12.9 mln Revs 196.2 mln vs 157.5 mln
This morning's sharp decline in coffee prices, following the breakdown late last night of negotiations in London to reintroduce International Coffee Organization, ICO, quotas, will be short-lived, Dutch roasters said. "The fall is a technical and emotional reaction to the failure to agree on reintroduction of ICO export quotas, but it will not be long before reality reasserts itself and prices rise again," a spokesman for one of the major Dutch roasters said. "The fact is that while there are ample supplies of coffee available at present, there is a shortage of quality," he said. "Average prices fell to around 110 cents a lb following the news of the breakdown but we expect them to move back again to around 120 cents within a few weeks," the roaster added. Dutch Coffee Roasters' Association secretary Jan de Vries said although the roasters were disappointed at the failure of consumer and producer ICO representatives to agree on quota reintroduction, it was equally important that quotas be reallocated on a more equitable basis. "There is no absolute need for quotas at this moment because the market is well balanced and we must not lose this opportunity to renegotiate the coffee agreement," he said. "There is still a lot of work to be done on a number of clauses of the International Coffee Agreement and we would not welcome quota reintroduction until we have a complete renegotiation," de Vries added. With this in mind, and with Dutch roasters claiming to have fairly good forward cover, the buying strategy for the foreseeable future would probably be to buy coffee on a hand-to-mouth basis and on a sliding scale when market prices were below 120 cents a lb, roasters said.
Greenwood Resources Inc said it has sold
its 4,300,000 common share majority holding in
Viacom International Inc said
The coupon on Dai-Ichi Hotel Ltd's 50 mln Swiss franc issue of five-year notes with equity warrants has been cut to 1-5/8 pct from the indicated 1-7/8 pct, lead manager Swiss Volksbank said. The warrants have an exercise price of 1,507 yen per share, compared with the last traded price of 1,470 yen, it said. The notes are guarantees by Long-Term Credit Bank of Japan Ltd. Payment is due on March 25.
Commerce Secretary Malcolm Baldrige said after the release of a sharply lower January leading indicator index that a pickup in exports is needed. "The best tonic for the economy now would be a pickup in net exports," he said in a statement after the department reported the index fell 1.0 pct in January from December, the sharpest drop since a 1.7 pct fall in July, 1984. The main reasons for the January decline after a 2.3 pct December rise were declines in building permits, new orders for plant and equipment and for consumer and industrial goods.
The Kenyan economy is heading for difficult times after a boom last year, and the country must tighten its belt to prevent the balance of payments swinging too far into deficit, President Daniel Arap Moi said. In a speech at the state opening of parliament, Moi said high coffee prices and cheap oil in 1986 led to economic growth of five pct, compared with 4.1 pct in 1985. The same factors produced a two billion shilling balance of payments surplus and inflation fell to 5.6 pct from 10.7 pct in 1985, he added. "But both these factors are no longer in our favour ... As a result, we cannot expect an increase in foreign exchange reserves during the year," he said. The price of coffee, Kenya's main source of foreign exchange, fell in London today to about 94 cents a pound from a peak of 2.14 dlrs in January 1986. Crude oil, which early last year slipped below 10 dlrs a barrel, has since crept back to over 18 dlrs. Moi said the price changes, coupled with a general decline in the flow of capital from the rest of the world, made it more difficult to finance the government's budget deficit. Kenya was already spending over 27 pct of its budget on servicing its debts and last year it was a net exporter of capital for the first time in its history, he added. "This is a clear indication that we are entering a difficult phase as regards our external debts, and it is imperative that we raise the rate of domestic savings and rely less on foreign sources to finance our development," he said. "It will be necessary to maintain strict discipline on expenditure ... And members of this house will have to take the lead in encouraging wananchi (ordinary people) to be more frugal in satisfying immediate needs," the president added.
Zimbabwean coffee output will reach 13,000 tonnes this year, up on just over 11,000 tonnes produced in 1986, the Commercial Coffee Growers Association said. Administrative Executive Robin Taylor told the domestic news agency ZIANA that Zimbabwe earned the equivalent of 33 mln U.S. Dlrs from coffee exports last year. He would not say how much the country would earn in 1987. Taylor said the 173 commercial coffee growers under his association had increased production from 5,632 tonnes in 1980 to more than 11,000 tonnes in l986.
Italy's state-owned
The collapse of International Coffee Organization, ICO, talks on export quotas yesterday removes the immediate need to reinstate U.S. legislation allowing the customs service to monitor coffee imports, analysts here said. The Reagan administration proposed in trade legislation offered Congress last month that authority to monitor coffee imports be resumed. That authority lapsed in September 1986. A bill also was introduced by Rep. Frank Guarini (D-N.J.). However, the failure of the ICO talks in London to reach agreement on export quotas means the U.S. legislation is not immediately needed, one analyst said. Earlier supporters of the coffee bill hoped it could be passed by Congress quickly. "You're going to have a hard time convincing Congress (now) this is an urgent issue," the coffee analyst said.
Scotia Mortgage Corp is issuing a 100 mln Canadian dlr eurobond due April 9, 1992 paying 8-3/4 pct and priced at 100-3/4 pct, lead manager Wood Gundy Ltd said. The non-callable bond is available in denominations of 1,000 and 10,000 Canadian dlrs and will be listed in Luxembourg. It is guaranteed by the Bank of Nova Scotia. The selling concession is 1-1/4 pct, while management pays 1/4 pct and underwriting pays 3/8 pct. The payment date is April 8 and there will be a long first coupon period.
Scotia Mortgage Corp is issuing a 100 mln Canadian dlr eurobond due April 9, 1992 paying 8-3/4 pct and priced at 100-3/4 pct, lead manager Wood Gundy Ltd said. The non-callable bond is available in denominations of 1,000 and 10,000 Canadian dlrs and will be listed in Luxembourg. It is guaranteed by the Bank of Nova Scotia. The selling concession is 1-1/4 pct, while management pays 1/4 pct and underwriting pays 3/8 pct. The payment date is April 8 and there will be a long first coupon period.
There was no evidence of winterkill in Yugoslavian winter wheat during field travel along a line running northwest from Belgrade to near Maribor, the U.S. Agriculture Department's counselor in Belgrade said in a field report. The report, dated February 26, said there is evidence of delayed germination in most areas due to late seeding last fall because of dry conditions. However warm temperatures over the past three weeks have promoted some early growth and will help the crop catch up on last fall's late seeding, it said. Some Yugoslav agriculture officials are concerned about the situation because warm temperatures have brought the grain out of dormancy and taken away snow protection a little early, the report said. Cold temperatures over the next month could cause damage under these conditions, they said. The report said all wheat farmers contacted during the field trip were optimistic about the crop and the way it emerged from winter.
An investor group led by Central National-Gottesman Inc, a New York investment firm, and its executive vice president, Edgar Wachenheim, said they cut their stake in Material Sciences Corp to less than five pct. In a filing with the Securities and Exchange Commission, the group said it sold 19,500 Material Sciences common shares between Feb 11 and 19 at prices ranging from 24.00 to 27.648 dlrs a share, leaving it with 239,500 shares, or 4.7 pct. As long as the group's stake remains below five pct, it is not required to disclose further dealings in Material Sciences common stock.
Tylan Corp aid it has retained the investment banking firm Kahn and Harris to sell its furnace product line. The company said it has already been contacted by several potential buyers. In 1986, Tylan's furnace product shipments in the U.S. represented 10.3 mln dlrs of the company's total net sales of 28.4 mln dlrs.
Shr 57 cts vs 27 cts Net 1,002,000 vs 470,000 Sales 15.9 mln vs 12.0 mln Note: 4th qtr data not available
Nigeria and Guinea agreed to set up a new company with Liberia to carry out the 14-year-old Mifergui-Nimba iron ore project, an official communique said. The communique was issued after two days of talks here between Guinean natural resources minister Ousmane Sylla and Nigerian minister of mines and power Bunu Sheriff Musa. Originally, Guinea held 50 pct in the project and Nigeria 16.2 pct with firms from several other countries also involved, but the project ran into problems over funding and the slump in world iron ore markets. Musa said Liberia was invited to join and its share will be decided after a project feasibility study. This would be completed in May after which finance will be sought. Officials said the study will be undertaken with the help of the World Bank, which is also expected to give financial support. Production, originally estimated at 15 mln tonnes a year, will be 12 mln initially and is expected to begin in early 1990. On an agreement between the two countries to prospect for uranium in Guinea, the communique said Musa and Sylla agreed that because of poor market conditions, it would be extended to cover exploration for gold, diamonds, cobalt, nickel and silver.
Lifetime Corp said it agreed to buy
five mln shares, or 16 pct, of
A World Bank team led by senior economist Katrine Saito arrived in Uganda for talks on an economic recovery program projected to cost one billion dlrs over three years. The four-member mission is expected to stay two to three weeks. An International Monetary Fund (IMF) team is due here over the same period, a World Bank offical said. The World Bank last year criticised Uganda's policies on deficit financing and exchange and interest rates, issues likely to dominate talks on the government's proposed recovery program. Finance Minister Chrispus Kiyonga said last month that most of the one billion dlrs would go towards rehabilitating industries, repairing and maintaining roads and buying tractors and other agricultural needs. He did not say where the money would come from, but diplomats expect the government to ask the World Bank and other foreign donors to provide most of the foreign exchange portion.
Shr 10 cts vs 13 cts Net 1,553,000 vs 1,541,000 Revs 73.1 mln vs 32.1 mln Avg shrs 15,474,000 vs 12,316,000 Year Shr 47 cts vs 24 cts Net 7,241,000 vs 2,835,000 Revs 216.2 mln vs 101.2 mln Avg shrs 15,492,000 vs 11,921,000 Note: Net income includes extraordinary profit from recognition of tax loss carryforward of 920,000 dlrs, or six cts a share, in 1986 year, and of 785,000 dlrs, or seven cts a share, in both 1985 periods.
The World Bank is launching a 300 mln markka seven-year straight issue, due March 11, 1994 with a coupon of 10 pct payable semi-annually and an issue price of 101-1/8, lead manager Postipankki said. It said fees totalled 1-3/4 pct, of which 1-3/8 pct for selling and 3/8 pct for managment and underwriting combined including a 1/8 pct praecipuum. Denominations are 10,000, 100,000 and one mln markka and listing is in Helsinki, it said.
The prospects of the International Coffee Organization (ICO) reaching an agreement on coffee export quotas before September appear dim, Alberto Hesse, former president of the European Coffee Federation, said. "There is no real goodwill in certain delegations to go to quotas," Hesse, who advises the Italian Foreign Affairs Ministry on coffee issues, told Reuters. He declined to name the delegations. A special meeting between importing and exporting countries ended in a deadlock late yesterday after eight days of talks over how to set quotas. The ICO executive board will meet from March 30 to April 1 but the full council is not due to meet again until September. "I am not optimistic about an agreement soon," Hesse said.
Anacomp Inc, one of the most actively
traded NYSE issues, rose today as at least one analyst expected
earnings to be boosted by its planned acquisition of a
micrographics company.
Anacomp rose 1/2 to 6-3/4 on volume of 950,000 shares after
trading as high as seven earlier.
Howard Harlow, analyst at Whale Securities Corp, said
Anacomp's earnings for fiscal 1987 ending September 31 could be
doubled to 80 cts a share from the 40 cts a share he had
forecast before Anacomp agreed to buy DatagraphiX, a
micrographics firm, from General Dynamics Corp
Coffee producing countries must quickly map out a fresh common strategy following the failure of the International Coffee Organization, ICO, to reach agreement on export quotas, Gilberto Arango, president of Colombia's private coffee exporters' association, said. Arango told Reuters that the most intelligent thing now would be to seek a unifying stand from producers, including Brazil, in order to map out a strategy to defend prices. An ICO special meeting ended last night in London with exporting and consuming nations failing to agree on a resumption of export quotas, suspended one year ago after prices soared following a prolonged drought in Brazil. Arango said there would be no imminent catastrophe but predicted that over the short term prices would undoubtedly plummet. However, he said the market should also take into account evident factors such as Brazil's low stocks and the sale of the near totality of the Central American crop. Trade sources said Colombia's coffee was today quoted at 1.14 dlrs a lb in New York, its second lowest price in the past 10 years. Cardenas said these countries apparently fail to understand the true impact of such a failure for coffee producing nations as well as for industrialized countries. It is difficult to believe that while efforts are made to solve the problem of the developing world's external debt, decisions are being taken which cut earnings used for repaying those debts, he said. "In Colombia's case, we watch with consternation that, while we try to effectively combat drug trafficking, countries which support us in this fight seek to cut our jugular vein," Cardenas said.
Colombia is holding a snap selling tender tonight for one cargo of world market raw sugar, traders said. The sugar is for March 15/April 15 shipment and bids are being sought based on the New York May delivery futures contract, they added.
Periods ended December 31 Shr loss 10 cts vs loss seven cts Net loss 316,289 vs loss 189,140 Revs 61,762 vs 8,934
Magellan Corp said it has entered into a letter of intent to acquire Balzac Investments Inc in a transaction that will result in former Balzac shareholders owning about 83 pct of the combined company. The company said on completion of the merger, the combined company wopuld be known as Power-Cell Inc and be engaged in the development of Balzac technology related to its Quick Charge product for charging auto batteries. The transaction is subject to approval by shareholders of both companies.
Qtly div nine cts vs eight cts in prior qtr Payable March 31 Record March 13
Recent heavy rains have not affected the Peru coffee crop and producers are looking forward to a record harvest, the president of one of Peru's four coffee cooperative groups said. Justo Marin Ludena, president of the Cafe Peru group of cooperatives which accounts for about 20 pct of Peru's exports, told Reuters a harvest of up to 1,800,000 quintales (46 kilos) was expected this year. He said Peru exported 1,616,101 quintales in the year to September 1986. A spokesman for the Villa Rica cooperative said flood waters last month had not reached coffee plantations, and the crop was unaffected. Floods in early February caused extensive damage in Villa Rica, whose coffee cooperative exported 59,960 quintales last year, according to the state-controlled coffee organisation. Marin said the rains would only affect the coffee crop if they continued through to next month, when harvesting starts. He said Peruvian producers were hoping for an increase this year in the 1.3 pct export quota, about 913,000 quintales, assigned to them by the International Coffee Organisation, ICO. He said Peru exported 1,381,009 quintales to ICO members last year with a value of around 230 mln dlrs, and another 235,092 quintales, valued at around 35 mln dlrs, to non-ICO members.
One of General Electric Co's biggest
businesses, aircraft engines, will ride a wave of increasing
profits into 1991 because of a new contract worth 650 mln dlrs,
Wall Street analysts said.
Previously, it was expected the business would peak and
decline at some point in the next five years. The improved
outlook results from AMR Corp's
The International Monetary Fund, IMF, said it approved 125.9 mln sdr's to assist development in Jamaica. Over the next 15 months 85 mln sdr's can be drawn under a standby arrangement in support of the government's economic and financial program. Another 40.9 mln is available immediately following an export shortfall for Jamaica in the year ended September 1986 due to reduced income from bauxite, alumina and tourism, the IMF said.
Assistant Treasury Secretary David Mulford said rapid progress was being made in talks with commercial banks for loans to Argentina, the Philippines and Brazil. "This should result in substantial new lending for the major debtors in 1987," he said in prepared testimony for the Subcommittee on International Development Institutions of the U.S. House of Representatives. Until recently, commercial banks were slow to conclude new financing packages pending completion of a Mexican package, Mulford said. "We are concerned about the backlog of other financial packages and would like to see these move ahead soon," he said, "There is some evidence that this is already happening. Chile signed an agreement with banks last week, and there was also an agreement with Venezuela on rescheduling principal payments on previously renegotiated debt. "We look for rapid progress in commercial bank discussions with Argentina, the Philippines, and ultimately Brazil," he said.
Coffee prices may have to fall even lower to bring exporting and importing countries once more round the negotiating table to discuss export quotas, ICO delegates and traders said. The failure last night of International Coffee Organization, ICO, producing and consuming countries to agree export quotas brought a sharp fall on international coffee futures markets today with the London May price reaching a 4-1/2 year low at one stage of 1,270 stg per tonne before ending the day at 1,314 stg, down 184 stg from the previous close. The New York May price was down 15.59 at 108.00 cents a lb. Pressure will now build up on producers returning from the ICO talks to sell coffee which had been held back in the hope the negotiations would establish quotas which would put a floor under prices, some senior traders said. The ICO 15 day average price stood at 114.66 cents a lb for March 2. This compares with a target range of 120 to 140 cents a lb under the system operating before quotas were suspended in February last year following a sharp rise in international prices caused by drought damage to the Brazilian crop. In a Reuter interview, Brazilian Coffee Institute, IBC, President Jorio Dauster urged producers not to panic and said they need to make hard commercial decisions. "If we have failed at the ICO, at least we have tried," Dauster said, adding "now it is time to go and sell coffee." But Brazil is keeping its marketing options open. It plans to make an official estimate of the forthcoming crop next month, Dauster said. It is too difficult to forecast now. Trade sources have put the crop at over 26 mln bags compared with a previous crop of 11.2 mln. Brazil is defining details of public selling tenders for coffee bought on London's futures market last year. A basic condition will be that it does not go back to the market "in one go" but is sold over a minimum of six months. The breakdown of the ICO negotiations reflected a split between producers and consumers on how to set the yardstick for future quotas. Consumers said "objective criteria" like average exports and stocks should determine producer quota shares, Dauster said. All elements of this proposal were open to negotiation but consumers insisted they did not want a return to the "ad hoc" way of settling export quotas by virtual horse trading amongst producers whilst consumers waited in the corridors of the ICO. Dauster said stocks and exports to ICO members and non-members all need to be considered when setting quotas and that Brazil would like to apply the coffee pact with a set ratio of overall quota reflecting stock holdings. It is a "simplistic misconception that Brazil can dictate" policy to other producers. While consumer countries are welcome to participate they cannot dictate quotas which are very difficult to allocate as different "objective criteria" achieve different share-outs of quota, Dauster said. Other delegates said there was more open talking at the ICO and at least differences were not hidden by a bad compromise. Consumer delegates said they had not been prepared to accept the producers' offer to abandon quotas if it proves impossible to find an acceptable basis for them. "We want the basis of quotas to reflect availability and to encourage stock holding as an alternative to a buffer stock if supplies are needed at a later stage," one delegate said. Some consumers claimed producer support for the consumer argument was gaining momentum towards the end of the ICO session but said it is uncertain whether this will now collapse and how much producers will sink their differences should prices fall further and remain depressed. The ICO executive board meets here March 30 to April 1 but both producer and consumer delegates said they doubt if real negotiations will begin then. The board is due to meet in Indonesia in June with a full council scheduled for September. More cynical traders said the pressure of market forces and politics in debt heavy Latin American producer countries could bring ICO members back around the negotiating table sooner than many imagine. In that case quotas could come into force during the summer. But most delegates and traders said quotas before October are unlikely, while Brazil's Dauster noted the ICO has continued although there were no quotas from 1972 to 1980. A clear difference between the pressures already being felt by importers and exporters was that consumers would have been happy to agree on a formula for future quotas even if it could not be imposed now. At least in that way they said they could show a direct relationship between quotas and availability. In contrast producers wanted stop-gap quotas to plug the seemingly bottomless market and were prepared to allow these to lapse should lasting agreement not be found. "Producers were offering us jam tomorrow but after their failure to discuss them last year promises were insufficient and we wanted a cast iron commitment now," one consumer said.
Qtr ended Jan 31 Shr 12 cts vs 19 cts Net 369,000 vs 358,000 Revs 7,076,000 vs 6,712,000 Avg shrs 3,050,000 vs 1,850,000 Nine mths Shr 53 cts vs 63 cts Net 1,523,000 vs 1,158,000 Revs 22.6 mln vs 20.7 mln Avg shrs 2,852,198 vs 1,850,000
Alcan Aluminium Ltd is closing its aluminum smelter in Ludwigshafen, West Germany this June due to high operating costs, an Alcan spokesman said. The smelter, near Frankfurt, had annual capacity of about 44,000 tonnes but was operating at about half that in January, spokesman Fernand Leclerc said. Leclerc said Alcan decided it would cost too much to modernize the plant. He said there is a possibility the company will sell the smelter, which currently employs 320 people, before its scheduled closing.
Canada's 1.20 billion dlr bond offer was virtually sold out as bond prices closed weaker in moderate trading, dealers said. Sales of today's issue were slowed by the decline in American credit markets and rising oil prices, which stirred concerns about inflation, the traders said. The issue was selling at or just below issue price. Overall prices fell as much as a point, with the benchmark Canada 9-1/2 pct of 2001 at 106-3/8 5/8, the 8-1/4 pct of 1997 at 99 99-1/4 and the 8-1/2 pct of 2011 at 98-1/8 3/8.
The U.S. Senate Agriculture Committee may take up a bill tomorrow that would strengthen the activities of U.S. agricultural trade teams in selected developing countries, committee staff said. The measure, sponsored by committee Chairman Patrick Leahy (D-Vt.) and Sen. John Melcher (D-Mont.), would establish trade teams of between six and nine persons drawn from federal agencies and private voluntary organizations, staff said. The trade missions would seek to generate interest in the U.S. government's food donation and commercial programs -- PL480, Section 416, export credit and export enhancement -- and upon return be required to advocate extension of concessional or commercial benefits to interested countries. The trade teams would be made up of representatives of the U.S. Agriculture Department, State Department, the Agency for International Development and private voluntary organizations such as U.S. Wheat Associates. The bill would require teams within six months to visit seven countries: Mexico, Philippines, Indonesia, India, Bangladesh, Senegal and Nigeria. Within one year after passage of the measure, another eight countries would have to be visited: Peru, Kenya, the Dominican Republic, Costa Rica, Malaysia, Venezuela, Tunisia and Morocco. Other countries could be added to the list. Senate staff members said the bill, still in the drafting stages, had broad support and was expected to be approved by the committee tomorrow.
Standard and Poor's said it is
reviewing
Shr profit 31 cts vs loss 20 cts Net profit 1,044,424 vs loss 515,425 Avg shrs 3,406,841 vs 2,544,531 Year Shr profit 2.83 dlrs vs profit 42 cts Net profit 8,811,142 vs profit 1,058,503 Avg shrs 3,111,464 vs 2,544,531 Note: Full company name is United Fire and Casualty Co Net includes realized gains of 93,551 dlrs and 764,177 dlrs, respectively, in 1986 qtr and year, and of 92,075 dlrs and 972,935 dlrs, respectively, in 1985 qtr and year. 1985 results restated for three-for-two stock split. Net income for 1985 has been restated due to a change in the method used in computing deferred acquisition costs. 1986 results include the effect of a stock offering resulting in the issuance of an additional 862,500 shares of common stock.
The U.S. Agriculture Department proposes to rename the "USDA Good" grade of beef to "USDA Select." The department said the proposed change is in response to a petition from Public Voice for Food and Health Policy and would present a more positive image of this grade of beef and help calorie-conscious consumers select leaner cuts of meat. Under current rules, the "good" grade of meat has less marbling and fat than the "prime" or "choice" grades, it said. Standards for all of the grades would remain unchanged under the proposal.
Zenith Laboratories Inc said the company will report a fourth quarter loss, and the amount will be determined on completion of its year end audit. The company did not elaborate further. For the third quarter ended Sept 30, 1986, Zenith reported a loss of 3,451,000 dlrs or 16 cts per share, adjusted for a May 1986 2-for-1 stock split. The company also said it received Food and Drug Administration approval to market Cefadroxil, a generic version of an antibiotic with domestic sales exceeding 50 mln dlrs in 1986. Zenith said it will not market the drug until "questions relating to the applicability of certain patents have been resolved."
Rockwell International Corp continues to expect significant improvement in 1987 results, despite the somewhate disappointing performance of one of its business segments, President Donald Beall told Reuters. Rockwell reported net earnings in its first quarter ended December 31 of 149.4 mln dlrs, or 1.05 dlrs per share, compared to 125.8 mln dlrs, or 84 cts per share a year ago. Operating earnings, however, were off about four pct, and analysts have attributed the decline to Rockwell's Allen-Bradley unit, which has suffered from weakness in the industrial automation market. "It is in a soft market now, but we are not concerned. It is moving forward with market development and is enhancing market share," Beall said of Allen-Bradley unit. Beall, who was in Los Angeles to address a Technology management conference, said first quarter sales for the Allen-Bradley unit were flat as compared to a year earlier. He said the company does not break out operating earnings by unit on a quarterly basis. Beall said the recent trend toward cost sharing in the research and development phase of government contracts should not have a major impact on Rockwell's near-term performance. He noted, however, the increasing focus on cost sharing could limit technological innovation. "I worry that we are heading into a period of misuse of contracting approaches too early in the development stages of important military contracts," Beall said, adding, "long-term, we have a very serious problem." In addition, Beall told the conference the greatest competitive threat to defense contractors is in defense electronics, due to the government's attempt to take advantage of competitively priced products made outside the U.S.
General Electric Co is raising 250 mln dlrs via an offering of notes due 1992 with a seven pct coupon and par pricing, said lead manager Kidder, Peabody and Co Inc. That is 30 basis points more than the yield of comparable Treasury securities. Non-callable for life, the issue is rated a top-flight AAA by Moody's and Standard and Poor's.
Pitney Bowes Credit Corp, a unit of Pitney Bowes Inc, is raising 100 mln dlrs through an offering of notes due 1992 with a 7-1/4 pct coupon and par pricing, said lead manager Goldman, Sachs and Co. That is 53 basis points more than the yield of comparable Treasury securities. Non-callable to maturity, the issue is rated A-1 by Moody's and AA-minus by Standard and Poor's. First Boston Corp co-managed the deal.
Shr 30 cts vs 21 cts Net 3,358,000 vs 2,276,000 Sales 43.3 mln vs 33.5 mln 1st half Shr 60 cts vs 42 cts Net 6,654,000 vs 4,638,000 Sales 86.6 mln vs 66.4 mln NOTE: Share adjusted for three-for-two stock split in May 1986.
A one billion stg issue of nine pct Exchequer stock due 2002 which became available for trading only this morning was exhausted in mid-afternoon trading on the U.K. Government bond market, dealers said. The Bank of England said the issue was no longer operating as a tap. The issue was announced Monday at a price of 96 stg pct and dealers said the Government broker's supplies were sold out this afternoon at a partly-paid 20-20/32 stg pct. The bonds started trading this morning at 20 stg pct. Dealers noted the market had seen vigorous demand throughout the day, prompted mainly by sterling strength. Dealers said that demand had been seen for the tap from both domestic and overseas sources, including from Japan and the U.S. Although the issue had not been designated as free of tax to residents abroad (FOTRA) widespread bullish sentiment for the market in general had generated foreign buying. The stock had been regarded as slightly expensive when it was announced and dealers said that even first thing this morning it had seemed slightly dear in relation to comparable existing stocks. However, sterling's continuing firm performance had prompted interest in the tap right at the outset. The issue's value had been enhanced by its partly-paid structure, which not only enabled investors to defer payment of the major part of the price until April 27, but also conferred a substantial gearing element. This meant, dealers explained, that investors who bought the bonds benefitted fully from price gains registered by the market in general, although only 20 stg pct of the total purchase price was tied up initially.
Waxman Industries Inc said it filed with the Securities and Exchange Commission a registration statement covering a 25 mln dlr issue of convertible subordinated debentures due 2007. Proceeds will be used to repay short-term indebtedness and for general corporate purposes, which may include acquisitions, Waxman said. The company named Drexel Burnham Lambert Inc as sole underwriter of the offering.
A leaf disease affecting seven pct of Sri Lanka's rubber plantations may reduce output this year and raise currently depressed prices, industry officials and researchers told Reuters. About 2,900 hectares of rubber planted with the Rubber Research Institute (RRI) clone 103 have been hit by the fungus "corenes pora" which attacks the roots of the tree and kills the leaves. The disease was first discovered about six months ago. Trade sources say prices might boom once again if the crisis leads to output below the 1987 target of 143,000 tonnes. Last year's output is estimated at between 133,000 and 135,000 tonnes. Researchers say the fungus could spread to other rubber clones if no immediate action is taken. "The RRI is considering asking estates to remove the trees seriously affected by the fungus because it was too late to use chemicals to kill the disease," an Institute spokesman said. Senior industry and research officials met yesterday at Padukka, east of here, to discuss ways of controlling the fungus which is affecting estates mostly belonging to the State Plantations Corp and Janatha Estates Development Board. The two state-owned groups account for 30 pct of rubber land with the balance belonging to small private producers with a total of 145,600 hectares. The RRIC 103 is a new clone propagated by the Research Institute as high yielding and recommended two years ago for planting. Only the two state groups seriously planted these clones while smallholders preferred the low-yielding but older PBX Malaysian clones. Officials at yesterday's crisis meeting said it was decided to uproot only some of the affected trees while others would be treated. They declined to comment on other decisions taken. Trade sources said supplies had improved in the past week but prices had hit their lowest since last December. "If there is a shortage of rubber, prices are bound to rise," a spokesman for a company buying on behalf of the Soviet Union said. Rubber prices, particularly crepe, fell sharply by about four rupees a kilo between December and March. The best crepe one-X traded at 23.68 rupees a kilo, averaged 19.75 at this week's auction. Sheet prices fell by a rupee in the same period. Quantities offered at the auction also fell to an average of 300 tonnes per auction last month from 800 tonnes in December because of wintering in early February in producing areas. Over 550 tonnes were offered at this Tuesday's auction with the supply position showing improvements. Trade sources said the smaller availability of rubber last month did not raise prices as on previous occasions. "Some factors, like less storage space from excess stocks, meant we could not buy much at the auction until we disposed of the rubber we already had," one buyer said. Other sources said there were few forward contracts and speculative buying last month, while delays in steamer arrivals aggravated the problem. European buyers delayed their purchases because of winter closures of factories and also in the hope that prices would ease further. They said another problem that could hit the industry is the dry spell in producing areas. "If the inter-monsoonal rains expected in late March/April are delayed, we would have further shortages," one official said. "But this again could benefit prices," a buyer said.
Shr loss 13 cts vs profit 10 cts Net loss 1,804,062 vs profit 1,370,063 Revs 33.5 mln vs 40.4 mln 12 mths Shr loss 51 cts vs profit cts Net loss 7,030,235 vs profit 9,163,141 Revs 149.4 mln vs 167.9 mln NOTE: income before taxes for the 12 mths ended Jan 1987 includes gains 895,000 for fire insurance settlement, and unusual charges of 7,900,000 for provisions for estimated cost of severance pay for terminated workers and a one-time writedown of inventory and equipment.
Latin American debtor nations are still willing to negotiate on their debts, World Bank director for Latin America and the Caribbean Rainer Steckhan said. In an article published in today's Handelsblatt daily, Steckhan said despite decisions by Peru, Costa Rica, Ecuador and Brazil to suspend some interest payments, these nations were still willing to talk constructively about their debts. "These countries are still prepared to negotiate, and the instruments of cooperation developed thus far provide the means to deal with the crisis over time," Steckhan said. Several highly indebted nations have made great efforts to meet their debt payments, especially Latin American countries, Steckhan said. Chile achieved gross national product growth of five to six pct last year and quadrupled its trade surplus from 1984, despite lower prices of key commodity exports like copper. Mexico, hit by a catastrophic earthquake and declines in world oil prices also boosted its non-oil exports by one third in 1986, the highest growth rate in its post-war history. The World Bank's annual lending to Latin America rose to 4.8 billion dlrs last year from three billion in 1984, he said.
Shr 21 cts vs 28 cts Net 1,456,000 vs 1,925,000 Sales 258.7 mln vs 290.2 mln Nine Mths Shr 77 cts vs 1.10 dlrs Net 5,384,000 vs 7,658,000 Sales 804.3 mln vs 760.1 mln
Harris Associates L.P., a Chicago investment advisor, said it raised its stake in Builders Transport Inc to the equivalent of 466,754 shares, or 9.1 pct of the total outstanding, from 335,800 shares, or 6.7 pct. In a filing with the Securities and Exchange Commission, Harris said it bought 36,700 Builders Transport common shares on Feb 10 at 17 dlrs a share. It also said it bought debentures on Feb 23 that could be converted into 94,254 shares. Harris said its dealings in Builders Transport were on behalf of its advisory clients. It has also said it has no intention of seeking control of the company.
Failure of talks on re-establishing International Coffee Organization, ICO, coffee quotas last week may put political pressure on the United States, particularly the State Department, to reassess its position, but the U.S. is unlikely to back away from its basic demand quotas be set by "objective criteria", U.S. officials said. Jon Rosenbaum, assistant U.S. trade representative and head of Washington's delegation to the talks, told Reuters on his return from London that the United States is willing to resume the coffee negotiations as early as April if necessary. Rosenbaum said the United States will be "flexible" in discussing the method of establishing objective criteria and any transition to new quotas, but not on the basic aim of establishing an objective method of setting quotas. At the ICO talks major consuming nations, led by the U.S., proposed that future coffee export quota shares be calculated by a formula incorporating a producer's recent exportable production and verified stocks, while large producers led by Brazil proposed maintaining the traditional ad hoc division of shares. The consumer position would have in effect reduced the market share of Brazil, by far the world's largest producer. Rosenbaum said the administration would continue to support legislation now before Congress which would allow the U.S. customs service to monitor coffee imports, as a way to comply with any future coffee quotas. He said the Reagan administration would be reviewing the coffee policy situation following the collapse of the London talks, but "nobody is proposing we change our position." However, other U.S. government officials involved in coffee policy said they are bracing for a diplomatic and coffee market offensive from producer countries, led by Brazil and Colombia, to soften the consumer position. "Knowing that its next crop is fairly large, Brazil will kind of want to test the resolve of other producers and consumers," said one U.S. official. The U.S. official, who asked not to be identified, said Brazil and Colombia may flood the coffee market in the next few months in an effort to drive down prices and pressure other countries, particularly the splinter group of small producers who differed with the major producers in London. This in turn could lead to urgent appeals from Latin American countries, faced with mounting debt problems, to the U.S. State department, and to the National Security Council in the White House, for an easing of the U.S. position, U.S. officials said. The State department, a major player in setting U.S. coffee policy, may then face conflicting pressures, particularly from politically-sensitive U.S. allies in Central America, U.S. officials said. El Salvador and Guatemala both backed Brazil and Colombia at the London talks in resisting pressures for quotas based on objective criteria. But the Dominican Republic and Costa Rica joined the splinter group, which said it would agree to objective criteria. There is a strong feeling among some in the State Department that the United States should continue to support the splinter group of producers who have taken the politically-risky step of opposing Brazil on the objective criteria question, U.S. officials said. Within the consuming countries there also is expected to be some pressure to reassess positions. In London, the U.S. was supported by the U.K., the Netherlands, West Germany, Japan, Australia and New Zealand on the issue of objective criteria, U.S. officials said. This bloc represented enough votes among consuming nations to successfully prevent adoption of the producer proposals. However, U.S. sources said West Germany's support was at times qualified and there is some concern that the European Community could come under pressure to be more accommodative to producers in future talks. France backed the Ivory Coast and other African producers during the talks. A softening of the EC stance would make it more difficult, although not impossible, for the U.S. to block producer plans. While political manuevering by small producers and consuming countries will be important, U.S. officials said the key to any future outcome will be Brazil's position. U.S. officials blamed Brazil's intransigence for the failure of the talks and said a more flexible position from Brasilia would be the most important step toward agreement.
Hayes-Albion Corp said it has
delayed the special meeting at which shareholders will vote on
its merger into Harvard Industries Inc
Oper shr loss nine cts vs profit 12 cts Oper net loss 1,791,000 vs profit 2,336,000 Sales 242.9 mln vs 225.8 mln Year Oper shr profit 15 cts vs loss 17 cts Oper net profit 2,925,000 vs loss 3,324,000 Sales 1.01 billion vs 875.6 mln NOTE: Net includes discontinued operations gain 2,437,000 dlrs vs loss 190.0 mln dlrs in quarter and losses 75.6 mln dlrs vs 227.7 mln dlrs in year. Net includes loss 294,000 dlrs vs nil in quarter and gain 224.8 mln dlrs vs loss 1,750,000 dlrs in year from settlement of liabilities under plan of reorganization from Chapter 11 bankruptcy. 1986 quarter net includes 2,300,000 dlr provision for loss on future store closings offset by reduction in pension liabilities.
Northgate Exploration Ltd said year-end 1986 ore reserves at its two Chibougamau mines in Quebec fell to 8,141,150 short tons grading 0.077 ounce gold a ton and 1.63 pct copper from year-earlier 8,462,000 tons grading 0.077 ounce gold ton and 1.67 pct copper. The company said it launched a 700,000 dlr exploration program at the mines to increase production and ensure the operations' continued long life. Ore production totaled 650,653 tons last year, it said, estimating year-end reserves contained about 627,000 ounces of gold and 265 mln pounds of copper.
The government daily Izvestia said a considerable amount of Soviet winter crops need to be reseeded and the state 1987 grain harvest target of 232 mln tonnes will not be easy to fulfil. Without giving figures, the newspaper said: "A considerable part of the winter crops must be reseeded, but that creates extra effort in the fields in spring." The Soviet Union has previously said nine mln hectares of winter grain will have to be reseeded because of winterkill. A U.S. Department of Agriculture analyst in Washington has said the figure of nine mln hectares would equal about 25 pct of the total winter crop and would be the second highest winterkill in 10 years. "The planned task of bringing in no less than 232 mln tonnes of grain is not simple," Izvestia said. This week's sudden fall in temperatures has affected large parts of the country and has caused fieldwork to stop in the Ukraine, it said, adding that temperatures fell to as low as minus 30 centigrade in Byelorussia.
Audiotronics Corp said it registered with the Securities and Exchange Commission to offer five mln dlrs of convertible subordinated debentures due 2002. H.J. Meyers and Co Inc will manage the underwriting of the offer. The company said proceeds will be used to repay bank debt and for working capital.
Shr profit 12 cts vs loss two cts Net profit 182,173 vs loss 28,977 Revs 4,483,047 vs 3,994,808 1st half Shr profit 14 cts vs loss eight cts Net profit 221,376 vs loss 120,435 Revs 8,270,947 vs 7,150,265
The Canadian Wheat Board has advised the federal government to sharply cut initial prices paid to farmers for their wheat, oats, and barley in the crop year beginning August 1, a board spokesman said. The spokesman declined to give the size of the recommended price drops but said it would not be good news for western Canadian grain growers. "They're all lower," he said. "This is really getting pretty serious. We're talking nuts and bolts economic survival and whether it's worthwhile for farmers to put in a crop." Farm leaders and economists have estimated the board will recommend cuts of around 20 pct in the initial prices. Farmers receive the initial payment when the grain is delivered to the elevators used by the wheat board. If the wheat board, which markets most of Canada's grain, obtains higher than expected prices on world markets, the farmers receive a final payment at the end of the crop year. If prices are lower, the federal treasury makes up the difference. The final decision on the initial prices, usually made in April, rests with Wheat Board Minister Charles Mayer and the federal cabinet. Last year Mayer cut the initial prices between 19 and 27 pct but last fall the government announced a one billion Canadian dlr aid program to compensate for the price cuts. But federal agricultural officials have already warned farmers not to depend on additional government aid this year.
Parsow Partnership Ltd, a Nevada investment partnership, said it lowered its stake in ERC International Inc to 343,500 shares or 8.3 pct of the total outstanding common stock, from 386,300 shares, or 9.3 pct. In a filing with the Securities and Exchange Commission, Parsow said it sold 42,800 ERC common shares between Jan 9 and March 2 at prices ranging from 12.125 to 14.50 dlrs each. The partnership said its dealings in ERC stock are for investment purposes and it has no intention of seeking control of the company.
The Bank of France said it will offer 7.5 billion francs' worth of negotiable Treasury bills at its next public weekly tender on March 9. The total includes two billion francs of 13-week bills, 2.5 billion francs of two-year bills and three billion francs' worth of five year bills. No maximum or minimum price has been set.
Resource Exploration Inc said it has
agreed to let
Colombian finance minister Cesar Gaviria blamed an inflexible U.S. position for the failure of last week's International Coffee Organisation, ICO, talks on export quotas. "We understand that the U.S. Position was more inflexible than the one of Brazil, where current economic and political factors make it difficult to adopt certain positions," Gaviria told Reuters in an interview. The U.S. and Brazil have each laid the blame on the other for the breakdown in the negotiations to re-introduce export quotas after being extended through the weekend in London. Gaviria stressed that Colombia tried to ensure a successful outcome of the London talks but he deplored that intransigent attitudes, both from producing and consuming nations, made it impossible. In a conversation later with local journalists, Gaviria said the U.S. attitude would have serious economic and political consequences, not necessarily for a country like Colombia but certainly for other Latin American nations and for some African countries. He told Reuters that Colombia, because of the relatively high level of its coffee stocks, would probably suffer less. According to Gaviria, Colombia can hope to earn about 1,500 mln dlrs this calendar year from coffee exports, which traditionally account for 55 pct of the country's total export revenue. That estimate would represent a drop in revenues of 1,400 mln dlrs from 1986. Colombia, which held stockpiles of 10.5 mln bags at the start of the current coffee year, exported a record 11.5 mln bags in the 1985/86 coffee year ending last September 30.
Dynamics Corp of America said it has reached an agreement with CTS Corp resolving all differences between the two companies. It said as a result of the settlement, CTS's special board committee has stopped soliciting orders to purchase some or all of CTS. Dynamics, which now owns 27.5 pct of CTS' outstanding stock, said it agreed to limit its shareholdings to not more than 35 pct of the outstanding shares for a year following the company's 1987 annual meeting. Dynamics said the CTS board will recommend CTS shareholders vote at the 1987 annual meeting in favor of the company paying Dynamics 2,178,000 dlrs as a reimbursement for its CTS releated costs and granting Dynamics an option to buy enough CTS common at 29.625 dlrs a share to give it ownership of 35 pct of the outstanding stock. Dynamics said the price of stock under the option, exercisable for one year, is based on the average closing price for the stock for the five days ending March two. Dynamics said CTS Chairman George F. Sommer will assume the additional title of President. Former President Robert D. Hostetler is resigning as a director, as is Chief Financial Officer Gary B. Erekson, Ted Ross and Donald J. Kacek. Dynamics said the CTS board will be reduced to seven members for eight with the remaining four members of the current board and three representatives of Dynamics as new directors.
Prospects for renewal of the five-year U.S./USSR grains agreement are uncertain at this point, a Soviet trade official told Reuters. The current trade imbalance between the United States and the Soviet Union, high U.S. commodity prices, and increased world grain production make a renewal of the supply agreement next year less certain, Albert Melnikov, deputy trade representative of the Soviet Union, said in an interview. The current agreement expires on Sept 30, 1988. Melnikov said that world grain markets are different than when the first agreement was signed in 1975. Statements from both U.S. and Soviet officials have indicate that a long term grains agreement might not be as attractive for both sides as it once was. "We have had one agreement. We have had a second agreement, but with the second agreement we've had difficulties with prices," Melnikov said. "I cannot give you any forecasts in response to the future about the agreement.... I do not want to speculate on what will happen after Sept 30, 1988," he said. Melnikov noted that he has seen no indications from Soviet government officials that they would be pushing for a renewal of the agreement. "The situation is different in comparison to three, five or ten years ago ... We can produce more," he said.
Healthvest, a Maryland real estate
investment trust, said it began selling five mln shares of
common stock at 21 dlrs a share.
The company said it is also selling 543,237 shares to
Healthcare International Inc
Shr profit 13 cts vs loss one ct Net profit 853,000 vs loss 22,000 Revs 41.1 mln vs 20.3 mln Avg shrs 6,349,753 vs 4,403,852 Nine mths Shr profit 57 cts vs profit 28 cts Net profit 2,869,000 vs profit 1,252,000 Revs 119.0 mln vs 67.6 mln Avg shrs 5,054,844 vs 4,403,000 Note: Company went public in October 1986.
Tandy Brands Inc said it sold its Grate Home and Fireplace division to an investor group that includes some members of Grate's management for 1,600,000 dlrs in cash and secured notes. The company said the sale will not materially offset the 9,848,000 dlr non-recurring charge it took against the sale of the division.
The following proposed securities
offerings were filed recently with the Securities and Exchange
Commission:
Intermark Inc
U.S. Trade Representative Clayton Yeutter said he hoped the U.S. dollar would continue to decline in relation to the currencies of Taiwan and South Korea as a way to improve the U.S. trade picture. Testifying before the House Appropriations subcommittee which must approve his agency's 1988 budget, he said, "In my judgment economic factors justify a continued decline." Asked by a committee member if he expected a further decline, and how much, Yeutter said the Taiwan and South Korean currencies should be adjusted to reflect "positive factors" in their economies.
The failure of talks to introduce new coffee export quotas within the International Coffee Agreement, ICA, was preferable to the alternative of Brazil having a sharply reduced quota, as had been proposed, President of the Rio de Janeiro Coffee Trade Association Carlos Calmon said. He told Reuters proposals to reduce Brazil's quota to 25 pct of the world share from 30 pct at present were unacceptable as the country has large stocks and a good harvest is expected. "Brazil has the capacity to export 20 mln bags this year," Calmon added. Calmon said, assuming a 58 mln bag global ICA quota, Brazil's share under the proposals would have been 14.5 mln bags, of which soluble would have accounted for 2.0 mln, leaving just 12.5 mln bags of green coffee for export. "It's a pity the talks broke down, but for Brazil this was better than such a quota reduction," he added. In 1985 Brazil exported 19.6 mln bags of soluble and green coffee, including about two mln bags to non-members. A severe drought and marketing problems cut exports last year to under 10 mln bags. Calmon estimated stocks as of January 1 at 18 mln bags, of which 5.0 mln have already been sold for export. The harvest this year should be around 30 mln bags, he added. The latest Brazilian Coffee Institute estimate for last year's harvest is 11.2 mln bags, although many traders believe it was higher than this.
Bank of Canada Governor John Crow said he expects the Canadian economy will grow moderately in the coming year, despite the near flat growth in the final quarter of 1986. "We see moderate growth," Crow told a news conference following presentation of the central bank's annual report in the House of Commons today. He said there were positive signs of growth in the economy, particularly the drawdown of business inventories in the fourth quarter. Yesterday, Statistics Canada reported gross domestic product expanded a slight 0.2 pct in the quarter. Crow reiterated the bank's previous statements that inflation remains a major priority in setting monetary policy and said only zero inflation would be acceptable. Canada's inflation rate is currently hovering around the four pct mark. The governor said Canada's banking system remains sound despite recent concern about exposure by the country's banks in debt plagued countries such as Brazil. "It (the debt problem) is not a happy development but I think it can be overplayed in terms of its impact," Crow told reporters.
Allis-Chalmers Corp said it asked lenders and other groups to approve a restructuring plan that would cause a dilution of the company's existing common stock. The company said it would sell all of its businesses other than the American Air Filter business, make a public financing of more than 100 mln dlrs and pay part of the currently outstanding debt with the proceeds. Under the plan, which was presented to institutional lenders, the company's unions and the Pension Benefit Guaranty Corp, "substantial amounts" of institutional debt would be converted to common stock of the restructured company. Allis-Chalmers said it will exchange existing preferred stock for common. The exchange of the institutional debt and preferred stock for common equity will cause a "resulting dilution of the existing common stock," Allis-Chalmers said in a statement. Under the plan, holders of existing common would hold about 15 pct of the restructured common stock. Holders of existing preferred would hold about 35 pct of the new common. Allis-Chalmers said its only alternative to the plan is bankruptcy. The restructuring must be approved by creditors, common and preferred holders,and present and former employees. Allis-Chalmers said a bankruptcy filing "appears to represent the company's only alternative if agreement upon the terms of the plan cannot be reached." The spokesman said in response to an inquiry that he was not aware of any extraordinary charge against earnings that would result from the restructuring. "It is too early to talk about a charge" because the plan must still be approved by the lenders and unions, he said. Also under the plan, payments to Allis-Chalmers' private lenders would be deferred. Trade payables and obligations incurred in the ordinary course of business will be met. Payment of health benefits for active and retired employees would be made "at substantially reduced levels." Allis-Chalmers, once one of the leading farm equipment companies, sold all of its farm equipment operations to Deutz of West Germany for 107 mln dlrs, leaving the company with businesses in lift trucks, air conditioning, fluids handling and solid materials processing. Last year, Allis-Chalmers sold the lift truck business to AC Material Handling Co of Columbus, Ohio. Under the restructuring plan, Allis-Chalmers will sell its solid materials processing and fluids handling businesses. Solid materials processing, which makes equipment to crush stones for highway construction, accounted for 288 mln dlrs of Allis-Chalmers's total 1985 revenues of 886 mln dlrs. The company will also sell its fluids handling operations, which makes pumps and valves. That business accounted for 196 mln dlrs of the company's 1985 revenues. Allis-Chalmers in 1986 reported a net loss of 8.6 mln dlrs, or 1.09 dlrs a share. In 1985, the company lost 168.4 mln dlrs, or 12.27 dlrs a share. The company's last profit was in 1980, when it earned 52.4 mln dlrs on sales of 2.1 billion dlrs.
Oper shr profit 11 cts vs loss 27 cts Oper net profit 662,625 vs loss 774,002 Revs 43.9 mln vs 18.4 mln Year Oper shr profit 37 cts vs loss 37 cts Oper net profit 1,487,796 vs loss 1,119,626 Revs 150.1 mln vs 51.7 mln NOTE: 1986 4th qtr and yr oper net excludes 6,134 dlrs and 720,500 dlrs or 20 cts per share, respectively, for realized investment gains. 1986 qtr and yr oper net also excludes 102,300 dlrs and 257,300 dlrs, respectively, for tax loss carryforwards. 1985 4th qtr and yr oper net excludes realized investment gains of 449,920 dlrs or 15 cts per share and 897,949 dlrs or 30 cts per share, respectively. 1985 4th qtr oper net also excludes a loss of 42,820 dlrs for carryforward.
Shr profit ten cts vs loss six cts Net profit 43,000 vs loss 26,000 Year Shr profit 46 cts vs profit 12 cts Net profit 193,294 vs profit 51,029 Assets 44.4 mln vs 25.3 mln Deposits 40.0 mln vs 21.4 mln Loans 25.3 mln vs 15.2 mln
the sharp fall in international coffee prices will not affect colombia's external credit situation, finance minister cesar gaviria told reuters. "our foreign debt is high, but we can pay, and I hope the foreign banking community will maintain its position toward us," he said. He said the current decline on world coffee markets was not totally unexpected and would have no immediate bearing on colombia's financial state, which he described as sound. Gaviria said the decline in coffee prices could mean a loss of 1.5 billion dlrs in revenues for 1987. The conservative party and the country's largest trade union called this week for the debt to be rescheduled following the price drop. Colombia, the only major latin american country not to have rescheduled its external public debt, has a total foreign debt of 13.6 billion dlrs.
Ivory Coast today predicted that the present coffee price crash recorded after the collapse of the recent International Coffee Organisation (ICO) meeting in London would not last long. Commenting on Monday's failure by producer and consumer nations to agree on new export quotas needed to tighten an oversupplied coffee market, Ivorian Agriculture Minister Denis Bra Kanon told reporters that traders would eventually be obliged to restore their positions. "I am convinced the market is going to reverse by April," he told a news conference here at his return from the failed London talks. Robusta coffee beans for May delivery ended the day in London down about 50 sterling at 1,265 sterling a tonne, the lowest since 1982. Bra Kanon estimated at at least 535 billion CFA francs (1.76 billion dlrs) the overall loss in revenues earned by Ivory Coast from all its commodities exports this year if the slide on the world markets continues. He disclosed that his country - the world's biggest cocoa producer and the third largest for coffee -- would spearhead an African initiative to reach a compromise formula by the end of next month. Ivory Coast has been chosen by the Abidjan-based Inter-African Coffee Organisation (IACO) to speak on behalf of the continent's 25 producer nations at the London talks. "An initiative from IACO is likely very soon," he said without elaborating. "Following the London collapse, we have immediately embarked on a concertation course to avoid breaking an already fragile market," he said. Questioned by journalists, the minister said President Felix Houphouet-Boigny estimated for the moment that his government would not be forced to reduce the price guaranteed by the state to Ivorian coffee-growers for the current season. Last year, the West African nation announced that the coffee producer price would stay at 200 CFA francs (65 cents) per kilo. Bra Kanon said that his country would strive to diversify its agricultural production to avoid beeing too dependent from world market fluctuation. A communique read over the state-run television tonight said that during today's weekly cabinet meeting, the veteran Ivorian leader reaffirmed "his faith in Ivory Coast's bright (economic) future" despite the commodities price slide. The Agriculture Minister also announced the government decided to earmark a sum of 7.5 billion CFA francs (24.71 mln dlrs) to support the country's small farmers. Financially-strapped Ivory Coast, long regarded as one of Africa's showpiece economies, is going through difficult times following the sharp slump in the world price of cocoa and coffee. Ivory Coast's real gross domestic product is expected to grow only one pct this year compared to five pct in 1986, according to a recent Finance Ministry estimate.
New Zealand's current account deficit narrowed to 180 mln N.Z. Dlrs in January from 203 mln, revised from 207 mln, in December and 305 mln in January 1986, in a smoothed measurement, the Statistics Department said. Unsmoothed figures show a deficit of 162 mln dlrs for January against 107 mln, revised from 75 mln for December 1986 and 575 mln in January 1986. The smoothed series -- adjusted to iron out random fluctuations -- shows a widening surplus on merchandise trade to 46 mln from a surplus of 33 mln, revised from 43 mln dlrs in December and a 71 mln deficit in the a year ago period. Exports were 905 mln dlrs against 929 mln, revised from 971 mln in December and 816 mln a year earlier, while imports fell to 858 mln from 895 mln, revised from 928 mln in December and 888 mln in January 1986. Unadjusted merchandise figures show a surplus of 53 mln dlrs vs 141 mln, revised from 203 mln surplus in December 1986 and a 323 mln deficit a year earlier. The deficit on invisibles on unsmoothed figures eased to 215 mln dlrs from 248 mln, revised from 277 mln in December and 252 mln in January 1986. The smoothed deficit on invisibles fell to 226 mln from 237 mln, revised from 250 mln in December and 234 mln in the year ago period.
Thai coffee exports rose to 22,068 tonnes in 1986 from 20,430 a year earlier, the Customs Department said.
Oesterreichische Draukraftwerke AG of Klagenfurt is launching a 100 mln Swiss franc 4-3/4 pct 10-year bond priced at 100-1/4 pct, lead manager Swiss Bank Corp said. The issue is guaranteed by the Austrian state. Subscriptions close March 20.
The highly visible drama involving the yen's sharp rise against the U.S. Dollar is obscuring the fact that the Japanese currency has hardly budged against major European currencies, thus creating a new set of exchange rate distortions, Japanese and European research officials said. The officials, looking beneath the rhetoric of statements by the Group of Five (G-5) industrial nations, told Reuters the currency movements of the past two years are also creating a fundamentally new world trade picture, which is throwing up new trade tensions and imbalances. Trade figures show that the new currency alignments are already changing the Japan-U.S. Trade axis into a Japan- European Community (EC) axis, to the discomfort of Europe. In many ways, not least in terms of rare international cooperation, the September, 1985 New York Plaza pact between the U.S., Japan, West Germany, Britain and France to cut down the value of the dollar was a historic one. But it is the underlying peaks and troughs of the major currency movements which lay bare the real picture, in which the Plaza pact appears as an event of prime importance, but not necessarily central significance, the officials said. The officials said that when the Plaza agreement took place, the dollar was already on its way down. The agreement simply helped it on its way. Senior EC financial expert in Tokyo Tomas de Hora has watched the movements closely. "You have to look at the dollar's peak compared with now, and that was well before Plaza," he said. On February 25, 1985, the dollar peaked against the yen at 263.15 yen. On September 20, the Friday before Plaza, it was 242. Since then, despite massive Bank of Japan intervention and periodic market frights about further G-5 concerted action, the dollar trend has been down, down, down. Yet the ECU is now around 173.4 yen. The historical cross rates for sterling and the mark tell much the same story. The European currencies are moving back up against the yen. The close relationship between exchange rates and trade flows makes it difficult to see which is driving which, but undoubtedly the trade equation between the big three is changing. In 1986, Japanese imports and exports with the EC both grew by around 50 pct in dollar terms, five pct in yen. This gave Japan a 16 billion dlr trade surplus. Last January, Japanese exports to the EC totalled half of of sales to the U.S, against about a third in recent years. Trade with the U.S in 1986 rose 23 pct for exports and 12 pct for imports in dollar terms, but fell 13 pct for exports and 21 pct for imports in yen terms. "The basic meaning for Europe is that Japanese firms have a tremendous interest in exporting to Europe, where every unit sold maximises profits in yen terms, which is what is important to them. Suddenly, instead of the U.S., It is Europe that is laying the golden egg," said de Hora. The EC is worried. EC business also had a remarkable year in Japanese sales, but this can be explained partly due to its start from a small base, compared with total Japan-U.S. Trade. The Japanese think EC firms are now more competitive than U.S. Firms, a factor which is aggravating the exchange rate imbalance, and which will cause problems. "This currency alignment between Japan and the EC is reflecting the excellent performance of the EC countries. But therefore, Japanese goods may keep their price competitive edge," said Azusa Hayashi, Director of the First International Economic Affairs Division of the Foreign Ministry. "If you want my objective view, I don't expect a drastic improvement in our trade imbalance. Last year, we asked for moderation in exports, and this year we may have to do so again," he said.
The state-owned Minerals and Metals Trading Corp will send a team to Japan next week to negotiate an iron ore export contract for 1987/88 beginning April 1, trade sources said. Japan, the biggest buyer of Indian iron ore with imports of around 23 mln tonnes a year, has asked India to reduce prices from the current average of 18 dlrs a tonne, the sources said. "Japan has said it may be forced to reduce ore imports from India next year if New Delhi fails to reduce the price," one source said, but declined to give further details.
The Rank Organisation Plc said it has appointed County Natwest Capital Markets Ltd, Samuel Montagu and Co Ltd and Swiss Bank Corporation International as dealers in a 100 mln stg commercial paper program. The notes will be issued in any maturity of between seven and 364 days and the funds will be used for the company's general financing requirements. Arranger for the facility is County Natwest Capital Markets Ltd while National Westminster Bank Plc will act as issuing and paying agent, Rank added.
U.S. Undersecretary of State for Economic Affairs Allen Wallis said he had urged Japan to do much more to reduce its large trade surplus with the United States. "Our central message to Japan this week was that while we have made progress in some areas, much needs to be done," he told a press conference after three days of talks. "What we need is a resolution of trade issues, we need visible efforts to restructure the economy to encourage more imports and we need greater domestic-led growth." Forecasting sluggish economic growth in Japan this year, Wallis urged Tokyo to stimulate domestic demand to help reduce its trade surplus, which hit a record 83 billion dlrs in 1986. He named several areas of particular concern to Washington -- computer microchips, supercomputers, Kansai airport, agricultural products and car telephones. He warned that the U.S./Japan agreement governing trade in semiconductors was in jeopardy. Despite the pact, Japanese producers are still dumping microchips in foreign markets other than the United States while U.S. Penetration of the Japanese market has not increased, he said.
The Bank of France said it sold a total of 11.05 billion francs of Treasury tap stock in an issue of two fixed-rate tranches and one variable rate tranche. It sold 8.25 billion francs of 8.50 pct June 1997 tap stock at a top accepted price of 96.30 pct, giving an average yield of 8.72 pct. Demand totalled 18.45 billion francs at prices between 94.70 and 97.10 pct. The Bank also sold 1.8 billion francs worth of 8.50 pct December 2012 tap stock at a top accepted price of 93.60 pct. Demand totalled 5.25 billion francs and the average yield was 9.13 pct. In addition, it sold one billion francs worth of floating rate 1999 tap stock at a top accepted price of 96.90 pct, on total demand of five billion francs.
The nine creditor banks of the
Singapore coffee trader
The Swiss Finance Ministry is inviting tenders for a new series of three-month money market certificates to raise about 150 mln Swiss francs, the Swiss National Bank said. Bids would be due on March 10 and payment on March 12. The last issue of three-month paper conducted on February 12 yielded 2.969 pct.
The two 150 mln dlr equity warrant eurobonds for Mitsui and Co Ltd, reported earlier today from Tokyo, have now been formally launched, lead manager Nomura International Ltd said. The first tranche matures on March 30, 1992 and has an indicated coupon of 2-3/4 pct while the second tranche matures on March 30, 1994 and has a fixed coupon of three pct. Both deals have an indicated pricing of par. The selling concession for both deals is 1-1/2 pct while management and underwriting combined pays 3/4 pct. Final terms on the deals will be fixed on March 12.
OPEC crude oil output in the first few days of March was running at about 14.7 mln bpd, down from a 16 mln bpd average for February and well below the 15.8 mln bpd ceiling the group adopted in December, a Reuter survey shows. The figures were polled by Reuters correspondents from oil traders, industry executives and analysts in Europe, the Middle East, Africa, Latin America and Asia. They back recent statements by OPEC ministers that the group is producing within its ceiling to support the return to a fixed price system, which came into effect last month. OPEC output for the whole of February was about 200,000 bpd above the ceiling, largely because of overproduction by the United Arab Emirates and Kuwait, the figures show. The UAE, together with the much smaller producer Ecuador, was also producing above quota in the first days of March, the survey reveals. But such overproduction was compensated for by a sharp fall in Saudi Arabian output, together with Iran"s inability to export as much as its quota allows. Iraq rejected its OPEC quota of 1.466 mln bpd and produced 1.75 mln bpd in February and early March, the figures showed. Saudi output -- excluding movements into stocks -- fell to 3.1 mln bpd in early March from 3.5 mln bpd in February, against a 4.133 mln bpd quota. The Saudi figures include a 200,000 bpd share of Neutral Zone production. Kuwait, which has consistently denied quota violations, was estimated to be pumping 1.4 mln bpd in February and 1.15 in early March -- both figures including 200,000 bpd as its share of Neutral Zone output -- against its 948,000 bpd quota. Reports of customer resistance to fixed prices set by some OPEC states were reflected in output from Qatar and Nigeria, both substantially under quota in February and early March. Qatar's February output was 230,000 bpd, and this fell to 180,000 bpd in early March compared with its 285,000 bpd quota. Industry sources say Japanese buyers are resisting Qatar"s prices and Gulf Arab oil states have pledged to make up for any shortfall in sales which a fellow Gulf state suffers. Nigeria's early March output was about one mln bpd, down from 1.14 mln bpd in February and its quota of 1.238 mln bpd. Industry sources say Nigeria's customers believe its Bonny grades are overpriced compared with compatible Brent crudes from the U.K. North Sea. Country-by-country production figures are as follows, in mln bpd - COUNTRY CURRENT FEBRUARY QUOTA ALGERIA 0.64 0.64 0.635 ECUADOR 0.26 0.26 0.210 GABON 0.15 0.15 0.152 INDONESIA 1.16 1.16 1.133 IRAN 1.80 2.20 2.255 IRAQ 1.75 1.75 1.466 KUWAIT 1.15 1.40 0.948 LIBYA 0.95 0.95 0.948 NIGERIA 1.00 1.14 1.238 QATAR 0.18 0.23 0.285 SAUDI ARABIA 3.10 3.50 4.133 UAE 1.10 1.15 0.902 VENEZUELA 1.50 1.50 1.495 TOTAL 14.7 16.0 15.8 REUTER
Responsibility for the appreciation of the Taiwan dollar and the South Korean Won lies soley with those countries, said U.S. trade representative Clayton Yeutter Speaking to the Asia Society, Yeutter said that it is in those countries' own long-term interest to raise the value of their currencies against the dollar. Yeutter was responding to a question about what the U.S. could do to encourage appreciation of those currencies against the dollar in order to reduce the large U.S. trade deficits with Taiwain and Korea. "An undervalued currency will help those countries' exports in the short term, but in the long run they have to be concerned about how they are perceived in the international business community," Yeutter said. For Taiwan, Yeutter said that with its per capita trade surplus with the U.S., much larger than that of Japan's, and with huge foreign exchange reserves, it was difficult to defend the high import tarrifs and other barriers that prevail in that country. He also said that the south Korean Won should begin to move to reflect underlying economic fundamentals, "otherwise in two or three years' time, Korea will be in the same situation that prevails in Taiwan." Turning to the U.S. deficit with Japan of more than 50 billion dlrs, Yeutter said that this situation was not sustainable. "Something must give soon. If not, there is a great threat of U.S. legislative action to counteract that trend," Yeutter said.
Shr diluted loss 31 cts vs profit 17 cts Net loss 2,806,005 vs profit 1,513,395 Revs 15.0 mln vs 10.4 mln Avg shrs diluted 8,982,754 vs 8,804,899 NOTE: Current year includes loss of 3.4 mln dlrs from takeover defense expenses. Also includes losses of 1.8 mln dlrs vs 332,000 dlrs from equity in limited partnerships.
American Software Inc said its board declared a three-for-two stock split on Class A and Class B common shares, payable March 31, record March 16. The company said it expects to increase its semiannual dividend 12.5 pct to six cts per share post-split from eight cts pre-split.
Comdata Network Inc said it has entered into a letter of intent with a limited partnership managed by Welsh, Carson, Anderson and Stowe (WCAS) to merge Comdata into a corproration to be formed by WCAS. Comdata said in the merger each share of the company's stock would be converted at the holders election into either 15 dlrs in cash or a combination of 10 dlrs in cash and a unit of securities including common stock. Comdata said the terms are subject to the condition that WCAS' affiliate investors would own a minimum of 60 pct of the fully diluted stock of the new entity. Comdata said WCAS and its affiliate investors would commit 50 mln dlrs to buy the securities comprising the new entities units of securities resulting from the merger in the same proportions and at the same price as the company shareholders. Comdata said the move is subject to execution of definitive agreement and approval by Comdata shareholders as well as obtaining up to 200 mln dlrs in debt financing. WCAS told Comdata it believes that it can get commitments for this financing.
Noel Industries Inc said its board approved in principle a private placement of 900 units, each unit consisting of 1,000 dlrs of nine pct senior subordinated convertible debentures due Marcxh 31, 1991, and 95 warrants to purchase Noel common. The company said chief executive officer Leon Ruchlamer has supplemented the planned funding with 300,000 dlrs. It said the investment package is subject to shareholder approval and will be presented to its adjourned shareholder meeting on March 26. Noel said proceeds will be used for additional working capital and expanding its factory in Kingston, Jamaica. It said the debentures, which will be priced at 100 pct, will have interest payable semi-annually and be convertible into common after April 30, 1987, at seven dlrs a share. Each warrant will be exercisable after April 30 at 7.50 dlrs a share, the company added. It said holders of 80 pct of the units may request one registration by the company kof the underlying common shares any time after Jan 15, 1988. Holders of the debentures and warrants will also have piggyback registration rights.
General Refractories Co said it agreed to sell its European refractories and building products operations for about 62 mln dlrs to an Austrian investor group. The European operations had sales of 186 mln dlrs in 1985, the last year for which results have been released, the company said. The sale, to a group headed by Girozentrale Bank of Austria, is subject to shareholder approval by April 24, 1987, it said. Its board has approved the deal, it said. General Refractories' mineral operations are not affected.
Brazil has no set target for its coffee exports following this week's breakdown of International Coffee Organization talks on export quotas, President of the Brazilian Coffee Institute, IBC, Jorio Dauster said. He told a press conference Brazil now had to reconsider its export plans and that the 15.5 mln bag export figure which it had proposed for itself earlier should no longer be taken as the country's export target to ICO-member countries. The 15.5 mln bag offer had been made on the assumption an agreement would bring stability to world markets, he added. It had been a gesture to ease negotiations, but the lack of an agreement leaves it no longer valid and exports could be above or below 15.5 mln bags, he said. Dauster said he would talk to producers, exporters and market analysts before taking any decision on export policy, but any future policy would be flexible and adjusted to market conditions. "We will not take any short-term decisions which might cause markets to panic," Dauster added. He said it would be a policy which shows Brazil has coffee to sell and that it could do so without an ICO agreement. "Brazil has coffee (to sell) and wants to show that it does not need an ICO agreement as a crutch," Dauster said. Commenting on the breakdown of the talks, Dauster said consumer proposals would have implied a reduction of one to two mln bags in Brazil's export quotas. "It was a proposal which would lead to a substantial loss for Brazil and which would be difficult for the country to recover," he said. The consumer proposal to base quotas on a six-year moving average of exportable production surpluses would lead to overproduction as countries boosted output to win higher quotas, he said. Dauster rejected reports which said Brazil's inflexibility had been the cause for the breakdown of talks, noting that its stance had the backing of 85 pct of producing countries. Close links would continue with these producers, particularly Colombia, Mexico and Francophone African countries, but Dauster said no joint marketing action was envisaged at present. He also said Brazil currently had no plans to return to a system of roaster buying contracts, although "no hypothesis has been abandoned." Dauster said he had not yet decided when registrations for May shipment coffee will be opened. He declined comment on whether the IBC will adopt a policy of opening registrations for up to six months in advance, as some exporters had suggested. He noted export registrations for the first four months of the year totalled around 5.5 mln bags, more than half the 9.9 mln exported in 1986 when drought reduced the crop to between 11.2 mln and 12 mln bags. He said that, although he had heard forecasts of 30 mln bags for the coming crop, the IBC would not make any estimate until late April.
Perkin-Elmer Corp said it
acquired
Net 5,521,000 vs NA Revs 358.1 mln vs 359.0 mln Year Net 55.3 mln vs NA Revs 1.43 billion vs 1.34 billion NOTE: Current year includes earnings of 49.6 mln dlrs for the four months ended April 30, 1986. Year-ago earnings not comparable because of acquisition by Aancor Holdings Inc on April 29, 1986.
Shr loss one ct vs profit 15 cts Net loss 10,863 vs profit 176,344 Revs 672,073 vs 766,066 Year Shr loss seven cts vs loss one ct Net loss 77,804 vs loss 16,627 Revs 1,717,810 vs 1,317,402
Leaks of a major Dutch official economic forecast due to be published on Monday indicate reduced economic growth and a renewed rise in unemployment this year, political and market sources say. Concern over an anticipated fall in Dutch competitiveness this year against a background of an average 2-1/2 pct wage increase, zero inflation and a firm guilder has triggered some calls for a change in monetary policy to help boost growth. But whatever the government's response, the central bank will stick to its policy of keeping the guilder firm, they say. The official forecasting agency Centraal Planbureau (CPB) publishes its 1987 outlook at the start of a week which will also see a key parliamentary debate on government finances and the economy. Merchant bank Pierson, Heldring en Pierson - in an estimate reflecting general sentiment - said last month that Dutch economic growth was now seen around one pct. Domestic consumer spending is not expected to offset the decline in export growth caused by slowing growth in West Germany, the main Dutch trading partner, and the lower dollar, Pierson said in its February economic outlook. The latest growth forecasts are well below a 1.5 to two pct growth figure seen by the CPB early last month and forecasts of 2.5 pct economic growth in 1987 made last September. The fall in unemployment is bottoming out and the government has already admitted it will not meet its goal of reducing unemployment by an annual 50,000 from 1986 to 1990. Some analysts and industry leaders have questioned central bank policy of pegging the guilder firmly to the mark and if necessary keeping interest rates up to support the guilder. Employers federation NCW chairman Fred Lempers criticised the guilder's revaluation in line with the West German mark in last January's European Monetary System (EMS) realignment and expressed concern over its effect on competitiveness. But the employers federation VNO noted the Dutch economy had become more competitive since 1980 and the fall of the dollar was affecting this gain more than the EMS realignment. Some analysts also question the central bank's decision not to copy the latest Bundesbank discount rate cut and instead lower money market rates and abolish a credit quota surcharge. Central bank president Wim Duisenberg has defended the move saying the bank had adjusted the rates with the most impact on the money market, noting "the (4.5 pct) discount rate is at the moment not the most important Dutch rate because it is already far below the market rates." Central bank officials say the heavy dependence on trade of the Dutch economy requires a stable exchange rate, and interest rate policies serve that goal. Analysts noted a large capital outflow from the Netherlands recently as foreign investments in Dutch stock are being sold to take profits. Loosening the tie between the guilder and the mark would reduce international confidence in the guilder and make it more dificult to attract foreign capital, they said, noting Dutch interest rates rose sharply when the guilder was not revalued completely in line with the mark in a 1983 EMS realignment. Many Dutch banks have reacted favourably to the decision not to copy the last German discount rate cut, but Pierson warned it could actually add to uncertainty over the guilder. Some analysts noted friction between the Finance Ministry and the central bank, with Finance Minister Onno Ruding having said before the Bundesbank discount rate cut he favoured lower Dutch rates but that the Germans should move first. One analyst said Ruding wanted to bring interest rates down to reduce the government debt burden. A Finance Ministry spokesman said lower interest rates were needed but denied any suggestion of conflicting views between the ministry and the central bank. "The cabinet's policy is steady, the guilder has to stay with the mark," he said.
Qtly div 73 cts vs 73 cts prior Pay March 31 Record March 16
Oper shr 57 cts vs 73 cts Oper net 6,051,000 vs 7,818,000 Revs 50.0 mln vs 56.0 mln Year Oper shr 1.06 dlrs vs 1.24 dlrs Oper net 11,301,000 vs 13,203,000 Revs 171.9 mln vs 207.4 mln NOTE: Current oper net excludes extraordinary income of 180,000 dlrs in qtr and 1,119,000 dlrs in year vs previous losses of 2,345,000 dlrs and 515,000 dlrs, respectively.
The EC Commission rejected all bids for free market bread-making and feed wheat and all bids for the special West German tender at today's weekly EC cereals tender, trade sources said here. It granted export licences for 123,000 tonnes of free market barley at a maximum rebate of 138.75 Ecus per tonne and 25,000 tonnes of maize at a maximum rebate of 133.75 Ecus, they said. Licences for 100,000 tonnes of the barley were awarded to French trade houses, they added.
Delegates from the National Pork Producers Council, NPPC, yesterday approved programs for control and eradication of pseudorabies and establishment of a national safe drug use program. The delegate body, attending the American Pork Congress in Indianapolis, approved a pseudorabies control and eradication program at the state level after a recommendation from NPPC's PRV (pseudorabies virus) oversight committee. The PRV committee received results of a three year, five state pilot project which had a 97.5 pct success rate in eradication of the disease within 116 hog herds. The project was jointly funded by the USDA and NPPC. "Primarily it (the program) allows individual states to deal with their own problems according to a timetable that suits them best," Mike Wehler, member of the NPPC's PRV oversight committee said. In regards to safe drug use, the delegates approved a plan asking that NPPC be active in establishing a national safe drug use program. The program would establish better relationships between producers and veterinarians and eventually lead to a quality assurance program in pork production, according to the plan. "This program basically communicates to the FDA that we are concerned about safe drug use and will do our part to use drugs safely, if FDA will allow the same policy to continue in effect," Wehler said.
The European Commission authorised the export of 33,500 tonnes of Irish intervention barley at today's tender for non-European Community destinations at 53.10 Ecus per tonne, grain traders said.
Shr 2.10 dlrs vs 1.72 dlrs Shr diluted 1.98 dlrs vs 1.72 dlrs Net 2,228,000 vs 1,730,000
Trade house Kaines said it sold Jordan two cargoes of white sugar at its buying tender today. The sale comprised two 12,000 to 14,000 tonne cargoes (plus or minus 10 pct) for Mar/Apr shipment, a Kaines trader said. Traders said the business was done at 235.5 dlrs a tonne cost and freight.
Securities and Exchange Commission Chairman John Shad said the SEC favors shortening the current 10-day period for disclosing takeover attempts but opposes putting restrictions on the use of so-called junk bonds. "We favor shortening the disclosure period to two days," Shad told members of the House Telecommunications and Finance subcommittee when asked for his recommendation. He said the SEC's responsibility was to provide full disclosure for securities, including junk bonds, and not to make decisions based on merit. He said junk bonds had some value because of their liquidity. Shad said he opposes proposals to require those attempting takeovers to file a statement on the impact the takeover would have on the communities involved. "We've opposed it in the past. It goes far beyond investor protection," Shad said. He said he had no comment on a proposal by House Speaker Jim Wright, D- Texas, to tax securities transactions.
Shr 22 cts vs 25 cts Net 472,000 vs 454,000 Revs 16.2 mln vs 15.2 mln Avg shrs 2,135,315 vs 1,835,325 12 mths Shr 71 cts vs 70 cts Net 1,393,000 vs 1,285,000 Rwevs 61,805,000 vs 55,367,000 Avg shares 1,960,319 vs 1,835,325
Federal Reserve Board Vice Chairman Manuel Johnson said that some U.S. banks have been too rigid in talks with lesser developed countries on debt refinancings and warned that a breakdown of the renegotiation process could be harmful. "There have been some difficulties in those negotiations ... banks have sometimes been too rigid," Johnson said in response to a question during an address before the Eastern Economic Association, an academic group. "I think there have been potential breakdowns in that process," he said, adding that an actual breakdown "would be very unfortunate." He declined to comment on the situation of specific nations and said it was not the Fed's role to become involved in such talks. However, he said it was "always a little bit risky" for a heavily indebted nation to seek refinancing without first negotiating with the International Monetary Fund on economic reforms. He added that he remains optimistic that current talks would be resolved successfully.
World Bank president Barber Conable said he believed that Brazil would come up with a medium term economic plan and that the current debt moritorium would be temporary. Speaking briefly to reporters following an address before the Export-Import Bank, Conable said that the bank had been urging the Brazilian government to come up with a specific plan designed to work the country out of its present economic difficulty. "Brazil would like to come up with such a plan," he said, adding: "the moritorium is likely to be a temporary affair." During his formal remarks, Conable made it clear that he believed Brazil must take some specific internal action. He said "they have everyone's attention but it must be followed by a construtive plan." He said that he expected Brazilian Finance Minister Dilson Funaro, who he met with last week to discuss the Brazilian debt suspension action, to return for further discussion but did not currently have a specific meeting arranged. Conable also told the gathering of mostly commericial bankers that in order for the Baker debt initiative to work all parties to the program must be on board.
First Union Corp said it has agreed to acquire First State Bancshares Inc of Pensacola, Fla., and its First State Bank of Pensacola subsidiary for about 457,000 common shares. First State has assets of about 110 mln dlrs. The acquisition, expected to be treated as a pooling of interests, is expected to be completed in the third quarter of 1987 subject to approval by regulatory agencies and First State shareholders.
Qtly div 12.5 cts vs nil Pay April 3 Record March 16 Note: in quarters preceeding 4th qtr, dividend was 29 cts.
Shr 13 cts vs eight cts Net 1,364,712 vs 881,082 Rev 11.6 mln vs 11.5 mln NOTE: Qtr includes extraordinary gain of 586,826 dlrs, or six cts a share, versus 183,850 dlrs or two cts a share in fiscal 1986's first qtr.
Combined International Corp should have another strong year, President Patrick G. Ryan told analysts, although he declined to forecast earnings specifically. In 1986, the company reported operating income of 5.51 dlrs a share, up from 4.84 dlrs a share a year earlier. Revenues increased to 1.81 billion dlrs from 1.36 billion dlrs. Ryan said Combined is testing a direct response long-term care product through its Union Fidelity Life Insurance Co and has plans to offer it through Ryan Insurance Group. In answer to a question on Combined's possible exposure to AIDS-related health claims, Ryan said it was "minimal" although he conceded that every carrier who provides coverage is vulnerable.
Shell Francaise
Corn sales gained 2,494,900 tonnes in
the week ended February 26, the highest weekly total since
August 1984 and two and three-quarter times the prior week's
level, the U.S. Agriculture Department said.
In comments on its Export Sales Report, the department said
sales of 1.0 mln tonnes to the USSR -- previously reported
under the daily reporting system -- were the first sales for
delivery to the USSR under the fourth year of the U.S.-USSR
Grains Supply Agreement, which began October 1.
Japan added 689,700 tonnes to previous purchases and sales
to unknown destinations rose by 429,800 tonnes.
Wheat sales of 362,400 tonnes for the current season and
151,000 for the 1987/88 season were down by more than half from
the previous week's combined sales, it said.
Egypt, Japan and Iraq were the major wheat buyers for
delivery in the current year, while sales to China decreased by
30,000 tonnes for the current season, but increased by 90,000
tonnes for the 1987/88 season, which begins June 1.
Net sales of soybeans totalling 274,200 tonnes equaled the
preceding week, but were nearly a third below the four week
average. Major increases were for Belgium, South Korea, Mexico
and Italy, it said.
Soybean cake and meal sales of 103,700 tonnes were 2-3/4
times the previous week's marketing year low, but six pct less
than the four week average.
Major increases for West Germany, Belgium, Spain, Italy and
Australia were partially offset by declines to unknown
destinations.
Soybean oil sales of 5,400 tonnes were the result of
increases for Venezuela and reductions of 500 tonnes for
unknown destinations.
Combined sales activity in cotton of 75,200 running bales
-- 44,700 bales for the current year and 30,500 bales for the
1987/88 bales -- were 56 pct below the prior week's good
showing, the department said.
Major purchasers for the current season were South Korea,
Japan, Taiwan and Thailand, while South Korea and Indonesia
were the major buyers for the 1987/88 season, which begins
August 1.
The sharp fall in international coffee
prices will not affect Colombia's external credit situation,
finance minister Cesar Gaviria told reuters.
He said the current depression on world coffee markets was
not totally unexpected and would have no immediate bearing on
Colombia's financial state which he described as sound.
"Our foreign debt is high, but we can pay and I hope the
foreign banking community will maintain its position toward us,"
he said.
Colombia, the only major latin american country not to have
rescheduled its external public debt, has a total foreign debt
of 13.6 billion dlrs.
Calls for a rescheduling of the debt have come this week
from the opposition conservative party and the biggest trade
union following the coffee price drop. Gaviria said lower
coffee prices this year could mean a loss of 1.5 billion dlrs
in revenues for 1987.
Gaviria submitted to the world bank and the inter-american
bank last week in new york a borrowing plan, for a total of
3.054 billion dlrs to be disbursed over the next four years,
which he said was approved.
Great Western Financial
Corp's subsidiary Great Western Bank said it will purchase
three retail banking branches in south Florida with total
deposits of 90 mln dlrs.
Great Western said it will purchase branches in Deerfield
Beach and Hollywood with approximately 80 mln dlrs in deposits
from Guardian Savings and Loan Association, and one in Palm
Beach with approximately 10 mln in deposits from Goldome
Savings Bank.
First Federal Savings of Arkansas FA
said it bought back 4.75 mln dlrs of its 15-3/8 pct
subordinated capital notes.
There are now 14.25 mln dlrs of these notes outstanding,
compared to an original issue of 25 mln dlrs sold in September
1985, First Federal said.
Brazil's recent announcement of a
suspension in interest payments on 68 billion dlrs of foreign
debt gave the banking system the jitters and confirmed views
among many international economists and commodities analysts
that Brazil will continue to flex its trading muscles in 1987.
The developing world's most indebted nation is also its
most prolific exporter of agricultural commodities such as
coffee and soybeans, and might maximize foreign exchange
revenue by selling hard on world markets, economists said.
"That sounds like a reasonable strategy. But there is no
way they can trade their way out of this situation," Aldo
Roldan, Vice President for International Services at Chase
Econometrics, said.
Roldan told Reuters that Brazil not only had to tackle the
problems of satisfying domestic demand and competing on glutted
world markets, but also had to work to make its position on
foreign exchange markets more profitable.
"Domestic costs have increased (due to inflation) and
exporters have not had the same offsetting movement in exchange
rates," Roldan said.
The Chase economist also said commodities markets were
depressed and generally did not appear very promising for a
country like Brazil, where pure commodities account for some 50
pct of exports and in 1986 had a total value of around 23
billion dlrs.
But he added: "They are always pretty aggressive and they
have good foreign marketing channels."
Analysts said a key factor in Brazilian trade will be
coffee, and even without background pressure from foreign
creditors the world's largest producer was expected to hit the
market this year with a vengeance.
Negotiations between International Coffee Organization
(ICO) members to re-establish producer export quotas broke up
earlier this week with major producers and consumers accusing
each other of intransigence.
"Brazil would not tolerate a change in ICO regulations,
which others wanted changed," one senior coffee dealer said.
The dealer, who declined to be named, said Brazil wanted to
preserve its market share. At the end of the talks, he said
Brazil hinted it could sell more than anyone else and others
would suffer.
Brazil will be an aggressive seller under any scenario but
as yet there is no sign of unusually heavy Brazilian sales, the
dealer said.
"If they do come into the market at this level it will go
lower and you could breach a dollar, ninety or eighty cents,"
he said.
New York coffee futures for May delivery settled 2.29 cents
lower Thursday at 104.68 cents a lb, while more distant
deliveries fell the six-cent maximum trading limit.
President of the Brazilian Coffee Institute, Jorio Dauster
told a press conference in Rio de Janeiro today that Brazil has
no set target for its coffee exports following the breakdown of
the ICO talks on export quotas.
Many economists and analysts believe soybeans could be the
focus of possible stepped-up Brazilian marketing efforts. "They
will be more aggressive this year than they have ever been,"
according to Richard Loewy, analyst for Prudential-Bache
Securities Inc.
Loewy believes the foreign debt problem, a good crop, plus
difficulties with storage would help motivate selling of the
Brazil soybean crop. "Brazilian farmers also need cash flow and
they can't afford to store the crops," he said.
The Chicago soybean complex has been nervous for some time
about large South American crops developing under near ideal
conditions towards record yields.
"We are going to see a very rapid decline, earlier than
usual, this year in our (U.S.) exports," Loewy said.
Tommy Eshleman, economist for the American Soybean
Association (ASA), said this year's Brazilian soybean harvest
could total 18 mln tonnes, versus 13.7 mln last year.
Marketings will be very aggressive this summer when prices
are usually high relative to the rest of the year due to the
vulnerability of the U.S. crop to bad growing weather.
Another incentive to sell might be trade anticipation of a
reduction in the U.S. government soybean loan rate, offered to
farmers who give crops as collateral, Eshleman said.
He said there has been some uncertainty this year about the
soybean loan rate, which acts as an effective floor for prices
by keeping supplies away from the free market. Farmers can
forfeit their beans to the government rather than repay the
loan.
"We're getting into a period when they (Brazil) are
starting to harvest and starting to export," Eshleman said. But
he added it will be a while before U.S. exports fall to below
10 mln bushels a week from around 20 mln bushels currently.
Jose Melicias from the research department of Drexel
Burnham Lambert said Brazil would be trying to export as much
as it can this year because of its economic situation.
He said the debt situation was a major consideration. "The
Brazilian government also does not have enough money to pay for
storage," he added.
Asked if a return to an inflationary environment in Brazil
would make farmers inclined to hold onto crops, Melicias said
it would not make a big difference.
On other commodity markets, Brazil's selling impact may be
muted no matter its need to generate capital.
Brazil is faced with a poor 1986/87 sugar harvest, which
could limit exports to the world market, analysts said. The
country may have oversold and be unable to honor export
commitments, and this plus higher domestic demand caused by
consumer price subsidies on ethanol and refined sugar, will
give it little room to stretch exports, they said.
Brazil's other major crop, cocoa, is in its third year of
surplus. "Cocoa consumption is basically flat and last year it
fell, so I don't think they can start throwing out cocoa and
find many more markets for it," one analyst said.
"If they come out as aggressive sellers, the market would
collapse and they can't afford to do that," she added.
Shearson Lehman Brothers Inc, the
brokerage subsidiary of American Express Co
Mexico has temporarily suspended
overseas coffee sales due to falling prices triggered by the
failure of the International Coffee Organisation (ICO) meeting
to agree a quota system at its latest meeting, the official
Notimex news agency said.
"We're just waiting a while for prices to improve," an
unidentified Mexican trader told the agency.
Mexico has already sold 80 pct of its export coffee
produced in the year to last September, the source said. The
country exports about 3.3 mln 60-kilo bags a year.
Costa Rica's economy minister said he
sees new hope for winning changes in the International Coffee
Organisation system of export quotas.
Minister Luis Diego Escalante, who serves as president of
the Costa Rican Coffee Institute, said he was hopeful because
of the support offered Costa Rica and other smaller producing-
nations by such major consumers as the United States, Britain
and the Netherlands at last week's ICO meeting in london.
Escalante told a news conference here he "carried the weight
of the negotiations" at the meeting by calling for larger export
quotas for the smaller coffee-growing nations.
Costa rica is insisting, Escalante said, on a new quota
system based on a producing nation's real export capacity, once
it has satisfied internal demand.
"There are countries such as our own whose sales
possibilities are close to or above 100 pct of their current
quotas," Escalante said.
At the same time, there are countries favoured by the
current system that have been assigned quotas far above their
export potential, he said.
The current ICO quota system is "unfair and autocratic,"
Escalante said.
Escalante attributed the nosedive in international coffee
prices over the last week to speculation rather than real
matters of supply and demand.
"Be careful," he warned, "there's not as much coffee in the
world as they say. What there is are bags of sawdust."
West German gross fishmeal imports rose
60,260 tonnes, or 14.6 pct, last year to 471,891 tonnes, the
highest level since 1972, trade sources said.
Re-exports fell by 6.6 pct, resulting in a surge in net
imports from 175,901 to 251,708 tonnes, an increase of 43 pct.
Total West German consumption was estimated at around a
high 287,000 tonnes, largely reflecting attractive prices. The
sources, however, could not give comparative figures for 1985.
South American producer countries supplied 97 pct of West
German requirements, with Chile shipping 229,176 tonnes (1985 -
182,959) and Peru 210,513 (147,014) tonnes.
The two South American countries' share of the West German
market rose to 93.2 pct from 80.2 pct because imports from
Ecuador fell to 21,110 tonnes in 1986 from 51,722 in 1985.
West Germany imported 56,823 tonnes of fishmeal in
December, up from 46,236 tonnes in the same 1985 month, with
re-exports at 22,262 tonnes after 25,062 a year earlier.
IMRE Corp said it has received
commitments for a group of European institutions to buy about
400,000 IMRE shares for 2,500,000 dlrs, with closing expected
on March 16.
Pace Membership Warehouse Inc said it
made a series of recent purchases of its 13 pct subordinated
notes totaling about 13.6 mln dlrs.
It said the amount of notes originally issued totaled 60
mln dlrs.
Pace also said it may purchase additional outstanding notes
in the future.
Dome Petroleum Ltd's 23.2 pct stake of
gold producer Dome Mines Ltd continues to be for sale "at the
right price," spokesman David Annesley said in response to an
inquiry.
Reaffirming remarks made last year by chairman Howard
Macdonald, Annesley said the company is considering selling its
stake in Dome Mines.
Concerning Dome Petroleum's 42 pct stake in
The failure of International Coffee
Organization talks on the reintroduction of quotas has
paralysed business on the Hamburg green coffee market in the
past week, trade sources said.
There was only sporadic activity for spot material, which
was mainly requirement buying, they said, adding that
pre-registered coffees were no longer available.
They said they expected Brazil and Colombia to open export
registrations for May shipment next week. However, the
president of the Brazilian Coffee Institute, Jorio Dauster,
said yesterday he had not yet decided when its registrations
would reopen.
South Africa's director-general of
finance Chris Stals said he was optimistic about reaching a
mutually acceptable agreement with foreign bank creditors in
debt renegotiation talks scheduled to begin next month.
Stals, the country's chief foreign debt negotiator, said "we
are busy finding out how they (banks) feel. They all have
different opinions. There is no consensus."
But asked if he was optimistic on agreement for a new debt
repayment plan, Stals replied "yes" in a telephone interview from
his Pretoria office.
He declined to comment further before the major review of
the interim debt agreement regarding the moratorium on
principal repayments on 13 billion dlrs of South Africa's 24
billion dlr external debt.
The agreement on the moratorium with some 330 creditor
banks expires on June 30. "We have had a series of discussions
with a great number of banks both bilaterally and individually
on the foreign debt situation in preparation for April," Stals
said.
He said no date has been set for the meeting and declined
to comment on published reports in the past few months that
banks may demand accelerated repayments.
Banking sources here said only an escalation of South
African political unrest would increase foreign pressure on
repayments.
Finance Minister Barend du Plessis said last month that in
the forthcoming talks South Africa would give a fair deal to
all creditors but not agree to "unrealistic demands."
The Mississippi River is now open for
barge traffic up to the Twin Cities in Minnesota after repairs
were completed and the first barges moved upstream through Lock
and Dam 20 near Quincy, Ill at 0600 CST today, an Army Corps of
Engineers spokesman said.
About 14 to 15 inches of ice were reported between locks
three and four on the upper Mississippi River, but other
sections were generally free of ice, the spokesman said.
Midwestern weather has been so mild that barges probably
could have kept loading at Mid-Mississippi River terminals
through the winter, if Lock and Dam 20 had not been scheduled
for repairs, he said.
The Peoria and La Grange locks on the Illinois River are
still scheduled to close July 13, for two months of repairs.
Hertz Corp, a unit of UAL Inc, filed
with the Securities and Exchange Commission for a shelf
offering of up to 500 mln dlrs of senior debt securities on
terms to be set at the time of sale.
Underwriters were not named in the draft prospectus.
Hertz said offering proceeds would be used for general
corporate purposes and to reduce short-term borrowings.
Moody's Investors Service Inc said it
downgraded 50 mln dlrs of debt of Allied Bancshares Inc and the
lead bank, Allied Bank of Texas.
Cut were the parent's senior debt to Ba-3 from Baa-2 and
commercial paper to Not Prime from Prime-2. The lead bank's
long-term deposits were reduced to Ba-1 from Baa-2 and
short-term deposits were cut to Not Prime from Prime-2.
Moody's cited the effects of a weak operating environment
on Allied's asset quality and profitability. The rating agency
expects nonperforming loans to remain high by industry
standards because of exposure to energy and real estate.
The U.S. National Association of
Wheat Growers (NAWG) urged the Reagan administration offer the
Soviet Union wheat under the export enhancement program (eep).
In a letter to Agriculture Secretary Richard Lyng, NAWG
stated its "strong support" for an eep offer to Moscow.
"We believe that a solid case continues to exist for Soviet
EEP eligibility, and the recently announced and reported Soviet
purchases of U.S. corn indicate a Soviet willingness to
purchase U.S. grain if it is competitively priced," NAWG said.
"Consequently, we believe it is important to renew the U.S.
eep offer and do all that is reasonably possible to ensure
mutual adherence to the terms of the U.S.-Soviet grain
agreement," the letter said.
The Reagan administration continues
to debate whether to offer subsidized wheat to the Soviet
Union, but would need assurances from the Soviets that they
would buy the wheat before the subsidy offer would be made, a
senior U.S. Agriculture Department official said.
"I think it still is under active debate whether or not it
would be advisable" to make an the export enhancement offer to
the Soviets, Thomas Kay, administrator of the department's
Foreign Agriculture Service, told Reuters.
"We'd need some assurances from them (the Soviets) that they
would buy if offered" the wheat under the subsidy plan, he said.
Kay called reports that such an offer was imminent "premature."
The Reagan administration's cabinet-level Economic Policy
Council is set to meet today to discuss, among other matters,
agricultural policy but is not expected to address a wheat
subsidy offer to the Soviet Union, administration officials
said earlier.
U.S. trade representative Clayton
Yeutter said Canada's finding announced today that U.S. corn
imports injure Canadian farmers is "totally unjustified."
"U.S. corn exports to Canada are so small that it is
inconceivable that they injure Canadian corn farmers by any
reasonable measure," Yeutter said in a statement.
He said if other countries follow Canada's lead it could
result in "a rash of protectionist actions throughout the
world." French corn growers have recently indicated they will
challenge U.S. corn gluten feed shipments to Europe.
Yeutter said the U.S. will examine the Canadian decision
closely and if the U.S. believes the decision was not based on
facts, "will carefully evaluate appropriate responses." Yeutter
did not say what steps the U.S. may take in response.
Shr profit nil vs loss nil
Net profit 28,565 vs loss 204,553
Revs 507,529 vs 6,563
Nine mths
Shr loss nil vs loss nil
Net loss 404,011 vs loss 649,495
Revs 938,345 vs 32,535
Total futures and options turnover on the
London International Financial Futures Exchange (LIFFE) fell
slightly during February, although daily average Eurodollar
volume set a new record, LIFFE said today.
Total futures and options turnover last month was 822,378
contracts, down from January's 881,778, but sharply above the
comparative February 1986 figure of 463,146 lots, it said.
Eurodollar turnover during February was 140,417 lots,
against January's 100,941 and the year ago figure of 81,648.
The daily average was a record 7,020 lots, up four pct from the
previous record, set in March 1985.
February trading encompassed a new daily record of 66,087
contracts on the 19th of the month, exceeding the previous
record of 61,398, which had been set on February 6, LIFFE said.
FT-SE 100 index futures volume was sharply higher during
February, with 22,109 contracts trading, against January's
15,279 and the year-ago level of 8,181.
Open interest also set new records last month in
Eurodollars at 29,372 contracts, in FT-SE 100 at 4,898 and in
short sterling interest rate futures at 19,846 lots.
Key futures volumes as detailed by LIFFE were:
Feb'87 Jan'87 Feb'86
Long gilt 424,865 525,354 134,420
Eurodollar 140,417 100,941 81,648
Short sterling 94,720 87,619 67,640
T-bond 84,694 87,980 133,766
FT-SE 22,109 15,279 8,181
Currencies 2,799 2,112 7,737
Short gilt 74 85 6,516
Key options volumes as detailed by LIFFE were:
Feb'87 Jan'87 Feb'86
Long gilt 44,640 54,329 ----
Eurodollar 3,580 1,720 2,844
T-bond 1,737 3,479 ----
Sterling 1,466 2,223 18,191
FT-SE 1,277 657 ----
Total options 52,700 62,408 23,238
(Long gilt, T-bond and FT-SE index options were not trading
in February 1986).
Dauphin Deposit Corp said it has
signed a letter of intent to acquire Colonial Bancorp Inc of
New Holland, Pa., in an exchange of 3.6 to 4.4 Dauphin shares
for each colonial share, depending on the market value of
Dauphin shares just before the merger takes place.
The company said the acquisition is subject to approval by
Colonial shareholders and regulatory authorities. Colonial had
assets at year-end of about 150 mln dlrs.
An investor group led by New York
investor George Soros said it was dissatisfied with Fairchild
Industries Inc management and was considering boosting its
holdings to as much as 49.9 pct of the aerospace and aviation
company's outstanding stock.
The group already controls 1,647,481 Fairchild Industries
shares or 11.5 pct of the total outstanding.
The group said it filed on Wednesday with federal antitrust
regulators for advance clearance to buy enough additional
shares to increase its total stake to up to 49.9 pct of the
total outstanding stock.
The group said its representatives had met with Fairchild
Industries officials to inform them "that they do not believe
management has been successful in enhancing or protecting
shareholder values."
It said it was considering the additional share purchases
to enable it to "assert a greater degree of influence over the
future management and policies of the issuer."
It said a decision on the specific level of share ownership
it would seek depended on market prices, future changes in
management policies, available financial resources and other
factors.
The group said it also reserved the right to pursue other
measures intended to influence Fairchild management and
policies, either alone or in concert with other investors.
The group includes Soros and Quantum Fund, an offshore
investment firm headquartered in Curacao, Netherlands Antilles
that is advised by Soros.
The group said that since its last SEC filing, made Jan. 2,
it had purchased no additional Fairchild shares and had sold
6,700 shares on the New York Stock Exchange Jan. 19.
A Fairchild Industries official later said Soros had told
the company he was not dissatisfied with its management.
"Contrary to the filing, Mr. Soros has told the company
today that he is not dissatisfied with management," Fairchild's
Bill Fulwider told Reuters.
However, Fulwider said the company would have nothing to
say at this time about Soros' disclosure that he may buy up
enough additional Fairchild shares to hold as much as 49.9 pct
of the company's outstanding stock.
Shr loss 3.86 dlrs vs profit 37 cts
Net loss 24,973,000 vs profit 2,389,000
Sales 62.5 mln vs 65.3 mln
Year
Shr loss 3.22 dlrs vs profit 1.32 dlrs
Net loss 20,861,000 vs profit 8,515,000
Sales 268.0 mln vs 272.7 mln
NOTE: 1986 earnings include a provision for restructuring
costs of 23,675,000 dlrs, or 3.66 dlrs a share (pre-tax) and
the effect of adoption of FASB 87 which reduced pension expense
by 617,000 dlrs for the quarter and 1,817,000 dlrs for the year
before taxes
Earnings include nonoperating income from the effect of
nonrecurring gains of 1,811,000 dlrs in the 1st Qtr of 1986
from the sale of its minority interest in Plexus Corp and
1,480,000 dlrs in the 3rd Qtr of 1985 related to the sale of
excess property
Hughes Tool Co rose one to 12-1/4 on
1,658,000 shares, apparently reflecting a belief that Baker
International Corp
Dome Petroleum Ltd is under pressure
from one of its largest creditors,
Qtr ends Jan 31
Shr six cts vs eight cts
Net 103,436 dlrs vs 134,360 dlrs
Revs 1,762,270 vs 1,282,463
Bradley Real Estate Trust said it signed
a 99-year lease for property in downtown Minneapolis to BCED
Minnesota Inc.
The lease will increase net income by about 24 cts a share
on a post-February 1987 three-for-two stock split basis. For
1986, the Trust reported net income of 1.3 mln dlrs or 38 cts a
share on a post-split basis.
Bradley will also be entitled to a one-time additional
rental payment of 30 cts a share upon BCED entering into a
space lease with a prime national tenant and a share in a
portion of net cash flow from operations on the property.
An American Farm Bureau
Federation (AFBF) official said that far from hurting Canadian
corn producers, U.S. farm programs benefit all foreign
producers.
AFBF president Dean Kleckner made the comments in response
to the ruling earlier today by the Canadian Import Tribunal
that subsidized U.S. corn imports were injurious to Canadian
growers. The tribunal upheld a countervailing duty of 84.9 U.S.
cents a bushel.
"Farm Bureau specialists went to Ottawa and testified
previous U.S. farm programs have actually benefited all foreign
producers by reducing the amount of corn grown in the U.S. (and
losing market share), while exerting an upward influence on the
price of corn Worldwide," he said.
The U.N. Centre on Transnational
Corporations has issued a report containing guidelines and
recommendations for negotiating natural gas clauses in
agreements between transnational petroleum corporations and
host countries.
The U.N. said the report was aimed at promoting petroleum
exploration in areas perceived as being gas prone. The 49-page
report contains an in-depth examination of the problems of gas
developoment and looks at different ways in which contractual
terms might deal with the risks in gas development associated
with pricing, marketing and volume.
A proposed buyout of Taft Broadcasting
Co by Dudley Taft and other investors includes a plan to sell
the company's Entertainment Group, according to one of the
investors.
Jonathan Nelson, managing director of Narragansett Capital
Corp
The U.S. Treasury proposed allowing
temporary imports of South African uranium ore and uranium
oxide until July 1 under certain conditions pending
clarification of anti-apartheid laws passed by Congress last
fall.
The Treasury said it proposed allowing the temporary
imports because it felt Congress had not intended when it
passed the comprehensive South African sanctions bill last fall
-- overriding President Reagan's veto -- to hurt U.S. industry.
The Treasury said an outright U.S. ban of uranium ore and
oxide might cause foreign electric utilities to divert their
South African origin ore and oxide to other countries including
the Soviet Union for processing.
The Treasury also proposed allowing U.S.-origin goods to be
imported temporarily from South African state-controlled
organizations for repair or servicing in the U.S.
The South African sanctions law, enacted by the U.S. to
protest the apartheid laws of racial segregation practiced by
South Africa's white minority government, prohibited imports of
uranium ore and oxide, iron and steel, coal and textiles at the
end of 1986.
Colombia denied having sold 440,000 60-kg
bags of old crop coffee below current market prices to clients
in Europe and Asia.
A spokesman for the National Coffee Growers Federation,
commenting on rumours which had circulated in market circles,
said these were false.
Shr 3.9 cents vs 4.2 cents
Interim dividend three cents vs same
Group net 35.8 mln ringgit vs 39.1 mln
Pre-tax 77.3 mln vs 99.8 mln
Turnover 1.16 billion vs 1.05 billion
Note - dividend pay May 22, register April 24.
China has raised the prices it pays
farmers for cotton, edible oil, sugar cane and beets to reverse
a decline in output in 1986, He Kang, Minister of Agriculture,
Animal Husbandry and Fisheries said.
The China Daily quoted He as saying China should adopt
intensive farming to increase per hectare output and improve
crop quality and maintain arable land at 111 mln hectares. He
gave no details of the price increases.
On grain, He said the state will cut the quota it purchases
from farmers by 50 mln tonnes and abolish the practice of
purchasing through agents.
He said the state will increase investment in agriculture
and supplies of fertiliser, diesel oil and other production
materials and stabilise fertiliser and diesel oil prices.
The state offers cheap fertiliser and diesel oil and
payment in advance to farmers who contract to supply grain at a
low state-fixed price.
He said China aims to produce between 425 and 450 mln
tonnes of grain by 1990, up from a target of 405 mln this year
and an actual 391 mln last year.
He gave no more details.
Increased federal government borrowing
needs and a growing unwillingness by foreign investors to buy
mark assets could push yields in German public authority bonds
higher this year, bond market sources say.
"At the moment we have a sideways movement in the short-term
rates. But how rates move in the long end will depend strongly
on foreigners," one portfolio manager for a large securities
investment house in Frankfurt said.
The sources also said the government had already stepped up
its borrowing programme in anticipation on increased needs.
Friday's loan stock was the third this year already, the
sources noted. It carried a 10-year maturity, a coupon of six
pct and price of 100-1/4 to yield 5.97 pct at issue.
This compared with the last issue which had a 5-3/4 pct
coupon priced at 99-3/4 pct for a yield of 5.75 pct.
But dealers said the terms were not enough to attract
foreign investors, and the federal government would have to
push yields higher in future if it wanted to borrow again soon.
Sources noted federal government issues had also increased
in size, with the introduction of a four billion mark volume
only starting last May.
One finance ministry economist said "It isn't more. It's
just the size (of each bond) which has increased." He added
conditions in the capital market currently remained fairly
favourable for raising new debt.
Until recently, federal issues sold very strongly abroad,
with up to 90 pct of some being placed with foreign investors.
With the recent stabilisation of the U.S. Dollar, however,
foreign investors have begun to back away from the market, as
hopes of further currency gains in marks diminish.
Sources said the government has may have already stepped up
its borrowing, having raised more than 18 billion marks.
The government made net borrowings of 23 billion marks in
1986. But Bundesbank statistics showed that net borrowing
through bonds was 26.6 billion.
The sources said this indicated a move by the government
out of other types of debt to gain access to foreign funds
through the more acceptable loan stock form.
Although new credit needs were partly inflated by a large
amount of issues maturing recently, other factors, including
the government's tax reduction program, would also reduce
income next year. "The problem here will be the tax reform," the
portfolio manager said.
He added that the government's cut in its top income tax
rate to 53 pct from 56 pct in 1988 would make it difficult for
the government to reduce borrowings.
The sources said the government would fall far short of
covering all of its 40 billion marks in lost revenue from the
tax reform by making expenditure cuts and would be forced to
fall back on debt markets in one form or the other.
The portfolio manager noted that besides the three federal
government loan stocks so far this year, it has also fallen
back twice to raise a total 6.43 billion marks through the
issue of fixed-rate medium-term "Kassenobligation" notes.
A finance ministry economist said the government did not
expect to have any trouble keeping to its plan to borrow only a
net 22.3 billion marks this year.
Though many sources agreed, they added that the trend would
probably not continue next year as the further tax cuts come
into effect.
"I would expect the efforts for a further tax reform would
mean government borrowing will increase," the manager said.
Bond prices last week were slightly firmer on balance, with
the Bundesbank's public authority bond yield calculation
falling to 5.64 pct on Friday from 5.66 a week earlier.
But sources said foreign demand for the new federal
government loan stock was slack, as sentiment grows that the
dollar may now rise against the mark.
"The demand wasn't so good," a dealer for a German bank in
London said.
The dollar's recent slight appreciation against the mark
even meant that foreign investors have sold mark bonds
recently, some dealers said.
The Asian dollar market continued to
expand in December with total assets and liabilities rising to
200.60 billion U.S. Dlrs from 188.54 billion in November and
155.37 billion in December 1985, the Monetary Authority of
Singapore said.
It said the increase came mainly from interbank activity,
with interbank lending rising to 146.61 billion dlrs in
December from 134.76 billion in November and 104.93 billion in
December 1985.
Interbank deposits increased to 158.52 billion dlrs against
147.95 billion and 120.03 billion, respectively.
Loans to non-bank customers increased in December to 38.74
billion dlrs from 38.64 billion in November and 37.44 billion
in December 1985.
Deposits by non-bank customers rose to 33.81 billion dlrs
against 33.60 billion and 28.02 billion.
The Dutch central bank said it has
accepted bids totalling 6.5 billion guilders at tender for new
eleven-day special advances at 5.3 pct covering the period
March 9 to 20 aimed at relieving money market tightness.
Subscriptions to 500 mln guilders were met in full, amounts
above 500 mln at 35 pct.
The new facility replaces old seven-day advances worth 4.8
billion guilders at the same rate.
Unilever Australia Ltd is issuing 40 mln
Australian dlrs of bonds due April 14, 1990 carrying a coupon
of 14-3/4 pct and priced at 101-1/2, said County NatWest
Capital Markets as lead manager.
The bonds are guaranteed by Unilever PLc whose outstanding
debt securities are rated AAA. The bonds are non-callable and
will be available in denominations of 1,000 and 10,000 dlrs.
The securities will be listed on the Luxembourg Stock Exchange.
Fees are a one pct selling concession and 1/2 pct combined
management and underwriting.
Hundreds of marines were on alert
at 11 key Brazilian ports after 40,000 seamen decided to remain
on indefinite strike, even after the Higher Labour Court
Saturday ruled it illegal, union leaders said.
The halt, the first national strike by seamen in 25 years,
started on February 27, and union leaders said they would not
return to work unless they got a 275 pct pay rise. Shipowners
have offered a 100 per cent raise, which the seamen rejected.
"We have nothing to lose. If they want to lay off the
workers, fine, but we are determined to carry on with our
protest until the end," a union leader said.
more
He said they had decided in a meeting that if the marines
take over the ships, the seamen would abandon the vessels and
let the marines handle the situation by themselves.
A spokesman for the Rio de Janeiro Port said the order to
send marines to take over the ports was given by Navy Minister
Henrique Saboya on grounds that ports are areas of national
security. But he said there were no incidents. The strike has
cut exports and imports and made an estimated 160 ships idle.
Petrol station owners in four states also continued their
shutdown and there were fears that the combination of the two
stoppages could lead to a serious fuel shortage.
West Germany takes "very seriously" the
recent undertaking by major industrial countries to promote
exchange rate stability around current levels, Finance Ministry
State Secretary Hans Tietmeyer said.
Talking to journalists before a meeting of European
Community Economy and Finance Ministers here, Tietmeyer
declined to say whether the February 22 Paris accord by the
Group of Five countries plus Canada included secret agreements
for stabilising currencies.
But he noted the official communique said the participants
agreed to cooperate closely to foster stability of exchange
rates around current levels. "We're taking this sentence very
seriously," he said.
Tietmeyer remarked that the dollar had hardly moved against
the mark since the meeting.
He said a slowdown in West German economic growth had been
caused by sharp exchange rate swings and that the Paris
agreement should help in this respect.
Economics Ministry State Secretary Otto Schlecht said the
Bonn government saw no current need for measures to bolster the
economy but was paying close attention to the slower growth and
had not ruled out "appropriate and timely" action if necessary.
Schlecht and Tietmeyer were speaking ahead of a discussion
by the EC ministers of the latest EC Commission report on the
economic situation in the 12-nation bloc.
The Commission has sharply revised down expected German
gross national product growth this year to two pct from 3.2 pct
predicted last autumn and says Bonn has the most room of any EC
country to stimulate economic activity.
Schlecht said the upturn in West Germany's economy slowed
in the fourth quarter of last year and the first quarter of
1987. But he said there was no cumulative downwards trend in
view that would make quick remedial action necessary.
He said a number of favourable indicators such as high
level of investment and a good climate for consumption meant a
recovery could be expected, while exports would pick up
slightly during the course of the year.
Uganda, Africa's second largest coffee
producer, was disappointed by the stalemate in recent coffee
talks in London, the chairman of the state-run Coffee Marketing
Board, CMB, said.
"This has not been good for coffee producers, more so in a
situation where the prices dropped by 200 pounds per tonne of
robusta coffee," J. Makumbi said when he returned from London on
Friday.
Producers and consumers failed to agree on a quota formula
to share the world's coffee production during International
Coffee Organisation, ICO, talks that ended last week.
Makumbi blamed the failure to set quotas, which were
suspended in Feburary last year, on Indonesian demands that its
quota be increased dramatically.
Uganda -- which earns about 400 mln dlrs annually from
coffee exports, over 95 pct of its foreign exchange earnings --
had sought to raise its ICO quota to 3.0 mln from 2.45 mln
60-kilo bags, according to sources close to the CMB.
The CMB has estimated that production will rise 20 to 25
pct in the current 1986/87 October-September season to over
three mln bags.
For several years Uganda had been unable to meet its ICO
export quota as rebel activity disrupted the coffee industry.
The Ugandan government depends on coffee export duties for
about 60 pct of its sales tax revenue and the industry employs
over half of salaried manpower.
In Dar es Salaam, Tanzania's Agriculture and Livestock
Development Minister Paul Bomani said today Third World
countries would suffer from the failure of the London coffee
talks.
"It is only the middlemen who will benefit, he said.
Bomani called on the ICO to convene another meeting within
two months, saying, "Once tempers have cooled and delegations
have had time to report back to their headquarters, common
sense will prevail."
THE FOLLOWING RAINFALL WAS RECORDED IN
THE AREAS OVER PAST 72 HOURS
PARANA STATE: UMUARAMA NIL, PARANAVAI 1.5 MILLIMETRES,
LONDRINA NIL, MARINGA NIL.
SAO PAULO STATE: PRESIDENTE PRUDENTE O.6 MM, VOTUPORANGA
12.0 MM, FRANCA 28.0 MM, CATANDUVA 10.0 MM, SAO CARLOS NIL, SAO
SIMAO NIL. REUTER11:43/VB
Regie Nationale des Usines Renault
Genex Corp said it has
completed an agreement for Eberstadt Fleming Venture Capital's
Plant Resources Venture Fund II and Morgenthaler Venture
Partners II and accounts managed by Citicorp
The National Weather Service said
warnings of gale force winds remained in effect over lakes
Erie, Huron and Michigan.
Also, warnings have been posted for large waves and beach
erosion along the shores of the Lakes. Winds gusting to 45 mph
caused four to six foot waves along the western and southern
shores of Lake Michigan during the morning.
Advisories for low wind chill temperatures have also been
posted across portions of upper Michigan and northern lower
Michigan. Early morning gusty winds brought the wind chill to
15 and 25 degrees below zero.
Freezing rain was scattered over central Colorado by mid
morning, also over central Kansas and northeast Illinois.
Snow reached from south central Montana across Wyoming,
western Nebraska and western Kansas. Snow also extended across
northern Wisconsin, upper Michigan and northern lower Michigan.
Rain reached along the northern Pacific Coast, across
northwest Utah, Maryland, Deleware, Virginia, the Carolinas,
Georgia and northern Alabama.
Over 240 mln bushels of government
grain have been allocated in redemptions for commodity
certificates since the program began April 30, according to the
Commodity Credit Corporation.
Redemptions included 11.4 mln bushels of corn valued at
17.0 mln dlrs, or an average per-bushel price of 1.492 dlrs,
since the current grain catalogs were issued December 1 by CCC.
Wheat redemptions totaled 9.6 mln bushels, valued at 23.7
mln dlrs, since December 1.
More
Den Danske Bank af 1871 A/S said it
was issuing the first certificates of deposit from a Danish
bank and that the CDs will be for six, nine and 12 months or a
negotiable period.
They will come in denominations of 10 mln crowns without
commission to the bank. Interest will be linked to money and
capital market rates and paid on a discount basis, with
certificates sold below par and maturing at par, a bank
statement said.
The certificates are not liable to stamp duty. "They will be
a flexible supplement to negotiated deposits and will give
companies and institutional investors better chances to
organise liquidity," the statement said.
Bank spokesman Arne Lund said "We could not do it earlier
because it was not possible for the tax authorities to say if
the certificates were liable to stamp duty or not."
He said the issue should be assisted by high short-term
interest rates.
The Treasury Department is due to
release funds for the Brazilian Coffee Institute, IBC, to pay
for the coffee purchased from local producers, the IBC said in
a statement.
IBC production director Oripes Gomes said in the statement
that payment would be made within the official guarantee
prices.
The statement said the IBC is sending a document to the
National Monetary Council asking the government to set a budget
for the purchase by the Institute of up to five mln bags of
coffee until June 30.
Gomes said in the statement there have been no problems in
the concession of funds by the Treasury for payment of the
coffee delivered to the IBC warehouses by the producers.
He said producers have already delivered 2.2 mln bags, of
which 1.5 mln bags have been paid for.
In the future, according to an agreement to be signed with
the Treasury, the Institute will no longer need to seek
approval by the Treasury to seek the release of additional
funds to buy coffee, the statement said.
South Korean Foreign Trade Minister
Rah Woon Bae said his country's firms have agreed to buy 1.8
billion dlrs worth of U.S. goods during his two-week buying
trip to the United States.
Rah said most of the purchases represented shifts from
Japanese firms to U.S. firms as part of South Korea's effort to
reduce its seven billion dlr trade surplus with the United
States.
South Korea has a five billion dlr trade deficit with
Japan.
Rolls Royce, the U.K.'s state-owned car
and aircraft engine maker, is seeking a 250 mln stg multiple
option facility to provide it with additional sources of
financing, banking sources said.
They said the facility, which will be syndicated among a
small group of the borrower's relationship banks, is being put
in place ahead of the privatisation of Rolls Royce in April or
May. At the borrower's request, terms will not be disclosed
until later this week, when bankers expect the syndication to
close. But while the terms are in line with the market, they
are somewhat tight, bankers said.
Total U.S. slab zinc stocks held by
smelters rose to 24,735 short tons at the end of February from
22,120 short tons at the end of January, the American Bureau of
Metal Statistics reported.
Zinc production increased to 26,732 short tons in February
from 25,786 short tons in January.
Shipments from smelters' plants declined to 23,560 short
tons in February from 24,564 short tons in January.
U.K. Insurers could face more than 30 mln
stg of insurance claims following the Zeebrugge ferry disaster,
a spokesman for Lloyds of London said.
It could take weeks before the extent of the compensation
claims for passengers, crew and cargo was known and also before
it was known how much, if any, of the ship could be salvaged,
said David Larner of Lloyds.
The hull and machinery of the Herald of Free Enterprise
were valued at 25 mln stg and were insured by Townsend
Thoresen's parent company Peninsular and Oriental Steam
Navigation Co Plc
Chrysler Corp said it valued its
proposed buyout of American Motors Corp at 757 mln dlrs, not
counting the effect of a contingent payment that could reach
350 mln dlrs based on AMC's future profits.
A Chrysler spokesman told Reuters that the letter of intent
signed with Renault, AMC's controlling shareholder with a 46.2
pct direct stake, includes a provision for Renault to be paid
35 mln dlrs in cash for AMC's finance subsidiary and 200 mln
dlrs in the form of an eight pct note. He said he did not know
the maturity of the note.
United Cities Gas Co said it
has acquired Lyle Propane Gas Co, a Cairo, Ga., propane gas
distributor, for undisclosed terms.
It said Lyle has sales of about four mln gallons annually
and serves about 4,000 customers in seven counties in southwest
Georgia and north Florida.
Immucor Inc said its board of
directors has declared a five-for-four stock split in the form
of a 25 pct stock dividend payable April 15 to shareholders of
record March 27.
National Heathcare Inc said it
signed an agreement to sell five rural hospitals to a private
corporation for about 18 mln dlrs, including the assumption of
six mln dlrs of debt.
The company said it plans to complete the sales, which are
subject to various regulatory approvals, by the end of July.
National Healthcare said it expects no material gain on
loss on the sales and that substantially all proceeds will be
used to reduce debt.
Canadian Pacific Ltd said fourth
quarter 1986 operating profit rose to 91.6 mln dlrs, or 30 cts
a share, from 50.7 mln dlrs, or 20 cts a share, a year ago.
The statement confirmed released preliminary earnings
figures the company released in February.
A 102.6 mln dlr gain on the sale of CP's Cominco Ltd
interest helped raise final 1986 fourth quarter profit to 193.8
mln dlrs or 65 cts a share.
The company said a drop in 1986 full-year operating profit
to 150.1 mln dlrs from a restated 252.7 mln dlrs in 1985 was
due mainly to lower world oil prices.
The company said its CP Rail division reported 1986 net
income of 119.4 mln dlrs, compared with 133.4 mln dlrs in 1985.
It said grain traffic recovered from drought-affected levels of
a year ago but was offset by weakness in other traffic areas
and increased expenses.
It said the net loss from its Soo Line increased to 33.5
mln dlrs loss from 8.7 mln dlrs loss in 1985, mainly due to
restructuring charges.
Canadian Pacific said favorable developments during the
year included reduced bulk shipping losses as a result of a
recovery in tanker markets and a turnaround in the forest
products sector.
The first 23 members have been elected to
the joint traded options facility of the London Commodity
Exchange (LCE) and the International Petroleum exchange (IPE),
the exchanges said in a statement.
More firms have applied and the final tranche will be
admitted on April one and trading is planned to start in early
June on the new trading floor on Commodity Quay.
Traded options need a volatile and liquid futures base to
succeed and chairman of the joint formation committee Jack
Patterson said the existing LCE cocoa, coffee, sugar and IPE
gas oil contracts should have no difficulty in providing this.
The Commodity Credit Corporation,
CCC, has authorized 25.0 mln dlrs in credit guarantees to North
Yemen to cover purchases of U.S. wheat under the Intermediate
Export Credit Guarantee Program (GSM-103), the U.S. Agriculture
Department said.
Under the program credit terms extended must be in excess
of three yeras, but not more than seven years.
All sales under the line must be registered and exports
completed by September 30, 1987, the department said.
The Commodity Credit Corporation,
CCC, has accepted one bonus offer from an exporter on the sale
of 4,400 tonnes of barley malt to Nigeria, the U.S. Agriculture
Department said.
The department said the bonus awarded was 100.00 dlrs per
tonne and was made to Rahr Malting Co and will be paid in the
form of commodities from the inventory stocks of the CCC.
The barley malt is scheduled for shipment during April,
1987.
An additional 76,300 tonnes of barley malt are still
available to Nigeria under the Export Enhancement Program
initiative announced December 10, 1986, it said.
The U.S. Agriculture Department
forecast Australia's 1986/87 wheat crop at 17.30 mln tonnes, vs
17.50 mln tonnes last month. It estimated 1985/86 output at
16.13 mln tonnes, vs 16.13 mln last month.
Australian wheat exports in 1986/87 are forecast at 14.50
mln tonnes, vs 15.00 mln tonnes last month, while exports in
1985/86 are estimated at 15.96 mln tonnes, vs 15.96 mln last
month.
Theodore Cross, editor of Business
and Society Review, a business publication, said an investor
group he heads has offered to buy Harper and Row Publishers Inc
for 34 dlrs a share cash.
In a filing with the Securities and Exchange Commission,
Cross said he proposed the takeover to the board of the New
York publishing house today.
Cross, whose investor group includes his wife, Mary, said
they already hold 261,650 Harper and Row common shares, or 6.0
pct of the total outstanding common stock. They said they have
spent 3.5 mln dlrs on their stake so far.
Cross said he proposed in a letter to Harper and Row that
the company be merged into a company Cross is forming.
Suggesting that the total cost of completing the merger
would be 190 mln dlrs, Cross said he would use 20 mln dlrs of
his own money for the deal and up to 170 mln dlrs which would
be borrowed from the First National Bank of Boston under a
revolving credit facility the bank has agreed to provide.
United Security Financial Corp of
Illinois said it has signed a letter of intent to buy Robert
Co. Brown and Co Inc's
Grand Metropolitan PLC said its
Grandmet USA Inc unit decided to sell its physical fitness and
exercise equipment business.
The company said Morgan Stanely and Co Inc is advising it
on the sale of the business.
Bancroft Convertible Fund Inc said it
filed a lawsuit in federal court in Newark, N.J., seeking to
block a hostile 30 dlr a share takeover offer by
An investor group that includes T.
Boone Pickens III said it set a deadline of 1600 EST on March
11 for its offer to acquire Japan Fund Inc.
The group, which also includes
T. Boone Pickens, the Texas oilman and
financier, said he believes the heady days the oil service
industry had in the early 1980s, when over 4,500 oil rigs were
once reported operating, will not return in his lifetime.
Pickens told Reuters he expects the rig count to drop to
below 600 before recovering. He added that oil prices will
eventually rise to 35 dlrs, then to 50 dlrs after 1990.
Currently, some 700 oil rigs are operating in the U.S.,
down sharply after oil prices slipped from 30 dlrs in late 1985
to around 10 dlrs in 1986. Prices are now around 18 dlrs. The
highest number of working rigs was 4,500 in December 1981.
"The rigs won't go back to work until the price of oil
gets above 30 dlrs," he said, adding that while he expects to
see 50 dlr a barrel oil, he does not expect to see 2,000 rigs
operating in his lifetime. Pickens is 58.
Pickens, who is currently touring the country promoting
his autobiography "Boone," said he does not believe the U.S.
should impose an oil import fee in order to stimulate the
domestic oil industry.
Japan's Finance Ministry auctioned 1,000
billion yen worth of tankoku, six month debt-financing paper,
to roll over previously issued tankoku maturing on March 19, a
spokesman said.
The last tankoku auction, on February 12, produced a record
low yield of 3.383 pct, reflecting expectation of a half point
cut in Japan's discount rate, he said.
In the previous auction for 1,000 billion yen, four major
Japanese securities houses took 92 pct of the issue amount in
an attempt to meet strong demand from large institutional
investors, securities managers said.
Securities managers said they expect the auction to go well
again this time as securities houses will try to expand their
inventories of tankoku on continuing good response from
institutional investors.
Contrary to a projected low yield on tankoku, short-term
interest rates have been resisting a fall on growing demand for
funds ahead of the March 31 financial year-end, they said.
The Bank of Japan has been trying to dampen money market
rates to make the latest discount rate cut effective, but so
far in vain, dealers said.
The auction results will be announced tomorrow.
There is little chance Soviet exports
to the United States will rise in 1987, but Moscow's current
trade reforms should result in more trade in manufactured goods
in future, a Soviet economist said.
Sergey Frolov, chief economist at Amtorg Trading Corp, an
agent for Soviet trade organisations and industries, told a
U.S.-USSR business meeting the Soviet Union produces few items
that western nations want.
But reforms, including upgrading the quality of goods and
allowing joint ventures with foreign firms, will encourage
modest export gains in future.
Frolov said the Soviet Union exported 500 mln dlrs worth of
goods to the United States in 1986 and imported 1.5 billion
dlrs worth. He gave no trade forecast for 1987.
But he said that even if all obstacles were removed, total
trade between the two countries would remain between two and
three billion dlrs a year.
"The post-detente embargoes have taught the USSR to limit
its trading with the U.S.," he said.
West German retail group Kaufhof AG
A one billion stg tranche of 8-3/4 pct
Treasury Loan stock due 1997 was exhausted in very early
trading on the U.K. Government bond market only minutes after
becoming available for trading, dealers said.
The Bank of England said the issue, announced on Monday and
available for official dealings from this morning, was no
longer operating as a tap. The striking price was a partly paid
41 stg pct, at which price bids were allotted 53.8 pct.
Dealers noted that strong demand had been detected for the
bonds yesterday afternoon and interest was further stimulated
by sterling's surge at the opening this morning.
The issue was announced on Monday, when it was widely seen
as a move by the authorities to brake market optimism for a
further U.K. Interest rate reduction following the half-point
cut in clearing bank base lending rates to 10.5 pct earlier in
the day.
Dealers said that the Bank's strategy succeeded in stemming
pressure for a further rate reduction only briefly, as the
market yesterday recovered all the ground it lost on Monday
immediately after the announcement.
Demand for the issue was lively from U.K. And overseas
sources, with particular interest seen from Japan.
The bonds were issued at a price of 96-16/32 stg pct,
partly paid as to 40 stg pct on application, although the
Government broker this morning sold them at a premium of one
stg pct over the partly paid issue price.
The issue has been designated the "B" tranche of the bonds,
since 1.3 billion stg of 8-3/4 pct Treasury Loan stock due 1997
is already in issue.
Dealers noted that the Bank of England last week issued one
billion stg of nine pct Exchequer bonds due 2002 in an effort
to dampen enthusiasm for an interest rate reduction caused by
sterling's uptrend on foreign exchange markets.
Last week's issue was sold out on its first day of dealings
but with nothing resembling the determined demand seen this
morning for the new tranche of bonds, dealers said.
After stifling pressure for a rate cut last week, the
authorities finally sanctioned a base rate reduction on Monday,
following it up with the announcement of the one billion stg
bond issue.
Sterling was briefly depressed by the rate cut but this
morning opened very strongly again, starting on a
trade-weighted basis at 72.6 against yesterday's final 72.1 and
later edging up to 72.7.
U.K. Money market rates declined again this morning by up
to 1/8 point, strongly reinforcing yesterday's speculation that
clearing bank base lending rates could drop into single figures
after the budget next Tuesday, money market dealers said.
U.K. Government bond dealers noted that under the influence
of stronger sterling and the further fall in money market
rates, prices this morning had opened as much as 3/4 point
higher at the longer end of the market.
Tesco Plc
The Belgian National Bank bought
foreign currencies against francs on the open market in the
week ended March 9, a Bank spokesman said.
In line with central bank policy he declined to give any
details of the amount bought.
The foreign currency purchased was used by the Treasury to
repay foreign debt and did not affect the Bank's foreign
exchange reserves. They slipped 394 mln francs to 37.33
billion, mostly due to sales of dollars for Special Drawing
Rights, the spokesman said.
News International
Saudi Arabia bought 5,000 tonnes of
refined bleached deodorised palm olein at its import tender
yesterday for April 16/25 shipment at 353 dlrs per tonne cost
and freight Jeddah, traders said.
Security Services Plc, a unit of
Securicor Group Plc, is seeking a 50 mln stg multi-option
facility, County NatWest Capital Markets said as arranger.
The facility will be for seven years and will allow the
borrower to issue multi-currency advances and sterling
acceptances through a tender panel.
There will be an underwriting margin of up to of 3/16 pct
over the London interbank offered rate. Underwriters will
receive a fee of 15 basis points on the available portion of
the facility and a fee of 10 basis points on the unavailable
portion, which could be for up to half the facility.
There will be a utilization fee of 1/16 pct when more than
half the facility is in use.
Securicor Group and other subsidiaries will guarantee the
facility.
Krupp Stahl AG
The borrowing limit of the Hong Kong
Exchange Fund, set up to regulate the value of the Hong Kong
dollar, has been raised to 50 billion H.K. Dlrs from 30 billion
by the legislature, an official statement said.
The limit governs total borrowing by the fund from the
government's general revenue account and various funds as well
as borrowing by the fund arising from money market operations.
The bulk of the government's fiscal surplus is invested by
the Treasury with the exchange fund against the issue by the
fund of interest-bearing debt certificates, Financial Secretary
Piers Jacobs said.
"At the close of the business today, the total amount of
debt certificates issued by the Exchange Fund in return for
money transferred from the general revenue account and the
various funds, in other words the total borrowing by the
Exchange Fund from these sources, will be 26.9 billion dlrs,"
Jacobs said.
He said borrowing arising from money market operations
would amount to an additional 2.9 billion dlrs, making a total
of 29.8 billion dlrs, just short of the borrowing limit of 30
billion dlrs.
Jacobs said the government's fiscal reserves are expected
to total 32 billion dlrs by the end of the current fiscal year
ending March 31.
"The current borrowing limit of 30 billion dlrs will,
therefore, constrain the ability of the Exchange Fund to
continue to take in these fiscal reserves by the issue of
interest-bearing debt certificates," he said.
"It will also constrain the ability of the exchange fund in
its money market operations," he added.
The Algerian authorities have regulated
the addition of chickpeas and barley used to make imported
coffee go further, the official APS news agency reported.
Taking advantage of scarcity, private roasters were selling
ground coffee mixtures which were 75 pct non-coffee, it said.
Since the beginning of March, the coffee market has been
strictly regulated by the state food marketing monopoly Enapal.
Now a third of imported coffee will be sold as pure beans
and two thirds as a ground mixture with a choice of 30 pct
chickpeas or 30 pct barley. In March private dealers will
handle 2,050 tonnes of pure coffee and Enapal 6,050 tonnes of
mixtures.
OPEC has reaffirmed its commitment to
fixed crude oil prices of around 18 dlrs a barrel and an
overall output ceiling of 15.8 mln barrels per day (bpd) to
defend prices, its president Rilwanu Lukman said.
He told a news conference here "After due consultation with
my colleagues in OPEC, I hereby wish to emphasize that Nigeria
and all member countries of OPEC remain determined to uphold
the December agreement by adhering strictly to their various
quotas and official selling prices."
Lukman added no extraordinary OPEC conference was planned.
"We are in a position to re-confirm that, despite misleading
news in foreign media to the contrary, ... OPEC member
countries as a whole produced below their agreed quota in the
month of February," Lukman, who is Nigerian oil minister, said.
Lukman put the overall OPEC output shortfall in February at
900,000 bpd and said this was as a result of their firm
determination to defend official selling prices of 18 dlrs
agreed upon last December in Geneva.
The December agreement set an overall output ceiling for
OPEC of 15.8 mln bpd for first half 1987 and restored fixed
prices as from February 1 around a reference point of 18 dlrs.
Oil prices rallied immediately after the Geneva accord but
fell again last month on reports that OPEC was producing more
than the agreed level.
"The idea was to suggest that OPEC's agreement would not
hold and this caused some customers to hold back purchases of
OPEC oil and resort to destocking to meet their needs," Lukman
said.
He said the 900,000 bpd shortfall last February was based
on the verified figure for 10 out of OPEC's 13 members, adding
that Nigeria alone had a shortfall in production of 100,000
bpd.
Iraq disassociated itself from the December agreement,
while the production figures of Ecuador and the United Arab
Emirates needed to be verified, Lukman said.
"If that is the price we have to pay to make the agreement
succeed, we are ready ... OPEC is not changing its price level
of 18 dlrs," the group's president said.
He said the OPEC price differentials committee meeting
formerly postponed to April had been put off indefinitely.
"Furthermore, no extraordinary meeting of the conference is
at the moment contemplated since most agreements reached in
December are being adhered to," he said.
Asked if the committee did not need to meet soon to narrow
the gaps in the prices of the various OPEC crudes -- fixed in
relation to the 18 dlr benchmark -- Lukman replied "We consider
the defence of our prices much more crucial than differentials."
Lukman said OPEC was aware that consumers had heavily drawn
on stocks of both crude oil and refined products to levels well
below this time last year and soon they would return to the
market in search of crude.
"We don't see that there is going to be any difficulty in
maintaining the 18 dlr price throughout the rest of the year,"
Lukman said.
The OPEC president praised non-OPEC oil producers, which he
said had contributed to the group's efforts to stabilise
prices, but he criticised Britain for maintaining its long-held
view not to do anything to help the market.
"We are quite confident, however, that in the long-term with
two-thirds of the world's reserves in OPEC hands, the future is
ours. We will use that advantage responsibly," he said.
Lukman described the disruption in Ecuador's output
following an earthquake as tragic, but refused to say if the
South American country would be allowed a higher output quota
when it recovered from the disaster.
Novell Inc said its board
declared a two-for-one stock split, payable to holders of
record at the close of business on MArch 31.
It said shareholders at the annual meeting approved a
doubling of authorized common shares to 30 mln from 15 mln and
a limitation of directors' liability.
The Bank of England said it gave the
money market assistance worth 106 mln stg this afternoon,
buying bank bills at the rates established on Monday.
The Bank bought 11 mln stg of band one bills at 10-3/8 pct
and 95 mln stg of band two paper at 10-5/16 pct. This is the
first time that it has intervened today.
The Bank has revised its estimate of the liquidity shortage
in the market down to 250 mln stg from 300 mln initially.
Hovnanian Enterprises Inc said
its board of directors has declared a two-for-one split of its
outstanding common stock.
The company said shareholders will receive one additional
share for each share held at the close of business on March 23,
1987 and additional shares will be distributed on April 13,
1987.
The U.S. merchandise trade deficit
on a balance of payments basis was a record 38.37 billion dlrs
in the October to December fourth quarter, the Commerce
Department said.
The record trade shortfall came after a revised 37.15
billion dlr third quarter deficit. The department previously
reported the third quarter deficit was 37.67 billion dlrs.
For the full year 1986, the merchandise trade deficit was a
record 147.7 billion dlrs, up from 124.4 billion dlrs in 1985,
the department said.
During the final quarter last year imports rose 2.78
billion dlrs or three pct to 95.7 billion dlrs, while exports
rose 1.56 billion dlrs or three pct to 57.33 billion dlrs.
The trade report on a balance of payments basis excludes
such factors as military sales and the costs of shipping and
insurance.
The Commerce Department said non-petroleum imports in the
quarter were up 2.7 billion dlrs or three pct to 87.7 billion
dlrs, with the largest increases in consumer goods, which rose
1.2 billion dlrs, and in non-monetary gold and passenger cars
from Canada, up 900 mln dlrs each.
Lumber imports from Canada fell 300 mln dlrs or 33 pct
because of a 15 pct duty on imports from Canada, the department
said. Passenger car imports fell 600 mln dlrs because of an 18
pct decrease in the number of South Korean-made imported cars
and a nine pct decrease from Japan.
On the exports side, agricultural exports rose 600 mln dlrs
or nine pct to 7.1 billion dlrs, primarily because of a 104 pct
or 600 mln dlr increase in soybean exports.
Soybean shipments to Western Europe rose sharply because
supplies from Brazil, a traditional major exporter, were
limited by drought.
Commerce said the U.S. trade deficit with Latin America
rose 900 mln dlrs to 2.6 billion dlrs, with Japan increased 700
mln dlrs to 14.8 billion dlrs and with Western Europe rose 200
mln to 7.2 billion dlrs in the quarter.
The deficit with newly industrialized Far East countries,
including Hong Kong, South Korea, Singapore and Taiwan, fell
500 mln dlrs to eight billion dlrs and with Canada the deficit
decreased 200 mln dlrs to 3.3 billion dlrs in the quarter.
In the full year 1986, imports rose 30.6 billion dlrs or
nine pct to 369.5 billion dlrs. Exports increased by only 7.3
billion dlrs or three pct to 221.8 billion dlrs.
Commerce said petroleum imports during 1986 fell 16.6
billion dlrs or 33 pct to 33.9 billion dlrs because of lower
prices. The average price per barrel decreased to 14.72 dlrs
from 26.41 dlrs.
Agricultural exports fell by 2.6 billion dlrs or nine pct
to 26.9 billion during the year. The average price of rice fell
27 pct, cotton was down 22 pct, corn 18 pct, wheat 16 pct and
soybeans nine pct.
The trade deficit with Japan for all of 1986 rose 11.1
billion dlrs to 54.6 billion dlrs and with Western Europe
increased 7.2 billion dlrs to 28.6 billion dlrs.
Shr loss 30 cts vs loss 43 cts
Net loss 891,000 vs loss 969,000
Revs 1,930,000 vs 1,815,000
Avg shrs 2.9 mln vs 2.2 mln
Nine Mths
Shr loss one dlr vs loss 1.36 dlrs
Net loss 2,622,000 vs loss 3,037,000
Revs 4,638,000 vs 4,105,000
Avg shrs 2.6 mln vs 2.2 mln
Canada's leading composite indicator
advanced 0.4 pct in December after gaining 0.4 pct in the two
previous months, Statistics Canada said.
The unfiltered index rose 0.8 pct in the month, a
turnaround from the 0.3 pct decline in November, the federal
agency said.
The manufacturing groups continued to post advances while
goods production rose 1.6 pct, the third increase in the last
four months. The advances, however, were offset by a
deceleration in household demand.
Bilfinger und Berger-Bau
AG
The French electricity utility
Electricite de France is issuing a five billion French franc
bond in three tranches, co-lead manager Banque Paribas said
here.
The issue is also being lead-managed by Credit Lyonnais.
The first two billion franc tranche carries a fixed
interest rate of 8.30 pct, with a life of 11 years 316 days and
redeemable en bloc at par at the end of its life. The issue
price will be 96.44 pct and the payment date is March 30.
The second tranche of 1.5 billion francs will be
denominated in 5,000 franc units and carry an 8.50 pct coupon,
payable December 14 each year.
The issue price will be 98.18 pct and it will have a life
of 12 years 259 days. Redemption will be en bloc at par at the
end of its life, and the payment date will be March 30.
Each bond will carry a warrant permitting subscription on
December 14, 1987 to a fixed-rate bond, which will be
integrated with the previous issue at an issue price of 98.18
pct, and with a nominal coupon of 8.50 pct.
The life of the issue will be 12 years.
A third tranche of 1.5 billion francs will be issued at a
variable interest rate, and the whole issue will be quoted on
the Paris Bourse.
Paribas and Credit Lyonnais will be market makers for the
first two tranches, the communique added.
J.C. Penney Co's stock rose sharply
after analyst William Smith of Smith Barney recommended the
stock, based on the company's strong earnings momentum and the
possibility of a stock buyback, dividend hike or stock split,
traders said.
"I am very impressed with the strong basic earnings story,"
analyst Smith said, noting that the company has "fine tuned its
buying and inventories, and has admirably controlled costs in a
time that they needed to."
The stock jumped 2-1/2 to 98-3/4.
Smith said the company ended 1986 with a strong cash
position of about 639 mln dlrs as compared to 158 mln dlrs the
year before. "This implies the possibility of a share buyback,
or significant dividend increase or a stock split," he said.
In addition, he said the company has been gradually
adjusting its merchandise mix and its gross margins have been
improving.
Smith expects the company to earn 8.25-to-8.50 dlrs a share
in 1987 as compared to the 7.06 dlrs a share earned last year.
Last year's results include a 69 cent charge for the buyback of
debt.
Completions of new homes fell 0.2
pct in January to a seasonally adjusted rate of 1.884 mln units
from 1.888 mln in December, the Commerce Department said.
The January fall came after a strong 6.4 pct rise from
November's rate of 1.774 mln units and brought completions to
6.7 pct above the January, 1986, level of 1.765 mln units.
In January, completions of single-family units rose 0.4 pct
to a seasonally adjusted 1.183 mln units from 1.178 mln units
in December while multi-family units fell 1.3 pct to 701,000
units in January, the department said.
Witco Corp said it is offering 140 mln
dlrs of 5-1/2 pct convertible subordinated debentures due 2012
through co-managing underwriters Smith Barney Harris Upham and
Co and Goldman Sachs and Co.
Each debenture is convertible into the company's common
stock at a rate of 54.55 dlrs per share, which represents a
conversion premium of about 25.8 pct over the last sale price
of 43-3/8 per share yesterday, it said.
Proceeds will be used to finance acquisitions and for
general purposes. The company said it has no agreements for and
is not in talks regarding any acquisitions.
Shr loss 38 cts vs profit eight cts
Net loss 10.4 mln vs profit 2,144,317
Revs 72.9 mln vs 67.4 mln
Nine mths
Shr loss 21 cts vs profit 38 cts
Net loss 5,747,393 vs profit 10.1 mln
Revs 224.6 mln vs 200.6 mln
NOTE: Current year net both periods includes 20.0 mln dlr
pretax charge for disposition of 21 underperforming
company-owned restaurants.
Current year net includes tax credits of 3,205,000 dlrs in
quarter and 7,305,000 dlrs in year.
Shares of Du Pont Co rose today after
accumulating recommendations from Shearson Lehman Brothers and
First Boston, traders said.
Du Pont, which opened with a two point gain, stood at
109-1/8, up 1-1/8.
First Boston's analyst was not available for comment.
Analyst Theodore Semegran of Shearson said he raised his
earnings estimates for the company to 7.25 dlrs a share in 1987
and eight dlrs a share in 1988. The company earned 6.35 dlrs a
share in 1986.
"Good domestic demand, higher operating earnings and a
strng export business, probably benefitting from a lower dollar
and effects of reduced imports in chemicals will continue to
aid Du Pont." He also noted that energy earnings in the first
quarter are better than expected because of the rise in crude
prices. Semegran expects first quarter earnings
of about 1.85 dlrs a share from 1.67 dlrs last year.
He also expects the company to raise its annual dividend
about 20 to 30 cts a share, from its current dividend of 3.20
dlrs a share, "and a stock split is possible but it has a low
probablility."
Cato Corp said it has filed for
an initial public offering of about three mln common shares.
Cato said the offering, to be made in late April or early
May, is expected to raise 35 to 45 mln dlrs.
Cato, which had been publicly held several years ago before
going private, operates a chain of women's specialty stores in
small to medium-sized towns.
Schering-Plough Corp said it
obtained an injunction against Nature's Blend Products Inc of
due to trademark infringement on its Fibre Trim label.
Under terms of the injunction, Nature's Blend agreed to
refrain from making and selling food supplement products under
the trademark Fiber Slim or using any any trademark that
simulates the trade dress of Fibre Trim.
Qtly div 14 cts vs 14 cts prior
Pay April 10
Record March 27
The New York Stock Exchange said
General Refractories Co had no comment on the activity in its
stock.
The company's shares were trading off 1-1/2 at 15-1/4.
The exchange said it contacted the company and asked if
there were any corporate developments to explain the unusual
activity. The company declined to issue a statement, the NYSE
said.
Belgian Budget Minister Guy
Verhofstadt has proposed a plan to sell off shares in several
state-owned enterprises, including national airline Sabena and
the postal and telecommunications authority, government sources
said.
They said the plan could raise more than 25 billion francs
in revenue over the next five years according to Verhofstadt's
projections, helping the government to reduce its huge budget
deficit, targetted this year at 418 billion francs.
But the scheme had received a guarded reception from the
Social Christian parties in Belgium's centre-right coalition
when Verhofstadt unveiled it at a cabinet meeting yesterday.
Discussion of the plan was likely to be long and difficult,
the sources said.
Verhofstadt proposes beginning the selloffs in the last
quarter of 1987, with the sale of 30 to 40 pct of state
investment company SNI. He expects the sale to raise three
billion francs, they added.
A 25 pct share in Sabena would be sold in mid-1989 for 1.5
billion francs, while 50 pct of the postal and
telecommunications authority would be sold off in two stages in
mid-1990 and early 1992, raising at least seven billion francs.
Also on Verhofstadt's list are the Maritime Transport
Authority, leading gas distributor Distrigaz, CGER savings
bank, CGER, and several other credit institutions.
Le Soir daily quoted CGER vice-president Paul Henrion as
expressing strong opposition to the privatisation of his bank.
"Public company we are and public company we wish to stay,"
Henrion told the paper.
Qtly div 37-1/2 cts vs 37-1/2 cts prior
Pay May 15
Record April 15
The overall area devoted to sugar
beet in Europe is forecast to remain stagnant this year at 7.22
mln hectares compared with 7.21 mln ha in 1986, West German
statistician F.O. Licht said.
It was feared that the recent steep rise in sugar prices
would have a marked effect on planting intentions this year,
Licht said, but judging by this first estimate the effect was
probably minimal.
The total beet area in the European Community is forecast
to fall two pct to 1.85 mln ha against 1.89 mln in 1986.
The total Western Europe area is put at 2.49 mln ha,
against 2.50 mln in 1986. Eastern Europe area is forecast at
4.73 mln ha against 4.72 mln.
Individual West Europe country estimates, in 1,000 hectares
(with 1986 figures in brackets), are, Belgium/Luxembourg 114
(118), Denmark 69 (69), France 419 (421), Greece 35 (44),
Ireland 36 (38), Italy 270 (275), Netherlands 129 (138),
Portugal 1 (1), Spain 192 (190), U.K. 200 (201), West Germany
385 (399), Austria 32 (28), Finland 30 (31), Sweden 51 (52),
Switzerland 15 (14), Turkey 355 (340), Yugoslavia 160 (136).
Eastern Europe plantings are forecast as follows, USSR 3400
(3440), Albania 10 (9), Bulgaria 52 (50), Czechoslovakia 195
(196), East Germany 210 (205), Hungary 108 (96), Poland 460
(440), Romania 295 (280).
On the basis of average yields this year, Licht said these
area forecasts pointed to a total European beet sugar crop in
1987/88 of 29.8 mln tonnes, raw value, down from 31.4 mln
tonnes in 1986/87. Licht said sugar yields were fairly high
last season, thanks to favourable weather, and this increases
the chances of a significant reduction in production in
1987/88.
Based on average yields, EC beet sugar production could
fall nearly 10 pct this year to 13.5 mln tonnes from 14.9 mln
in 1986/87, while total Western Europe production could be 16.9
mln tonnes against 18.1 mln. Eastern Europe production could be
12.9 mln tonnes against 13.3 mln in 1986/87.
A meeting of leading politicians,
bankers and economists has forecast Austrian real gross
domestic product growth for this year at between 0.5 and 1.5
pct, a government spokesman said.
This compared with a two pct growth forecast made by the
semi-official Institute for Economic Research (WIFO) last
December.
Helmut Kramer, spokesman for Chancellor Franz Vranitzky,
told Reuters that the forecast had been made during the meeting
attended by Vranitzky, Finance Minister Ferdinand Lacina,
National Bank President Stefan Koren and a WIFO representative.
Economists have been cutting growth forecasts recently
mainly due to expectations of a poor export performance this
year, notably to Eastern Europe and oil exporting states.
Hannes Androsch, general director of
Creditanstalt-Bankverein
Qtly div 44 cts vs 44 cts prior
Pay June One
Record May Eight
Alaska Air Group Inc said it will offer
1.8 mln shares of common stock at 25.875 dlrs per share.
The company said proceeds from the 45.1-mln-dlr offering
will be used to reduce debt, for working capital and for
capital expenditures.
Chronar Corp said it signed a
joint venture agreement with
Austrian gross domestic product growth
for this year is likely to be between 0.5 and 1.5 pct, Helmut
Kramer, head of the semi-official Institute for Economic
Research (WIFO) said.
This compared with a two pct growth forecast made by the
WIFO last December.
Kramer made the forecast at a meeting today on Austria's
economic outlook also attended by Chancellor Franz Vranitzky,
Finance Minister Ferdinand Lacina and National Bank President
Stefan Koren.
Software AG Systems Inc said it
expects to report earnings for its third quarter "substantially
weaker" than earnings of prior periods due to an unexpected
shortfall in U.S. domestic license revenues.
For the second quarter ended November 30, Software AG
earned 2,089,000 dlrs, down from 5,014,000 dlrs a year before.
In last year's third quarter, Software AG earned 1,598,000
dlrs.
With troops in place in Brazil's
ports and oil installations, the government of Prersident Jose
Sarney today sought to end a wave of labour unrest by a show of
force.
Yesterday the government sent thousands of troops supported
in some instances by tanks to occupy nine oil refineries and
six areas of oil production.
The state-oil company Petrobras requested the intervention
because of a threatened strike by 55,000 oil industry
employees.
The government had already dispatched more than 1,000
marines to occupy the country's main ports after a national
seamen's strike was ruled illegal last Friday.
The strike by 40,000 seamen, now in its 13th day,
represents a stern challenge to the government.
The stoppage has delayed exports at a time when Brazil
desperately needs foreign exchange.
It was a deterioration in the country's trade balance which
precipitated Brazil's current debt crisis and the decision on
February 20 to suspend interest payments on 68 billion dlrs of
commercial debt.
There was no sign today of an early end to the seamen's
strike, which has badly hit the port of Santos -- the most
important in South America -- and the country's other main
ports.
Small groups of marines armed with submachineguns stand on
the quays near the strike-bound ships, but the military
presence here is generally discreet.
A total of 800 marines are inside the docks but most are
out of sight.
Yesterday marines and police occupied one ship, the
Docemarte, seamen's leaders said. After explaining to the
captain that the strikers faced up to one year in jail because
the strike was illegal, the men returned to work.
One of the strike leaders, Elmano Barbosa, said "it is a
psychological war. They are using force and we are using
peaceful methods."
Port sources said only two Brazilian ships in Santos, the
Docemarte and the Henrique Leal, were working.
At the seamen's national strike headquarters in Rio de
Janeiro, spokesmen say a total of about 190 ships are
strike-bound in Brazil and in foreign ports.
Contradicting earlier reports from strike headquarters in
Rio de Janeiro, seamen in Santos said the strikers on board
ships here were not running out of food.
The current labour unrest is the worst faced by Sarney's
civilian government since it came to power two years ago.
Yesterday, in a separate protest, hundreds of thousands of
farmers held rallies directed largely against high bank
interest rates.
The current rash of labour unrest in industry and
agriculture stems from the failure of the government's
now-collapsed Cruzado Plan price freeze.
Shr loss 21 cts vs loss 29 cts
Net loss 1,246,000 vs loss 1,420,000
Revs 2,120,000 vs 1,186,000
Avg shrs 5,853,587 vs 4,880,427
Year
Shr loss 85 cts vs loss 1.21 dlrs
Net loss 4,968,000 vs loss 5,274,000
Revs 6,536,000 vs 5,056,000
Avg shrs 5,854,543 vs 4,367,864
Intelligent Systems Master
Limited Partnership said it will make a cash distribution of 25
cts a unit in early April to unitholders of record as of March
31.
The company said continued strength in its results prompted
the move.
Intelligent Systems added that if current plans to sell
some of its assets, as previously announced, are successful, it
may make further distributions estimated at 15 cts to 25 cts a
unit.
Earlier, the company reported fiscal third quarter ended
December 31 net income of 2.3 mln dlrs, or 20 cts a share, up
from fiscal 1985 third quarter results of 563,000 dlrs, or five
cts a share.
In addition, it reported fiscal 1986 nine months' net
income of 4.4 mln dlrs, or 40 cts a share, versus a loss of 1.1
mln dlrs, or 10 cts a share, in fiscal 1985's first three
quarters.
the council of ministers approved
petroleos de venezuela's planned purchase of a half interest in
the champlin petroleum refinery at corpus christi, texas,
government sources said.
The cabinet authorized energy and mines minister arturo
hernandez grisanti to approve the purchase in the shareholders
assembly of the state oil company petroleos de venezuela
(pdvsa).
Pdvsa last april 14 signed a letter of intent to buy a half
interest in champlin's corpus christi refinery for an
undisclosed sum.
Under the terms of the provisional agreement, venezuela
would supply up to 160,000 barrels a day to the plant through a
new company which would be jointly owned by the pdvsa and
champlin, a subsidiary of the union pacific corp
Home Shopping Network Inc filed with
the Securities and Exchange Commission for an offering of 400
mln dlrs of convertible subordinated debentures due April 1,
2002.
Proceeds from the offering will be used to build and equip
enlarged broadcast and order processing facilities, to redeem
some of the company's 11-3/4 pct senior notes due Oct 15, 1996
and for general corporate purposes, the company said.
Drexel Burnham Lambert Inc will underwrite the sale.
Two U.S. government agencies are in
dispute over a proposal for U.S. firms to sell computers to
Iran, officials said.
The Commerce Department said it intends to approve export
licenses for two firms to sell computers and related equipment
to the Islamic Republic of Iran News Agency and the Iran Power
Generation Transmission, spokesman B. Jay Cooper said.
The export companies were not identified, but the sales
included computers made by Digital Equipment Co
Donaldson Bramham Lee, an investor
from Birmingham, Alabama, said he raised his stake in Penobscot
Shoe Co to 40,500 shares, or 6.6 pct of the total outstanding
common stock, from 33,500 shares, or 5.5 pct.
In a filing with the Securities and Exchange Commission,
Lee said he bought 7,000 Penobscot common shares between Feb 12
and March 2 at prices ranging from 13.75 to 16.25 dlrs a share.
Lee has said he bought the Penobscot stock for investment
purposes only and has no plans to seek control of the company,
although he may buy more stock.
An 11-day-old strike by
Brazilian seamen is affecting coffee shipments and could lead
to a short term supply squeeze abroad, exporters said.
They could not quantify how much coffee has been delayed
but said at least 40 pct of coffee exports are carried by
Brazilian ships and movement of foreign vessels has also been
disrupted by port congestion caused by the strike.
A series of labor disputes and bad weather has meant
Brazil's coffee exports have been running at an average two
weeks behind schedule since the start of the year, one source
added.
By the end of February shipments had fallen 800,000 bags
behind registrations, leaving around 2.4 mln bags to be shipped
during March. By March 10 only 230,000 bags had been shipped,
the sources said.
Given Brazil's port loading capacity of around 100,000 bags
a day, even if normal operations were resumed immediately and
not interrupted by bad weather, some March registered coffee
will inevitably be shipped during April, they added.
(Power Corp of Canada) said it
received subscriptions for 252,223 shares of its recent issue
of participating preferred shares for total proceeds of 4.3 mln
dlrs.
Australia's seasonally-adjusted
unemployment rate eased to 8.2 pct of the estimated workforce
in February from 8.3 pct in January, compared with 7.9 pct a
year earlier, the Statistics Bureau said.
The number of unemployed declined to 632,100 from 638,300
in January, against 594,500 in February 1986, it said.
But unadjusted, the number of jobless rose to 699,800 or
9.1 pct of the workforce from 671,400 or 8.9 pct in January and
658,500 or 8.7 pct a year earlier.
Taiwan's maize import commitments are
expected to rise to 970,000 tonnes in the first four months of
1987 from 870,000 tonnes a year earlier, a spokesman for the
Joint Committee of Maize Importers told Reuters.
He said more than 75 pct of the imports come from the U.S.
And the rest from South Africa.
The maize import target for calendar 1987 is set at well
over 3.4 mln tonnes compared with an actual 3.07 mln in 1985,
he added.
Indonesia's coffee production in
1986/87 ending September 30 may fall slightly from last year's
level of 360,000 tonnes, Dharyono Kertosastro, chairman of the
Association of Indonesian Coffee Exporters told Reuters.
He said shade trees had been damaged by pests and this may
have affected the crop, though it remains to be seen how
seriously. Indonesia's main crop is harvested next month.
He gave no figure for expected output, except to say it
would probably be down a little from 1985/86. He said stocks
were about normal at 90,000 tonnes.
Kertosastro predicted that exports were unlikely to rise
much from last year's level of 320,000 tonnes. "I expect exports
will be a bit more, maybe 330,000 tonnes, but not above that,"
he said. Exports in 1985/86 were valued at 944 mln U.S. Dlrs,
but the value could fall by 30 pct this year because of low
prices, he added.
Dharyono said production was behind a five year plan target
of 420,000 tonnes for the current year, but Indonesia is trying
to boost output through introduction of higher yielding seeds,
better training for farmers and increased use of fertilizers.
Saudi Arabia's 11 commercial banks are
reporting a further decline in profits for 1986 as increasing
provisions have to be set aside to cover the burden of non-
performing loans.
Bankers in the Saudi capital said the need to build
reserves for bad and doubtful debts may start to decline a
little this year.
But the kingdom's still sluggish economy and legal problems
hampering traditional lending operations mean earnings will
remain vulnerable.
One senior bank credit officer said "The work is largely
done in terms of identifying bad loans and making provisions,
but banks are still going to face difficulties earning money."
The sudden decline of Saudi Arabia's corporate sector in
1983 - culminating in a number of debt reschedulings - has
taken a heavy toll of bank profits, with first results now
appearing for 1986 showing a fourth successive year of broad
decline.
The cumulative net 1985 earnings of the kingdom's banks had
sunk to 827.9 mln riyals from 2.66 billion in 1982 before world
oil prices tumbled.
Of the kingdom's nine joint-venture banks which operate on
the Gregorian calendar year, four have already reported and
revealed a further profits decline - or net loss - for 1986 at
the expense of increased provisions.
The newest and smallest of the joint ventures,
Indonesian coffee exporters are
preparing for a period of depressed prices while urging their
government to lobby for a resolution of the deadlocked issue of
export quotas, the chairman of the Association of Indonesian
Coffee Exporters (AICE) told Reuters.
Dharyono Kertosastro said in an interview that Indonesia,
the world's third largest producer, is trimming costs and
improving its marketing while seeking a compromise on quotas.
"But as long as Brazil sticks to its hardline position, we
can never bridge the gap," Dharyono said.
Indonesia was one of a group of eight producing countries,
along with Costa Rica, the Dominican Republic, Ecuador,
Honduras, India, Papua New Guinea and Peru, which proposed a
new quota system at last month's failed International Coffee
Organistion (ICO) talks in London.
Brazil, which would have had its quota reduced under the
Group of Eight scheme, blocked the proposal.
AICE officials are now hoping Colombia can use its contacts
with Brazil to suggest a compromise.
Edward Muda, an AICE official who attended the ICO
negotiations, said Latin American members of the Group of Eight
were in contact with Colombia, the world's second largest
producer, but gave no details.
"Colombia has shown interest because they will gain from a
compromise. Without one, they will suffer if the present market
stays like it is," Muda said.
He said Indonesia was in contact with consumers such as the
U.S., Japan, the Netherlands, West Germany and Canada ahead of
an ICO executive board meeting scheduled for April 1.
Dharyono said the AICE will send delegations to the U.S.
And Japan to brief Indonesian embassy officials there and press
them to present Indonesia's case more firmly.
He urged the Indonesian government to do more to help the
country's coffee traders through the ICO negotiations.
Muda said the Group of Eight had some common ground with
the big consumers because they agreed on the need for basing
quotas on what he termed "realistic criteria."
The breakaway group believes the old quota system, which
gives Brazil a 30 pct share of the quota exports, does not
reflect up-to-date supply and demand trends.
Brazil has stuck rigidly to its insistence that the old
system be applied.
Export quotas were suspended in February 1986 when market
prices surged because of the failure of the Brazilian crop.
Although prices have long since come down to a point where
export controls could be reintroduced, producers and consumers
at the 75-member ICO have not been able to agree on new
guidelines. Brazil and the U.S., The largest consumer, are both
refusing to alter their positions.
Dharyono said if new quotas are not agreed he believed
Indonesia was well placed to survive low prices.
Indonesian farmers are trimming production costs and the
AICE is improving its marketing system, Dharyono said.
Indonesia's coffee output in 1986/87, ending September 30,
is expected to stagnate or fall slightly from last year's level
of 360,000 tonnes, he said.
He said stocks, at 90,000 tonnes, were about average for
the time of year.
Toyota Motor Credit Corp is issuing a 23
billion yen eurobond due April 10, 1992 paying 4-1/2 pct and
priced at 101-1/2 pct, lead manager Nomura International Ltd
said.
The bond is available in denominations of one mln yen and
will be listed in Luxembourg. Payment is April 10.
Fees comprise 1-1/4 pct selling concession and 5/8 pct for
management and underwriting combined.
Great Universal Stores Plc
The tin price is likely to rise to
20 ringgit a kilo this year because of the producers' accord on
export quotas and the reluctance of brokers and banks to sell
the metal at lower prices, a Malaysian government bulletin
said.
The Malaysian Tin bulletin said it is in producers'
interest to keep to their quotas to limit total exports to
90,000 tonnes and to gradually deplete the 80,000 tonnes
overhang.
It said consumption by industrialised countries should stay
at 160,000 tonnes and that International Tin Council creditors
and brokers are not likely to dump their stocks excessively
unless there is a large and abrupt price jump.
The continued depreciation of the dollar could also help
push up the price of tin, the bulletin said.
A depreciation of the dollar means the depreciation of the
ringgit which is closely pegged to it, making the price of tin
cheaper in sterling terms, it added.
"Even in the absence of economic rationale in the tin
market, psychological optimism alone is sufficient to secure a
price recovery of up to 20 ringgit per kilo," the bulletin said.
Shr 22 cts vs 13 cts
Net 1,063,000 vs 639,000
Sales 7,489,000 vs 4,656,000
Year
Shr 55 cts vs 28 cts
Net 2,633,000 vs 1,343,000
Sales 23.3 mln vs 17.9 mln
Jacobs Suchard AG expects a world cocoa
surplus of around 100,000 tonnes in 1987 compared with a
104,000 tonne surplus in 1986, Jens Sroka, head of commodity
buying, told a news conference.
The company expects prices to remain at around current
levels despite the likelihood of agreement on buffer stock
rules at the forthcoming London cocoa talks, and believes
market intervention by the buffer stock manager would stabilise
prices.
Sroka said world coffee prices are expected to remain weak
if any international coffee talks fail to produce agreement.
Sroka said stagnating consumption and slight overproduction
will continue to weigh on coffee prices and he forecast a
continued build-up in stocks.
The recent failure of the London coffee talks had surprised
market observers.
Unless reason prevails and the major producers return to
the conference table, the world coffee market will remain free
and the consequences for some producers dependant on coffee for
their foreign exchange earnings would be catastrophic, Sroka
added.
General Mining Union Corp Ltd
chairman Derek Keys cautioned that profits may not rise this
year if the rand stays at its current level of 48 U.S. Cents.
"We would do well to repeat last year's results if the rand
stays depressed," Keys said.
The level of the dividend, however, "ought not to be
affected," he added, discussing the 1987 outlook.
General Mining earlier reported that 1986 per share
earnings rose 28 pct to 616 cts.
Shr 100.6 cts vs 76.9 cts
Final div 40 cts vs 32 making 58 cts vs 50
Pre-tax 14.17 mln rand vs 8.85 mln
Net 10.06 mln vs 7.69 mln
Tax 4.10 mln vs 1.16 mln
Gross premiums 210.16 mln vs 178.69 mln
Net premiums written 143.99 mln vs 123.88 mln
Underwriting loss 1.78 mln vs loss 6.25 mln
Div pay April 10, register March 27.
Note - period year to December 31 1986.
The convertible eurobond issue announced
yesterday for Genentech Inc
IGENE Biotechnology Inc said its
research teams at Auburn and Hebrew universities have found its
patented pesticide is highly effective in combating a disease
reponsible for approximately three billion dlrs in annual crop
losses.
The company said it learned ClandoSan controls nematodes,
deadly plant pathogens formerly controlled by now-banned
synthetic chemicals.
Varieties of the deadly disease attack major cash crops
such as cotton, vegetables, orchard trees, citrus fruits, and
garden plants, the company said.
Sweden announced its promised program
of unilateral economic sanctions against South Africa and gave
firms an October deadline to cut trading links.
Foreign Trade Minister Anita Gradin said a trade boycott of
South Africa and neighbouring Namibia would take effect from
July 1, followed by a three-month period of grace to give
companies time to wind down their operations.
From October 1, no direct trade would be allowed in either
direction, with certain exceptions covering medical supplies
and printed matter, Gradin told a news conference.
She said exceptions would also be granted in cases where a
Swedish trade boycott would benefit South African firms and
disadvantage South Africa's black-ruled neighbours, the
front-line states.
Gradin cautioned that legislation upon which the boycott
would be based was not impossible to get round. She said a
parliamentary committee would investigate ways of closing some
of the bigger loopholes, including indirect trade with South
Africa via Swedish subsidiaries in third countries.
The Brazilian Coffee Institute,
IBC, is unlikely to disclose its future export policy until the
end of next week at the earliest, trade sources said.
IBC president Jorio Dauster is meeting government
ministers, producers, exporters and market analysts to assess
Brazil's position in the light of the failure of talks in
London earlier this month to set new International Coffee
Organization, ICO, export quotas.
"The failure of the talks means Brazil has got to rethink
its position completely," one Santos exporter said.
A meeting of the National Coffee Policy Council is set for
Thursday, March 19, and Dauster will almost certainly explain
his plan to members then before announcing any new measures.
Dauster told reporters on his return from London last week
that no decisions would be made on exports before he had held
talks with all sectors of the industry.
Exporters said Dauster is not under any great pressure to
start marketing coffee immediately. World prices have been
recovering from the lows which followed the collapse of the ICO
talks and Brazil has sold a reasonable 5.5 mln bags of 60 kilos
for export in the first four months of this year.
The exporters said the key factor in the eventual opening
of May and June export registrations will be the amount at
which the contribution quota is set.
With little expectation of other sales incentive mechanisms
such as discounts, bonuses and price fall guarantees being
introduced, the level of the quota will be decisive in
determining the competitiveness of Brazilian coffee on world
markets, they said.
They noted that on February 16, the eve of a planned
increase in the quota, April registrations were opened and
closed after 1.68 mln bags were registered for export, a record
amount for a single day.
If May/June registrations are opened under similar
conditions as before, Brazil would have no difficulty in
selling at least 2.0 mln bags per month.
"The problem would be how to limit sales," one exporter said.
Brazil's present foreign trade and payments problems mean
there are pressures from the government to boost exports to
maximise foreign exchange earnings.
However, the sources said they expect the IBC to adopt a
marketing strategy aimed at regaining Brazil's dominant
position as an exporter, but without causing a price war.
General opinion among exporters was that Brazil would plan
to export between 17 and 18 mln bags this year of which between
1.5 and 2.0 mln would be to non-members of the ICO.
The 15.5 mln to 16 mln bags sold to members would be around
the figure Brazil had offered to ship if ICO quotas were
reintroduced, although Dauster has said this offer expired with
the breakdown of talks.
With the prospects of a crop of at least 28 mln bags this
year, Brazil has the capacity to export up to 20 mln bags after
meeting local consumption of around 7.0 mln, the sources added.
However, the sources said Brazil is unlikely even to
consider exporting such quantities, as this would almost
inevitably lead to a fall in world prices as Brazil tried to
encroach on other producers' markets.
Maximum export earnings would be achieved by orderly
marketing of traditional amounts, thus re-establishing Brazil's
market share after last year's unusually low exports of 9.9 mln
bags, enabling it to rebuild stocks and maintaining cordial
relations with the producer group which backed Brazil's stance
at the ICO talks, they added.
Fieldcrest Cannon Inc is raising 110
mln dlrs through an offering of convertible subordinated
debentures due 2012 with a six pct coupon and par pricing, said
sole underwriter Kidder, Peabody and Co Inc.
The debentures are convertible into the company's common
stock at 44.25 dlrs per share, representing a premium of 26.43
pct over the stock price when terms on the debt were set.
Non-callable for two years, the debt is rated Ba-2 by
Moody's Investors Service Inc and BB-minus by Standard and
Poor's Corp. The issue was increased from an initial offering
of 100 mln dlrs because of investor demand.
Shr two cts vs nine cts
Net 86,469 vs 325,937
Revs 5,119,637 vs 6,390,995
12 mths
Shr 10 cts vs 33 cts
Net 354,820 vs 1,148,476
Revs 21.2 mln vs 23.2 mln
The Federal Reserve is not expected to
intervene in the government securities market today, several
economists said.
They said the Fed does not have a much of an adding need
this week and may wait until tomorrow or Monday before
supplying reserves.
But a few economists said there was an outside chance that
the Fed may inject reserves indirectly via a small round of
customer repurchase agreements.
Federal funds hovered at 6-1/8 pct this morning after
averaging 6.32 pct yesterday.
Shr 81 cts vs 81 cts
Net 8,750,024 vs 7,772,932
Revs 157.6 mln vs 162.4 mln
Avg shrs 10.8 mln vs 9.6 mln
4th qtr
Shr nine cts vs four cts
Net 658,159 vs 299,930
Revs 3,770,341 vs 2,614,224
Avg shrs 7,382,802 vs 6,747,442
Year
Oper shr 33 cts vs 18 cts
Oper net 2,287,179 vs 1,045,799
Revs 13.1 mln vs 8,577,853
Avg shrs 6,874,505 vs 5,951,612
NOTE: 1985 year net excludes 131,000 dlr tax credit.
Cyacq Corp, an investor group
bidding for Cyclops Corp, said it would raise its outstanding
tender offer price for Cyclops common to 92.50 dlrs a share
from 80 dlrs, if certain conditions were met.
The increased offer would exceed the 90.25 dlrs a share
price offered by Dixons Group PLC in a tender offer for Cyclops
that is part of a definitive agreement to acquire the
Pittsburgh-based maker of carbon tool and specialty steel
products.
Cyacq includes Audio/Video Affiliates Inc and Citicorp
Capital Investors Ltd and other investors.
Cyclops has about 4.1 mln shares outstanding.
For the tender price to be raised, Cyclops must provide
Cyacq with all non-public information provided to Dixons Group
and Cyacq must be satisfied with financial projections made in
offering material by Dixons based on the information, Cyacq
said.
Additionally, Dixon Group's rights to buy Cyclops common
and its rights to fees or expenses if the Dixon-Cyclop merger
agreement is broken must be rescinded, Cyacq said.
Cyacq said financial projections it developed for Cyclops
were materially lower than the financial projections provided
by Cyclops to Dixons Group.
A Cyclops spokeswoman said the company had no details of
the new Cyacq proposal and could not comment. "We have nothing
in hand," she said.
In addition to making specialty metal products, Cyclops
also operates about 115 specialty stores that sell consumer
electronics products. The stores are located in 17 states
concentrated in the Northeast, Northwest and Southwest.
Cyclops employs about 8,900 people in Pennsylvania, Ohio
and other states. It also has interests in non-residential
construction.
In 1986, Cyclops earned 21.3 mln dlrs or 5.26 dlrs a share
on sales of 1.5 billion dlrs, compared to 1985 earnings of 26.2
mln dlrs or 6.20 dlrs on sales of 1.4 billion, the spokeswoman
said.
The agreement with Dixons Group calls for Cyclops's steel
and construction businesses to be sold to a unit of Alleghany
Corp
Businessland Inc is raising 50 mln
dlrs via an offering of convertible subordinated debentures due
2007 with a 5-1/2 pct coupon and par pricing, said lead manager
Shearson Lehman Brothers Inc.
The debentures are convertible into the company's common
stock at 20/50 dlrs a share, representing a 25.19 pct premium
over the stock price when terms on the debt were set.
Non-callable for two years, the debt is rated B-3 by
Moody's Investors Service Inc. The issue was increased from an
initial offering of 40 mln dlrs.
Qtly div 62-1/2 cts vs 62-1/2 cts previously
Pay April 30
Record April Seven
The International Coffee Organization
(ICO) executive board meeting scheduled for the end of this
month has been delayed by one day and will now run from March
31 to April 2 and not March 30 to April 1, ICO officials said.
On March 30, the ICO ad hoc working group will meet to
consider management consultants Ernst & Whinney's report on the
ICO secretariat. This report was commissioned late last year to
report on the administrative structure of the ICO.
Shr 22 cts vs 19 cts
Net 1.1 mln vs 994,000
Year
Shr 83 cts vs 60 cts
Net 4.3 mln vs 3.1 mln
NOTE:1985 net includes tax loss carryforward gain of 8,000
dlrs.
Shr loss two cts vs loss five cts
Net loss 17,334 vs loss 51,507
Sales 245,560 vs 179,839
Avg shrs 1,136,785 vs 1,046,785
Six mths
Shr profit four cts vs loss 17 cts
Net profit 47,749 vs loss 174,373
Sales 721,937 vs 284,809
Avg shrs 1,136,785 vs 1,046,785
Oper shr 1.30 dlrs vs 1.51 dlrs
Oper net 4.06 mln vs 4.17 mln
Sales 146.3 mln vs 155.9 mln
Note: 1985 excludes extraordinary loss of 7.45 mln dlrs, or
2.70 dlrs per share.
Shr nine cts vs 22 cts
Net 700,000 vs 2,200,000
Revs 5,400,000 vs 5,700,000
Avg shrs 7,589,344 vs 10.1 mln
12 mths
Shr 43 cts
Net 3,500,000
Revs 21.6 mln
NOTE: 12 mth figures not available for 1985 since company
started operations March 31, 1985.
Sun Co said it raised the contract
price it will pay for crude oil 50 cts a barrel, effective
today.
The increase brings Sun's posted price for the West Texas
Intermediate and West Texas Sour grades to 17.50 dlrs/bbl. The
Light Louisiana Sweet grade was also raised 50 cts to 17.85
dlrs/bbl.
Sun Co last changed its crude postings on March 4.
Oper shr loss 48 cts vs profit 50 cts
Oper net loss 11.3 mln vs profit 18.1 mln
Revs 262.8 mln vs 399.7 mln
Note: 1986 net excludes tax gain of 1.1 mln dlrs or three
cts shr vs yr-ago gain of 5.6 mln dlrs or 17 cts shr.
1986 net includes 15 mln dlr charge for reduction in
carrying value of refinery and related assets. 1985 net
includes 10.8 mln dlr gain on sale of Canadian natural gas
property.
U.S. dlrs.
Purolator Courier corp's stock rose on
specualtion that a disgruntled former Purolator director would
find a new suitor for the company, traders said.
Purolator agreed in late February to a 35 dlr-a-share, 265
mln-dlr offer from E.F. Hutton LBO Inc and certain members of
its Purolator courier division's management.
The stock today hit 36-1/4, up one.
Today, Purolator revealed in a filing with the Securities
and Exchange Commission that director Doresy Gardner resigned
from its board of directors in a letter dated March 10.
The letter from Gardner said he resigned the board because
the merger agreement with Hutton barred directors from
soliciting new offers and he believes shareholders might get a
better deal. Gardner said he believes a better offer might be
found if the company would agree to be sold to some other
entity, or if it could sell off all or part of its U.S. courier
division.
"Basically, (the courier division) is a company that has
450 mln dlrs in revenues. It's a very large company and it's
being sold for 50 or 60 mln dlrs," said Gardner in a telephone
interview with Reuters.
Gardner is an official of Kelso Management, a firm
associated with Fidelity International Ltd. A group of Fidelity
companies owns eight pct of Purolator, and Gardner said he
personally owns 20,000 shares.
A Purolator official said the company has no comment on the
letter from Gardner.
Arbitragers speculated another overnight messenger service
may emerge as a likely bidder for Purolator. Before the
transaction with Hutton LBO was announced, analysts had also
speculated another courier company would be the most likely
suitor.
While one arbitrager acknowledged there in fact may be no
new bidders, he said the possibility one could appear pushed
the stock into play again.
"There's no shortage of possibilities. It's just a question
of management's willingness to let the process continue," said
one arbitrager.
Arbitragers said a new buyer might be found because they
believe Hutton LBO has taken on no risk in the transaction.
Hutton has begun a tender for 83 pct of Purolator at 35 dlrs
cash per share. The balance of Purolator's stock will be bought
for securities and warrants in a new company holding the U.S.
courier operations.
The arbitragers said tender offer documents show that
Hutton does not need to use its cash in the transaction and
will emerge with a giant, majority equity interest in
Purolator.
"As far as I can tell from the public documents from the
deal that's on the table, Hutton is basically putting up zero.
One always likes a situation like that. You always like to
think if they can do this deal at no risk, there should be
someone else in the world that could do it higher," said one
arbitrager.
The firm, however, is supplying temporary financing, and
sources close to the transaction disputed the claim that the
firm will not end up paying for its equity position.
While one scenario mentioned in the tender offer document
did note that the E.F. Hutton Group subsidiary may not have to
keep cash in the transaction, the sources said there is some
risk to the firm.
"There are a variety of contingencies and restricted cash,
and all sorts of things that make it very speculative," said
one of the sources, adding there are also severance payments to
employees.
The E.F. Hutton Group subsidiary is supplying 279 mln dlrs
in so-called "bridge" financing for the transaction. The bridge
financing is a temporary loan from Hutton.
The financing is to be replaced with permanent financing,
expected to come from banks. However, it may take some time to
replace the financing, the source said, resulting in what could
be a substantial expense to the firm.
Gardner said Hutton stands to gain fees of 10 to 20 mln
dlrs from the transaction, but sources close to the transaction
said fees are at the low end of the scale.
"It's a very complex transaction, but basically what
happens is they ostensibly put up money but the fees recapture
any investment they might have once the merger takes place,"
Gardner said.
Safeguard Scientifics Inc
said it made a 2.5 mln dlr equity investment in
Moody's Investors Service Inc said it
cut to Caa from B-2 Allegheny Beverage Corp's 112 mln dlrs of
subordinated debt.
The rating agency cited Allegheny's high leverage and poor
operating performance, as well as reduced cash flow.
Moody's said the company's prospects for improvement are
limited by increasing competition in the food service industry
and decreasing demand for the vending services that Allegheny
provides. Moody's also said a renegotiated bank agreement
includes accelerated amortization requirements that exacerbate
Allegheny's already weakened ability to service its debt.
Shr loss two cts vs profit 10 cts
Net loss 79,000 vs profit 507,000
Revs 10.6 mln vs 2,238,000
12 mths
Shr profit two cts vs profit 23 cts
Net 89,000 vs 1,130,000
Revs 21.4 mln vs 7,766,000
Florida Citrus Processors
Association said frozen concentrate orange juice movement into
trade channels in the week ended March 7 totalled 3,915,370
gallons versus 3,956,126 gallons in the week ended February 28
and 4,284,693 gallons in the corresponding year-ago period.
There were 3,814,891 gallons of foreign imports last week
versus 133,505 gallons the week before. Domestic imports last
week were 306,031. Retail movement was 1,652,916 versus
2,015,953 a year ago. Bulk movement was 1,934,494 against
1,954,103 a year earlier.
Current season cumulative movement was 60,480,375 gallons
versus 59,654,702 last year. Cumulative net pack for the season
was 80,359,978 versus 74,071,755 a year ago. Inventory was
83,422,435 versus 81,963,040 a year ago.
Qtr ends Jan 30
Oper shr loss 45 cts vs profit 44 cts
Oper Net loss 225,815 vs profit 219,593
Revs 175,247 vs 827,748
NOTE: oper net 1987 excludes loss from discontinued
operations of 125,047 vs loss 34,055 for prior qtr.
excludes tax carryforward 150,000 for prior qtr.
The Cannon Group Inc said its
financial statements will show substantial losses for fiscal
1986 and "significant downward adjustments in previously
reported stockholders' equity."
The company also said its 1986 audit being conducted by
Colombia intends to improve the
marketing of its coffee with the accent on more flexibility on
setting export registration prices, finance minister Cesar
Gaviria said.
Speaking to reporters after announcing a lower export
registration price, or reintegro, of 1.10 dlr per lb ex-dock
New York, Gaviria said export mechanisms would be more agile.
"In the first stage, we decided not only to lower the
reintegro but also to adopt a flexible policy of reintegro that
will allow private exporters to participate more actively in
Colombia's coffee export policy," he said.
Traders said this means the export registration price will
change more often in a truer reflection of market trends.
Gaviria said the measures merely responded to new market
factors since a return to a system of International Coffee
Organisation (ICO) export quotas may not occur in the short
term.
ICO talks last month in London failed to break a deadlock
over re-introduction of export quotas, suspended in February
1986.
Gaviria stressed that Colombia will not necessarily suffer
from depressed prices because it can compensate lower prices
with increased volume.
"Colombia will continue to export its traditional amount of
coffee, between 9.6 and 10 mln bags (of 60 kilos), and will do
so without an agreement among producers," he said.
He ruled out a much higher volume of exports, or up to 13.5
mln bags as mentioned in market circles, "because the idea is
precisely not to disrupt the market."
Colombia exported a record 11.5 mln bags in the 1985/86
coffee year which ended last September 30.
Echoing Gaviria's words, Jorge Cardenas, manager of the
national coffee growers' federation, said Colombia sought to
adapt its coffee marketing policy to circumstances.
"There is great expectation in the world for the policies
that Brazil and Colombia will adopt. Ours is beginning to
emerge and no agreement among producers is foreseeable in the
immediate future," he told journalists.
Trade sources in Rio today said Brazil's future export
policy was unlikely to be revealed before the end of next week.
Cardenas said a new ICO meeting could only take place when
problems that hindered an agreement at the recent London talks
have been resolved.
Asked to comment on a Reuter report from Jakarta saying
Indonesia hoped Colombia could use its contacts with Brazil to
suggest a compromise on the quota issue, Cardenas said the
Brazilian stand was quite clear.
He said Brazil's current quota "reflects the reality of the
market, allows for an orderly supply and satisfies demand," but
added more clarity was needed to assess the criteria that
determined it.
Cardenas said lows registered immediately after the failure
of the London talks were triggered by a widespread fear among
dealers of an imminent price war and the belief that producers
would go out and sell their coffee as quickly as possible,
which did not happen.
United Medical Corp said it
it has requested a meeting of holders of its Swiss Francs 30
mln 5-1/8 pct convertible subordinated notes due 1991.
The meeting has been requested in order to amend the
negative pledge and financial covenants which have proved to be
too restrictive in light of the company's activities, it said.
United also said it plans to acquire some of these notes to
reduce its exposure to foreign exchange fluctuations.
The National Australia Bank's Hong
Kong branch is planning a 75 mln Australian dlr floating rate
certificate of deposit (CD) issue, banking sources said.
The three-year issue, which matures April 9, 1990, is in
two tranches. Tranche A of 50 mln dlrs carries interest at 30
basis points below one-month bank bill rate, payable monthly,
and tranche B of 25 mln dlrs carries interest at 25 basis
points below three-month bank bill rate, payable quarterly.
Fee for co-managers is 1/8 pct.
Lead manager is BT Asia Ltd, and syndication is expected to
close on March 16.
A Foreign Ministry official dismissed
arguments made by senior U.S. Government officials seeking to
block the sale of a U.S. Microchip maker to a Japanese firm.
"They appear to be linking completely unrelated issues,"
Shuichi Takemoto of the Foreign Ministry's North American
Division told Reuters.
U.S. Commerce Secretary Malcolm Baldrige has asked the
White House to consider blocking the sale of
China's 1987 cotton output must rise
above the 1986 level of 3.54 mln tonnes or supply will fall
short of increasing demand, the China Daily said.
Demand in 1986 rose 10.9 pct over 1985.
Output in 1986 fell from 4.15 mln tonnes in 1985 and a
record 6.2 mln in 1984, official figures show. The China Daily
attributed the decline to several factors, including less
favorable weather conditions and new state measures to restrict
cotton production after the 1984 build-up of stocks.
According to Customs figures, cotton exports rose to
558,089 tonnes in calendar 1986 from 347,026 in 1985.
To increase output quickly, the state will raise by 10 pct
the price it pays for cotton produced above and beyond quota
levels, the newspaper said. Its official purchasing agencies
will buy cotton produced in excess of that originally
contracted for, it added.
The China Daily said all cotton growing areas in south
China should be maintained, and growing in the north should be
concentrated in Hebei, Shandong, Henan and Xinjiang.
It called for comprehensive planning to coordinate
production of cotton with that of grain, edible oil and other
crops, but gave no more details.
Schweizerische Aluminimum AG
Dutch state-owned chemical group N.V.
DSM is launching a 150 mln guilder dual currency bond with a
7-1/4 pct coupon due 1992 and priced at par, lead manager
Algemene Bank Nederland N.V. Said.
Interest will be paid in guilders and each 1,000-guilder
bond will be redeemed in 313.00 sterling on April 15, 1992.
Subscription closes Friday March 20, payment date is April
15, listing will be on the Amsterdam stock exchange.
Co-leads are Bank Mees en Hope, AMRO Bank and Citicorp
Investment Bank (Netherlands). The management group consists of
RABO, NMB, CLN Oyens en van Eeghen and F van Lanschot Bankiers.
Finance Minister Kiichi Miyazawa told a
parliamentary session the current dollar/yen exchange rate is
not necessarily satisfactory for the Japanese economy.
Miyazawa said the Paris currency accord among six major
industrial nations last month does not necessarily mean the yen
should stay stable around current levels in the future.
The Paris agreement was aimed at stopping a further rapid
fluctuation of exchange rates, he said.
The accord stipulated that current rates reflect
fundamentals of the six nations - Britain, Canada, France,
Japan, the U.S. And West Germany.
The Bank of England said it provided the
money market with a further 168 mln stg of assistance to help
offset a shortage it now estimated at 1.05 billion stg, revised
down from 1.10 billion.
It bought 21 mln stg of bank bills outright, 20 mln in band
one at 10-3/8 pct and one mln in band two at 10-5/16 pct. In
addition, it bought 98 mln stg of bills for resale on March 30
and 49 mln stg for resale April 8 at an interest rate of
10-7/16 pct. All these rates are the same as for today's
earlier help.
So far today, the bank has provided the market with
assistance worth 646 mln stg.
The bank also announced the rates applicable to temporary
lending facilities rolled over today.
The average mid-market rate for lending rolled over for one
week is 10-15/16 pct and for two weeks 10-5/8 pct.
Shr profit seven cts vs loss 24 cts
Net profit 151,000 vs loss 523,000
12 mths
Shrs loss 1.70 dlrs vs loss 44 cts
Net loss 3,670,000 vs loss 947,000
Assets 99.7 mln vs 102.6 mln
Deposits 91.1 mln vs 90.6 mln
Loans 44.3 mln vs 51.7 mln
Long delays at the railway crossing on
the Kenyan border have led Uganda to re-route its coffee
exports through a ferry link with the Kenyan port of Kisumu
across Lake Victoria, Ugandan officials based in Kenya said.
Uganda has a direct rail link with the Kenyan port of
Mombasa through which it conducts 70 pct of its external trade
but there is a chronic shortage of railway wagons, they said.
Customs at Kisumu take less than a day compared with two to
three at the Malaba rail border crossing, a Ugandan Railways
official said. "Malaba is now handling only 10 pct of the trade
and all the coffee and oil goes through Kisumu," he said.
However, an accident recently damaged the wagon ferry which
plies between Kisumu and the Ugandan port of Jinja, causing
bottlenecks on the lake route too.
Sources at the Coffee Marketing Board in Kampala reported
delays in coffee export shipments last January due to
congestion on the lake ferries.
Coffee accounts for about 95 pct of Uganda's export
earnings and last November President Yoweri Museveni ordered
all coffee shipments to be carried by rail in order to avoid
the higher costs of road haulage.
The Soviet Union is rumored
this morning to have bought up to 1.5 mln tonnes of U.S. corn,
export trade sources said.
The amount was not confirmed, but the talk was widespread
through the trade. Gulf cash barge basis levels jumped two to
three cents this morning on the rumors, which were expected to
boost futures prices on today's open.
The Soviet Union recently bought over 1.0 mln tonnes of
U.S. corn, ostensibly as a conciliatory gesture ahead of trade
talks with U.S. agriculture officials.
Purchases rumored today were seen as a positive factor in
light of a Soviet trade official's statement that the previous
purchase had satisfied near-term needs.
Haiti's agriculture minister
yesterday announced his department will permit the importation
of 730 black Creole pigs, which had been banned from the island
nation since 1983.
Between 1981 and 1983, a team of Canadian veterinarians
funded by the United States, Canada, Mexico and Costa Rica
supervised the slaughter of all Haiti's 1,200,000 pigs under a
program to eradicate African swine flu.
Today's announcement that Catholic Relief Services
(CARITAS) can import 730 Jamaican pigs comes after months of
protests by farmers who had owned 90 pct of the slaughtered
pigs.
West German banking authorities are
considering requiring German banks to bring securities holdings
into lending ratio calculations used to regulate credit risk,
banking sources said.
The present interpretation of the credit law limits banks'
maximum lending to 18 times eligible capital -- reserves plus
equity capital -- but sets no restraints on securities
holdings.
Under new provisions, weightings would be attached to
securities similar to those used for lending. Weightings would
range from a zero rating for no-risk assets to 100 pct of total
asset value for what authorities consider the highest risk.
Low-risk securities carrying a zero rating would include
public authority bonds for the federal government, states and
municipalities, the sources said.
A 20 pct rating would be assigned to issues of domestic
banks. Secured bonds of mortgage, shipping and public authority
banks would be an exception to this, via such securities as
mortgage and municipal bonds.
Securities issued by foreign banks would attract a
weighting of 50 pct, while authorities are considering
requiring banks to include 100 pct of the value of debt assets
of foreign issuers, including sovereign borrowers.
The sources said the revision is still being discussed, and
required approval by the federal Banking Supervisory Office in
West Berlin, the Bundesbank, and West Germany's four banking
associations.
The move is a response to the increasing securitisation of
debt markets, they added.
Grain traders and analysts look for a
10 to 12 mln acre sign-up in the USDA's conservation reserve
program, scheduled to be announced after 1400 CST today.
The USDA probably will accept about 80 to 90 pct of the
acres submitted, they said.
Total enrollment in the first three years of the program is
only 8.9 mln acres, so the sharp increase expected this year
has underpinned new crop corn futures all week.
However, some analysts said a 10 to 12 mln acre sign-up may
end up being negative to new crop corn prices, citing trade
talk earlier this year that 14 to 15 mln acres may be submitted
by farmers. Also, acres set-aside under the conservation
program are by definition poor yielding, so the impact on total
corn production will be minimal, they added.
Standard and Poor's Corp said it
expects the asset-backed securities market to grow dramatically
over the next few years, spurred by what it termed the
compelling benefits of secured financing.
S and P projected the market would grow to 100 billion dlrs
in the next five years. Investment bankers say the market
currently stands at roughly 11.9 billion dlrs.
Assets used to secure the debt included auto loans, credit
cars, computer leases and corporate loans, S and P noted. The
most active issuers to date had two main motivations, lower
costs of funding and increased financial flexibility.
Standard and Poor's pointed out that General Motors Corp
The growth rate of Brazilian
industrial output slowed in January to 6.09 pct above the same
1986 month after rising 6.71 pct in December, Brazilian
Geography and Statistics Institute figures show.
The result is in line with the declining trend in the
growth rate since October, the Institute said.
In the 12 months to end-January industrial production was
10.48 pct above the 12 months to end-January last year while in
calendar 1986 output was 10.89 pct above 1985.
The biggest output rises in the 12 months to end-January
were 23.68 pct in pharmaceuticals and 22.12 pct in machinery.
Colombia opened coffee export
registrations for April and May with the National Coffee
Growers' Federation setting no limit, Gilberto Arango,
president of the private exporters' association, said.
He told Reuters the decision not to put any limit responded
to "new factors" which have emerged from recent International
Coffee Organisation talks in London, where producers and
consumers failed to agree on a re-introduction of export quotas.
The U.S. Agriculture Department has
accepted 10,572,402 more acres of highly erodable cropland into
the Conservation Reserve Program, USDA announced.
In the latest signup, farmers on 101,020 farms submitted
bids on a total of 11,254,837 acres.
The accepted bids for annual rental payments ranged up to
90 dlrs per acre with an average of 51.17 dlrs per acre.
Land entered into the Conservation Reserve Program will be
ineligible for farming for ten years and must be planted with
permanent vegetative cover.
Producers enrolled 1,894,764 acres of corn base acreage in
the conservation program to take advantage of a corn "bonus"
rental payment that was offered by USDA.
The corn bonus, to be paid in generic comodity
certificates, amounts to two dlrs per bushel, based on the ASCS
program payment yield for corn, for each acre of corn based
accepted into the reserve.
The state showing the biggest enrollment in the
conservation program during this signup was Texas with
approximately 1.225 mln acres, followed by Iowa with 1.030 mln
acres, Minnesota with 890,000 acres, Montana 875,000 acres, and
Kansas with 842,000 acres.
Other states showing big enrollment were Missouri with
646,000 acres, North Dakota with 588,000 acres, and Nebraska
with 554,000 acres.
In the corn belt states of Illinois and Indiana, 217,000
acres and 116,000 acres respectively were enrolled.
Farm land signed up to date in the conservation program
totals 19,488,587 acres. Bids on the previous signups ranged up
to 90 dlrs per acre with an average of 45.52 dlrs.
Shr loss 30 cts vs loss 20 cts
Net loss 1,553,000 vs loss 1,031,000
Revs 10.0 mln vs 8,696,000
International Game Technology said it
filed with the Securities and Exchange Commission a
registration statement covering a 35 mln dlr issue of senior
notes due 1995 and a 25 mln dlr issue of convertible senior
subordinated debentures due 2002.
The company named Drexel Burnham Lambert Inc as sole
manager of the offerings.
Standard and Poor's Corp said it
upgraded 1.2 billion dlrs of debt of Union Carbide Corp and its
affiliate, DCS Capital Corp.
Raised were the pair's senior debt to BB-plus from
BB-minus. Union Carbide's subordinated debt was upgraded to
BB-minus from B.
S and P said the action reflected several positive factors
which emerged over the past year, including a better balance of
supply and demand in the chemical industry. Union Carbide has
also benefitted from the turnaround in foreign exchange rates
and lower feedstock costs, the agency noted.
Standard and Poor's said the company's asset sales, and
subsequent use of the proceeds for debt reduction, exceeded the
corporate plan of a year ago.
The rating agency also pointed out that Union Carbide's
successful refinancing of more than 2.5 billion dlrs of
long-term debt has resulted in a substantially lower interest
burden.
Armatron International Inc said
it negotiated a new seasonal line of credit with three lenders
for 10 mln dlrs for working capital requirements to support its
lawn and garden product line.
Shr loss 52 cts vs profit six cts
Net loss 2,943,000 vs profit 334,000
Revs 33.5 mln vs 18.5 mln
Year
Shr loss 1.57 dlrs vs profit 16 cts
Net loss 8,781,000 vs profit 792,000
Revs 116.0 mln vs 56.5 mln
Qtly div class B 13.5 cts vs 13.5 cts
Pay April 30
Record April 9
Prices of wholesale finished energy
goods in the United States were up in February, rising by 4.0
pct after a 9.8 pct rise in January, the Labor Department said.
The Producer Price Index for finished energy goods has
fallen 20.9 pct in the past 12 months.
Heating oil prices rose 3.0 pct in February after a 18.0
pct rise in January, the department said.
Gasoline prices rose by 5.5 pct last month after a 15.7
pct January rise, the department said. Natural gas prices rose
1.8 pct after a 4.2 pct rise in January.
Energy goods at the intermediate stage of processing rose
2.7 pct in February after rising 3.5 pct in January and were
down 16.1 pct over the past 12 months, the Labor Department
said.
Prices for crude energy goods, such as crude oil, coal and
gas at the wellhead, rose 2.6 pct last month after a 10.0 pct
January rise. They were down 11.6 pct from February 1986, the
department said.
At the intermediate stage, liquefied petroleum gas prices
rose 10.1 pct last month after a 5.0 pct January rise and were
41.0 pct below prices a year earlier, the department said.
Residual fuel prices rose 16.7 pct in February after a 13.4
pct rise a month earlier and were off 17.4 pct in 12 months.
Electric power prices fell 0.3 pct last month, after a 1.3
pct January decline, and were down 3.6 pct from a year ago.
Crude oil prices rose 4.4 pct in February, after a 19.7 pct
January rise and were off 21.3 pct from the year ago level.
Prices of natural gas at the wellhead rose 1.8 pct in
February after rising 4.2 pct a month earlier and were 14.8 pct
lower than they were 12 months earlier, the department said.
Coal costs were down 0.3 pct last month after rising 0.4
pct in January and were down 0.8 pct from a year ago.
Shr loss two cts vs profit three cts
Net loss 80,333 vs profit 67,967
Revs 1,162,678 vs 1,009,731
Avg shrs 3,317,104 vs 2,494.049
year
Shr loss 21 cts vs profit four cts
Net loss 679,520 vs profit 96,724
Revs 4,191,540 vs 4,702,999
Avg shrs 3,242,641 vs 2,525,677
NOTES: Revenues exclude hospital television rental business
sold Dec 29, 1986
1986 losses in both periods include gain of 530,000 dlrs on
sale of discontinued business
The Commerce Department said all
Canadian firms have begun to pay an agreed 15 pct surcharge on
softwood shipped to U.S. markets.
It made the statement after talks with Canadian officials
about rumors in Canada that some exporters were not paying the
charge.
Canada and the U.S. agreed last December to the 15 pct
charge, ending a lengthy trade dispute over alleged Canadian
subsidies to Canada's softwood exporters.
Commerce officials declined to say if any Canadian
companies had been evading the charge, but said following the
talks they were convinced all exporters were complying with the
agreement.
Undersecretary of Commerce Bruce Smart said "We are
gratified to learn that companies in Canada have begun paying
the export charge on lumber."
He added the agreement was important to the health of the
U.S. lumber industry and he intended to see that it was fully
carried out.
A decision by Colombia to open coffee
export registrations for an unlimited amount does not imply the
country will heavily sell coffee until recently withheld,
Gilberto Arango, president of the private exporters'
association, told Reuters.
Colombia today opened export registrations for april and
may, with the National Coffee Growers' Federation setting no
limit.
Since the start of the coffee year last october, private
exporters were on average allowed 350,000 bags of 60 kilos per
month.
"Traders will initially interpret this measure as announcing
heavy sales. Even today it pressured the market. But it will
quickly become apparent that Colombia does not intend to go
over the top," Arango said in an interview.
"Colombia's marketing policy is to sell without haste but
consistently. No targets for volume will be set. We will react
to market factors adequately. Colombia has no intention to give
its coffee away," he added.
Arango described measures adopted here yesterday, including
a lower export registration price, as a major change in
Colombia's coffee marketing policy.
The export registration price, or reintegro, was lowered to
1.10 dlr per lb ex-dock new york, or 155.83 dlrs per bag of 70
kilos, from 1.35 dlrs (194.33 dlrs).
The government announced a more flexible policy of
reintegro, in order to closely reflect market trends, which
arango warmly welcomed saying private exporters will
undoubtedly be more actively present in the market.
A frequent gap between international market prices and the
reintegro was unlikely to recur, he said.
Ecuadorean President Leon Febres Cordero
said his country was unilaterally suspending payments to
private foreign banks due to last week's earthquake which
caused up to one billion dollars in damage.
Febres Cordero, quoted in an Information Ministry
communique, said: "We have to ratify this suspension ... on debt
service to the private international banks.
"I am not ashamed to say it, there definitely isn't a way to
pay," he said.
Ecuador had already suspended payments to private foreign
banks, holding two-thirds of Ecuador's 8.16 billion dollar
foreign debt, from last January due to a cash-flow squeeze
stemming from a slide in world oil prices last year.
But finance officials had earlier said the length of the
suspension would depend on negotiations with private foreign
banks.
The information ministry communique said febres cordero
made these statments to reporters at lago agrio, at the heart
of ecuador's region of jungle oilfields, before returning to
quito.
Febres cordero said up to a total of 1,000 people died or
were missing in avalanches and mudslides during the march 5
earthquake.
The tremor damaged an oil pipeline, thus barring all crude
exports for a projected five months. Oil accounts for up to
two-thrids of ecuador's total exoprts and for as much as 60 per
cent of the government's revenues.
He did not specify for how long the suspension of payments
would last.
Ecuador owes private foreign banks 450 to 500 mln dlrs in
interest payments for the rest of the year and 66 mln dlrs
in principal payments maturing in 1987, finance officials said.
Finance minister domingo cordovez said two days ago the
government seeks to postpone all the payments due to private
foreign banks in 1987 until next year through negotiations with
these creditors.
Sweden's trade surplus rose to 3.6
billion crowns in February from 1.5 billion in January and 3.48
billion in February 1986, the Central Bureau of Statistics
said.
The trade surplus for the first two months of the year rose
to 5.1 billion crowns from 4.9 billion in the corresponding
period of 1986.
The report said February imports stood at 20.1 billion
crowns while exports were 23.7 billion.
Saudi Arabian business
leaders assembled for a conference aimed at thrashing out
problems facing the private sector of the kingdom's
oil-dependent economy.
The meeting of some 500 top businessmen from across Saudi
Arabia comes at a time of guarded optimism in industry and
commerce following the OPEC pact to boost world oil prices.
The four-day conference in this resort town, high in the
mountains above the Tihamah plain stretching to the Red Sea,
has been organised by Saudi Arabia's chambers of commerce.
Finance Minister Mohammed Ali Abal-Khail and Commerce
Minister Suleiman Abdulaziz al-Salim will attend the first day.
Bankers and businessmen said the conference will air
problems facing commerce and industry after last year's slide
in oil prices and examine ways to promote higher investment in
a private sector sorely short of finance.
Government planners have long recognised that Saudi Arabia,
the world's largest crude exporter, needs to foster private
enterprise to diversify its oil-based economy.
The fledgling private sector was hard hit by the Middle
East recession as early as 1983 and several big manufacturing
and trading companies ran into problems repaying loans.
Renewed optimism this year stems largely from the accord
reached by OPEC last December to curb oil output and boost
prices to a benchmark level of 18 dlrs per barrel.
With oil prices recovering, Saudi Arabia went ahead at the
turn of the year with long-delayed budget plans incorporating a
52.7 billion riyal deficit to be bridged by drawing down
foreign reserves.
The simple act of publishing a budget restored a measure of
confidence to the business community.
Some share prices have risen by more than 35 pct since last
November, while banks are generally reporting a slowdown in the
number of new non-performing loans.
But not all bankers are convinced. One senior corporate
finance manager in Riyadh said: "Banks are still reluctant to
lend ... There is certainly more optimism in the air, but I am
not sure if it is firmly based."
Some businessmen and bankers point out that government
spending is still under tight control and the non-oil economy
may still be contracting.
Capital expenditure on large projects has been cut sharply.
A U.S. Embassy report on Saudi Arabia published just before the
budget said: "While industrialisation has continued to be one of
the government's highest priorities, the recession, the
payments problem and the lack of financing have reduced Saudi
and foreign investor interest in industry."
It is the lack of fresh investment that is expected to be a
major issue among the businessmen gathered here.
Official figures show the number of new licences for
industrial ventures fell 24 pct in the six months to March
1986, compared with the same period in 1985.
Lending by the Saudi Industrial Development Fund, a major
source of industry backing, has fallen steadily since 1983.
Trading companies have also been hit, some caught with huge
inventories of construction equipment as recession bit.
Some firms laid off workers and cut bloated inventories.
Others have effectively been liquidated. A few have reached
agreement with bankers to extend debt repayments.
The latest rescheduling is for the shipping-to-hotels
conglomerate REDEC. Its negotiators have just initialled a
draft accord to restructure payments on 1.3 billion riyals of
bank debt.
Bankers and businessmen said the conference was also likely
to discuss the apparent reluctance of U.S. And British firms to
step up investment in the kingdom.
A British government delegation has just left Riyadh after
holding preliminary talks on ways of offsetting the huge Saudi
outlay on a defence contract to supply 132 fighter aircraft
worth five billion stg.
The United States wants Taiwan's
currency to appreciate faster to reduce Taiwan's trade surplus
with the U.S., A senior trade official said.
Board of Foreign Trade director Vincent Siew told reporters
on Saturday U.S. Officials told him in Washington last week
that unless Taiwan allowed its dollar to rise faster it would
face retaliation.
Siew returned from Washington on Friday after the U.S
responded to Taiwan's request to increase its textile export
quotas by promising further talks in May. Taiwan's surplus with
the U.S. Hit a record 13.6 billion U.S. Dlrs in 1986.
Washington signed a three-year accord with Taipei last year
limiting textile export growth to 0.5 pct a year.
Siew said the Taiwan dollar had risen by about 15 pct
against the U.S. Dollar since September 1985.
It surged last week amid indications Washington was seeking
a major rise in its value. It rose four cents against the U.S.
Dollar on Saturday to close at 34.59.
Western trade sources told Reuters Taiwan and the U.S. Have
been holding talks on the currency issue but added it is not
clear how far Washington wants to see the Taiwan dollar rise.
Tanzania seeks to export a
surplus of 200,000 tonnes of maize from last year's bumper
harvest, agriculture minister Paul Bomani said yesterday.
The 1986 maize crop was officially estimated at 2.1 mln
tonnes, but only a fraction of this was marketed, with most
grain consumed by the farmers who grew it.
The state-owned National Milling Corp (NMC) meanwhile said
it is trying to sell 190,742 tonnes of maize stored in
different parts of the country.
NMC acting general manager John Rubibira said Tanzania has
only 56,000 tonnes of silo storage capacity, concentrated in
Dar es Salaam, Arusha in the north and Iringa in central
Tanzania.
In addition, the country has 450,000 tonnes of flat storage
capacity, he added.
Rubibira said the government is planning to build new silos
in the main maize producing areas of Iringa, Mbeya, Ruvuma and
Rukwa.
European sugar beet plantings are
expected to show little change from last year, despite recent
firmness in world prices, analysts and industry sources said.
A Reuter survey of planting intentions showed that while,
so far, European Community (EC) growers plan unchanged to lower
areas, increases are expected in some Eastern European nations.
Trade analysts said their private reports give similar
results and do not differ significantly from the first estimate
of stagnant 1987 European beet plantings made last week by West
German sugar statistician F. O. Licht.
Areas may be slightly lower but analysts and agricultural
experts said the steady rise in yields resulting from improved
seed varieties and better farming techniques could offset this.
In recent years, good autumn weather has given yields a late
boost, making up for lower areas despite some disappointing
starts to growing seasons.
Changes in EC areas reflect the extent to which producers
will grow so-called "C" sugar for unsubsidised sale to the world
market. This is what is produced in excess of the basic area
needed to meet the EC "A" and "B" quotas, which receive full and
partial price support, respectively.
Some analysts said the open row that broke out last week
between producers and the EC commission over its export policy
could have serious implications for future sugar output.
Beet producers have threatened to effectively dump nearly
one mln tonnes of white sugar into EC intervention stocks as
they feel export subsidies have been too low to compensate for
the gap between high EC internal and low world market prices.
However, with the EC budget stretched to breaking point,
this could give treasury ministers extra resolve in resisting
higher guaranteed sugar prices and build a case for a future
cut in the basic "A" and "B" quotas, they added.
In France, the largest producer of EC quota and non quota
sugar, the sugar market intervention board FIRS said first
planting intentions indicate an area about the same as last
year's 421,000 hectares, nine pct below the previous year.
"The basic trend is towards stability," a FIRS spokesman
said. Unlike world market raw sugar prices in dollars, white
sugar French franc prices are not particularly high and are not
encouraging higher planting levels, he said. Beet sugar output
last year was 3.37 mln tonnes, with an average yield of 8.00
tonnes per ha, the highest in the EC apart from the Netherlands
but below 8.52 the previous year and a five year average 8.11.
In West Germany, recent price rises have not altered plans,
since planting decisions were taken a few months ago, industry
sources said. The farm ministry said a December survey is still
valid and plantings should be cut slightly after being trimmed
by just under four pct in 1986 when yields were above average.
Licht last week estimated West German plantings at a
reduced 385,000 hectares against 399,000 last year.
British Sugar Plc, the monopoly beet processor, has signed
up U.K. Farmers to grow 8.1 mln tonnes of beet. This should
yield about 1.25 mln tonnes of whites. Last year's crop
equalled the second highest ever at 1.32 mln tonnes.
British Sugar has "A" and "B" quotas totalling 1.144 mln tonnes
of whites and its "C" output is due to improved yields from more
consistent disease-resistant seed types.
Recent price rises have not altered Polish plans, Wincenty
Nowicki, a deputy director of Cukropol, the Amalgamated Sugar
Industry Enterprises, said. World prices are still below Polish
production costs and there is no way to convince farmers to
increase the area above the already signed contracted level.
The national plan, set before prices began to rise, put
plantings this year at 460,000 hectares, against 425,000 in
1986, Nowicki said. Last year production was 1.74 mln tonnes.
World prices have less impact in Italy than in France or
Germany as it is traditionally not an exporter but is geared to
the domestic market, an official at the national beet growers'
association said. Italian sowings are not yet complete but
surveys suggest a drop from last year's 270,000 ha, especially
in the north where some farmers have switched to soya.
Beet output last season of 15.5 mln tonnes yielded a higher
than expected 1.72 mln tonnes of white sugar.
Dutch plantings are expected to fall to 130,000 ha from a
record 137,600 in 1986 as a new self-imposed quota system comes
into force, a spokesman for Centrale Suiker, the second largest
Dutch sugar processor, said.
The new system aims for an average of around 915,000 tonnes
of white sugar and to cut output of "C" sugar. Last year, the
Netherlands produced a record 1.2 mln tonnes of white sugar
against a combined "A" and "B" quota of only 872,000 tonnes.
"The world price of sugar would have to rise much higher
than it has done recently to make planned production of "C" sugar
really worthwhile," the spokesman said.
Western agricultural experts in Moscow said Soviet planting
intentions are likely to be unchanged. Licht put this year's
Soviet beet area at 3.40 mln ha, against 3.44 mln last year.
Hungary is expanding its beet area to 105,000 ha from some
95,000 in 1986, the official MTI news agency said, but
diplomats said policy is to balance supply with domestic
demand.
The Spanish ministry of agriculture said beet sowings are
estimated unchanged at 180,000 ha this year.
A spokesman for Denmark's largest beet concern, De Danske
Sukkerfabrikker A/S, said its 1987 sugar target was unchanged
from 1986 at 365,000 tonnes from a steady area of 60,000 ha.
In Sweden, where beet is grown just to meet domestic
demand, the planted area is seen little changed at 51,000 ha
against 51,300 last year, according to a spokesman for sugar
company Svenska Sockerfabriks AB.
Last year, Irish yields were the lowest for 10 years due to
late sowings and the state-run Irish Sugar Plc said the 1987
plantings target is the equivalent of 36,400 hectares, down
from 37,600 in 1986.
A government commission that controls 51
pct of
Year-on year Finnish consumer prices
fell to 3.5 pct in February 1986 from 3.7 pct in January and
4.6 pct in February 1985, the Central Statistical Office said.
Consumer prices rose 0.3 pct in February after rises of one
pct in January and 0.5 pct in February 1985.
The consumer price index, base 1981, was 142.7 in February,
142.2 in January and 137.8 in February 1986.
Gold is expected to continue its rise
this year due to renewed inflationary pressures, especially in
the U.S., Hamburg-based Vereins- und Westbank AG said.
It said in a statement the stabilisation of crude oil
prices and the Organisation of Petroleum Exporting Countries'
efforts to achieve further firming of the price led to growing
inflationary pressures in the U.S., The world's biggest crude
oil producer.
Money supplies in the U.S., Japan and West Germany exceed
the central banks' limits and real growth of their gross
national products, it said.
Use of physical gold should rise this year due to increased
industrial demand and higher expected coin production, the bank
said.
Speculative demand, which influences the gold price on
futures markets, has also risen. These factors and South
Africa's unstable political situation, which may lead to a
temporary reduction in gold supplies from that country,
underline the firmer sentiment, it said.
However, Australia's output is estimated to rise to 90
tonnes this year from 73.5 tonnes in 1986.
The Bank of Japan is satisfied with the
yen around its current range, a senior central bank official
told reporters.
He said the pledge by major industrial nations in Paris
last month to cooperate to hold exchange rates around current
ranges applied in both directions, a dollar fall or a dollar
rise.
Unilateral intervention itself cannot ensure currency
stability, but it can be useful when coordinated with other
policies and with other central banks, he said.
The Bank of Japan is rather confident currency stability
will continue for some time, the senior bank official said, but
declined to be more specific.
Finance Minister Kiichi Miyazawa told parliament on Friday
the current dollar/yen exchange rate is not necessarily
satisfactory for the Japanese economy.
Asked what factors might destabilize the markets, the
official cited a lessening of market fear about intervention, a
completely unexpected change in the economy of Japan, the U.S.
Or West Germany, or resumption of comments by government
officials seeking to talk the dollar up or down.
The senior bank official said he expects Japan's gross
national product (GNP) to grow three pct or slightly more in
the fiscal year beginning in April. That would be little
changed from the performance expected this year.
Domestic demand may grow nearly four pct in 1987/88, but
the external sector will have a negative impact on GNP of
nearly one percentage point, he said.
He said there was virtually no room for further monetary
policy action to boost the economy. The economy's performance
in the future very much depends on fiscal policy, he added.
The central bank's monetary policy has already done its
part in stimulating the economy, the senior bank official said.
The Bank of Japan has cut its discount rate five times over the
last year and a half.
Although the central bank does not see any imminent risk of
inflation, there could be some problems in the future, he said.
"We are sitting on a barrel of powder, but fortunately it may
still be wet," he added.
Liquidity among private households and especially the
corporate sector has increased substantially, he said.
The liquidity is the reason for the recent boom of stock
exchange prices, the bank official said. This inflow of funds
into the stock exchange, occurring also in other countries, may
continue, he said.
Peru will put into effect today a foreign
exchange rationing system for imports designed to stop a slide
in the country's international reserves, a government decree in
the Official Gazette said.
Under the system, importers will be required to present a
bill from the foreign seller of goods and apply for a license
for foreign exchange. The central bank will have 10 days to
decide whether to issue the required foreign exchange.
Net international reserves now total about 800 mln dlrs
compared to 1.54 billion dlrs a year ago.
The system will be effective until the end of 1988.
A ceiling for foreign exchange availability will be set by
a council with members from the central bank, the economy
ministry and the planning and foreign trade institutes. The
central bank will issue licenses to procure foreign exchange in
accordance with guidelines set by the council.
Peru's reserves fell sharply due to a drop in the trade
surplus to about five mln dlrs in 1986 from 1.1 billion in
1985, according to preliminary central bank estimates.
Total exports dropped to 2.50 billion dlrs last year against
2.97 billion in 1985.
Indonesia will build a crude palm oil
terminal at a new port on Batam island, south of Singapore,
Research and Technology Minister Yusuf Habibie said.
The terminal will be able to handle 2.1 mln tonnes of crude
palm oil from new plantations in northern Sumatra and western
Kalimantan (Borneo), he said.
A tender for engineering work on the Asia Port project will
be offered mid-year. Habibie did not say when the terminal was
expected to be operational.
Philippines finance minister Jaime
Ongpin said he was cautiously optimistic an accord on debt
rescheduling would be reached with commercial bank creditors,
as he prepared for the third week of talks starting Monday.
"One can never be too optimistic, but I'm cautiously
optimistic that we can get an agreement....We think we're close
to a deal," Ongpin told Reuters by telephone.
He said he had received a new proposal from the banks late
Friday and had spent the weekend evaluating it with other
members of the Philippine delegation.
Ongpin declined to disclose details of the banks' new offer
and bankers also declined to be specific ahead of their next
meeting with Ongpin on Monday. But one senior banker said he
too was guardedly optimistic a deal could be struck, possibly
by the end of the week.
Still at the heart of the talks is Ongpin's offer to pay
part of the country's interest bill in Philippine Investment
Notes, PINs, instead of cash. The bank creditors' advisory
committee led by Manufacturers Hanover Trust Co rejected the
concept as it was originally drafted, but the counter-proposal
made on Friday contains a revised version, bankers said.
Manila, seeking to reschedule 9.4 billion dlrs of its total
debt of 27.2 billion, wants to pay the London Interbank Offered
Rate (LIBOR) in cash and a margin above LIBOR in PINs.
These dollar-denominated notes would be sold by banks at a
discount to multi-national firms which would then convert them
at face value with the central bank, thus receiving subsidized
pesos for use in funding government-approved investments.
Effectively foreign companies would be paying the interest
margin above LIBOR. The Philippines would conserve foreign
exchange and enjoy investment inflows, reducing marginally the
need to seek new bank loans.
But the banks rejected the PINs proposal in its original
form, fearing regulatory and accounting problems.
They were also reluctant to veer from the principle that
interest should be paid in cash not paper, fearing that other
debtor nations would emulate the idea, bankers said.
Ongpin sweetened his original offer by guaranteeing that
his government would redeem the notes at 7/8 pct over LIBOR if
there was no buyer in the secondary market.
Last week the banks came under pressure to accept this,
when senior U.S. Officials endorsed it as fully consistent with
Treasury Secretary James Baker's debt strategy.
But banking sources said that the margin over LIBOR was
still a sticking point.
After Venezuela clinched a revised rescheduling agreement
last month at 7/8 pct over LIBOR, some New York bankers
imediately claimed that 7/8 pct should be seen as a new
benchmark for a debtor that needs no new loans, is current on
interest and is repaying some principal.
The Philippines meets the first two criteria but not the
third.
Renouf Corp International said it has
extended the expiration of its offer to pay 31 dlrs a unit to
buy all outstanding units of Benequity Holdings a California
Limited Partnership to March 24 from March 13.
As of March 13, Renouf said, about 3,847,375 units had been
tendered.
Renouf pointed out this exceeds the minimum number sought
in the offer, but its statement gave no reason for the
extention. Benequity has 5.7 mln units outstanding.
Banca della Svizzera Italiana
U.S. roastings of green coffee in the
week ended March 7 were about 325,000 (60-kilo) bags, including
that used for soluble production, compared with 290,000 bags in
the corresponding week of last year and about 315,000 bags in
the week ended February 28, George Gordon Paton and Co Inc
reported.
It said cumulative roastings for calendar 1987 now total a
3,295,000 bags, compared with 3,620,000 bags by this time last
year.
WTD Industries Inc said it filed with
the Securities and Exchange Commission a registration statement
covering a 30 mln dlr issue of senior subordinated debentures
due 1997.
Proceeds will be used mainly for the acquisition of
additional woods products manufacturing facilities and related
properties, WTD said.
The company named Kidder, Peabody and Co Inc as lead
underwriter of the offering.
U.S. Trade Representative Clayton
Yeutter said the Export Enhancement Program, EEP, should be
used as a "tactical tool" and not as a general policy.
Yeutter made the comment in response to a question whether
the U.S. should expand the EEP to cover grain sales to the
Soviet Union.
He did not comment directly on the Soviet question,
replying that any decision would be made at the highest levels
of the Reagan administration, and "I don't want to preempt that."
Yeutter told the National Grain and Feed Association EEP
should continue to be used as a tactical tool against the
European Community but not as a general policy. He said
selective EEP use has been successful in pressuring the E.C.
A group of affiliated New York-base
investment firms and funds told the Securities and Exchange
Commission they have acquired 453,300 shares of Purolator
Courier Corp, or 5.9 pct of the total outstanding.
The group, led by Mutual Shares Corp, said it bought the
stock for investment purposes.
It also said it is studying the 35 dlr a share leveraged
buyout offer made by Purolator managers and E.F. Hutton LBO Inc
but has not decided whether it will tender its stock in the
offer. The group said it has held talks with the Hutton LBO
group before and may do so again.
Metex Corp said its chairman and
chief executive officer Alan Cohen sold 78,375 shares of Metex
common stock to Metropolitan Consolidated Industries Inc
Private coffee exporters say Colombia's
more pragmatic coffee marketing policy will ensure that the
country does not suffer excessively from current depressed
prices and erratic market conditions.
Gilberto Arango, president of the exporters' association,
said in an interview that Colombia, the world's second largest
producer, was in a position to withstand a prolonged absence of
International Coffee Organization (ICO) export quotas.
"Colombia is one of the countries that will benefit most
from this situation," he said.
Recent ICO talks in London failed to break a deadlock over
re-introduction of export quotas, suspended in February 1986,
and no date has been set for a new meeting on the issue.
Arango said that government measures adopted here last
week, including a lower export registration price, indicated a
major change but also disclosed a welcome pragmatism.
"This is the start of a new era in Colombia because world
market conditions are also new," he said.
The government lowered local taxes for exporters and said
the export registration price, or reintegro, will be changed
more often in order to closely reflect market trends.
Arango said an illustration of Colombia's new attitude was
the decision on Friday to open export registrations for an
unlimited amount.
But he added it did not imply the country would begin heavy
selling of coffee.
"Our marketing policy is to sell without haste but
consistently. No targets for volume will be set. We will react
to market factors adequately and Colombia has no intention of
giving its coffee away."
Colombia's past records should be the basis for upcoming
exports, he said.
"We will certainly not export seven mln (60-kilo) bags but
neither are we going to sell like mad. The trade knows full
well what Colombia's export potential is," he said.
Colombia, with stockpiles standing at about 10 mln bags,
exported a record 11.5 mln bags in the 1985/86 coffee year
which ended last September, and 11.3 mln in calendar 1986.
Arango did not want to commit himself on export predictions
but said that output for the 1986/87 coffee year would not
exceed 10.5 mln bags, compared with 12 mln forecast by the
National Coffee Growers' Federation and 12.5 mln by the U.S.
Department of Agriculture, a figure he said was "ridiculous."
He said ageing plantations and rust, in particular in the
number one producing province of Antioquia, meant output was
likely to fall but that nationwide estimates were rare and
oscillated between 9.5 mln and 11.5 mln bags.
On the failure of the recent ICO talks, Arango said
Colombia understandably felt frustrated at not having managed
to force a compromise.
Jorge Cardenas, manager of the national federation and head
of his nation's delegation in London, has blamed the
intransigence of some big countries, without naming them.
However, Arango, like Colombian Finance Minister Cesar
Gaviria last week, was more explicit and said the United States
would undoubtedly be under great political pressure in coming
weeks to revise its policy.
"Washington will have to take into account that for many
countries, and some of its allies for instance in Central
America, a sharp fall in coffee export revenue would have
far-reaching political and economic consequences."
Arango ruled out a fresh Colombian initiative on export
quotas saying producers had now to show a common resolve which
could emerge from continuous contacts.
Consul Restaurant Corp said it began
an exchange offer for its 13 pct convertible debentures due
1992 with an aggregate principal amount of 17.5 mln dlrs.
Consul officials told an analysts meeting that in return
for each 1,000 dlr face value of the bonds tendered, investors
will receive 10 shares of preferred stock convertible after Dec
1, 1987, into 500 shares of common. The company said the value
represents a substantial premium over the debentures' market
value, which traded at 410 dlrs per 1,000 dlr face amount on
March 13.
Consul said the debt was taken on to finance expansion.
James Crivits, Consul chairman, said debt service on the
outstanding debentures has cost the company 55 cts a share per
quarter and cut deeply into the company's profitability.
For the year ended May 31, 1986, the company reported a net
loss of 1.12 dlr per share or 5.3 mln dlrs on revenues of 77.6
mln dlrs.
Crivits said the company will report an improved but still
unprofitable third quarter ended February 28, compared to a
loss of 22 cts a share in the year-ago thrid quarter. He said
current third quarter results would be similar to 1987's
second quarter's loss of 12 cts per share.
Crivits said the company will not produce a gain in the
fourth quarter or the full year, and said there will be a write
off in the fourth quarter for the debenture exchange offer. He
would not specify the amount of the write off.
Robert Lamp, Consul's chief financial officer, said the
company needs to have at least 90 pct of the bonds exchanged in
the transaction to report a profit in the first quarter of
fiscal 1988. Lamp said that if the exchange is successful, the
company will report profits much higher than the three cents a
share reported in the first quarter of fiscal 1987.
The Minneapolis-based company, which it said is the
nation's largest franchisee of Chi-Chi's family-style Mexican
restaurants, said it had the planned to expand to 80 units, but
had to abandon the effort, leaving 38 units in operation.
The company also said the restaurants are profitable, with
profit margins increasing over last year.
A 250 dlr spot charge will be added to
the New York cocoa futures, July delivery, contract starting
Wednesday, March 18, the Coffee, Sugar and Cocoa Exchange said.
The March delivery ceases trading March 17, making May and
July the two nearby unlimited positions. Previously, March and
May were unlimited.
The margin requirement for a May or July position will be
1,000 dlrs--750 dlrs original margin plus 250 dlrs spot fee.
Prime Minister Brian Mulroney said
"significant progress" was being made in trade talks with the
United States and a profile of a major deal was emerging.
Opening a debate on free trade in the House of Commons,
Mulroney said an accord would create thousands of jobs in
Canada and bring greater economic prosperity to both countries.
Mulroney, who offered few new details of the talks, said
that while the negotiations were risky and difficult, "a
profile of a major trade deal is now emerging."
In a 50-minute address, Mulroney made an often passionate
defense of the initiative that he said would give poorer areas
of the country a major economic boost.
"Because of our trading patterns over a period of decades,
we are in the process of building two Canadas -- one that is
rich and promising, one that is under-developed and
under-employed," said Mulroney.
"What we want is to make sure Newfoundlanders and British
Columbians and Albertans and others, that they get their
chance. They must be given the opportunity to trade their way
to prosperity."
Few detials have been released on the trade talks which
were launched nearly two years ago between the two nations that
are each others most important trading partners.
Recent published reports in Canada, quoting senior trade
sources, said the countries were close to reaching a trade deal
and it will involve eliminating border trariffs and many
non-tariff barriers over the next 10 to 12 years.
It has been reported a key stumbling block in the talks is
a Canadian proposal to find a new way to settle trade disputes,
something that would give Canada protection from Washington's
tough trade remedy laws.
But Mulroney, sharply critical of protectionist sentiment
in the U.S, said Canada was a "fair trader" and denied the
government was pursuing the deal to win unfair access to the
American market.
He said a trade deal must bring benefits to both sides.
"We recognize a good deal must be a fair deal, one that is
fair to both sides," Mulroney said.
Maryland National Corp
Magnetic Technologies Corp said
it expects the second half to show continued growth in earnings
and sales.
The company today reported a profit for the first half
ended January 31 of 105,013 dlrs, compared with a year-earlier
loss of 745,641 dlrs, on sales of 3,661,565 dlrs, up from
2,810,132 dlrs. In all of last year, Magnetic earned 996,000
dlrs after a loss from discontinued operations of 359,000 dlrs,
on sales of 6,084,000 dlrs.
Africa may have to follow Brazil in
halting foreign debt payments unless industrialised nations are
prepared to be more flexible in trade and economic policy,
Ethiopian trade minister Tesfay Dinka said.
Growing protectionism and declining commodity prices had
caused a major deterioration in the export earnings of all
developing countries, he said in an opening speech to a meeting
of African trade ministers in Addis Ababa.
Unless there was an early improvement in developing
countries' terms of trade "the only choice is to follow the
route that Brazil appears to have taken," Tesfay said.
The two-day meeting of delegates from 50 African states was
called to work out a consensus ahead of the Group of 77
ministerial meeting in Havana next month, when the developing
countries will debate their strategy in economic negotiations
with the West.
Tesfay accused the West of intransigence in the negotiation
of recent commodity agreements.
The failure of the International Coffee Organisation to
agree on the reintroduction of export quotas would mean "several
African countries will not have the foreign exchange to import
essential items," he said.
Coffee accounts for 60 pct of Ethiopian exports and the
recent fall in world coffee prices has sharply reduced the
country's foreign exchange earnings.
Adebayo Adedeji, the executive secretary of the U.N.
Economic Commission for Africa, told the meeting that there was
an increasing net outflow of resources from Africa.
He blamed this on high interest rates, debt servicing and
the repatriation of profits by foreign investors.
Africa paid 13 billion dlrs to service its total foreign
debt last year and by 1990 annual service payments are expected
to rise to between 16 and 24 billion, Adedeji said.
He accused industrialised countries of failing to provide
more resources to implement the U.N. Program for Africa's
economic recovery and development, despite Africa's willingness
to raise two thirds of the capital from domestic sources.
The U.N. Program, approved last year, calls for 128 billion
dlrs of economic investment in Africa over five years.
Western donors were asked to contribute 46 billion dlrs,
with the rest being raised from local resources, but Adedeji
said the donors had not responded as hoped.
In view of this poor response, he said "it is possible that
by the year 2,000 nearly all African countries, except a few,
will be categorised as least developed countries."
At present, 27 of Africa's 50-odd states are officially
listed in this category.
Shr profit four cts vs loss 49 cts
Net profit 160,700 vs loss 1,867,100
Revs 4,700,000 vs 5,600,000
Year
Shr profit two cts vs loss 1.20 dlrs
Net profit 84,400 vs loss 4,507,800
Revs 20.5 mln vs 22.5 mln
Shr nil vs loss 10 cts
Net profit 2,936 vs loss 170,866
Revs 4,147,248 vs 1,091,392
Lynch Corp subisidiary Lynch
Entertainment Corp said it formed a general partnership called
Coronet Communications Co, which has acquired WHBF-TV station,
in Rock Island, Ill.
The company said the price for the station, a CBS
television network affiliate, was 20 mln dlrs. The company also
said the other partner is Lombardo Communications Inc, a
wholly-owned corporation of Phillip Lombardo.
Lynch said it will pursue further acquisitions of media and
entertainment entities with emphasis on broadcasting and cable
television operations.
GenCorp said its first quarter
earnings from operations rose four pct as sales increased six
pct to 650 mln dlrs from 614 mln a year earlier.
However, the company reported net income declined to 17 mln
dlrs, or 77 cts a share, in the quarter ended February 28 from
19 mln dlrs, or 84 cts a year earlier. This year's net included
700,000 dlrs from the sale of assets while last years was
increased 3.0 mln dlrs by such sales.
GenCorp said lower operating profits for the tire and
plastics and industrial products segments were essentially
offset by higher wallcovering results.
McGraw-Hill Inc said it bought
First Bank System Inc said it has
found a potential buyer for First Bank Luverne and its office
in Pipestone, Minnesota.
The bank holding company said 215 Holding Co, a corporation
controlled by the family of the late Robert Short, will buy
First Bank Luverne. The bank has 59.2 mln dlrs in assets.
First Bank, which announced plans in 1985 to restructure
its banking assets by offering to sell 28 of its banks with a
total of 45 offices, said agreements have now been signed for
43 of these offices.
Qtrly div 34 cts vs 34 cts prior
Pay May 1
Record April 15
SAFT, a unit of Cie Generale
d'Electricite of France, said it bought U.K.-based Alcad Ltd
from Penn Central Corp's Marathon Manufacturing Cos Inc.
Terms of the deal were not disclosed.
Alcad is one of the world's largest producers of
pocket-plate nickel-cadmium storeage batteries, used in
industrial and railroad applications to start engines and as
light sources, SAFT said.
SAFT said it expects to add 400 jobs at the U.K.
operations.
Qtly div 66 cts vs 66 cts
Pay May one
Record April 15
Caesars World Inc said it filed a
lawsuit against Martin T. Sosnoff and MTS Acquisition Corp
regarding its March 9 unsolicited tender offer for Caesars
World stock.
The company said it filed in the Federal Court in the
Central District of California, charging the tender offer,
which its board rejected, violated federal securities laws and
federal margin regulations.
The suit charges the offering materials are materially
false and misleading and misstate and conceal material
information required to be disclosed to shareholders.
The suit also charges the offer is illusory and designed to
manipulate the market in Caesars World stock to enable Sosnoff
to sell the Caesars World stock he already owns for a
substantial profit.
The complaint seeks, among other things, to enjoin the
tender offer and to require MTS and Sosnoff to correct false
and misleading statements in the offer.
Caesars World is expected to seek a friendly suitor,
restructure operations, or buy back Sosnoff's holdings in an
attempt to fight off the bid.
Sosnoff holds about 13.6 pct of the company's stock.
The Economic Planning Agency will
announce gross national product (GNP) figures for the
October/December quarter today at 1700 hrs local time (0800
gmt), Agency officials told Reuters.
In the July/September quarter, GNP rose 0.6 pct from the
previous three months.
The European Community (EC) yesterday
warned Japan and the United States, its main trading partners,
that friction over trade issues is affecting the EC's relations
with both countries.
EC foreign ministers issued a statement deploring Japan's
continued trade imbalance and appealed for the country to make
a greater effort to open up its markets. They also said they
were disturbed by a draft bill before the U.S. Congress that
would impose permanent quotas on textile imports and were
prepared to react. The U.S. Administration has already
distanced itself from the bill.
EC External Trade Commissioner Willy De Clercq has written
to his U.S. Counterpart, Trade Representative Clayton Yeutter,
outlining the EC's concerns.
The statement said ministers were very disturbed by U.S.
Moves towards protectionism. "The adoption of such measures
would not fail to have a negative effect on the process of
multilateral negotiations just started, as well as on bilateral
relations," it said.
Any unilateral U.S. Moves would leave the EC no option but
to react according to the laws of the General Agreement on
Tariffs and Trade, it said.
In a separate statement on Japan, the EC ministers said
they "deplore the continued aggravation of the imbalance in
trade (and) expect Japan to open up its market more."
The statement said the EC would continue to insist that
Japan boost imports and stimulate domestic demand.
Ministers also called on the EC Commission to prepare a
report on U.S.-Japanese trade for July this year to enable them
to take appropriate action where necessary.
One diplomat said the call for a report showed ministers
were determined not to let the Japanese question drop. "It will
be back on the table again and again," the diplomat said.
De Clercq, talking to journalists during the meeting, said,
"There is a certain nervousness, a growing impatience within the
Community concerning trade relations with Japan."
The EC is not satisfied with Japan's inability to cut its
trade surplus, and the Commission has adopted a tough approach
on imports of goods such as Japanese photocopiers, where it has
imposed 20 pct anti-dumping duties.
But diplomats said the EC is keen to negotiate with Tokyo
to solve the problem rather than embark on a costly and
damaging trade war, and the ministers called for more
cooperation with Japan in industry and research.
Japan's gross national product (GNP) rose
a real 0.8 pct in the October/December quarter after an
upwardly revised 0.7 pct increase the previous three months,
the Economic Planning Agency (EPA) said.
The rise in the July/September quarter had originally been
put at 0.6 pct. The annualized growth rate accelerated to 3.2
pct in October/December from 3.0 pct in July/September.
In the 1986 calendar year, GNP rose 2.5 pct, after a 4.7
pct increase in 1985. Last year's performance was the worst
since 1974, when GNP fell 1.4 pct. Agency officials blamed the
strong yen for depressing exports and manufacturing industry.
In nominal terms, GNP rose 0.5 pct in the October/December
quarter, reflecting stable prices, after a one pct increase in
the previous three months, the Agency said.
Domestic real demand increased 0.6 pct in October/December,
after a one pct rise the previous quarter.
Domestic demand contributed 0.5 percentage point to real
GNP growth in October/December, while foreign trade added 0.2.
The figures do not tally exactly due to rounding.
In July/September, domestic demand contributed one
percentage point to GNP growth while foreign trade knocked off
0.3 point.
Of the 0.2 point contribution of foreign trade to GNP last
quarter, falling exports knocked off 0.2 while falling imports
contributed 0.4 point.
Total export volume fell 1.2 pct quarter on quarter in
October/December. Imports also fell, by 2.9 pct.
Of the 0.5 point contribution of domestic demand to
October/December GNP growth, the private sector accounted for
0.4 point and the public sector, 0.2.
The private sector contribution included 0.3 point for
housebuilding, 0.4 for corporate capital outlays and 0.1 for
stockbuilding. Consumer spending had a 0.4 negative impact.
The Agriculture Ministry is expected to
reduce official intervention prices for beef and pork in
1987/88 starting in April, but the cutback ratio has not been
set yet, industry sources said.
Production prices, the basis for setting intervention
prices, have been falling because of declining compound feed
prices due to low coarse grain import prices, they said.
Last November an advisory panel urged the government to
work on reducing officially set high farm product prices to
levels closer to international values, the sources added.
In Japan the government maintains a price stabilisation
zone system for beef and pork to support domestic producers.
The stabilisation zone is kept by the semi-government
Livestock Industry Promotion Corp (LIPC) through a buffer stock
operation in the wholesale market.
The 1987/88 beef and pork price stabilisation zone will be
set by the end of March after an advisory panel to the
Agriculture Ministry recommends the price zone at a meeting on
March 25, ministry officials said. At present, the standard or
bottom price of castrated wagyu beef, known as marbled beef, is
1,400 yen per kilo, while its ceiling is 1,820, they said.
The standard price of other beef, mainly produced from
dairy steers, is now 1,090 yen per kilo and the ceiling is
1,420, the officials said. The pork standard price is now 540
yen per kilo and the ceiling 760.
They said the domestic beef intervention price influences
imported beef selling prices on the domestic market.
Japan sets an annual beef import quota. A semi-government
body imports most of this and releases it to wholesalers or
processors in line with the standard price of other beef
categories in an attempt to avoid jeoparadising domestic beef
prices, they said.
Swiss watchmaker SMH Societe Suisse de
Microelectronique et d'Horlogerie is issuing a 100 mln Swiss
franc 10-year bond with warrants to buy participation
certificates, lead manager Union Bank of Switzerland said.
The bond carries a 2-1/4 pct coupon and is priced at par.
Subscription is from March 24 to 30. The bond can be called at
par on April 15, 1995 or 1996. Each 2,000 franc bond carries
three warrants, each of which allows the purchase of one
certificate, of a nominal 100 francs, at a price of 600 francs
from June 1, 1987 until November 30, 1990. The certificates,
created in October last year, closed at 570 francs today.
The European Investment Bank said it
was advancing loans to Italy worth a total of 318.5 billion
European Currency Units, equivalent to 460.6 billion lire, to
finance transport, industry and infrastructure projects.
It said 40 billion lire will go to state airline Alitalia
for the purchase of 10 McDonnell Douglas Corp
Japanese officials sought to convince the
U.S. That a U.S.-Japan pact on microchip trade is working ahead
of an April 1 deadline set by the U.S. For them to prove their
case.
"We are implementing the agreement in good faith and the
situation does not run counter to the pact," Osamu Watanabe,
Director of the Ministry of International Trade and Industry's
(MITI) Americas and Oceanic Division, told foreign reporters.
"The effects of the measures we have taken and are taking
are emerging in the market place," he said.
U.S. Trade officials have repeatedly accused Japanese
microchip makers of violating the pact by continuing to sell at
below cost in markets outside Japan and the United States.
The agreement, signed last September, aimed at halting
predatory Japanese pricing policies and increasing U.S.
Semiconductor firms' access to the Japanese market.
The comments by MITI officials followed a call by Prime
Minsiter Yasuhiro Nakasone to clear up any misunderstandings on
the U.S. Side about the pact, Watanabe said.
Yukio Honda, director of MITI's Industrial Electronics
Division, denied that Japanese chipmakers were selling at below
cost in third countries.
MITI's call to Japanese chip makers last month to cut
production of key memory chips in the first quarter of this
year has begun to dry up the source of cheap chips for sale in
the non-regulated grey market, Honda said.
"The grey market exports from Japan are shrinking now, but
in contrast U.S. And South Korean companies are expanding
market share because of their cheaper prices," Honda said.
MITI plans to take further steps to reduce the excess
supply of inexpensive chips which developed in Japan after the
pact was formed because of a slump in Japanese semiconductor
exports to the United States, he added.
The ministry will soon release its supply-demand guidelines
for the second quarter and suggested production volumes are
likely to be lower than that for the first quarter, he said.
Despite businessmen's ingenuity in finding ways around any
artificial controls, regulation of supply and demand should
bring positive results, Watanabe said. "I am optimistic," he
added.
Wavehill International Ventures Inc
said it has completed the previously-announced acquisition of
Personal Computer Rental corp for 500,000 restricted common
shares, giving former shareholders of Personal Computer a 25
pct interest in the combined company.
Production of fish meal by the three
South American producers -- Chile, Peru and Equador -- last
year reached 2.5 mln tonnes, equalling the record output of
1970, the International Association of Fish Meal Manufacturers
(IAFMM) said.
However, IAFMM said in a statement that it expected Chilean
and Peruvian fish meal production in the first quarter of 1987
to be much lower than the 651,000 tonnes produced in the last
quarter of 1986, due to a ban on sardine fishing in Chile for
the month of February and to adverse fishing conditions in Peru
in the same month.
The statement added that, due to technical market promotion
and energetic sales by Chile and Peru, the stock position at
the end of the year remained reasonable.
Fish meal production outside South America decreased
slightly, falling from 114,400 to 111,100 tonnes.
The IAFMM said fish meal consumption in 1986 rose in West
Germany, Scandinavian countries, Eastern Europe and the Far
East, but fell in the U.S. And remained static in the U.K.
It added that fish meal consumption had suffered from
competition with feed grade tallow in the U.S. And with skimmed
milk powder in the U.K.
IAFMM figures for fish oil production in the main producing
nations, in thousands of tonnes, were -
Oct/Dec Jan/Dec
1986 1985 1986 1985
CHILE 22 8 109 76
PERU 56 28 238 104
NORWAY 14 14 97 130
ICELAND 44 52 102 118
DENMARK 20 18 88 77
U.S. 10 8 152 129
JAPAN 67 91 213 249
Shr 15 cts vs 14 cts
Net 614,000 vs 449,000
Revs 4,186,000 vs 4,124,000
Avg shrs 4,131,000 vs 3,321,000
Year
Shr 47 cts vs 42 cts
Net 1,768,000 vs 1,394,000
Revs 15.0 mln vs 12.5 mln
Avg shrs 3,799,000 vs 3,324,000
Shr 12 cts vs 10 cts
Net 1,683,000 vs 1,407,000
Revs 42.2 mln vs 28.8 mln
12 mths
Shr 83 cts vs 70 cts
Net 11.9 mln vs 10.0 mln
Revs 160.3 mln vs 126.5 mln
NOTE: prior qtr and yr ended Jan 26.
Clabir Corp said its 86 pct
owned affiliate, Ambrit Inc
Numac Oil and Gas Ltd said it
arranged a 59.7 mln dlr financing with two investment dealers.
The financing includes 30 mln dlrs of convertible
subordinated debentures and 2.7 mln common shares at a price of
11 dlrs per share for a total of 59.7 mln dlrs
Wood Gundy Inc and Gordon Capital Corp agreed to buy the
securities. The debentures will be for a term of 15 years with
a seven pct coupon and convertible into common shares for 10
years at 13.50 dlrs per share. The debentures are not
redeemable for three years, Numac said.
The Bank of England said it provided the
money market with late assistance of around 120 mln stg.
This brings the bank's total help today to some 136 mln stg
and compares with its forecast of a 400 mln stg shortage in the
system.
Memory Protection Devices Inc said it
expects to close the previously announced acquisition of the
assets and liabilities of Bogen, a division of
Shr loss 20 cts vs loss 12 cts
Net loss 2,195,000 vs loss 1,402,000
Revs 3,600,000 vs 5,777,000
Year
Shr loss 71 cts vs loss 51 cts
Net loss 7,851,000 vs loss 5,594,000
Revs 16.7 mln vs 24.8 mln
The western industrialised nations have
agreed reforms in rules by which they provide credit for
exports to developing countries, the Organisation for Economic
Cooperation and Development said.
The reforms tighten the rules for the use of foreign aid to
subsidise export credits in so-called "mixed credits," the OECD
said.
The agreement, to be implemented in two stages in July this
year and July 1988, means the minimum aid component in mixed
credits will be raised to 35 pct from 25 pct, and to 50 pct for
credits covering exports to the world's least developed
nations.
Additionally, a new formula will be used for calculating
the aid element in mixed credits, to take account of different
interest rates in the exporting countries, the 24-nation OECD,
which hosted the reform negotiations, said.
Minimum interest rates for officially subsidised trade
loans have also been revised with the aim of cutting the
subsidies, and ending them completely on loans to relatively
rich developing countries by July next year.
The reforms follow several years of pressure by the U.S. To
stop competitors, notably France and Japan, using foreign aid
to subsidise exports, putting U.S. Firms at a disadvantage.
OECD officials said the agreement was based on a
provisional accord reached in January subject to ratification
by member governments. Some governments, including Austria, had
linked their final approval to other trade credit issues which
would be discussed at a meeting here in mid-April, they added.
By raising the minimum amount of aid required in mixed
credits the agreement aims to make such hidden subsidies too
costly for frequent use.
"A major loophole in the General Agreement on Tariffs and
Trade has been closed today," a senior U.S. Official here
commented.
Period ended Jan 31
Net loss 89,255 vs loss 277,536
Sales 913,136 vs 854,194
Six mths
Net profit 481,372 vs loss 555,722
Sales 1,845,532 vs 1,754,076
Chancellor of the Exchequer Nigel
Lawson, presenting his budget for fiscal 1987/88 to Parliament,
said U.K. Economic growth was forecast at three pct in calendar
1987.
He said the Treasury expected a current account balance of
payments deficit in 1987 of 2.5 billion stg, after a 1.1
billion shortfall in 1986.
Inflation is expected to be 4.0 pct at the end of this
year, Lawson said.
"As I forecast in the Autumn Statement, inflation may
continue to edge up for a time, perhaps exceeding 4.5 pct by
the summer, before falling back to 4.0 pct by the end of the
year," he added.
Turning to the Public Sector Borrowing Requirement (PSBR),
Lawson said the likely outturn for fiscal 1986/87 was 4.0
billion stg, or 1.0 pct of GDP.
The planned PSBR for 1987/88 was set at 4.0 billion stg.
On monetary policy, Lawson confirmed the target range for
the narrow M0 measure would be two to six pct in fiscal
1987/88.
No explicit target was set for the broad sterling M3
aggregate, he said. "But broad money will continue to be taken
into account in assessing monetary conditions, as of course
will the exchange rate," the Chancellor told Parliament.
Lawson said the low outturn of the PSBR in 1986/87 "is
chiefly attributable to the remarkable buoyancy of non-oil tax
revenues in general, and the corporation tax paid by an
increasingly profitable business sector in particular."
On oil prices, Lawson said he was sticking to his earlier
assumption that North Sea crude prices will average 15 dlrs per
barrel in calendar 1987.
He said "it is clear that the increased flow of non-oil tax
revenues, coupled with the prospective further growth of the
economy in excess of the growth of public expenditure, puts the
public finances in a very strong position."
Lawson said the Treasury would strive to keep the PSBR at
1.0 pct of GDP in future.
"We have reached what I judge to be the (Medium Term
Financial Strategy's) appropriate destination - a PSBR of 1.0
pct of GDP. My aim will be to keep it there over the years
ahead," Lawson said.
"Inevitably, this greatly diminishes the scope I have this
year for reducing the burden of taxation, which of course
remains a major objective of government policy."
"But I am sure it is right to err on the side of prudence
and caution, and to build a still firmer base for the future."
Lawson said the time had come to strike the Exchange
Control Act from the Statute book.
On corporation tax, he said the rate will remain unchanged
at 35 pct in 1987/88. But companies' capital gains will be
charged at the "appropriate corporation tax rate."
He said that under the new proposed system, companies
should be able to set Advanced Capital Tax (ACT) payments
against tax on capital gains.
"Taken together, these changes should yield 60 mln stg in
1988/89," Lawson said.
Lawson said he will propose that all companies and building
societies be treated the same way on payment of corporation
tax, "with all liable to pay corporation tax nine months after
the end of the accounting period on which the tax is due."
"I also propose to legislate now to pave the way for a new
method of collecting corporation tax, to be known as Pay and
File."
This would be part of a wider programme of streamlining tax
collection, and would not come into force until the early
1990s.
Lawson said he planned two reliefs on Petroleum Revenue Tax
(PRT). As from today, companies may elect to have up to 10 pct
of the costs of developing certain new fields set against their
(PRT) liabilities in existing fields, until the income of those
new fields exceeds the costs incurred.
Second, there will be a new relief against PRT for spending
on research into U.K. Oil extraction that is not related to any
particular field.
On business employment, Lawson said employers will receive
tax relief for retraining workers.
Lawson said that in future, traders registered for Value
Added Tax (VAT) would be able to choose to account for the tax
on the basis of cash paid and received.
Small businesses may account for VAT annually instead of
quarterly. The VAT compulsory registration period was being
extended to 30 days, he added, and VAT registration thresholds
are to be raised to 21,300 stg.
New measures are planned to combat VAT avoidance, he added.
The capital gains tax retirement relief limit would now be
set at 125,000 stg.
Lawson said he proposed to change the law so that companies
in multinational groups with dual residence will no longer be
able to secure tax relief twice on the same interest payment.
The change will take effect on April 1, 1987, but "genuine
trading companies" will not be affected.
He also planned to end the present treatment of tax credit
relief for foreign withholding tax paid on interest on bank
loans, also from April 1.
"In future, banks will be able to offset this tax credit
only against tax on the profit on the relevant loan," he said.
The standard rate of taxation is being reduced by two
pence, to 27 pct from 29 pct.
Lawson reiterated the government's aim of reducing basic
taxation to 25 pence in the pound, but added "given my decision
to use the greater part of the fiscal scope I now have to
reduce the PSBR, that goal cannot be achieved in this budget."
Small companies' corporation tax is also being reduced to
27 pct, he said.
On the Lloyd's insurance market, Lawson said he planned to
change the tax treatment of Lloyd's syndicates, bringing it
into line with that of provisions for outstanding liabilities
made by ordinary insurance companies and of comparable
provisions made by financial traders.
The Inland Revenue would be told to consult urgently with
Lloyd's about the details of the legislation, he said.
"The new rules will first apply to premiums payable for the
Lloyd's account which closes on December 31 this year," Lawson
said.
MORE
Spendthrift Farm Inc said it has
received three tentative proposals to acquyire control of the
company.
It said it is evaluating the proposals and will not comment
further unless a definitive agreement is reached.
Israel has drawn up a five-year plan
for 1987-1991 to raise agricultural production by 500 mln dlrs
to 2.7 billion dlrs, an annual rise of 3.4 pct, the Israeli
Ministry of Agriculture said. Agricultural exports are to be
increased by 180 mln dlrs, or 4.8 pct per year on average.
The area planted to cotton is to remain at the 1986 level
of 100,000 to 112,500 acres with exports expected to bring in
80 to 90 mln dlrs per year. The 34 pct decline from the 1985
level reflects continued water rationing which will remain in
force, the ministry said.
Groundnut production is planned to increase by 13,000
tonnes, or 57 pct, by 1991 and exports by 9,000 tonnes, or 82
pct. Maize production is targetted to rise by 48,000 tonnes, or
48 pct, and exports by 34,000 tonnes, or 45 pct.
Commerce Secretary Malcolm Baldrige
predicted 1987 will be the fifth successive year for growth in
housing starts after a 2.6 pct rise overall in February starts
to a seasonally adjusted annual rate of 1.851 mln units.
"This year should be the fifth solid year in a row for
homebuilding activity -- with single-family units stronger than
multi-family units," he said in a statement.
Single-family starts rose last month from January levels by
5.6 pct to 1.317 mln units on a seasonally adjusted basis while
multi-family unit starts fell 4.1 pct to 534,000 units, the
department reported.
Light, scattered showers covered
winter wheat areas in the North China Plain in the week ended
March 14, moistening topsoils for wheat, just breaking dormancy
in most central and northern areas, the Joint Agricultural
Weather Facility of the U.S. Agriculture and Commerce
Departments said.
In its International Weather and Crop summary, the agency
said southern winter wheat areas are in the early vegetative
stage. Above-normal February temperatures over the North China
Plain caused winter grains to break dormancy early in the
south.
Moderate to heavy rains in southern Jiangsu, Anhui,
eastern Hebei, Hunan , Jiangxi, Fujian, and Zheziang, reversed
February's below normal precipitation pattern.
The agency said the wet weather in these areas provided
ample moisture for rice planting and lessened the need for
irrigation.
Mostly dry weather in early-rice areas of Guanxi and
Guandong resulted in irrigation for continued rice planting, it
said.
Norstar Bancorp said it has agreed
in principle to acquire United National Bank of Callicoon,
N.Y., by exchanging three Norstar common shares for each of the
201,660 United shares outstanding.
Based on the recent price of Norstar's stock, it said, the
proposed tax-free exchange would have a market value of about
20 mln dlrs.
Norstar said the acquisition is subject to approval by
United's holders and state and federal regulators. United has
assets of 90 mln dlrs.
an eventual oil import fee in the
united states will make no difference to champlin petroleum
corp's joint venture agreement signed today with petroleos de
venezuela (pdvsa), champlin chairman william adams said.
"this was an aspect which was discussed at length during the
negotiations, but we can say our contract covers all
eventualities in this regard," he told reuters during the
signing ceremony here.
Venezuela's energy and mines minister arturo hernandez
grisanti earlier described the agreement, under which pdvsa
buys 50 pct of champlin's corpus christi refinery, as "one more
step in the maturation and presence of our oil industry in
world markets."
union pacific chairman william cook said the agreement will
be beneficial to both sides, combining a secure source of
supply with a modern refinery and access to markets.
"we are looking to a long-term relationship, and at a time
of protectionist tendencies in the U.S. Congress there are
clear benefits to both sides," he said.
Adams said pdvsa crude would remain competitive even with
an oil import fee because champlin had invested heavily over
the years in adapingthe texas refinery to process venezuelan
heavy crudes with coking and hydro-treating facilities and
obtain a competitive product yield.
"therefore while the danger of an oil import fee has been a
consideration in the negotiations, and it remains to be seen
what such a fee would represent, we do not foresee any impact
on today's agreement," adams said.
He said the refinery could run crude as heavy as
venezuela's bolivar coastal field (bcf) 17 api without any
difficultiesand would probably move over time to a heavier diet
to take advantage of bigger margins.
The refinery has a capacity to process up to 110,000 bpd of
venezuelan high sulphur content heavy crude, with an 80-85 pct
yield of white products.
Shr 31 cts vs 27 cts
Net 11.4 mln vs 9,905,528
Revs 194.3 mln vs 171.7 mln
Avg shrs 36.6 mln vs 36.4 mln
NOTE: Sixteen-week periods.
Dry weather pushed further into
South Africa's Orange Free State's Maize Triangle in the week
ended March 14, the Joint Agricultural Weather Facility of the
U.S. Agriculture and Commerce Departments said.
In a summary of its Weather and Crop Bulletin, the agency
said scattered showers continued throughout Transvaal, but dry
pockets persisted in the northeast and south.
Temperatures average one to four degrees C above normal
throughout all grain areas, stressing grain-filling corn in
areas receiving lightest rainfall, it said.
The agency said rainfall during February was near to above
normal in most areas, but earlier periods of hot, dry weather
reduced yield prospects in parts of the northern Transvaal and
southern Orange Free State.
Chancellor of the Exchequer Nigel
Lawson's budget contained virtually everything the government
bond (gilts) market had hoped for and is likely to help prices
race ahead in coming months, analysts and traders said.
Indeed, in the first half hour after Lawson completed his
speech, gilt prices soared about 1-1/2 points, an extremely
sharp gain in such a short period of time. Overall, they rose
about two points on the day.
"This budget was incredibly bullish for the gilts market,"
Morgan Grenfell and Co Ltd economist Stephen Bell said.
Analysts said that in the light of the reaction to the
budget in the gilts and U.K. Money markets, U.K. Commercial
bank base rates are likely to be cut by as much as a full point
tomorrow.
Analysts said the market's euphoria was simply a reflection
of supply and demand. The crucial piece of news in the budget
was that the Public Sector Borrowing Requirement would be held
to 4.0 billion stg.
By comparison, a year ago, the PSBR was set at 7.0 billion
stg.
The lower PSBR means the Bank of England will have to offer
far less new stock to the market to meet its funding needs and
the scarcity factor is sure to drive prices up further,
analysts said.
"The PSBR at four billion is lower than anyone realistically
expected," Bell said. Most market expectations called for the
Chancellor to announce a PSBR of about 5.5 billion stg.
S.G. Warburg Securities Co Ltd economist John Shepherd said
that overall, the Bank will have to sell about two billion less
in new securities next fiscal year -- a cut of about 15 pct in
total new issue volume.
Chase Manhattan Securities Ltd international economist Andy
Wrobleski noted the Bank has already raised about 1.8 billion
stg of next year's funding needs this year via a series of tap
issues.
The issues have been in a partly-paid form where the full
price does not have to be paid until the start of the new
fiscal year and therefore they are not counted in the current
year's fund raising.
But the Bank of England will also be constrained from
issuing gilts in the conventional form by its promise to try
out a U.S.-style auction system in which firms bid for new
stock.
The Bank will also have to offer at least one index-linked
issue where the rate paid to investors is tied to the Retail
Price Index, leaving about one to two billion stg, in total, to
be raised in the form of traditional stock.
Analysts noted that the budget contains provision for a two
pence in the pound cut in the basic rate of income tax, in line
with most market expectations, although some operators had
expected a cut of up to four pence in the pound.
The gilts market approved of the more modest tax cut,
Shepherd said, because "If it was more than two pct, they would
have become concerned about the economy heating up again."
Also, a cut of two pence in the pound suggests that if the
ruling Conservative party is re-elected, another two pence cut
can be offered at budget time next year.
Analysts said the gilts market may also be building steam
on the political implications of the budget which suggests an
early election.
"All the goodies in this budget will be in place by the
middle of May," Morgan Grenfell's Bell said. "This makes a June
election very likely."
Bell said some politically popular provisions omitted from
the budget, such as lifting the ceiling on the amount of
mortgage eligible for tax benefit and some provisions on
pensions, could not have been implemented until autumn anyway.
At that rate, they would have been of little use for a
political party expecting to call an election in June.
Also, analysts noted, the budget does not go overboard with
measures that are seen as generous to the wealthy.
"This will be a difficult budget for the (opposition) Labour
party to attack," Shepherd said.
The Bank of France expects a continued
revival in short-term industrial activity, but the outlook for
any improvement in France's record 10.9 pct unemployment rate
remains bleak, the Bank of France said in its monthly review.
The upturn in activity in all industrial sectors except the
agro-food sector in February more than compensated for the fall
in January, while construction and civil engineering
experienced a recovery which appears likely to extend over the
next few months.
Internal demand rose and the export situation improved, in
particular toward the European Community (EC), the Bank said.
Stocks decreases and order book levels, with the exception
of the agro-food industry, improved substantially.
In addition, retail prices and salaries stabilised last
months.
Production rose in all sectors except agricultural
machinery and aeronautics, where it stabilised, and ship
construction, where it declined.
The car industry was the major beneficiary of the upturn in
activity in February, with both domestic and export orders
rising.
In the consumer goods sector, actitity rose sharply despite
a fall in the household goods sector and stability in
pharmaceuticals.
Among semi-finished products, output rose sharply, helped
by a strong growth in construction materials.
But activity in the retail sector declined slightly over
the past two months.
Moody's Investors Service Inc said it
is reviewing for posible downgrade the debt ratings of W.R.
Grace and Co because of concern the company's earnings may not
be high enough to provide meaningful improvement in its
currently thin margins of interest coverage for some time.
Some 650 mln drls of outstanding debt is affected.
Moody's said it is evaluating the ability of Grace's less
diversified business portfolio to generate funds sufficient for
reinvestment and growth, along with debt service and repayment,
in the next three to five years.
Honduras has been authorized to buy
about 75,000 tonnes of U.S. wheat, about 15,000 tonnes of U.S.
corn, and about 6,000 tonnes of U.S. tallow under an existing
PL 480 agreement, the U.S. Agriculture Department said.
The department said it may buy the wheat, valued at 8.5 mln
dlrs, the corn, valued at 1.5 mln, and the tallow, valued at
2.0 mln dlrs, between March 24 and August 31, 1987, and ship it
from U.S. ports and/or Canadian transshipment points by this
September 30.
The purchase authorizations cover the entire quantity
provided under the agreement, signed March 11.
Shr loss three cts vs profit two cts
Net loss 54,791 vs profit 28,866
Sales 137,9810 vs 338,886
Avg shrs 1,602,717 vs 1,331,739
The U.S. Treasury said it will sell
12.8 billion dlrs of three and six-month bills at its regular
auction next week.
The March 23 sale, to be evenly divided between the three
and six month issues, will result in a paydown of 2.875 billion
dlrs as maturing bills total 15.68 billion dlrs.
The bills will be issued March 26.
Shr 31 cts vs 31 cts prior
Payable April 24
Record March 31
Standard and Poor's Corp said it
raised to BBB-plus from BBB Hechinger Co's 86 mln dlrs of
convertible subordinated debentures of 2009.
S and P cited Hechinger's outstanding record of sales and
earnings growth as well as what it termed the company's
position as one of the best operators in the retail home
improvement industry.
It also said the firm's financial performance as measured
by profitability and debt leverage underscore strong credit
quality. S and P assigned a BBB-plus rating to Hechinger's
planned 100 mln dlr issue of convertible debt due 2012.
Shr 10 cts vs 10 cts
Net 358,941 vs 299,838
Revs 8,645,289 vs 4,532,175
Avg shrs 3,446,752 vs 2,921,173
Nine mths
Shr 23 cts vs 12 cts
Net 705,799 vs 491,076
Revs 21.5 mln vs 11.0 mln
Avg shrs 3,093,491 vs 4,068,000
Note: Net includes tax credits of 164,000 dlrs vs 123,634
dlrs for qtr and 311,000 dlrs vs 207,719 dlrs for nine mths.
Trade sources here confirmed earlier
tentative reports that Bangladesh had bought 200,000 tonnes of
optional origin feed wheat late last week and over the weekend.
They said the Continental Grain Co, of the United States,
won the contract to supply the wheat from the EC and other
parts of Europe.
It will supply 100,000 tonnes at a rate of 96.92 U.S. Dlrs
a tonne as a first consignment by April 7. It will supply the
remaining 100,000 tonnes at a rate of 93.42 dlrs by April 16.
More U.S. And European firms will be
falling prey to Japanese corporations bulging with cash and
eager to extend their reach further overseas, according to
merger and acquisitions specialists polled by Reuters.
Already, rich Japanese companies have pounced on U.S.
Banks, steel and other businesses.
In the latest attempt, Fujitsu Ltd
Officials of five Thai commercial banks
are expected to meet tomorrow to seek agreement on cutting
interest rates, banking sources said.
They said they expect Thai banks to opt for a cut to spur
domestic loan demand to help reduce persistent high liquidity
on the money market.
Many bankers have been urging an average half percentage
point cut in deposit rates and a one point cut in lending
rates, they said.
Six major Thai major banks reduced minimum loan and
overdraft rates by 0.50 to 0.75 percentage point on February 16
but the move has not substantially increased loan demand, the
sources said.
Excess liquidity has been hitting bank profits since early
last year despite five interest rate cuts in 1986. The current
gross 7.25 pct interest rate for one-year fixed bank deposit
and the 11.5 pct minimum loan rate are the lowest in a decade.
Bankers said the Thai banking system is saddled with about
40 to 50 billion baht of surplus funds which have created
problems for many banks in managing their money effectively.
Profits of many Thai banks fell sharply last year partly
because of a mismatch of loan demand and bank deposit growth.
The Bank of Thailand estimated overall lending by the Thai
banking system grew 3.8 pct in 1986 against a 12 pct expansion
in bank deposits.
Reports of a possible new round of interest rate cuts have
further buoyed the Thai stock market this week.
The Securities Exchange of Thailand (SET) Index on Monday
recorded its biggest daily advance in recent years, shooting up
4.57 points to a new seven-year high of 223.02.
Brokers and market analysts said Thai stocks will register
more gains as long as liquidity remains in the money market.
Thai and foreign bankers said the liquidity problem will
grow if the Bank of Thailand does not extend permission for
local banks to hold foreign exchange positions up to 40 pct of
bank capital.
If the regulation is not extended beyond its April 3 expiry
date, many commercial banks will have to reduce foreign
exchange holdings to a maximum 20 pct.
Bankers said such that could add another five billion baht
of surplus funds to the local money market.
Turner and Newall Plc said it planned to
raise a net 71.7 mln stg with a one-for-six rights issue of
36.15 mln shares.
The shares would be offered at 205p, compared with Turner's
price which fell to 227p from last night's close at 241p.
The group said the funds would be used to cut borrowings,
which had risen to 234 mln stg at end-February, largely as a
result of the takeover of
Talks are underway between financially
troubled Zaire and the International Monetary Fund (IMF) aimed
at rescuing the economy of the second largest nation in
sub-Saharan Africa.
Diplomatic and banking sources in Kinshasa agreed that a
compromise formula could be reached in the coming weeks
enabling pro-Western Zaire to obtain a much needed injection of
cash.
For its part the government is expected to increase
budgetary discipline, which in turn is likely to attract
foreign investors, the sources said.
"Barring last-ditch obstacles, which can't be totally ruled
out in an issue involving a nation's pride and substantial
political and economic interests, Zaire and its creditors are
bound to come to terms soon," a Western diplomat told Reuters.
"The Zairean economy won't survive without massive IMF
assistance. Similarily, the West has no interest to see Zaire's
strategic minerals fall into communist hands," the diplomat
said.
Zaire defied its creditors late last year by saying it
would limit repayments on its five billion dlr external debt to
10 pct of its export earnings from January 1987.
The government also announced an end to the floating
exchange rate for the zaire currency and a return to a fixed
parity against special drawing rights (SDRs) with periodic
adjustments.
Until last year, Zaire devoted up to 28 pct of its export
revenue to servicing large foreign debts contracted during the
copper boom of the 1970's to finance largely non-productive and
often extravagant investment projects.
Zaire, the world's leading cobalt producer and the sixth
largest supplier of copper, depends on the two minerals for
two-thirds of its export earnings.
"A young country cannot go on indefinitely sacrificing
everything for the sake of servicing its external debt,"
President Mobutu Sese Seko commented in October when he
announced his government's decision.
As early as January 1986, Mobutu had warned that "one does
not feed on austerity and praise. I have another debt, one
toward my people and my people's efforts must not backfire," he
told diplomats.
Zaire pointed out that during four years of IMF-backed
austerity (1983-86), it had become a net exporter of capital
without receiving appropriate financing from abroad.
Economists said that since the large devaluation of the
zaire currency in September 1983, the country suffered a net
outflow of 830 mln dlrs each year.
Zaire's medium and long term public debt in the past few
years reached an equivalent of about 100 pct of its Gross
National Product (GNP), one of the highest such ratios in the
world, banking sources said.
Mobutu accused the IMF of "strangling" his country at an
October meeting of the ruling MPR party and said his people
could not long endure the hardship caused by austerity.
Zairean officials blame their present difficulties on the
IMF recovery plan's two basic assumptions which, they said,
failed to materialise last year,
- a world economic recovery pushing up commodity prices and
boosting Zaire's export revenue and debt servicing capacity,
- substantial, additional financial help from the country's
traditional donors.
In 1983 Zaire set out on a major economic reform aimed at
curbing its soaring debt. It floated its currency, slashed
spending and privatised industry, gaining praise from Western
creditors and obtaining debt rescheduling.
As a result, the overall economic and financial situation
improved markedly, with inflation down to 41 pct last year from
100 pct in 1983.
But it also led to a severe and steady fall in living
standards for Zaire's 35 mln population, fuelling widespread
discontent among poorer city dwellers, diplomats said.
Economists estimate the drop in purchasing power at between
20 and 35 pct for an average household over the last 12 months,
despite a pay rise of up to 67 pct for civil servants announced
last May.
The World Bank has released in the last two months half of
a previously-agreed 80 mln dlrs industrial sector loan and lent
27.6 mln dlrs to modernise the country's vital river transport
system.
Belgium, Zaire's former colonial ruler and its main trading
partner, recently agreed to release a total of 17 mln dlrs to
ease payments difficulties and finance imports of spare parts
for industry.
A new agreement between the IMF and Zaire would pave the
way for another debt rescheduling, probably at the next meeting
of the Paris Club of Western creditor nations, diplomats said.
The Bundesbank is likely to steer a
steady monetary course over the next few weeks and a change in
credit policies is not expected at tomorrow's regular central
bank council meeting, bank economists and dealers said.
"There is no need for action," Hermann Remsperger, chief
economist of Berliner Handels- and Frankfurter Bank (BHF) said.
Others noted that exchange rates are stable after last
month's Group of Six agreement in Paris and central bank money
stock growth is still well above the three to six pct target
zone, so a change in credit policies could be ruled out.
One money market dealer said comments by Bundesbank
President Karl Otto Poehl at a private seminar in Duesseldorf
two weeks ago hinting at another interest rate cut only
indicated the Bundesbank might act if conditions changed.
Bank economists said U.S. Pressure on West Germany to
further ease credit policies had receded since the Paris pact.
But such demands could re-emerge if West Germany failed to
stimulate its economy enough to affect the massive U.S. Trade
deficit.
Remsperger said continued strong money supply growth also
precluded a further cut in official interest rates.
Central bank money stock was growing at an annualized 7.5
pct in February, unchanged from the 7.5 pct in January.
Economists said some of the 18 members of the central bank
council were worried about the continued overshoot in the money
supply target and were bound to resist any moves to cut rates.
But Poehl played down the risk of inflation.
Economists said the fact that money stock growth remained
stable last month was a success. Some said it was likely to
return to within the target range later this year.
"The special factors which boosted money supply growth last
year are disappearing," one economist said.
He said some 75 pct of the money supply increase in 1986
was caused by a sharp rise in the inflow of foreign funds.
This trend had been reversed recently and with domestic
credit demand likely to remain at steady levels, money stock
growth was expected to narrow in the medium-term.
These developments were increasing the Bundesbank's scope
for a rate cut in the medium-term, economists said.
Money market dealers said period rates remained little
changed, indicating no change in credit policy was expected.
Call money rates declined to 3.75/80 pct from 3.90/95
yesterday, with the market well stocked with liquidity.
Dealers said call money was soft because tax payments on
behalf of customers had been less than expected so far. But
rates were likely to tighten again as soon as the full effect
of this month's major tax payment period is felt. Payments for
the federal railways bond are also likely to burden the market.
The Bundesbank did not inject liquidity via a securities
repurchase agreement this week, but countered a tightening in
rates on Monday by injecting funds through government-owned
banks.
Dealers said recent securities repurchase pacts had shown
the Bundesbank clearly wanted call money rates stable at 3.80.
One dealer said, "If the central bank wanted lower interest
rates, it would first of all drive call money rates down."
Banks remained relatively well stocked with minimum reserve
assets. They held 52.9 billion marks in minimum reserves on
Monday, averaging 53.7 billion marks over the first 16 days of
March. A requirement of around 51 billion is expected.
Shr 89 cts vs 68 cts
Net 116.0 mln vs 88.1 mln
Revs 1.17 billion vs 924.0 mln
12 mths
Shr 1.17 dlrs vs 93 cts
Net 152.2 mln vs 119.8 mln
Revs 2.44 billion vs 1.97 billion
NOTE: net 1986 were restated to reflect three-for-two stock
split on June 27, 1986.
Shr loss five cts vs loss 15 cts
Net loss 619,000 vs loss 1,730,000
Sales 3,138,000 vs 5,667,000
Avg shrs 12.5 mln vs 11.5 mln
Year
Shr loss four cts vs loss 40 cts
Net loss 343,000 vs loss 3,963,000
Sales 13.4 mln vs 35.3 mln
Avg shrs 12.5 mln vs 10.3 mln
Feb 28 end
Shr profit 11 cts vs loss 37 cts
Net profit 3,027,000 vs loss 10.4 mln
Revs 22.3 mln vs 19.9 mln
Avg shrs 28.6 mln vs 29.0 mln
Nine mths
Shr profit 34 cts vs loss 22 cts
Net profit 9,560,000 vs loss 6,072,000
Revs 71.9 mln vs 64.7 mln
Avg shrs 28.5 mln vs 27.9 mln
NOTE: Prior year net both periods after 15.2 mln dlr
writeoff.
Christiania Bank og Kreditkasse is
issuing a 15 billion yen eurobond due March 31, 1992 paying
7-1/2 pct and priced at 101-3/4 pct, lead manager Yamaichi
International (Europe) Ltd said.
The bond is available in denominations of 10 mln yen and
will be listed in London. Fees comprise 1-1/4 pct selling
concession and 5/8 pct management and underwriting combined.
The redemption rate will be calculated according to a
complex formula tied to the spot yen/dlr currency rate,
Yamaichi said.
Mitsui Trust International Ltd is co-lead.
State-owned Air Canada said it will
make a statement at 1100 EST concerning a published report that
the airline has agreed to acquire Gelco Corp's Canadian unit,
Gelco Express Ltd, an Air Canada spokesman said.
The spokesman declined to comment on the Toronto Globe and
Mail report when queried.
The sale of Gelco Express, Canada's second largest courier
service, is part of the parent company's strategy to repay 350
mln U.S. dlrs of debt by the end of 1987, the report said,
quoting a Gelco spokesman. The report did not disclose a price
for the sale of Gelco's Canadian unit.
Qtly div 1-3/4 cts vs 1-3/4 cts prior
Pay April 15
Record April One
Qtly div five cts vs five cts prior
Pay April 20
Record April 13
The following proposed securities
offerings were filed recently with the Securities and Exchange
Commission:
Norwest Corp - Shelf offering of up to 100 mln dlrs of debt
securities, supplementing another 275 mln dlrs of debt
securities which remain unsold from a previous shelf
registration.
First Bancorp, Troy, N.C. - Initial offering of 400,000
shares of common stock at an estimated 17-19 dlrs a share
through Interstate Securities Corp.
Pearson Plc
Shr profit one ct vs loss 27 cts
Net profit 22,000 vs loss 763,000
Revs 161,000 vs 316,000
NOTE: Prior year net includes 1,209,000 dlr writedown of
oil properites and 314,000 dlr tax credit.
Recent purchases of U.S. corn by the
Soviet Union have skewed the domestic cash market by increasing
the price difference between the premium price paid at the Gulf
export point and interior levels, cash grain dealers said.
Many dealers expect the USDA will act soon to reduce the
cash price premium at the Gulf versus the interior -- which a
dealer in Davenport, Iowa, said was roughly 20 pct wider than
normal for this time of year at 25 cents a bushel -- by making
it worthwhile for farmers to move grain.
By lowering ASCS county posted prices for corn, the USDA
could encourage farmers to engage in PIK and roll corn sales,
where PIK certificates are used to redeem corn stored under the
government price support loan program and then marketed.
If the USDA acts soon, as many dealers expect, the movement
would break the Gulf corn basis.
"The USDA has been using the Gulf price to determine county
posted prices," one dealer said. "It should be taking the
average of the Gulf price and the price in Kansas City," which
would more closely reflect the lower prices in the interior
Midwest.
"But we don't know when they might do it," an Ohio dealer
said, which has created uncertainty in the market.
The USDA started the PIK certificate program in an effort
to free up surplus grain that otherwise would be forfeited to
the government and remain off the market and in storage.
Yesterday, USDA issued a report showing that only slightly
more than 50 pct of the 3.85 billion dlrs in PIK certificates
it has issued to farmers (in lieu of cash payments) had to date
been exchanged for grain.
With several billion dlrs worth of additional PIK
certificates scheduled to be issued in the coming months, the
USDA would be well advised to encourage the exchange for grain
by adjusting the ASCS prices, cash grain dealers said.
A byproduct of the Soviet buying has been a sharp rise in
barge freight costs quoted for carrying grain from the Midwest
to the export terminals, cash dealers said.
Freight from upper areas of the Mississippi have risen
nearly 50 pct in the past two weeks to over 150 pct of the
original tariff price. The mild winter and early reopening of
the mid-Mississippi river this spring have also encouraged the
firmer trend in barge freight, dealers noted.
The higher transportation costs have served to depress
interior corn basis levels, squeezing the margins obtained by
the elevators feeding the Gulf export market as well as
discouraging farmer marketings, they said.
"The Gulf market overreacted to the Soviet buying reports,"
which indicate the USSR has booked over two and perhaps as much
as 4.0 mln tonnes of U.S. corn, one Midwest cash grain trader
said.
But dealers anticipate that once the rumors subside,
freight rates will settle back down because of the overall
surplus of barges on the Midwest river system.
Shr 1.27 dlrs vs two cts
Net 18.8 mln vs 357,000
Revs 126.0 mln vs 98.5 mln
Avg shrs 14.7 mln vs 12.0 mln
Year
Shr loss 2.17 dlrs vs loss 65 cts
Net loss 28.4 mln vs loss 7,225,000
Revs 405.0 mln vs 356.2 mln
Avg shrs 13.1 mln vs 12.2 mln
NOTE: 1986 net both periods includes 15.0 mln dlr gain from
sale of real estate.
1986 year net includes charge 34.0 mln dlrs from
restructuring of Bojangles' restaurant unit and charge
4,090,000 dlrs from exchange of notes for common stock.
1985 year net includes charge 6,900,000 dlrs related to
foodservice unit and gain 2,400,000 dlrs from sale of
marketable securities.
Several traders and analysts here told
Reuters Latin American coffee producers will meet this weekend
in Managua, Nicaragua. The purpose, they said, is to review the
breakdown of International Coffee Organization quota talks last
month and try to formulate a unified position ahead of possible
future negotiations.
Two traders, who asked not to be named, said separately
Brazil is expected to attend the meeting along with most or all
of the Central American producers. The Central American
attendees would include Costa Rica and Honduras, who were part
of a minority producer group at the February talks that opposed
Brazil's position, they said.
Another source, also requesting anonymity, said Colombia
probably will not attend.
Mexican Finance Minister Gustavo
Petriccioli said Mexico will sign its 7.7 billion dlr
commercial bank loan on Friday.
Petriccioli, speaking to reporters after a visit to the
World Bank, said the loan was currently 98.5 pct subscribed, a
figure Treasury Secretary James Baker used in Congressional
testimony yesterday.
Representatives from Brazil, Colombia,
Mexico and Nicaragua will meet here Friday to discuss the
economic impact of falling coffee prices, a Nicaraguan official
announced.
Vice-minister of foreign trade Bernardo Chamorro said that
participating in the meeting will be the heads of the coffee
associations from the four countries.
He did not say if the meeting would continue beyond friday.
Chamorro said Nicaragua supports the establishment of
export quotas in an effort to boost sagging world prices.
St. Joseph Light and Power Corp
said its board declared a three-for-two stock split and raised
the quarterly dividend on presplit shares to 49 cts per share
from 47 cts.
The company said the dividend is payable May 18 to holders
of record May 4 and the split is subject to approval by
shareholders at the May 20 annual meeting.
Peru registered a 16 mln dlr trade deficit
in 1986, its first trade shortfall in four years, a central
bank statement said.
The figure compared with a surpluses of 1.17 billion dlrs
in 1985, 1.01 billion in 1984 and 293 mln in 1983. The last
trade deficit was a 428 mln shortfall in 1982.
Peru's exports fell to 2.51 billion dlrs last year from
2.98 billion in 1985. Last year's imports were 2.53 billion
dlrs against 1.81 billion dlrs in 1985.
Amoco Corp said its WEQB-1 exploratory
well 39 miles east of Galeota Point on Trinidad's east coast
flowed 24 mln cubic feet of natural gas and 500 barrels of
condensate daily from one zone and 29 mln cubic feet of natural
gas and 600 barrels of condensate daily from a second.
The company said both flows were through 40/64 inch chokes
and from zones between 10,000 and 13,000 feet in depth. The
well, in 260 feet of water, was drilled to a total depth of
14,629 feet, it said. It said the discovery was made in sands
previously untested in the area.
The surprise 2.2 billion-dlr tender
offer for Ohio-based conglomerate GenCorp Inc will not be
enough to buy the company, analysts said.
Analysts estimated the 100 dlr-per-share offer from General
Partners is 10 to 20 dlrs per share below the breakup value of
GenCorp. However, market sources and analysts said uncertainty
surrounds any transaction because of the legal challenges to
Gencorp broadcasting licenses.
Gencorp's stock rose 15-3/4 to 106-1/4 in heavy trading.
"The expectation is either there will be someone else or
the bidder will sweeten the offer hoping to get management's
cooperation," said Larry Baker, an analyst with E.F. Hutton
group.
Analysts said there is concern about challenges to
Gencorp's broadcast licenses for two television and 12 radio
stations. Some of the disputes, dating back about 20 years,
were brought by groups that alleged improper foreign payments
and political contributions.
"I think it kind of muddies an already muddy situation,"
said Baker of the offer.
Some arbitragers said they were concerned the ongoing issue
might be a stumbling block or result in a long period of time
for any transaction.
A source close to General Partners, however, said General
Partners would apply to the Federal Communications Commission
for special temporary authority to hold the broadcast stations.
The source said if approved, the authority would allow a
transaction to be carried out.
If it received the "short-form" approval, General Partners
would set up a trust which would hold the broadcasting
properties until the licensing situation is resolved.
General Partners is equally owned by investors Wagner and
Brown and glass-maker AFG Industries Inc.
Some market sources speculated an outside buyer, such as
General Partners, might even be be a catalyst to resolution of
the challenges since it would carry out GenCorp's plan to sell
the stations.
GenCorp earlier this month reached an agreement with Walt
Disney Co to sell its Los Angeles television station, WHJ-TV.
Disney would pay 217 mln dlrs to GenCorp and 103 mln dlrs to a
group that challenged the station's license.
GenCorp also has a pending agreement to sell WOR-TV in
Secaucus, N.J. to MCA Inc for 387 mln dlrs.
General Partners said it intends to keep the company's
plastics and industrial products businesses and its tires and
related products segment.
Charles Rose, an analyst with Oppenheimer and Co, said
that, on a breakup valuation, the company might be worth as
much as 125 dlrs per share. Rose estimated the aerospace
business could bring 30 to 40 dlrs per share or one billion
dlrs, as would DiversiTech, the plastics unit. Broadcasting,
including assets pending sale, might be 30 to 40 dlrs per
share, he said.
The company, formerly known as General Tire
and Rubber Co, also has a tire business Rose estimated would be
worth five to 10 dlrs per share. He estimated the bottling
business might also be worth several dollars per share, he
said.
Analysts said GenCorp chairman A. William Reynolds, who
became chairman last year, has been emphasizing the company's
Aerojet General and DiversiTech General businesses. GenCorp,
founded in 1915, became an unfocused conglomerate over the
years and analysts believe reynolds has helped it to improve.
"The management's doing a very fine job in trying to deal
with the non-strategic assets of the company," Rose said.
Analysts expect GenCorp to resist the tender offer, but
they declined to predict what steps the company might take.
They said it would be possible the company might consider a
leveraged buyout or restructuring to fend off the offer.
General Partners holds 9.8 pct of GenCorp stock, and there
was some concern about "greenmail." Greenmail is the payment at
a premium for an unwanted shareholders' stock.
"I would doubt they would greenmail them, but nothing
surprises me anymore," said Rose.
GenCorp has not commented on the offer. It has retained
First Boston Corp and Kidder, Peabody and Co as advisers.
Qtly div eight cts vs eight cts prior
Pay April 30
Record April 16
The European Community (EC) has
warned the U.S. House of Representatives that tough trade
legislation it is considering could prompt retaliation by U.S.
trading partners.
The warning was sent in a letter from Sir Roy Denman, head
of the EC delegation in Washington, to Dan Rostenkowski,
chairman of the House Ways and Means Committee.
A copy of the letter was made available to Reuters.
Denman told Rostenkowski, an Illinois Democrat, he backed
aspects of the bill, such as one backing new talks under the
GATT and one excluding protection for the textile industry.
But Denman disagreed with other provisions which would
require President Reagan to take retaliatory trade action
against nations with large trade surpluses with the U.S. and
would set new standards for judging unfair foreign trade
practices.
Denman told Rostenkowski that GATT regulations prohibit
member nations from taking unilateral retaliatory action in
trade disputes unless the action is GATT-approved.
He said "If the Congress makes retaliatory action mandatory,
then the United States would be in violation of its
international legal obligations and on a collision course with
its major trading partners."
Denman added that a president should have flexibility in
enforcing trade laws, saying "in the last resort, any
administration must take its decision in light of the overall
national interest."
Otherwise, he said, "the risk would be counter-reaction by
trading partners of the United States, i.e., retaliation or
enactment of mirror image legislation to be employed against
imports from the United States."
Denman also said Congress could prompt retaliation if it
reduced the threshhold of unfair trade by making it easier for
firms to file unfair trade practice claims.
Retaliation could also be prompted by relaxing standards
for findings that imports were injuring U.S. firms.
"Changes in these standards must be agreed upon
multilaterally. They cannot be imposed by the United States
alone on the world trading system," he said.
House leaders have rejected a plan by textile-state
legislators to add to the trade bill a provision to curb
imports of cloth and clothing, similar to a measure passed two
years ago but vetoed by President Reagan.
There was concern by the leaders that Reagan would veto the
entire trade bill because of the textile amendment.
Ended December 31
Shr three cts vs nine cts
Net 220,000 vs 721,000
Revs 4,920,000 vs 4,184,000
Avg shrs 6,425,925 vs 6,599,000
NOTE: Full name Rada Electronic Industries Ltd.
Shr loss 18 cts vs profit six cts
Net loss 509,471 vs profit 163,840
Revs 2,623,974 vs 1,835,580
12 mths
Shr loss 18 cts vs profit 10 cts
Net loss 494,352 vs profit 173,948
Revs 10.1 mln vs 3,551,429
NOTE: 4th qtr loss reflects 290,000 dlrs of non-recurring
expenses related to senior management changes.
Full name of company is Children's Discovery Centers of
America Inc.
Hyponex Corp is raising 150 mln dlrs
through an offering of senior subordinated debentures due 1999
yielding 11.828 pct, said sole underwriter Drexel Burnham
Lambert Inc.
The debentures have an 11-3/4 pct coupon and were priced at
99.50, Drexel said.
The issue is non-callable for five years. There were no
ratings by Moody's Investors Service Inc or Standard and Poor's
Corp at the time of the pricing, Drexel said. Hyponex said
proceeds will be used mainly to finance acquisitions of assets
and businesses.
The Murray Ohio Manufacturing
Co said it expects first quarter earnings to be higher than the
4,800,840 dlrs, or 1.25 dlrs per share, it recorded for the
first quarter of last year.
The company, which produces lawn mowers and bicycles, said
earnings are ahead of last year due to increased lawn and
garden shipments in January and February and a record-setting
pace in March.
Shr 55 cts vs NA
Net 2,512,000 vs 773,000
Year
Net 7,123,000 vs 3,098,000
Assets 417.7 mln vs 251.1 mln
Deposits 329.4 mln vs 230.1 mln
Loans (net) 366.1 mln vs 205.2 mln
NOTE: Some per shr amounts not available as company
converted to public ownership in July 1986.
A shareholder group led by Far
Hills, N.J., investor Natalie Koether said it is reconsidering
its plan to seek control of Computer Memories Inc and now plans
to sell its entire stake in the company.
In a filing with the Securities and Exchange Commission,
the group, which includes Sun Equities Corp, said it sold a net
365,375 Computer Memories common shares between March 5 and 17
at prices ranging from 3-3/4 to four dlrs a share, lowering its
stake to 687,000 shares, or 6.2 pct of the total outstanding.
The group said it reconsidered its takeover plans after the
company announced it agreed to a stock swap.
On March 12, the Chatsworth, Calif., computer disk drive
concern said it agreed in a letter of intent to exchange 80 pct
of its stock, all of which would be newly issued, for the
assets of privately held Hemdale Film Corp, with Hemdale as the
surviving entity.
"In light of these disclosures, Sun found it necessary to
re-evaluate the feasibility of seeking control of the company
and has sold a portion of its shares and currently intends to
sell the balance thereof from time to time," the group said.
The group, which disclosed plans on Dec 29 to seek control
of the company, reserved the right to change its mind again.
Shr 1.05 dlrs vs 51 cts
Net 8,500,000 vs 4,100,000
Revs 183.2 mln vs 136.6 mln
Canadian Pacific Ltd said it retained
Wood Gundy Inc to seek a buyer for Maple Leaf Mills Ltd of
Toronto.
The company said Maple Leaf had 1986 sales of 819 mln
Canadian dlrs and an after tax profit of 16.3 mln Canadian
dlrs. It is a diversified agriproducts company which produces
and sells industrial and consumer flour, flour-based products
and baked goods.
It also operates a fully integrated poultry business and a
rendering business, markets livestock and poultry feed and
distributes grain through a network of country and terminal
elevators.
Brazilian Coffee Institute (IBC)
president Jorio Dauster said he will attend a meeting in
Managua this weekend.
He told Reuters by telephone from Brasilia that the
meeting, involving Brazil, Colombia and Central American coffee
producers, will be strictly to review the coffee market
situation.
"The meeting is set for Saturday but could also continue on
Sunday," he said.
Financial analysts see little chance
that U.S. interest rate futures will break out of their narrow
ranges and low volatility during the remainder of the week.
"We got a little volatility Wednesday," said Staley
Commodities International analyst Jerome Lacey. "But for the
moment we're still in a trading range."
Even unexpected developments concerning the growth of the
U.S. economy may not be enough to spur the market out of its
sluggish state, the analysts said.
"It (the bond market) has not yet demonstrated that it can
break out of its very low volatility," said Carroll McEntee and
McGinley analyst Denis Karnosky. "It needs something, but it's
not going to be news about the economy," he said.
Karnosky said that the bond market will possibly break out
of the doldrums if participants perceive that the dollar has
stabilized and the Federal Reserve has more room to conduct
monetary policy.
But even Wednesday, when fed funds were below six pct, the
dollar strong and oil on the soft side, bond futures attracted
eager sellers when contracts approached recent highs, he said.
In addition to a changing perception about the dollar and
monetary policy, Golden Gate Futures president Norman Quinn
said the beginning of April could bring foreign investors back
into the marketplace.
"The market is beginning to feel there may be demand at the
beginning of the fiscal year in Japan on April 1," Quinn said.
Quinn echoed the sentiment of many analysts that there are
large amounts of cash waiting to be invested. If Japanese
investment in U.S. securities does materialize at the start of
Japan's fiscal year, domestic funds may also flow into the bond
market, he said.
"We could get a stiff rally, possibly enough to bring
yields on long bonds down to seven to 7-1/8 pct," compared to
the current yield of about 7.5 pct, Quinn said.
In the meantime, even the prospect of new supply is not
likely to move futures.
The Treasury's announcement of a 15 billion dlr refunding
operation did little to move cash government securities prices
late Wednesday after the close of futures.
"I'd be surprised if supply pushed us out of it (the
trading range)," Lacey said.
Lifestyle Restaurants Inc said it
reduced the number of Bombay Palace Restaurants inc common
shares to be received in its previously announced merger
agreement.
Under the amended deal, Lifestyle shareholders will get one
Bombay share for each six instead of five Lifestyle shares.
Under the amended offer, Bombay will issue about 900,000
shares, currently 7.2 mln dlrs.
The amendment also increases the cash consideration to be
offered on Lifestyle's 13 pct convertible subordinated
debentures from 55 pct of the principal amount to 57.5 pct.
The Taiwan Flour Mills Association will
import 81,000 tonnes of wheat from Canada in calendar 1987,
unchanged from the 1986 level, an association spokesman told
Reuters.
He said the total will be delivered in three shipments. The
first will be shipped to Taiwan between March 20 and April 20
and the other two will be made later this year, he said.
The total wheat import target this year has been set at
700,000 tonnes, down from actual imports of 758,770 last year.
Most of Taiwan's wheat imports come from the U.S., The
spokesman said.
New Zealand's unemployment rate fell
to 6.0 pct of the workforce at the end of February from 6.1 pct
in January but was above the 4.3 pct level of February 1986,
the labour department said.
It said the number of unemployed fell to 78,711 from 81,558
in January, and compared with 57,103 in February 1986.
The Australian Wheat Board (AWB)
expects to sell about 900,000 tonnes of wheat to the Japanese
Food Agency this year after renewing its annual supply
agreement, AWB general manager Ron Paice said.
Under the agreement, the AWB makes the wheat available and
sells into the Food Agency's regular tenders, he said in a
statement.
He noted that the Board has sold more than three mln tonnes
to Japan in the past three years.
State-owned
Pyongyang and a group of Tokyo-based
North Korean businessmen plan to resurrect a North Korean
goldmine and boost annual output to almost one tonne within two
years from 600 pounds at present, said Li Sangsu, a spokesman
for
U.K. Average earnings rose a seasonally
adjusted 7.6 pct in the year to end-January after a 7.4 pct
rise in the year to December, the Department of Employment
said.
The underlying rise was 7.5 pct after 7.75 pct in December.
The January index, base 1980, was set at a provisional
seasonally adjusted 190.4, down from 193.4 in December.
The underlying rise, adjusted for factors such as back-pay
and timing variations, had been steady at 7.5 pct from October
1985 to October 1986.
Unit wage costs in U.K. Manufacturing industry rose 3.3 pct
in the three months to end January, on a year-on-year basis,
after a 3.1 pct rise in the three months to end December, the
Department of Employment said.
In January, the unit wage rise in manufacturing industries
was 3.6 pct, unchanged from the December rise.
The Department said the decline in the underlying rate of
rise in earnings reflected the reduced significance of bonus
payments in January compared with December.
The actual increase reflected teacher pay settlements and
industrial action in the transport and communications sectors
in January 1987.
U.K. Property company MEPC Plc is
issuing a 75 mln stg eurobond due April 15, 2004 paying 9-7/8
pct and priced at 99-5/8 pct, lead manager County Natwest
Capital Markets said.
The bond is in partly paid form with 25 pct due on April 15
and the remainder on July 15. It will be available in
denominations of 1,000 and 10,000 stg and will be listed in
London.
Fees comprise 1-1/2 pct selling concession and 1/2 pct each
for management and underwriting.
Sanwa Bank Ltd
The liberalization of West German
capital markets in May 1985 led to a flood of financial
innovations but the lack of a secondary market for these has
diminished their acceptance, Deutsche Girozentrale - Deutsche
Kommunalbank management board member Wiegand Hennicke said.
While innovations may be intellectualy stimulating, they
lack transparency, he told an investors' forum in West Berlin.
"Properly functioning markets require standardized products.
This (condition) has not been met by some of the innovations,"
Hennicke said.
The volume of zero coupon bonds and floating rate notes,
the most widely used financial innovations in Germany, stands
at four billion and 16 billion marks, respectively, a tiny
proportion of the 1,000 billion marks of bonds in circulation.
Even for zero-coupon bonds and floating rate notes, a
secondary market had not developed, Hennicke said. One
important reason for this was the bourse turnover tax, which
was reducing the rate of return to the investors.
West German Finance Minister Gerhard Stoltenberg said this
week he believed the tax could still be removed, even if its
abolition was not decided during recent coalition discussions.
Karl-Herbert Schneider-Gaedicke, deputy management board
chairman of DG Bank Deutsche Genossenschaftsbank, said German
domestic and institutional investors had also shown
reservations about investing in participation shares.
One of the reasons was the widely varying terms and
conditions of participation shares in West Germany. "The
investor has to scrutinize (participation shares) carefully,
before making an investment decision," Schneider-Gaedicke said.
He added the attractiveness of participation shares could
be increased by limiting the combination possibilities of terms
and conditions and increasing safeguards for investors.
He also urged publicizing the comparative advantage of
participation shares over ordinary shares for foreigners.
Foreigners do not receive the corporation tax bonus granted
to domestic investors for share dividends.
Karl Thomas, head of the Bundesbank's credit department,
said the domestic investor had missed earnings opportunities
over the last four years by failing to invest in German bonds.
Domestic investors did not believe interest rates would
decline and stay at low levels for such a long time, because
expectations were determined by sharp interest rate
fluctuations at the start of the decade.
The Bundesbank has a natural interest in seeing domestic
savings channelled into bonds and shares, Thomas said.
A shift of savings into long-term assets would dampen
monetary expansion and foster a stable rise of the money
supply, he said.
New applications for unemployment
insurance benefits fell to a seasonally adjusted 340,000 in the
week ended March 7 from 373,000 in the prior week, the Labor
Department said.
The number of people actually receiving benefits under
regular state programs totaled 2,507,000 in the week ended Feb
28, the latest period for which that figure was available.
That was up from 2,477,000 the previous week.
Energy Secretary John Herrington
said his proposed option to raise the oil depletion allowance
to 27.5 pct was probably the most economically promising way to
spur domestic production.
The White House has said it would consider the option
although it was generally opposed to any revisions in the new
tax code.
Herrington told a meeting of the Mid-Continent Oil and Gas
Association that the higher depletion allowance on new oil and
enhanced oil recovery would cost taxpayers about 200 mln dlrs a
year.
The option was one of many contained in a report on oil and
the national security the Energy Department sent to the White
House on Tuesday.
Herrington said of the increased depletion allowance
option: "that is one that could significantly increase
production at a very low cost to the American taxpayer."
He again rejected an oil import fee as far too costly to
the overall U.S. economy.
Zimbabwe's projected coffee output of
13,000 tonnes for 1987/88 could be reduced by drought, growers
said.
The main coffee growing areas in eastern Zimbabwe have
received little rain since April 1986 and the Coffee Growers'
Association has begun a survey to assess the effects of the
drought, a spokesman said.
Zimbabwe exported 11,000 tonnes of coffee in 1986, mainly
to West Germany, Britain, Japan, the Netherlands, Switzerland
and the United States.
Shr 56 cts vs 63 cts
Net 48,500,000 vs 55,400,000
Sales 1.53 billion vs 1.46 billion
Avg shrs 86.6 mln vs 87.3 mln
Nine mths
Shr 1.73 dlrs vs 1.79 dlrs
Net 150,300,000 vs 156,200,000
Sales 4.60 billion vs 4.30 billion
Avg shrs 86.7 mln vs 87.3 mln
NOTE: 1987 results include gain of 9.7 mln dlrs, or 11 cts
a share from sale of assets
1986 results include gain of 161 mln dlrs, or 18 cts a
share, from sale of assets, offset partly by a restructuring
provision
Fiscal 1987 results restated to give effect to adoption of
financial accounting standards relating to pension costs.
Segment data for Foods restated to include results of commodity
marketing, previously reported separately. Earnings restated
for two-for-one stock split, effective Nov 30, 1986
Caisse Nationale des Autoroutes is
issuing a three billion French franc bond, the French bond
issuing committee said.
The issue will be lead-managed by Caisse Nationale du
Credit Agricole, Credit Lyonnais and Cie Financiere de Paribas
subsidiary Credit du Nord.
Colombia will not attend a meeting of
coffee producing countries scheduled for this weekend in
Nicaragua, Jorge Cadenas, manager of the National Coffee
Growers' Federation, said.
"We prefer to wait until things are better prepared," he told
Reuters. He added the meeting could be postponed.
Colombia, Brazil and the Central American coffee producing
countries were invited to the meeting in Managua to analyze the
market situation
However, he did not dismiss the idea of dialogue and
negotiation in preparation for meetings of the International
Coffee Organization.
Gilberto Arango, president of Colombia's exporters'
association, speaking to Reuters earlier this week, ruled out a
fresh Colombian initiative on export quotas saying producers
had now to show a common resolve which could emerge from
continuous contacts.
The International Coffee Organization executive board is to
meet in London between March 31 and April 2.
Scan-Graphics Inc said it will be
acquired by Captive Venture Capital Inc, a public company,
in a stock transaction approved by shareholders of both
companies.
As a result of the merger, the former shareholders of
Scan-Graphics will become the majority shareholders of Captive
Venture Capital. The name of the corporation will be changed to
Scan-Graphics Inc and its borad of directors will be composed
of individuals now on the Scan-Graphics board.
Under the terms of the deal, Capitive Venture Capital will
issue 1.6 mln shares of restricted convertible preferred stock,
convertible into 16 mln shares of common stock, in exchange for
all outstanding stock of Scan-Graphics.
Upon completing the deal, there will be 2,649,500 common
shares of Capitive Venture Capital issued and outstanding, of
which 149,500 shares will be held by the public.
In addition, there are 95,050 tradeable class A warrants
and 100,000 B warrants, each of which entitles the holder to
buy 10 shares of common stock at 1.25 dlrs and 1.50 dlrs,
respectively, a share.
Scan-Graphics makes systems that allow users to convert
graphic documents, such as charts, maps and engineering
drawings, into computer data that can be displayed, edited and
stored by computer.
Currently, Captive Venture Capital stock is traded over the
counter and will soon trade under the Scan-Graphics name.
Application for Nasdaq listing is expected as soon as
requirements are met.
Standard and Poor's Corp said it
downgraded Bethlehem Steel Corp's debt securities.
Bethlehem has one billion dlrs of debt and preferred stock
outstanding. Cut were its senior debt to CCC-plus from B-minus
and subordinated debt to CCC-minus from CCC. S and P affirmed
the C-rated preferred, since preferred dividends were
discontinued last year.
S and P cited concerns over Bethlehem's viability over the
intermediate term, rather than any immediate threat to
solvency. Its cash is strong relative to 1987 requirements, but
was accumulated through such means as asset sales.
Madagascar's available coffee
output is estimated at 80,725 tonnes this year, down from
82,210 in 1986, due to a rundown of government agricultural
services and the poor state of feeder roads in rural areas,
Agriculture Ministry sources said.
This is after accounting for the loss of some 15,000 to
20,000 tonnes due to the transport problems in the countryside,
they said.
The sources did not give an estimate for exports in 1987,
but they noted that shipments declined to 37,200 tonnes last
year from 41,662 in 1985.
Low yields from the country's ageing coffee plantations and
prevalence of the fungal disease Hemileia Vastatrix also
contributed to the poor performance, the sources said.
They pointed out that 52 pct of Madagascar's coffee bushes
were planted before 1930.
The sources said Madagascar was still a long way from
reaching the production target of 110,000 tonnes per year and
the export target of 63,000 tonnes outlined in the government's
1986-1990 five-year plan.
In order to reverse the decline in coffee production, the
government has decided to plant 20,000 hectares with
high-yielding arabica and canephora varieties, the sources
said.
The planting programme will begin this year and is aimed at
producing 300 to 360 kilos per hectare of beans with a low
caffeine content.
The sources added that Madagascar's plan to export roasted
coffee has failed to take off due to packaging problems. Only
650 tonnes of roasted coffee were exported last year.
Federal Paper Board Co Inc said
it has filed for an offering of 140 mln dlrs of cumulative
convertible preferred stock, or 2,800,000 shares with a
liquidation preference of 50 dlrs each, through underwriters
First Boston Inc
Ryan's Family Steak Houses Inc
said its board declared a three-for-one stock split, payable
May 20 to holders of record May 6.
The company said the split is subject to shareholder
approval of an increase in authorized shares to 100 mln from 20
mln at the April 22 annual meeting.
Bahrain-based
Carson Pirie Scott and Co said the Tax
Reform Act of 1986, which repealed investment tax credits, had
a negative impact of 22 cts a share on earnings for the year
ended January 31.
Earlier, Carson reported yearly per-share earnings of 1.83
dlrs, down from 1.86 dlrs a year ago. Average shares increased
to 10.2 mln from 9.9 mln a year earlier. Sales gained to 1.41
billion dlrs from 1.30 billion dlrs.
Carson said it was "extremely optimistic about improved
profit performance in 1987."
It said in the first half of 1987 it hopes to reduce
seasonal-type losses sustained in the 1986 first and second
quarters.
The company said that in early April its Oak Brook Hills
Hotel and Conference Center in suburban Chicago will open under
its management. Provisions for startup expenses have been made,
it added.
AmSouth Corp said the Federal
Reserve Board approved the affiliation of First Tuskaloosa Corp
with Amsouth.
The approval was the final regulatory step in the
affiliation process which began in August, Amsouth said.
Under terms of the affiliation, each First Tuskaloosa
shareholder will receive 66 dlrs value of AmSouth stock for
each share held. The total consideration is valued at 105.6 mln
dlrs.
J and J Snack Foods Corp said it filed
with the Securities and Exchange Commission a registration
statement covering a 25 mln dlr issue of convertible
debentures.
The company said proceeds would be used for potential
future acquisitions.
Shr loss 12 cts vs profit 37 cts
Net loss 350,738 vs profit 1,095,991
Revs 18.8 mln vs 15.8 mln
Year
Shr profit 28 cts vs profit 1.29 dlrs
Net profit 831,901 vs profit 3,000,716
Revs 60.6 mln vs 48.2 mln
Avg shrs 2,996,903 vs 2,756,596
Note: Per share date adjusted to reflect 10 pct stock
dividend of March 1986.
Quaker State Oil Refining Corp
said it signed a 100 mln dlr revolving credit and term loan
agreement with a group of six banks, for which Mellon Bank N.A.
is agent.
The four-year arrangement has an additional four-year term
loan amortization agreement, Quaker said.
Quaker said the credit line will be used to finance
expansion plans. Quaker's total capital spending program for
1987 is expected to exceed 125 mln dlrs, it said. In 1986, the
company's capital spending totaled 71.0 mln dlrs.
Quaker also said costs of new store openings and new
product introductions will depress earnings in the first half.
For the first half of 1986, Quaker reported net income of 26.0
mln dlrs on sales of 473.5 mln dlrs.
In the first two months, Quaker opened about 25 new stores.
It said it expects to add 150 Minit-Lube fast lubrication
service centers in 1987 at a cost of 75 mln dlrs.
The company said it is optimistic it will recover in the
second half and report higher earnings for full year fiscal
1987. The company reported net income of 50.3 mln dlrs on sales
of 899.1 mln dlrs for 1986.
An additional margin of 1,000 dlrs
will be required on all July 1987 delivery coffee "C" contracts
as of the opening of trade Monday, March 23, the Coffee, Sugar
and Cocoa Exchange, CSCE, said.
The March contract ends trading this week, making May and
July the two "spot," or unlimited, contract months next week.
Members will then have to obtain a minimum 3,500 dlrs for
net long or net short positions in the May and July contracts,
including a 2,500 original margin plus the additional 1,000 dlr
spot charge.
Dow Chemical Co said it will
issue 100 mln New Zealand dollar denominated bonds worth
approximately 56 mln U.S. dlrs at current exchange rates.
It said the two-year bonds will offer a floating interest
rate which will not be less than 17 pct in New Zealand dollars.
Proceeds from the bonds, issued under the company's shelf
registration, will be swapped for U.S. funds resulting in an
all-in cost to Dow fixed at 15 basis points below the two-year
U.S. Treasury rate.
O'Brien Energy Systems Inc is raising
25 mln dlrs through an offering of convertible subordinated
debentures due 2002 with a 7-3/4 pct coupon and par pricing,
said sole underwriter Drexel Burnham Lambert Inc.
The debentures are convertible into the company's common
stock at 10.925 dlrs per share, representing a premium of 15
pct over the stock price when terms on the debt were set.
Non-callable for three years, the debt is rated B-3 by
Moody's and CCC-plus by Standard and Poor's. The issue was
increased from an initial offering of 20 mln dlrs because of
investor demand.
Liberalization of Italy's foreign exchange
controls should be "gradual" but also "reasonably rapid," a report
issued by a study committee nominated by the Italian Treasury
Ministry said.
The report, looking at the country's financial development
prospects, said Italy's large public sector deficit and growing
public debt were among the considerations that made a gradual
liberalization preferable.
The report also favoured retention of the lira's six pct
oscillation band with the European Monetary System (EMS) during
the liberalization process in order to lessen short-term
domestic interest rate fluctuations which could result from
portfolio adjustments.
The lira's fluctuation margin is currently significantly
higher than that allowed for other EMS currencies.
Italy has over recent months announced a series of
deregulation moves in response to a European Community
directive aimed at creating a genuine common market in goods,
services and finance by 1992.
This weekend's meeting of Latin
American coffee producers here will call for the International
Coffee Organisation (ICO) to start talks aimed at firming
prices, Nicaraguan foreign trade minister Alejandro Martinez
Cuenca said.
He said those countries which had confirmed their presence
were Brazil, Mexico, Guatemala, El Salvador, Costa Rica and
Panama. Colombia had been invited but he did not know if it
would attend.
Martinez Cuenca told reporters central america alone had
lost some 700 mln dlrs through the weakness of world coffee
prices, partially caused by lack of an ICO quota agreement.
Oper shr loss 30 cts vs loss 25 cts
Oper net loss 2,138,000 vs loss 2,312,000
Revs 99.3 mln vs 89.4 mln
Year
Oper shr loss 40 cts vs profit 47 cts
Oper net profit 4,294,000 vs profit 8,793,000
Revs 390.9 mln vs 360.5 mln
NOTE: Excludes discontinued operations loss of 1.33 dlrs a
share vs 5.35 dlrs a share in the quarter, and loss 1.52 dlrs a
share vs loss 13.64 dlrs in the full year.
Fourth quarter 1986 includes reserve of nine mln dlrs for
operations company plans to sell.
Per share figures come after preferred dividend
requirements.
Quarter ended Feb 28
Shr four cts vs seven cts
Net 500,000 vs 900,000
Revs 9,200,000 vs 10,500,000
Year
Shr four cts vs 12 cts
Net 600,000 vs 1,500,000
Revs 17.6 mln vs 20.8 mln
Qtly div nine cts vs nine cts
Pay May 21
Record May 1
Qtly div 12 cts vs 12 cts
Pay April 8
Record April 1
The U.S. Senate has unanimously
called for President Reagan immediately to force Japan to live
up to a pledge to stop dumping its microchips and open its
markets to U.S. Chipmakers.
The Senate voted 93 to 0 to urge Reagan to impose penalties
on Japanese high-technology products containing semiconductors
in retaliation for what it sees as Japan's violations of the
semiconductor pact.
While the measure does not bind Reagan to any action,
Senate leaders said its adoption would warn Japan stiffer
legislation would be considered if the violations continue.
"We want to send a message to Japan to let it know how the
Senate feels about this matter," Senate Democratic Leader Robert
Byrd told the Senate.
Senate Finance Committee chairman Lloyd Bentsen told the
Senate the measure was not aimed at retaliation but at
correcting Japan's unfair trade practices.
A key House trade lawmaker, Representative Richard Gephardt
also announced he would seek to force Japan and other countries
with huge trade surpluses to slash their surplus by 10 pct a
year for three years.
About 9,000 miners employed by the
state corporation, Comibol, declared a general strike as from
midnight (0400 gmt) to press for higher salaries, a statement
by the federation for Bolivian mine workers said.
It said the strike was called to defend the nationalised
mining industry. The miners were willing to negotiate with the
government of President Victor Paz Estenssoro, but only if it
showed an intention to meet the strikers' demands.
The government said the strike was designed to cause it
embarrassment during the four-day visit of West German
President Richard Von Weizsaecker, which starts on Friday.
The miners statement said police had violently evicted
Comibol office workers in the city of Oruro after they began a
hunger strike yesterday.
The government has sacked about 20,000 miners from its
deficit-ridden corporation since the collapse in the
international price of tin. The lay-offs represent about
two-thirds of the original workforce.
The state-owned Krung Thai Bank Ltd
will start taking over state-owned Sayam Bank Ltd and complete
the process in a year, Finance Minister Suthee Singhasaneh told
a press conference.
He said the takeover decision was made this week to stem
the current heavy losses of Sayam and to avoid competition
between the two state-owned institutions.
The minister said some of the existing 30 Sayam Bank
branches will be merged with their Krung Thai counterparts,
while others will continue operating but under Krung Thai's
name.
Sayam Bank has existed since August 1984 when the Finance
Ministry took over and re-named the Asia Trust Bank Ltd.
Sayam president Waree Havanonda told reporters last month
her bank posted a loss of more than 400 mln baht in 1986. At
the end of 1985 the bank, with 13.8 billion baht of assets, was
ranked 12th among Thailand's 16 local commercial banks.
Waree said Sayam Bank was trying to recall about six to
seven billion baht of loans extended by its previous private
management and was taking legal action to collect another four
to five billion baht of doubtful debts.
Krung Thai is Thailand's third largest bank.
Copper shipments are likely to be
delayed because of power problems at
West German M3 money supply rose a
seasonally adjusted 2.6 billion marks in February to 1,035.1
billion, the Bundesbank said.
The rise compares with a revised 14.8 billion mark increase
in January and a 2.2 billion rise in February 1986.
McCarthy and Stone Plc, a public U.K.
Company which owns and operates retirement homes, has signed a
100 mln stg multi-option facility, National Westminster Bank
Plc said as arranger.
The facility incorporate a 70 mln stg committed element
from a group of international banks.
The facility will provide the group with working capital to
meet its planned expansion in the U.K. Over the next three
years.
A top Swiss banker called for an
obligatory, continuous rating for all Swiss franc bonds and
said he believed anyone buying more than five pct of a company
should be made to declare their share.
In comments at a news conference of
Italian industrial production fell 3.4 pct
in January, compared with the same month last year, the
national statistics institute Istat said.
The rise follows a year-on-year increase in December 1986
of 4.5 pct.
Istat's industrial production index, base 1980, not
seasonally adjusted, registered 93.3, compared with 96.6 in
January 1986.
Istat said there were 20 working days in January, the same
as December, but one fewer than January last year.
Istat said the year-on-year fall reflected poorer
performances in the footwear, clothing, textiles, chemicals and
metals industries.
It said office machinery and data sectors, wood and
furniture, precision mechanics, oil and electricity showed
improved activity.
Calculations based on Istat figures showed industrial
production rose 2.4 pct in January, on a month-on-month basis,
after falling 12.0 pct in December over November.
The Bank of Spain suspended its daily
money market assistance and offered to drain funds with three-
and seven-day repurchase agreements at 12-1/2 pct, money market
sources said.
The sources said the measures were a further attempt to
rein in money supply and were likely to force some institutions
to scramble for funds before the 10-day accounting period for
reserve requirements closes on Monday.
The bank, which raised its rate for ordinary overnight
assistance to 13-3/4 from 13-1/2 pct on Wednesday, opened its
special borrowing facility for overnight funds at 14-1/2 pct.
Money market sources said institutions in need of funds
were likely to have to return to the bank tomorrow for further
assistance.
The bank rarely invites applications for ordinary
assistance on a Saturday and the sources said it was more
likely to open its special borrowing facility again.
Geodome Resources Ltd said
following receipt of a feasibility study from Raytheon Co's
The European Community (EC) and
Soviet-led Comecon ended talks here, having made progress on
setting up formal trade relations, but no breakthrough because
of Comecon's refusal to recognise West Berlin as part of the
EC, delegates said.
Negotiators were trying to reach agreement on the draft of
a joint declaration setting up official relations after 30
years of mutual non-recognition. John Maslen, head of the EC
delegation, told Reuters as he emerged from the final session:
"We made some progress, but we have called for another meeting."
Officials, who asked not to be named, said the Comecon team
had refused to accept a clause in the draft declaration which
would recognise West Berlin as part of the 12-nation EC.
Under the 1957 Treaty of Rome all contracts and agreements
signed by the Community must contain this territorial clause
stipulating West Berlin is an integral part of the EC. An EC
negotiator taking part in the three-day talks said: "We wanted
the territorial clause in, but Comecon said no."
A joint statement issued after the talks said progress was
made towards clarifying positions, but another meeting would be
necessary to complete the work.
Any decision in principle to set up relations would require
approval by the Community's Council of Ministers and by the
executive committee of Comecon.
Zdzislaw Kuroski, deputy director of Comecon, who heads the
East bloc delegation, told Reuters ahead of today's session: "We
have narrowed our differences on a range of questions, but not
on all questions."
Asked whether Comecon would accept EC insistence that any
joint declaration stipulate West Berlin as part of the
Community, he replied: "This question is not contained in the
draft which our side presented."
West German diplomats said they would insist on including
the clause on West Berlin in any EC-Comecon agreement.
The talks followed an earlier round between the two trading
blocs here last September and the first-ever direct talks
between the EC and the Soviet Union on establishing diplomatic
relations in January.
The EC trades with individual Comecon member states despite
non-recognition of Comecon. Last year, the EC had a five
billion dlr trade deficit with East European states, about half
the deficit of the previous year, due to a drop in the price of
Soviet oil imported by the EC.
Geodome Resources Ltd said
following receipt of a feasibility study from Raytheon Co's
Stearns Catalytic unit it will proceed with construction and
pre-production stripping at its Sunbeam Mine in Custer County,
Idaho, as quickly as possible.
The company said the study found proven ore reserves of
3,302,000 short tons grading 0.077 ounce of gold per ton. It
said the mine will operate at a rate of 626,000 tons of ore per
year, with higher-grade ore being mined in the first three
years for a rapid payback of capital costs.
It said the feasibility study calls for gold production
averaging 41,000 ounces a year for the life of the mine and
50,000 ounces a year over the first three years, with 99,000
ounces of silver per year being produced over the mine life.
Capital costs would be 22.3 mln dlrs with all-new equipment
and 500,000 to one mln dlrs less with used equipment, the firm
said. It said the mine would be operated by a contract miner
but the associated mill by Geodome.
Geodome said a new ore zone discovered last summer is not
included in reserve calculations. It said eight of the nine
holes drilled there have an average grade of 0.046 ounce of
gold and 2.1 ounces of silver per ton.
Also excluded are reserves of 1,400,000 tons of low-grade
material that could be milled profitably at 425 dlrs a ton for
gold. The feasibility study used a 350 dlr gold price.
Geodome said operating costs of the mine will average 201
dlr per ounce of gold for the mine life and 171 dlrs for the
first three years, in constant dollars.
Australian Treasurer Paul Keating said
he expects the country's 1986/87 current account deficit to be
one billion dlrs lower than the 14.7 billion forecast in the
August budget. Keating told a financiers' dinner that
February's 750 mln dlr deficit, against January's 1.23 billion,
was "in the groove" of the government's expectations.
"We will probably bring the current account this year under
14 billion, I think, which will probably be about a billion
dollars less than we forecast in the budget," Keating said. "I am
sure we will see a lower current account deficit for next year
... And a fall as proportion of GDP."
Australia posted a 13.82 billion dlr current account
deficit in 1985/86 and Keating said the latest monthly figures
showed an encouraging trend.
Keating said the government would maintain responsible
economic management regardless of whether it was drawn into an
election, because it would take time to stabilise Australia's
80 billion dlr foreign debt.
"We have to build the import competing sector back," he said.
"We are now trying to rebuild our capital structure. We are
trying to rebuild the culture of productivity and
manufacturing."
Keating said the foundation for a transition of the economy
had been laid with the floating of the Australian dollar and
continued with wage restraint and deregulation.
The Government would follow with spending cuts in its
economic statement on May 14, he said.
Marine Midland Banks Inc is offering
125 mln dlrs of subordinated capital notes due 1997 yielding
8.66 pct, said lead manager First Boston Corp.
The notes have an 8-5/8 pct coupon and were priced at 99.80
to yield 145 basis points more than comparable Treasury
securities.
Non-callable to maturity, the issue is rated A-3 by Moody's
and A by Standard and Poor's. Merrill Lynch and Salomon
Brothers co-managed the deal.
Sonex Research Inc said its
modified 1986 British Ford Escort passed the European emissions
test, but reported the engine consumed 35 pct more fuel than
the stock engine.
Sonex said its engine is not equipped with a catalytic
converter and does not use exhaust gas recirculation or an
emission air pump. It said the company expected to realize a
reduced fuel economy, but is working on improving fuel
consumption.
The company said after it installs the new fuel system, it
will retest the automobile.
In a separate announcement, the company said it received
confirmation from the European Patent Office that Sonex
successfully defended its BETA European Patent from a
competitor.
Shr loss eight cts vs loss 20 cts
Net loss 469,000 vs loss 1,104,000
Revs 3,093,000 vs 3,056,000
Nine mths
Shr loss 19 cts vs loss 29 cts
Net loss 1,098,000 vs 1,646,000
Revs 9,562,000 vs 12.2 mln
Mthly div 14.248 cts vs 4.912 cts prior
Pay April 10
Record March 31
Mexican officials and representatives
of about 360 creditor banks worldwide started to sign
agreements for 7.7 billion dlrs in new loans, Citibank said as
co-chairman of Mexico's bank advisory committee.
The package, which was agreed in principle with the
committee last October 16, is built on a core loan of six
billion dlrs, of which five billion dlrs will be lent for 12
years with five years' grace.
The remaining one billion dlrs is in the form of a
co-financing with the World Bank, which will guarantee 500 mln
dlrs. This loan is for 15 years with nine years' grace.
The package also includes two contingency facilities
totalling 1.7 billion dlrs.
One is a growth-contingency co-financing with the World
Bank for 500 mln dlrs, of which half will be guaranteed by the
World Bank.
The loan may be drawn to fund high-priority investment
projects if Mexican economic growth fails to reach certain
growth targets for the first quarter of 1987.
Disbursements would be for 12 years with seven years'
grace. Bankers said they expect the loan, which is available
until March 1988, will be drawn down.
The second contingency facility, for 1.2 billion dlrs, is
designed to support investment in the public and private
sectors.
The loan may be drawn down until April 1988 but only if
Mexico experiences a shortfall in public-sector external
receipts and provided that Mexico first qualifies for drawings
under a 600 mln sdr oil-contigency facility from the
International Monetary Fund.
This IMF loan would be triggered if the price of oil falls
below nine dlrs a barrel for three months.
Because of the level of public sector external receipts in
the fourth quarter of 1986 and the first quarter of 1987,
Mexico will not draw the first two tranches of the continency
facility, totalling 451 mln dlrs, Citibank said.
As previously reported, bank commitments to the new money
package will also be reduced by 250 mln dlrs, representing the
interest payments that Mexico will save this year, thanks to
the reduced spread on the rescheduling.
Under the rescheduling, Mexico is restructuring 43.7
billion dlrs of previously rescheduled debt over 20 years with
seven years' grace.
Maturities on another 8.6 billion dlrs of loans granted in
1983 and 1984 will remain the same. The interest rate will be
at 13/16 pct over Eurodollar deposit rates - the margin that
applies to the entire package.
Rounding out the deal, the banks have agreed to prolong six
billion dlrs of trade lines and to refinance some 10 billion
dlrs of private-sector debt that comes under the Mexican
government's exchange-guarantee scheme, Ficorca.
The size of the package thus comes to about 76 billion
dlrs, the largest ever assembled in the international credit
markets, Citibank said.
The loan is still only 99 pct subscribed and the loan books
will be kept open for several more weeks to round up the final
100 mln dlrs and the approximately 60 banks that have so far
refused to join the deal.
Shr loss 64 cts vs loss 57 cts
Net loss 34.9 mln vs loss 22.1 mln
Revs 31.5 mln vs 60.2 mln
Avg shrs 60.1 mln vs 45.2 mln
Year
Shr loss 2.27 dlrs vs loss 1.66 dlrs
Net loss 103.2 mln vs loss 57.6 mln
Revs 129.8 mln vs 169.5 mln
Avg shrs 51.2 mln vs 38.1 mln
NOTE: Per share results after preferred dividend
requirements of 3.3 mln dlrs vs 3.5 mln dlrs in quarter and
12.9 mln dlrs vs 5.7 mln dlrs in year
1986 4th qtr loss includes accruals, writedowns and
non-recurring charges aggregating 13.9 mln dlrs including costs
anticipated in 1987 for the reopening of the Sunshine Mine and
a writedown of the capitalized costs at the Sixteen-to-One Mine
by 4.2 mln dlrs
1986 year loss includes charges totaling 100 mln dlrs
Shr loss not given
Net loss 1,300,000
Sales 3,300,000
NOTE: Company incorporated in June 1985.
Fourth quarter loss 895,000 dlrs.
Qtly div 22 cts vs 22 cts prior
Pay April 10
Record March 30
Shr loss six cts vs loss 88 cts
Net loss 128,141 vs loss 1,298,377
Sales 1,332,218 vs 385,146
Year
Shr profit six cts vs loss 1.47 dlrs
Net profit 120,571 vs loss 2,171,011
Sales 4,617,034 vs 2,959,141
Moody's Investors Service Inc said it
downgraded 1.6 billion dlrs of debt of Standard Chartered PLC
and its units, Standard Chartered Bank and Union Bancorp.
Moody's cited concerns over the asset quality of Standard
Chartered Bank.
Cut were the parent's junior subordinated debt to A-3 from
A-2 and Standard Chartered Bank's long-term deposit rating to
Aa-3 from Aa-2. Moody's lowered Union Bancorp's senior debt and
preferred stock to A-1 from Aa-3, subordinated debt to A-2 from
A-1 and long-term deposits to A-1 from Aa-3. Union's commercial
paper and short-term deposits were unchanged.
Also left unchanged were Standard Chartered Bank's ratings
for short-term deposits.
Although Moody's cited Standard Chartered Bank's
long-standing position in a number of regional markets and
improved risk control procedures, it pointed out that the bank
still lacks the stabilizing effect of a more significant
presence in the U.K. market.
The rating agency reiterated that it is concerned about the
relative levels of risk in the bank's widely dispersed asset
portfolio.
The Agriculture Department is not
considering any major changes in its pricing system for posted
county prices, an Agriculture Department offical said.
"We do not have current plans to make any major adjustments
or changes in our pricing," said Bob Sindt, USDA assistant
deputy administrator for commodity operations.
U.S. grain traders and merchandisers said earlier this week
USDA might act soon to reduce the cash corn price premium at
the Gulf versus interior price levels by dropping ASCS posted
prices to encourage interior PIK and roll movement.
But Sindt denied USDA is planning any such changes.
"If people are suggesting that we are going to make
wholesale changes in pricing, we are not considering this," he
said.
Sindt, however, did not rule out the possiblity of
implementing more minor changes in its pricing system.
"We are continually monitoring the whole nationwide
structure to maintain its accuracy," he said. "If we become
convinced that we need to make a change, then appropriate
adjustments will be made."
Sindt acknowledged that concern has been voiced that USDA's
price differentials between the New Orleans Gulf and interior
markets are not accurate because of higher than normal barge
freight rates.
He said commodity operations deputy administrator Ralph
Klopfenstein is currently in the midwest on a speaking tour and
will meet with ASCS oficials in Kansas City next week.
Sindt said a number of issues will be discussed at that
meeting, including the current concern over the gulf corn
premiums.
He defended the USDA differentials, saying that these price
margins reflect an average of prices throughout the year and
that seasonal factors will normally cause prices to increase or
decrease.
The USDA official also said that only those counties that
use the Gulf to price grain are being currently affected by the
high barge freight tariffs and increased gulf prices.
When asked if the USDA emergency storage program which
allows grain to be stored in barges was taking up barge space
and accounting for the higher freight rates, Sindt discounted
the idea.
He said USDA has grain left in only about 250 barges and
that, under provisions of the program, these all have to be
emptied by the end of March.
Nestle SA
Spear, Leeds and Kellogg, a New York
brokerage partnership, said it has acquired 136,300 shares of
Allegheny International Inc's 11.25 dlr convertible preferred
stock, or 7.1 pct of the total outstanding.
In a filing with the Securities and Exchange Commission,
Spear Leeds said it bought the stake for 11.7 mln dlrs as part
of its normal trading activities.
Shr 10 cts vs seven cts
Net 249,143 vs 175,476
Sales 3,034,010 vs 2,745,288
Endotronics Inc, halted at 1-3/4 on
NASDAQ pending release of a news report, on Monday said it was
expecting "substantial losses" for the quarter ending March 31,
1987 and the fiscal year ending Sept 30, 1987.
The company had cited a dispute over payment by Yamaha Inc,
one of its Japanese distributors, over payment of a promissory
note for 3,686,000 dlrs in overdue accounts.
York Financial Corp, parent company
of York Federal Savings and Loan Association, said its board of
directors declared a five-for-four stock split in the form of a
25 pct stock dividend.
The company said it will distribute the split on May 5, to
shareholders of record April 20.
A new International Natural Rubber
Agreement, INRA, was formally adopted by a United Nations
Conference today.
The new accord is due to replace the current one, which
expires in October.
Conference chairman Manaspas Xuto of Thailand said the
formal adoption represented "a historic moment."
The latest round of talks, which began March 9, represented
the fourth attempt to negotiate a new INRA in nearly two years.
Xuto described the negotiations as "by no means easy, and we
often faced problems."
The new pact is due to enter into force provisionally when
ratified by countries accounting for 75 pct of world net
exports and 75 pct of net imports.
The new INRA will enter into force definitively when
governments accounting for at least 80 pct of net exports and
80 pct of net imports have ratified it.
It will be open for signature from May 1 to December 31
this year.
It is expected that provisional entry into force will take
at least 12 to 14 months from now, delegates said.
During the hiatus between the two agreements buffer stock
operations will be suspended, but the International Natural
Rubber Council will remain in place.
Xuto told the conference both the 1979 agreement and its
successor were aimed at meeting the needs of producers and
consumers of natural rubber over the long term.
Both had interest in stabilising prices and supplies, Xuto
added. He also praised "the spirit of 'give' and 'take' that
prevailed throughout this session."
Ahmed Farouk of Malaysia, speaking on behalf of producers,
said the conclusion of the new pact showed that the mutuality
of interests between producers and consumers is now as valid as
it was when negotiations of the first agreement began in the
1970s.
Farouk said the ability to manage inventories on the basis
of predictable stable prices is "a vital consideration for
multinational tire companies, whether or not consuming
countries as a whole claimed to be no longer so seriously
concerned about security of the rubber supply."
He said producers considered that the 1979 agreement had
served the purpose for which it was created.
Farouk urged consuming countries to promote early accession
to the new pact "to avoid an undue gap between the old and the
new.
Gerard Guillonneau of France, speaking for consumers,
agreed that the 1979 agreement had worked relatively well.
But as economic conditions had changed, he said, consumers
had been led to make proposals for improving its functioning.
He added that the adoption of the new agreement "attests to
the importance of rubber and confidence in the rubber industry."
Advanced Institutional Management
Software Inc said it has cut its workforce to 53 from 74 and
closed its Atlanta office to cut expenses and improve
profitability.
The company said it is also in the process of reducing its
office space in four of its six offices nationwide.
Advanced also said it has named executive vice president
Steven B. Sheppard chief operating officer.
The company said president and chief executive officer
Morris Moliver had been chief operating officer as well.
Jorio Dauster, president of the
Brazilian Coffee Institute, IBC, left Brazil early today to
attend a weekend meeting of Latin American coffee producers in
Managua, an IBC official said.
Carlos Brasil, an adviser to the IBC president, said
Dauster had left Rio de Janeiro for Managua early this morning.
There were rumours on the London coffee market earlier
today that Dauster would not attend the meeting.
Qtly div six cts vs six cts prior
Pay April 10
Record March 31
Standard and Poor's Corp said it
raised to A-1 from A-2 American Security Corp's commercial
paper.
S and P also upgraded, to A and A-1 from BBB-plus and A-2
respectively, the certificates of deposit of American
Security's lead bank, American Security Bank N.A.
The rating agency said the actions reflected the firm's
merger with what it termed a stronger Maryland National Corp,
as well as American's improving performance. S and P said the
merger would allow American Security to diversify its wholesale
funding base.
The Soviet Union's winter grain
crop is likely to have suffered losses due to dry planting
conditions last fall and severe cold this winter, an analyst of
world weather and crop conditions said.
Grain analyst and meteorologist Gail Martell, author of the
EF Hutton publication "Global Crop News," said in her latest
report that the Soviets may import more grain, possibly wheat,
from the U.S. due to potential crop damage.
"Compared with last year, the outlook (for the Soviet
winter grain crop) is far more pessimistic," she said. "But
it's still too early to talk about disastrous losses. A lot
will depend on spring weather, not only for the outcome of the
troubled winter grain crop, but also for spring planting."
Martell said the dry weather conditions last fall probably
prevented optimal seed germination for winter grains. Key wheat
growing areas of the southern Ukraine and North Caucasus
received on 25-35 pct of autumn precipitation, she said.
The bitter winter cold temperatures -- which broke record
lows that had stood for four decades -- also may have taken its
toll on Soviet winter crops, she said.
However, she noted that most of the southern grain belt had
ample snow cover, which should have well-insulated the majority
of crop areas from severe frost damage.
The USSR has already bought 20 to 21 mln tonnes of grains
in the July 1986/June 1987 marketing year, primarily from
Canada, the European Community, Argentina and Australia,
Martell said.
She cited a number of reasons besides possible crop
problems that might point to additional Soviet import demand.
Last fall's dry weather may limit livestock grazing on
moisture-depleted pastures, while the cold winter weather
necessitated supplemental feeding to keep livestock healthy.
Martell was also skeptical of a Soviet claim for a 1986
grain harvest of 210 mln tonnes, and said the Chernobyl
accident may have contaminated more grain than originally
thought and have to be made up with imports.
However, she said the U.S. remains a supplier of last
resort for the Soviet Union, noting that the Soviets have only
just recently begun their first U.S. grain purchases of the
1986/87 season by buying 2.25 mln tonnes of corn.
Martell cited USDA statistics showing that since the 1980
grain embargo the U.S. is only a major supplier of grain to the
USSR during years of heavy Soviet demand.
In 1984/85, the U.S. supplied 41 pct of record Soviet grain
imports of 55.5 mln tonnes. But in 1985/86, the Soviet Union
bought 29.9 mln tonnes of grain and turned to the U.S. for only
24 pct of that total.
While the USDA Soviet import target for grain for 1986/87
was 22 mln tonnes, many U.S. grain analysts have revised their
estimates of Soviet imports up to 25-28 mln tonnes, she said.
Qtly div 10 cts vs 10 cts prior
Pay April 10
Record March 27
The Commodity Credit Corporation,
CCC, has accepted a bid for an export bonus to cover a sale of
6,000 tonnes of semolina to Egypt, the U.S. Agriculture
Department said.
The department said the semolina is for shipment
April-October, 1987, and the bonus awarded was 224.87 dlrs per
tonne.
The bonus was made to International Multifoods Corp and
will paid to the exporter in the form of commodities from CCC
stocks, the department said.
An additional 7,000 tonnes of semolina are still available
to Egypt under the Export Enhancement Program initiative
announced August 1, 1986, it said.
Regency Cruises Inc said it agreed to
sell a 40 pct interest in the corporation that owns the M/V
Regent Sea cruise ship for 2.1 mln dlrs to Monmouth
International SA, which owns the other 60 pct.
The company said it also extended a 1.7 mln dlr secured
loan to Monmouth to finance completion of the renovation of
another vessel, the M/V Regent Star, which is scheduled to
begin operating in late June.
Regency Cruises, which operates both ships, received a
five-year extension, to November 1995, to the Regent Sea's
original charter agreement, it said. It also received a
reduction, to 600,000 dlrs from 1.6 mln dlrs, of its total
charter guarantee for the Regent Sea and Regent Star.
Regency also reported 1986 earnings of 5,695,000 dlrs or 37
cts a share on revenues of 40.9 mln dlrs. It began operations
in November 1985.
In addition, the company said its bank, Irving Bank Corp
Shr 24 cts vs 26 cts
Net 1.5 mln vs 1.3 mln
Revs 40.5 mln vs 33.5 mln
Year
Shr 80 cts vs 82 cts
Net 4.9 mln vs 4.1 mln
Revs 143.0 mln vs 121.1 mln
Avg shrs 6.1 mln vs 5.0 mln
Rogers Corp said its board
approved a shareholder rights plan designed to protect its
shareholders in the event of an attempted hostile takeover.
Rogers said the plan is not being adopted in response to
any specific takeover attempt.
Under the plan, shareholders may buy one share of common
stock at 65 dlrs for each share held. The rights will be
exercisable only if a person or group acquires 20 pct or more
of Rogers' shares or announces an offer for 30 pct or more.
The dividend distribution will be made March 30 to holders
or record on that date.
Wisconsin Electric Power Co said it
began a public offering of 700,000 shares of serial preferred
stock, 6-3/4 pct series, 100 dlrs par value, at a price of 100
dlrs per share.
The shares are being offered pursuant to a shelf
registration covering 700,000 sahres of serial preferred stock
which the company filed on February 19, 1987.
Proceeds will be used to redeem outstanding preferred stock
or for repayment of short-term indebtedness.
Shr 26 cts vs 38 cts
Net 44.0 mln vs 65.0 mln
NOTE:1986 net includes one mln dlr extraordinary gain and
1985 net icludes four mln dlrs extraordinary loss.
The Philippines and its bank advisory
committee completed another round of debt rescheduling talks
and will meet again on Saturday, a senior banker said.
Although today's negotiations did not produce a final
agreement, the decision to meet at the weekend appears to be a
signal that the two sides are making progress.
The Philippines seeks to restructure 9.4 billion dlr of its
27.2 billion dlr foreign debt. The interest rate to be charged
on the debt and Manila's proposal to pay interest partly with
investment notes instead of cash have been the main sticking
points in the talks.
World Bank President Barber Conable is
expected to press Indonesia, the Third World's sixth largest
debtor, to maintain the momentum of economic policy changes to
tackle the slump in its oil revenues, western diplomats said.
Conable, who flew to Indonesia yesterday from Tokyo, will
meet with President Suharto and senior economic ministers.
He said on arrival that the economy of South-East Asia's
largest nation was being managed well, but the slump in world
oil prices called for major policy adjustments.
Today the World Bank chief will visit Bank-funded projects
in the eastern section of Java, Indonesia's most populous
island. He will see Suharto on Tuesday after a day of detailed
discussions with ministers tomorrow.
Indonesia, the only Asian member of OPEC, has been severely
hit by last year's crash in oil prices, which cut its oil and
gas revenues in half.
Japan's state Export-Import Bank last month agreed to
provide around 900 mln dlrs in untied credits to help Indonesia
pay for its share of 21 World Bank development projects.
Indonesia, a country of 168 mln people, has responded to
the oil slump by cutting spending, devaluing its currency by 31
pct, and trying to boost exports, while using foreign loans to
bridge its deficit.
Diplomats said that Conable was expected to press Suharto
and leading economic ministers to maintain the pace of policy
change, particularly in dismantling Indonesia's high-cost
protected economy.
"Oil prices, the debt crisis, the world recession, all call
for major policy adjustments and external support," Conable said
in his arrival statement.
But with Indonesia facing parliamentary elections next
month, he is likely to avoid anything which would imply that
the Bank is demanding specific changes.
"We believe there has been wise leadership here and the
economy is being very well managed," Conable told reporters at
Jakarta airport.
Indonesia has official and private overseas debts totalling
37 billion dlrs, according to the Bank, which makes it the
Third World's sixth biggest debtor. It has received 10.7
billion dlrs from the World Bank since 1968.
Conable did not spell out what further changes he would
like to see. Last month the Bank endorsed economic changes
already introduced by Indonesia, but implied it wanted more.
Giving a 300 mln dlr loan in balance of payments support,
the Bank said it will monitor progress on implementation of the
government's trade reform measures, and supported its
determination to promote efficiency and longer-term growth.
Indonesia has introduced a series of measures since last
May to boost non-oil exports, liberalise trade and encourage
outside investment.
Suharto has also ordered a government committee to look
into which of Indonesia's 215 state-run companies could be
sold.
But in a report last month, the U.S. Embassy said the
government appeared divided over how far to take its reforms.
Western analysts say that in particular the government is
unsure how far to go with dismantling Indonesia's high-cost
monopolies, which control core areas of the economy.
Central bank governor Arifin Siregar said this week that
Indonesia faced very limited economic choices.
It could not spend its way out of trouble because this
would increase the balance of payments deficit and domestic
inflation.
He said the main objective was to raise exports outside
the oil and natural gas sector.
Indonesia's current account deficit is projected by the
government to fall to 2.64 billion dlrs in the coming financial
year which starts on April 1, from an estimated 4.1 billion in
1986/87.
Provisional net profit 55 billion lire vs 48 billion
Turnover 3,750 billion vs 3,369 billion.
NOTE - Official results for Alitalia, Italy's national
airline which is controlled by the state industrial holding
company (Istituto per la Ricostruzione Industriale -IRI), are
expected to be announced at an annual shareholders meeting in
April.
A meeting of eight Latin American
coffee producers ended with a call for continued talks aimed at
arriving at an agreement to stabilize international prices.
A statement delivered by the conference's president,
Nicaragua's External Trade Minister Alejandro Martinez Cuenca,
said the object of future meetings would be to seek
negotiations leading to basic export quotas.
The meeting was attended by representatives from Brazil,
Mexico, Guatemala, El Salvador, Honduras, Costa Rica and
Nicaragua. A Panamanian representative attended the meeting as
an observer.
Representatives at the meeting said efforts would continue
to be made to reach a regional consensus on export quotas which
could be presented to the International Coffee Organization.
In opening the meeting, Nicaraguan President Daniel Ortega
said the lack of an accord on export quotas was behind falling
coffee prices, which he said have caused billions of dollars in
losses to countries in the region.
Jorio Dauster, president of the Brazilian Coffee Institute,
said his government is committed to working towards an
producers accord in order to bring about higher prices.
U.S. Treasury Secretary James Baker said
any attempt to declare blanket debt forgiveness for major Latin
American debtor nations might damage the world economy.
In an article in Monday's edition of the Miami Herald,
Baker also criticised the concept of short-term debt relief,
calling it a "dramatic, overnight solution."
"While these ideas may be well-intentioned and have some
political appeal, they are impractical and counterproductive in
the long run," he said.
The article was published to coincide with a three-day
meeting here of the Inter-American Development Bank (IADB).
Baker is the chief architect of the U.S. Strategy on Third
World debt.
Brazil, the Third World's largest debtor, last month
declared a moratorium on interest repayments. It has given no
indication of when it may resume interest payments, prompting
fears that some large U.S. Banks may be forced into substantial
debt writedowns and calling into question the viability of the
U.S. Strategy.
Baker, defending the strategy, said private commercial
banks have rescheduled nearly 70 billion dlrs in debt since
October 1985 at longer maturities and lower interest rates.
"Together with expected progress in commercial bank
discussions with Argentina and, we hope, Brazil, this should
add up to substantial new lending for the major Latin debtors
in 1987," Baker wrote.
He estimated that debt-equity conversion plans accounted
for 2.5 billion dlrs last year in four of the region's major
debtor states. Such plans allow foreign bank creditors to sell
Third World debt at a discount to investors who then become
stockholders in firms in these countries. "These swaps aren't a
panacea, but they do demonstrate how a creative free market can
make progress in reducing the debt burden," he said.
Singapore will have an inflation rate
of one pct in 1987, up from a negative 1.4 pct in 1986, Trade
and Industry Minister Lee Hsien Loong told Parliament.
He said the 1986 drop in the inflation rate, the first fall
in a decade, was due largely to lower world prices for oil and
oil-related items.
But Lee said the negative inflation rate is unlikely to be
repeated this year because of projected higher prices for
primary commodities and oil.
Indonesia's non-oil and gas exports
fell to 5.79 billion dlrs in calendar 1986 from 5.98 billion in
1985, according to Bank Indonesia figures.
Coffee exports rose to 753 mln dlrs from 580 mln in 1985,
but rubber shipments fell to 625 mln from 720 mln and tin to
180.6 mln from 246 mln, weekly central bank figures show.
Indonesia hopes to boost its non-oil exports to make up for
oil revenue lost because of lower prices. But the lower value
of commodities such as timber, rubber, palm oil and tea on
world markets has prevented this, despite a 31 pct devaluation
of the rupiah against the dollar in September.
The United States and Japan
are on the brink of serious conflict on trade, especially over
semiconductors, Japanese unwillingness for public bodies to buy
U.S. Super-computers, and barriers to U.S. Firms seeking to
participate in the eight billion dlr Kansai airport project,
U.S. Trade Representative Clayton Yeutter said.
He was talking to reporters yesterday on the eve of a
two-day meeting of trade ministers which will review progress
made by committees set up after the Uruguay meeting last
September launched a new round of GATT (General Agreement on
Tariffs and Trade) talks.
European Community (EC) commissioner Willy de Clercq
meanwhile told reporters conflict between the world's three
major trading and economic powers -- the EC, the U.S. And Japan
-- set a poor example for other members of GATT.
Australian Trade Minister John Dawkins told the reporters
bilateral retaliation at the enormous expense of the rest of
the world was no way to solve trade disputes.
New Zealand trade minister Mike Moore told his colleagues
great progress had been made in preparing for the current round
of GATT negotiations which must not be sidetracked.
The ministers have said they want to maintain the momentum
towards fresh negotiations or avert serious trade conflicts.
Yeutter said the problem with international trade talks was
that they tended to get bogged down for years. "Countries don't
get very serious about negotiating until the end of the day
which is, maybe, five or six years in the future."
He also said he did not consider the new U.S. Congress as
protectionist as it was 18 months ago. "That's a very healthy
development," he added."If you asked me about that a year or 18
months ago I would have said that it was terribly
protectionist."
"Members of Congress, that is the contemplative members of
Congress, have begun to realise protectionism is not the answer
to the 170 billion dlr trade deficit," Yeutter said.
"They've also begun to realise that you cannot legislate
solutions to a 170 billion dollar trade deficit so they are
more realistic and, in my judgement, more responsible on that
issue than they were 12 or 18 months ago."
He added, "Whether that will be reflected in the legislation
that eventually emerges is another matter."
The Bremen green coffee market attracted
good buying interest for Colombian coffee last week, while
Brazils were almost neglected, trade sources said.
Buyers were awaiting the opening of Brazil's export
registrations for May shipment, which could affect prices for
similar qualities, they said.
Colombia opened export registrations and good business
developed with both the FNC and private shippers. Prices were
said to have been very attractive, but details were not
immediately available.
Central Americans were sought for spot and afloat.
In the robusta sector nearby material was rather scarce,
with turnover limited, the sources said.
The following offers were in the market at the end of last
week, first or second hand, sellers' ideas for spot, afloat or
prompt shipment in dlrs per 50 kilos fob equivalent, unless
stated (previous week's prices in brackets) -
Brazil unwashed German quals 100 (102), Colombia Excelso
105 (110), Salvador SHG 110 (108), Nicaragua SHG 109 (same),
Guatemala HB 111 (same), Costa Rica SHB 113 (112), Kenya AB FAQ
142 (134), Tanzania AB FAQ 120 (same), Zaire K-5 105 (unq),
Sumatra robusta EK-1 91 CIF (same).
Uganda's state-run Coffee Marketing
Board (CMB) has been suffering a cash crisis for the past two
months due to a bottleneck in export shipments and
administrative delays in handling payments, trade sources said.
The CMB needs between 10 and 15 billion shillings (the
equivalent of seven to 10 mln dlrs) to pay farmers and
processors for coffee already delivered, but its present export
revenue is insufficient to cover such expenditure, they said.
The board's cash crisis has serious implications for the
economy as a whole, since coffee accounts for 95 pct of
Uganda's total exports.
The CMB's financial difficulties first started in January
following delays in rail-freighting export consignments of
coffee to the ports of Mombasa, Dar es Salaam and Tanga.
These delays were caused by a shortage of railway wagons in
Uganda and bottlenecks on the ferries which transport Ugandan
wagons across Lake Victoria to link up with the Kenyan and
Tanzanian railway systems, the sources said
Marketing Minister John Sebaana-Kizito publicly
acknowledged on February 19 that the CMB had run up arrears to
local suppliers as a result of the shortage of transport for
moving exports.
Sebaana-Kizito said at the time that the payments squeeze
would be resolved in two weeks.
However, an accident to the rail ferry which plies between
the Ugandan lake port of Jinja and Kisumu in Kenya put it out
of action between February 21 and March 15, causing fresh
delays in cargo movements.
Coffee exports are especially sensitive to the disruption
of rail transport since president Yoweri Museveni has banned
their haulage by road in a drive to save transport costs.
Transport difficulties meant that by early February the CMB
was holding unsold coffee stocks of around 750,000 bags.
These stocks were equivalent to one quarter of Uganda's
expected three mln 60-kilo bag 1986/87 (October-September)
crop, the sources said.
According to the sources, the board's financial problems
have been aggravated by long delays in processing export
receipts.
The coffee board was taking about eight weeks to recycle
export receipts into payments to local producers, whereas
export bills handled by local banks took half that time to
process, they said.
The sources said the CMB's price structure had been
overtaken by Uganda's high inflation rate, unofficially
estimated at about 200 pct, and that this was a further
disincentive to producers, already owed large arrears.
"The coffee pricing structure is wrong and three months
behind, the foreign exchange rate is unrealistic, and the
sooner the so-called economic package is put in top gear, the
better for the coffee industry and the economy as a whole," one
of the sources said.
The government is currently negotiating a package of
economic reforms with the World Bank and International Monetary
Fund aimed at underpinning a renewed inflow of foreign aid to
help Uganda's economic recovery after 15 years of political
strife.
The sharp drop in world oil prices
the past year triggered a 60 pct increase in bankruptcies in
the country's oil states, according to a study released by the
American Petroleum Institute (API).
API said the Dunn and Bradstreet study found that business
failures rose nationally by 6.9 pct in 1986 over 1985, but in
the "oil patch" of the Southwest the increase was 59.9 pct.
It said bankruptcies in Texas were up 57.4 pct, Oklahoma,
55.9 pct, Colorado, 55.8 pct and Louisiana, 46.6 pct.
In Alaska, failures rose by 66.2 per cent, it said.
API also said that three of the states with the highest
number of bank failures last year were large oil and gas
producers - Texas, Oklahoma and Kansas.
New Zealand ports reopened at 0730
hrs local time (1930 GMT March 22) after being closed since
March 19 because of a strike over pay claims by watersiders, a
Waterside Federation spokesman said.
But industrial action by other port workers is likely to
cause further disruption, Harbour Workers union secretary Ross
Wilson told Reuters.
Wilson said his members are holding stopwork meetings this
morning to consider further stoppages over their pay claim.
The two disputes are not related.
Harbour Workers around the country went on strike for 24
hours on March 16, but Wilson said any further action will
occur on a port-by-port basis.
Jamesway Corp said its board
declared a two for one stock split and increased the quarterly
cash dividend by 33 pct.
The company said the dividend on the pre-split shares was
increased to four cts from three cts.
It said both the split and the dividend are payable May 23
to holders of record April 20, adding the company will have
about 13,860,000 shares outstanding after the split.
The Inter-American Development Bank
said it intended this year to match the over three billion dlrs
it lent to Latin America in 1986, despite growing pressures on
its capital.
In its annual report and in a briefing for reporters, the
Bank made it clear, however, that the Latin countries needed
vast amounts of new investment if they are to strengthen their
ailing economies in the period ahead. The report said Latin
America continued to emerge slowly from the deep recession that
began in the early 1980s, with Gross Domestic Product edging up
to nearly four pct from 3.5 pct in 1985.
The report said the region's improved economic growth last
year was based on a rise in internal demand and fuller
utilization previously underused production capacity.
"This situation will be difficult to duplicate in 1987 and
beyond because no significant new investments are being made,"
the report said.
The Bank's lending last year consisted of 63 loans totaling
3.04 billion dlrs, bringing the agency's cumulative lending to
35.44 billion dlrs.
Of last year's loans, 2.26 billion dlrs was actually
disbursed, bringing total disbursements to 24.03 billion dlrs.
To assist in loan activities, the Bank said it borrowed
1.91 billion dlrs in the capital markets in 1986, bringing its
total outstanding borrowings to 12.11 billion dlrs.
In a briefing for reporters, Bank President Antonio
Ortiz-Mena said that this year lending by the bank "will be at a
similar level to last year."
He noted that bank lending in 1986 was directed
particularly to projects in energy, agriculture, and
environmental and public health, education and urban
development. The annual report was released as the Bank's
annual meeting is being held in Miami.
Ortiz-Mena told reporters that the bank's member countries
will discuss a plan by the United States to reduce the loan
veto power from the current majority to 35 pct.
Such a plan would allow the United States to block any loan
it did not like with the assistance of only one other country.
The proposal, which is tied to any U.S. backing for a new
financing for the bank, is sure to run into rough going as the
Latin countries view it as a move by the Reagan administration
to control the agency's critical loans.
The U.S. position is that it is not seeking veto power
although it believes the bank's largest contributors should
have greater influence within the institution.
Citizens Growth Properties said
it ommitted its regular quartelry dividend as a result of
decreased earnings, principally attributable to the default by
a borrower of the trust's laargest mortgage loan.
The trust last paid 12 cts on January 28.
The trust said it also reaffirmed a limited share
repurchase program subject to available cash flow in light of
the defaulted mortgage.
The Inter-American Development Bank
said it intended this year to match the over three billion
dollars it lent to Latin America in 1986 despite growing
pressures on its capital.
In its annual report and in a briefing for reporters, the
Bank made it clear, however, that the Latin countries needed
vast amounts of new investment if they are to strengthen their
ailing economies in the period ahead.
The report said that Latin America continued to emerge
slowly from the deep recession that began in the early 1980s,
with Gross Domestic Product (GDP) edging up to nearly four pct
from 3.5 pct in 1985.
The report said the region's improved economic growth last
year was based on a rise in internal demand and fuller
utilization of previously underused production capacity.
"This situation will be difficult to duplicate in 1987 and
beyond because no significant new investments are being made,"
the report said.
The Bank's lending last year consisted of 63 loans totaling
3.04 billion dlrs, bringing the agency's cumulative lending to
35.44 billion dlrs.
Of last year's loans, 2.26 billion dlrs was actually
disbursed, bringing total disbursements to 24.03 billion dlrs.
Tonka Corp said it expects
results for its fiscal first quarter to end April four, to
decline from the record earnings of 3.8 mln dlrs or 57 cts a
share and revenues of 53.2 mln dlrs.
The toy manufacturer attributed its anticipated lower
financial results to an an expected moderate decline in
shipments of its Pound Puppies product line.
Tonka also said it expects revenues and earnings to remain
lower through the 1987 first half compared with 1986 record
results of 125.4 mln dlrs in revenues and 10.3 mln dlrs in net
earnings or 1.47 dlrs a share.
The company said its level of shipments is good despite a
conservative buying pattern on the part of retailers industry
wide. Tonka's first quarter shipments will be down somewhat
from 1986 record levels and gross profit margins will be down
slightly from a year ago, it said.
Second half sales are expected to be stronger based on a
return to a more traditional seasonal shipping pattern in which
retailers order and stock conservatively early in the year and
time large shipments for the second half, it said.
Tonka said that while the pace of order writing is trailing
last year's, bookings are "very good" for orders on several of
its new product introductions for 1987.
Shr 30 cts vs 12 cts
Net 727,000 vs 266,000
Revs 27.8 mln vs 21.1 mln
Nine mths
Shr 59 cts vs 48 cts
Net 1,355,000 vs 1,098,000
Revs 69.4 mln vs 59.1 mln
Wickes Cos Inc said its
board authorized a one-for-five reverse stock split and plans
to call the company's its 12 pct senior subordianted debentures
due 1994.
The company said it will seek shareholder approval of the
reverse stock split at the annual shareholders meeting
scheduled for June 18.
At January 31 Wickes had 239 mln shares outstanding, the
company also said.
Wickes also said it will call the debentures on Dec 1,
1987, assuming market conditions remain essentially the same.
IRT Property Co said it is in talks on
the issucne in Europe of 30 mln dlrs of 15-year two pct
debentures convertible into common stock at 23.50 dlrs per
share.
It said investors would have the right to require the
company to redeem half of the issue during the 49th month of
the term of the bonds and the remainder during the 73rd month.
On exercise of the redemption right, the investors would be
entitled to repayment of the bond at a premium to par that
would provide a total rate of return equal to the yield on the
issue date of four or six-year U.S. Treasury bonds.
IRT said conversion would be permitted at any time after 90
days after completion of the distribution of the debentures.
It said the conversion price might be adjusted or the offering
discontinued based on fluctuations in the market price of IRT
common before distribution of the debentures.
Shr three cts vs nil
Net 328,112 vs 6,374
Revs 1,401,155 vs 846,253
NOTE: Full name is Intelligent Business Communications Corp
Trandy Brands Inc said 8.0
mln dlrs of 8.5 pct, 10-year subordinated convetible notes were
placed with a private institutional investor by Goldman Sachs
and Co.
Tandy Brands also said it completed a new two year credit
agreement Citicorp's
Shr loss 1.16 dlrs vs loss 61 cts
Net loss 3.5 mln vs loss 1.3 mln
Revs 943,938 dlrs vs 480,333 dlrs
The United States has offered Navy
warships to escort Kuwaiti oil tankers into and out of the
Gulf where they could be threatened by new Iranian anti-ship
missiles, U.S. defense officials said today.
"We believe the Kuwaitis have also approached the Soviet
Union about the possibility of using Soviet tankers" to ship
their oil, one of the officials told Reuters. "But if there is
superpower protection, we would rather it come from us," the
official said.
The officials, who asked not to be identified, said Kuwait
had asked about possible protection for a dozen vessels, most
of them oil tankers, which could be supplied by three U.S. Navy
guided missile destroyers and two guided missile frigates now
in the southern part of the Gulf.
"We told them we would give them help and we are waiting to
hear the Kuwaiti response to our offer," one official said.
In addition to a half dozen ships in the U.S. Navy's small
Mideast Task Force near the Straits of Hormuz, the Pentagon has
moved 18 warships -- including the Aircraft Carrier Kitty Hawk
-- into the northern Indian Ocean in the past month.
White House and defense officials said today that massing
of the fleet was routine and had nothing to do with the
Iran-Iraq war or Iran's recent stationing of Chinese-made
anti-ship missiles near the mouth of the Gulf.
The land-based missiles have increased concern in Kuwait
and other Middle East countries that their oil shipments might
be affected. Several hundred vessels have been confirmed hit in
the Gulf by Iran and Iraq since early 1984. White House
spokesman Marlin Fitzwater told reporters today that it was in
the U.S. strategic interest to keep the free flow of oil in the
gulf and through the Straits of Hormuz.
But he said U.S. ships in the region were on routine
maneuvers.
Defense Secretary Caspar Weinberger on Sunday declined to
discuss specifics, but said the United States would do whatever
was necessary to keep the Gulf shipping open in the face of new
Iranian anti-ship missiles in the region.
"We are fully prepared to do what's necessary to keep the
shipping going and keep the freedom of navigation available in
that very vital waterway of the world," he said on NBC
television's "Meet the Press."
The State Department said Friday Iran has been informed
about U.S. concern over the threat to oil shipments in the
Gulf. The communciation was sent through Switzerland, which
represents American interests in Iran.
Iran on Sunday denied as baseless reports that it intended
to threaten shipping in the gulf and warned the United States
that any interference in the region would meet a strong
response from Tehran, Tehran Radio said.
An Iranian Foreign Ministry spokesman, quoted in a
broadcast monitored by the BBC in London, said reports that
Iran intends to threaten shipping in the Gulf were baseless.
"In conjunction with this misleading propaganda, America has
already paved the ground to achieve its expansionist and
hegemonistic intentions, aiming to build up its military
presence in the region," he was quoted as saying.
The Federal Home Loan Bank Board
said thrift institutions insured by the Federal Savings and
Loan Insurance Corp reduced their liabilities at a 4.1 pct
annual rate during January.
It was the first drop in liabilities in a year and resulted
from repayments of borrowings, the bank board said.
Mortgage loans closed by thrifts in January totaled 15.2
billion dlrs, down from 31.6 billion dlrs in December. Net new
deposit withdrawals were up to 2.2 billion dlrs from 1.9
billion dlrs in December.
Total liabilities in January were 1.108 trillion dlrs,
compared with 1.112 trillion dlrs in December. Capital rose to
53.51 billion dlrs from 53.17 billion dlrs in December.
The bank board said thrifts were net repayers of 4.4
billion dlrs of borrowings in January, in contrast to their 6.3
billion dlr net increase in borrowings in December.
Takeover speculation buoyed Wendy's
International Inc's stock, even after Coca Cola Co took the
fizz out of market rumors by denying it was an interested
suitor.
Wendy's retreated from an earlier high of 13-3/8, and lost
a point when Coca Cola
All claims to be settled under a
U.K./Soviet pact agreed last year in connection with
pre-revolutionary Russian bonds and seized assets will be
treated equally, Price Waterhouse and Co (PW) said.
It said that the treatment for the bonds had not actually
been determined, although it had been estimated that holders
would receive about 10 pct of the nominal value of the bonds,
which was the percentage to be assigned to property claims.
Now, "the face value of the bond will be added to the value of
the property. A dividend will then be calculated and all claims
will be treated equally," PW said.
PW administers the Russian Compensation Fund, which was set
up by the Foreign Office in 1917 to oversee some 45 mln stg in
pre-revolutionary reserves for claimants of assets seized
during the Revolution.
PW, which is currently accepting applications for the
claims, said that to date, 2,000 bond application forms and 600
property application forms have been returned.
Because the number of applications and bonds returned is
increasing rapidly, a special office where the claims are being
processed will remain open beyond the close of business until
midnight on March 31, the deadline for claims to be submitted.
Shr loss 12 cts vs loss 63 cts
Net loss 596,000 vs loss 2,934,000
Revs 7,261,000 vs 6,600,000
Year
Oper shr loss 14 cts vs loss 1.28 dlrs
Oper net loss 683,000 vs loss 5,824,000
Revs 29.8 mln vs 22.7 mln
Avg shrs 4,930,000 vs 4,546,000
NOTE: Year net excludes losses from discontinued operations
of 764,000 dlrs vs 5,152,000 dlrs.
Shr 1.25 dlrs vs 1.14 dlrs
Net 472,254 vs 446,805
Revs 21.4 mln vs 19.4 mln
Net profits for year ended December 31
1986 1.3 billion lire vs 47.3 billion
Deposits from clients 3,691.0 billion lire vs 3,419.0
billion
Loans to clients 2,448.0 billion lire vs 2,181.5 billion
Note: The bank, sold by Bankamerica Corp
Security Capital Corp said it has
suspended quarterly cash dividend payments indefinitely.
The company also said its board has withdrawn authroization
for the company to buy its stock on the open market. Its
previous dividend payment was five cts on February 24.
Security Capital said this action was taken in response to
its continuing operating losses, primarily at Benjamin Franklin
Savings Association, a Houston-based subsidiary.
Shr loss eight cts vs profit 10 cts
Net loss 714,905 vs profit 889,679
Revs 1,091,461 vs 3,156,569
Year
Shr loss five cts vs profit 22 cts
Net loss 422,037 vs profit 1,850,637
Revs 6,642,490 vs 7,948,312
Avg shrs 8,808,323 vs 8,412,822
Shr 41 cts vs 38 cts
Net 5,630,000 vs 5,152,000
Revs 97.1 mln vs 85.4 mln
Data Card Corp said it does not
expect to meet its earnings and revenue targets for the fiscal
year ending March 28.
Earlier, the company said it expected earnings per share
from continuing operations to be 35 to 45 cts a share. Now it
sees that figure at 15 cts a share, or about 1.5 mln dlrs.
Data Card said it expects revenues for the year in the
range of 170 mln to 175 mln dlrs, down from a previous estimate
of 180 mln to 185 mln dlrs.
It said integration of Addressograph Farrington Inc, a
private company acquired on Aug 25, 1986, is proving more
difficult than expected. The company reported revenues of 154
mln dlrs and net income of 10.6 mln dlrs in fiscal 1986 ended
March 26, 1986.
Shr eight cts vs five cts
Net 1,370,898 vs 823,988
Sales 7,786,730 vs 4,383,825
Avg shrs 17,744,333 vs 17,071,236
NOTE: Per-share amounts adjusted for three-for-two stock
splits in April and July, 1986
Shr loss 1.34 dlrs vs profit two cts
Net loss 4.5 mln vs profit 46,000
Revs 7.6 mln vs 8.9 mln
Nine months
Shr loss 1.41 dlrs vs loss two cts
Net loss 4.7 mln vs loss 76,000
Revs 30.2 mln vs 23.8 mln
NOTE:1986 includes gain on disposition of investments of
2,454 dlrs in 3rd qtr and 5,306 dlrs in nine months
respectively. 1987 includes gain on disposition of investments
of five dlrs in 3nd qtr and 7,052 dlrs in nine months.
Oper shr loss 20 cts vs loss 81 cts
Oper net loss 1,042,000 vs loss 4,077,000
Revs 38.5 mln vs 50.3 mln
12 mths
Oper shr profit six cts vs loss 43 cts
Oper net profit 336,000 vs loss 2,176,000
Revs 137.8 mln vs 209.1 mln
(Company corrects to show profit rather than a loss for
current 12 mths oper shr and oper net.)
Royal Dutch/Shell Group
Kuwaiti oil minister Sheikh Ali
al-Khalifa al-Sabah said OPEC was producing well below its oil
output ceiling and this would help prices move higher,
according to a Kuwaiti newspaper interview.
The al-Rai al-Aam newspaper quoted him as saying OPEC was
pumping 2.4 mln barrels per day (bpd) less than its 15.8 mln
bpd ceiling, while consumers were drawing down their petroleum
stocks at a rate of 4.5 mln bpd.
As long as OPEC maintains its output curbs, demand for its
oil will rise in April and May, Sheikh Ali said, adding that
Kuwait was strongly committed to its OPEC quota.
The council of the
Australian Petroleum Exploration Association (APEA) said it
will press on with its campaign for major improvements to
Australia's petroleum taxation structure.
The council said in a statement the industry was bitterly
disappointed by the Australian government's position on
taxation, as presented in a speech by Resources and Energy
Minister Gareth Evans to the APEA conference.
As earlier reported, Evans said he was inclined to target
any tax changes rather than take a broad-based approach to
secondary taxation of petroleum.
APEA had expected the government to make positive responses
to detailed industry submissions seeking the removal of
existing secondary tax disincentives to exploration and
development, the council said.
It said it plans to reply in detail to issues raised by
Evans, but its immediate concern was the decision to proceed
with the current resource rental tax (RRT) legislation.
Evans told the conference the government did not plan to
accept industry pleas for changes in the legislation to allow
deductibility of unsuccessful exploration expenditure.
"The government's unwillingness to allow the deduction of
unsuccessful exploration expenditure within the whole offshore
area in which RRT applies negates any claim that the tax is
profit based," the APEA council said.
The government missed a major opportunity to persuade oil
exploration companies that it had realistic answers to the
industry's concerns, despite its recognition of the industry's
problems, the council said.
The industry has called for the end of all discriminatory
secondary taxation of petroleum, citing them as major
disincentives at a time of low oil prices.
Import prices in West Germany fell
0.7 pct in February from January to stand 15.6 pct below their
level in February 1986, the Federal Statistics Office said.
In January the import price index, base 1980, was unchanged
compared with December but 17.8 pct lower against January 1986.
February export prices, same base as import prices, were
unchanged compared with January and 2.5 pct lower than in
February 1986.
In January export prices fell 0.3 pct against December to
stand 3.0 pct lower than in January 1986.
Soviet sugar imports in October and
November were significantly higher than in the same period of
the year before, according to figures received by the
International Sugar Organization.
Imports in October totalled 23,803 tonnes, compared with
4,685 tonnes in the same month of 1985, while November imports
were up to 136,029 tonnes from 46,541.
For the first 11 months of 1986, Soviet imports totalled
5.12 mln tonnes, against 4.30 mln in the same period of 1985.
The October 1986 import figure consisted entirely of whites
from Cuba, while the November total was made up of 84,037
tonnes Cuban whites and 51,992 tonnes whites from Thailand. Of
the imports in the January/November period, those from Cuba
were up to 3.81 mln tonnes from 3.65 mln and from Thailand to
292,808 tonnes from 22,800.
Soviet exports also increased in 1986. The January/November
export total of 289,232 compares with 165,859 tonnes in the
first 11 months of 1985. Exports in October 1986 were 20,064,
down from 38,853 a year earlier, while November exports were up
from 32,796 to 50,855 tonnes.
Iran has test-fired its newly acquired
Silkworm anti-shipping missile in the Strait of Hormuz and has
set up at least two land-based launching sites in the area, a
British naval source in the Gulf said.
The source, who declined to be identified, said Iran had
fired the Chinese-made missile at a hulk off its southern Gulf
naval port of Bandar Abbas and scored a hit.
"These missiles pack a fairly big punch," he told Reuters.
"There is no doubt they could be used to target (shipping)
across the Strait of Hormuz."
Tension in the Gulf has risen since U.S. Officials last
week broke the news that Iran had acquired the Silkworm
missiles.
The U.S. Has said it will not allow Iran to use the
missiles to choke off oil shipments and has offered its
warships to escort Kuwaiti tankers past the missile batteries.
But Tehran denied last Sunday it intended to threaten Gulf
shipping and warned the U.S. Any interference in the region
would meet a strong response.
The British naval source said the Silkworms were in place
at at least two sites around the Strait of Hormuz, but would
not give the exact location.
World Bank president Barber Conable
pledged the Bank's support to help Indonesia adjust to lower
world oil prices, but said further deregulation of its
protected economy was needed.
Speaking to reporters after talks with President Suharto,
he said he expected Jakarta to do more to liberalise the
economy and deregulate trade policy.
Indonesia, hurt by the fall in oil prices last year which
cut the value of its crude exports in half, is the Third
World's sixth largest debtor. It has received 10.7 billion dlrs
from the World Bank in the past 20 years.
Qtly div 10 cts vs 10 cts prior
Pay May 25
Record April 20
Note: Canadian funds
The Bank of England said it provided the
money market with assistance of 104 mln stg in the afternoon
session.
This takes the bank's total help so far today to 219 mln
stg and compares with its estimate of a 300 mln stg shortage.
The central bank bought outright 104 mln stg in bank bills
in band two at 9-13/16 pct.
The gold mining industry had
another "exceptional year" in 1986 with tonnage milled, revenues
and profits reaching high levels, the Chamber of Mines said.
Nearly 108 mln tons of ore was milled, three pct higher
than the prior year, while revenues rose 17 pct to 16.5 billion
rand and profits increased 6.5 pct to 8.31 billion rand, the
Chamber reported.
The profit rise was achieved despite substantial cost
increases and a 26.1 pct rise in capital expenditures to 2.42
billion rand, it said.
The chamber said that a "comparatively buoyant gold price
allowed mines to continue the practise of mining lower grade
ores which has characterised recent years."
It said the industry now mines to an average grade of 5.63
grams per ton compared with 6.09 grams per ton in 1985.
Gold output for the year declined five pct to 638 tons
compared with the previous year's 671 tons.
National Semiconductor Corp
said improved results at its Semiconductor Group helped reduce
losses in the third quarter and nine months.
In the quarter ended March 8, the group had a modest sales
increase and major improvement in operating performance
compared to the year-ago quarter, the company said.
But results softened from the prior quarter because of low
bookings last fall for third quarter shipment and holiday
shutdowns, it said.
The semiconductor maker cut net losses to 25.6 mln dlrs or
31 cts a share from 39.4 mln dlrs or 47 cts in the quarter.
Losses in the nine months were reduced to 32.7 mln dlrs or
44 cts from 84.4 mln dlrs or one dlr. Sales grew 23.5 pct in
the quarter to 398.1 mln dlrs and 25.5 pct in the nine months
to 1.36 billion dlrs.
Bookings recovered in the latter part of the third quarter,
the company said. Despite the improvement in order rates and
operating results year-to-year, pricing continues to be
"aggressive for many products," it said.
Nevertheless, it expects the semiconductor business will
continue to improve this year. The Information Systems Group
will continue strong sales growth based on recent order trends
and new product introductions, it said.
A unanimous Supreme Court ruled that
oil and gas exploration can proceed on two tracts off the
Alaska coast which were leased by the federal government to
eight major oil companies.
The ruling was an important victory for the oil companies
and the Reagan administration's controversial off-shore leasing
program and a setback for two small Alaskan villages that
challenged the leases by claiming damage to the environment.
The administration said that the court-ordered halt in
drilling had created uncertainty over the 4.2 billion dlrs paid
for 621 leases off the shores of Alaska since December 1980.
A federal appeals court ordered the oil companies to halt
all exploration and remove all drilling rigs from two tracts in
the Bering Sea off Alaska because of possible harm to the
subsistence needs and culture of native Eskimos.
But the Supreme Court said the appeals court was wrong in
issuing an injunction halting exploration.
"Here, injury to subsistence resources from exploration was
not at all probable," Justice Byron White wrote for the court.
"And on the other side of the balance of harms was the fact
that the oil companies had committed approximately 70 mln dlrs
to exploration to be conducted during the summer of 1985 which
they would have lost without chance of recovery had exploration
been enjoined," he said.
The oil companies, Amoco Corp
The Ghana Cocoa Board said it purchased
456 tonnes of cocoa in the 23rd week, ended March 12, of the
1986/87 main crop season, compared with 684 tonnes the previous
week and 784 tonnes in the 23rd week ended March 20 of the
1985/86 season.
Cumulative purchases so far this season stand at 217,235
tonnes, ahead of the 203,884 tonnes purchased by the 23rd week
of last season, the board said.
OII HoLdings Corp, a concern formed by
Kohlberg Kravis Roberts and Co, said it completed its
previously announced acquisition of Owens-Illinois Inc.
Under terms of the February 10 agreement, OII paid 60.50
dlrs per common share and 363 dlrs per 4.75 dlrs convertible
preferred share.
OII said each common share still outstanding at the time of
the merger has been converted into the right to receive 60.50
dlrs per share and all preference shares not converted will be
redeemd on April 22 at a redemption price of 100 dlrs per
preference share plus accrued and unpaid dividends.
OII said it has assumed Owen's 3-3/4 pct sinking fund
debentures due June 1, 1988, 9.35 pct sinking fund debentures
due November 1, 1999, and 7-5/8 pct debentures due April 1,
2001.
OII said the New York Stock Exchange said the securities
will be delisted as a result of the merger. OII said it is
anticipated that the securities will be traded in the over-the-
counter market.
The surviving company will be known as Owen-Illinois Inc,
it said.
Flowers Industries Inc said it
expects lower earnings for the current year due to operating
losses incurred by recent acquisitions and possible
nonrecurring losses resulting from its restructuring efforts.
For the year ended June 28, Flowers earned 29.5 mln dlrs.
Today it reported nine month earnings of 14.9 mln dlrs, down
from 15.9 mln dlrs a year before.
Flowers said it expects fiscal 1988, however, to show the
best growth in profits in its history due to the growing
profitability of ongoing businesses, cost control efforts,
higher productvitiy and lower taxes.
Flowers said losses suffered in its West Texas operations
and in five plants acquired at the start of the third quarter
from
Alcan Aluminium Ltd. in Montreal said
it increased yesterday its prices for unalloyed ingot and
extrusion billet by two cents a lb, effective with shipments
beginning May 1.
The new price for unalloyed ingot is 64.5 cents a lb while
the new price for extrusion billet is 72.5 cents a lb.
"We feel very confident about raising our prices because we
see demand over supply as being sustainable for some time,"
said Ian Rugeroni, Alcan's president of metal sales and
recycling - U.S.A.
Rugeroni said sheet and can bookings for Alcan aluminium
were up at a time when the company's total 1.1 mln tonne North
American smelter system had less than a week's supply.
"We're short and we're buying," he said.
Rugeroni added that Alcan expects the International Primary
Aluminum Institute to report a drop in total non-Socialist
stocks in February and March. He estimated supply in the latter
month will have fallen 100,000 to 150,000 tonnes, based in part
on current low inventories of aluminium in Japan and on the
London Metal Exchange.
Standard Chartered Plc
Colombia's coffee export revenue dropped
97 mln dlrs to 233.6 mln dlrs for the first two months of the
year against 330.9 mln dlrs in the similar period of 1986,
central bank preliminary figures show.
Experts attributed the fall to lower world market prices
following the failure to re-introduce international coffee
export quotas, but they said Colombia could compensate the drop
with higher exports in calendar 1987.
Coffee export revenue for 1986 was 2.33 billion dlrs,
according to the bank.
Jorge Cardenas, manager of the National Coffee Growers'
Federation, last week estimated the recent drop of 30 cents a
lb in coffee prices would mean a net loss revenue of 457 mln
dlrs for Colombia.
But he stressed that Colombia, with stockpiles of 10 mln
(60-kg) bags, had the capacity to export more and would use a
recently-introduced more flexible marketing policy to do so.
About 14,000 of Brazil's 40,000
seamen are now back at work after pay accords with 21 shipping
companies but the rest are still on strike, a spokesman at
strike headquarters said today.
The seamen began a national stoppage on February 27.
The spokesman, talking by telephone from Rio de Janeiro,
said 126 ships were strike-bound.
He added that because of resignations by many seamen there
were scarcely any crews left on 38 of these ships.
The seamen have settled in general for pay rises of 120 pct
with the 21 companies. Talks with the shipowners' association
Syndarma have been deadlocked over overtime.
While exports have been delayed by the strike, exporters
say the problems have been manageable.
"It hasn't been critical by any means," said a coffee trader
in Santos, who noted that coffee was still moving on foreign
ships.
Economic analysts added, however, that any delay to exports
served to aggravate Brazil's balance of payments crisis, which
last month prompted the government to suspend interest payments
on 68 billion dlrs of commercial debt.
Shr 57 cts vs 72 cts
Net 2.7 mln vs 3.3 mln
Six months
Shr 45 cts vs 84 cts
Net 2.1 mln vs 3.8 mln
NOTE:1987 six months includes 790,000 dlr charge. 1986 six
months includes 679,000 net gain.
American Express Co's
The chairman of the Federal Reserve
Board, Paul Volcker, has written to the chairman of the House
Banking Committee to raise concerns about legislative proposals
scheduled for consideration Wednesday.
Volcker told committee chairman Fernand St. Germain a
proposal to deny primary dealer status to firms from countries
that do not grant U.S. firms equal access to their government
debt markets might invite retaliation against U.S. firms
abroad.
He added, "even Japan, against whom this proposal seems to
be particularly directed," has started opening its markets.
In his letter, made available at the Treasury, Volcker also
said a proposal to ease debt problems of developing countries
by setting up a public facility to buy their debts owed to
commercial banks, was a problem.
"I believe that the prospect of debt relief would undermine
the difficult internal efforts of the borrowing countries to
achieve the structural reform that is needed regardless of the
policies that are followed on servicing external debt," Volcker
said.
It might also cause private lenders to become reluctant to
extend more credit to the borrowing countries, he said.
Volcker said he endorsed comments by Treasury Secretary
James Baker "about the inappropriateness of using public
resources for purchasing private commercial bank debt, which we
both see as an inherent aspect of the proposed international
debt facility."
He also said a proposal for establishing formal procedures
for international negotiations on currency exchange rates "is
unrealistic and could well have damaging effects."
"For example, the bill's directive to intitiate negotiations
in order to achieve a competitive exchange rate for the dollar
-- a matter upon which there can be considerable difference
among analysts -- runs the risk of building up potentially
destabilizing market expectations," Volcker said.
He recommended "we should not lock ourselves into formalized
procedures for international negotiations" on exchange rates but
instead use other, more flexible means like the recent mmeting
in Paris between U.S. treasury and central bank representatives
and those of major trade allies.
Leading U.S. farm state senators are
seeking to insert into the Senate's omnibus trade bill a
provision that would broaden eligibility requirements under the
U.S. Agriculture Department's export enhancement program, EEP,
to include traditional buyers of U.S. farm products, including
the Soviet Union, Senate staff said.
Under existing criteria, USDA can offer EEP subsidies to
recoup export markets lost to competing nations' unfair trading
practices.
Senate Agriculture Committee Chairman Patrick Leahy (D-Vt.)
is leading a group of farm state senators in an effort to
broaden the criteria in such a way as to enable Moscow to be
eligible for the subsidies, sources said.
The senators -- including Senate Finance Committee Chairman
Lloyd Bentsen (D-Tex.), Max Baucus (D-Mont.), David Pryor
(D-Ark.), John Melcher (D-Mont.) and Thad Cochran (R-Miss.) --
also may fold into the trade bill a measure to shield pork
producers and processors from Canadian imports.
The measure, sponsored by Sen. Charles Grassley (R-Iowa),
would clarify the definition of "industry" in determining whether
or not imports were causing injury to U.S. producers.
Grassley's bill stems from a 1985 decision by the
International Trade Commission that imports from Canada of live
swine -- but not fresh, chilled and frozen pork -- were harming
U.S. producers.
The bill's proponents have argued Canada has simply
replaced shipments of live hogs with fresh pork.
External Affairs Minister Joe Clark
today vowed to do everything possible to fight the U.S. action
against Canadian potash exports, but also warned against
raising the alarm too early in the dispute.
In the latest flashpoint in Canadian-U.S. trade relations,
the U.S. International Trade Commission ruled unanimously
Monday that Canadian potash shipments valued at 270 million
U.S. dlrs last year were injuring the U.S. industry.
"We certainly intend to do everything we can to insure that
Canadian interests are well protected," Clark told the House of
Commons in the daily question period.
But he said the opposition parties should be careful "not
to raise false alarms too early."
The case now goes before the U.S. Commerce Department's
trade division to determine if a duty should be imposed. Potash
producers from New Mexico, claiming unfair government
subsidies, are seeking a 43 pct tariff on Canada's shipments.
Canada, the world's largest potash producer, exported 9.8
mln metric tonnes of potash last year, with nearly a third
going to the U.S.
Most of the potash, used in the production of fertilizer,
comes from provincially owned mines in Saskatchewan.
In the Commons, Liberal member Lloyd Axworthy branded the
ruling as just another "trade harrassment" from the U.S. and
criticized Clark's assurances the country's interests would be
protected.
"We received exactly the same kind of assurances in the
softwood lumber case that was totally fumbled and bumbled,"
Axworthy said.
Canada's Progressive Conservative government agreed to
impose a 15 pct duty on its softwood lumber exports earlier
this year to end a long and bitter bilateral trade dispute with
the U.S.
Axworthy urged the government to present Canada's case to
world trade authorities under the General Agreement on Tariffs
and Trade.
But Clark maintained the potash dispute was another example
of why Canada needs to find a new way to settle bilateral
irritants in the free trade negotiations under way with the
U.S.
"What we are seeking to do is put in place a better
system," Clark said.
Meanwhile, Saskatchewan Trade Minister Bob Andrew expressed
confidence Canada would win its case, claiming the problem
stems from low international commodity prices and not
government subsidies.
"The reality of the problem and the injury is caused
worldwide," he said. "It's caused by a downturn in the
commodity price for fertilizer, whether it's potash fertilizer,
nitrogen fertilizer or whatever."
Chapman Energy INc said it is launching
a major restructuring which, if not approved, it will have no
alternative but to seek protection under Chapter 11.
Under the plan, Chapman will exchange securities and cash
for all outstanding 12 pct senior subordinated debentures due
2000 and will sell a controlling interest to Troon Partners
Ltd.
The agreement with Troon requires Troon to advance 6.5 mln
dlrs partially secured by a first mortgage lien on the
company's interest in its natural gas pipeline partnership and
Troon to tender 100,000 principal amount of debentures to
Chapman.
Proceeds of the loan will be used for the cash portion of
the restructuring. Troon will acquire a majority stock interest
and control of the board.
In addition, Chapman and Troon will establish a 10 mln dlrs
acquisition joint ventures, it said.
The plan also contemplates establishing a restructured loan
providing for one master credit agreement having an aggregate
balance of 22.4 mln dlrs.
The plan also contemplates the recapitalization of
preferred stock whereby each share will be converted into three
shares of common stock.
Chapman also said it also plans to negotiate settelment and
discharge of a substantial portion of its accounts payable and
settlement of certain litigation.
If approved by various creditors and shareholders, the
company expects the plan to be completed by May 29.
Chapman also repoted a loss of 43.4 mln dlrs for the year,
including asset writedowns of 35.5 mln dlrs, compared to
December 31, compared to a net income of 177,243 in 1985.
The 1986 loss resulted in shareholders' deficiency of 15
mln dlrs compared to shareholder's equity of 28.9 mln last
year.
Total assets decreased to 35.6 mln dlrs from 81.8 mln dlrs.
Matsushita Electric Industrial Co Ltd
Nippon Steel Corp
Vietnam will resettle 300,000 people on
state farms known as new economic zones in 1987, to create jobs
and grow more high-value export crops, the communist party
newspaper Nhan Dan said.
Yesterday's edition, received here today, said Vietnam
would invest one billion dong, including the costs of
relocation, in 272 new economic zones. About one third of that
sum would be spent on export crops such as coffee, tea, rubber
and pepper in the Central Highlands, it said.
Since 1975, Vietnam has resettled about three million
people from cities and crowded river deltas to the zones.
The Dutch Central Bank said it
allocated 4.183 billion guilders at tender for the new 5.3 pct,
nine-day special advances.
Bids were fully met for the first 200 mln guilders and for
40 pct above.
The new advances for the period March 25 to April 4,
replace current 5.3 pct, five day advances totalling 4.003
billion guilders which expire today.
Money brokers said yesterday they expected the Bank to
allocate about 3.5 billion guilders.
Middle East currency dealers meet in
Abu Dhabi this weekend at a time of fundamental change in their
business, which has seen a growing volume of trade shift from
the Arab world to London.
The 14th congress of the Inter-Arab Cambiste Association
also comes at a time when the prospect of a unified Gulf
currency system is more real that at any time this decade.
Foreign exchange traders and bank treasurers said these
issues, and the slide of the Lebanese pound, can be expected to
be major talking points.
About 250 traders and treasurers from some 115 banks --
including some in London and other major non-Arab financial
centres -- are expected to attend the conference which begins
on on Saturday.
Bankers said it is hard to avoid the impression that a
growing proportion of transactions in the Saudi riyal market,
by far the largest in the region, is being carried out in
London.
The market had been dominated by Saudi Arabia's 11 banks,
foreign exchange houses in the Kingdom and offshore banks in
Bahrain. But bankers said more and more Saudi and Bahrain-based
banks are boosting their treasury operations in London.
As recession hit the Middle East and the need for trade
finance in the region declined, many offshore banks in Bahrain
ran down their currency operations. None of the four major U.K.
Clearing banks now has a dealing room on the island.
The two major Bahrain-based international banks,
Citibank NA is issuing up to 50,000
currency warrants which give the holder a call right on U.S.
Dollars from marks or yen, Citicorp Investment Bank Ltd said as
sole manager.
Each warrant, priced at 47.50 dlrs, gives the holder the
right to purchase a nominal sum of 500 dlrs for either 182.50
marks or 149.50 yen between March 31, 1987 and March 31, 1989.
The warrants will be listed in Luxembourg and pay date is
March 31. Exercise, requiring one day's notice, must be for a
minimum of 100 warrants through one currency only.
Shr net basis 24.8p vs 24.5p
Shr nil basis 22.7p vs 20.9p
Div 5p making 7.6p vs 6.5p
Pretax profit 57.78 mln stg vs 50.61 mln
Net after tax 37.47 mln vs 36.49 mln
Outside shareholders interests 1.75 mln vs 1.32 mln
Extraordinary debit 370,000 vs 1.93 mln
Turnover 533.59 mln vs 555.81 mln
Profit breakdown by activity -
Electrical equipment 28.59 mln stg vs 27.60 mln
Engineering 10.75 mln vs 11.13 mln
Industrial services 18.78 mln vs 16 mln
Corporate finance 340,000 vs 4.12 mln
Making total pre-tax profit 57.78 mln vs 50.61 mln.
West German gross green coffee imports
in January fell sharply to 38,616 tonnes from 54,576 in January
last year, figures from the Federal Statistics Office show.
Imports of decaffeinated unroasted coffee were 396 tonnes
against nil a year earlier.
Qtly div 26 cts vs 25 cts prior
Pay April 15
Record March 31
NOTE: One Valley Bancorp of West Virginia Inc.
Shr 19 cts vs 10 cts
Net 653,464 vs 287,606
Revs 10.6 mln vs 7,600,000
Year
Shr 68 cts vs 46 cts
Net 2,309,181 vs 1,408,813
Revs 38.4 mln vs 26.0 mln
Enserch Inc is issuing 100 mln dlrs of
convertible debt due October 4, 2002 carrying an indicated
coupon of six to 6-3/8 pct and priced at par, Salomon Brothers
International said as lead manager.
Enserch's stock closed at 22-1/2 last night on the New York
Stock Exchange. The conversion premium is indicated to be 20 to
23 pct. The securities are non-callable for three years.
There is a 1-1/2 pct selling concession and two pct
combined management and underwriting fee.
Perception Technology Corp said
it expects to take a charge of about 686,000 dlrs or 19 cts per
share against earnings for the second quarter ended March 31
due to the bankruptcy proceeding of customer T.C. of New York
Inc.
Perception said it has outstanding lease receivables from
T.C. of about 2,480,000 dlrs.
It said the exact amnount of the charge will depend on the
extent of recovery of the leased equipment involved and on
arrangements that might be made with the bankruptcy court on
the equipment.
A unit of Inspectorate International
AG
Qtly div three cts vs three cts prior
Pay May One
Record April Eight
Utilicorp United Corp
said it expects to report 1987 first quarter earnings of about
12 mln dlrs or about 1.12 dlrs a share and revenues of about
190 mln dlrs.
In the comparable quarter a year ago, Utilicorp earned 8.5
mln dlrs or 87 cts on revenues of 203 mln dlrs.
There are 9.6 mln shares outstanding this year, up from the
8.5 mln shares in 1986, Utilicorp's president Richard Green
told financial analysts here.
First quarter 1987 results include one month contribution
of West Virginia Power, which became a division on March 1,
1987, Green said in remarks prepared for delivery to analysts.
Higher earnings for the period reflected reduced operating
and maintenenace expenses and about 10 mln dlrs in rate
increases in Iowa, Minnesota, Kansas and Colorado, he said.
However, Utilicorp's Missouri Public Service division is
experiencing the effect of a 5.9 pct rate reduction authorized
in September 1986, he noted.
Of Utilicorp's total revenues expected for the 1987 first
quarter, about 43 mln dlrs will be derived from electric
operations and about 147 mln dlrs will come from gas
operations, he said.
Operating income derived from electric operations in the
first three months of 1987 is estimated to be eight mln dlrs,
while the contribution from gas operations will be about 10 mln
dlrs, Green said.
Green told analysts that Utilicorp received regulatory
approval from various states and the Federal Energy Regulatory
Commission to reincorporate in Delaware, effective April one.
Utilicorp signed an agreement with Cominco Ltd of Vancouver
to extend the deadline to May 31, 1987, for completion of the
company's purchase of West Kootenay Power and Light of British
Columbia, due to a longer than expected regulatory approval
process, he said.
Hearings were completed in February and a decision by the
British Columbia Utilities Commission on the 60 mln dlrs
purchase by Utilicorp is pending, he said.
Tseng Laboratories Inc said it
expects first quarter 1987 sales to exceed total sales for the
entire 1986 year, and said it expects earnings for the quarter
to grow at a faster rate than sales.
Tseng posted total revenues for 1986 of 4,255,731, and net
income of 258,125, or 14 cts per share.
Jack Tseng, president of the company, attributed the high
expectations to increased orders from major costomers, as well
as accelerated business from its growing reseller network.
Tseng posted first quarter 1986 sales of 549,950, and net
income of 19,163, the company said.
International Platinum Corp said it
signed a letter of intent to enter into further negotiations on
a joint venture exploration agreement with Degussa A.G., of
West Germany, regarding several North American platinum
properties.
Conclusion of the agreement is subject to completion of
further detailed examination by Degussa, as well as board and
regulatory approvals.
Under terms of the letter of intent, Degussa would
contribute substantially to a three year exploration budget of
4.5 mln dlrs in return for a 50 pct interest in the venture.
Degussa's contribution to the exploration budget will be
based on it matching International Platinum's past exploration
and acquisition costs, estimated at about two mln dlrs, and
then contributing on a pro rata basis, International Platinum
said.
Degussa's contribution would provide a major portion of
International Platinum's exploration budget, especially during
the first and second year of the proposed joint venture, the
company said.
BAT Industries Plc
International Broadcasting
Corp said shareholders at its annual meeting approved a one for
25 reverse stock split.
The split will be effective after completion of filing
requirements, it said. New certificates will be needed, it
added.
The media company said it currently has 40,950,000 common
shares issued and outstanding and, upon completion of the
reverse split, will have 1,638,000 shares outstanding.
Shr 24 cts vs 13 cts
Net 380,325 vs 211,183
Sales 5,046,578 vs 3,941,764
NOTE: Current year net includes gain from sale of Sterling
Heights, Mich., plant of 174,000 dlrs. Another 698,000 dlrs of
gain from sale sale has been treated as deferred income.
Synalloy Corp said it has
ended talks on the sale of its Blackman Uhler Chemical Division
to Intex Products Inc because agreement could not be reached.
The company said it does not intend to seek another buyer.
Allied-Signal Inc said it
agreed to sell its Linotype Group unit to
Shr 10 cts vs five cts
Net 512,000 vs 230,000
Revs 16.8 mln vs 9,025,000
Year
Shr 55 cts vs 34 cts
Net 2,662,000 vs 1,541,000
Revs 57.5 mln vs 32.3 mln
Oper shr one ct vs two cts
Oper net 30,000 vs 62,000
Revs 2,315,000 vs 2,355,000
Year
Oper shr four cts vs nine cts
Oper net 95,000 vs 204,000
Revs 9,214,000 vs 9,950,000
Avg shrs 2,492,000 vs 2,351,000
NOTE: Full name is Arden International Kitchens Inc
More
Oper shr 15 cts vs 1.07 dlrs
Oper net 372,000 vs 2,601,000
Year
Oper shr 80 cts vs 61 cts
Oper net 1,952,000 vs 1,491,000
NOTE: Net excludes realized investment loss 13,000 dlrs vs
gain 986,000 dlrs in quarter and gains 1,047,000 dlrs vs
1,152,000 dlrs in year.
1986 year net excludes tax credit 919,000 dlrs.
Earthquake-stricken Ecuador is
negotiating with Nigeria to have the African country lend it
10,000 barrels per day (bpd) of crude for export, Deputy Energy
Minister Fernando Santos Alvite told Reuters.
He said Ecuador was negotiating a shipments schedule and
the terms of repaying the loan. Ecuador has suspended crude
exports for about five months until it repairs a pipeline
ruputured by a March five tremor.
Santos Alvite added Ecuador is finalizing details for a
program under which Venezuela would temporarily lend the
country 50,000 bpd for export.
Treasury Secretary James Baker said
the United States and other nations were willing to cooperate
to stabilize foreign exchange rates at the levels that existed
at the time of an international agreement last month.
"Our position with respect to the dollar goes back to the
Paris Agreement that the currencies were within ranges broadly
consistent with underlying economic conditions," Baker told a
Senate committee.
Baker continued, "We said further that we and others are
willing to cooperate closely to foster stability in exchange
rates around those levels."
He referred to a February agreement by six leading
industrial nations to cooperate on monetary matters.
Baker refused to answer a question whether Japan and
Germany had done enough to stimulate their domestic economies
for the United States to support the dollar.
"I will not comment because the foreign exchange market
reads more or less than is intended in my statements," Baker
said.
Baker said that the other signatories recognized that they
must carry their share of the load of correcting external
imbalances that have hindered the world's economy.
He cited news reports that Germany would increase a
proposed tax cut for 1988 by about five billion marks to
stimulate domestic growth.
Japan also agreed to consider stimulative measures after
the Japanese budget was made final.
Baker said those nations were stimulating their economies
in a manner consistent with gains against inflation.
Canada may begin monitoring steel
flowing in and out of the country to determine if any steel is
being illegally "trans-shipped" to the U.S., senior government
trade officials said.
The officials, asking not to be identified, said the
government will investigate an industry contention that steel
imported from countries such as South Korea and Taiwan is being
diverted to the U.S. and ultimately exasperating concerns about
the level of Canadian exports south of the border.
But the senior officials, asking not to be indentified,
said that despite intense pressure from the Reagan
Administration, Ottawa was not considering any kind of formal
limits on Canadian shipments to the U.S.
"In a sense what I hope we are doing is buying some time,"
said one official who claimed Canadian companies were "fair
traders" in the big American market.
If approved by the Canadian cabinet, the officials said a
monitoring system will be established in the next three or four
months.
"I guess if we find trans-shipment is a problem, we would
have to do something about it," said a trade official.
Canadian steel shipments to the U.S. have risen to 5.7 pct
of the U.S. market in recent months, almost double the level
just two years ago.
The increase in Canadian shipments comes at a time of
growing anger in the U.S. over rising steel imports from
several countries in the face of a decline among domestic steel
producers.
Some U.S. lawmakers have proposed Canada's share of the
American market be limited to 2.4 per cent.
The Ontario Government has urged Ottawa to require foreign
companies to obtain permits to import steel into the country.
Currently, import licences are required only for carbon or raw
steel, which makes up less than half the steel market.
Canada exported two billion Canadian dlrs worth of steel in
1986, while importing 944-mln dlrs worth of the product in the
same year.
Southwestern Bell Corp said that
its planned acquisitions of cellular telephone and paging
systems, including those of
Qtly div 40 cts vs 40 cts prior
Pay June 10
Record May 27
Standard and Poor's Corp said it
downgraded Dana Corp's 900 mln dlrs of debt securities.
Cut were Dana's senior debentures, industrial revenue bonds
and medium-term notes to A-minus from A, and commercial paper
of Dana and its unit Dana Credit Corp to A-2 from A-1.
S and P said Dana's management plans an aggressive stock
repuchase which would result in a significantly more leveraged
capital structure. The combination of higher debt levels and
ongoing stock repurchases, about 12 mln shares in the past two
years financed mainly with debt, bring debt leverage to 48 pct
as of December 31, 1986 from 30 pct the year earlier.
U.S. oil demand as measured by
products supplied rose 0.1 pct in the four weeks ended March 20
to 16.16 mln barrels per day from 16.15 mln in the same period
a year ago, the Energy Information Administration (EIA) said.
In its weekly petroleum status report, the Energy
Department agency said distillate demand was off 0.1 pct in the
period to 3.258 mln bpd from 3.260 mln a year earlier.
Gasoline demand averaged 6.72 mln bpd, off 1.2 pct from
6.80 mln last year, while residual fuel demand was 1.38 mln
bpd, off 2.1 pct from 1.41 mln, the EIA said.
Domestic crude oil production was estimated at 8.35 mln
bpd, down 7.8 pct from 9.06 mln a year ago, and gross daily
crude imports (excluding those for the SPR) averaged 3.44 mln
bpd, up 16.3 pct from 2.95 mln, the EIA said.
Refinery crude runs in the four weeks were 11.90 mln bpd,
up 1.4 pct from 11.74 mln a year earlier, it said.
In the first 78 days of the year, refinery runs were up 1.8
pct to an average 12.25 mln bpd from 12.04 mln in the year-ago
period, the EIA said.
Year-to-date demand for all petroleum products averaged
16.32 mln bpd, up 1.8 pct from 16.04 mln in 1986, it said.
So far this year, distillate demand rose 0.1 pct to 3.31
mln bpd from 3.30 mln in 1986, gasoline demand was 6.60 mln
bpd, up 0.1 pct from 6.59 mln, and residual fuel demand fell
0.4 pct to 1.42 mln bpd from 1.43 mln, the EIA said.
Year-to-date domestic crude output was estimated at 8.41
mln bpd, off 7.7 pct from 9.11 mln a year ago, while gross
crude imports averaged 3.96 mln bpd, up 28.1 pct from 3.09 mln,
it said.
Peru's foreign debt obligation this year
totaled 6.3 billion dlrs, including maturities falling due and
overdue payments, equivalent to almost twice its expected
exports of goods and services, Central Bank President Leonel
Figueroa said.
He told the InterAmerican Development Bank (IADB) annual
meeting here that Peru will have to maintain its 10 pct limit
on debt payments to preserve growth.
Figueroa said gdp grew by almost nine pct in 1986, while
inflation dropped to 63 pct from an annual rate of 280 pct in
the first half of 1985.
Brazilian Coffee Institute (IBC)
president Jorio Dauster said he will not attend the ICO
executive board meeting and was surprised to hear that a report
of his absence had a slightly depressing effect on the New York
coffee market today.
"I have too much work to accomplish here in Brazil at the
moment. Besides the presence of the IBC president at an ICO
executive board meeting is not a tradition," Dauster said.
Dauster said except in rare cases, Brazil has always sent
its London-based representative to ICO board meetings.
Ambassador Lindenberg Sette will attend the meeting, he said.
Moody's Investors Services Inc said it
downgraded 200 mln dlrs of long-term debt of Zenith Electronics
Corp.
Cut were Zenith's senior debt to Ba-2 from Baa-3,
convertible subordinated debt to B-1 from Ba-2 and commercial
paper to Not-Prime from Prime-3.
Moody's cited the company's overall losses.
The agency also said it believes that future profits in the
consumer electronics business will be limited because of
intense competition from international market participants.
Moody's pointed out that Zenith's total debt increased
sharply over the past year and is being serviced by weak cash
flow.
A spokesman for Zenith criticized the action.
"The company believes the downgrade is unwarranted.
Operating results for 1986 improved over 1985 and Zenith was
profitable in the second half of 1986," he said.
Brazil will not announce any
changes to its coffee export policy, Brazilian Coffee Institute
(IBC) president Jorio Dauster said.
He told Reuters Brazil was not planning to modify the
position it held before the recent International Coffee
Organisation meeting.
Earlier this month, talks in London to set new ICO export
quotas failed.
Commenting on the outcome of a coffee producers' meeting in
Managua last weekend, Dauster said that they discussed nothing
involving the market.
"In the meeting we agreed to work on behalf of the union of
the producers in matters related to an international agreement,"
Dauster said.
The Managua meeting was attended by representatives from
Brazil, Mexico, Guatemala, El Salvador, Honduras, Costa Rica,
Nicaragua and Panama, the latter represented at the meeting
merely as an observer.
Peruvian President Alan Garcia said
his government was not trying to convince other nations to
follow its decision to limit foreign debt repayments.
"We do not want to export a model," Garcia told a press
conference at the end of an official two-day visit to Mexico
yesterday. He was referring to Peru's policy of limiting
payments on its 14 billion dlr debt to 10 pct of its export
earnings.
Peru's attitude contrasts with that of Mexico, which
followed a more conciliatory route and last week signed a 7.7
billion dlr loan package with its creditor banks.
Since it decided to put a ceiling on debt payments, Peru
has been barred from International Monetary Fund lending.
Despite their different approaches to debt, Garcia and
Mexican President Miguel de la Madrid issued a joint
declaration yesterday calling the foreign debt problem an
"expression of the present unjust international economic order."
But the declaration said that no Latin American debtors' club
was about to appear.
"We affirm the sovereignty of our economic decisions and the
capacity for mobilising our own resources," it said.
The two presidents also signed a variety of agreements
aimed at boosting trade and tourism between their countries as
well a number of technical cooperation pacts.
Garcia was scheduled to return to Lima tomorrow.
The House of Representatives
Appropriations Committee yesterday approved 300 mln dlrs in
economic aid for four Central American states, 50 mln dlrs to
black-led states neighbouring South Africa and 50 mln dlrs in
military assistance for the Philippines.
The programmes, part of 1.3 billion dlr supplemental budget
request by the Reagan administration to restore funds cut
earlier by Congress, must be approved by Congress.
The committee rejected the administration's request for
21.6 mln dlrs as the U.S. Contribution to U.N. Peace-keeping
troops in Lebanon.
The 300 mln dlrs will go to El Salvador, Honduras,
Guatemala and Costa Rica while another 12 mln dlrs was
allocated to replace the earthquake-damaged U.S. Embassy in San
Salvador.
The 50 mln dlrs approved for a "Southern Africa" initiative
is part of a larger programme promised by the Reagan
administration last year when it tried unsuccessfully to block
sanctions approved by Congress against South Africa's
white-minority government.
BP International and BP North America
are seeking a five billion dlr, four year syndicated credit
facility in support of British Petroleum Co Plc's tender offer
for the 45 pct of Standard Oil Co it does not already own,
Morgan Guaranty Trust Co of New York said as arranger.
The facility, to be guaranteed by British Petroleum Co Plc
Treasurer Paul Keating forecast
economic growth at slightly under two pct in the financial year
ending June this year, down from the 2.25 pct forecast
contained in the 1986/87 budget delivered last August.
Australia's terms of trade also fell, by 18 pct, over the
past two years, he told Parliament. Terms of trade are the
difference between import and export price indexes.
Despite the figures, the budget forecast of about 1.75 pct
annual growth in employment would be met, Keating said.
Unemployment is currently at 8.2 pct of the workforce.
"This government is dragging Australia through a trading
holocaust the kind of which we have not seen since the Second
World War," Keating said.
"We are not pushing this place into a recession. We are not
only holding our gains on unemployment, we are bringing
unemployment down," he said, adding that the government had help
the country avoid recession.
Parliament passed laws increasing the
amounts and frequency of treasury bill issues and allowing the
government to raise up to 35 billion dlrs through issues of
registered stock, bearer bonds and book-entry securities.
Both steps are aimed at establishing a wider domestic
capital market as part of Singapore's plans to expand its
financial sector, Finance Minister Richard Hu said.
Banking sources said the new government securities market,
scheduled to have been launched on March 2, had been delayed
pending legislative approval of these bills.
The 35 billion dlrs maximum which may be raised under the
Development Loan Bill (1987), against a ceiling of 15 billion
under current laws, is expected to satisfy demand for
government securities over the next four years, Hu said.
He said 6.1 billion dlrs of the 15 billion has so far been
raised as development loans. The rest will be used up when
bonds are issued to absorb advance deposits of 13.9 billion
dlrs from the Central Provident Fund (CPF), a mandatory pension
savings scheme. Workers and employers contribute a respective
25 pct and 10 pct of a worker's salary to the CPF, which had
funds totalling 29.3 billion at end-1986.
Regular government securities issues are needed to meet the
demand of banks, insurance companies, other financial
institutions and corporate and individual investors, Hu said.
The Monetary Authority of Singapore (MAS) had said it
planned to launch trading by issuing taxable instruments
grossing seven billion dlrs in the first year and a gross 38
billion dlrs of paper over the next five years.
Funds raised in excess of the government's budgetary needs
will not be channelled into increased spending, but will be
recycled back to the financial system, largely through the MAS,
Hu said.
Hu said the current government securities market is
rudimentary, with the CPF holding three-quarters of the
outstanding debt and banks, discount houses and insurance
companies holding the rest. "The concentration of securities in
the hands of such long-term holders has left little scope for
trading activity," he said.
"Moreover, the maturity of the bonds, mostly 20 years, was
not attractive to other investors who might have been expected
to deal more actively in the market. The infrequency of bond
issues exacerbated the lack of liquidity necessary for the
development of a market," Hu said.
Hu said these obstacles have been resolved and regular
issues of government securities will be made, initially
carrying terms of up to five years and market-related yields.
The minimum denomination is 1,000 dlrs for notes and bonds
-- aimed at individual investors -- and 10,000 dlrs for the
treasury bills, which are directed at corporate investors.
Eight primary and registered dealers have undertaken to
make markets in order to ensure liquidity, he said.
Hu said while the new government securities market will be
essentially domestic, non-residents are free to invest, but
interest earned will be subject to withholding tax.
Hu said under the new Treasury Bills (Amendment) Bill, all
book entries of borrowings through treasury bill issues must be
made in records maintained by MAS.
Hu said that instead of physical certificates having to
travel back and forth at each transaction, with side trips to
the MAS for registration, the MAS will maintain a computerised
system for updating records in a central register.
Commercial banks and primary and registered government
securities dealers will each have two securities accounts with
the MAS, one for their own holdings and the other for holdings
on behalf of all their customers, Hu said.
All trades will be reflected daily in changes in these
accounts, Hu said.
"These institutions will in turn act as custodians of
government securities for their customers, rendering each an
individual accounting of his holdings."
Hu said the new system will cut storage and handling costs
and paper work, reduce the danger of loss, theft, destruction
and counterfeiting, and permit greater speed and efficiency in
handling large volumes of transactions.
World group turnover of Siemens AG
The monetary authorities of the major
industrialised countries lost their credibility this week as
the dollar was sold off despite pleas from ministers and
widespread central bank intervention, dealers said.
The dollar's fall below 150 yen, which follows last month's
Paris currency stabilisation agreement by the U.S., Japan, West
Germany, Britain, France and Canada, is a dramatic reversal of
the success of the Group of Five (G-5) 1985 New York Plaza
meeting to weaken the dollar, they said.
The G-5 and the market agreed in 1985 that the dollar was
overvalued but this time the market and the authorities are on
different sides, dealers said.
Apparent confusion in the ranks of the G-5 nations has
encouraged the market to challenge the authorities despite
concerted intervention by the central banks of the United
States, Japan, Britain and West Germany, they said.
Pleas by Japanese Finance Minister Kiichi Miyazawa for
action to stabilise the dollar were matched over the weekend by
comments by U.S. Treasury Secretary James Baker that there was
no target zone for the dollar. The dollar was sold anyway.
Yesterday's comment by Baker that he stood by the Paris
accord did nothing to reverse sentiment, dealers said.
The intervention, backed by remarks by Fed Chairman Paul
Volcker and Japanese central bank governor Satoshi Sumita,
which a few months ago would have brought the dollar fall to a
halt, has done little but slow the rate of its decline, they
noted.
The situation has again raised the question of whether
intervention can succeed against the trend in today's huge
currency markets. Dealers said the market's cool response to
intervention reflected a basic oversupply of dollars.
"This means that the current dollar selling is not of a
sheer speculative nature but backed by real demand," said Koichi
Miyazaki, deputy general manager at Sanwa Bank.
Dealers said the dollar will remain weak despite the
intervention and it is only a matter of time before some
operators try to push it below 148 yen. The dollar closed in
Tokyo today at 149.40 against New York's 149.30/40. Its record
low was 148.40 in Tokyo last Tuesday.
Dealers said the dollar will gain only temporary support to
rise above 150 yen toward early April when the Group of Seven
industrial nations meets to discuss currencies again.
The market expects the seven nations (the Paris six plus
Italy) to try to agree on another way to stabilise currencies
apart from intervention, a chief dealer at a U.S. Bank said.
Dealers said they were unsure what other methods could be
used and they are sceptical anyway about how long the Paris
accord nations, particulary the U.S., Will remain willing to
prevent a further dollar fall given the continuing high U.S.
Trade deficit, especially with Japan.
Further pressure from a protectionist U.S. Congress for a
lower dollar is also limiting Washington's options, they said.
The market now thinks the central bank action is to slow
the dollar fall, not to push it back over 150 yen, said
Tadahiko Nashimoto, manager at Long Term Credit Bank of Japan.
Another bearish factor for the dollar is expected large
forward dollar sales from April to June for export bills
falling due for Japanese exporters from April to September.
The exporters had delayed in expectation of a further yen
depreciation, dealers said.
Yesterday's request to 30 trading houses by the Ministry of
International Trade and Industry to restrict dollar sales looks
ineffective in light of this real demand, they said.
The market is also anticipating active institutional dollar
sales to hedge currency risks on bond holdings from the new
business year starting April 1, dealers said.
"The market seems to have established a new dollar trading
range between 147 and 149 yen," one dealer said.
The dollar traded between 151 and 153 yen after the Paris
accord on February 22 and 150 yen was then considered the low
end for the dollar against the yen, he said.
Some dealers now believe that if the dollar falls below 148
yen, it will pick up renewed downward momentum and slide to
145.
Austria is making a two billion
schilling issue of floating rate treasury notes carrying
interest of 1/8th of a point over the three-month Vienna
Interbank Offered Rate (VIBOR), lead manager Oesterreichische
Laenderbank AG [OLBV.VI] said.
The issue, to be made at par, carries a placing fee of 20
basis points and will be listed in Vienna, a Laenderbank
official told Reuters.
The issue will have an initial three-year life and the
issuer has the right to make two three-year extensions and a
further one-year extension to 1997.
Payment and closing date is April 23 and redemption will be
on the same date at the end of each of the periods.
The notes, in one mln schilling denominations, may not be
offered in Austria, Britain or the United States.
Bank of Japan Governor Satoshi Sumita
said it is in Japan's national interest to make greater efforts
to reduce its trade surplus.
He told business executives the most important issues for
the world economy are the correction of international trade
imbalances and a solution to the world debt problem.
To this end, Japan and the U.S. Must make medium- and
long-term efforts to alter economic structures which have
expanded the trade gap between the two nations. World economic
growth and therefore an expansion of debtor countries' export
markets are needed to solve the debt issue, he added.
The release of U.K. February trade data
showing that the current account surplus was a provisional 376
mln stg, up from a 73 mln surplus in January, has boosted hopes
of an early cut in interest rates, analysts said.
Market forecasts had been for a worse outcome, with
expectations of a deficit in visible trade averaging about 750
mln stg, against the official figure of 224 mln stg, sharply
narrower than January's 527 mln deficit.
"The figures are unreservedly good," Chase Manhattan
Securities economist Andrew Wroblewski said.
Sterling rebounded on the trade figures, reversing a weaker
morning trend, to stand at 72.1 pct of its trade weighted index
against a basket of currencies at midday, unchanged from
yesterday's close but 0.3 points above the 1100 GMT level.
The market had feared that a deteriorating non-oil trade
pattern would undermine international support for sterling,
which has been the motor behind the recent fall in U.K.
Interest rates. Money market sources said the market had begun
to doubt that a widely expected drop in bank base lending rates
to 9.5 pct from the present 10.0 pct was really on the cards.
But sentiment now looks to have turned about again.
There now looks to be no danger that the Chancellor of the
Exchequer Nigel Lawson's forecast of a 1987 current account
deficit of 2.5 billion stg will be exceeded, Wroblewski said.
Seasonally adjusted figures showed imports rose in February
to 7.16 billion stg from 6.73 billion in January.
Exports rose to a record 6.93 billion from 6.20 billion.
However, Chris Tinker, U.K. Analyst at brokers Phillips and
Drew said the faster rise in exports than imports would prove
partly aberrational in coming months. He forecast the
Chancellor's Budget tax cuts would increase consumer
expenditure on imported goods.
However, Warburg Securities economist Ian Harwood said his
firm was sharply revising its 1987 current account deficit
forecast in the light of the latest data, cutting one billion
stg off the expected full year total to about 1.75 billion stg.
He said news of strong growth in exports of non-oil goods
confirmed recent bullish surveys among members of the
Confederation of British Industry.
The growth in imports appears to be flattening, even if
January's bad weather had curbed consumer spending on overseas
goods and import-intensive stock building among manufacturers,
Harwood said.
U.K. Government bonds, or gilts, surged by more than 1/2
point on the better-than-expected news, as earlier worries
about the figures evaporated.
Sterling peaked at a high of 1.6075 dlrs, before settling
to a steady 1.6050 about 1300 GMT, nearly a cent higher than
the European low of 1.5960.
However, analysts noted that the turnabout in market
sentiment still looks highly vulnerable to political news.
Morning weakness in sterling and the gilt market was
largely attributed to a newspaper opinion poll showing that the
Conservative government's support was slipping.
LONDON, March 26 - The Bank of England said it provided 15
mln stg in assistance to the money market this morning, buying
bank bills in band two at 9-13/16 pct.
Earlier the Bank revised its money market liquidity
forecast from a flat position to a deficit of around 350 mln
stg.
Sandoz Corp, a U.S. Subsidiary of Sandoz
AG, is establishing a 50 mln dlr euro-commercial paper (CP)
program, Morgan Guaranty Ltd said as one of the dealers.
The other dealer is Swiss Bank Corp International Ltd and
Morgan Guaranty Trust Co of New York is issuing and paying
agent.
Paper will have maturities between seven and 183 days and
will be issued in global and definitive form.
Treasury Secretary James Baker said
he stood by the Paris agreement among leading industrial
nations to foster exchange rate stability around current
levels.
"I would refer you to the Paris agreement which was a
recognition the currencies were within ranges broadly
consistent with economic fundamentals," Baker told The Cable
News Network in an interview.
"We were quite satisfied with the agreement in Paris
otherwise we would not have been a party too it," he said.
Baker also noted the nations agreed in the accord to
"co-operate to foster greater exchange rate stability around
those levels."
He refused to comment directly on the current yen/dollar
rate but said flatly that foreign exchange markets recently
tended "to draw unwarranted inferences from what I say."
Baker was quoted on British Television over the weekend as
saying he has no target for the U.S. currency, a statement that
triggered this week's renewed decline of the dollar.
"I think the Paris agreement represents evidence that
international economic policy co-ordination is alive and well,"
Baker said.
The Treasury Secretary stressed however it was very
important for the main surplus countries to grow as fast as
they could consistent with low inflation to resolve trade
imbalances.
He added that Federal Reserve Board chairman Paul Volcker
has also "been very outspoken" in suggesting main trading
partners grow as fast as they can.
Britain's visible trade deficit narrowed
to a seasonally adjusted provisional 224 mln stg in February
from 527 mln in January, The Trade and Industry Department
said.
The current account balance of payments in February showed
a seasonally adjusted provisional surplus of 376 mln stg
compared with a surplus of 73 mln in January.
Invisibles in February were put provisionally at a 600 mln
surplus, the same as in January.
Seasonally adjusted, imports rose in February to 7.16
billion stg from 6.73 billion in January. Exports rose to a
record 6.93 billion last month from 6.20 billion in January.
Trade Department officials said the improvement in
Britain's current account contrasted with most private
forecasts and they attributed much of the strength to imports
rising less quickly in February than might otherwise have been
expected.
The Department said exceptionally cold weather in January
reduced exports that month and that there had been an element
of catching up in the February figures.
The seasonally adjusted volume index, base 1980, a guide to
underlying non-oil trade, showed exports rising to 131.0 from
114.6 in January and imports rising to 142.2 from 136.5.
The value of British oil exports in February rose to 751
mln stg from 723 mln in Jnauary while oil imports rose to 425
mln from 352 mln.
Shr 12 cts vs 10 cts
Net 19.6 mln vs 17.6 mln
Revs 276 mln vs 170.4 mln
Avg shrs 85.3 mln vs 84.8 mln
NOTE: Company owns 65 pct of
Anchor Glass Container Corp said
first quarter net income is now expected to exceed the 3.1 mln
dlrs earned before extraordinary items in the year earlier
quarter.
Previously, the company had said first quarter results
would likely be lower than for the 1986 period due to
production disruptions caused by the large number of production
line changes scheduled during the first quarter, its statement
pointed out.
While the disruptive effects of the production line changes
had occurred in line with expectations, Anchor Glass said,
first quarter operating results were helped by lower than
anticipated operating costs and improved margins on sales as a
result of a more favorable product mix.
The company said its income performance for the full year
remains very good.
It also said Anchor Hocking Corp
The Bank of England said it provided
about 25 mln stg in late help to the money market, bringing the
total assistance today to 266 mln stg.
This compares with the bank's revised estimate of a 350 mln
stg money market shortfall.
Foote Mineral Co said it signed a
letter of intent to merge into Rio Tinto-Zinc Corp PLC for
cash.
Foote, 83 pct owned by Newmont Mining Corp, said Newmont
has informally indicated it would vote in favor of the Rio
Tinto proposal.
Foote said terms of the agreement, including price for the
proposed cash transaction, have not been released because they
are subject to a continuing due diligence investigation.
The company said a definitive merger agreement is expected
to be negotiated within six weeks and shareholders are expected
to vote on the deal at a meeting expected to be held in June or
July.
Cross and Trecker said it
agreed to acquire the Alliance Automation Systems division of
Gleason Corp
Contel Corp said it has agreed in
principle to acquire
Shr loss nil vs profit 19 cts
Net loss 3,175 vs profit 284,945
Revs 13.6 mln vs 10.6 mln
Year
Shr profit 13 cts vs profit 56 cts
Net profit 195,202 vs profit 857,006
Revs 47.5 mln vs 42.9 mln
Note: Current year net includes charge against discontinued
operations of 1,060,848 dlrs.
The New York Coffee, Sugar and Cocoa
Exchange (CSCE) elected former first vice chairman Gerald
Clancy to a two-year term as chairman of the board of managers,
replacing previous chairman Howard Katz.
Katz, chairman since 1985, will remain a board member.
Clancy currently serves on the Exchange board of managers
as chairman of its appeals, executive, pension and political
action committees.
The CSCE also elected Charles Nastro, executive vice
president of Shearson Lehman Bros, as first vice chairman.
Anthony Maccia, vice president of Woodhouse, Drake and Carey,
was named second vice chairman, and Clifford Evans, president
of Demico Futures, was elected treasurer.
Danzar Investment Group Inc said it
received 60 mln shares of
Final 1986 crop U.S. cotton ginnings
totaled 9,438,425 running bales, vs 12,987,834 bales at the end
of the 1985 season and 12,544,866 bales at end-1984 season, the
U.S. Census Bureau said.
The bureau said upland cotton ginnings from the final 1986
crop totaled 9,237,296 bales, vs 12,837,088 bales in 1985 and
12,418,749 bales in 1984.
American Pima ginnings from the final 1986 crop totaled
201,129 bales, vs 150,746 bales in the 1985 crop and 126,117
bales in 1984, the bureau said.
Federal Reserve Board governor Robert
Heller said that the dollar's current level is appropriate but
declined to comment on widespread market reports of concerted
central bank intervention this week.
"The dollar is stable again... The current level is the
appropriate level," Heller told reporters after a speech to a
meeting of financial services analysts.
He said last month's six-nation currency accord in Paris
did not include target ranges for the dollar in an "academic
way."
Heller also said that it was too early to determine whether
the parties to the six-nation accord were taking appropriate
steps to carry out the longer-term economic adjustments agreed
to in Paris.
"Clearly, they've not been implemented yet... No one
expects implementation within a week or two," he said.
Earlier today, U.S. Treasury assistant secretary told a
Senate banking subcommittee that he did not believe that West
Germany and Japan have yet carried out their international
responsibilities.
Louisiana-Pacific Corp said it
plans to sell its sawmill in Lakeview, Oregon and 18,000 acres
of timberland to Ostrander Construction Co.
The company said the transaciton shoould be finalized in
early April. Terms were not disclosed.
Jorge Cardenas, manager of Colombia's
coffee growers' federation, said he did not believe any
important decisions would emerge from an upcoming meeting of
the International Coffee Organization (ICO).
The ICO executive board is set to meet in London from March
31 and could decide to call a special council session by the
end of April to discuss export quotas.
"It's going to be a routine meeting, an update of what has
been happening in the market, but it's unlikely any major
decisions are taken," Cardenas told journalists.
Earlier this month, talks in London to re-introduce export
quotas, suspended in February 1986, ended in failure.
Colombian finance minister Cesar Gaviria, also talking to
reporters at the end of the weekly National Coffee Committee
meeting, said the positions of Brazil and of the United States
were too far apart to allow a prompt agreement on quotas.
Brazil's coffee chief Jorio Dauster said yesterday Brazil
would not change its coffee policies.
Cardenas said the market situation was getting clearer
because the trade knew the projected output and stockpile
levels of producers.
He said according to ICO statistics there was a shortfall
of nine mln (60-kg) bags on the world market between October,
the start of the coffee year, and February.
The Soviet Union bought almost 90,000
tonnes of raw sugar from international trade houses last night,
with some of the sugar changing hands at discounts to the spot
May world sugar contract, according to trade sources.
They said Japanese trade houses sold up to three cargoes of
Thai sugar for relatively nearby delivery.
British and European-based trade houses sold the remaining
six cargoes for shipment between April/May/July, they said.
Traders said this week's sharp fall in world sugar prices
helped to provoke the Soviet Union into covering nearby needs.
Yesterday, spot May sugar closed at 7.18 cents a pound.
China has switched purchases of U.S.
wheat totaling 60,000 tonnes from the 1986/87 season, which
began June 1, to 1987/88 season delivery, the U.S. Agriculture
Department said.
The department said outstanding wheat sales to China for
the current season amount to 90,000 tonnes and sales for
delivery in the 1987/88 season amount to 910,000 tonnes.
Total corn commitments for the 1986/87 season total
1,015,800 tonnes, the department said.
Moody's Investors Service Inc said it
may downgrade British Petroleum Co PLC's 3.5 billion dlrs of
debt and Standard Oil Co's 3.8 billion dlrs of debt.
The agency cited British Petroleum's 7.4 billion dlr tender
offer today for the remaining 45 pct of Standard Oil shares it
does not already own.
Moody's said that while British Petroleum has greatly
strengthened its capital structure over the past few years,
this acquisition would seriously affect the company's
liquidity, leverage and interest coverage.
Moody's noted that British Petroleum would use more than
two billion dlrs of excess cash and marketables and about five
billion dlrs of new acquisition debt to fund the transaction.
In addition, the minority interest and deferred income
taxes attributable to Standard Oil would be excluded from
British Petroleum's capitalization. That would result in a
total debt to capital ratio of nearly 50 pct, Moody's said.
The rating agency said it would study B.P.'s strategy to
restore financial flexibility after the acquisition. Moody's
said that may include divestiture of various petroleum and
non-petroleum assets and operations of B.P. and Standard.
But Moody's noted that after the major asset writedown and
divestiture progress achieved by Standard Oil in 1985, fewer
non-petroleum assets are available for sale.
Under review are the A-1 senior debt of issues guaranteed
by British Petroleum, including Eurobonds of BP Capital B.V.,
debentures of BP North America Finance Corp, Eurodebt of
British Petroleum B.V., BPCA Finance Ltd and BP Canadian
Holdings Ltd, debentures and medium-term notes of BP North
America Inc. Also, the A-1 debt of Standard Oil and Sohio
Pipeline, and debentures of Sohio/BP Trans-Alaska Pipeline
guaranteed severally and not jointly by B.P. and Standard.
British Petroleum Co PLC may have to
raise its planned 70 dlrs a share tender offer for the publicly
traded shares of Standard Oil Co
Top executives with Tenneco Corp
Qtly div five cts vs five cts
Pay April 30
Record April 15
The Bank of Japan will sell today 400
billion yen of government financing bills in a 24-day
repurchase agreement due April 20 to soak up a projected money
market surplus, money traders said.
The yield on the bills for sale to banks and securities
houses from money houses will be 3.9505 pct against the 3.9375
pct discount rate on one-month commercial bills and the 4.50/37
pct yield on one-month certificates of deposit today.
Today's surplus is seen at 480 billion yen, mainly excess
bank holdings due to big Bank of Japan dollar purchases on
March 25. Outstanding bills will total some 2,300 billion yen.
Prime Minister Yasuhiro Nakasone will
make an official week-long visit to the United States from
April 29 and hold talks in Washington with President Reagan,
Chief Cabinet Secretary Masaharu Gotoda told reporters.
Government sources said Nakasone would try to resolve
growing bilateral trade friction and discuss the June Venice
summit of Western industrial democracies.
Foreign Minister Tadashi Kuranari will accompany Nakasone,
ministry officials said.
U.S. Industry sources in Washington said the White House
Economic Policy Council was recommending trade sanctions
against Japan for violating the two countries' agreement on
semiconductor trade.
Under the pact, Japan pledged to stop dumping microchips in
the U.S. And Asia and open its domestic market to U.S.
Semiconductors.
India is searching for non-communist
countertrade partners to help it cut its trade deficit and
conserve foreign exchange.
Wheat, tobacco, tea, coffee, jute, engineering and
electronic goods, as well as minerals including iron ore, are
all on offer in return for crude oil, petroleum products,
chemicals, steel and machinery, trade sources told Reuters.
Most of the impetus behind countertrade, which began in
1984, comes from two state trading firms -- the State Trading
Corp (STC) and the Minerals and Metals Trading Corp (MMTC).
"The two state trading corporations are free to use their
buying power in respect to bulk commodities to promote Indian
exports," a commerce ministry spokeswoman said, adding that
private firms are excluded from countertrading.
One trade source said India has targetted countries that
depend on an Indian domestic market recently opened to foreign
imports.
However, countertrade deals still make up only a small part
of India's total trading and are likely to account for less
than eight pct of the estimated 18.53 billion dlrs in trade
during the nine months ended December, the sources said.
Countertrade accounted for just five pct of India's 25.65
billion dlrs in trade during fiscal 1985/86 ended March,
against almost nothing in 1984/85, official figures show.
However, the figures exclude exchanges with the Eastern
Bloc paid in non-convertible Indian rupees, the sources said.
Total trade with the Soviet Union, involving swaps of
agricultural produce and textiles for Soviet arms and crude
oil, is estimated at 3.04 billion dlrs in fiscal 1986/87,
against three billion in 1985/86.
Indian countertrade, which is being promoted mainly to help
narrow the country's large trade deficit, is still
insignificant compared with agreements reached by Indonesia,
Venezuela and Brazil, the trade sources said.
The trade deficit, which hit an estimated record 6.96
billion dlrs in 1985/86, is expected to decline to 5.6 billion
in the current fiscal year.
But the push to include non-communist countries in
countertrade is also due to other factors, including the slow
growth of foreign reserves, a tight debt repayment schedule,
shrinking aid and trade protectionism, businessmen said.
One source said India is showing more dynamism in promoting
countertrade deals than in the past, when the deals were made
discreetly because they break GATT rules. As a member of the
General Agreement on Tariffs and Trade (GATT), India cannot
officially support bartering.
The MMTC's recent countertrade deals include iron ore
exports to Yugoslavia for steel structures and rails.
"MMTC's recent global tenders now include a clause that
preference will be given to parties who accept payment in kind
for goods and services sold to India," a trade official said,
adding that the policy remains flexible.
"We also take into account other factors such as prices at
which the goods and services are offered to India," the trade
official said.
Early this year the commerce ministry quietly told foreign
companies interested in selling aircraft, ships, drilling rigs
and railway equipment to India that they stood a better chance
if they bought Indian goods or services in return, the trade
sources said.
Illustrating the point, the official said a South Korean
firm recently agreed to sell a drilling platform worth 40 mln
dlrs to the state-run Oil and Natural Gas Commission.
In return, the South Koreans gave a verbal assurance to buy
Indian goods worth 10 pct of the contract, against the 25 pct
sought by New Delhi, the trade official said.
"We selected the Korean firm because its bid was the lowest,"
he added.
Countertrade is helping African countries short of foreign
currency to import goods. India has signed a trade protocol to
buy up to 15,000 tonnes of asbestos fibre from Zimbabwe in
exchange for Indian goods, including jute bags and cars.
But despite India's new drive, countertrade has some
inherent problems, they added.
"It is not always easy to meet the basic requirement that
the trade should always be balanced," one trade source said. "The
other problem is it is often difficult to supply or buy
commodities which the other party wants."
Another added, "Barter is also restrictive. We look upon it
as a temporary measure to get over the current balance of
payments difficulty.
"This is why countertrade has not been made a law in India.
It does not even figure in the country's foreign trade policy."
The
Shr 126 H.K. Cents vs 42 (adjusted)
Final div 30 cents vs 10, making 40 vs 10
Net 479 mln dlrs vs 157 mln
Turnover 10.4 billion vs 10.5 billion
Note - Profits excluded extraordinary items 52 mln dlrs vs
losses 426 mln. Dividend payable after general meeting on June
4, books close April 22 to May 5.
Note - Bonus issue of four new "B" shares of par value 20
cents each for every one share of par value two dlrs each,
books close August 3 to 10.
REUTER N
India's castor oil exports are
provisionally estimated at 30,000 tonnes in fiscal 1986/87,
ending March 31, against 54,000 tonnes in 1985/86 due to a
shortfall in the domestic castorseed crop, private traders
said.
Drought in parts of the country is expected to reduce the
castorseed crop to a provisionally estimated 350,000 tonnes in
1986/87 from 550,000 tonnes in 1985/86, they told Reuters.
IBM Australia Credit Ltd is issuing a 75
mln Australian dlr eurobond due April 24, 1990 with a 14-1/8
pct coupon and priced at 101-1/4, Salomon Brothers
International Ltd said as lead manager.
The non-callable bonds will be issued in denominations of
1,000 and 10,000 dlrs and will be listed in Luxembourg. Gross
fees of 1-1/2 pct comprise 1/2 pct for management and
underwriting combined and one pct for selling.
There will be co-leads. The borrower is wholly owned by
International Business Machines Corp
South Africa's trade surplus rose
to 1.62 billion rand in February after falling to 906.2 mln in
January, Customs and Excise figures show.
This compares with a year earlier surplus of 958.9 mln
rand.
Exports rose slightly to 3.36 billion rand in February from
3.31 billion in January but imports fell to 1.74 billion from
2.41 billion.
This brought total exports for the first two months of 1987
to 6.67 billion rand and imports to 4.15 billion for a total
surplus of 2.52 billion rand against 1.71 billion a year
earlier.
India is searching for non-communist
countertrade partners to help it cut its trade deficit and
conserve foreign exchange.
Wheat, tobacco, tea, coffee, jute, engineering and
electronic goods, as well as minerals including iron ore, are
all on offer in return for crude oil, petroleum products,
chemicals, steel and machinery, trade sources told Reuters.
Most of the impetus behind countertrade, which began in
1984, comes from two state trading firms -- the State Trading
Corp (STC) and the Minerals and Metals Trading Corp (MMTC).
"The two state trading corporations are free to use their
buying power in respect to bulk commodities to promote Indian
exports," a commerce ministry spokeswoman said, adding that
private firms are excluded from countertrading.
One trade source said India has targetted countries that
depend on an Indian domestic market recently opened to foreign
imports. But countertrade deals still make up only a small part
of India's total trading and are likely to account for less
than eight pct of the estimated 18.53 billion dlrs in trade
during the nine months ended December, the sources said.
Countertrade accounted for just five pct of India's 25.65
billion dlrs in trade during fiscal 1985/86 ended March,
against almost nothing in 1984/85, official figures show.
However, the figures exclude exchanges with the Eastern
Bloc paid in non-convertible Indian rupees, the sources said.
Total trade with the Soviet Union, involving swaps of
agricultural produce and textiles for Soviet arms and crude
oil, is estimated at 3.04 billion dlrs in fiscal 1986/87.
Multivest Corp said it has ended talks
on
Societe Generale is issuing a 15 billion
yen bond due April 21, 1992 carrying a coupon of 4-1/2 pct for
the first four years and priced at 102, Mitsui Trust
International Ltd said as joint book runner.
In the fifth year, the coupon rises to 7-1/2 pct but the
bond is callable after four years.
Japan's Ministry of Finance does not permit the issuance of
euroyen bonds with maturities shorter than five years.
Daiwa International (Europe) Ltd is the other joint book
runner. Payment is due April 21.
The securities are available in denoninations of 10 mln yen
each and will be listed on the Luxembourg Stock Exchange.
There is a 1-1/4 pct selling concession and a 5/8 pct
combined management and underwriting fee.
Honeywell Inc said it has
completed the sale of 57.5 pct of its Honeywell Information
Systems
Pegasus Gold Inc said
milling operations have started at its Montana Tunnels open-pit
gold, silver, zinc and lead mine near Helena.
The start-up is three months ahead of schedule and six mln
dlrs under budget, the company said. Original capital cost of
the mine was 57.5 mln dlrs, but came in at 51.5 mln dlrs, the
company said.
After a start-up period, the mill is expected to produce
106,000 ounces of gold, 1,700,000 ounces of silver, 26,000 tons
of zinc and 5,700 tons of lead on an annual basis from
4,300,000 tons of ore, the company said.
The Agriculture Department's
widening of Louisiana gulf differentials will affect county
posted prices for number two yellow corn in ten states, a USDA
official said.
All counties in Iowa will be affected, as will counties
which use the gulf to price corn in Illinois, Indiana,
Tennessee, Kentucky, Missouri, Mississippi, Arkansas, Alabama
and Louisiana, said Ron Burgess, Deputy Director of Commodity
Operations Division for the USDA.
USDA last night notified the grain industry that effective
immediately, all gulf differentials used to price interior corn
would be widened on a sliding scale basis of four to eight cts,
depending on what the differential is.
USDA's action was taken to lower excessively high posted
county prices for corn caused by high gulf prices.
"We've been following this Louisiana gulf situation for a
month, and we don't think it's going to get back in line in any
nearby time," Burgess said.
Burgess said USDA will probably narrow back the gulf
differentials when and if Gulf prices recede. "If we're off the
mark now because we're too high, wouldn't we be as much off the
mark if we're too low?" he said.
While forecasting more adjustments if Gulf prices fall,
Burgess said no other changes in USDA's price system are being
planned right now.
"We don't tinker. We don't make changes lightly, and we
don't make changes often," he said.
The Federal Reserve entered the U.S.
Government securities market to arrange one billion dlrs of
customer repurchase agreements, a Fed spokesman said.
Dealers said Federal funds were trading at 6-1/8 pct when
the Fed began its temporary and indirect supply of reserves to
the banking system.
The cocoa buffer stock rules just
decided by the International Cocoa Organization, ICCO, council
will take effect immediately, delegates said.
That means the buffer stock manager is likely to begin
buying cocoa within two or three weeks, after organizing
communication systems and assessing the market, they said.
Jamaica bought U.S. corn, wheat and
rice at its tender earlier this week using PL-480 funds, a U.S.
Department of Agriculture official said.
The purchase consisted of the following cargoes -
- Cargill sold 1,503.5 tonnes of number two soft red winter
(SRW) wheat for May 5/30 shipment at 117.44 dlrs per tonne FOB
Gulf ports.
- Continental Grain 8,250 tonnes of number two northern
spring/dark northern spring (NS/DNS) wheat (14.5 pct protein)
for April 15/May 10 at 123.97 dlrs FOB Gulf, excluding
Brownsville.
- Nichemen 10,000 tonnes number two SRW wheat for June 12/July
7 at 103.43 dlrs FOB Gulf.
- Nichemen 10,000 tonnes number two NS/DNS wheat (14.0 pct
protein) for May 25/June 20 at 121.89 dlrs FOB Gulf.
- Cargill 10,000 tonnes number two SRW wheat for April 10/May
5 at 120.88 dlrs FOB Gulf.
- Cargill 8,469.5 tonnes number two SRW wheat for May 5/30 at
117.44 dlrs FOB Gulf.
- Louis Dreyfus 4,500 tonnes number three yellow corn (15.0
pct maximum moisture) for April 10/May 5 at 76.09 dlrs FOB
Gulf.
- Louis Dreyfus 5,300 tonnes same corn April 20/May 15 at
75.89 dlrs FOB Gulf.
- Louis Dreyfus 5,300 tonnes same corn May 10/June 5 at 75.49
dlrs FOB Gulf.
- Louis Dreyfus 5,300 tonnes same corn June 1/25 at 75.49 dlrs
FOB Gulf.
- Loius Dreyfus 3,700 tonnes number two yellow corn (14.5 pct
maximum moisture) for Apirl 10/May 5 at 76.29 dlrs FOB Gulf.
- Louis Dreyfus 3,700 tonnes same corn for May 10/June 5 at
75.68 dlrs FOB Gulf.
Exporters have not received final PL-480 approval on their
sale of a total of 9,500 tonnes of U.S. number five or better
long grain brown rice (10 pct maximum broken) for April 10/May
25 shipments.
But the USDA official said he saw no hold-up in obtaining
that approval.
LSB Industries Inc said it
entered into an agreement to acquire Northwest Federal Savings
and Loan Association of Woodward, Oklahoma.
Upon completion of the acquisition, LSB would pay about 1.5
mln dlrs to the shareholders of Northwest and transfer to
Northwest Federal certain assets having a net current appraised
value of not less than 30 mln dlrs.
At completion of this transaction, Northwest Federal would
be a subsidiary of LSB's non-consolidated wholly-owned
financial subsidiary.
The acquisition is subject to obtaining approvals, waivers
and forbearances from the Federal Home Loan Bank Board and
other government approvals.
Corning Glass Works said it
bought a 50 pct interest in Technology Dynamics Inc, a
Woodinville, Wash., company involved in research and
development of fiber-optic sensors.
The purchase price was not disclosed.
Privately held Technology Dynamics plans to introduce its
first line of fiber-optic sensors later this year, Corning
Glass said.
Japanese computer chip makers reacted
angrily to news the United States plans to take retaliatory
action against them for allegedly failing to live up to an
agreement on trade in computer microchips.
Electronic Industries Association of Japan (EIAJ) Chairman
Shoichi Saba stated: "EIAJ believes that it is premature and
even irrational to attempt an assessment of the impact of the
agreement and our efforts to comply with it only six months
after concluding the agreement."
"We urge U.S. Governmental authorities to reconsider the
decision made, to evaluate fairly the results of Japanese
efforts in implementing the objectives of the agreement, and to
resist emotional biases," he said.
Yesterday, Washington announced plans to slap as much as
300 mln dlrs in tariffs on Japanese imports in retaliation for
what is sees as Japan's failure to comply with the terms of the
pact.
The agreement, struck late last year after months of heated
negotiations, called on Japan to stop selling cut-price chips
on world markets and to buy more American-made semiconductors.
To salvage the pact, Tokyo has instructed its chip makers
to slash production and has helped establish a multi-lateral
organisation designed to promote chip imports.
Saba said that Japanese chip companies have pledged three
mln dlrs over the next five years to the new organisation and
expressed regret that no American company has seen fit to join.
"This suggests that American semiconductor manufacturers may
not be really interested in participating in the Japanese
market," he said.
A senior Nicaraguan official said a
recent plunge in coffee prices was economically and politically
disastrous for Latin American coffee-producing countries.
Nicaraguan Foreign Trade Minister Alejandro Martinez Cuenca
was in London to brief International Coffee Organisation (ICO)
executive board producer members after a meeting last weekend
in Managua attended by eight Latin American coffee producers to
discuss the fall in coffee prices.
London coffee prices slid 300 stg per tonne in March, to
1,279 stg from 1,580 stg at end-February.
Martinez told reporters the price fall since the ICO failed
to agree export quotas on March 1 has had disastrous results on
Latin America, both economically and politically.
He urged continued negotiations among coffee producers to
pave the way for a coffee export quota agreement by September.
Coffee export quotas, used to regulate coffee prices under
an International Coffee Agreement, were suspended a year ago
when prices soared in response to a drought in Brazil.
Central American economic ministers have estimated the
region will lose 720 mln dlrs in foreign exchange earnings in
1987 if coffee prices are not rescued by a quota arrangement,
Martinez said.
He said ICO quota talks broke down last month because
consumer members lack the political will to fully support
commodity agreements, and because consumers tried to dictate to
producers.
U.S. roastings of green coffee in the
week ended March 21 were about 250,000 (60-kilo) bags,
including that used for soluble production, compared with
195,000 bags in the corresponding week of last year and about
300,000 bags in the week ended March 14, George Gordon Paton
and Co Inc reported.
It said cumulative roastings for calendar 1987 now total
3,845,000 bags, compared with 4,070,000 bags by this time last
year.
French retail prices rose a confirmed 0.2
pct in February, in line with provisional figures released two
weeks ago showing a rise of between 0.1 and 0.2 pct, the
National Statistics Institute said.
The rise compared with a 0.9 pct rise in January.
Year-on-year retail price inflation was confirmed at 3.4
pct for February compared with a three pct rise year-on-year in
January.
Singapore's M-1 money supply rose
2.7 pct in January to 10.09 billion Singapore dlrs after a 3.7
pct increase in December, the Monetary Authority of Singapore
said.
Year on year, M-1 grew by 15.6 pct in January compared with
an 11.8 pct growth in December.
The January rise was largely seasonal, reflecting an
increase in currency in active circulation prior to the Lunar
New Year. Currency in active circulation rose to 5.42 billion
dlrs from 5.03 billion in December and 4.84 billion a year ago.
The demand deposit component of M-1 dropped in January by
4.67 billion dlrs from 4.79 billion in December and compared
with 3.89 billion in January, 1986.
Broadly-based M-2 money supply rose 1.1 pct to 31.30
billion dlrs in January, after a 1.6 pct rise in December,
bringing year on year growth to 12.1 pct in January against
10.0 pct in the previous month.
The Bundesbank did not intervene as
the dollar was fixed lower at 1.8063 marks after 1.8231 on
Friday, dealers said.
Business calmed down after a hectic start, with European
operators sidelined because of uncertainty about the short-term
direction of the dollar, dealers said. "At the moment, all the
action is taking place in New York and Tokyo," one said.
The U.S. Currency traded within a 145 basis point range in
Europe, touching a low of 1.7940 and a high of 1.8085 marks.
But it remained within a narrow 40 basis point span around
1.8050 marks after the first hour of European trading.
Comments by Japanese officials and Bank of Japan dollar
support had pushed it above 145 yen and 1.80 marks after
falling as low as 144.50 and 1.7860 respectively in Tokyo.
The green coffee market saw some demand
for high quality coffees in the past week, but business was
described as generally unsatisfactory, trade sources said.
Especially sought were spot East African and Ethiopian and
some Brazils, they said, adding that some high grade robustas
also met some demand.
Sporadic business was noted in the second hand which
offered Kenya coffee for May/June shipment up to 25 dlrs below
origin levels.
Roasters are said to be well covered and are not expected
to enter the market for larger purchases in the near term.
Bank of Japan governor Satoshi Sumita
said he does not expect the dollar to remain unstable and fall
further.
He told a Lower House Budget Committee in Parliament that
the Bank of Japan would continue to cooperate closely with
other major nations to stabilize exchange rates.
The central bank has been keeping extremely careful watch
on exchange rate movements since last week, he said.
He said the dollar would not continue to fall because of
underlying market concern about the rapid rise of the yen.
Sumita said the currency market has been reacting to
overseas statements and to trade tension between Japan and the
U.S. over semiconductors.
The yen's tendency to rise will prevent Japan from
expanding domestic demand and undertaking necessary economic
restructuring, he said.
The Philippines and the World Bank have
signed a 300 mln dlr loan and 10 mln dlr worth of technical
assistance to help Manila in its economic recovery efforts,
bank officials said .
The loan, to be disbursed in three equal tranches, is
repayable over 20 years, including a five-year grace period,
with a variable interest rate, currently at 7.92 pct.
The loan was signed by Finance Minister Jaime Ongpin and A.
Karasmasoglu, World Bank vice-president for East Asia and the
Pacific. Ongpin said the first tranche of 100 mln dlrs was
expected within a month.
Yugoslav trade is declining rapidly
this year in hard currency terms, according to the latest
Federal Statistics Office (FSO) figures.
The FSO figures showed total exports from January 1 to
March 23 valued at 875.59 billion dinars, compared with 667.18
billion dinars in the same period last year.
These figures were down by 12.5 pct on last year in dollar
terms due to exchange rate fluctuations and changes in how the
figures were calculated, FSO sources said.
This year current exchange rates were used for the first
time instead of a fixed rate of 24.53 dinars to the dollar.
BELGRADE, March 30 - Yugoslav trade is declining rapidly
this year in hard currency terms, according to the latest
Federal Statistics Office (FSO) figures.
The FSO figures showed total exports from January 1 to
March 23 valued at 875.59 billion dinars, compared with 667.18
billion dinars in the same period last year.
These figures were down by 12.5 pct on last year in dollar
terms due to exchange rate fluctuations and changes in how the
figures were calculated, FSO sources said.
This year current exchange rates were used for the first
time instead of a fixed rate of 24.53 dinars to the dollar.
Biogen NV said as part of a
program to reduce expenses, it is in talks on the sale of its
Geneva, Switzerland operations.
The company gave no details.
The United States does not expect
the executive board meeting of the International Coffee
Organization, ICO, to call for a new round of negotiations on
reinstating coffee quotas, a U.S. government official said.
The official, a member of the U.S. delegation to ICO talks
earlier this year, said no new coffee agreement talks are
expected because there is no indication the negotiating
positions of major producers and consumers have changed.
The U.S. still demands, as a condition of reimposition of
coffee quotas, that "objective criteria" be set for
establishing quotas, said the U.S. official, who asked not to
be identified. Brazil, the major producer, insists on quotas
based on a traditional formula.
The U.S. remains open to a negotiating meeting but only if
some new flexibility is apparent from major countries, the
official said.
The ICO executive board meets tomorrow in London.
Shr 22 cts vs 16 cts
Net 2,460,000 vs 1,730,000
Sales 37.0 mln vs 27.3 mln
NOTE: Share adjusted for two-for-one stock split in
February 1987.
Louisiana Pacific Corp said it
reached a non-binding agreement in principle to buy a gypsum
wallboard plant in Seattle from Norwest Gypsum.
Purchase price and other details of the agreement were not
disclosed.
Nobel Industries Sweden SA
Chances that the International Coffee
Organization, ICO, executive board meeting this week will agree
to resume negotiations on export quotas soon look remote, ICO
delegates and trade sources said.
ICO observers doubted Brazil or key consuming countries are
ready to give sufficient ground to convince the other side that
reopening negotiations again would be worthwhile, they said.
ICO talks on quotas last month broke down after eight days
when producers and consumers failed to reach agreement.
"Since we have not seen signs of change in other positions,
it's difficult to see a positive outcome at this stage,"
Brazilian delegate Lindenberg Sette said. But quotas must be
negotiated sometime, he said.
The U.S. has indicated it is open to dialogue on quotas
but that Brazil must be flexible, rather than refuse to lower
its export share as it did in the last negotiations, delegates
said.
At this week's March 31-April 2 meeting, the 16-member ICO
board is scheduled to discuss the current market situation, the
reintroduction of quotas, verification of stocks and some
administrative matters, according to a draft agenda.
The fact that Brazilian Coffee Institute president Jorio
Dauster, Assistant U.S. Trade Representative Jon Rosenbaum and
chief Colombian delegate Jorge Cardenas are not attending the
meeting has signalled to most market watchers that it will be a
non-event as far as negotiating quotas is concerned.
"I would imagine there will be a lot of politicking among
producers behind closed doors to work up some kind of proposal
by September (the next scheduled council meeting)," Bronwyn
Curtis of Landell Mills Commodities Studies said.
Traders and delegates said they have seen no sign that a
date will be set for an earlier council meeting.
If the stalemate continues much longer, analysts expect the
coffee agreement will end up operating without quotas for the
remainder of its life, to September 30, 1989.
When talks broke down, the U.S. and Brazil, the largest
coffee consumer and producer respectively, blamed one another
for sabotaging negotiations by refusing to compromise.
Brazil wanted to maintain the previous export quota shares,
under which it was allocated 30 pct of world coffee exports,
but consumers and a small group of producers pressed for shares
to be redistributed using "objective criteria," which would have
threatened Brazil's share.
At a recent meeting in Managua of Latin American producers,
Costa Rica and Honduras said they were willing to put their
objections as members of the group of eight ICO "dissident"
producers aside, in order to stem the damaging decline in
prices, Nicaraguan External Trade Minister Alejandro Martinez
Cuenca told reporters Saturday. He was in London to brief
producers on the Managua meeting.
However, other producers said they were not aware of this
move toward producer solidarity.
London coffee prices closed at 1,276 stg a tonne today,
down from around 1,550 at the beginning of March.
A group of firms and funds
controlled by New York investor Mario Gabelli said it has
acquired the equivalent of 882,507 shares of Allegheny
International, or 8.0 pct of the total outstanding.
In a filing with the Securities and Exchange Commission,
the Gabelli group said it bought the stake as part of its
business and not in an effort to seek control of the company.
It said it may by more shares or sell some or all of its
current stake. The stake includes 782,000 common shares and
cumulative convertible preferred stock which could be converted
into 100,507 common shares.
Floating-rate notes denominated in a
foreign currency, a relatively new wrinkle on Wall Street, will
probably be issued infrequently because the so-called "window
of opportunity" opens and closes quickly, traders say.
"In just two days we had as many issues. As a result, the
market became glutted," said one trader.
He said the window depends more on supply than on foreign
exchange or interest rate risk, at least for the moment.
"Obviously, currency risk is important. But there is a limited
number of investors right now for the paper," he said.
On Thursday, Bear, Stearns and Co sole-managed a 100 mln
New Zealand dlr offering of three-year floating-rate notes
issued by Ford Motor Credit Co, a unit of Ford Motor Co
An investor group controlled by New
York Investor David Rocker told the Securities and Exchange
Commission it has acquired 291,400 shares of Circle Express
Inc, or 6.1 pct of the total outstanding common stock.
The group, Rocker Partners Ltd and Compass Investments Ltd,
said it bought the stake for investment purposes and not as
part of an effort to seek control of the company.
The Brazilian Coffee Institute,
IBC, is expected to maintain its previous pricing system when
it reopens export registrations, probably later this week,
exporters said.
They said IBC President Jorio Dauster is likely to leave
the basic formula for the minimum registration price unchanged
but raise the contribution quota to partially offset the
effects of cruzado devaluation since April registrations were
closed in mid-February.
To fully compensate for devaluation the quota would have to
be around 28 dlrs per bag against 7.0 when registrations closed.
However, even a 21 dlr per bag rise in the contribution
quota would make Brazil coffees uncompetitive on world markets,
and an increase to around 15 dlrs a bag is more likely, the
exporters said.
They added that Dauster is keen to raise the contribution
quota as the Institute needs money to repay Central Governmnet
funds released to finance IBC purchases at the guaranteed
producer price.
Although a vote in the Monetary Council to provide more
funds for such purchases was deferred on technical grounds last
week, funds are still being released for subsequent approval.
The sources said it is still unclear when registrations
will be reopened, although most expect it to be by the end of
this week.
"Brazil owes it to its customers to make its intentions
know. A country like Brazil cannot afford to be permanently
closed down," one exporter said.
However, before announcing its export policy the IBC is
likely to wait to see if tomorrow's meeting of the
International Coffee Organisation, ICO, executive board in
London decides to call a full council meeting to discuss
reintroduction of export quotas, sources said.
There is also talk of the announcement this week of new
measures to adjust the Brazilian economy, and the IBC could be
awaiting clarification before making any move, the exporters
said.
Another factor which could be delaying the opening of
registrations is the current strike by bank workers which,
while not affecting current shipments, could affect
documentation and currency operations for new sales.
This would certainly be the case if the IBC was considering
obliging exporters to pay the contribution quota within two or
three days of registering a sale.
Shr loss 67 cts vs profit 60 cts
Net loss 1,398,000 vs profit 1,250,000
Revs 8,834,000 vs 20.9 mln
Year
Shr loss 2.81 dlrs vs loss 15 cts
Net loss 5,864,000 vs loss 310,000
Revs 52.1 mln vs 82.7 mln
Shr profit 32 cts vs profit eight cts
Net profit 936,000 vs profit 249,000
Revs 348,000 vs 1,150,000
Year
Shr loss 2.15 dlrs vs loss 19 cts
Net loss 6,095,000 vs loss 469,000
Revs 1,554,000 vs 4,254,000
NOTE: Results include credits of 556,000 and 1,141,000 for
the latest qtr and yr vs 112,000 and 656,000 for prior periods
from tax loss carryforwards.
Results include after-tax gains of 567,000 for both 1986
periods vs loss of 45,000 for prior periods on disposal of
discontinued operations.
Prior periods restated to reflect sale of discontinued
operations.
Shr loss nine cts vs profit 20 cts
Net loss 257,157 vs profit 414,890
Year
Shr profit 54 cts vs profit 1.05 dlrs
Net profit 1,295,104 vs profit 2,140,673
Ball Corp said it was unable to
complete negotiations to acquire the plastic container business
of Monsanto Co.
It said the two companies had entered into exclusive
negotiations last October.
Neither company provided details on why the talks were
terminated.
Treasury balances at the Federal
Reserve fell on March 27 to 2.424 billion dlrs from 2.508
billion dlrs on the previous business day, the Treasury said in
its latest budget statement.
Balances in tax and loan note accounts fell to 9.706
billion dlrs from 10.786 billion dlrs on the same respective
days.
The Treasury's operating cash balance totaled 12.131
billion dlrs on March 27 compared with 13.283 billion dlrs on
March 26.
Florida's citrus groves continue
in very good condition, acccording to the latest report by the
U.S. Department of Agriculture's Florida Agricultural
Statistics Service. Late-week rains and thunderstorms came at
an opportune time. Warm daytime temperatures and good soil
moisture have produced an abundance of new growth and bloom.
Most trees are in some stage of bloom development with
petal drop already taking place in many south Florida groves.
Harvest of late-type valencia oranges is increasing rapidly
with the near completion of the early and midseason varieties.
Rain during the week caused some delay in picking.
For the week ended March 29, there were an estimated 77,000
boxes of early and midseason and 945,000 boxes of late season
oranges harvested, the USDA said.
Inland Vacuum Inc said is
board proposed a two-for-one stock split payable to
shareholders of record April 30.
The board also elected Phillip Frost chairman, succeeding
John Durkin, who remains president and chief executive officer.
Frost in early February bought 49 pct of the company, Durkin
said.
Stockholders at the annual meeting approved a measure to
change the company's name to IVACO Industries Inc. Five new
directors were also elected to the company's board. Durkin was
re-elected to the board, the company said.
The Oklahoma weekly USDA crop
report said cold weather slowed crop development and caused
some cattle deaths.
Wheat growth was halted by cold weather, and rain early in
the week prevented fertilizer application and weed spraying.
Fields in the west were short of nitrogen, and moderate insect
activity was noted in the southwest region.
Wheat condition was rated 15 pct fair, 84 pct good and one
pct excellent.
Row crop activity was very slow amid wet conditions.
Topsoil moisture was rated 30 pct adequate and 70 pct surplus,
and subsoil moisture was rated 100 pct adequate. Only two days
were suitable for fieldwork.
The Venezuela Guayana Corporation, CVG,
which oversees the state steel, iron, aluminum and other
industries, will invest 75 billion bolivars in new projects
during 1987-89, CVG president Leopoldo Sucre Figarella
announced.
The investments will go to plant expansion, infrastructure
and the extension of hydroelectric facilities in the
mineral-rich Guayana region, south of the Orinoco river.
Sucre Figarella told a news conference the CVG's 12
companies showed an overall increase of 120 pct in profits,
which rose from 1.732 billion bolivars in 1985 to 3.926 billion
bolivars last year.
Among the best performers was steel company Sidor which
earned 1.019 billion bolivars, the first time since 1978 Sidor
turned a profit.
The gain was made possible in part by the refinancing of
1.619 mln dollars of foreign debt.
CVG's three aluminum companies also showed substantial
gains. Interalumina, which makes the intermediate material
alumina, had an increase in profits from 116 to 217 mln
bolivars, Alcasa earned 487 mln bolivars, as compared to 1985's
412 mln and Venalum's profits rose by around half, from 1.042
to 1.504 bln bolivars.
Meanwhile, the state iron company Ferrominera saw its
profits rise from 156 mln bolivars in 1985 to 204 mln bolivars
last year.
Amfac Inc said it entered an
agreement to sell the last remaining store of its original
Liberty House of California operation to H and S - San Mateo
Inc.
Terms were not disclosed.
Qtr ended Nov 30
Shr loss nil vs profit nil
Net loss 1,321,940 vs profit 128,164
Revs 4,582,260 vs 5,115,456
China and the European Community (EC)
signed an agreement on the establishment of an EC office here.
Chinese vice-foreign minister Zhou Nan and the EC's
external relations commissioner, Willy De Clercq, signed the
accord. EC sources said the office was likely to open in the
second half of this year.
In 1986 the EC was China's third largest trading partner,
with Chinese imports from the EC worth 5.7 billion dlrs and
exports worth 2.6 billion dlrs.
De Clercq told the official China Daily that more joint
ventures should be set up in China as a way of reducing China's
trade deficit with the EC.
The EC's affairs in China are currently looked after by
whichever country holds the group's six-monthly rotating
presidency, now held by the Belgians until the Danes take over
in July.
CSR Ltd
India cut the export duty on coffee
to 330 rupees per 100 kg from 600 rupees, effective March 23, a
Coffee Board official said.
The reduction should help India reach its coffee export
target of 90,000 tonnes in fiscal 1987/88 ending March 31,
against provisionally estimated exports of 75,000 tonnes in
1986/87 and an actual 99,254 tonnes in 1985/86, he said.
India is likely to press for international export quotas at
a meeting of coffee producers in London this week because of
depressed prices, he added.
The International Coffee Organisation, which represents
both consumers and producers, has so far failed to reach
agreement on quotas.
India feels it will be useful to have quotas now because
the slide in prices is unlikely to be halted immediately, he
said.
Export quotas were suspended in February 1986 when market
prices surged after a drought devastated Brazil's coffee crop.
World closing stocks of primary zinc
at smelters, excluding Eastern Bloc countries, fell 7,700
tonnes in February to 459,100 tonnes from 466,800 (revised from
449,600) in January, compared with 403,700 in February 1986,
provisional European Zinc Institute figures show.
February closing stocks of primary zinc at European
smelters, excluding Yugoslavia, fell 4,500 tonnes to 160,000
from 164,500 (revised from 164,300) in January, compared with
126,700 in February 1986.
Total world zinc production, excluding Eastern Bloc
countries, fell to 390,800 tonnes in February from 419,900
(revised from 419,600) in January. February 1986 production was
378,600 tonnes.
European zinc production, including estimates for
Yugoslavia, fell to 152,900 tonnes in February from 164,200 in
January, compared with 156,400 in February 1986.
The Bank of England said it had provided
the money market with 1.143 billion mln stg assistance in
response to an early round of bill offers from the discount
houses.
Earlier, the Bank forecast the system would face a very
large deficit today of around 1.75 billion stg.
The central bank purchased bank bills outright comprising
393 mln stg in band one at 9-7/8 pct, 649 mln stg in band two
at 9-13/16 pct and 85 mln stg in band three at 9-3/4 pct.
In addition it bought 16 mln stg of local authority bills
in band two at 9-13/16 pct.
Rainfall in the past few days has eased
the threat of drought in the south China province of Guangdong,
the New China News Agency said.
It said 75 pct of early rice fields are ready to be planted
and seedlings have already been transplanted on 90 pct of rice
fields in Hainan island. Some 840,000 hectares of farmland have
been planted with cash crops including sugar cane, peanuts and
soybeans, 67,000 ha more than in 1986.
The provincial government has increased investment in grain
and taken effective measures to combat natural disasters this
year, the agency said, but gave no further details.
Consuming countries, chastened by the
collapse of International Tin Council (ITC) price support
operations in 1985, are insisting more than ever before that
commodity pacts reflect the reality of the markets they are
serving, a Reuter survey showed.
They want price ranges to be more responsive to market
trends - to avoid overstimulating output and straining the
accords' support operations - and intervention rules that avoid
the risk of exports by non-members undermining the pacts.
Consumers and producers, mindful of ITC buffer stock losses,
have also sought strict conditions for buffer operations.
Importers and some key exporting countries have shunned a
generalised approach to commodity price stabilisation and
prefer to assess each commodity case by case, the survey
showed.
The International Cocoa Organization (ICCO) last week set
precise limits on what the Buffer Stock Manager (BSM) could do
under the new agreement. It imposed daily and weekly purchase
limits, prohibited the BSM from operating on futures markets
and stipulated, after consumer insistence, that up to 15 pct of
total buffer stock purchases could be of non-member cocoa. This
will help prevent lower quality cocoa from Malaysia, the
world's fourth largest producer, undermining the market.
The cocoa pact establishes precise differentials the Buffer
Stock Manager must use when purchasing varying grades.
A new International Natural Rubber Agreement (INRA) was
adopted earlier this month in Geneva. Importing and exporting
countries agreed several changes to make the reference price
more responsive to market trends and they eliminated provisions
under which the buffer stock could borrow from banks to finance
operations. Direct cash contributions from members will fund
buffer stock purchases. Bank financing was a particular feature
of the failed ITC buffer stock which suffered losses running
into hundreds of millions of sterling. Legal wrangles continue.
Recent International Coffee Organization (ICO) negotiations
in London exemplified the degree to which consumers insist that
agreements reflect market reality, commodity analysts said.
Consumers and a small group of producers argued that
"objective criteria" should be used to define export quota
shares, which would have meant a reduction in the share of
Brazil, the world's leading producer. Brazil wanted to maintain
its previous quota share of 30 pct. The talks broke down and,
although an ICO executive board meeting starts in London today,
delegates and trade sources see chances of any near term
negotiations on export quota distribution as remote.
International agreements exist for sugar and wheat. These
do not have any economic clauses but provide a forum for
discussions on possible future economic agreements, collect
statistics and draw up market analyses. Analysts said
differences between sugar exporting countries have held up any
progress towards an accord with economic teeth, while sheer
competition between major exporters amid a world grain glut
militate against any pact with economic provisions for wheat.
An alternative focus for commodity discussions are
international study groups, made up of governments with advice
from industry, such as those for lead and zinc and rubber.
The U.N. Common fund for commodities, with a planned
directly contributed capital of 470 mln dlrs, has failed to
become operational because neither the U.S. Nor the Soviet
Union has ratified it. U.S. Officials in Washington said the
U.S. Doubts the fund would be able to fulfil its objectives,
citing the lack of widespread support.
U.S. Officials in Washington and Malaysian officials in
Kuala Lumpur expressed a policy of looking at each commodity
pact case by case. U.S. Officials said it has been willing to
study individual cases for economically sound, market-oriented
commodity accords balancing producer and consumer interests.
"We see little to be gained by attempting to increase the
price of a commodity whose long-term trend is downward,"
official Administration policy states. The U.S. Currently
belongs to only two international commodity agreements that
have economic clauses - the International Coffee Agreement
(ICA) and INRA - but it is also a member of the sugar and wheat
pacts.
The U.S. Did not join the International Cocoa Agreement
because it considered its proposed price ranges unrealistic and
not designed to protect the interests of consuming countries,
the State Department said. U.S. Officials singled out the INRA
as the one commodity agreement that seems to be working.
U.S. Negotiators were successful in getting other members
of the pact to agree that the price review and adjustment
mechanism of the rubber agreement would accurately reflect
market trends and also to continue the accord as a market
oriented agreement, U.S. Officials said.
Canadian officials in Ottawa also said they have
consistently tried to look at membership of commodity pacts on
the merits of each case. Malaysian Primary Industries Minister
Lim Keng Yaik told Reuters in Kuala Lumpur his country, the
world's top producer of rubber, tin and palm oil, decides its
participation in international commodity pacts case by case.
Malaysia is a member of the Association of Tin Producing
Countries (ATPC) which produce 65 pct of world tin. The ATPC
launched a plan to limit member tin exports to 96,000 tonnes
for a year from March to cut the tin surplus to 50,000 from
70,000.
Economist in the West German Ministry of Agriculture and
delegate to cocoa, wheat and sugar agreements Peter Baron told
Reuters in London, "Agreements with economic clauses to
stabilise prices could function if fixed price ranges were
close to market reality, if there was full participation by
producers and consumers, and if participants were prepared to
take their obligations in the framework of the agreement
seriously."
But Baron added, "No real sanctions are available for a
country that doesn't stick to its obligations...The German
approach is sceptical. We don't think agreements are the best
instrument to help developing countries. They were never meant
to be a vehicle for the transfer of resources and that is how
developing countries often interpret them."
Traditionally Britain has always been supportive of
commodity agreements, reflecting its strong links with Third
World producing countries. But recently demands for more
stringent and justifiable pacts with emphasis placed on the
need for "intellectual honesty" and "objective criteria" have
grown.
British officials stress the need for commodity pacts to be
a two way partnership in trade rather than a disguise for aid.
It is now seen as essential that any pacts involving direct
market participation through a buffer stock have a high degree
of transparency and do not contain the risk of open-ended
borrowing that occurred in the tin pact, they said. U.K.
Delegates talk of stabilisation and the need for prices to
reflect changes in market structure and price trends rather
than dictate what prices should be.
A Foreign Ministry official in Tokyo said Japan urges price
realism in commodity pacts, adding high prices inflate supply.
A government spokesman in Paris said France is favourable
to commodity pacts. France, a large consumer and producer of
sugar, favours a sugar pact as long as it reflects the real
market situation, particularly regarding stocks.
Indonesia's Foreign Minister Mochtar Kusumaatmadja told
Reuters in Jakarta: "These agreements can work as long as the
problems are cyclical..But it's another matter when there are
structural problems..But we are still committed to commodity
agreements as an act of faith." Nicaraguan External Trade
Minister Alejandro Martinez Cuenca said in London producers
cannot afford not to give their backing to commodity
agreements.
"The political will is not there on the part of some
consumers to make agreements work," Martinez Cuenca said.
The head of the economics department in the Brazilian
Foreign Ministry, Sebastiao do Rego Barros, told Reuters an
agreement can be successful if it keeps a link with market
reality. If you have an agreement such as coffee with a system
of quotas, with a link between prices practised inside the pact
and actual market prices, it can work. UNCTAD spokesman Graham
Shanley said consuming countries realise steady export earnings
enhance developing countries' ability to service debt and mean
greater demand for industrialised nations' capital goods.
Leading domestic semiconductor makers
will boost imports and cut production of key memory microchips
from next month in line with government attempts to ward off
U.S. Trade sanctions, company spokesmen said.
The moves might persuade the U.S. To call off the
sanctions, despite obstacles to full implementation of the
plans, analysts said.
The tariffs will affect about 300 mln dlrs worth of
products and are in retaliation for Japan's alleged failure to
honour a semiconductor trade pact.
In announcing the sanctions last Friday, President Reagan
said Japan had not fulfilled its promise to halt predatory
pricing and open Japan's market to foreign products.
But U.S. Trade representative Clayton Yeutter said
yesterday on U.S. Television that the U.S. Is willing to drop
the tariffs if Japan shows a "clear indication" that it will open
its markets to U.S. Goods.
The Ministry of International Trade and Industry (MITI) has
urged producers to slash output of the chips by 11 pct in the
second quarter, following a call to reduce production by more
than 20 pct the previous quarter.
MITI also urged makers to boost chip imports.
Analysts said the moves could encourage Washington to
cancel the tariffs ahead of next month's meeting between Prime
Minister Yasuhiro Nakasone and President Reagan.
"The U.S. Wants to be satisfied. It has rattled its sword
and shown that it can and will do business," said analyst Nick
Edwards at Jardine Fleming Securities Ltd in Tokyo.
But analysts cautioned that although Japanese producers can
cut output, boosting imports -- the key to U.S. Withdrawal of
the sanctions -- is more difficult.
"The U.S. Does not have the low-end consumer IC's
(integrated circuits) that the Japanese need for consumer
products. They're well supplied here," said Richard May, senior
analyst at Barclays de Zoete Wedd Ltd in Tokyo.
The U.S. Leads in production of medium and high-end IC's,
but Japanese makers are keen to develop their own high-end
production skills, the analysts said.
"The Japanese must be prepared to trade some losses on
semiconductors in return for free access to other areas," said
Edwards.
A spokesman for Hitachi Ltd
The proceeds from yesterday's 100 mln
dlr equity warrant for Kansallis-Osake-Pankki (K-O-P) will
probably be swapped into floating rate dollars once the final
terms have been set for the deal, executive vice-president
Erkki Karmila told a press conference.
The seven-year issue has an indicated coupon of 4-1/8 to
4-5/8 pct and is priced at par. Final terms will be set on
April 7.
Karmila said that in the short term K-O-P did not need
additional capital funds but the issue "gives us access to
attractive funds."
Year 1986
Div 7.0p vs 12.2p
Shr 9.6p vs 31.3p
Pretax profit 4.4 mln stg vs 118.0 mln
Net 17.6 mln vs 37.7 mln
Total turnover 183.8 mln vs 348.0
Amortisation 71.4 mln vs 86.3
Traded oil purchases 41.2 mln vs 44.5 mln Administration
expenses 6.2 mln vs 8.0 mln
Net interest payable 6.4 mln vs 4.8 mln
Related company's credit 6.1 mln vs nil
One or two large West German banks
effectively drained the domestic money market of liquidity at
the end of the month in order to achieve higher rates from
their overnight deposits, money dealers said.
As a result, call money soared in active trading to around
the Lombard rate of five pct from 3.70/80 pct yesterday as
banks found themselves short of minimum reserve funds.
Bundesbank figures showed that banks held an average daily
51 billion marks in interest-free minimum reserve assets at the
central bank over the first 29 days of the month.
Though this was above the March requirement of 50.7
billion, actual holdings at the weekend were 44.2 billion.
To meet the daily average, dealers said, banks must raise
holdings by two billion marks to 46.3 billion today and
tomorrow. But liquidity was tight in early business because
banks excessively took up the Bundesbank's offer for sale of
Treasury bills on Friday. This provides a rate of 3.50 pct for
three-day deposits and is an effective floor to the market.
Though some liquidity, from bills bought on Thursday,
flowed back into the market today, the bulk would not return
until tomorrow, the start of the new month, dealers said.
Dealers said the large banks, which they did not name,
commanded short-term money requirements of as much as five
billion marks or so.
With a knowledge of their own needs until the end of the
month, the banks bought excessive amounts of treasury bills,
draining liquidity for three days. When other banks sought
funds, rates rose and large banks were able to place excess
funds on deposit at a considerably higher average return.
One senior dealer said the Bundesbank, with advanced
knowledge of the market's needs, should have curtailed its
sales of treasury bills on Friday.
Though dealers only late in the day learn of the total
minimum reserve holdings of the previous day, the Bundesbank
has an immediate overview of the situation and could anticipate
the strength of demand for funds the following day, he said.
"(Bundesbank dealers) could easily have said we are not
selling any treasury bills or we're not selling them in this
amount," he said. "If the Bundesbank wants to finely steer the
market then they should avoid such excesses. Tomorrow it will
be different. Call money will fall back to 4.0 pct or so."
But the Bundesbank would not approve of the sharp jump in
rates, given the delicate state of currency markets.
International central banks have been at pains to prevent a
dollar fall against major currencies, including the mark.
Dealers said a rise in call money gives the mark a firmer
undertone, contributing to downward pressure on the dollar.
"The whole tender policy is to have a call money of between
three and four pct. In that case the excesses as we have today
cannot be very popular," the senior dealer said.
Dealers said the large banks probably achieved average
rates of return on their excess funds of between 3.75 pct or
four pct. This is a higher return than they would have earned
without the excessive draining through the treasury bill
mechanism.
Because of the currency situation and the wage negotiations
between Germany's major employers and the unions, the
Bundesbank would be very unlikely to make any changes to
monetary policy at its council meeting on Thursday, they said.
Bundesbank figures showed that banks fell back on the
Lombard emergency funding facility to draw down 1.5 billion
marks yesterday as rates began to tighten in late business.
CSR Ltd
The Bank of Japan will sell tomorrow a
total of 800 billion yen worth of financing bills from its
holdings to help absorb a projected money market surplus of
1,700 billion yen, money traders said.
Of the total, 300 billion yen will yield 3.8992 pct on
sales from money houses to banks and securities houses in a
23-day repurchase accord maturing on April 24.
The remaining 500 billion yen will yield 3.8990 pct in a
31-day repurchase pact maturing on May 2, they said.
The repurchase agreement yields compare with the 3.8750 pct
one-month commercial bill discount rate today and the 4.28/11
pct rate on one-month certificates of deposit.
Tomorrow's surplus is attributable to excess bank holdings
from sales of yen to buy dollars and to huge cash amounts to be
redeposited at banks after the current financial year-end
today, the traders said.
The operation will put the outstanding bill supply at about
3,200 billion yen.
General Motors Acceptance Corp (GMAC),
the financing arm of General Motors Corp of the U.S., Will
launch its planned one billion U.S. Dlr medium term note
program in the international capital markets on April 7, said
Wendy Dietz, a vice-president at Salomon Brothers Inc, New
York.
She told a conference here on medium term notes that GMAC
is looking to obtain as fine pricing on the paper as it does
with its program in the U.S.
The notes will be sold on a continuously offered basis, the
most popular structure so far in the U.S.
State-owned
General Acquisition Co said it was
disappointed by Gencorp's response to its tender offer and
asked how the company might give better value to shareholders.
Gencorp had earlier urged shareholders to reject a 100 dlr
per share tender offer from General Acquisition, an affiliate
of Wagner and Brown and AFG Industries Inc, and said it was
studying financially superior alternatives.
The General Acquisition partnership called the response
inflammatory and unproductive, particularly since it had tried
to discuss the offer with Gencorp.
The partnership said Gencorp failed to say how it would
provide a "superior value yet they continue their attempt to
prevent a satisfactory offer by failing to redeem their poison
pill." Poison pills are shareholder rights plans that make
takeovers more expensive.
Gencorp said in its statement earlier that it planned to
put off the date its rights will trade separately from the
common stock to April 6 from April 3. It said the extension was
subject to further extensions by the board and is conditional
on no person acquiring beneficial ownership of 20 pct or more
of Gencorp before April 6.
General Acquisition said it is confident its offer can be
completed in a timely manner using its financial arrangements.
The partnership in its statement again urged Gencorp
management to work with it to facilitate a transaction.
Japan's Minister of International Trade
and Industry, Hajime Tamura, will meet representatives from 151
of the nation's largest companies next week and appeal to them
to do their best to increase imports, ministry officials said.
The meeting was unveiled as part of a plan to boost imports
and help head off protectionist legislation in the U.S.
Senior officials from the Ministry of International Trade
and Industry told reporters that such personal appeals appeared
to have paid off in the past, as Japanese imports of
manufactured goods have climbed.
Leading domestic semiconductor makers will boost imports
and cut production of key memory microchips next month in an
attempt to help ward off U.S. Trade sanctions, company
spokesmen said.
The officials also said they expect the government's new
trade insurance law to boost imports and encourage Japanese
companies to set up production facilities overseas.
Under the new law, the government will insure Japanese
companies who pre-pay for imports against loss arising from
everything from war to bankruptcy of the foreign firm they are
dealing with. MITI estimated that it would help solve Japan's
trade problem to the tune of about $10 billion dlrs a year.
Executive board members of the
International Coffee Organization, ICO, passed over the issue
of export quota negotiations at its regular meeting here,
delegates said.
No move was made to reopen dialogue on export quotas and no
further discussion on the issue is likely during the three-day
talks, they said.
Producer and consumer members of the ICO council failed to
agree export quota shares in early March.
Neither Brazil, the largest producer, nor the U.S., the
largest consumer, are ready to be flexible, delegates said.
"The situation is unchanged," consumer spokesman Abraham Van
Overbeeke told reporters. "As long as Brazil sticks to its
position there will not be quotas -- there is no point in
meeting."
At the last council meeting, Brazil wanted to maintain its
previous quota share of around 30 pct of the market. Consumers
and a splinter group of eight producers favoured redistribution
of export shares using "objective criteria," which would likely
have reduced Brazil's share.
Brazilian delegate Lindenberg Sette said that, if quota
negotiations were to resume, the 1.0 mln bag shortfall Brazil
was willing to give up in early March if the producer proposal
was accepted would no longer be on the table.
"As we said from the start...No agreement, no one million
bags," he told Reuters.
Shortfalls of 200,000 bags offered by OAMCAF, the African
and Malagasy Coffee Organization, and 20,000 bags offered by
Angola, are also no longer valid, delegates said.
The closest the board came to discussing quotas was a
briefing by the Guatemalan ICO delegate Rene Montes on a recent
Latin American producers meeting in Managua, delegates said.
There, the producers expressed their political will to
negotiate basic quotas, particularly in the face of the
damaging drop in coffee prices after the council failed to
agree quotas, Montes said.
The ICO board also reviewed export statistics and stock
verification. They expected talks on stock verification to take
up the remainder of today's session, delegates said.
Esso Malaysia Bhd, a unit of Exxon
Corp of the U.S., Reported net profit of 70 mln ringgit from
its petroleum and ammonia operations in 1986 compared with 48.7
mln in 1985. Chairman Gerald F Cox said the improved
performance was mainly due to product prices falling more
slowly than crude prices during the year.
He added that total sales volume increased as a result of
higher offtake by affiliated companies, while inland market
sales were maintained at around the previous year's levels.
But growth prospects in 1987 remained weak and 1986 results
are unlikely to be repeated in the current financial year.
USAir Group Inc said it entered into
a credit agreement with a group of commercial banks to provide,
on a secured basis, up to two billion dlrs to finance its
pending acquisitions of Piedmont Aviation Inc
The Coffee, Sugar and Cocoa Exchange
has expanded the normal daily trading limit in Coffee "C"
contracts to 6.0 cents a lb, from the previous 4.0 cents,
effective today, the CSCE said.
The new daily limits apply to all but the two nearby
positions, currently May and July, which trade without limits.
In addition, the 6.0 cent limit can be increased to 9.0
cents a lb if the first two limited months both make limit
moves in the same direction for two consecutive sessions,
according to the CSCE announcement.
Before the rule change today, the CSCE required two days of
limit moves in the first three restricted contracts before
expanding the daily trading limit.
Under new guidelines, if the first two restricted
deliveries move the 6.0 cent limit for two days the Exchange
will expand the limit. The expanded 9.0 cent limit will remain
in effect until the settling prices on both of the first two
limited months has not moved by more than the normal 6.0 cent
limit for other contracts in two successive trading sessions,
the CSCE said.
Guatemala will host a meeting of other
milds coffee producers probably in May to discuss basic export
quotas, the Guatemalan delegate to the International Coffee
Organization, ICO, said.
No firm date has been set for the talks, Ambassador Rene
Montes told reporters at the ICO executive board meeting here.
Producer countries Brazil, Colombia, and a member of
OAMCAF, the African and Malagasy Coffee Organization, may also
be invited for consultation, he said.
ICO producers and consumers could not agree on how to
calculate export quota shares at a recent council meeting here.
Other milds coffee producers include Costa Rica, Dominican
Republic, Ecuador, El Salvador, Guatemala, Honduras, India,
Mexico, Nicaragua, Papua New Guinea, and Peru.
The Canadian industrial product price
index, base 1981, fell 0.2 pct in February after rising 0.2 pct
in January, Statistics Canada said.
"A significant part of this monthly decrease was
attributable to the impact of the increase of the Canadian
dollar on prices for wood pulps, newspaper, aluminum, nickel
and motor vehicles," the federal agency said.
On a year-over-year basis, the index was down 0.8 pct,
little change from the 0.9 pct decline posted in January.
The St Lawrence Seaway said the first
ship of the season passed through the St Lambert lock here this
morning, officially opening the 2,300-mile-long waterway's 1987
shipping season.
The seaway has said it expects little increase in freight
levels this year from last year when it moved 37.6 mln tonnes
of freight between Montreal and Lake Ontario and 41.6 mln
tonnes on the Welland Canal, which links Lake Erie and Lake
Ontario. The canal is scheduled to open tomorrow.
Officials expect the waterway to lose nine to ten mln
Canadian dlrs this year, about the same as the estimated
deficit for fiscal 1986-87, which ends today.
Hal Weiss, chairman,
president and chief executive officer, of Rocky Mount
Undergarment Co Inc, said he expects the company to show a
profit for the first quarter fiscal 1987.
Weiss said sales for 1987 have been strong following a net
loss of 1,548,000 dlrs, or 53 cts a share, for the fourth
quarter of fiscal 1986. The company reported a net loss for the
year of 2,408,000 dlrs, or 82 cts a share.
Rocky Mount recorded net income of 248,000 dlrs, or eight
cts per share, for the first quarter of fiscal 1986.
Weiss attributed the poor year to problems involving
management, manufacturing operations, financial condition and
credibility among its suppliers.
Weiss predicted the pattern of quarterly lossses which
characterized 1986 will be reversed and 1987 will see the
company return to profitability.
A new grade of unleaded gasoline
now being test marketed will increase refining costs when
refiners can least afford it, according to officials attending
the National Petroleum Refiners Association conference here.
The new grade of unleaded gasoline has an octane level of
89 compared with over 90 for super unleaded and 87 for regular
unleaded gasoline.
Amoco Corp expects to begin marketing the new
89 octane unleaded gasoline in May, sources said.
Converting current refinery operations to produce the 89
octane unleaded gsoline could cost hundreds of millions of
dollars per refinery but that depends on the present capacity
and intensity of the refinery, said Amoco's Collier.
But not all oil company's welcome the introduction of
another grade of unleaded gasoline.
"Three grades are not warranted," said Henry Rosenberg,
chairman of Crown Central Petroleum
Tunisia is expected to tender shortly for
100,000 tonnes of soft wheat for shipment between April and
June, covered by COFACE export credits, trade sources said.
Over 300,000 tonnes of French soft wheat have been sold to
Tunisia since the beginning of the 1986/87 campaign, of which
225,000 to 250,000 tonnes have already been shipped, they said.
Shr loss 48 cts vs loss 35 cts
Net loss 1,587,000 vs loss 1,063,000
Revs 45.3 mln vs 50.9 mln
Avg shrs 3,322,032 vs 3,054,457
Year
Shr profit three cts vs loss 19 cts
Net profit 112,000 vs loss 587,000
Revs 211.2 mln vs 199.3 mln
Avg shrs 3,220,163 vs 3,038,361
NOTE: Net includes tax credits 1,411,000 dlrs vs 929,000
dlrs in quarter and tax provision 689,000 dlrs vs credit
1,288,000 dlrs in year.
1986 year revenues include 18.7 mln dlrs from gain on sale
of Quality Sausage Co Inc.
1986 net includes costs of 900,000 dlrs in quarter and
1,200,000 dlrs in year from proposed merger.
CPL Real Estate Trust
Investment said its regular quarterly dividend distribution
will be lower than its present 26 cts per share, and could be
significantly lower starting with the third quarter of 1987.
The company, which lowered the payout from 27 cts to 26 cts
this current quarter, said it did not know how low the payout
would go.
The company said the reason for the cutbacks was because it
would not be purchasing a property it had anticipated, and
alternative investments will produce significantly lower yields
than anticipated.
Treasury Secretary James Baker told
the House Appropriations Committee the United States is still
pressing newly industrialized south Asian nations that have
tied their currencies to the dollar to let those currencies
strengthen against the dollar.
"We have seen some strengthening of those currencies (but)
not as much as we would like," he said.
"We have been somewhat disappointed in the results so far,
but we intend to continue these discussions," he said.
The Coffee, Sugar and Cocoa Exchange
amended regulations governing expanded trading limits on
coffee, cocoa and sugar contracts to provide uniformity.
Effective today, the exchange will permit normal daily
price limits in those commodities to expand whenever the first
two limited contract months move the limit in the same
direction for two consecutive sessions.
The normal daily limits will be reinstated once the first
two limited deliveries close by less than the normal limit for
two successive trading days.
Previously exchange rules required the first three limited
months to move the limit in coffee and cocoa. It had required
the first two limited sugar deliveries to make such moves for
three consecutive sessions.
UAL Inc said it completed the
acquisition of Hilton International from Transworld Corp
Shr 94 cts vs 75 cts
Net 27.0 mln vs 18.4 mln
Revs 631.6 mln vs 409.5 mln
Avg shrs 27.1 mln vs 22.6 mln
The Farm Credit Funding Corp said it
will not issue bonds as scheduled on April 21 because of a
decline in borrower needs for term credit.
A total of 1.461 billion dlrs of bonds maturing on April 20
will be retired with excess cash and internally generated
funds.
The next term debt offering is scheduled for June 1, with
an announcement covering the terms due on May 21.
The farm credit system's reduced need for medium- to
long-term financing also enabled it to cancel bond issues
scheduled for January 20 and last October 20.
Commerce Secretary Malcolm Baldrige
said the United States would go ahead with planned 300 mln dlr
sanctions against Japanese semiconductor exports, despite any
U.S. Japanese talks to avert the trade curbs.
He said in a speech to an export-import group that he was
sure the United States and Japan could work out their dispute
over unfair Japanese trade practices in semiconductor trade,
but "I am sure the sanctions will go in before we work it out."
Sanctions are to be imposed on April 17.
He also said he did not think there would be a trade war
with Japan, because Japan had too much value in exports to the
United States to risk such a war.
"Those fears are unfounded," he said.
He told reporters later that the sharp drop in the
securities market was not due to fears of a trade war, but fear
of inflation and that the Federal Reserve may act on that fact.
Market reaction was also due, he said, to the drop in the
value of the dollar, although trade issues did have some
effect.
Baldrige said that observers who were attributing the drop
in the market to trade sanctions were "barking up the wrong
tree."
He said the market observers will realize this shortly.
Baldrige said his remarks did not mean to suggest anything
about the market or the exchange rate of the dollar.
Qtly div 15 cts vs 15 cts prior
Pay April 30
Record April 14
Getty Petroleum Corp said its
board declared a five pct stock dividend payable on April 21 to
shareholders of record April 10.
The company also declared a regular cash dividend of four
cts a share and reported 1986 net income rose to 17.1 mln dlrs
from 11.5 mln dlrs.
Imperial Oil Ltd, 70 pct-owned by Exxon
Corp
Concord Fabrics Inc said it has
restructered its long-term debt with an institutional lender.
The company said it extended its debt by borrowing 15 mln
dlrs and paying off its existing term loan of 3,100,000 dlrs,
resulting in a new debt of 11.9 mln dlrs.
The company said the remaining funds will be used to equip
a prooduction facility in Chino, Calif., and provide working
capital.
Harvard Industries Inc said its board
approved a two-for-one stock split in the form of a special
stock dividend of its outstanding common stock.
The special dividend is payable May 28, 1987, to
stockholders of record April 24, 1987.
The split will be effected by one additional share for each
common share held, the company said.
Coleman Co said it expects a
first-quarter charge against earnings of 1.6 mln dlrs, or 23
cts a share, as a result of its voluntary program to replace
condensing heat exchangers in its early Model 90 series
high-efficiency residential gas furnaces.
The company said extensive testing indicates a problem
found in the furnaces is not safety related. Coleman said it
noted an increasing number of heat exchangers in certain
furnaces made from March 1984 through December 1985 were
returned because of corrosion.
Overland Express Inc said it
negotiated a restated debt moratorium agreement with its
principal secured lender banks.
The company said the new agreement extends a prior debt
moratorium on principal and interest payments on approximately
30 mln dlrs of long-term debt to June one, 1987.
It is subject to repayment of the debt on or before that
date at a discount of approximately 8,600,000 dlrs in principal
and cancellation of approximately 1,800,000 dlrs of current and
deferred interest, the company said.
Overland also said it negotiated a 3,000,000 dlr interim
credit agreement with its majority owner,
Shr loss 26 cts vs loss six cts
Net loss 535,110 vs loss 129,433
Revs 787,000 vs 622,130
Holder Communications Corp said it
agreed to buy five privately held companies with combined 1987
revenues expected to be about 25 mln dlrs.
Holder plans to issue 32 mln common shares to buy the
Nashville-based companies, all of which are owned by Jack
Norman and Joe Shaw, their families and employees.
The companies include radio stations WKXC-AM and WWKZ-FM,
which operate in the New Albany/Tupelo, Miss., market, and
General Masonry Inc, a contractor in the Southeast.
The acquisitions are subject to approval by Holder
shareholders and the Federal Communications Commission.
Energy futures now set the
standard for oil pricing, said Arnold Safer, president of The
Energy Futures Group Inc, a consulting firm.
"Petroleum futures trading at the New York Mercantile
Exchange literally set spot market prices in the U.S.," he
said, adding that some oil products sellers now offer contracts
based on a daily average of NYMEX prices.
He also said that petroleum futures are a major market for
oil companies as well as for commodity traders. His remarks
were made at the National Petroleum Refiners Association.
Linear Films Inc said it sees lower
earnings in the fourth quarter ending March 31 compared with a
year ago due to lower profit margins on stretch film from price
increases of polyethelene resin, a key raw material.
In last year's fourth quarter it earned 1,235,000 dlrs or
19 cts a share, a spokesman said.
The company said it is raising its stretch film prices by
six pct as of April 15 to reflect the higher costs of
polyethelene resin. It also said sale volume of stretch film in
the fourth quarter was lower than anticipated, although it has
returned to normal in recent weeks.
Servotronics Inc said it declared
a 10 pct stock dividend, payable May 15 to shareholders of
record April 21.
The company last declared a stock dividend, also 10 pct, in
March 1986.
Oper shr loss 11 cts vs profit two cts
Oper net loss 1,058,585 vs profit 282,998
Revs 24.4 mln vs 23.7 mln
Note: 1986 oper includes accrued interest of 686,914 from
financing of capital goods transaction with Prudential Bache
Trade Corp.
Year-ago oper excludes extraordinary gain of 121,000.
A Brazilian delegation, led by central
bank president Francisco Gros, will meet Brazil's bank advisory
committee here on April 10, said Citibank's William Rhodes as
Chairman of the 14-bank committee.
Rhodes said in a statement that the parties are expected to
discuss Brazil's economic plans and "interim arrangements." He
did not elaborate further.
This meeting will be the first here since Brazil's
unilateral suspension of interest payments on 68 billion dlrs
of commercial bank debt on February 20. The two sides held
inconclusive talks in Miami on March 22, bankers said.
Australian annual broad money growth rose
10.3 pct in February, unchanged from January, but down from the
corresponding February growth rate of 13.9 pct, the Reserve
Bank said.
February broad money growth was steady at 0.7 pct from the
previous month and unchanged from February last year.
Borrowings from the private sector by non-bank financial
intermediaries rose by 8.8 pct in the February year from
January's 9.5 pct rise, compared with a 13.6 pct increase in
the previous February year.
In February, borrowings from the private sector by non-bank
financial intermediaries rose by 1.0 pct compared with
January's 0.2 pct increase and the previous February rise of
1.7 pct.
At the end of February, broad money stood at 177.1 billion
dlrs up from January's 175.84 billion and compared with the
previous February level of 160.60 billion.
The Reserve Bank last week reported a February M3 growth
rate of 11.2 pct from January's 10.7 pct rise and a previous
annual February increase of 14.0 pct.
Malaysia said it cut the gazetted
price of rubber to 202-7/8 cents per kg from 213-1/2 cents in
March, effective immediately.
No export duty is applicable at this level, against 3/8
cent per kg last month, because the government raised the
export duty threshold price to 210 cents per kg in early 1985.
The cess for rubber research and replanting remained
unchanged at 3.85 and 9.92 cents per kg respectively.
The economy will grow by an average
rate of 2.2 pct a year in real terms between now and the end of
1991, Westdeutsche Landesbank Girozentrale (WestLB) said in an
annual report.
A year ago WestLB had forecast average growth of just under
three pct for 1986-1990.
The 1987 report said gross national product would only
expand a real 1.7 pct this year -- below previous expectations
-- because of weaker exports. Growth rates will pick up later,
however, producing a 2.2 pct increase on average for the
five-year period.
MORE
A U.S. Appeals court last night
blocked the 860 mln dlr merger of Delta Airlines Inc
Oesterreichische Kontrollbank AG is
raising 150 mln marks through a private placement for five
years with a 5-1/2 pct coupon and priced at 100-1/4 pct, lead
manager Deutsche Girozentrale - Deutsche Kommunalbank said.
The bond, guaranteed by Austria, will be issued in
denominations of 1,000 and 10,000 marks. No fees were
disclosed. Investors pay for the bond on May 21. The bond pays
yearly interest on that day, and expires on that day in 1992.
The bond is callable for tax reasons only, with a premium
of one pct on May 21, 1988 and 1989, with a premium of 1/2 pct
on May 21, 1990, and at par on May 21, 1991.
Singapore's United Industrial Corp Ltd
(UIC) has agreed in principle to inject 16 mln dlrs in
convertible loan stock into
The volume of mark eurobond issues
fell in the period March 16 to 31 to 900 mln marks from 1.37
billion in the period March 1 to 15, the Bundesbank said.
Issues comprised three bonds, including two fixed-interest
bonds totaling 700 mln marks and one equity warrant bond
totaling 200 mln marks. In addition, one Australian dollar bond
was issued totaling 220 mln dlrs, with a portion of interest
and principal payments to be met in marks.
Mitsubishi Heavy Industries Ltd
A proposed sales tax on gold transactions
could put a damper on the Tokyo market and encourage a shift of
trading to Hong Kong and Singapore, senior vice president and
Tokyo branch manager of Credit Suisse Paul Hofer told a press
conference.
"If you impose five pct on both buy and sell transactions,
Tokyo participants in the gold market could be out of business,"
he said. The tax would create such a spread that Japanese would
be unable to compete in the international market, he added.
"How can the government really raise taxes if the system
they impose is prohibitive of generating business?" he said.
The government now imposes a 15 pct tax on physical trades
exceeding 37,500 yen for gold jewellery and coins and a 2.5 yen
tax per 10,000 yen on futures transactions, gold dealers said.
The new five pct tax would be imposed on companies trading
more than 100 mln yen a year and apply to paper gold trades,
gold deposits with banks and trading of gold bars as well as
that of jewellery and coins, dealers said.
However, the tax would lower the rate on jewellery and
coins to only five pct from the current 15 pct, they said.
Hofer said in 1982 Switzerland had imposed a 5.6 pct gold
turnover tax on Jan 1, 1980, but abolished it on Oct 1, 1986.
A study by one of the Swiss banks showed that in early
1980, the first year of the tax, the volume for all Swiss banks
fell by up to 25 pct compared with 1978 and 1979, Hofer said.
Transactions of paper gold also fell up to 75 pct of the
volume prior to imposition of the tax, he said.
While gold transactions in Switzerland decreased, the
volume of trades outside the country, particularly in London
and Luxembourg, increased between 10-25 pct, Hofer said.
Japan is a major importer of gold, buying a yearly average
just under 200 tonnes, gold dealers said.
Last year Japan imported about 600 tonnes of gold, but the
government had bought about 300 tonnes for minting coins to
commemorate the 60th year of Emperor Hirohito's reign, dealers
said.
Gold trading in Tokyo is dominated mainly by Japanese
trading companies, while Credit Suisse is the major foreign
participant.
Daily turnover in the Tokyo spot market ranges between one
and 10 tonnes with the average around three tonnes, while
futures turnover amounts to about four tonnes, gold dealers
said.
"All of us are concerned daily with the fact that the Tokyo
market is growing, that Japan is becoming one of the three
major financial markets in the world ... And in my personal
opinion I think it would be a very big mistake to put a damper
on this positive growth or developments by imposing such a tax,"
Hofer said.
"I don't think it fits the philosophy of an
internationalising market," he added.
Officials of several major Japanese trading houses,
attending the press conference, said they supported Credit
Suisse's call for the government not to impose the gold tax.
Bond Corp Holdings Ltd
The prospect that other banks will
follow industry leaders Citibank and Chase Manhattan in raising
their prime rate is likely to cast a pall over the credit
markets today, economists said.
Bond prices had been making a smart recovery from two days
of heavy selling when Citibank surprised the market by
announcing a quarter-point increase in its prime rate to 7-3/4
pct. Chase Manhattan quickly followed.
Prices quickly fell by a full point, even though the dollar
- the market's overriding concern of late - rose sharply on the
news.
Citibank cited the higher cost of money, especially in the
Euromarket, as the reason for raising its prime rate.
Part of this rise in market rates has been caused by fears
of a tighter Federal Reserve policy to defend the dollar, but
economists said it is too early to tell whether the Fed, whose
policy-making federal open market committee, FOMC, meets this
week, is already tightening its grip on credit.
"The Fed seems to have been a bit slow in meeting the
banking system's reserve needs this statement period, but I
wouldn't conclude anything until I've seen the Fed data," said
Jeffrey Leeds of Chemical Bank.
REUTER^M
International Coffee Organization, ICO,
producers will meet at 1500 GMT (0900 est) for a general
discussion of the market situation, producer spokesman
Lindenberg Sette said.
The Brazilian delegate said several producers requested the
meeting but Brazil was not among them. The ICO executive
board's regular session this week has so far been confined to
routine matters, with no attempt by producers or consumers to
revive export quota negotiations, delegates said.
Talks to restore quotas collapsed early last month when
producers and consumers failed to resolve differences on how
quotas should be allocated.
Producer delegates said there was no sense of urgency among
producers to reopen quota talks with consumers, with most
countries now prepared to wait for the ICO's annual September
council session to restart negotiations.
Members of the Inter-African Coffee Organization called for
today's producer meeting to exchange views on the market
situation, the producer delegates said.
The lack of a new debate on export quotas here this week
was cited as the reason for renewed weakness in coffee prices
in London and New York futures, traders said.
Near May in London hit a five-year low this morning at
1,220 stg, about 50 stg below last night's close, they said.
The executive board session looks set to end today,
following a final session at 1600 GMT (1000 est) when a
consultancy report of the operation of the ICO will be
presented to producers and consumers, delegates added.
V.A.G. Kredit Bank GmbH,
the credit bank subsidiary of Volkswagen AG
Kenya's economy will continue to expand
this year and the government will do more to encourage
investment by foreign firms and the local private sector,
Planning Minister Robert Ouko said.
He told a news conference that the government would soon
create a special bureau to expedite processing of investment
applications by local and foreign investors.
Praising the role of multinational companies and local
entrepreneurs in Kenya's economy, the minister promised to
maintain a close working contact with the private sector.
The economy grew by 5.3 pct last year, up from 4.1 pct in
1985, Ouko said.
This was owing to high prices for the country's coffee
exports, low oil prices, low inflation and rising real incomes,
he added.
"Despite rising petroleum prices and falling coffee prices,
Kenya's economy is still expected to improve in 1987," the
planning minister said.
"High aggregate demand arising from low inflation, trade
liberalisation and disciplined financial management are
expected to increase output in the manufacturing sector," he
said.
Agriculture would expand significantly if favourable
weather continued and farmers responded to producer price rises
announced in February, the minister added.
Kenyan farmers are anxiously awaiting the arrival of the
long rainy season, which is due to start about now.
Ouko said the production of Kenya's main cash crops
increased during the second half of last year.
Coffee deliveries to the state-run Coffee Board of Kenya
rose 17 pct and tea deliveries rose four pct during the period,
he said.
Ouko paid tribute to the private sector for its
contribution to the economy and promised to improve government
cooperation with businessmen by maintaining regular contact
with them.
"I wish to pay tribute to the private sector for its
contribution to the economy in 1986 and challenge it to
maintain the same spirit this year ... The manufacturing sector
grew by an estimated 5.8 pct in 1986, in line with the same
period the previous year," he said.
Ouko said the "one stop" bureau was intended to stimulate
investment and cut the time and bureacracy currently involved
in processing applications.
The planning minister presented a review of the Kenyan
economy during the second half of 1986 which showed inflation
falling to 4.3 pct from 10.2 a year earlier.
This was owing to higher agricultural production and the
Kenyan shilling's relative strength against other major
currencies, the report said.
The average exchange rate was 16.23 shillings per U.S. Dlr
last year, a fall of only 1.2 pct from 16.432 in 1985. The half
yearly report said exports increased about 30 pct in
July-December 1986, while imports rose by only six pct during
the period.
This gave Kenya an overall balance of payments surplus of
780 mln Kenya shillings (48 mln dlrs) during the period,
compared with a 1.4 billion shilling (87 mln dlr) deficit in
the second half of 1985, it said.
Cyclops corp said it has
reconstituted its board to include three
Patten Corp said it called for
redemption on May one its outstanding 23 mln dlrs of 7-1/4 pct
convertible subordinated debentures of 2001.
It will buy back the debt at 1,105.93 dlrs per 1,000 dlr
face amount, including accrued interest.
Debenture holders can convert the securities into the
company's common stock at 12.976 dlrs per share until the close
of business on April 17, Patten said.
The company's common is currently trading at 25 dlrs a
share on the New York Stock Exchange, down 3/4.
Divi Hotels NV of Aruba said the
exercise price of its warrants has been cut to 11 dlrs per
share from 12 dlrs until September 17 and to 13 dlrs from 14
dlrs thereafter due to the impact of a recent 1,500,000 share
offering.
Southeast Banking Corp said it filed
with the Securities and Exchange Commission a registration
statement covering a 50 mln dlr issue of convertible
subordinated capital notes due 1999.
The notes are designed to qualify as primary capital for
Federal Reserve Board regulatory purposes, the bank said. It
will apply to list the notes on the New York Stock Exchange.
The company named Lazard Freres and Co as lead manager of
the deal.
The Turkish Central Bank set a
lira/dollar rate for April 2 of 780.00/783.90 to the dollar,
down from the previous 777.00/780.89. The Bank also set a
lira/mark rate of 429.15/431.30 to the mark, up from the
previous 430.50/432.65.
Asarco Inc said it is decreasing its
domestic delivered copper cathode price by 1.50 cents to 67.0
cents a lb, effective immediately.
Kenya's economy will continue to expand
this year and the government will do more to encourage
investment by foreign firms and the local private sector,
Planning Minister Robert Ouko said.
He told a news conference that the government would soon
create a special bureau to expedite processing of investment
applications by local and foreign investors.
Praising the role of multinational companies and local
entrepreneurs in Kenya's economy, the minister promised to
maintain a close working contact with the private sector.
The economy grew by 5.3 pct last year, up from 4.1 pct in
1985, Ouko said. This was owing to high prices for the
country's coffee exports, low oil prices, low inflation and
rising real incomes, he added.
"Despite rising petroleum prices and falling coffee prices,
Kenya's economy is still expected to improve in 1987," the
planning minister said.
Agriculture would expand significantly if favourable
weather continued and farmers responded to producer price rises
announced in February, the minister added.
Kenyan farmers are anxiously awaiting the arrival of the
long rainy season, which is due to start about now.
Ouko said the production of Kenya's main cash crops
increased during the second half of last year.
Coffee deliveries to the state-run Coffee Board of Kenya
rose 17 pct and tea deliveries rose four pct during the period,
he said.
Privately-held investment firm
Certificated cotton stocks deliverable
on the New York Cotton Exchange No 2 cotton futures contract as
of March 31 were reported at 36,659 bales, unchanged from the
previous day's figure. There were no bales awaiting review and
985 bales awaiting decertification.
Ames Department Stores Inc
said Duane Wolter has been named executive vice president and
chiedf financial officer, succeeding as chief financial officer
Ralph M. Shulansky.
The company said Shulansky remains senior vice
president-administration and investor relations.
Ames said yesterday that inventory shortages found at its
Secaucus, N.J., distribution center would hurt results for the
year ended January 31.
Wolter had been senior vice president, finance, and chief
financial officer of
Shr 19 cts vs 18 cts
Net 1,230,041 vs 1,153,280
Sales 10,909,729 vs 9,675,355
Six mths
Shr 31 cts vs 29 cts
Net 2,019,930 vs 1,857,357
Sales 21.0 mln vs 17.8 mln
Shr three cts vs six cts
Net 54,965 vs 106,147
Revs 2,124,983 vs 1,915,928
Avg shrs 2,206,017 vs 1,878,438
Year
Shr 14 cts vs eight cts
Net 302,388 vs 157,690
Revs 7,952,360 vs 7,495,936
Avg shrs 2,139,991 vs 2,051,178
Genetics Institute Inc and
Wellcome PLC, a British-based pharmaceutical company, jointly
announced the selection of a site for their joint venture,
WelGen Manufacturing Inc, formed last September.
The companies said they choose a 77-acre site in West
Greenwich R.I. for the venture's manufacturing facility, which
will make biotechnology-based pharmaceuticals. The plant should
be completed in 1989, and will employ about 200 people.
Shr profit one ct vs loss nine cts
Net profit 177,061 vs loss 1,364,878
Revs 5,913,334 vs 487,121
Avg shrs 18.6 mln vs 15.9 mln
The Federal Home Loan Mortgage Corp
adjusted the rates on its short-term discount notes as follows:
MATURITY RATE OLD RATE MATURITY
32 days 6.00 pct 6.10 pct 1 day
The restoration of coffee export quotas
before the end of the current 1986/87 coffee year (Oct 1/Sept
30) now seems unlikely, given reluctance by International
Coffee Organization, ICO, producers and consumers to resume
negotiations on an interim quota accord, producer delegates
told reporters.
Consumers and most producers see no point in reopening the
quota dialogue while Brazil's position remains unchanged, they
said.
Brazil's refusal to accept a reduction in its previous 30
pct share of the ICO's global export quota effectively
torpedoed talks here last month aimed at restoring quotas
before October, the delegates noted.
Disappointment at the lack of progress on quotas forced
coffee futures in London and New York to new lows today,
traders here said. Near May in New York fell below one dlr in
early trading at around 99.10 cents per pound, traders said.
Producer delegates said that while the possibility of
reimposing quotas before October remained on the ICO agenda, in
practice the idea had effectively been discarded.
The ICO's executive board session here this week has so far
barely touched on the quota debate, demonstrating general
unwillingness to revive talks while chances of success are
still remote, producer delegates said.
Some producers are in no hurry to see quotas restored,
despite the price collapse seen since the failure of last
month's negotiations, they said.
"With Brazil's frost season approaching, who wants to
negotiate quotas," one leading producer delegate said.
Coffee prices normally rise during Brazil's frost season
(mainly June-August) as dealers and roasters build up stocks as
insurance against possible severe frost damage to Brazil's
crop.
Many producers are more interested in working towards
reimposing quotas from October 1, based on a new system of
quota allocations valid until the International Coffee
Agreement expires in 1989, they said.
Guatemala has already proposed the "other oilds" producer
group should meet in the next two months to begin talks on how
to allocate quota shares.
Producers still seem divided on how to overhaul the quota
distribution system, with some producer delegates reporting
growing support for a radical reallocation, based on the
principle of "objective criteria" favoured by consumers.
At last month's council session a splinter group of small
producers backed consumer demands for new quota shares based on
exportable production and stocks, while Brazil, Colombia and
the rest of the producers favoured leaving quota allocations
unchanged, except for some temporary adjustments.
A delegate from one of the eight said more producers now
supported their cause.
The delegate said unless major producers like Brazil showed
readiness to negotiate new quota shares, prospects for a quota
accord in October also looked bleak.
The U.S. and most other consumers are still determined to
make reimposition of quotas conditional on a redistribution of
quota shares based on "objective criteria."
ICO observers remained sceptical that Brazil would be
prepared to accept a quota reduction when the ICO council meets
in September.
Brazil has adopted a tough stance with banks on external
debt negotiations and is likely to be just as tough on coffee,
they said.
They said Brazil's reluctance to open coffee export
registrations might reflect fears this would provoke another
price slide and force an emergency ICO council session, which
would most likely end in failure.
Producers met this afternoon to review the market situation
but had only a general discussion about how further
negotiations should proceed, a producer delegate said.
Producers plan to hold consultations on quotas, and then
may set a date for a formal producer meeting, but plans are not
fixed, he said.
The ICO executive board reconvened at 1650 hours local time
to hear a report from consultants on ICO operations. The board
meeting looks set to end today, a day earlier than scheduled,
delegates said.
Cyprus Minerals Company said it is
decreasing its electrolytic copper cathode price by 1.25 cents
to 67.0 cents a pound, effective immediately.
General Public Utilities corp
said its Three Mile Island Unit One's power output has been cut
to 81 pct of reactor power, or 730 megawatts of electricity,
due to mineral deposits on the secondary or non-nuclear side of
its two steam generators.
The company said the deposits do not affect the safe
operation of the plant but interfere with the production of
steam.
It said the unit was similarly limited in power in late
1985.
The following proposed securities
offerings were filed recently with the Securities and Exchange
Commission:
Southeast Banking Corp
Kraft Inc said in its annual
report it expects 1987 capital expenditures to be between 250
mln dlrs and 300 mln dlrs.
The company said it invested 209 mln dlrs in property,
plant and equipment in 1986, up from 181 mln dlrs in 1985.
Kraft also said its advertising expenditures for 1987 are
expected to match the five-year compounded 15 pct rate of
increase recorded in 1986, when such expenditures totaled 433
mln dlrs.
Kraft said research and development expenditures rose 12
pct in 1986 to 66.7 mln dlrs, and a greater increase in seen in
1987.
It cited a continued emphasis on new product development,
advances in cheese and edible-oil technologies, further
adaptation of tamper-evident packaging and continued
development of consumer battery technologies.
Treasury Secretary James Baker said
the administration backs the Federal Savings and Loan Insurance
Corp (FSLIC) recapitalization bill approved by the House
Banking Committee and opposes the Senate-passed version.
Baker told a House Appropriations Subcommittee the 15
billion dlr recapitalization plan approved by the House panel
was sufficient while the 7.5 billion dlr plan in the
Senate-passed bill was "inadequate."
He also urged the House to reject loophole-closing
provisions in the Senate bill that would restrict banking
activities.
First Bank Minneaplois and First
Bank Saint Paul, both units of First Bank Systems Inc, said
they raised their reference rates to 7-3/4 pct from 7-1/2 pct.
Drilling of this year's British sugar
beet crop got off to a slow start due to poor weather
conditions with only around one pct sown so far, a spokesman
for British Sugar Plc said.
This compares with two pct at the same stage last year,
three pct in 1985 and 38 to 39 pct in 1984.
There is little cause for concern with better weather
forecast and the capacity available to drill the contracted
area of around 200,000 hectares in about 10 days. Seed beds
look good and farmers are advised to wait for soil temperatures
to rise, the spokesman said.
"If the crop can be drilled by the third week in April we
will be delighted," he said. Last year a large proportion of the
crop was not drilled until May but it still turned out to be
the equal second largest on record.
Michaels Stores Inc said March
sales were up 19.2 pct to 7,823,000 dlrs from 6,564,000 dlrs a
year earlier, with same-store sales up 2.7 pct.
The company noted that Easter sales fell in March last year
and are falling in April this year.
The International Coffee Organization
executive board meeting will end tomorrow without any move to
reopen the debate on restoring coffee export quotas, delegates
said.
Talks have focused on administrative matters and
verification of stocks in producer countries, they said.
Producers met briefly today to exchange views on the market
situation but there seems little chance discussion on quotas
will begin much before the ICO's annual council session in
September, they said.
Delegates earlier thought the meeting would end tonight,
but a further session is scheduled tomorrow at 1030 GMT to
complete reports on stock verification.
Meantime, the executive board will meet May 12 to discuss
possible action on the consultancy report on the ICO presented
today to the board, consumer delegates said.
E.F. Hutton Group's E.F. Hutton LBO Inc
unit said it extended the expiration date for its 35 dlr per
share tender offer for Purolator Courier corp to midnight EST
April six from midnight April one.
E.F. Hutton lbo inc said its wholly owned PC Acquisition
Inc subsidiary, which is the entity making the offer, extended
both expiration date and the withdrawal rights period for its
pending tender for 6.3 mln shares or 83 pct of Purolator
common.
Hutton's offer was topped today by a 40 dlr per share bid
for 83 pct of the stock from Emery Air Frieght Corp
Fresh, heavy rains caused further
damage to the Argentine 1986/87 coarse grains crop in the week
to yesterday, particularly in Buenos Aires province, trade
sources said.
They said the sunflower, maize, soybean and sorghum crops
were damaged and yield estimates affected. New production
forecasts were made for all these crops.
The rains over the weekend and up to yesterday registered
more than 200 mm on average in western Buenos Aires and
worsened the flooding in various parts of the province.
The weather bureau said the rains, which in Buenos Aires
have surpassed 750 mm in the last 30 days, could continue.
The northeast of the country was also hit by heavy rains.
In Corrientes province the rains also passed an average of
200 mm in some parts, notably the Paso de los Libres area
bordering on Uruguay.
In Santa Fe and Entre Rios provinces they were over 100 mm
in places, in Misiones and San Luis 90 mm and in Cordoba 80 mm.
The rains were less intense in Chaco and Formosa.
Harvesting in areas not actually under water could also be
further delayed due to dampness in the earth, the sources said.
The excessive humidity might also produce rotting of the
crops, further dimishing the yield, the sources added.
Sunflower harvesting before the weekend rains reached 26 to
30 pct of the area sown in Santa Fe, Cordoba, La Pampa and
Buenos Aires provinces.
The production forecast for 1986/87 sunflowerseed has been
lowered to between 2.2 and 2.4 mln tonnes, against 2.3 to 2.6
mln tonnes the previous week, making it 41.5 to 46.3 pct lower
than the record 4.1 mln tonnes produced last season.
The area sown was two to 2.2 mln hectares, down 29.9 to
36.3 pct on the record 3.14 mln hectares in 1985/86.
The maize harvest advanced to within 26 to 28 pct of the
area sown in Cordoba, Santa Fe and northern Buenos Aires. It
will begin in La Pampa within about 10 days, weather
permitting.
Maize yield this season is now estimated at 9.6 to 9.9 mln
tonnes, against last week's 9.9 to 10.1 mln tonnes, down 21.4
to 22.6 pct on the 12.4 to 12.6 mln tonnes at which private
producers put 1985/86 production.
The new forecast is 22.7 to 25 pct down on the official
figure of 12.8 mln tonnes for last season's production.
The grain sorghum harvest reached 17 to 19 pct of growers'
targets, against 14 to 16 pct the previous week.
The production forecast was reduced to between three and
3.3 mln tonnes, against 3.2 to 3.5 mln tonnes last week, 21.4
to 26.8 pct down on last season's 4.1 to 4.2 mln tonnes.
The area sown with sorghum in 1986/87 was 1.23 to 1.30 mln
hectares, down 10.3 to 15.2 pct on the 1.45 mln in 1985/86.
The forecast for soybean yield this season was the least
changed in relation to last week. It was put at a record 7.5 to
7.7 mln tonnes, against the previous 7.5 to 7.8 mln tonnes.
These figures are 4.2 to 5.5 pct higher than last season's
record of 7.2 to 7.3 mln tonnes, according to private sources,
and 5.6 to 8.5 pct up on the official 7.1 mln tonnes.
The adjustment to the production forecast is due to the
rains and overcast conditions which have greatly reduced the
sunlight needed for this crop, sources said.
Producers fear estimates may yet have to be adjusted down
further.
The humidity could induce rotting and growers are still
finding more empty pods due to excessively dry weather earlier
in the season.
Soybean harvesting is due to start in mid-April in southern
Cordoba and Santa Fe and northern Buenos Aires.
Rio Grande/Azores and Leixoes 26,000 mt
hss 14 dlrs basis one to two 4,000/1,500 Azores and 3,500
Leixoes 25/4-5/5.
Paranagua/one-two ports Spanish Med 35,000 mt hss 11.50
dlrs basis one to one 10 days all purposes 20-30/4.
USG/Taiwan 54,000 mt hss 10,000 shex/4,000 shex 20/4-5/5.
USG/ARA-Ghent option Seaforth 40,000/45,000 long tons hss
10 days all purposes 9-15/4 try later.
Dieppe/one-two ports Italian Adriatic 9,500/11,000 mt bulk
wheat 3,000/2,000 6-12/4.
St Lawrence/one-three ports Marseilles-Manfredonia range
20,000/35,000 mt bulk wheat 5,000/222,500 10-15/4.
Chimbote/Kaohsiung 9,500 mt bulk/bagged fishmeal 250 ph/200
ph 20/4-5/5.
Immingham or Foynes/Red Sea 25,000 mt bulk barley
4,000/3,000 10-15/4 alternatively try t/c.
USG/Maracaibo 10,000 mt wheat (three grades) three
days/1,000 1-15/4.
Shr loss three cts vs profit 16 cts
Net loss 119,000 vs profit 637,000
Revs 17.5 mln vs 15.8 mln
Sarlen and Associates Inc
said it completed its private placement of 12.5 mln dlrs of
five-year eight pct senior subordinated notes with warrants to
purchase common and 2.5 mln dlrs of 12 pct series A preferred
with warrants to purchase common.
It said a portion of the proceeds was used to finance its
acquisition of Gleason Security Services Inc and Gleason Plant
Security Inc.
Shr loss five cts vs profit eight cts
Net loss 152,000 vs profit 214,000
Revs 6.2 mln vs 2.4 mln
Year
Shr profit 22 cts vs profit 33 cts
Net profit 809,000 vs 853,000
Revs 22.4 mln vs 7.9 mln
Qtly div 32 cts vs 32 cts prior
Pay May 15
Record May One
Topps Co Inc said it has filed for an
initial public offering of 4,500,000 common shares, including
3,500,000 shares to be sold by shareholders.
It said lead underwriters are
Digital Communications Associates Inc
said the U.S. District Court issued a ruling prohibiting
U.S. farmers who reorganize their
operations to circumvent a cap on federal payments could add
2.3 billion dlrs to the cost of the government's agricultural
programs by 1989, the General Accounting Office, GAO, said.
"We estimate that should the trend in farm reorganizations
continue, reorganizations since 1984 could be adding almost 900
mln dlrs annually to program costs by 1989," GAO Senior
Associate Director Brian Crowley said.
"Cumulative costs for the six-year period, 1984 to 1989,
could approach 2.3 billion dlrs," he said.
Between 1984 and 1986, reorganizations added almost 9,000
new persons to U.S. Agriculture Department payment rolls,
Crowley told the House Agriculture Subcommittee on Wheat,
Soybeans and Feedgrains.
Nissan Motor Co Ltd of Japan said it
expects that it was profitable in the second half ended
yesterday after a first half operating loss of 17 billion yen.
Nissan chief financial officer Atsushi Muramatsu, in a
speech before an automotive seminar, said he attributed the
improvement to cost reductions and rationalizations of
operations.
He said if exchange rates stabilize, Nissan will have a
strong profit recovery in fiscal 1988 and profits for fiscal
1989 better than those before the yen started advancing.
Muramatsu said Nissan is studying the possibility of
setting up its own finance company to improve access to U.S.
and European capital markets.
New York coffee futures prices will
probably fall to about 85 cents a lb in the next month before a
consolidation trend sets in, according to market analysts.
Yesterday, prices for the spot May contract fell below 1.00
dlr a lb for the first time since August 1981 after the
International Coffee Organization did not place new export
quota discussions on its current agenda.
Talks aimed at renegotiating ICO export quotas, after five
years of price-supporting agreements, broke down in February.
"Short-term, it looks like a definite test of 90 cents,
perhaps 85 cents," said William O'Neill, coffee analyst with
Elders Futures. "But the additional downside may not be all
that great from current levels."
"At this price level the market is very vulnerable to
bullish developments," O'Neill added. "Rather than us having a
market that will plummet we'll kind of see prices erode --
probably to around 85 cents."
"I definitely see 90 cents and would not rule out a brief
drop to 85 cents," said Debra Tropp, a coffee analyst with
Prudential Bache. But she said by June worries about a freeze
in Brazil growing areas will become more of a market factor,
with prices likely to consolidate ahead of that time.
A trader at a major international trade house, who asked
not to be named, said he expects a 10 cent drop near term but
believes if Brazil opens May registrations at a relatively high
export price and requires a high contribution quota from
exporters the market could steady at the lower levels.
Longer term, he added, producer pressure will mount on
Brazil to agree to consumers' export quota terms, and a new
international agreement could come into force next fall.
Since the February talks broke down, the market has fallen
from about 130.00 cents a lb to a low of 98.10 cents a lb
today, as buyers and sellers sought to reassess supply and
demand.
Generally, analysts say, producers have a large buildup of
stocks, but U.S. roasters have drawn down supplies and will
need to do some buying soon.
"Most producing nations have just completed or are about to
complete their annual harvests and exportable supplies are at
their seasonal peak. Exports remain behind year ago and
warehouses in producer nations are becoming increasingly
overburdened," said Sandra Kaul, coffee analyst for Shearson
Lehman, in that firm's forthcoming quarterly coffee report.
Kaul said producers' need to procure hard currency to
service foreign debt will put further pressure on them to sell,
and "this should keep substantial pressure on exporters to
undertake sales despite the drop in prices to six year lows."
Kaul believes the market will drop to 80 cents a lb before
Brazil's frost season begins in June.
Accurate assessments of roaster demand are hard to come by,
though analysts note the peak winter consumption period is
passed and demand usually slows this time of year.
Shearson's Kaul estimated U.S. roaster ending stocks as of
January 31, including soluble and roasted, at 6.3 mln bags
compared with 6.9 mln at end-September 1986, a small drawdown
for the usually busy winter roasting season.
But Elders O'Neill said, "The roasters are not overstocked
by any means."
Analysts said picking a bottom to the market is difficult,
given the fact prices have fallen into uncharted territory
below the long-term support at 1.00 dlr per lb, and several
traders said the sidelines might be preferable for the short
term.
U.S. refiners said they are worried
that growing supplies of imports, proposed federal
environmental regulations, and the marketing of a third grade
of unleaded gasoline would cost them dearly and at a time when
the industry is recovering from a recent slump.
"We have to look at national security and cut the amount
of products and crude coming into the country if it hurts the
industry," said Archie Dunham, vice president of petroleum
products at Conoco, subsidiary of DuPont Corp (DD).
U.S. oil imports account for about 38 pct of U.S.
consumption but are expected to rise to 50 pct by the mid
1990s, according to the Department of Energy.
"Can we afford to import 60 or 70 pct of our oil
requirements 15 or so years from now?" asked John Swearingen,
chairman of the board of Continental Illinois Corp
Moore Medical Corp said it
plans to acquire privately-held Penta Products, a wholesale
distributor of generic durgs, for undisclosed terms.
Neti Technologies Inc said
American Telephone and Telegraph Co agreed to sell Neti's
document transfer software.
Neti chairman Lawrence Brilliant said in response to an
inquiry that the software, called "docuFORUM", transfers
documents between separate locations over telephone lines. It
is designed to work with most personal computers, including
those made by International Business Machines Co
Oper shr loss 1.10 dlrs vs loss 8.63 dlrs
Oper net loss 5.1 mln vs loss 42.1 mln
Revs 23.1 mln vs 63.3 mln
Year
Oper shr loss 4.71 dlrs vs loss 14.09 dlrs
Oper net loss 22.0 mln vs loss 67.2 mln
Revs 114.6 mln vs 221.8 mln
Avg shrs 4,910,330 vs 4,851,650
NOTE: Current year excludes gain of 12.1 mln dlrs from
disposal of discontinued operations.
Shr figures after preferred dividend requirements.
Towle Manufacturing Co, operating
under Chapter 11, said that based on a reorganization plan it
is likely that its outstanding common and preferred will be
substantially diluted or cancelled.
Towle also said that it is likely that general unsecured
claims, including claims of subordinated debenture holders,
will be paid at less than 100 pct of their face value and
without interest.
Towle has not yet submitted a reorganization plan under
Chapter 11. It based its predictions on its liabilities and on
the resources which would be available under such a plan.
Company officials were not immediately available to comment
on the company's reorganization plan.
Towle also said that as a result of its restructuring, its
sales for 1987 will not exceed 100 mln dlrs.
Earlier it reported a loss from operations of 22 mln dlrs
or 4.71 dlrs a share on revenues of 114.6 mln dlrs for 1986. In
1985, the company reported a loss of 67.2 mln dlrs or 14.09
dlrs a share on sales of 221.8 mln dlrs.
As a results of its restructuring, the number of employees
the company had at year end were 820, compared with 1,300 on
June 30, 1986 and 2,500 on January 1, 1985.
period ended February 28
Shr 26 cts vs 14 cts
Net 28.4 mln vs 15.2 mln
Revs 305.7 mln vs 179.6 mln
Six mths
Shr 50 cts vs 28 cts
Net 54.6 mln vs 30.3 mln
Revs 586.2 mln vs 359.8 mln
Avg shrs 100,362,000 vs 91,360,000
Procter and Gamble Co said it
appointed the New York ad agency of Wells, Rich, Greene, Inc to
handle its Duncan Hines Ready-to-Serve Cookies, effective
immediately.
The account was previously handled by Grey Advertising Inc
of New York.
The company declined to discuss the reason for the change
in accounts, nor would it dislose its advertising expenditures
for the brand.
Procter and Gamble said Grey will continue to handle many
of its brands, including Crisco, Bold, Joy, Downy and Puritan
Oil, Monchel and Jif.
Wells, Rich, Green handles Procter's Pringle's, Gain,
Safeguard, Spic and Span, Prell, Sure Banner, and Oil of Olay
brands.
Security Pacific National Bank and
Provident National Bank said they increased their prime lending
rates a quarter point to 7-3/4 pct.
They said the move is effective immediately.
Shr 39 cts vs 31 cts
Net 232,991 vs 198,185
Revs 2.9 mln vs 2.3 mln
Year
Shr 2.20 dlrs vs 1.12 dlrs
Net 1.3 mln vs 715,113
Revs 11.3 mln vs 10.1 mln
NOTE:1986 revs includes 260,000 dlr finder's fee , net
includes 112,000 gain from sale of securities, 115,000
dividends, 78,000 dlrs from lease recalculations.
1985 revs includes 700,000 finder's fee and 75,000 gain
from sale of asset.
British Petroleum Co plc said it raised
its posted butane prices by 15.50 dlrs per tonne to 123 dlrs,
fob north sea, effective today.
Posted propane prices were unchanged at 110 dlrs per tonne,
the company said.
The First National Bank of Boston, the
main banking unit of Bank of Boston, said it is raising its
prime lending rate to 7.75 pct from 7.50 pct, effective
immediately.
The National Broadcasting Co delivered
its "final offer" for a new contract to representatives of
2,800 writers, editors and technicians early today and waited
for a response.
A committee of the National Association of Broadcast
Employees and Technicians discussed the offer but after three
hours they had not come to any decision.
If the union walks out it would mean simultaneous strikes
against all three major U.S. television networks. A different
union struck CBS Inc
Coffee futures dipped further today and
closed below 1 dlr a pound for the first time in six years.
Coffee for delivery in May ended at 99.28 cents a pound on
the Coffee, Sugar and Cocoa Exchange, down 0.76 cent and the
lowest price since August, 1981.
Prices have been falling steadily since the International
Coffee Organization failed in February to reach an agreement
controlling exports by its members, and pressure was renewed
this week as the executive board of the organization met in
London without reopening debate on its export quotas.
The executive board has limited its current discussions to
administrative matters and is set to adourn Thursday.
Burdensome supplies have pressed the market down from 1.30
dlr a pound in February, when the organization's discussions
aimed at re-establishing export quotas broke down.
Sandra Kaul, a coffee analyst in New York with Shearson
Lehman Brothers, said supplies currently are at their high
point for the year because most producing nations have just
completed their harvests.
In addition, she said, many of those nations are faced with
serious debt and need to sell coffee to raise capital.
"This should keep substantial pressure on exporters to
undertake sales despite the drop in prices," she said.
Further, U.S. demand could be sluggish because winter, the
period of greatest consumption, is ending. Prices could fall
another 10 cents to 15 cnts a pound, analysts said.
Gold futures retreated from modest early gains and closed
steady while silver prices rallied on the Commodity Exchange in
New York.
The increase in U.S. banks' prime rates prompted concern
about renewed inflation, but the strength of the U.S. dollar
discouraged new buying.
"The market is getting mixed signals and it doesn't know
which way to go," one analyst said.
Gold futures retreated from modest early gains and closed
steady while silver prices rallied on the Commodity Exchange in
New York.
The increase in U.S. banks' prime rates prompted concern
about renewed inflation, but the strength of the U.S. dollar
discouraged new buying.
"The market is getting mixed signals and it doesn't know
which way to go," one analyst said.
Shr loss 1.92 dlrs vs profit five cts
Net loss 5.6 mln vs profit 136,598
Revs 1.4 mln vs. 2.5 mln
Year
Shr loss 3.81 dlrs vs profit 21 cts
Net loss 10.8 mln vs profit 435,176
Revs 7.6 mln vs 9.4 mln
NOTE:1986 4th qtr includes write-off of about 373,000 dlrs
or 13 cts and writdown of assets of 4.0 mln dlrs. 1986 year
includes 4.1 mln dlrs 1st qtr writedown.
Coffee futures dipped further and closed
below one dlr a pound for the first time in six years.
Coffee for delivery in May ended at 99.28 cents a pound on
the New York Coffee, Sugar and Cocoa Exchange, down 0.76 cent
and the lowest price since August, 1981.
Prices have fallen steadily since the International Coffee
Organization failed in February to reach an agreement
controlling exports by its members, and pressure was renewed
this week as the executive board of the organization met in
London without reopening debate on its export quotas.
The executive board has limited its current discussions to
administrative matters and is set to adourn Thursday.
Burdensome supplies have pressed the market down from 1.30
dlrs a pound in February, when the organization's discussions
aimed at re-establishing export quotas broke down.
Sandra Kaul, a coffee analyst in New York with Shearson
Lehman Brothers, said supplies currently are at their high
point for the year because most producing nations have just
completed their harvests.
In addition, she said, many of those nations are faced with
serious debt and need to sell coffee to raise capital.
"This should keep substantial pressure on exporters to
undertake sales despite the drop in prices," she said.
Further, U.S. demand could be sluggish because winter, the
period of greatest consumption, is ending. Prices could fall
another 10 to 15 cents a pound, analysts said.
Gold futures retreated from modest early gains and closed
steady while silver prices rallied on the Commodity Exchange in
New York.
The increase in U.S. banks' prime rates prompted concern
about renewed inflation but the strength of the U.S. dollar
discouraged new buying.
"The market is getting mixed signals and it doesn't know
which way to go," one analyst said.
Cattle futures posted new highs on the Chicago Mercantile
Exchange, while live hogs rallied from early losses and frozen
pork bellies finished sharply lower.
Cattle prices continued to draw support from the winter
storm that swept the Plains states, leaving animals stranded in
snowbound fields and feed lots in miserable condition.
Live hogs were pressured early by the Agriculture
Department's report Tuesday that producers expanded their
breeding herds more than the market expected last quarter.
Prices recovered to keep pace with higher cash prices.
Frozen pork bellies fell sharply on the outlook for greater
production and closed with limit losses.
Soybean futures posted sharp gains on the Chicago Board of
Trade, while corn and wheat were lower.
Soybeans rallied in response to Tuesday's USDA report that
farmers intend to plant 56.9 mln acres this year, down from
61.5 mln planted last year.
Corn prices were pressured by the outlook for 67.6 mln
acres of corn, which is down from last year's 76.7 mln acres,
but was larger than analysts expected.
The Argentine grain board adjusted
minimum export prices of grain and oilseed products in dlrs per
tonne FOB, previous in brackets, as follows:
Sunflowerseed cake and expellers 99 (97), pellets 97 (95)
and meal 95 (93).
Sunflowerseed oil for shipments through May 308 (300) and
June onwards 314 (307).
Linseed cake and expellers 137 (136), pellets 115 (114) and
meal 105 (104), all for shipments through June.
Linseed cake and expellers 146 (145), pellets 124 (123) and
meal 114 (113), all for shipments July onwards.
Soybean cake and expellers 169 (167), pellets 162 (160) and
meal 152 (150), all for shipments through May.
Soybean cake and expellers 166 (164), pellets 159 (157) and
meal 149 (147), all for shipments June onwards.
The federal government and the Japanese
trading company, C. Itoh and Co Ltd, have signed a letter of
understanding to try and boost trade ties between the two
countries, the Industry department said.
The two parties have agreed to encourage direct Japanese
investment in Canada, bilateral trade, and more joint ventures
and licensing accords between Canadian and Japanese companies.
C. Itoh has just begun a trade mission in Canada to
investigate trading opportunities in the aerospace, autoparts
electronics and other sectors and will visit some 30 leading
companies across Canada.
The U.S. Agriculture Department said
its summary report on the Feed Situation and Outlook, scheduled
for release April 24, has been delayed until May 15.
The department said the delay will enable analysts to
incorporate into the report USDA's first supply and demand
estimates for the 1987/88 marketing year and data on farm
program participation.
Shr loss 64 cts vs loss 1.70 dlrs
Net loss 13.4 mln vs loss 35.6 mln
REvs 47.9 mln vs 72.1 mln
NOTE:1985 includes loss of 941,000 from discontinued
operations and 5.8 mln dlrs from disposal of net asset solds.
Shr loss 56 cts vs loss 71 cts
Net loss 809,000 vs loss 1.0 mln
Revs 5.3 mln vs 5.3 mln
Year
Shr loss 1.51 dlrs vs profit 61 cts
Net loss 2.2 mln vs loss 2.3 mln
Revs 26.5 mln vs 29.1 mln
System Energy Resources Inc, a unit of
Middle South Utilities Inc, said it plans to file with the
Securities and Exchange Commission a request for authorization
to retire a number of outstanding first mortgage bonds.
It plans to buy back up to 300 mln dlrs of 16 pct first
mortgage bonds due 2000 and up to 100 mln dlrs of 15-3/8 pct
mortgage bonds of 2000.
To refinance the redemptions, System Energy said it would
ask the SEC for approval to issue up to 300 mln dlrs of new
first mortgage bonds.
Deutsche Bank AG
Thai coffee exporters said they hoped
the International Coffee Organisation (ICO) would not reimpose
export quotas even though this may lead to a further slump in
world prices.
Susin Suratanakaweekul, president of the Thai Coffee
Exporters Association, told Reuters that Thailand obtained
little benefit from previous ICO quotas which represented only
about 30 pct of its total annual exports.
Thailand expects increased overall coffee export revenue if
there are no restrictions on sales to current ICO members who
offer higher prices than non-members, he said.
The Customs Department said Thailand exported 21,404 tonnes
of coffee last year, up from 20,602 in 1985.
Thai coffee production is projected to fall to about 25,000
tonnes in the 1986/87 (Oct/Sept) season from 28,000 the
previous year.
However, a senior Commerce Ministry official said the Thai
government supports coffee producers' lobbying for reimposed
ICO quotas which, he said, would help lift world prices.
Somphol Kiatpaiboon, director general of the Commercial
Economics Department, said an absence of ICO quotas would
encourage producers to rapidly release coffee on to the market,
further depressing prices.
He said Indonesia is expected to export a substantial
amount of coffee this month without such restrictions.
Kenya's late coffee crop is flowering
well, but the main coffee areas were generally dry and hot in
the week ended Wednesday, trade sources said.
"Machakos, Embu, Meru and Kirinyaga in eastern Kenya, and
Nyeri and Thika in central, have been dry in the past week. The
farmers expect rain this week. If it does not fall output of
the late (October-November-December) crop will decline sharply,"
one source said.
He said that since most growers did not irrigate their crop
they could do nothing but wait for rain, the main factor which
determines Kenyan coffee production.
Two months ago the International Coffee Organization issued
a forecast of Kenyan exportable coffee production in the
1986/87 (Oct-Sept) season at 1.82 mln bags.
Prices rose at the fortnightly
export auction here on March 25 for sales of 1,907.1 tonnes of
coffee from the 1986/87 and 1985/86 crops out of a total
offering of 1,940.7 tonnes, the Coffee Board said.
Withdrawals amounted to 33.6 tonnes. The type and grade,
quantity sold, average prices in rupees per 50 kilos, exclusive
of sales tax, with previous prices at the March 11 auction in
brackets -
1986/87 crop
Plantation "A" 592.2 1,284.50 (1,223.50)
Plantation "B" 74.1 1,095.50 (1,122.00)
Plantation "C" 208.2 1,019.00 (1,017.50)
Arabica Cherry "AB" 33.3 976.50 (NA)
Arabica Cherry "PB" 22.5 949.00 (NA)
Arabica Cherry "C" 58.2 889.50 (NA)
Robusta Cherry "AB" 90.9 1,256.00 (NA)
Robusta Cherry "PB" 43.8 1,039.50 (NA)
Robusta "PMT AB" 49.2 1,255.50 (NA)
Robusta "PMT PB" 13.5 1,200.00 (NA)
REP Bulk "A" 93.9 1,057.50 (908.50)
REP Bulk "B" 256.5 1,079.00 (930.00)
Robusta Cherry Bulk 40.2 1,082.50 (NA)
Robusta Cherry "C" 9.0 997.00 (NA)
Robusta Cherry "BBB" 9.6 700.00 (NA)
1985/86 crop
Arabica Cherry "AB" 123.3 961.00 (951.50)
Arabica Cherry "BBB" 160.8 635.50 (613.50)
Robusta Cherry "BBB" 4.2 735.00 (704.50)
Monsooned coffee
Monsooned Robusta "AA" 23.7 1,265.50 (NA)
The onset of cooler weather in Brazil
during the southern hemisphere winter is expected to have a
stabilising effect on a weak coffee market, West German trade
sources said.
"The annual fear of frost in Brazil will probably grip the
market sometime this month until June or early July," one trader
said.
The trade believes the International Coffee Organization
(ICO) is unlikely to tackle the re-introduction of quotas
before its September meeting and until then the market will not
see any unexpected sharp moves in either direction.
The Bundesbank left credit policies
unchanged after today's regular meeting of its council, a
spokesman said in answer to enquiries.
The West German discount rate remains at 3.0 pct, and the
Lombard emergency financing rate at 5.0 pct.
Coffee producers belonging to the "Other
Milds" group will meet May 4 in Guatemala to discuss the
possibility of restoring export quotas, producer delegates told
reporters after the closing session of the International Coffee
Organization, ICO, executive board meeting.
The "Other Milds" group, comprising Costa Rica, Dominican
Republic, Ecuador, El Salvador, Guatemala, Honduras, India,
Mexico, Nicaragua, Papua New Guinea and Peru, might consult
with Brazil and Colombia on this meeting, but it was not
certain whether these two countries would attend, they said.
The ICO board meeting ended without moves to restart
negotiations on quotas, which broke down last month, producer
delegates said.
Producers are expected to hold other consultations in the
coming months on how to proceed with quota negotiations, but no
date for a full producer meeting has been mentioned, they said.
The board completed reports on stock verification and the
next regular board session will be in Indonesia June 1-5,
delegates said.
North East Insurance Co said due
to the magnitude of its losses in 1986 and 1985, it may be
found in violation of minimum capital and surplus requirements
by officials in Maine and New York and be subject to sanctions
and administrative actions in those and other states.
The company today reported a 1986 loss of 236,469 dlrs,
after realized investment gains of 734,609 dlrs, compared with
a 1985 loss of 2,522,293 dlrs, after investment gains of
645,438 dlrs. Its fourth quarter net loss was 1,653,386 dlrs,
compared with 2,646,876 dlrs.
The company said its fourth quarter and year losses
resulted from additions to loss reserves.
Shr profit nil vs loss three cts
Net profit 140,022 vs loss 882,869
Revs 13.3 mln vs 8,870,035
Avg shrs 45.0 mln vs 35.0 mln
Backlog 1,683,000 vs 978,000
NOTE: Current year net includes tax credit of 51,000 dlrs.
Electromedics Inc said it
expects to take a 150,000 dlr charge against first quarter
results due to the conversion of debentures.
The company said, however, it expects "positive" operating
comparisons for the period. Electromedics lost 6,000 dlrs in
last year's first quarter.
Turkey's Central Bank set a lira/dollar
rate for April 3 of 782.50/786.41 to the dollar, down from
780.00/783.90. It set a lira/D-mark rate of 428.30/430.44 to
the mark, up from 429.15/431.30.
San Diego Gas and Electric Co said a
California Public Utilities Commission decision to reconsider
allowing only 20 mln dlrs of the 69 mln dlrs in San Onofre
nuclear station costs it disallowed makes it likely that
earnings in 1987 will be reduced at least 36 cts per share.
The company said if the decision to disallow the other 20
mln dlrs is not changed, earnings would be penalized by another
19 cts.
Stanley Interiors Corp is raising 25
mln dlrs through an offering of convertible subordinated
debentures due 2012 with a seven pct coupon and par pricing,
said lead manager Salomon Brothers Inc.
The debentures are convertible into the company's common
stock at 14.06 dlrs per share, representing a 25 pct premium
over the stock price when terms on the debt were set.
Non-callable for two years, the issue is rated B-2 by
Moody's and B-minus by Standard and Poor's. First Albany and
Wheat First co-managed the deal, which was reduced from an
initial offering of 30 mln dlrs.
Key Centurion Bancshares Inc
said it has completed the previously-announced acquisitions of
Union Bancorp of West Virginia Inc and Wayne Bancorp Inc.
Britton Lee Inc said it
expects to report a loss on lower sales than it had anticipated
for the first quarter.
The company earned 119,000 dlrs before a 70,000 dlr tax
credit on sales of 7,227,000 dlrs in the year-ago period.
The European Community (EC) is to boost
spending to help the jobless this year.
The EC's executive commission said in a statement spending
on its so-called social fund would rise to 3.1 billion European
Currency Units from 2.5 billion ECUs in 1986. The fund is
designed to help boost job creation and improve worker
mobility, and supplement national schemes in the EC's 12 member
states.
Another 60 mln ECUs could be added if EC ministers switch
unused project credits to other programs, the Commission said.
Italy is the largest net beneficiary in 1987, getting 635
mln ECUs, with Britain in second place with 580 mln.
Bacob Finance NV is issuing a 50 mln
Australian dlr eurobond due July 5, 1990 paying 14-3/4 pct and
priced at 101-3/8 pct, lead manager Goldman Sachs International
Corp said.
The non-callable bond is available in denominations of
1,000 and 10,000 Australian dlrs and will be listed in
Luxembourg. The selling concession is one pct while management
and underwriting combined pays 1/2 pct.
The payment date is May 5 and there will be a long first
coupon. The issue is guaranteed by Bacob Savings Bank.
U.S. Trade Representative Clayton
Yeutter stressed the importance of trade negotiations to open
foreign markets rather than trade restrictions in a statement
to the Senate Finance Committee.
"In the long term we cannot repeatedly bludgeon other
nations into opening their markets with threats of U.S.
restrictions. Rather, we must be able to negotiate credibly for
global liberalization," Yeutter said.
Yeutter did not mention the recent U.S. trade sanctions
against Japanese semiconductors in his testimony on the pending
trade bill.
Yeutter said the trade bill should increase U.S.
competitiveness, aid U.S. trade negotiating leverage, and avoid
provoking foreign retaliation.
He urged Congress to reject provisions that would mandate
U.S. retaliation against foreign unfair trade practices.
Yeutter emphasized the importance of the new multilateral
trade negotiating round and called on Congress to quickly
approve an extension of U.S. negotiating authority.
"We want to open foreign markets and establish and enforce
rules of international competition, not foster dependence on
protection and subsidies," he said.
Qtly div 20 cts vs 20 cts prior
Pay June 1
Record April 16
West German unemployment, unadjusted
for seasonal factors, fell to 2.41 mln in March from 2.49 mln
in February, the Federal Labour Office said.
The total represents 9.6 pct of the workforce compared with
10.0 pct in February.
The seasonally adjusted jobless total rose, however, in
March to 2.23 mln from 2.18 mln in February, it added.
In March last year the unadjusted unemployment total stood
at 2.45 mln and represented 9.8 pct of the workforce.
Seasonally adjusted unemployment was 2.29 mln.
The Federal Labour Office said the number of workers on
short time rose by 80,629 to 462,802 and the number of
vacancies increased by 15,263 to 180,047.
Labour Office President Heinrich Franke, announcing the
figures, said the hesitant decline in the unadjusted jobless
total reflected continuing bad weather, slack activity in the
capital goods sector and structural changes in the coal and
steel industry.
In a separate statement, the Federal Statistics Office said
the rise in the overall number of people in employment had
slowed in February.
The Office said that, according to estimates for February,
25.7 mln people were in work, a rise of around 240,000 or 0.9
pct compared with the same month in 1986.
It noted that in January the year-on-year rise was 250,000
or 1.0 pct and the number in work stood at 25.78 mln. The
decline in February compared with January reflected seasonal
factors, it added.
Meals and feed on a cif Rotterdam
basis opened quietly this morning with mixed to slighlty firmer
seller indications compared with yesterday's midday levels,
market sources said.
Early buying interest was low despite a weaker dollar
against European currencies, they added. No trades were
reported so far.
US soymeal indicated between unchanged and one dlr a tonne
lower compared with yesterday. Brazilian soymeal pellets were
offered between one dlr lower and one higher, while Argentines
indicated up to two dlrs a tonne higher than yesterday.
Cornglutenfeed pellets were indicated between unchanged and
one dlr lower, while citruspulp pellets were offered at
slightly firmer levels compared with yesterday midday.
Seller indications for sunmeal pellets were between one dlr
higher and 0.50 dlrs lower than yesterday, while linseed
expellers were up to two dlrs above yesterday's midday levels.
A Swedish Finance Ministry committee
forecast that British Petroleum Plc
The Bundesbank did not intervene as
the dollar was fixed lower at 1.8162 marks after 1.8270
yesterday, dealers said.
The dollar firmed slightly from its opening 1.8135/45 marks
in very quiet pre-weekend trading and dealers said they
expected business to remain thin this afternoon.
"Trading is at an absolute nil, nobody wants to get involved
ahead of next week's meetings," one dealer with a U.S. Bank
said, referring to the Group of Seven industrial nations and
the International Monetary Fund meetings in Washington.
Dealers saw the dollar staying at current levels but
possibly rising above 1.83 marks on any supporting remarks
emerging from the meetings. "But the dollar's medium-term
direction is soft," one dealer said.
The dollar could well come under renewed pressure after the
international forums as attention returned to the U.S. And the
U.K.'s trade dispute with Japan, dealers said.
Cross currency trading was also subdued though sterling's
rise above 1.60 dlrs helped it to firm against the mark. It was
fixed higher at 2.924 marks after yesterday's 2.910.
The pound was seen staying between 2.90 and 2.93 marks for
the next days, dealers said.
Eurodollar deposit rates were steady from this morning,
with six month funds unchanged at midpoint 6-11/16 pct. Six
month euromarks stayed at midpoint 3-7/8 pct.
The Swiss franc firmed to 119.86 marks per 100 at the fix
from 119.71 yesterday and the yen rose to 1.244 marks per 100
from 1.243.
The French franc was little changed at 30.050 marks per 100
after 30.055 yesterday.
Central bank governor Jose Fernandez said
the 10.3 billion dlr debt restructuring package he and Finance
Secretary Jaime Ongpin negotiated with the Philippines'
commercial creditors was better than Mexico's.
"I think we got a better deal. It was really an enormous
drop, a reduction in rates and that to me is the critical
element," he told Reuters.
He was reacting to comments by local economists who said
Manila's debt accord was no better than Mexico's, which had won
a 20-year repayment, including a seven-year grace last year at
13/16 points over London interbank offered rates (Libor).
The Philippines clinched a repayment of 17 years, including
a grace period of 7-1/2 years on 10.3 billion dlrs of its total
debt of 27.8 billion.
But Fernandez said what was more significant was that
Manila came down from 1-7/8 on the new money and 1-5/8 on the
restructured debt to 7/8 points. Mexico, on the other hand
dropped to 13/16 from 14/16.
"They got a 1/16 reduction. We got almost a one percentage
point reduction," he said.
Asked why some features of the debt agreement such as the
token prepayments of principal were not made public
immediately, he said "These are very long documents and in a
press statement you can only cover the key points. But these
will be made available to you."
Ongpin confirmed on Tuesday that a Reuter report from New
York that Manila will pay its commercial creditors 111 mln dlrs
over 1987-1989 was accurate.
He omitted the token prepayments in previous announcements
but said there was nothing secret about them.
The Bank of England said it has operated
in the money market this morning, purchasing 170 mln stg bank
bills. This compares with the Bank's revised estimate of a 750
mln stg shortfall. In band two the Bank bought 72 mln stg at
9-13/16 pct, in band three 52 mln at 9-3/4 pct and in band four
46 mln at 9-11/16 pct.
The Finance Ministry has asked Japanese
commercial banks to moderate their dollar sales, bank dealers
said.
They said the Ministry had telephoned city and long-term
banks earlier this week to make the request.
One dealer said this was the first time the Ministry had
made such a request to commercial banks.
Finance Ministry officials were unavailable for immediate
comment. Dealers said the Ministry has already asked
institutional investors to reduce their sales of the dollar.
Dutch green coffee imports fell to
10,430 tonnes in January from 13,506 tonnes in January 1986,
and exports fell to 366 tonnes from 615, the Central Bureau of
Statistics said.
Imports of Colombian coffee were 2,169 tonnes (3,025 in
January 1986), Brazilian 483 (3,715), Indonesian 455 (145),
Guatemalan 196 (126), Cameroun 464 (560) and Ivory Coast 353
(839).
The Bank of England said it has operated
in the money market this afternoon, buying back bills totalling
347 mln stg. This brings the total help so far today to 517 mln
stg and compares with the Bank's revised estimate of an 800 mln
stg shortfall.
The central bank purchased in band one 20 mln stg at 9-7/8
pct, in band two 254 mln at 9-13/16 pct, in band three 66 mln
at 9-3/4 pct and in band four seven mln stg at 9-11/16 pct.
Japan should increase foreign access to
its farm products market, while encouraging further development
of domestic agriculture, a government report said.
The white paper on agriculture for the year ended March 31
said active participation in writing world farm trade rules at
the next round of General Agreement on Tariffs and Trade (GATT)
talks will help prepare Japan to improve access.
Agriculture Ministry sources said the paper marked an
easing in Japan's tough position on agricultural imports which
stressed the need for strict controls on some products to
maintain self-sufficiency in food.
Japan now produces only 30 pct of its annual grain needs,
down from 61 pct some 20 years ago, official figures show.
The paper said Japanese agriculture has been slow to
improve productivity and demand/supply imbalances.
The relative shortage of farmland in Japan is mainly
responsible for higher domestic prices, it said.
The strong yen has meant lower input material prices but
has also resulted in higher agricultural imports which has
worsened working conditions among part-time farmers, the paper
said.
This could make it difficult to improve the industry's
structure, the paper said.
To solve these problems and to reduce farm product prices
to more reasonable levels, Japan should try to restructure the
the agricultural sector to improve productivity and make it
self-supporting, it said.
THE FOLLOWING RAINFALL WAS RECORDDD IN
THE AREAS OVER THE PAST 24 HOURS
PARANA STATE UMUARAMA 10.6 MILLIMETRES, PARANAVAI 12.2 MM,
LONDRINA 6.0 MM, MARINGA 8.0 MM.
SAO PAULO STATE: PRESIDENZE PRUDENTE 1.0 MM, VOTUPORANGA
26.0 MM, FRANCA NIL, CATANDUVA 0.1 MM, SAO CARLOS NIL, SAO
SIMAO NIL.
The average rate of discount at today's
U.K. Treasury bill tender rose to 9.5195 pct from 9.3157 pct
last week, the Bank of England said.
This week's 100 mln stg offer of 91-day bills met
applications of 327 mln stg, the bank said.
Applications for bills dated Monday to Friday at the top
accepted rate of discount of 9.5261 pct were allotted about 81
pct.
Next week 100 mln stg of Treasury bills will be offered,
replacing 100 mln stg of maturities.
Active timecharter fixing by Soviet
operators to cover USSR grain imports featured the freight
market, ship brokers said.
At least two fixtures were reported on Soviet account to
lift EC grain, with a 22,000 tonner booked from Tilbury for a
voyage via lower Baltic Sea and redelivery passing Skaw at
4,000 dlrs daily and a 27,000 tonner from Ceuta for a voyage
via the U.K. And redelivery Skaw-Cape Passero at 4,500 dlrs
daily.
The Soviets also secured a 34,000 tonner from Gibraltar for
a trans-Atlantic round trip at 4,500 dlrs daily and a 61,000
tonner for similar business at 6,750 dlrs daily.
Brokers said several other fixtures were also thought to be
connected with Soviet grain, including a 69,000 tonner from
Taranto for five to seven months at 6,500 dlrs daily. Similar
fixing was reported yesterday at 6,000 dlrs.
Other timecharter fixing included a 14,000 tonner from
Indonesia to the U.S. Gulf at 2,800 dlrs daily and a combined
carrier of 75,000 tonnes dw from the U.S. Gulf to Italy at
9,000 dlrs daily.
Severel vessels were booked from Antwerp-Hamburg range,
including a 61,000 tonner bound for Singapore-Japan at 7,500
dlrs daily and a 16,000 tonner destined for west coast India at
5,000 dlrs.
Grain fixing was much quieter out of the U.S. Gulf, with no
fresh business seen on the significant routes to the Continent
or Japan, although tonnage was secured for at least five small
corn cargoes from the Gulf to Jamaica at between 21 and 25
dlrs. Wheat from the River Plate and Buenos Aires to Sri Lanka
received 26 dlrs.
Market talk suggested 11 dlrs had been paid for grain from
the U.S. North Pacific to Japan but no confirmation was
available.
Fairly active grain fixing emerged out of the Continent,
however, with maize covered from Nantes to Egypt at 15 dlrs,
and bagged flour from Greece to China at 27 dlrs.
Barley cargoes were arranged from Immingham to the Red Sea
at 17.25 dlrs and from Foynes to Jeddah at 17.25 dlrs.
Turkey's Central Bank set a lira/dollar
rate for April 6 of 781.95/785.86 to the dollar, up from
782.50/786.41. It set a lira/D-mark rate of 430.15/432.30 to
the mark, down from 428.30/430.44.
Shr three cts vs three cts
Net 141,224 vs 118,192
Sales 5,849,695 vs 3,717,794
Avg shrs 4,975,000 vs 4,925,000
Year
Shr 15 cts vs 10 cts
Net 720,126 vs 474,879
Sales 18.2 mln vs 11.5 mln
Avg shrs 4,959,932 vs 4,902,778
NOTE: 1985 year net includes gain of 58,000 dlrs, or one
cent a share, from tax loss carryforward
The Panama Canal Commission, a U.S.
government agency, said in its daily operations report that
there was a backlog of 30 ships waiting to enter the canal
early today. Over the next two days it expects --
4/03 4/04
Due: 36 28
Scheduled to Transit: 38 38
End-Day Backlog: 28 18
Average waiting time tomorrow --
Super Tankers Regular Vessels
North End: 19 hrs 8 hrs
South End: 20 hrs 16 hrs
The Stock Exchange is virtually certain
to agree to change its regulations in order to permit "when
issued" trading of U.K. Government bonds (gilts) as part of an
experimental series of bond auctions later this year, market
sources said.
"The principle that this "when issued' trading should take
place has been accepted by the Executive Committee of the
International Stock Exchange," said George Nissen, chairman of
the Gilt Edged Market Makers' Association (GEMMA). "It's a
question of how, rather than whether," he told Reuters.
The Bank of England announced in February that it planned a
possible series of experimental auctions for gilts, similar to
the system used to market U.S. Treasury issues, with the first
auction possibly in April or May.
The Bank said at that stage that it was not opposed in
principle to "when issued" trading developing in bonds in the
period between the announcement of full details of the auction
and the auction itself, as in the U.S.
However, "when issued" trading is prohibited under the rules
of the International Stock Exchange, formerly the London Stock
Exchange, and would require an amendment in order to proceed.
Nissen said discussions on the technical details of a rule
change to allow "when issued" trading were still taking place
between the Government broker at the Bank of England and the
Quotations Department of the Stock Exchange.
The 27 gilt-edged primary dealers regard the introduction
of grey market trading as an essential feature of an auction
system covering part of the Government's funding needs.
"If we are going into an auction system, we need to have
some form of market test of the stock we're bidding for," said
Simon Hartnell, Head Trader at primary dealer Alexanders Laing
and Cruickshank Gilts Ltd.
"The American WI (when issued) market certainly functions
very efficiently," he said.
Nissen said he believed that if "when issued" trading were
not allowed, market-makers "would be extremely unhappy about the
whole auction."
Gilt dealers noted that it was a basic provision of Stock
Exchange rules that dealing could not take place in a stock
until it was listed by the Quotations Department. However, this
was mainly designed to prevent a grey market springing up in
equities prior to listing.
They pointed out that in contrast to the many uncertainties
connected with an issue of equity securities, there would be
few imponderables relating to bonds just about to be issued by
the Bank of England.
Senior market sources noted that in any case "when issued"
trading would be supervised by the Stock Exchange and would be
subject to Bank of England supervisory guidelines.
Since the Bank of England and market-makers themselves are
known to be in favour of the idea, the sources said, there was
now a presumption that there would be scope for "when issued"
trading to take place.
Gilt sales now are effected by means of large-scale stock
tenders or by tap issues of stock tranches direct to the
market. But greater market capitalisation following the "Big
Bang" restructuring last year provided an opportunity for
change.
A combination of both systems would enable the Bank to
benefit from both the flexibility offered by traditional
marketing methods and the guarantee of a steady supply of funds
implied by auctions.
The Bank said in a consultative document published in
February that possibly two or three experimental auctions might
each raise between one to 1-1/2 billion stg.
The remainder of the funding would be conducted by
traditional tender and tap issue means. Total gross official
sales of gilt-edged stock were 11.9 billion stg in 1985/86.
Nissen said that market-makers had agreed unanimously with
the bank's view that auctions would be more easily conducted on
a price basis, rather than based on yield.
He said that the odds were also in favour of adoption of a
bid price form of auction, where successful bidders were
allotted stock at the various prices at which they bid, rather
than a common price allotment whereby stock was allocated at
the lowest accepted price.
Hartnell said that while a "when issued" facility was crucial
to market-makers' adaptation to the new system, he would also
have liked to see an extension to the "fallow" period proposal
made by the Bank of England.
The Bank said that it would not sell by any method stock of
the same type as that to be auctioned between the time of the
announcement of auction details and a period ending 28 days
after the auction itself.
Noting that in the case of long bond auctions, U.S. Primary
dealers have as much as three months between successive sales
of stock, Hartnell said the Bank's proposal was "very tight."
Nissen said that following a meeting between GEMMA and the
Bank of England on March 3, which he described as "very helpful,"
GEMMA submitted a note making several further residual points.
Market-makers are now awaiting a further, fairly
definitive, paper from the Bank which would contain details of
auction procedures. Although the Bank has not yet formally
announced a definite intention to proceed with the auctions,
most market participants assume that they will go ahead.
"My own view is that we are on course and the first
indications from the original paper - an auction at the end of
April or in May - must be the best assumption," he said.
Lloyds Investment Managers Ltd, a
London-based investment firm, said it raised it stake in Italy
Fund to 760,500 shares, or 12.0 pct of the total outstanding
common stock, from 466,000 shares, or 7.4 pct.
In a filing with the Securities and Exchange Commission,
Lloyds said it bought the additional 294,500 Italy Fund common
shares since November 7 for a total of 3.3 mln dlrs. Another
70,000 shares of the stake are held by an affiliate, it said.
It said its dealings in Italy Fund stock are for investment
purposes only and that it has no current plans to increase or
decrease its current stake.
The Federal Home Loan Bank Board said
home mortgage rates fell from early February to early March to
their lowest point in nine years, but the rate of decline was
slower than it had been in recent months.
The bank board said the average effective commitment rate
for fixed-rate mortgages for single family homes and a 25 pct
loan-to-price ratio with a maturity of at least 15 years was
9.48 pct in early March.
The rate was four basis points lower than a month ago, only
one-eighth the size of decline in the previous month, the bank
board said.
Rates for adjustable-rate mortgages decline eight basis
points from early February to 8.43 pct in early March, the bank
board said. The drop was far less than the 15 basis point
decline in the previous period, the agency said.
The average effective interest rate on all loans closed by
major mortgage lenders declined nine basis points from early
February to early March, the agency said. The fall brought the
rate to 9.14 pct was the lowest since December 1977, it said.
The effective rate for ARMS was 8.39 pct, 15 basis points
below a month earlier. For fixed-rate loans it was 9.36 pct, 14
basis points below a month earlier, the agency said.
Shr 5.56 dlrs vs 3.88 dlrs
Net 47.5 mln vs 33.2 mln
Revs 254.5 mln vs 243.5 mln
Note: shr after preferred dividends
ITT Corp
FCS Laboratories Inc said merger
discussions with an unnamed privately-held company in the
health care field have ended without an agreement.
The previously announced negotiations began last August,
the company said.
"It's disappointing to spend so much time on these
negotiations and have them fail," said FCS chairman Nicholas
Gallo III. "But the discussions could not produce a deal
acceptable to our board in the context of the company's
stronger financial position today as compared to six months
ago."
Gallo said FCS will stop actively seeking potential merger
partners, but will respond to serious inquiries.
"We are determined to follow our plan to restore this
company to profitability," he said. "To continue actively
searching for potential acquirers inherently forces us to
postpone the implementation of critical decisions which are
part of the plan."
The company, which has 4,475,930 common shares outstanding,
reaffirmed it expects to be profitable in the second half of
the fiscal year ending September 30, 1987.
Pacific Gas and Electric Co said
its Diablo Canyon Unit 2 nuclear power plant will begin its
first refueling today after about 13 months of operation.
The refueling outage is expected to last about 12 weeks and
will include a variety of maintenance as well as the
replacement of about one-third of Unit 2's fuel, the company
said.
Pacific Gas said Unit 2 generated power about 93.7 pct of
the time during its first year of operation.
Pacific Gas' two Diablo Canyon units generate about 2.2 mln
kilowatts of electricity in full operation.
World Bank President Barber Conable
expressed concern that trade protectionism, at the heart of a
new showdown between the United States and Japan, might spread
throughout the industrial world.
But in an interview with Reuters, Conable said the action
by the United States to slap tariffs on certain electronic
goods from Japan did not mean the countries were heading for a
full-scale trade war.
Conable said the World Bank has been pressing developing
countries to open their markets, arguing that a free trading
environment increased the possibility of global economic
growth.
"We have, in fact, been making adjustment loans to many
countries in the developing world which have encouraged the
opening of their markets and we want to be sure that the
developed world doesn't close at the same time," he said.
He said the U.S. action against Japan was "a significant
retaliatory step but it did not constitute a basic change in
trade policy."
The interview came just before next week's semi-annual
meetings of the Bank and the International Monetary Fund.
Referring to Brazil's recent interest payments moratorium,
Conable also said the global debt situation was very serious
and must be closely watched.
He said the Bank, which in the past has concentrated on
making loans that assist the basic underpinnings in the
developing world such as dams, roads and sewers, will
increasingly make assistance available for economic reform.
The Bank has increased these loans, in part because of the
debt crisis that has found countries desperately in need of new
funds for balance of payments adjustment and economic reforms
aimed at opening their markets, encouraging foreign investment
and reducing government's role in the economy.
"We're comfortable with adjustment lending, we expect,
however, that it will never reach a majority of our portfolio,"
Conable said.
He made clear, however, that adjustment lending would
continue to increase as a proportion of overall Bank lending
for some time.
He noted, "the problem of debt was a severe one and many
countries are asking for adjustment assistance because of the
problem of debt."
Conable, is a a former Republican Congressman from New York
chosen by President Reagan for the Bank position last year. He
is an associate of Treasury Secertary James Baker who launched
the U.S. strategy for shoring up indebted nations in October,
1985 which included a call for increased adjustment lending by
the World Bank.
Conable also said that he expected the result of a major
study of the Bank's organization to be completed in the next
several weeks.
He said the decision to seek a reorganization was based, in
part, on the fact that the Bank had come under fire from the
poorest countries for not doing enough to help and from the
richest countries because of inefficiency.
the reorganization is considered a major initiative by
Conable, and is being closely-watched by the agency's 151
member-countries as an indication of his management style and
priorities.
"I want to be sure this institution is viewed by those who
must support it as soundly constituted so that it will be
permitted to grow," Conable said.
However, he said "I don't believe there is anything
basically wrong with this institution and I don't believe it
has to have any redefinition of its purpose."
He said, however, that it was apparent that the debt
initiative proposed by Baker has given the Bank a central role
in dealing with the debt crisis.
Conable added that cooperation between the Bank and its
sister agency, the International Monetary Fund, was good and
that he talked often with IMF Managing Director Michel
Camdessus on a variety of issues.
On a personal level, Conable said that he not feel a need
to put his personal stamp on the Bank noting that "I don't have
a particular mission here except to be useful to the
institution and to the process of development."
He added, "so I don't feel a great calling to personalize
the institution."
On the development needs of sub-Sahara Africa, Conable said
that the Bank was constantly reviewing new ways for assisting
the region, noting that half of the recently agreed financing
of 12.4 billion dlrs for Bank's International Development
Association was earmarked for Africa.
Leading industrial nations are expected to consider new
forms of debt relief for the very poorest nations, like those
in the Sub-Sahara, during next week's meetings.
U.S. grain carloadings totaled 25,744
cars in the week ended March 28, down 4.3 pct from the previous
week but 41.6 pct above the corresponding week a year ago, the
Association of American Railroads reported.
Grain mill product loadings in the week totalled 10,920
cars, up 0.1 pct from the previous week and 12.7 pct above the
same week a year earlier, the association said.
The Securities and Exchange
Commission reminded corporate raiders and others tendering for
the shares of companies that they must extend the period their
offers are open if key conditions are changed.
Specifically, the agency said those making tender offers
for companies' stock must extend the offers if they decide to
eliminate conditions requiring a minimum number of shares to be
tendered in order for the offers to be valid.
Tender offers typically include minimum share conditions.
As a result, a purchaser would not be bound to buy the shares
that were tendered if the minimum level were not reached.
In an interpretation of current rules, which officials said
clarifies the SEC's present position, the agency said a tender
offer must be extended if a minimum share condition is waived,
even if the purchaser reserved the right to do so.
The interpretation makes clear that waiving a minimum share
condition is a "material change" of the tender offer under U.S.
securities law, SEC officials said.
The SEC has already said that other specific material
changes, such as changes in the percentage of securities being
sought or the price being offered, made during the course of a
tender offer require a 10-day extension of the offer.
The length of the extension, which is aimed at giving
shareholders an adequate chance to assess revisions of a tender
offer, was not specified in cases where the minimum share
conditions were waived.
SEC officials said the length of the extension in such
cases would depend on the facts and circumstances surrounding
each case, but would generally be between five and 10 days.
The agency cited two recent tender offers in which waivers
of a minimum share conditios were tried on the last day of each
offer, denying shareholders the chance to react to the new
information. Officials declined to identify the two offers.
"If a bidder makes a material change near or at the end of
its offer, it will have to extend the offer to permit adequate
dissemination," the SEC said.
Federal securities law requires that all tender offers
remain open for at least 20 business days.
Mtly div 10.4 cts vs 10.8 cts prior
Paid April 1
Record March 31
Bayou International Ltd said it
acquired 19.9 pct of
Network Control Corp said it
intends to take a 250,000 dlr charge against earnings for the
third quarter ended March 31 and said sales for the quarter
would be about 400,000 dlrs, about 50 pct below sales in the
same year-ago quarter.
Network said it is taking the charge due to the significant
increase in accounts receivable which remain uncollected for
more than 90 days after billing. It said it ultimately will
collect most of those accounts.
It attributed the sales decline to a transition period for
its new products and a delay in a major order.
Brazil's state oil company
Petrobras is pledging to export 4.6 mln cubic meters of fuel,
or 28.9 mln barrels in 1987, a company spokesman said.
He said that represents a total sale worth 600 mln dlrs.
The volume is 27 pct higher over 1986 sales, which totalled 3.6
mln cubic meters, or 22.6 mln barrels.
The United States, Africa and Latin American are Brazil's
main fuel buyers, the spokesman said.
The Brazilian Coffee Institute
(IBC) could close May export registrations tonight following
extremely heavy sales today, exporters said.
They estimated registrations today at between 1.0 mln and
1.2 mln 60 kilo bags. Yesterday 645,000 bags were registered.
The exporters said over 1.0 mln bags of total registrations
could have been the declaration of sales made in the six weeks
during which books were closed. The rest would be new sales.
When the IBC opened May registrations from yesterday it did
not set any volume limit. April registrations opened and closed
on February 16 when a daily record 1.68 mln bags were declared.
The Argentine Grain Board adjusted
minimum export prices of grain and oilseed products in dlrs per
tonne FOB, previous in brackets, as follows:
Maize 71 (72), grain sorghum 65 (66).
Roasted groundnutseed, according to grain size, 510 (520),
400 (410), 375 (385), 355 (365).
Soybean pellets for shipments through May 164 (162) and
June onwards 161 (159).
Loctite Corp said it expects
third quarter earnings to be higher than security analysts'
forecasts of 75 to 80 cts a share.
Last year the company earned 53 cts per share in the third
quarter.
It attributed its better than expected forecast to sales
growth, which it said were particularly strong overseas. It
also said it will have a lower effective tax rate.
Leonard Chavin, a Chicago real estate
developer who has said he is considering seeking control of
L.E. Myers Co Group, said he raised his stake in the company to
273,100 shares, or 12.1 pct, from 219,600, or 9.7 pct.
In a filing with the Securities and Exchange Commission,
Chavin said he bought 53,500 Myers common shares between March
10 and 31 at prices ranging from 5-1/2 to six dlrs a share.
Last January, Chavin said he retained investment banker
R.G. Dickinson and Co to advise him on his Myers stock
dealings. He has also said he would be unable to seek control
of Myers unless he gets financing.
The Brazilian Coffee Institute
today registered 1.4 mln 60 kilo bags of green coffee for May
shipment, an IBC statement said.
This brings the total in the two days registrations have
been open to 2.05 mln, including 4,868 bags of soluble.
Today's registrations comprised 1,076,226 bags to members
and 326,259 to non-members of the International Coffee
Organisation. No soluble sales were registered today.
Shr loss 31.09 dlrs vs loss 1.86 dlrs
Net loss 112.7 mln vs loss 5.5 mln
NOTE: 1986 loss includes operating loss of 109.4 mln dlrs
or 30.21 dlrs a share, including an additional loan loss
provision of 68 mln dlrs, write downs in the value of real
estate of 13 mln dlrs and an extraordinary loss of 3.3 mln dlrs
for early retirement of long-term debt.
The Brazilian Coffee Institute
(IBC) tonight closed export registrations, exporters said.
They said they heard of the closure from IBC officials but
no officials could be reached immediately for confirmation.
Earlier an IBC statement said registrations for May, the
only month which was open, today totalled 1.4 mln bags of 60
kilos to bring the total registered for the month to 2.05 mln.
A group led by New York investor
Mario Gabelli told the Securities and Exchange Commission it
cut its stake in Gencorp Inc to 1,410,184 shares, or 6.3 pct of
the total, from 1,626,233 shares, or 7.3 pct.
The Gabelli group said it sold 216,049 Gencorp common
shares between March 20 and 30 at prices ranging from 108.75 to
114.75 dlrs a share.
South Korea's wholesale price index, base
1980, rose 0.2 pct to 125.1 in March after a 0.2 pct rise in
February but was 0.6 pct lower than its March 1986 level, the
Bank of Korea said.
The March consumer price index, same base, rose 0.5 pct to
146.0 after a 0.1 pct gain in February, for a year-on-year rise
of 1.7 pct.
The Brazilian Coffee Institute
(IBC) confirmed having closed May export registrations,
effective April 6.
On Friday night exporters said they had heard of the
closure from IBC officials, but the officials could not at the
time be reached for confirmation.
The U.S. economy in March improved at a
faster rate than in February, with the National Association of
Purchasing Management's composite index rising to 53.9 pct from
51.9 pct, the NAPM said.
The first quarter average for the index also was 53.9 pct.
The NAPM said that, if this average were to continue for the
rest of 1987, it would be consistent with real gross national
product growth of about three pct.
An index reading above 50 pct generally indicates that the
economy is in an expanding phase. One below 50 pct implies a
declining economy.
The NAPM said the economic improvement was evident in all
of the indicators in the index except inventories, which
declined slightly.
New orders rose sharply in March, with production also
higher. Vendor deliveries slowed, another sign that the economy
improved in March. Employment expanded for the first time since
August 1984.
Robert Bretz, chairman of the NAPM's business survey
committee and director of materials management at Pitney Bowes
Inc
Growth in oil consumption in the Western
industrialized countries is likely to slow to around one pct
this year compared with 2.3 pct in 1986, the International
Energy Agency said.
Oil use in the 24 member countries of the Organization for
Economic Cooperation and Development (OECD) increased by around
one pct in the first quarter of 1987 to 35.9 mln barrels a day,
the IEA said in its latest monthly report.
Growth in OECD countries is expected to come primarily from
transport fuels, as was the case in 1986. But if average
consumer prices are higher than 1986, the rate of growth for
these fuels may be below last year's 3.6 pct.
The IEA said assuming crude and product prices remain nar
current levels, some destocking by end-users can be expected.
If that takes place, natural gas will also regain some of
the market share it lost to heavy fuel in 1986, it said.
IEA estimates on April one put oil stocks held in the OECD
area at 428 mln tonnes, or 98 days of forward consumption. This
is about the same as at the begining of the year.
The agency said this flat trend is explained by the
projected seasonal consumption decline in the second quarter of
the year which offset a reduction in stocks.
Company stocks on land in the OECD rose to 326 mln tonnes
on April one this year compared with 316 mln tonnes in calender
1986 while governments also built up their strategic stocks to
102 mln tonnes against 97 mln in 1986.
The year-on-year trend of government stock building is
continuing with company stocks rising, more or less in line
with consumption, after declining for five years, IEA said.
Oil stocks on land in the United States and Canada were put
at 206.6 mln tonnes down from the 214 mln tonnes on January one
and equivalent to 94 and 98 days of consumption, respectively.
Oil stocks in Western Europe were 147.4 mln tonnes, down
from the 154 mln tonnes on January one but still equivalent to
94 days of consumption.
The IEA said that initial estimates indicate that company
stocks fell by 1.2 mln bpd in OECD countries in the first
quarter of the year. This followed a small rise in January of
400,000 bpd but a decline of 1.5 bpd in February and 2.5 bpd in
March.
And it is possible that final data will show a larger draw,
particulary for March, it said.
As crude production also fell, there is likely to have also
been a decline in non-reported stocks, particularly at sea, the
IEA said.
World oil supply fell through the first quarter by about
two bpd to 45.2 bpd from 47.5 bpd in the last quarter of 1986.
This drop was mostly due to a decline in OPEC crude
production to around 15.5 bpd in February/March from 16.5 bpd
in January and to the seasonal drop in exports from Centrally
Planned Economies, the IEA said.
Total OPEC oil supply totalled 17.2 bpd in the first
quarter of 1987 compare with 19.3 bpd in the last three months
of 1986 while supply from non-OPEC countries totalled 28 bpd as
against 28.2 bpd in the same 1986 period.
A drop in Saudi Arabian output to a tentatively forecast
3.3 bpd in march from 3.6 bpd in February was the largest
factor behind the OPEC production decline, the IEA said.
Philippine coffee exports are expected
to fall sharply due to a combination of the International
Coffee Organisation's (ICO) decision not to revive export
quotas and higher local prices, ICO Certifying Agency official
Dante de Guzman told Reuters.
He said exporter registrations dropped from an average
weekly 500 tonnes in March to 45 tonnes last week, with exports
in coffee year 1986/87, ending September, forecast to total
about 8,000 tonnes against 48,000 in 1985/86.
"Because of the relatively higher level of domestic prices,
it has become difficult to service exports," de Guzman said,
adding that most exporters are taking a wait and see attitude.
Coffee production was expected to drop slightly to about
one mln bags of 60 kg each in the 1986/87 crop year ending June
from 1.1 mln bags last year, he said.
Wheat and rapeseed crops in east China
suffered considerable damage because of frost during a spell of
unusually cold weather in late March, the China Daily said.
It said average temperatures for the last 10 days of March
in most of east China were three to five degrees centigrade
below average. Snow fell in Jiangsu, Anhui, Hubei and Henan,
making early rice sowing difficult.
Heavy snow blanketted central and south Jilin and north
Liaoning, leaving farmland too muddy for spring ploughing and
sowing, the paper said.
The paper said rainfall during the last 10 days of March in
areas south of the Yangtze had been much higher than normal.
Heavy rain fell last Sunday in parts of Guangdong, ending a
particularly arid dry season and marking the start of the flood
season, it said. It gave no further details.
The New China News Agency said rain and snow in Henan had
improved the prospects for wheat, sown on 4.8 mln hectares, and
caused a drop in grain prices at rural fairs since late
February. It gave no 1986 figures for comparison.
The Bank of Japan intervened in early
afternoon Tokyo trading to support the dollar against active
selling by institutional investors and speculative selling by
overseas operators, dealers said.
The central bank had also bought dollars against the yen in
morning trade.
The dollar traded around 145.20/30 yen when trading began
in the afternoon here and weakened only slightly, the dealers
said.
The French treasury has decided to repay
680 mln francs of debt issued before 1950, the Finance Ministry
said.
Seven issues, accounting for 0.13 pct of total state
domestic debt, would be redeemed by the Caisse d Amortisement
de la Dette Publique, the national debt amortisation fund, a
Ministry statement said.
The Ministry said the debt rationalisation exercise,
similar to one carried out in 1958 and 1959, would take out of
circulation old issues which were expensive to manage and
difficult to trade because of their highly complex structure.
Technical details of the operation would be announced in
the next few days.
The securities to be redeemed would be the three pct
perpetual rente, five pct perpetual rente, four pct 1941-1960
redeemable rentes, 3.5 pct 1942-1952 redeemable rentes, three
pct 1942-1955 redeemable rentes, three pct 1945-1954 redeemable
rentes, and 4.5 pct 1933-1960 redeemable treasury bonds.
The ministry said the operation would mainly benefit
long-term holders of the issues, mainly small investors and
small communes.
The issues were difficult to trade because they comprised
securities of variable nominal value, it noted.
The Italian Treasury said it would offer
2,500 billion lire of indexed government discount certificates
at rates slightly higher than on the preceding issue.
The seven-year certificates carry a first-year coupon,
payable April 21 1988, of 4.86 pct, identical to that on the
preceding issue in March.
They will be offered at a base price of 72 lire, down from
74 previously, for an effective net annual yield on the first
coupon of 10.15 pct against 9.66 in March. Yields after the
first year will be linked to rates on 12-month Treasury bills.
Subscriptions to the issue close April 17.
FMD Inc said it has agreed to acquire
Bankers Protective Financial Corp for 28,836,000 common shares,
subject to approval by the Texas State Board of Insurance.
Bankers Protective is a life insurance company based in
Texas.
Shr 99 cts vs 97 cts
Net 31,011,000 vs 30,899,000
Sales 651.5 mln vs 583.1 mln
Year
Shr 3.13 dlrs vs 2.92 dlrs
Net 98,643,000 vs 92,347,000
Sales 2.61 billion vs 2.51 billion
NOTE: 1986 results reflect two-for-one stock split of July
23, 1986
Household International
Inc said it expects its fully diluted earnings per share for
the first quarter to be about 35 pct above the same year-ago
period.
It also looks for 1987 full-year fully diluted earnings to
be about 20 pct higher than the record 4.31 dlrs a share
reported for 1986.
Chairman Donald Clark, in remarks prepared for delivery to
New York security analysts, cited increased earnings from
Household Financial Services and "excellent return on equity
from Household Manufacturing, combined with the impact of our
share repurchase program, will result in higher earnings per
share and improved return on equity in 1987."
THE FOLLOWING RAINFALL WAS RECORDED IN
THE AREAS OVER THE PAST 24 HOURS
PARANA STATE: UMUARAMA NIL, PARANAVAI NIL, LONDRINA NIL,
MARINGA NIL.
SAO PAULO STATE PRESIDENTE PRUDENTE NIL, VOTUPORANGA NIL,
FRANCA NIL, CATANDUVA NIL, SAO CARLOS NIL, SAO SIMAO NIL.
MINAS GERAIS STATE: GUAXUPE 33.0 MILLIMETRES, TRES PONTAS
5.0 MM.
Marion Laboratories Inc's stock rose
sharply today after the company presented a bullish earnings
scenario at a meeting for pharmaceutical analysts Monday,
traders and analysts said.
The company said it expects earnings for fiscal 1987,
ending June 30, to rise more than 75 pct over a year ago.
That pronouncement encouraged analyst David Crossen of
Sanford C. Bernstein and Co to raise his earnings estimates for
the company to 1.28 dlrs a share in 1987, compared to his
previous estimate of 1.20 dlrs a share. Last year the company
earned 70 cts a share.
Marion's stock gained 3-1/4 to 75-1/2.
At the meeting of pharmaceutical analysts, Marion's
president Fred Lyons Jr. said Wall Street eanrings estimates of
1.10-1.15 dlrs a share for fiscal 1987 "are expected to cause
even the aggressive side of this range to be 10 to 15 cts low."
Lyons said the strong performance in the second half of
this year will result from the fourth quarter introduction of
90 mg and 120 mg Cardizem tablets. Analyst Crossen said that
Cardizem, which treats angina, is also expected to be approved
for the treatment of hypertension by the end of the year.
Crossen said "because Marion is still just a small company,
the growth of Cardizem is having a big impact on the bottom
line." He raised fiscal 1988 earnings estimates to 2.15 dlrs a
share from his previous estimate of 2.05 dlrs a share.
"The company has a broad new product pipeline in the
industry and as far as I am concerned, it is the most
innovative company in the business," he said.
For the five years through 1991, Crossen expects Marion to
have a growth rate of 55 pct.
China's soybean crop this year is
forecast at 11.5 mln tonnes, down slightly from 11.55 mln
estiamted for last year, the U.S. Agriculture Department's
officer in Peking said in a field report.
The report, dated April 2, said Chinese imports this year
are projected at 300,000 tonnes unchanged from last year's
level.
Exports are forecast to increase to 1.0 mln tonnes from
800,000 tonnes exported last year, the report said.
Imports of soybean oil are estimated at 200,000 tonnes,
also unchanged from last year.
The Turkish Central Bank set a
Lira/Dollar rate for April 8 of 784.50/788.42 to the Dollar,
down from the previous 784.35/788.27.
The Bank also set a Lira/Mark rate of 430.60/432.75 to the
Mark, down from the previous 429.35/431.50.
Corroon and Black Corp said it
completed the acuqisition of
Qtly div 11 cts vs 11 cts prior
Pay June 15
Record May 15
Cotton planting continued progressing
in the week ended April 5, but cold, wet weather in the South
hampered seedbed preparation, the Joint Agricultural Weather
Facility of the U.S. Agriculture and Commerce Departments said.
In a summary of its Weather and Crops Bulletin, the agency
said planting increased in California as soil temperatures
improved.
Texas planted 10 pct compared with an average of eight pct.
Arizona and Georgia planted 35 pct and two pct, respectively,
it said.
Oklahoma farmers prepared 10 pct of their cotton seedbeds,
15 points below average, the agency said.
The amount of coffee stored in New York
and New Orleans warehouses and certified for delivery against
the New York Coffee "C" futures totalled 585,555 bags as of
April 3, compared with 585,794 bags the previous week, a net
decrease of 239 bags, the New York Coffee, Sugar and Cocoa
Exchange said.
The total comprised 392,845 bags in New York, an increase
of 261 bags, and 192,710 bags in New Orleans, a drop of 500
bags.
The exchange said there were nil bags pending
classification. There were 56,578 bags pending certification,
including 32,553 in New York and 24,025 in New Orleans, the
exchange said.
Textron Inc said it plans to
sell its Avco Specialty Materials Division as part of its debt
reduction and restructuring.
The company said it will use proceeds from the sale to
reduce the debt incurred by its acquisition of Ex-Cell-O Corp
last year.
Textron said Morgan Stanley and Co will represent it in the
sale.
GenCorp Inc said the decision by
General Partners, comprised of AFG Industries and Wagner and
Brown, to end its hostile offer for the company supports its
belief that the buy back offer it announced yesterday was a
"financially superior alternative."
GenCorp said it would annouce details of its plans to buy
back 54 pct of its stock for 1.6 billion dlrs, or 130 dlrs a
share, later this week. GenCorp's buy back was made to fend off
the hostile 2.3 billion dlr, 100-dlr-a-share, tender offer by
AFG and Wagner and Brown.
Earlier today AFG and Wagner and Brown said that without
the benefit of additional information available to GenCorp's
management, it cannot compete economically with GenCorp's
proposal.
The group said it is ending its tender offer for GenCorp
and promptly return to tendering shareholders all shares
tendered pursuant to its offer.
The group owns 9.8 pct, or 2,180,608 shares, of GenCorp's
outstanding shares.
Shr nine cts vs seven cts
Net 1,356,000 vs 1,041,000
Revs 9.7 mln vs 8.4 mln
Shr 38 cts vs 30 cts
Net 1,356,754 vs 1,048,340
Assets 448.5 mln vs 407.4 mln
Qtly dividend 52-1/2 cts vs 52-1/2 cts
Pay May one
record April 17
Qtly div 25 cts vs 25 cts prior
Payable July one
Record May 7
Treasury balances at the Federal
Reserve rose on April 6 to 4.262 billion dlrs from 3.876
billion dlrs on the previous business day, the Treasury said in
its latest budget statement.
Balances in tax and loan note accounts fell to 4.950
billion dlrs from 5.004 billion dlrs on the same respective
days.
The Treasury's operating cash balance totaled 9.212 billion
dlrs on April 6 compared with 8.880 billion dlrs on April 3.
The U.S. Treasury said it will sell
13.2 billion dlrs of three and six-month bills at its regular
auction next week.
The April 13 sale, to be evenly divided between the three
and six month issues, will result in a paydown of 12.35 billion
dlrs as maturing bills total 25.55 billion dlrs including the
9-day cash management bills issued April 7 in the amount of
11.01 billion dlrs.
The bills will be issued April 16.
An investor group led by Dart
Container Corp, a Sarasota, Fla., plastic utensil maker, told
the Securities and Exchange Commission it raised its stake in
Texstyrene Corp to 420,500 common shares or 11.7 of the total
outstanding.
The group said it bought the shares for investment and
intends to continue to buy Texstyrene stock in the future.
The group said its most recent purchases included 106,000
shares bought March 10-31 in ordinary brokerage transactions.
Allegheny International Inc, which has
agreed to a merge with a jointly-formed First Boston Inc
affiliate in a deal worth 500 mn dlrs, said shareholders of its
preferred stock have filed a class action complaint against the
company.
The complaint alleges, among other things, that the company
and its board agreed to pay First Boston an illegal seven mln
dlr topping fee if it received a higher offer for the company
prior to the buyout.
The suit contends that this fee hampers Allegheny's ability
to attract other offers or take other actions that would
benefit holders of preferred stock. The complaint also alleges
federal securities laws violations and breach of fiduciary
duty.
The suit requests an injunction against proceeding with the
pending offer being made by Sunter Acquisition to acquire
Allegheny. Sunter Acquisition Corp and Sunter Holdings Corp
were formed by First Boston and Allegheny.
Allegheny said it and the Sunter concerns intend to
vigorously defend the complaint's charges.
The complaints were filed by Robert Moss and other parties
who are believed to own about 230,000 shares of Allegheny's
preferred stock.
A group of Canadian lawmakers from
Ontario today asked their U.S. counterparts to exempt Canada
from the mandatory trade retaliation provisions in a major
trade bill being considered by the U.S. Congress.
At a meeting of the Northeast-Midwest Coalition, an
organization of U.S. legislators, David Cooke, chairman of the
Ontario Parliament's Select Committee on Economic Affairs, said
the exemption would help trade relations.
The trade legislation to be considered by the full House in
late April would require President Reagan to retaliate against
foreign unfair trade practices unless the trade actions would
harm the U.S. economy.
Currently, Reagan can reject trade sanctions on any
grounds.
Cooke, a member of the Liberal party, told the U.S.
congressmen, "I can understand (the trade bill). I think it has
to do with concerns you have with the other parts of the world."
"I would suggest to you that we are your best friends. You
do not have those concerns with Canada and you should sincerely
consider exempting our country from that bill," he added.
Canada is the United States' largest trading partner, with
two-way trade more than 113 billion dlrs in 1985, according to
the coalition. But the U.S. ran up a 23 billion dlr deficit in
manufactured goods that year compared to a 14 billion dlr
surplus in services trade with its neighbour.
The Reserve Bank said it will offer
400 mln N.Z. Dlrs in government bonds of two differing
maturities at a 14 pct coupon at a bond tender on April 15.
The bank said it will offer 200 mln dlrs of bonds maturing
March 1990 and 200 mln dlrs of bonds maturing July 1992.
The bond tender is the first for the fiscal year ending on
March 31 1988. A full bond tender program for the year has not
yet been announced.