Datasets:

ajay141

/

ds_articles

like 0

SIMEX CURRENCY FUTURES EASE IN EARLY TRADING

Simex currency futures eased in early dealings, after a higher opening in quiet and cautious trading, dealers said. They said operators were unwilling to take large positions ahead of the expected group of seven ministers meeting in Washington today. Participants also were cautious because of persistent Bank of Japan dollar buying intervention, with dollar supportive comments by Federal Reserve chairman and Japan's Finance Minister having little impact, dealers said. June mark eased to around 0.5500 dlrs from a 0.5510 opening and Chicago's 0.00501 and yen to 0.006910 against 0.006920 and 0.006913. About 200 lots of mark and 65 lots of yen were traded. June Sterling was indicated at 1.6075/85 dlrs against Chicago's 1.6080 with no business seen in the first trading hour. Speculative buying helped Nikkei Stock Average Index futures to firm in early trading, after a lower opening following weaker New York stock market. June firmed to 22,920 from a 22,550 low and 22,895 here yesterday with about 400 lots exchanged. Gold futures remained idle. REUTER 

NIPPON MINING LOWERS COPPER PRICE

Nippon Mining Co Ltd said it lowered its selling price for electrolytic copper by 10,000 yen per tonne to 260,000, effective immediately. REUTER 

REUTER WORLD NEWS HIGHLIGHTS 0300 GMT - APRIL 8

President Reagan ordered a high-level review of U.S. Embassy security amid rising concern over a sex-and-spy scandal in the Moscow embassy which he said had wide implications. At the same time he said Soviet diplomats will not be allowed to use their new embassy in Washington until the U.S. Embassy in Moscow was made secure. BAHRAIN - Iranian forces have renewed their assault on Iraqi lines defending the southern city of Basra and gained what Baghdad described as "footholds" on Iraqi territory. BEIRUT - Syria intervened to halt months of fighting over Palestinian refugee camps besieged by Amal militia. CAIRO - The ruling National Democratic Party of President Hosni Mubarak took 75 pct of the seven mln votes cast in Monday's general election, but incomplete official results indicated some Socialist and Moslem Brotherhood gains. WASHINGTON - U.S. And NATO forces are monitoring what seems to be the largest deployment of Soviet attack submarines in the Western Atlantic since 1985, the Pentagon said. ROME - Partners in Italy's collapsing coalition government headed for a showdown in a parliamentary vote of confidence. PARIS - France's conservative government won as expected a parliamentary vote of confidence sought by Prime Minister Jacques Chirac on his general policies. ROME - Israeli Foreign Minister Shimon Peres discussed the Middle East with Palestinian and Soviet officials at a Socialist International committee meeting here. WASHINGTON - Jordanian Prime Minister Zaid al-Rifa'i said he had made progress in talks with U.S. Secretary of State George Shultz on the possibility of convening an international conference on Middle East peace. BELFAST - A British soldier was shot and seriously hurt in Northern Ireland and buses and lorries were hijacked and set on fire after mourners clashed with police at an Irish Republican Army funeral. REUTER 

ASIAN DOLLAR DEPOSITS OPEN QUIETLY MIXED

Asian dollar deposit rates opened narrowly mixed in quiet trading, dealers said. They said the market ignored dollar supportive comments by U.S. Federal Reserve Chairman Paul Volcker and Japanese Finance Minsiter Kiichi Miyazawa. The U.S. Federal Reserve's addition of temporary reserves via two-day system repurchase agreements when fed funds were trading at 6-1/8 pct also had little effect on the market. Short-dates were unchanged to slightly higher underpinned by a steady U.S. Fed funds rate. Overnight was little changed at 6-5/16 6-3/16 and week-fixed rose 1/16 point to 6-3/8 6-1/4. Dealers said most operators refrained from taking large positions as they await more news from the expected currency talks in Washington starting today. Among period rates, one month eased 1/16 point to 6-7/16 6-5/16 pct, three and six months were unchanged at 6-9/16 6-7/16 and 6-11/16 6-9/16 pct, respectively while one year gaind 1/16 point to 6-7/8 6-3/4 pct. Asian dollar CD rates opened mixed in quiet trading. One month slipped to 6.40/30 pct from 6.45/35 yesterday, three months was steady at 6.55/45 pct but six months rose slightly to 6.70/60 pct from 6.65/55. REUTER 

YEN BOND FUTURES HIT RECORD HIGH IN EARLY TRADE

Yen bond futures prices hit record highs in early trade in response to the early jump in the cash bond market on speculative purchases by brokers, dealers said. Key June was 111.31 after hitting a record high earlier of 111.48, against an opening of 111.02. It closed at 110.68 yesterday. September was 110.10, below the earlier record of 110.15 and against a 109.40 close. The rally was triggered by a fall in short-term interest rates and heavy broker speculation in expectation of more end-investor purchases. But prices eased towards end-morning as the cash bond market fell on profit taking, dealers said. The yen unconditional call rate was 3.5000 pct today, down from 3.6250 pct yesterday. The Bank of Japan sold a total of 800 billion yen worth of financial bills from its holdings to help absorb a projected money market surplus of 1,300 billion yen due to allocation of government revenues to local governments and public entities and the return of bank notes. Dealers were divided about whether expectations of another discount rate cut have been built into the market. Some dealers said it is too early for the market to discount a rate cut and projected a possible sudden market retreat. REUTER 

H.K. OFFICIAL, STOCK EXCHANGE BAR JARDINE ISSUE

Securities Commissioner Ray Astin and Chairman of the Stock Exchange of Hong Kong Ronald Li said in a joint statement they have rejected a plan by Jardine Matheson Holdings Ltd <JARD.HK> to list its new "B" shares and that other such plans will not be approved. They said the move resulted from recognition of the potential disadvantages of listing "B" shares and from strong opposition by stock brokers and members of the exchange. They also noted both Cheung Kong (Holdings) Ltd <CKGH.HK> and associate Hutchison Whampoa Ltd <HWHH.HK> have agreed to withdraw previously announced plans to issue "B" shares. The Cheung Kong firms each announced bonus issues of one new "B" share for each two ordinary shares last week after a proposed four-for-one bonus issue of "B" shares by Jardine. The stock exchange then barred any further issues of "B" shares, except the three proposals already submitted. The "B" shares have equal voting rights with existing shares but a much lower par value. The exchange's Hang Seng index lost 134 points between Jardine Matheson's March 27 announcement and its close at 2,664.70 yesterday. But the index rose over 40 points in early trading today and brokers linked the rise to the statement. REUTER 

AUSTRALIAN UNIONS LAUNCH NEW SOUTH WALES STRIKES

Australian trade unions said they have launched week-long strikes and other industrial action in New South Wales (NSW) to protest against new laws that would reduce injury compensation payments. Union sources said talks with the state government broke down last night, but the two sides are scheduled to meet later today in an attempt to find a compromise. Rail freight and shipping cargo movements in the country's most populous state were the first to be affected, and union officials said almost every business sector will be hit unless there is a quick settlement. The state government recently introduced a new workers' compensation act which would cut the cash benefits to injured workers by up to a third. The act is now awaiting parliamentary ratification. NSW state premier Barrie Unsworth has said workers' compensation has risen steeply in recent years and the proposed cuts would save hundreds of mlns of dollars a year. Union officials said industrial action could spread to other states as the federal government also plans to make sharp cuts in workers' compensation. REUTER 

JAPAN'S LDP URGES MORE IMPORTS OF 12 FARM ITEMS

The ruling Liberal Democratic Party (LDP) has proposed expanding imports of 12 farm products named in a U.S. Complaint against Japan to the General Agreement on Tariffs and Trade last year, an LDP official said. The products include fruit juices, purees and pulp, some tomato products, peanuts, prepared beef products and beans. The proposal will be used as the basis for a more detailed LDP economic package to cut the trade surplus with the U.S. The party is expected to formalise the package before April 19, when LDP General Council Chairman Shintaro Abe visits Washington. REUTER 

JAPANESE OFFICIAL TAKES DATA TO MICROCHIP TALKS

Ministry of International Trade and Industry (MITI) Vice Minister Makoto Kuroda leaves for Washington today with data he hopes will refute U.S. Charges Japan has violated a pact on microchip trade. A three-man Japanese trade team is already in Washington laying the groundwork for talks between Kuroda and Deputy U.S. Trade Representative Michael Smith aimed at persuading the U.S. Not to impose tariffs on certain Japanese products. But Kuroda said he is taking no new proposals. "I have nothing in my briefcase except an explanation of the current situation," Kuroda told the daily newspaper Asahi Shimbun. Kuroda said the U.S. Decision was based on incorrect data and an exaggerated sense of MITI's power to control market forces. "The U.S. Has excessive expectations. To stabilise supply-demand relations which have been disrupted by excess inventories since 1985 will take some time," he said. Kuroda also laid part of the blame for low U.S. Chip sales in Japan on a lack of effort by American firms here. He said if he fails in talks tomorrow and Friday to forestall sanctions, he will seek further talks with U.S. Trade Representative Clayton Yeutter. U.S. Officials said this week's talks are unlikely to delay imposition of tariffs. REUTER 

SHARP CORP <SHRP.T> TO SET UP PLANT IN THAILAND

Sharp Corp will set up a 100 pct-owned subsidiary in Thailand to make microwave ovens and refrigerators for export to the U.S. And western Europe, a company spokesman said. The company, to be named <Sharp Appliances (Thailand) Ltd>, will be capitalised at 2.1 billion yen and start operations in October, he told Reuters. Sharp hopes the subsidiary, which will use parts from Japan and southeast Asia, will eventually produce other electric appliances, he said. REUTER 

YUGOSLAV WORKERS MAY BE ANGERED BY LOST SUBSIDIES

Yugoslav government plans to stop subsidising loss-making firms will anger hundreds of thousands of workers, Western diplomats said. The law, proposed by Prime Minister Branko Mikulic, goes into effect on July 1 and aims to end a long-standing practice of supporting unprofitable companies. Under the law, wage cuts will be imposed on losing enterprises, while those failing to recover within a six-month grace period will face liquidation. The diplomats said Mikulic's attempt to create a market economy is inevitable, but has still come as a shock to those accustomed to government subsidies. "It was a bitter pill which had to be swallowed, but if an overdose is taken too abruptly, it may have adverse effects on the system," a Western diplomat said. He said if the law was applied too strictly it would probably provoke a new wave of strikes and unrest. Yugoslavia was swept by strikes last month following the introduction of a wage-freeze law, later amended to allow more flexibility and some exemptions in what some political analysts saw as a retreat by Mikulic. But with inflation moving towards 100 pct, trade union leaders have asked how much more deprivation workers can take. The union leaders said workers thoughout the country are already receiving salaries below limits set under existing law, while others have received no wages at all this year because their employers are unable to pay them. Workers also complain much of their income is taken in local, state and federal taxes. Many others are losing their motivation to work and confidence in government as they feel their decision-making powers are being eroded, trade union officials said. Meanwhile, the official Tanjug news agency reported a paper and cellulose factory at Ivangrad in the Montenegro republic closed yesterday and 2,000 of its workers were given "temporary leave." Tanjug said the plant had been running at a loss for the 24 years it had been in operation, and its closure was the result of "economic necessity" rather than bankruptcy. REUTER 

FRENCH GOVERNMENT WINS CONFIDENCE VOTE

The French government won, as expected, a vote of parliamentary confidence sought by Prime Minister Jacques Chirac on his general policies. Votes from Chirac's Gaullist RPR party and its junior partner in the ruling coalition, the centre-right UDF, gave Chirac's cabinet a slim majority in the National Assembly. A total of 294 deputies in the 577-member assembly voted to support Chirac, with 282 voting against. One member was absent. The Socialists, Communists and the extreme-right National Front voted against the prime minister's call. REUTER 

ASIAN EXPORTERS FEAR DAMAGE FROM U.S.-JAPAN RIFT

Mounting trade friction between the U.S. And Japan has raised fears among many of Asia's exporting nations that the row could inflict far-reaching economic damage, businessmen and officials said. They told Reuter correspondents in Asian capitals a U.S. Move against Japan might boost protectionist sentiment in the U.S. And lead to curbs on American imports of their products. But some exporters said that while the conflict would hurt them in the long-run, in the short-term Tokyo's loss might be their gain. The U.S. Has said it will impose 300 mln dlrs of tariffs on imports of Japanese electronics goods on April 17, in retaliation for Japan's alleged failure to stick to a pact not to sell semiconductors on world markets at below cost. Unofficial Japanese estimates put the impact of the tariffs at 10 billion dlrs and spokesmen for major electronics firms said they would virtually halt exports of products hit by the new taxes. "We wouldn't be able to do business," said a spokesman for leading Japanese electronics firm Matsushita Electric Industrial Co Ltd <MC.T>. "If the tariffs remain in place for any length of time beyond a few months it will mean the complete erosion of exports (of goods subject to tariffs) to the U.S.," said Tom Murtha, a stock analyst at the Tokyo office of broker <James Capel and Co>. In Taiwan, businessmen and officials are also worried. "We are aware of the seriousness of the U.S. Threat against Japan because it serves as a warning to us," said a senior Taiwanese trade official who asked not to be named. Taiwan had a trade trade surplus of 15.6 billion dlrs last year, 95 pct of it with the U.S. The surplus helped swell Taiwan's foreign exchange reserves to 53 billion dlrs, among the world's largest. "We must quickly open our markets, remove trade barriers and cut import tariffs to allow imports of U.S. Products, if we want to defuse problems from possible U.S. Retaliation," said Paul Sheen, chairman of textile exporters <Taiwan Safe Group>. A senior official of South Korea's trade promotion association said the trade dispute between the U.S. And Japan might also lead to pressure on South Korea, whose chief exports are similar to those of Japan. Last year South Korea had a trade surplus of 7.1 billion dlrs with the U.S., Up from 4.9 billion dlrs in 1985. In Malaysia, trade officers and businessmen said tough curbs against Japan might allow hard-hit producers of semiconductors in third countries to expand their sales to the U.S. In Hong Kong, where newspapers have alleged Japan has been selling below-cost semiconductors, some electronics manufacturers share that view. But other businessmen said such a short-term commercial advantage would be outweighed by further U.S. Pressure to block imports. "That is a very short-term view," said Lawrence Mills, director-general of the Federation of Hong Kong Industry. "If the whole purpose is to prevent imports, one day it will be extended to other sources. Much more serious for Hong Kong is the disadvantage of action restraining trade," he said. The U.S. Last year was Hong Kong's biggest export market, accounting for over 30 pct of domestically produced exports. The Australian government is awaiting the outcome of trade talks between the U.S. And Japan with interest and concern, Industry Minister John Button said in Canberra last Friday. "This kind of deterioration in trade relations between two countries which are major trading partners of ours is a very serious matter," Button said. He said Australia's concerns centred on coal and beef, Australia's two largest exports to Japan and also significant U.S. Exports to that country. Meanwhile U.S.-Japanese diplomatic manoeuvres to solve the trade stand-off continue. Japan's ruling Liberal Democratic Party yesterday outlined a package of economic measures to boost the Japanese economy. The measures proposed include a large supplementary budget and record public works spending in the first half of the financial year. They also call for stepped-up spending as an emergency measure to stimulate the economy despite Prime Minister Yasuhiro Nakasone's avowed fiscal reform program. Deputy U.S. Trade Representative Michael Smith and Makoto Kuroda, Japan's deputy minister of International Trade and Industry (MITI), are due to meet in Washington this week in an effort to end the dispute. REUTER 

UAL <UAL.N> PILOTS PROPOSE WAGE CUT TO FUND BUYOUT

The union representing 7,000 pilots at United Airlines is proposing wage cuts of up to 25 pct to help finance a 4.5 billion dlr employee buyout of the nation's second largest air carrier. In a television link-up of 10,000 employees at 11 sites nationwide, the Air Line Pilots Association unveiled details of a planned employee stock ownership plan for United, a wholly-owned subsidiary of UAL Inc. The proposed wage cuts would affect senior pilots the most, although the other 53,000 workers employed by United would also be asked to accept less pay. In addition, the union is asking its pilots to invest one-third of the union pension fund's 1.1 billion dlrs in the proposed employee-owned company. In an effort to get the rank and file to contribute five pct of their earnings, United's 21-member master executive council donated 150,000 dlrs in cash and committed 2.1 mln dlrs in pension fund assets for acquisition of new preferred shares. REUTER 

CHINA DAILY SAYS VERMIN EAT 7-12 PCT GRAIN STOCKS

A survey of 19 provinces and seven cities showed vermin consume between seven and 12 pct of China's grain stocks, the China Daily said. It also said that each year 1.575 mln tonnes, or 25 pct, of China's fruit output are left to rot, and 2.1 mln tonnes, or up to 30 pct, of its vegetables. The paper blamed the waste on inadequate storage and bad preservation methods. It said the government had launched a national programme to reduce waste, calling for improved technology in storage and preservation, and greater production of additives. The paper gave no further details. REUTER 

JAPAN TO REVISE LONG-TERM ENERGY DEMAND DOWNWARDS

The Ministry of International Trade and Industry (MITI) will revise its long-term energy supply/demand outlook by August to meet a forecast downtrend in Japanese energy demand, ministry officials said. MITI is expected to lower the projection for primary energy supplies in the year 2000 to 550 mln kilolitres (kl) from 600 mln, they said. The decision follows the emergence of structural changes in Japanese industry following the rise in the value of the yen and a decline in domestic electric power demand. MITI is planning to work out a revised energy supply/demand outlook through deliberations of committee meetings of the Agency of Natural Resources and Energy, the officials said. They said MITI will also review the breakdown of energy supply sources, including oil, nuclear, coal and natural gas. Nuclear energy provided the bulk of Japan's electric power in the fiscal year ended March 31, supplying an estimated 27 pct on a kilowatt/hour basis, followed by oil (23 pct) and liquefied natural gas (21 pct), they noted. REUTER 

NISSAN MAY SUPPLY PARTS TO MEXICAN FORD, CHRYSLER

Nissan Motor Co Ltd <NSAN.T> is negotiating the supply of car components to Mexican units of Ford Motor Co <F> and Chrysler Corp <C>, a Nissan spokeswoman said. <Nissan Mexicana SA de CV> is owned 96.4 pct by Nissan and 3.6 pct by Marubeni Corp <MART.T>. It expects to win orders for precision casting parts for engines, and aluminium cases for automatic transmissions. These will supply output of 70,000 mid-size cars a year at Chrysler's Mexican unit, the spokeswoman said. Nissan is negotiating a similar deal to supply Ford's Mexican unit with precision casting parts for car engines, the spokeswoman said, without providing further details. The company is expected to reach agreements with both U.S. Car makers sometime this year, she said. Nissan Mexicana will invest about 400 mln yen to improve production facilities after the agreements are signed, she said. REUTER 

NEW ZEALAND RAISES FOREIGN INVESTMENT THRESHOLD

Foreigners will be able to invest up to two mln N.Z. Dlrs in New Zealand assets without getting approval from the Overseas Investment Commission, the Commission said. The decision, effective tomorrow raises the threshold from its previous level of 500,000 dlrs, it said in a statement. "The new level is felt to be more appropriate to objectives given the present cost structure involved in operating a business in New Zealand," the commission said. The increase does not apply to the acquisition of shares. REUTER 

THAI TRADE DEFICIT WIDENS IN FIRST QUARTER

Thailand's trade deficit widened to 4.5 billion baht in the first quarter of 1987 from 2.1 billion a year ago, the Business Economics Department said. It said Janunary/March imports rose to 65.1 billion baht from 58.7 billion. Thailand's improved business climate this year resulted in a 27 pct increase in imports of raw materials and semi-finished products. The country's oil import bill, however, fell 23 pct in the first quarter due to lower oil prices. The department said first quarter exports expanded to 60.6 billion baht from 56.6 billion. Export growth was smaller than expected due to lower earnings from many key commodities including rice whose earnings declined 18 pct, maize 66 pct, sugar 45 pct, tin 26 pct and canned pineapples seven pct. Products registering high export growth were jewellery up 64 pct, clothing 57 pct and rubber 35 pct. REUTER 

INDONESIA SEES CPO PRICE RISING SHARPLY

Indonesia expects crude palm oil (CPO) prices to rise sharply to between 450 and 550 dlrs a tonne FOB sometime this year because of better European demand and a fall in Malaysian output, Hasrul Harahap, junior minister for tree crops, told Indonesian reporters. Prices of Malaysian and Sumatran CPO are now around 332 dlrs a tonne CIF for delivery in Rotterdam, traders said. Harahap said Indonesia would maintain its exports, despite making recent palm oil purchases from Malaysia, so that it could possibly increase its international market share. Indonesia, the world's second largest producer of palm oil after Malaysia, has been forced to import palm oil to ensure supplies during the Moslem fasting month of Ramadan. Harahap said it was better to import to cover a temporary shortage than to lose export markets. Indonesian exports of CPO in calendar 1986 were 530,500 tonnes, against 468,500 in 1985, according to central bank figures. REUTER 

JAPANESE CONSORTIUM WINS NEW YORK SUBWAY CAR ORDER

<Nissho Iwai Corp> and Kawasaki Heavy Industries Ltd <KAWH.T> have jointly won an order to build 200 subway cars worth about 200 mln dlrs for the Metropolitan Transportation Authority of New York, a Nissho spokesman said. The cars, to be produced with 51 pct U.S. Content, will be delivered between early 1988 and August 1989, he said. Ten will be built in Japan, but the others will be made at a Yonkers, New York, plant equally owned by Nissho and Kawasaki. REUTER 

Japan four-year note auction average yield record low 3.714 pct, stop 3.743 -official

Tokyo stock market index rises 128.34 to record close of 22,912.99

U.S. HOUSE COMMITTEE PROPOSES DEFENCE CUTS

The House Armed Services Committee last night proposed cutting President Reagan's funding request for the Strategic Defence Initiative program by 1.7 billion dlrs to 3.5 billion. The committee also cut by more than half the amount the president requested for a rail system for strategic missiles. It approved 250 mln dlrs for the project during its consideration of the 1988 defence authorisation bill. The committee's proposals must be adopted by the full House and Senate before becoming law. The administration's total request for 1988 defence spending was 312 billion dlrs. REUTER 

NEC SUES SEIKO EPSON OVER COPYRIGHT INFRINGEMENT

NEC Corp <NESI.T> filed suit in Tokyo District Court to temporarily halt the manufacture and marketing of <Seiko Epson Corp>'s NEC-compatible personal computer series, an NEC spokesman said. He said Seiko Epson's PC 286 computer and HDD-20 interface board infringe on software copyrights of the Basic In Out System program of NEC's best-selling 9801 computer series. A spokesman for Seiko Epson, which is part of the Hattori Seiko Co Ltd <HATT.T> group, said its computer does not infringe on any copyrights and will be marketed this month. The HDD-20 interface board went on sale last December. NEC's request for an injunction against Seiko Epson and its marketing subsidiary is the first entirely domestic lawsuit charging infringement of computer software copyrights, the Seiko Epson spokesman said. Share market analysts said that NEC controls about 70 pct of Japan's personal computer market. Introduction of NEC-compatible machines could spark a price war and cut NEC's profits, as happened to International Business Machines Corp <IBM> following the introduction of IBM-compatible machines, they added. REUTER 

AUSTRALIAN FOREIGN SHIP BAN ENDS BUT NSW PORTS HIT

Tug crews in New South Wales (NSW), Victoria and Western Australia yesterday lifted their ban on foreign-flag ships carrying containers but NSW ports are still being disrupted by a separate dispute, shipping sources said. The ban, imposed a week ago over a pay claim, had prevented the movement in or out of port of nearly 20 vessels, they said. The pay dispute went before a hearing of the Arbitration Commission today. Meanwhile, disruption began today to cargo handling in the ports of Sydney, Newcastle and Port Kembla, they said. The industrial action at the NSW ports is part of the week of action called by the NSW Trades and Labour Council to protest changes to the state's workers' compensation laws. The shipping sources said the various port unions appear to be taking it in turn to work for a short time at the start of each shift and then to walk off. Cargo handling in the ports has been disrupted, with container movements most affected, but has not stopped altogether, they said. They said they could not say how long the disruption will go on and what effect it will have on shipping movements. REUTER 

INDONESIAN COMMODITY EXCHANGE MAY EXPAND

The Indonesian Commodity Exchange is likely to start trading in at least one new commodity, and possibly two, during calendar 1987, exchange chairman Paian Nainggolan said. He told Reuters in a telephone interview that trading in palm oil, sawn timber, pepper or tobacco was being considered. Trading in either crude palm oil (CPO) or refined palm oil may also be introduced. But he said the question was still being considered by Trade Minister Rachmat Saleh and no decision on when to go ahead had been made. The fledgling exchange currently trades coffee and rubber physicals on an open outcry system four days a week. "Several factors make us move cautiously," Nainggolan said. "We want to move slowly and safely so that we do not make a mistake and undermine confidence in the exchange." Physical rubber trading was launched in 1985, with coffee added in January 1986. Rubber contracts are traded FOB, up to five months forward. Robusta coffee grades four and five are traded for prompt delivery and up to five months forward, exchange officials said. The trade ministry and exchange board are considering the introduction of futures trading later for rubber, but one official said a feasibility study was needed first. No decisions are likely until after Indonesia's elections on April 23, traders said. Trade Minister Saleh said on Monday that Indonesia, as the world's second largest producer of natural rubber, should expand its rubber marketing effort and he hoped development of the exchange would help this. Nainggolan said that the exchange was trying to boost overseas interest by building up contacts with end-users. He said teams had already been to South Korea and Taiwan to encourage direct use of the exchange, while a delegation would also visit Europe, Mexico and some Latin American states to encourage participation. Officials say the infant exchange has made a good start although trading in coffee has been disappointing. Transactions in rubber between the start of trading in April 1985 and December 1986 totalled 9,595 tonnes, worth 6.9 mln dlrs FOB, plus 184.3 mln rupiah for rubber delivered locally, the latest exchange report said. Trading in coffee in calendar 1986 amounted to only 1,905 tonnes in 381 lots, valued at 6.87 billion rupiah. Total membership of the exchange is now nine brokers and 44 traders. REUTER 

SRI LANKA GETS USDA APPROVAL FOR WHEAT PRICE

Food Department officials said the U.S. Department of Agriculture approved the Continental Grain Co sale of 52,500 tonnes of soft wheat at 89 U.S. Dlrs a tonne C and F from Pacific Northwest to Colombo. They said the shipment was for April 8 to 20 delivery. REUTER 

WESTERN MINING TO OPEN NEW GOLD MINE IN AUSTRALIA

Western Mining Corp Holdings Ltd <WMNG.S> (WMC) said it will establish a new joint venture gold mine in the Northern Territory at a cost of about 21 mln dlrs. The mine, to be known as the Goodall project, will be owned 60 pct by WMC and 40 pct by a local W.R. Grace and Co <GRA> unit. It is located 30 kms east of the Adelaide River at Mt. Bundey, WMC said in a statement It said the open-pit mine, with a conventional leach treatment plant, is expected to produce about 50,000 ounces of gold in its first year of production from mid-1988. Annual ore capacity will be about 750,000 tonnes. REUTER 

SUMITOMO BANK AIMS AT QUICK RECOVERY FROM MERGER

Sumitomo Bank Ltd <SUMI.T> is certain to lose its status as Japan's most profitable bank as a result of its merger with the Heiwa Sogo Bank, financial analysts said. Osaka-based Sumitomo, with desposits of around 23.9 trillion yen, merged with Heiwa Sogo, a small, struggling bank with an estimated 1.29 billion dlrs in unrecoverable loans, in October. But despite the link-up, Sumitomo President Koh Komatsu told Reuters he is confident his bank can quickly regain its position. "We'll be back in position in first place within three years," Komatsu said in an interview. He said that while the merger will initially reduce Sumitomo's profitability and efficiency, it will vastly expand Sumitomo's branch network in the Tokyo metropolitan area where it has been relatively weak. But financial analysts are divided on whether and how quickly the gamble will pay off. Some said Sumitomo may have paid too much for Heiwa Sogo in view of the smaller bank's large debts. Others argue the merger was more cost effective than creating a comparable branch network from scratch. The analysts agreed the bank was aggressive. It has expanded overseas, entered the lucrative securities business and geared up for domestic competition, but they questioned the wisdom of some of those moves. "They've made bold moves to put everything in place. Now it's largely out of their hands," said Kleinwort Benson Ltd financial analyst Simon Smithson. Among Sumitomo's problems are limits placed on its move to enter U.S. Securities business by taking a share in American investment bank Goldman, Sachs and Co. Sumitomo last August agreed to pay 500 mln dlrs for a 12.5 pct limited partnership in the bank, but for the time being at least, the Federal Reserve Board has forbidden them to exchange personnel, or increase the business they do with each other. "The tie-up is widely looked on as a lame duck because the Fed was stricter than Sumitomo expected," said one analyst. But Komatsu said the move will pay off in time. "U.S. Regulations will change in the near future and if so, we can do various things. We only have to wait two or three years, not until the 21st century," Komatsu said. Komatsu is also willing to be patient about possible routes into the securities business at home. Article 65 of the Securities and Exchange Act, Japan's version of the U.S. Glass-Steagall Act, separates commercial from investment banking. But the walls between the two are crumbling and Komatsu said he hopes further deregulation will create new opportunities. "We need to find new business chances," Komatsu said. "In some cases these will be securities related, in some cases trust bank related. That's the kind of deregulation we want." Until such changes occur, Sumitomo will focus on such domestic securities business as profitable government bond dealing and strengthening relations with Meiko Securities Co Ltd, in which it holds a five pct share, Komatsu said. He said Sumitomo is cautiously optimistic about entering the securities business here through its Swiss universal bank subsidiary, Banca del Gottardo. The Finance Ministry is expected to grant licences to securities subsidiaries of U.S. Commercial banks soon, following a similar decision for subsidiaries of European universal banks in which the parent holds a less than 50 pct. But Komatsu is reluctant to push hard for a similar decision on a Gottardo subsidiary. "We don't want to make waves. We expect this will be allowed in two or three years," he said. Like other city banks, Sumitomo is also pushing to expand lending to individuals and small and medium businesses to replace disappearing demand from big business, he added. The analysts said Sumitomo will have to devote a lot of time to digesting its most recent initiatives, including the merger with ailing Heiwa Sogo. "It's (Sumitomo) been bold in its strategies," said Kleinwort's Smithson. "After that, it's a question of absorbing and juggling around. It will be the next decade before we see if the strategy is right or wrong." REUTER 

SUBROTO SAYS INDONESIA SUPPORTS TIN PACT EXTENSION

Mines and Energy Minister Subroto confirmed Indonesian support for an extension of the sixth International Tin Agreement (ITA), but said a new pact was not necessary. Asked by Reuters to clarify his statement on Monday in which he said the pact should be allowed to lapse, Subroto said Indonesia was ready to back extension of the ITA. "We can support extension of the sixth agreement," he said. "But a seventh accord we believe to be unnecessary." The sixth ITA will expire at the end of June unless a two-thirds majority of members vote for an extension. REUTER 

SOUTH AFRICA MINES BODY SEES MAY DAY WORK STOPPAGE

Negotiations between mining companies and the National Union of Mineworkers are foundering and mines could face a May Day work stoppage, the Chamber of Mines said. It said the union had called off talks on a specific issue, the introduction of a Labour Day on May 1. The union refused a request to give advance notification of the names of workers who would be working on May 1 rather than taking the option of a paid holiday, the Chamber said. It said mining companies wanted advance notice in order to plan their operations. "The union is adamant only employees who wish to work on Labour Day should notify management," the Chamber said. "This raises the prospect that the mines will once again face stay-away action on May 1 and that the employees who do not work will once again forfeit pay." It said the union accepted all the proposals except giving advance notification for May 1. It said miners had been offered a full paid holiday on May 1 or a premium of six pct of their basic monthly pay for working that day. REUTER 

FINAL TERMS SET ON ATARI CORP CONVERTIBLE EUROBOND

The coupon on the 75 mln dlr, 15-year, convertible eurobond for Atari Corp has been set at 5-1/4 pct compared with indicated range of five to 5-1/4 pct, lead manager Paine Webber International said. The conversion price was set at 32-5/8 dlrs, representing a premium of 20.38 pct over yesterday's Atari share close of 27 dlrs. REUTER 

BANGLADESH LIKELY TO SET HIGHER DEVELOPMENT PLAN

Bangladesh is expected to draw up a 47 billion taka development plan for the 1987/88 fiscal year beginning July 1, Finance Ministry officials said. This is a rise of six pct over the current year. They said 86.5 pct of the funds would come from foreign sources. Bangladesh will seek nearly two billion dlrs to be used for development projects and imports in 1987/88 at a donors' meeting in Paris later this month, the officials said. REUTER 

Bundesbank allocates 6.1 billion marks in 28-day repurchase pact at 3.80 pct

BUNDESBANK ALLOCATES 6.1 BILLION MARKS IN TENDER

The Bundesbank accepted bids for 6.1 billion marks at today's tender for a 28-day securities repurchase pact at a fixed rate of 3.80 pct, a central bank spokesman said. Banks, which bid for a total 12.2 billion marks liquidity, will be credited with the funds allocated today and must buy back securities pledged on May 6. Some 14.9 billion marks will drain from the market today as an earlier pact expires, so the Bundesbank is effectively withdrawing a net 8.1 billion marks from the market with today's allocation. A Bundesbank spokesman said in answer to enquiries that the withdrawal of funds did not reflect a tightening of credit policy, but was to be seen in the context of plentiful liquidity in the banking system. Banks held an average 59.3 billion marks at the Bundesbank over the first six days of the month, well clear of the likely April minimum reserve requirement of 51 billion marks. The Bundesbank spokesman noted that by bidding only 12.2 billion marks, below the outgoing 14.9 billion, banks themselves had shown they felt they had plenty of liquidity. Dealers said the Bundesbank is keen to prevent too much liquidity accruing in the market, as that would blunt the effectiveness of the security repurchase agreement, its main open-market instrument for steering market interest rates. Two further pacts are likely this month over the next two weeks. The Bundesbank is currently steering call money between 3.6 and 3.8 pct, although short-term fluctuations outside that range are possible, dealers said. REUTER 

U.N. OFFERS GRANT FOR STUDY ON BANGLADESH BRIDGE

The U.N. Development program (UNDP) will give Bangladesh a 6.79 mln dlr grant to undertake a detailed study on the building of a bridge over the River Jamuna, the official BSS news agency said. It said an agreement was signed here yesterday. Communication Ministry officials said the bridge would be to link Dhaka with the northern areas of Bangladesh and was expected to cost about 836 mln dlrs. They said offers of help had been received from Saudi Arabia and the World Bank, but they gave no details. REUTER 

EIB 300 MLN GUILDER BULLET BOND PRICED AT PAR

The issue price of the European Investment Bank's 300 mln guilder 6.25 pct bullet bond due 1995, announced on April 1, has been set at par, lead manager Amro bank said. Subscriptions remain open until 1300 gmt tomorrow, April 9. Payment is due May 14 and coupon date is May 15. REUTER 

BOND CORP STILL CONSIDERING ATLAS MINING BAIL-OUT

Bond Corp Holdings Ltd <BONA.S> and Atlas Consolidated Mining and Development Corp <ATLC.MN> are still holding talks on a bail-out package for the troubled mining firm, an Atlas statement said. Atlas, the Philippines' biggest copper producer, said it had been hit by depressed world copper prices. It reported a net loss of 976.38 mln pesos in the year ending December 1986, compared with a net loss of 1.53 billion in 1985. The company said it had been able to cut its losses because its scaled-down copper operations in the central island of Cebu started in the second half of 1986. Atlas said negotiations were continuing on the acquisition by Bond of the company's existing bank loans and their restructuring into a gold loan. A memorandum of understanding signed by the two sides in October last year said Bond would acquire Atlas' total loans of 275 mln dlrs, to be repaid by the mining company in gold. Atlas said the two sides were also discussing equity infusion into Atlas and the creation of a development fund for further exploration and development of the company's gold properties in the central province of Masbate. Wilson Banks, general manager of <Bond Corp International Ltd> in Hong Kong, told Reuters the Atlas statement on the negotiations was "reasonably accurate." Banks said Bond Corp was seriously considering several investments in the Philippines but did not give details. In its statement, Atlas said development of the pre-World War Two underground mines in Masbate had been accelerated and the ore tonnage had increased, extending the operation's life at least until 1993. REUTER 

ECONOMIC SPOTLIGHT - EXCESS MONEY HURTS THAI BANKS

Thailand's improving economy may have helped its trade and finance position but it has also created major problems for local banks, Thai and foreign bankers said. They said a 900 mln dlr saving from cheaper imported oil and 19.7 pct export growth last year contributed to the country's first current account surplus in 20 years. But the bright picture, together with a government program to help farmers cope with depressed commodity prices, coincides with sluggish investment by a private sector still feeling the lingering effects of the 1984-86 recession. Thai banks have had growing surplus funds and difficulties finding borrowers since the third quarter of 1986. Kunthon Narkprom, head of the budget and planning division of Thai Farmers Bank Ltd, estimated excess liquidity in banks peaked last month at 60 billion baht, three times what he considered normal. Bank of Thailand figures show total deposits in 1986 grew 12.7 pct to 627.7 billion baht, while lending rose only 3.4 pct to 548.6 billion. The lending/deposit ratio, which measures bank loans as a percentage of deposits, fell to 86.6 pct last month, the lowest since the 1970s, after averaging 96.6 pct in 1985. Thai banks have cut lending and deposit rates a record six times since January 1986, during which time the average minimum loan rate fell to 11.5 pct from 15.5 and the gross one-year fixed deposit rate to 7.25 pct from 11. Five banks announced last week they would cut their maximum lending rates to small borrowers by one percentage point to 14 pct. Kunthon of Thai Farmers estimated banks now have a combined 80 billion baht unused overdraft line as many small and medium-size companies delay borrowing in anticipation of more cuts in interest rates. The record liquidity has seriously hurt the profits of banks, which have been forced to invest idle funds in low-yield government securities. Kunthon said the banks hold four to 10 billion baht in short-term government bonds bought through the Bank of Thailand's bond repurchase facility, double the normal amount. Thailand's 16 local commercial banks registered one of their worst years in 1986, with overall profits falling over 30 pct after a 14 pct decline in 1985. Kunthon said profits should increase 10 pct this year as the banks adjust to the new interest rate structure. Olarn Chaipravat, senior executive vice president of Siam Commercial Bank Ltd, told reporters last week the liquidity problem stems partly from the fact most loan demands come from businesses seeking funds for small, labour-intensive projects. He said there are few large, capital-intensive projects and many borrowers go offshore to meet their requirements. Somboon Chinsavananond, Thai Farmers' fund management executive, said liquidity has been aggravated by the central bank's policy of fixing a stable baht-dollar exchange rate which permits Thai companies to import dollar-denominated funds with a minimal risk of currency exchange losses. He said underlying bearishness towards the U.S. Dollar has encouraged foreign borrowers who hope to pay less on loan principal when their loans mature. Thai bankers said central bank governor Kamchorn Sathirakul last month rejected a request to increase a 10 pct withholding tax on interest on foreign loans, a measure they said would reduce foreign borrowings. The governor replied the bankers should extend more loans to rural areas instead. Bankers said some Thai banks have offered credit-worthy clients loans at near money market rates of seven to eight pct in a bid to compete with foreign funds. A market analyst at Siam Commercial Bank said bank lending at such rates amount to about 15 pct of all loans extended by the industry. A foreign banker, who requested anonymity, said the "segmented market approach" used by Thai banks for setting different lending rates has caused dislocation of funds in the financial sector, eroded bank profits and prevented banks from taking a more logical move of further cutting interest rates. He said the liquidity problem gives the Bank of Thailand a perfect opportunity to assert more control on the Thai money market. The Bank of Thailand is taking "a step in the right direction" by planning to float three billion baht in bonds to mop up part of the surplus, he said, but he added the bank has been lax in using its bond repurchase window as a tool to absorb or inject liquidity into the market. William Wu, head of the Treasury Unit of Chase Manhattan Bank N.A., Said the money market lacks the instruments to absorb liquidity and avoid sharp interest rate fluctuations. He said the liquidity has fuelled the stock market's strongest rally in seven years and Thailand should seize the opportunity to develop the corporate bond market. REUTER 

CHINA INDUSTRIAL OUTPUT RISES IN FIRST QUARTER

China's industrial output rose 14.1 pct in the first quarter of 1987 against the same 1986 period, the People's Daily said. Its overseas edition said the growth rate, which compares with a target of seven pct for the whole of 1987, was "rather high" but the base in the first quarter of 1986 was on the low side. Industrial output grew 4.4 pct in the first quarter of 1986. It said China's industrial production this year has been normal but product quality and efficiency need further improvement. It gave no further details. REUTER 

SAITAMA BANK ISSUES 100 MLN DLR CONVERTIBLE BOND

The Saitama Bank Ltd is issuing a 100 mln dlr convertible eurobond due March 31, 2002 paying an indicated two pct and priced at par, the bank's London office said. The issue is being lead managed by Saitama Bank (Europe) SA. The deal is available in denominations of 5,000 dlrs and will be listed in Luxembourg. Final terms will be set on April 15. The selling concession is 1-1/2 pct while management and underwriting each pay 1/2 pct. The payment date is May 6 and there will be a short first coupon period. REUTER 

WESTPAC BANKING ISSUES 50 MLN AUSTRALIAN DLR BOND

Westpac Banking Corporation is issuing a 50 mln Australian dlr eurobond due May 6, 1990 paying 14-1/2 pct and priced at 101-1/4 pct, lead manager Deutsche Bank Capital Markets 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 6. REUTER 

JAPANESE AUTOMAKERS TURN TO FOUR-WHEEL STEERING

Major Japanese automakers are gearing up to equip sporty models with four-wheel steering, a feature that could become standard on high-grade cars in the future, automotive industry sources said. Two companies are ready to market such cars soon, they said. Honda Motor Co Ltd will sell its Prelude with four-wheel steering from this Friday, and Mazda Motor Corp officials say a model with the new steering will be out by mid-year. Mazda aims to ship the cars overseas before year-end but the decision will depend on initial consumer reaction. Nissan Motor Co Ltd has offered a less sophisticated four-wheel steering system on its Skyline since August 1985. Toyota Motor Corp has exhibited its developments in the field at a recent motor show and Mitsubishi Motors Corp said it will use the system in the near future. Though major U.S. And European automakers have also researched and tested the four-wheel system, they say they are waiting to see consumer response to the Japanese cars and for further improvements in safety and costs. Four-wheel steering allows drivers to easily manoeuvre into parking spaces and gives more control on sharp turns. Mazda officials believe the new steering will improve safety. "At extremes, four-wheel steering gives a driver more control," said one official. "On slippery surfaces or at high speeds, the system reduces unnecessary movement of the vehicle." While acknowledging the added vehicle stability, a Honda engineer said: "This invention is not intended to improve safety, but is aimed at allowing everyone to drive easily." Mazda's electronic steering system tells the back wheels to turn in the opposite direction from the front wheels at slow speeds but in the same direction at high speeds. Honda's system, which is mechanical, is similar but the direction of the rear wheels is determined by the angle of the front wheels. With Nissan's system the rear wheels move only parallel to the front. Automakers say professional drivers who have tested the four-wheel steering say it greatly improves handling. An official with one U.S. Vehicle manufacturer said four-wheel steering is a technical improvement, but it is uncertain whether it will translate into higher sales or profits. "All automakers are interested in something new," he said. "If it becomes a predominant factor, everyone will want to follow." The official said four-wheel steering is partly a gimmick to sell cars. "It's a benefit of a secondary nature compared with devices for fuel economy or emission control." General Motors Corp has developed a four-wheel steering system, but is unlikely to market it within the next five years, Y. Hojoh, engineer with the Japan branch of General Motors Overseas Corp, said. GM must consider the costs to the consumer, he added. The industry sources said the additional cost of the system in Japan would probably make little difference to the consumer as it would be added to already high-priced models. REUTER 

JAPAN MINISTRY SAYS OPEN FARM TRADE WOULD HIT U.S.

Japan's Agriculture Ministry, angered by U.S. Demands that Japan open its farm products market, will tell U.S. Officials at talks later this month that liberalisation would harm existing U.S. Farm exports to Japan, a senior ministry official said. "Imports from the U.S. Would drop due to active sales drives by other suppliers," the official, who declined to be named, said. "Japan is the largest customer for U.S. Farm products and it is not reasonable for the U.S. To demand Japan liberalise its farm import market," he said. Agriculture Minister Mutsuki Kato has said if the U.S. Insists Japan open its protected rice market it will also open its wheat market, where volume and origin are regulated to protect local farmers. Australia and Canada could then increase their wheat exports as they are more competitive than the U.S., He said. End-users would also buy other origins, grain traders said. U.S. Agriculture Secretary Richard Lyng, who is due to visit Japan for talks between April 16-27, has said he will ask Japan to offer a share of its rice market to U.S. Suppliers and remove quotas on U.S. Beef and citrus imports. Other countries are already cutting into the U.S. Market share here. Australia, the largest beef supplier to Japan, has been trying to boost exports prior to the expiry of a four-year beef accord next March 31. Imports of U.S. Corn have fallen due to increased sales from China and South America, while Japanese soybean imports from Brazil are expected to rise sharply this year, although the U.S. Will remain the largest supplier. U.S. Feedgrain sales will also drop if Japan opens up its beef imports, since Japan depends almost entirely on feedgrain imports, mainly from the U.S., Japanese officials said. An indication of the U.S. Position came last December when Under Secretary of Agriculture Daniel Amstutz said Japan has the potential to provide one of the largest boosts to U.S. Agricultural exports, with the beef market alone representing some one billion dlrs in new business. The U.S. Has also asked the General Agreement on Tariffs and Trade to investigate the legality of Japanese import controls on 12 other farm products, including fruit juices, purees and pulp, tomato juice, ketchup and sauce, peanuts, prepared beef products and miscellaneous beans. To help calm heated trade relations with the U.S., Japan's top business group Keidanren has urged the government to remove residual import restrictions on agricultural products. But Agriculture Minister Kato has ruled out any emotional reaction, and the senior ministry official said the farm issue should not become a scapegoat for trade pressure in the industrial sector. "Japan is the largest buyer of U.S. Farm products, and these issues should not be discussed on the same table," the official said. REUTER 

AMATIL PROPOSES TWO-FOR-FIVE BONUS SHARE ISSUE

Amatil Ltd <AMAA.S> said it proposes to make a two-for-five bonus issue out of its revaluation reserve to shareholders registered May 26. Shareholders will be asked to approve the issue and an increase in authorised capital to 175 mln shares from 125 mln at a general meeting on May 1, it said in a statement. The new shares will rank for dividends declared after October 31. Amatil, in which B.A.T. Industries Plc <BTI.L> holds a 41 pct stake, said it does not expect to maintain its latest annual dividend rate of 29 cents a share on the enlarged capital. REUTER 

BOWATER 1986 PRETAX PROFITS RISE 15.6 MLN STG

Shr 27.7p vs 20.7p Div 6.0p vs 5.5p making 10.0p vs 9.25p Turnover 1.34 billion stg vs 1.29 billion Pretax profit 48.0 mln vs 32.4 mln Tax 14.4 mln vs 6.9 mln Company name is Bowater Industries Plc <BWTR.L> Trading profit 63.4 mln vs 45.1 mln Trading profit includes - Packaging and associated products 23.2 mln vs 14.2 mln Merchanting and services 18.4 mln vs 9.6 mln Tissue and timber products 9.0 mln vs 5.8 mln Interest debit 15.4 mln vs 12.7 mln Minority interests 7.0 mln debit vs 6.2 mln debit Extraordinary items 15.4 mln credit vs 11.9 mln debit REUTER 

U.K. MONEY MARKET DEFICIT FORECAST AT 250 MLN STG

The Bank of England said it forecast a shortage of around 250 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 505 mln stg, while bills for repurchase by the market will remove around 194 mln. In addition, a rise in note circulation and bankers' balances below target will each drain around 110 mln stg. Partly offsetting these outflows, exchequer transactions will add some 690 mln stg to the system today. REUTER 

SOUTH KOREA MOVES TO SLOW GROWTH OF TRADE SURPLUS

South Korea's trade surplus is growing too fast and the government has started taking steps to slow it down, Deputy Prime Minister Kim Mahn-je said. He told a press conference the government planned to increase investment, speed up the opening of the local market to foreign imports and gradually adjust its currency to hold the surplus "at a proper level." But he said the government would not allow the won to appreciate too much in a short period of time. South Korea has been under pressure from Washington to revalue the won. The U.S. Wants South Korea to cut its trade surplus with the U.S., Which rose to 7.4 billion dlrs in 1986 from 4.3 billion dlrs in 1985. Kim, who is also economic planning minister, said prospects were bright for the South Korean economy, but the government would try to hold the current account surplus to around five billion dlrs a year for the next five years. "Our government projections of eight pct GNP growth, five billion dlrs of (current account) surplus and 12 pct growth in exports all seemed to be reasonable early this year. But now the surplus is growing faster than we expected," he said. Trade ministry officials said South Korea's exports rose 35 pct to 9.34 billion dlrs in the first three months of this year, while imports rose only 8.5 pct to 8.2 billion dlrs. Kim said the swing of South Korea's current account to a surplus of 4.65 billion dlrs in 1986 from an 890 mln dlr deficit in 1985 was very significant. The surplus enabled the country to reduce its foreign debt last year for the first time. South Korea's foreign debt, which fell to 44.5 billion dlrs in 1986 from 46.8 billion in 1985, is still among the largest in Asia. "This huge amount of our foreign debt has been one of the major constraints on our development... Last year was a major turning point for the Korean economy," Kim said. Kim said his government plannned to reduce the ratio of foreign debt to the country's GNP to about 20 pct in 1991, from about 50 pct in 1986. "The government, however, does not want to accelerate reducing the debt by making an excessive trade surplus," he said. Kim said a sudden rise in the surplus would cause inflation and lead to trade friction with Seoul's major trading partners, particularly the United States. "We need a surplus because we have to reduce our debt, but we are taking measures to hold the size of the surplus at a proper level," Kim said. REUTER 

FINNS AND CANADIANS TO STUDY MTBE PRODUCTION PLANT

Finland's national oil company Neste Oy <NEOY.HE> said in a statement it had agreed with Canadian firms to study the feasibility of building a plant in Edmonton, Canada, to produce a replacement for lead in petrol. The prospective plant would cost an estimated 270 mln Canadian dlrs and would produce methyl tertiary butyl ether (MTBE) from raw materials available locally, it said. The partners in the study are Neste Oy, Celanese Canada Inc, Hoechst Celanese Corporation and Trade Mountain Pipe Line Company Ltd, of Vancouver, B.C. The Edmonton site was suitable because of the raw materials availability, the proximity to pipeline transportation and the important capital and operating advantages gained by locating on an existing Celanese Canada site, the statement said. The partners would look into the feasibility of a plant producing 500,000 tonnes per annum of MTBE, an octane enhancer that can replace tetra ethyl lead. Most of the MTBE would be targeted for the United States where lead levels in gasoline are being lowered because of health concerns, the statement added. Canadian lead limits are currently 11 times as high as the U.S. Limit but lead is scheduled for virtual elimination in Canada by 1993, which should create a Canadian demand for MTBE, it said. Finland's Neste Oy, whose turnover last year was over five billion dlrs, has extensive experience with MTBE. It has a major investment in an MTBE plant in Saudi Arabia. The Edmonton, Alberta plant would be scheduled to go on stream in late 1989, the statement said. REUTER 

GERMAN ENGINEERING WAGE-ROUND TALKS BREAK DOWN

Talks between employers and unions in the West German engineering industry over pay and working hours broke down without result late last night, an official from the IG-Metall union said. IG-Metall, Western Europe's largest union, is reviving its campaign for a 35-hour working week and is demanding a five pct pay increase. Strikes for a 35-hour week in 1984 brought West Germany's automobile industry virtually to a standstill. The result of the 1984 campaign was a compromise reduction in working hours to 38.5 from 40. The talks which broke down yesterday were in the key North Wuerttemberg/North Baden area, which generally sets the trend for the rest of the country. IG-Metall official Ernst Eisenmann, speaking last night, blamed the failure of the negotiations on the employers. He said they had been uncompromising on the question of the shorter week. Hans-Peter Stihl, negotiating for the employers, said any plan to reduce working hours gradually to 35 hours was unacceptable. The employers have not made an official offer on cutting the working week, but sources involved in the negotiations say that they are working on the basis of a possible half-hour reduction from next year and a pay increase of 2.7 pct in 1987 and of 1.5 pct in 1988. The Union will propose that the negotiations be officially declared a failure and then a process of arbitration is likely. IG-Metall has said that cutting the working week will create jobs in West Germany where more than two mln people are unemployed. IG-Metall itself has about 2.5 mln members. IG-Metall has already been staging a series of "warning strikes" to press home demands for the 35-hour week. Yesterday, 23,000 engineering workers struck at 90 plants for one to two hours, according to an IG-Metall statement. Among the strikers were 4,000 at a Daimler-Benz AG <DAIG.F> plant in Bremen, and 3,100 at Ford Motor Co's <F> Ford-Werke AG plant in Saarlouis. REUTER 

CRA SOLD FORREST GOLD FOR 76 MLN DLRS - WHIM CREEK

<Whim Creek Consolidated NL> said the consortium it is leading will pay 76.55 mln dlrs for the acquisition of CRA Ltd's <CRAA.S> <Forrest Gold Pty Ltd> unit, reported yesterday. CRA and Whim Creek did not disclose the price yesterday. Whim Creek will hold 44 pct of the consortium, while <Austwhim Resources NL> will hold 27 pct and <Croesus Mining NL> 29 pct, it said in a statement. As reported, Forrest Gold owns two mines in Western Australia producing a combined 37,000 ounces of gold a year. It also owns an undeveloped gold project. REUTER 

MALAYSIA SETS 100 MLN SWISS FRANC NOTES ISSUE

Malaysia is launching a 100 mln Swiss franc 5-3/4 pct 10-year notes issue priced at 100.2 pct, lead manager Swiss Bank Corp said. Payment date is expected to be April 22. Early redemption is not allowed. Swiss Bank Corp said this is the first time Malaysia has tapped the Swiss capital market since it issued a bond here in July 1985. REUTER 

GERMAN INDUSTRIAL EMPLOYMENT SEEN STAGNATING

The number of workers employed in the West German industrial sector stagnated in the last quarter of 1986 as a 50,000 increase in overall employment benefited only the services branch, the DIW economic institute said. A DIW report added the general downturn in the economy since last Autumn had had a negative effect on the willingness of firms to take on workers. It referred to a marked downturn in the number of workers taken on in the capital goods sector. New orders for manufacturing industry goods have mostly fallen or stagnated in recent months, but data for February finally showed a reversal of the trend, with a 1.9 pct rise. REUTER 

FEDERAL REALTY ISSUES 75 MLN DLR CONVERTIBLE BOND

Federal Realty Investment Trust is issuing a 75 mln dlr convertible eurobond due April 30, 2002 paying an indicated coupon of 5-1/4 to 5-1/2 pct and priced at par, lead manager Salomon Brothers International said. The issue has a put option after seven years which will be priced to give the investor a yield in line with current seven year U.S. Treasury bond. Final terms will be fixed on April 9. The selling concession is 1-1/2 pct while management and underwriting each pay 1/2 pct. The issue is available in denominations of 1,000 and 10,000 dlrs. REUTER 

SEOUL STOCK MARKET CONSOLIDATES ON STATE MEASURES

The South Korean stock market seems to be consolidating following government measures to cool its rapid rise this year, domestic and foreign analysts said. The composite index hit a record 405.13 early last week, nearly 50 pct up from the New Year when it stood at 264.82, but plunged to a 383.48 close on April 3, the day after the government intervened. Under the measures, industrial firms with bank loans worth 50 billion won or more must either offer new shares or issue convertible bonds to repay the loans. Securities houses will have to sell shares they are holding if the volume exceeds 40 pct of their paid-in capital. The ceiling for investment trust firms was fixed at 50 pct. South Korean firms have traditionally preferred obtaining low interest bank loans -- the current rate is 10 pct -- to issuing bonds at a higher rate or floating share issues with the attendant dividend pressures and launch expenses. The Seoul Stock Exchange, with 355 listed stocks, grew explosively in the first three months of the year, building on an already impressive 68.9 pct gain in 1986. Analysts now expect the market to pause temporarily and then resume its upward movement, despite the indirect government regulation. They said the continuous growth of the nation's gross national product (GNP) and trade surplus, improved exports and good performances by industrial firms all fuelled the boom. The trade surplus widened to 460 mln dlrs in March from 110 mln in February, while government economists expect GNP to grow nine pct this year. Analysts said the deep slump in the real estate market also increased liquidity in the stock market. "Many investors are still confident the market will not lose its strength. It seems likely to pause for a while and then rebound again," said Park Sin-bom, a director of Lucky Securities Co. "There are more positive factors than negative. The market is still buoyed by ample liquidity thanks to the economy's strong performance." The stock market began to recover during Saturday's half-day session with the index closing at 397.24 in active trading on Monday, but closed lower on Tuesday at 390.24 on turnover of 76 billion won. "I would say the market is flat for the time being.... It is very prone to profit-taking after the sharp gains in the first three months and the various government measures," a foreign analyst said. "But the market will head up again after a rest because the fundamentals are expected to rise and investors will be as bullish as ever at the slightest sign of a market recovery." He added that the newly launched 30 mln dlr Korea Europe Fund would have an impact on the South Korean stock market, despite its small volume compared with the 5.72 trillion won of listed capital on the Seoul exchange. Local dealers recommend blue chips and financial shares as these stand to benefit most from continuing trade friction between the United States and Japan and the rumoured restructuring of local finance houses. Dealers also cite the shares of domestically oriented firms, which are less vulnerable to the effects of the gradual appreciation of the won. REUTER 

MALAYSIA SHELVES HUGE HYDROELECTRIC PROJECT

Malaysia has decided to postone development of a five billion dlr hydroelectric power project in Sarawak, East Malaysia, until the economy improves, deputy Minister of Energy, Telecoms and Post Zainal Abidin Zin said. He told reporters a shortage of funds forced the government to shelve the project, which involved building several dams and a 20,000 megawatt capacity undersea cable. Malaysia originally planned to export electricity generated by the project to Singapore, Brunei and Indonesia by 2000 if the project could be started before 1996, Zainal said. REUTER 

QUEBEC ISSUES 30 BILLION YEN EUROBOND

The Province of Quebec is issuing a 30 billion yen eurobond due May 7, 1997 paying five pct and priced at 102-1/2 pct, lead manager Bank of Tokyo International Ltd said. The non-callable bond is available in denominations of one mln yen and will be listed in Luxembourg. The selling concession is 1-1/4 pct, while management and underwriting combined pays 3/4 pct. The payment date is May 7. REUTER 

BOWATER INDUSTRIES PROFIT EXCEED EXPECTATIONS

Bowater Industries Plc <BWTR.L> 1986 pretax profits of 48.0 mln stg exceeded market expectations of around 40 mln and pushed the company's shares up sharply to a high of 491p from 468p last night, dealers said. The shares later eased back to 481p. Bowater reported a 32.4 mln stg profit in 1985. The company said in a statement accompanying the results that the underlying trend showed improvement and it intended to expand further by developing existing businesses and seeking new opportunities. It added that it had appointed David Lyon, currently managing director of Redland Plc <RDLD.L> as its new chief executive. Analysts noted that Bowater's profits of 18.9 mln stg from 13.2 mln previously had been given a boost by pension benefits of 4.5 mln stg. Profit from Australia and the Far East showed the greatest percentage rise, jumping 55.0 pct to 15.5 mln from 10.0 mln, while the profit from U.K. Operations rose 30.7 pct to 24.7 mln, and Europe, 42.9 pct to 11.0 mln. REUTER 

CITIBANK NORWAY UNIT LOSES SIX MLN CROWNS IN 1986

Citibank A/S <CCI.N>, the Norwegian subsidiary of the U.S.-based bank, said it made a net loss of just over six mln crowns in 1986 -- although foreign bankers said they expect it to show 1987 profits after two lean years. Citibank's Oslo treasury head Bjoern Sejerstad told Reuters, Citibank, one of seven foreign bank subsidiaries operating in Norway, lost money because of restructuring for investment banking away from commercial banking and an economic slump in Norway following last year's plunge in oil prices. Foreign banks have been allowed to operate susbidiaries in Norway since 1985. Foreign banking analysts in Oslo said access to Norway's second-hand securities and equities markets, to be approved later this spring, and lower primary reserve requirements would make profit this year. Citibank lost 490,000 crowns in Norway in 1985, but Sejerstad said a profit was likely this year because of planned liberalisation and better economic performance, helped by a steadier oil price of around 18 dlrs a barrel. Earlier this year, Chase Manhattan Bank's <CMB.N> subsidiary decided to stop foreign exchange trading after heavy losses and focus instead on fee-based merchant banking. REUTER 

JAPANESE ECONOMIC PACKAGE SEEN AS MAJOR CHANGE

The economic package unveiled yesterday by the ruling Liberal Democratic Party (LDP) marks the start of a major shift away from the policies of the past, private economists and government officials said. "A big step forward has been taken," said Industrial Bank of Japan Ltd senior economist Susumu Taketomi. The package, seen as a response to mounting overseas pressure to boost the sagging Japanese economy, calls for a supplementary budget of more than 5,000 billion yen later this year, plus increased imports. Although the measures must still gain the approval of the Finance Ministry, economists said the government will find it too difficult to alter the measures significantly once they have gained domestic and overseas backing. "At last, the LDP and the Ministry of Finance are turning a corner," said Sumitomo Bank Ltd's chief economist Masahiko Koido. For the past five years the government has adhered to a tight fiscal policy in its drive to stop issuing deficit financing bonds in 1990. To meet that goal, spending departments are required to submit annual budgets for current expenditure 10 pct below the previous year and investment five pct below. Masayoshi Ito, chairman of the LDP's policy affairs council, said yesterday the government must stick to its 1990 fiscal reform target, but should review the ceiling it places on public works spending. Even some Finance Ministry officials privately acknowledge that policy changes might be needed, including easing the government's iron grip on spending. Economists said the government could meet its 1990 target and also increase spending by using money it got from the sale of Nippon Telegraph and Telephone Corp shares and by taking advantage of lower than expected interest rates on its debt. Officially, the Finance Ministry is adhering to its tight stance but some signs of change have appeared. "We do not have any intention of abandoning our objective to restore fiscal balance," a Finance Ministry spokesman said. He said so far the ministry had tried to achieve two goals simultaneously. These were reforming the government's fiscal position and stimulating domestic demand. But the Finance Ministry spokesman added, "In looking at the current situation of the economy and the relationship between Japan and the United States, we feel we have to place more emphasis on stimulating demand." Economists predict battles within the government over the coming months as the Finance Ministry fights to ensure the cracks in its policy do not lead to a complete breakdown of fiscal discipline. "The Ministry is afraid that once there is a small hole in the dike, it will lead to a flood," Industrial Bank's Taketomi said. But Taketomi said the ministry, provided it has a device in place to check excess spending for political reasons, is likely to give the go-ahead to a shift in policy. "This seems to mark the first step toward a more active fiscal policy in response to requests from the international community," he said. Sumitomo's Koido said if the government quickly implements the LDP's 5,000 billion yen package, economic growth in the 1987/88 year ending next March 31 could be around three pct, His current forecast of 2.2 pct growth assumes a supplementary budget of around 1,000 billion yen. REUTER 

VIEILLE MONTAGNE SAYS 1986 CONDITIONS UNFAVOURABLE

A sharp fall in the dollar price of zinc and the depreciation of the U.S. Currency created unfavourable economic conditions for Vieille Montagne SA <VMNB.BR> in 1986. It said in a statement that the two factors led to a squeeze on refining margins and an 18.24 pct fall in sales and services income despite an unchanged level of activity. Vieille Montagne, which is actively pursuing a restructuring program, reported a 198 mln franc net loss, after 187 mln francs in provisions for the closure of an electrolysis plant, compared with a 250 mln franc net profit in 1985. REUTER 

VIEILLE MONTAGNE REPORTS LOSS, DIVIDEND NIL

1986 Year Net loss after exceptional charges 198 mln francs vs profit 250 mln Exceptional provisions for closure of Viviez electrolysis Plant 187 mln francs vs exceptional gain 22 mln Sales and services 16.51 billion francs vs 20.20 billion Proposed net dividend on ordinary shares nil vs 110 francs Company's full name is Vieille Montagne SA <VMNB.BR>. REUTER 

EC MAINLY FOR TIN EXTENSION, NO U.K. STAND TAKEN

European Community (EC) members of the International Tin Council, except Britain, have said they are prepared to back an extension of the International Tin Agreement, an EC spokesman said. He said at a meeting of EC states' representatives here yesterday, Britain undertook to communicate its own decision to its partners today. It said it was not ready yesterday to take a stand but did not say why. He added nine other EC states backed an extension. Spain and Portugal, which are not members of the International Tin Council, raised no objections to a common EC stance in favour. REUTER 

IAE CALLS OFF SUPERFAN ENGINE PROJECT

The five-nation <International Aero Engine> (IAE) consortium has decided not to go ahead with the proposed launch of its Superfan engine, a spokesman for consortium member <Rolls-Royce Plc> said. He said a group board meeting had concluded that a launch would have been premature given the risks involved in trying to meet an availability date of Spring, 1992 required by airlines. However, he added that the project had not been cancelled and could be offered later on. The engine was originally proposed for fitting on the <Airbus Industrie> A340. IAE's members are Rolls, United Technologies Corp's <UTX.N> Pratt and Whitney, Fiat SpA <FIAT.MI> <Japanese Aero Engines Corp> and <MTU> of West Germany. Airbus said this week it would switch to the Franco-U.S. CFM-56-S3 alternative because of doubts whether the Superfan would be ready on time. Rolls, which has been state-owned since 1971, launches its "pathfinder" prospectus giving preliminary details of its public flotation later today. Analysts said that the timing of the postponement of Superfan -- an 30,000 pound thrust upgrade of the consortium's V2500 engine fitted to the A320 -- was embarrassing but should not be considered a serious blow. If anything, it indicated the financial prudence of the group, one added. The Rolls spokesman added that the decision did not affect the V2500 programme itself. Equally, there was the possibility that the consortium would go ahead with the Superfan later on. Rolls RB211 engine was not available for fitting to early versions of the Boeing Co <BA.N> 747 but had since captured about 25 pct of the market, he noted. REUTER 

JAPAN, BRITAIN TO EXCHANGE SECURITIES MARKET INFO

Japan and Britain have signed a memorandum on exchange of securities market information to protect investors and promote the integrity of securities markets, Finance Ministry officials said. As interaction between Japanese and U.K. Securities markets grows, it is desirable for both countries to exchange supervisory and investigatory information to assist each other in securing compliance with their statutes, rules and requirements, the memorandum said. The ministry's securities bureau has a similar arrangement with the U.S. Securities and Exchange Commission. REUTER 

SOUTH KOREA STUDIES RESTRUCTURING FINANCIAL SECTOR

Deputy prime minister Kim Mahn-je said South Korea is studying various measures to reform what he described as its underdeveloped bank and financial sector. Kim, who is also economic planning minister, told a news conference the country's banks and finance houses had not developed to keep pace with their industrial counterparts. He said two major factors had hampered the development of the financial sector -- high inflation and heavy government intervention in bank decision-making. He said in the past the government had pressed banks to give soft loans to industry to boost economic growth. Kim said the government would now give top priority to interest rate liberalisation. This could be achieved within several years, though not within one year. He said liberalisation was possible because South Korea's current account had turned from a deficit to a surplus, which had brought in foreign funds and increased domestic savings. The current account recorded a surplus of 4.65 billion dlrs in 1986 after a deficit of 890 mln dlrs in 1985. But Kim said the government needed to reorganise much of the financial sector. Kim said mergers of some financial companies and the upgrading of others to merchant banks or full banks were being considered by the financial development committee of the finance ministry. He did not elaborate but said he expected no drastic measures to be announced this year. On liberalisation of the country's stock market, Kim said despite Seoul's determination to open it up, free investments there by foreigners would not be allowed in the near future because the market was currently "over-heated." He said this was due to ample liquidity created partly by the country's current account surplus. Kim said the market was extremely vulnerable to a sudden influx of foreign funds because it was still very small in terms of size and numbers of shareholders. "Opening up the capital market must wait until the vulnerability to such an influx is removed," he said. He said only about one mln South Koreans, out of a population of 40 mln, invest in the Seoul market. REUTER 

JAPAN GIVEN LITTLE HOPE OF AVOIDING U.S. SANCTIONS

A top U.S. Official said Japan has little chance of convincing the U.S. To drop threatened trade sanctions, despite the efforts of a Japanese team that left for Washington today. Michael Armacost, Under Secretary of State for Political Affairs, was asked at a press conference whether Japan's moves to boost its domestic economy and open its markets could persuade the U.S. Not to impose tariffs on Japanese imports said, and replied: "...It is probably too early for the figures to demonstrate that the situation has turned around and to permit the result you have described." Armacost said the U.S. Hopes Japan will take steps to lift its domestic economy and reduce dependence on exports, remove barriers to imports and settle outstanding trade issues. "There are obvious problems at the moment in the trade area, but we do not wish those problems to divert attention from important areas of cooperation that continue to exist on security and political issues," he said. "The question is whether through cooperative actions between our governments we can reduce the (trade) imbalance or whether Congress takes action to reduce it through protectionist legislation," he said. REUTER 

THAI ZINC EXPORTS FALL IN MARCH

Thai zinc ingot exports fell to 882 tonnes in March from 1,764 in February and 3,008 in March 1986, the Mineral Resources Department said. A spokesman for Padaeng Industry Co Ltd, the country's sole exporter, attributed the decline to the company's lower stocks, which averaged 5,000 tonnes in the first quarter against 16,000 tonnes in late 1985 when it began exporting. The department said major buyers included China, Japan, the Philippines, South Korea, Singapore and Taiwan. Thailand exported 4,842 tonnes of zinc ingots during the first quarter, down from 14,937 a year ago. REUTER 

DUTCH PROPOSE STRICT INSIDER TRADING LAW

The ministries of Finance and Justice said they have presented parliament with a new law to make insider trading in shares a criminal offence. A year ago, the Amsterdam Bourse announced its own rules, effective from January 1, 1987, aimed at preventing unfair use of inside information in the trading shares listed on the exchange, but said back-up legislation was essential. The proposed law calls for up to two years imprisonment, fines of up to 100,000 guilders for an individual and one million guilders for a company, and repayment to the state of profits made from insider dealing. The proposed fines are higher than any currently in force in Dutch law, a joint statement from the two ministries said. The draft law sets no limit to the illegal profits to be repaid. The amount would be determined by a court. A Finance Ministry spokesman said the time-frame for the introduction of the new legislation depended entirely on its reception in Parliament. In the meantime the Bourse's Share Trading Association monitors business closely, frequently suspending or even rescinding dealings in a stock when price movements suggest that foreknowledge of a pending announcement is being exploited. REUTER 

DANSK NATURGAS ISSUES 10 BILLION YEN EUROBOND

Dansk Naturgas A/S is issuing a 10 billion yen eurobond due May 13, 1993 paying 4-5/8 pct and priced at 101-5/8 pct, lead manager IBJ International Ltd said. The non-callable bond is available in denominations of one mln yen and will be listed in Luxembourg. The selling concession is 1-1/4 pct while management and underwriting combined pays 5/8 pct. The issue is guaranteed by Denmark. The payment date is May 13. REUTER 

EC SUGAR TENDER HARD TO PREDICT - LONDON TRADE

The outcome of today's European Community (EC) white sugar tender is extremely difficult to predict after last week's substantial award of 102,350 tonnes at the highest ever rebate of 46.864 European currency units (Ecus) per 100 kilos, traders said. Some said they believed the tonnage would probably be smaller, at around 60,000 tonnes, but declined to give a view on the likely restitution. Last week, the European Commission accepted 785,000 tonnes of sugar into intervention by operators protesting about low rebates. This might be a determining factor in today's result, they added. REUTER 

NORTH YEMEN CALLS SUGAR BUYING TENDER - TRADE

North Yemen has called a buying tender for Saturday for the purchase of 30,000 tonnes of white sugar for arrival in June, traders said. REUTER 

JAPAN TO HOLD FORMAL FINANCIAL TALKS WITH FRANCE

The Japanese Finance Ministry said it plans to hold formal financial talks with France on April 17 in Tokyo, the second such meeting after a first session in May last year. The agenda has not yet been decided. The Japanese side will be headed by Toyoo Gyohten, Vice Finance Minister for International Affairs, while the French delegation will include Daniel Lebegue, Director General of the Treasury. REUTER 

ANHEUSER-BUSCH JOINS BID FOR SAN MIGUEL

Anheuser-Busch Companies Inc <BUD.N> has joined several other foreign bidders for sequestered shares of the Philippines' largest food and beverage maker San Miguel Corp <SANM.MN>, the head of a government panel which controls the shares told Reuters. Ramon Diaz, Secretary of the Presidential Commission on Good Government (PCGG), said Anheuser-Busch had told the government it was interested in buying 14 mln "B" shares of San Miguel. He did not disclose the offered price. Diaz said Australian brewer Alan Bond's Bond Corp Holdings Ltd had offered 150 pesos per share for the "B" shares. Diaz said New York investment bank Allen and Co Inc had earlier said it was interested in buying all 38.1 mln sequestered shares. He told Reuters last month Elders IXL Ltd <ELXA.S>, the Melbourne-based brewing company, had also bid for the "B" shares. The Hong Kong Economic Journal last month quoted a spokesman of Australian stock broker Jacksons Ltd as saying that <Barwon Farmlands Ltd>, an Australian firm owned 30 pct by <Ariadne Australia Ltd>, was planning a Filipino branch in order to buy the entire block of 38.1 mln shares. Anheuser-Busch last year made a 150 mln dlr bid to buy <San Miguel Brewery Ltd>, a Hong Kong listed company which is 69.65 pct owned by <Neptunia Corp Ltd>, a San Miguel Corp subsidiary. The talks broke down last June after the two sides said they could not agree on the terms of the sale. REUTER 

CHINA CONSTRUCTION BANK MANDATES 150 MLN DLR LOAN

The People's Construction Bank of China is launching its first international borrowing by mandating four foreign banks for a 150 mln U.S. Dlr loan, one of the lead managers Banque Indosuez said. The other three lead managers are Bank of Tokyo, Citicorp International Ltd and the Industrial Bank of Japan Ltd. The 10 year loan has a 4-1/2 year grace period. Interest is set at 1/8 percentage point over London interbank offered rate for the first eight years, rising to 1/4 pct for the remaining two years. There is a 3/16 pct management fee and an unspecified, but very small, commitment fee. Syndication of the loan is expected to start soon and it should be signed in Shanghai next month. The Construction Bank, which is one of four specialist banks in China, focuses on infrastructure and heavy industrial projects. The funds raised will partly finance two ethylene factories near Shanghai. Construction of the plants, which are a major item in the current five year plan, will begin soon. The plants will cost more than 300 mln dlrs. The remainder of the funds will come from export credits and domestic borrowings. REUTER 

ECONOMIC SPOTLIGHT - AUSTRALIAN MARKETS BOOMING

Australian markets are booming as foreign fund managers redirect capital away from the United States and other traditional markets, analysts said. High short-term interest rates, a bullish stock market and an increasingly stable currency reflect a massive inflow of fresh funds in the last two months, largely from Japanese and U.S. Investors, analysts polled by Reuters said. Fund managers want quality markets to park their cash in and have settled on Australia, Britain and Canada as they diversify from volatile U.S. Dollar instruments, they said. A one percentage point fall in key 10-year bonds rates in the past month, record share prices and a 10-month high for the currency of 0.71 U.S. Dlrs all illustrated the inflow. Official figures on the latest inflow of investment capital are not available, but brokers said they received almost daily inquiries from Japan and the United States. "These people have got trillions of dollars sloshing about and they don't know what to do with it. Some of that is ending up here with the attraction of high interest rates and reasonable currency stability," National Australia Bank Ltd economist Brian Hamley said. "There is a 'flight to quality'," Hamley said. "Australia may not be in the best (economic) position, but there aren't too many other countries where you'd want to put your money." The stronger Australian dollar was also attracting investors taking advantage of an appreciating currency against the volatility of the U.S. Unit, analysts said. "We're looking a more favoured market than perhaps the U.S. Where some people would be concerned about the value of the U.S. Dollar," Lloyds Bank NZA Ltd chief economist Will Buttrose said. "Why not put the money in Australia where entry is cheap and the currency looks stable?" But turning that capital into more permanent productive investment depends on government economic policy, he said. "It will only disappear if people lose confidence in the direction in the economy," Buttrose said, adding that offshore investors would carefully watch the government's promised tough economic statement on May 14. While happy to invest in bonds and other vehicles yielding interest unobtainable elsewhere, fund managers could just as easily reverse the flow -- particularly the Japanese, who were badly hurt in the past by rapid falls in the Australian dollar and hefty jumps in bond rates, analysts said. "It will remain very edgy money. If something was not to be delivered, if the statement wasn't considered tough enough, one might see a substantial outflow," Buttrose said. Offshore investors are eager to see Australia take tough economic decisions to curb its 100 billion dlr foreign debt and stubborn current account deficit, analysts said. "They are giving us the benefit of the doubt and I think they would like to leave the money here," Buttrose said. Reserve Bank policy has also reflected the increased interest in investment in Australia and the need to shield Japanese investors from rapid currency fluctuations. Reserve Governor Bob Johnston last week acknowledged an element of targeting the rate against the yen in currency policy when he said authorities could not take their "eyes off the yen" because of the crucial role of Japanese investors. Analysts said they believed the Reserve Bank had worked successfully in recent months to keep the Australian dollar within the range of 100 to 103 yen. Apart from its recovery against a weak U.S. Dollar, the Australian dollar has also risen almost three pct on a trade-weighted basis in the last three weeks. Offshore buying has also played a role in the booming Australian share market. It has followed Wall Street and other markets, but is also setting its own trend in response to the weight of both domestic and offshore funds pouring into equities, particularly in the gold sector. The key all ordinaries index rose to a record 1,758.3 today, nearly 20 pct above its level at the end of 1986, while the gold index has nearly doubled to a record 3,081.0 in the same period. The property sector is also sought after, with Japanese companies that have invested heavily in the United States in recent years turning their attention to undervalued real estate, particularly in the tourism field. Analysts pointed to the recent sale of Sydney's five-star Regent Hotel to Japanese interests for more than 145 mln dlrs as indicative of the type of property being sought. "They think they find good value real estate here which, with long term and fixed capital investment, is the kind of investment Australia needs," Buttrose added. REUTER 

ECONOMIC SPOTLIGHT - KUWAITI ECONOMY

Kuwait's oil-reliant and debt-ridden economy has started to pull out of a nosedive but oil prices will determine the pace of recovery, bankers and economists say. Crucial will be the ability of the 13-member OPEC to hold oil prices around a new benchmark of 18 dlrs a barrel in the northern hemisphere summer when demand usually slackens. Bankers estimate the economy, measured in terms of gross domestic product (gdp), shrank 19 pct in real terms last year after contracting 8.1 pct the year before. This was after taking into account inflation in consumer prices of 1.5 pct in 1985, slowing to 1.0 pct in 1986. Factors depressing economic activity include the 6-1/2-year-old Iran-Iraq war on Kuwait's doorstep, which threatens the emirate's vital oil export lifeline through the Gulf and has sapped business confidence. But sentiment received a much-needed boost in September when, after a series of piecemeal steps to combat a debt crisis caused by the 1982 crash of local stock market, a comprehensive new debt settlement program was introduced. The share crash, result of a speculative spree in forward trading, left 95 billion dlrs of post-dated cheques in default. The cheques were also used as collateral for consumer spending, thus generating an informal credit system. Much of the debt has been watered down but big sums are still owed by individuals and companies. There was some 4.4 billion dinars (about 15.7 billion dlrs) in outstanding bank credit at the end of 1986, of which one-quarter to one-third was estimated by bankers to rank as bad or doubtful debt. But the government has repeatedly said it will not allow any banks to go under. The new debt settlement scheme entails a rescheduling of problem credit over 10 to 15 years, depending on whether debtors have regular cash flows or not. Banks' shareholders and depositors will have their rights guaranteed by the government -- an edict of vital significance in a country of only 1.7 mln people where the financial sector is the biggest after oil. Kuwait is better placed than any other OPEC country to ride out the oil glut, bankers and economists say. Kuwait has an OPEC quota of 948,000 barrels per day (bpd) compared with production capacity of 4.0 mln bpd mentioned last year by Oil Minister Sheikh Ali al-Khalifa al-Sabah. But strategic diversification into downstream operations in Europe several years ago and a hefty refining investment at home gives it guaranteed markets abroad and enables it to sell over one-half of its output as high-grade refined oil products. Oil industry sources say Kuwait is able to get an average 2.00 dlrs a barrel more by selling oil in the form of processed product such as gas oil, kerosene and naphtha, rather than as crude. Bankers say the rebound in oil prices is the major reason for cautious optimism. Other reasons are low domestic inflation, a bottoming out of the fall in imports in recent years and signs government spending on productive sectors will remain steady. External accounts are in good shape, with an estimated 1.8 billion dinar current account surplus in 1986, 16 pct below that for 1985, but still an achievement in the recession-hit Gulf. Kuwait's petrodollar reserves in mid-1986 were put officially at over 80 billion dlrs, earning investment income of the equivalent of about 3.65 billion dlrs a year. But for the first time since the end of the oil boom, these reserves may not be enough to prevent a "real" budget deficit for the 1986/87 fiscal year ending June 30, bankers say. In a budget portrayed by bankers as mildly contractionary, revenues for 1986/87 were cut 38.6 pct and spending 11 pct, doubling the nominal deficit to 1.33 billion dinars. This left out income from state reserves, usually excluded in official budget accounting, which are forecast by bankers at up to 1.0 billion dinars in 1986/87, resulting in some shortfall. Bankers say it is too early to venture a forecast for economic growth this year or next. "It depends on oil prices," one said. "This summer is important." Cabinet Affairs Minister Rashid al-Rashid said last Sunday the cabinet has ratified recommendations to rationalise state spending in favour of productive sectors and reactivate the economy. He gave no details but bankers say these are expected to be spelled out in the 1987/88 budget, possibly in June. REUTER 

MALAYSIA MAY NOT MEET 1987 OIL PALM TARGET

Malaysia is unlikely to meet its targeted output of five mln tonnes of oil palm in calendar 1987, oil palm growers told Reuters. Output in 1987 is expected to reach around 4.5 mln tonnes, unchanged from 1986, because of drought, low use of fertiliser and overstressed palms, they said. The growers were asked for their reaction to an Oil World newsletter report that Malaysia's oil palm output is likely to drop sharply this year. Palm oil now sells at around 700 ringgit a tonne, or about 115 ringgit less than soybean oil, but Malaysia must sell more palm oil to prevent a stock buildup that could damage the industry, a leading grower told Reuters. The country's palm oil stocks now total some 500,000 tonnes against about 800,000 last March, the growers said. The growers expect palm oil prices to ease later this year due to pressure from South American and U.S. Soybean output. The current South American oilseed harvest, mainly soybean, is likely to be around 25.7 mln tonnes against the previous 21.7 mln tonne crop, they said. In addition, new U.S. Soybean plantings are also expected to enter the market around November when Malaysian palm oil output peaks. They said new planting of palms is also likely to slow, with some 50,000 hectares expected to be planted with new trees against 100,000 in 1986, although the effects of this reduction will not be felt for about another three years. REUTER 

ELDERS PLANS TO FLOAT OFF COURAGE PUBS

Elders IXL Ltd <ELXA.S> plans to float off the around 5,000 public houses belonging to its U.K. Subsidiary Courage Ltd to raise about one billion stg, Elders strategy executive director Stuart Kelso said. The scheme, subject of speculation in a Scottish newspaper yesterday, was fairly well advanced, but not certain to go ahead. "There could be road blocks," he added. The earliest flotation date would be June, though the sale will probably be later. Elders would retain a one-third interest in the property interests under the current plan. No immediate use has been earmarked for the funds raised. Kelso said float plans currently include an offering of debentures to institutional investors and issues of ordinary shares and convertible stock for sale to the public. Elders bought Courage from Hanson Trust Plc <HNSN.L> last year for 1.4 mln stg. The deal followed Elders' unsuccessful efforts to expand into the U.K. Drinks industry by acquiring Allied-Lyons Plc <ALLD.L>. Hanson acquired Courage when it took over Imperial Group Plc early last year. The Elders plan to raise funds from Courage is a variant of the its earlier scheme to sell off 50 pct stakes in the Allied-Lyons pubs to their publicans, market sources added. REUTER 

FREEPORT TO START SULPHUR MINE IN PHILIPPINES

Freeport McMoran Inc <FTX.N>, a New York listed New Orleans-based natural resource, oil and gas company, is planning to build and run a surface sulphur mine in the central Philippines, a company statement said. It said Freeport officials were in the Philippines to discuss contractual arrangements with joint venture partner <International Consultex (Philippines) Inc>. The statement quoted Robert Foster, president of Freeport Sulphur Co, as saying the company was optimistic about the proposed mine at Pamplona in Negros Oriental province, as well as the country's investment climate. "The sulphur project will involve initial capital expenditures of between 50 and 100 mln dlrs depending upon the processing technology and the capacity of the project," Foster said. "We anticipate that the project may employ as many as 1,000 workers in Negros Oriental." Freeport-McMoran's senior vice-president Rene Latiolais said the company was also interested in gold and other precious metals and geo-thermal energy development in the Philippines. The statement said Freeport, which anticipates 1987 sales of 1.5 billion dlrs, is a major producer of sulphur, phosphate and nitrogen fertilisers, uranium oxide and geo-thermal energy. REUTER 

BANK OF JAPAN HAS NO COMMENT ON YEN BOND REPORT

A Bank of Japan spokesman declined to comment on a press report that the central bank had decided to conduct closer scrutiny of the operations of financial institutions in the bond market. The JIJI Press news agency had quoted Bank of Japan sources as telling Japanese reporters the bank was deeply concerned over potential risk in yen bond trading because the market had risen too fast. However, JIJI quoted the sources as saying, the central bank would not take such actions as guiding interest rates higher. JIJI quoted the sources as saying that current bond market yields are similar to short-term interest rates due to excessive speculative operations. This was attributable to heavy redemptions of government bonds and unclear prospects for the dollar, which has sent many foreign bond market participants to the domestic market, the sources were quoted as saying. REUTER 

MAFINA ISSUES 200 MLN SFR BOND WITH WARRANTS

Mafina BV of Voorburg, a subsidiary of Petrofina SA <PETB.BR>, is issuing a minimum 200 mln franc seven year bond with warrants, paying two pct, lead manager Credit Suisse said. The issue is guaranteed by the Belgian parent. The warrant exercise period is from May 1, 1987 until May 20, 1991. Each 5,000 franc note carries nine warrannts, each of which entitles the holder to buy one share in the company at 10,800 Belgian francs each. Payment is due April 30. REUTER 

HOKURIKU ELECTRIC ISSUES 35 MLN DLR WARRANT BOND

Hokuriku Electric Industry is issuing a 35 mln dlr equity warrant bond due May 7, 1992 paying an indicated coupon of 2-1/8 pct and priced at par, lead manager Nomura International Ltd said. The issue is guaranteed by Hokuriku Bank Ltd. The selling concession is 1-1/2 pct while management and underwriting combined pays 3/4 pct. Final terms are due April 16. The payment date is May 7 and the issue is available in denominations of 5,000 dlrs. Listing will be in Luxembourg. REUTER 

SAITAMA BANK ISSUES 100 MLN SFR CONVERTIBLE

Saitama Bank Ltd is issuing 100 mln Swiss francs of convertible notes due September 30, 1992, paying an indicated 1-1/4 pct, lead manager Credit Suisse said. Terms will be set on April 15 with payment due May 6. The conversion period is from May 20, 1987 until September 18, 1992. REUTER 

JARDINE MATHESON SAID IT SETS TWO-FOR-FIVE BONUS ISSUE REPLACING "B" SHARES

MONIER SAYS BRITAIN'S REDLAND MAY BID FOR IT

Diversified building materials group Monier Ltd <MNRA.S> said talks are taking place which may lead to Britain's Redland Plc <RDLD.L> making an offer for the Monier shares it does not already hold, chairman Bill Locke said. Redland already holds about 49 pct of Monier's 156.28 mln issued shares, he said in a brief notice to the Australian Stock Exchange. Locke said shareholders would be advised as soon as the discussions progressed and recommended that they keep their shares. Monier shares were trading at a 1987 high of 3.10 dlrs today, up from the previous peak of 2.80 at yesterday's close, and well above the 1987 low of 2.18 dlrs. Monier is the largest concrete roof tile manufacturer in Australia, the U.S. And New Zealand and the world's largest marketer of fly ash, according to its annual report for 1985/86 ended June 30. It recently reported first-half 1986/87 net fell to 15.02 mln dlrs from 17.09 mln a year earlier due to the Australian housing downturn, although foreign earnings rose. REUTER