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TREASURY'S BAKER SAYS MACROECONOMIC INDICATORS NEED MORE PROMINENT ROLE

HOSPITAL CORP SAYS IT RECEIVED 47 DLR A SHARE OFFER FROM INVESTOR GROUP

BEVERLY ENTERPRISES <BEV> SETS REGULAR DIVIDEND

Qtly div five cts vs five cts prior Pay July 13 Record June 30 Reuter 

TREASURY'S BAKER SAYS FLOATING EXCHANGE RATE SYSTEM NEEDS GREATER STABILITY

CRUDE OIL NETBACKS UP SHARPLY IN EUROPE, U.S.

Crude oil netback values in complex refineries rose sharply in Europe and firmed in the U.S. last Friday from the previous week but fell sharply in Singapore, according to calculations by Reuters Pipeline. The firmer tone to refining margins in Europe and the U.S. relected higher prices for petroleum products, particularly gasoline, and support from crude oil prices. Netback values for crude oil refined in Northern Europe rose substantially following strong gains in gasoline prices there. Brent is valued at 19.45 dlrs, up 56 cts a barrel or three pct from the previous week. In the U.S. Gulf, sweet crudes rose in value by 14 cts to 19.33 dlrs for West Texas Intermediate, up about 0.7 pct. Sour grades in the U.S. Gulf showed an increase of 33 cts a barrel for Alaska North Slope, up 1.7 pct. But netbacks for crude oil refined in Singapore fell sharply, down 15 cts to as much as 68 cts a barrel as ample distillate supplies weighed on petroleum product prices. Attaka in Singapore is valued at 18.55 dlrs, a decline of 68 cts a barrel or 3.5 pct from the previous week. For refineries in the Mediterranean, netback values were mostly lower, with declines of seven to 14 cts. The value of Kuwait crude fell 14 cts to 18.37 dlrs, while Iranian Light fell 11 cts to 19.14 dlrs. On the U.S. West Coast, netback values for ANS CIF L.A. also jumped sharply, up 40 cts a barrel or 2.2 pct to 18.82 dlrs on higher gasoline prices. Reuter 

TREASURY'S BAKER SAYS SYSTEM NEEDS STABILITY

Treasury Secretary James Baker said the floating exchange rate system has not been as effective as had been hoped in promoting stability and preventing imbalances from emerging in the global economy. In remarks before the afternoon session of the International Monetary Fund's Interim Committee, Baker said he was not suggesting that the system should be abandoned. "But I do suggest," he said, "that we need something to give it more stability and to keep it headed in the right direction when the wind shifts." He said that indicators can serve "as a kind of compass" but added that structural indicators can help focus attention on some policies. Baker, however, said the IMF "needs to move beyond macroeconomic indicators and find structural indicators that can help focus attention on some of the policies of specific relevance to the imbalances we face today." The Treasury Secretary said that indicators should be given a more prominent role in the annual economic reviews -- Article IV consultations -- that the Fund performs. Baker also told the policy making group that it was time for the IMF to adopt earlier recommendations making IMF surveillance more relevant to national policymakers and the public. "In particular, we urge increased publicity for IMF appraisals developed in Article IV consultations, the use of follow-up reports on country actions to implement IMF recommendations, and greater use of special consultation procedures," he said. Baker emphasized that indicators were a device "for moving beyond rhetoric to action." He said they provide "more structure to the system, and induce more discipline and peer pressure into the process of policy coordination." He said the Fund's procedures for surveillance need to be reviewed and updated to reflect the use of indicators. "This should be matter of priority for the executive board," he said. Baker also urged the Fund to develop alternative medium-term economic scenarios for countries that "can help us focus even more clearly on the most important imbalances, by identifying options for addressing them and analyzing the implications of these options." He said also that further work should be done on finding paths that lead toward possible medium-term objectives. "If we are to take effective remedial action when there are significant deviations from an intended course, then we must have more definitive ways of indentifying the right course for key variables," he said. Reuter 

NERCI <NER> UNIT CLOSES OIL/GAS ACQUISITION

Nerco Inc said its oil and gas unit closed the acquisition of a 47 pct working interest in the Broussard oil and gas field from <Davis Oil Co> for about 22.5 mln dlrs in cash. Nerco said it estimates the field's total proved developed and undeveloped reserves at 24 billion cubic feet, or equivalent, of natural gas, which more than doubles the company's previous reserves. The field is located in southern Louisiana. Reuter 

U.S. AND BRITAIN VETO SANCTIONS AGAINST S.AFRICA

For the second time in seven weeks, the United States and Britain vetoed a Security Council resolution to impose mandatory sanctions against South Africa. Nine of the Council's 15 members voted for the draft, aimed at forcing South Africa to implement an eight-year-old U.N. independence plan for Namibia (South West Africa), a vast, sparsely populated territory rich in minerals. The U.S. and Britain were joined by West Germany in casting negative votes. France, Italy and Japan abstained. The resolution called for comprehensive mandatory sanctions because Pretoria insists on making Namibian independence conditional on the withdrawal of more than 30,000 Cuban troops from neighbouring Angola. Reuter 

U.S. DOLLAR LOSSES PROPEL BROAD COMMODITY GAINS

Commodities from gold to grains to cotton posted solid gains in a flurry of buying today as losses in the U.S. dollar and rising interest rates kindled fears of inflation and economic instability. Gains were most pronounced on the Commodity Exchange in New York, where gold jumped 12.40 dlrs and closed at 436.50 dlrs a troy ounce, and silver 22.5 cents to 6.86 dlrs a troy ounce. A key factor behind the advance was anticipation that inflation will be the only way for the major industrial nations to halt the slide in the value of the U.S. dollar, said Steve Chronowitz, director of commodity research with Smith Barney, Harris Upham and Co., in New York. The dollar tumbled one day after top finance officials from the seven largest industrial nations reaffirmed their commitment to support its value, and despite reports of intervention by the U.S. Federal Reserve Bank, traders said. Traders said it appears that the industrial nations, known as the Group of Seven, lack the ability to change the long-term direction of the currency markets. "Maybe they have some ideas or plans," said Chronowitz. "If they do, it's not evident." "It looks like there's no cure but to let the free market take values to where they should be. "One way or another, we will force our major trading partners to stimulate their economies," as a measure to correct the mounting U.S. trade deficit, Chronowitz said. "I think the markets believe, and have believed for a long time, that the only recourse is to reflate at some point. It's going to be a long and tedious process, but that's what's happening," he said. The falling value of the dollar makes U.S. commodities cheaper for foreign buyers, stimulating demand. At the same time, traders who are holding stocks and bonds saw the value of their investments falling and many are turning to commodities such as precious metals as a hedge, said Marty McNeill, a metals analyst in New York with the trading house of Dominick and Dominick. The reaction in the metal markets reverberated throughout the commodities markets, as grains, livestock, and cotton posted broad gains. Traders at the Chicago Board of Trade said attention in the grain markets has shifted from concern about burdensome supplies to the outlook that a lower dollar will stimulate export demand. After the close of trading, the Agriculture Department raised its estimate for grain imports by the Soviet Union by two mln tonnes from the month-earlier report. Live hogs and frozen pork bellies posted sharp gains on the Chicago Mercantile Exchange, while live cattle were moderately higher. Analysts said several factors boosted hog prices. They said hogs haven't been making the weight gains that are normal at this time of year, and farmers have been too busy with field work to market animals. Reuter 

GENERAL MOTORS <GM> TO IDLE 9,800 WORKERS

General Motors Corp said it will temporarily lay off 9,800 workers at two plants next week. The layoffs will bring to 11,900 the number of General Motors workers temporarily let go by the company. Indefinite layoffs remain unchanged at 37,000. General Motors said its Chevrolet-Pontiac-GM of Canada plant at Okalhoma City, Okla., will be shut down April 13 through April 20 for inventory adjustment. Some 5,500 workers will be idled at the plant. General Motors' Chevrolet-Pontiac-GM of Canada plant at Doraville, Ga., will be closed for the same period for inventory adjustment, with 4,300 workers affected. The company's Lakewood, Ga., plant has been shut since December, with 2,100 workers on temporary layoff. General Motors said it will have one car plant and five truck plants working on on overtime Saturday, April 11. Reuter 

TENNEX INDUSTRIES TO BUILD PLANT IN TENNESSEE

<Tennex Industries Inc>, a Japanese owned supplier of air cleaners for the automotive industry, said it will build a seven mln dlr plant in Munfreesboro, Tenn. The company said the 37,500-square-foot plant will initially supply parts to <Nissan Motor Manufacturing Corp USA> in nearby Smyna. The company said it hopes to eventually produce parts for other U.S. car makers. Reuter 

EGYPT SEEKING 500,000 TONNES CORN - U.S. TRADERS

Egypt is expected to tender April 22 for 500,000 tonnes of corn for May through September shipments, private export sources said. Reuter 

TRUSTCORP INC <TTCO> 1ST QTR NET

Shr 67 cts vs 62 cts Net 9,160,000 vs 7,722,000 Assets 4.5 billion vs four billion Note: Shr and net data are before accounting change announced in 1986, which added 30 cts a share to year-ago 1st qtr results. Reuter 

NAPA VALLEY BANCORP <NVBC> 1ST QTR NET

Shr 20 cts vs 25 cts Net 487,000 vs 435,000 Reuter 

INTERNATIONAL POWER MACHINES <PWR> 4TH QTR LOSS

Shr loss 21 cts vs loss 28 cts Net loss 817,000 vs loss 1,058,000 Revs 5,627,000 vs 7,397,000 Year Shr loss 75 cts vs loss 1.36 dlrs Net loss 2,872,000 vs loss 5,200,000 Revs 23.3 mln vs 21.1 mln Note: 1985 net includes 1,255,000 adjustment in inventory valuations and 486,000 in cost-reduction expenses. Full name is International Power Machines Corp. Reuter 

CBOE TO LIST NEW S AND P OPTIONS <NSX> APRIL 20

The Chicago Board Options Exchange, CBOE, said it will list new Standard and Poor 500 stock index options beginning April 20 that will trade side-by-side with the existing S and P 500 options <SPX>. The new S and P 500 option contract differs from the existing contract in that settlement of the new contract will be based on the opening value of the index on expiration Friday. Settlement of the existing contract is based on the closing value of the index on expiration Friday. The new opening settlement S and P 500 options will be offered only in months in which there are S and P 500 futures. Initial months to be listed in the new options will be June, September and December, the CBOE said. Dissemination of the settlement of price of the new options will be made through a special ticker symbol -- <SET>, the exchange said. There will initially be seven series of strike prices for each contract month of the new options -- one strike price "at the money," or near to the actual spot index value, and three above and three below the spot index. Position limits in any combination of both the new and existing S and P 500 options will be 15,000 contracts. The exchange said in the rare event that a stock does not open on expiration Friday, the previous day's closing price of that stock will be used to calculate the settlement value of the index. Reuter 

EC WARNS AGAINST PASSAGE OF TEXTILE BILL

The European Community has told Congress that if textile legislation injuring EC interests is approved, there was no doubt the community would retaliate against U.S. exports. Roy Denmam, head of the EC delegation here, issued the warning in a letter to Senator Lloyd Bentsen, chairman of the Finance Committee. A copy of the letter was provided Reuters. Denmam told Bentsen, a Texas Democrat, that if the textile legislation passed on its own or was included in an omnibus trade bill and injured EC interests, "there should be no doubt that the EC will retaliate against the United States." He added that "at a time when U.S. textile exports to the EC are growing rapidly, one result of such retaliation would be a substantial reduction of U.S. exports and jobs." The textile legislation, backed strongly by the industry, hard hit by imports, and by senators from textile-producing states would impose new tough global quotas on textile imports and for the first time include Europe in the quotas. Reagan Administration officials have also opposed the textile legislation, saying that if it passed it would likely prompt a presidential veto. Denman made his comments on the textile issue in a general assessment of the Senate trade bill, titled S.490. He said he was concerned about provisions in the Senate bill that would limit, if not eliminate, the president's discretion if retaliating against nations for keeping their home markets closed to foreign goods. U.S. Trade Representative Clayton Yeutter has also opposed those provisions, arguing that presidential flexibility was needed in order to be able to negotiate with countries to open their markets, with retaliation being retained as a final, but discretionary, weapon. The pending overall trade legislation would force the Administration to consult often with Congress and seek its approval during step-by-step GATT negotiations. He said "enactment of S. 490 would reduce the confidence of other governments in America's commitment to multinational trade." Summing up the senate legislation, Denman said "a number of provisions of that bil may achieve the opposite of what is intended and lead to dangerous consequences for the world and the U.S. economy." Reuter 

CBOE TO LIST NEW S AND P OPTIONS APRIL 20

The Chicago Board Options Exchange, CBOE, said it will list new Standard and Poor 500 stock index options beginning April 20 that will trade side-by-side with the existing S and P 500 options. The new S and P 500 option contract differs from the existing contract in that settlement of the new contract will be based on the opening value of the index on expiration Friday. Settlement of the existing contract is based on the closing value of the index on expiration Friday. The new opening settlement S and P 500 options will be offered only in months in which there are S and P 500 futures. Initial months to be listed in the new options will be June, September and December, the CBOE said. Dissemination of the settlement price of the new options will be made through a special ticker symbol -- <SET>, the exchange said. There will initially be seven series of strike prices for each contract month of the new options -- one strike price "at the money," or near to the actual spot index value, and three above and three below the spot index. Position limits in any combination of both the new and existing S and P 500 options will be 15,000 contracts. The exchange said in the rare event that a stock does not open on expiration Friday, the previous day's closing price of that stock will be used to calculate the settlement value of the index. Reuter 

THREE TRADERS INDICTED FOR INSIDER TRADING

A Grand Jury in Manhattan Federal Court indicted three arbitrageurs, charging they swapped inside information between their firms, Goldman Sachs and Co and Kidder Peabody and Co, court documents showed. Robert Freeman, head of risk arbitrage at Goldman Sachs and Co, Richard Wigton, an employee of Kidder Peabody Co Inc, and Timothy Tabor, also formerly with Kidder, were charged with trading on inside information between June 1984 and January 1986. They were arrested in February. The indictments also alledged that Goldman Sachs and Freeman made money on the insider trading scheme. According to the indictment, Freeman exchanged inside information with Martin Siegel, who at the time was a vice president of Kidder Peabody. Siegel pleaded guilty last February 13 to charges he participated in the conspiracy. The indictment charged Siegel passed on non-public information to both Wigton and Tabor from Freeman. Reuter 

GREAT AMERICAN MGMT<GAMI> HAS ATCOR<ATCO> STAKE

Great American Management and Investment Inc told the Securities and Exchange Commission it acquired a 7.7 pct stake in Atcor Inc. Great American said it bought the stake for investment. It added that it has also considered--but not yet decided--to buy additional Atcor shares, either in the open market, in private transactions, through a tender offer or otherwise. Great American said it paid about 6.1 mln dlrs for its 462,400 Atcor shares. It said its most recent purchases included 191,400 shares bought March 18-April 6. Reuter 

RAI RESEARCH CORP <RAC> 3RD QTR FEB 28 NET

Oper shr one ct vs 13 cts Oper net 17,806 vs 312,692 Revs 1,318,165 vs 2,239,349 Nine mths Oper shr 27 cts cs 28 cts Oper net 640,156 vs 671,291 Revs 5,612,818 vs 5,632,044 Note: Oper excludes gain from discontinued operations of 15,598 for year-ago qtr and loss from discontinued operations of 49,040 for year-ago nine mths. Reuter 

MOORE <MCL> SEES SUBSTANTIAL 1987 PROFIT GAIN

Moore Corp Ltd expects 1987 profits from continuing operations will exceed 1986 results and recover to 1985 levels when the company earned 152 mln U.S. dlrs or 1.70 dlrs a share, president M. Keith Goodrich said. "We'll have a substantial increase in earnings from continuing operations," he told reporters after the annual meeting. He said he expected profits would recover last year's lost ground and reach 1985 results. In 1986, profits from continuing operations slumped to 139.5 mln dlrs or 1.54 dlrs a share. The total excluded losses of 30 mln dlrs on discontinued operations. Goodrich said Moore is still actively looking for acquisitions related to its core areas of business forms manufacturing or handling. "We could do a large acquisition," he said when asked if the company could raise as much as one billion dlrs for this purpose. Chairman Judson Sinclair, answering a shareholder's question, told the annual meeting that a special resolution passed by shareholders to create a new class of preferred shares would allow Moore to move quickly if it decided to pursue an acquisition. "If we were to make a major acquisition ... it means we can move with a certain expediency," Sinclair said. Asked if the resolution was designed to give Moore protection from a possible hostile takeover, Sinclair said only, "I know of no threat to the corporation at this time." Reuter 

ARVIN <ARV> RAISES NUMBER OF AUTHORIZED SHARES

Arvin Industries Inc said its shareholders at the annual meeting voted to increase authorized common shares to 50 mln from 30 mln. The company told shareholders that the offering of 1.7 mln common shares in January raised 50 mln dlrs, and the 500 shares of variable rated preferred stock offered in February also raised 50 mln dlrs. The company said it also placed 150 mln dlrs in long-term debt in March. Reuter 

RAYTHEON <RTN> WINS U.S. NAVY CONTRACT

Raytheon Co said the United States Navy awarded it a 215.3 mln dlr contract to produce 1,927 AIM/RIM-7M Sparrow Missile Guidance and Control Sections and associated hardware. Under the contract, the company said it will provide missiles and associated hardware to the U.S. Navy and Air Force and to several U.S. allies. Raytheon said the contract represents the major share of the fiscal 1987 competitive Sparrow missile procurement. Reuter 

FIRM HAS 14.8 PCT OF DECISION/CAPITAL FUND<DCF>

Gabelli Group Inc said it and two subsidiaries held a total of 295,800 Decision/Capital Fund Inc shares or 14.8 pct of the total outstanding. It said the shares were held on behalf of investment clients and it said it had no intention of seeking control of the fund. Gabelli said its most recent purchases of Decision/Capital Fund stock included 95,800 shares bought April 3-6 on the Philadelphia Stock Exchange. Gabelli is an investment firm headquartered in New York City. Its Gabelli and Co subsidiary is a brokerage firm. Reuter 

CONSUMERS POWER <CMS> TO REDEEM BONDS

Consumers Power Co said it has 56 mln dlrs available to be used to redeem at par any 15 pct series first mortgage bonds that are not exchanged under an outstanding bond exchange program. The utility on March 17 offered to exchange its 15 pct first mortgage bonds due March 1, 1994 for a new series of first mortgage bonds, 9-1/4 pct due April 1, 1997. The offer will expire April 14, 1987. Reuter 

SEMICONDUCTOR BOOK TO BILL RATIO AT 1.21 PCT

The Semiconductor Industry Association put the three-month average book-to-bill ratio at 1.21, which was above analysts' expectations and reflects the sixth straight increase in this indicator of computer industry activity. Average booking in the three month period ended in March totaled 910.8 mln dlrs, up 15.6 pct from a month ago and the highest bookings since September, 1984. March billings, or computer chip sales in the month, totaled 912.1 mln dlrs, up 34.6 pct from a month ago, the association said. The three month average billings totaled 751.3 mln dlrs, up 6.5 pct. March billings were the strongest recorded since November, 1984, the association said. The book to bill ratio, at 1.21, was the highest since May, 1984, it noted. Preliminary total solid state shipments for the first quarter of 1987 totaled 2.25 billion dlrs, up 4.9 pct from last quarter and up 15.9 pct from last year's first quarter. Semiconductor Industry Association President Andrew Procassini said the rise in the book to bill was due to a substantial increase in U.S. bookings during March. "We believe that the bookings increase reflects growing confidence by electronic equipment manufacturers that some end-equipment market segments have improved substantially during the first quarter," Procassini said in a statement. The association also revised its book-to-bill ratio estimate for the three months ended in February to 1.12, from 1.13 earlier. It further revised the January book-to-bill figure to 1.09 from 1.12 estimated earlier. The three-month average book-to-bill ratio of 1.21 for March means for every 100 dlrs worth of product shipped, computer chip maker received 121 dlrs in new orders. Drexel Burnham Lambert Inc analyst Michael Gumport said association numbers indicate March orders were up 20 pct above the normal seasonal level. The association does not break out March orders from its three-month average, which it put at 910.8 mln dlrs. Gumport noted the three-month average bookings were well above the 800-865 mln dlrs anticipated by the industry. He said semiconductor stock could rise five to ten pct on the stock market open tomorrow, due to the positive numbers. "Skeptics are going to have to have some pretty strong reasons not to like this group (of stocks)," Gumport said. Kidder Peabody and Co analyst Michael Kubiak said the ratio indicates March orders at about one billion dlrs, which would be the highest monthly order rate since April, 1984. He predicted at least a five pct rise in semiconductor stocks on the open, and said the stock group could soar as high as 15 pct during the session. "One month does not a boom-time make, but this is very good news," he said. Kubiak attributed the stong semiconductor orders to strength in the personal computer market, inventory restocking and strong buying by distributors. Purchasing managers had been keeping computer chip inventories low, due to the overcapacity in the industry and the slow growth of the economy in general, analysts noted. The semiconductor industry has been in a slump for the past three years. The analysts said the March order and sales numbers are the strongest evidence yet that the trend may be turning. Nevertheless, they do not expect the Administration to retreat from proposed sanctions against Japanese chip makers. They added, however, if the industry continues to improve, it could mean the sanctions will be short term. Jack Beedle, President of In-Stat, an electronics industry research firm, called the March numbers "excellent", but also cautioned against excessive optimism. "I still believe caution should be the word, rather than euphoria," said Beedle, adding that he has yet to see strong indications from the general economy or the computer industry that support a solid, long-term recovery. Beedle said while he thinks the semiconductor industry will have a very good second quarter, he still thinks positive shifts in exports and industrial production are needed to sustain a recovery. Reuter 

PARTNERSHIP BUYS IPCO <IHS> STAKE OF 6.8 PCT

MP Co, a New York investment partnership, told the Securities and Exchange Commission it bought a 6.8 pct stake in IPCO Corp common stock. The partnership said it acquired 346,600 IPCO shares, paying 4.9 mln dlrs, because it believed the securities to be "an attractive investment opportunity." It said it planned to regularly review its investment and may in the future recommend business strategies or an extraordinary corporate transaction such as a merger, reorganization, liquidation or asset sale. The partnership is controlled by Marcus Schloss and Co Inc, a New York brokerage firm, and Prime Medical Products Inc, a Greenwood, S.C., medical supplies firm. Reuter 

DELMED INC <DMD> YEAR LOSS

Oper shr loss 30 cts vs loss 1.27 dlrs Oper net loss 8,648,000 vs loss 25.6 mln Revs 27.4 mln vs 33.3 mln Avg shrs 29.1 mln vs 20.1 mln Note: Oper excludes loss on provision for discontinued operations of 971,000 vs 12.2 mln and loss from conversion of debt 587,000 vs gain of 1,734,000. 1985 oper excludes loss from pension plan liquidation of 631,000 and loss from discontinued operations of 1,015,000. Reuter 

MARCH TRUCK SALES SAID UP 16.4 PCT

Retail sales of trucks in March rose 16.4 pct over the same month last year, said the Motor Vehicle Manufacturers Association. The trade group said dealers sold 377,617 trucks in March, up from 324,327 last year. Year-to-date truck sales were up 3.6 pct at 934,074 from 1986's 901,757. Reuter 

DRUG INDUSTRY ATTACKED ON ASPIRIN ISSUE

Elements of the drug industry endangered the lives of children by pressuring the government to delay a now common warning on the link between aspirin and an often fatal disease, a doctor said. The warning involving Reye's Syndrome has since been required on aspirin products under a Food and Drug Administration (FDA) directive of one year ago, and now appears on the labels of aspirin and aspirin-containing products. The industry under government coaxing began voluntarily printing warning labels in mid-1985. But in an editorial in this week's Journal of the American Medical Association, Dr Edward Mortimer of Case Western Reserve University in Cleveland said some aspirin manufacturers misled physicians and acted irresponsibly in opposing the warning for several years before then. Mortimer's criticism was prompted by a new government study published in the same issue of the Journal which said it had found a "strong association" between aspirin and Reye's Syndrome. Reye's Syndrome, which kills about 20 per cent of its victims, strikes following chicken pox, influenza and other illnesses. Symptoms include lethargy, belligerence and excessive vomiting. Those who survive sometimes suffer brain damage. Reuter 

CADILLAC FAIRVIEW SAYS IT HAS RECEIVED SOME ACQUISITION PROPOSALS

GM <GM> UNIT GETS BOEING <BA> CONTRACT

General Motors Corp's Hughes Aircraft Co said it received a contract worth more than 20 mln dlrs from Boeing Co's Boeing Commercial Airplane Co. Hughes will supply a cabin entertainment and service system for Boeing's new 747-4000 jumbo jetliners. Reuter 

AUDEC IN PRIVATE PLACEMENT OF STOCK, WARRANTS

<Audec Corp> said it sold privately 24 units, each consisting of 40,000 common shares and 40,000 redeemable common share purchase warrants, for a total of 480,000 dlrs. Audec said the sale was part of its plan to place a total of 28 units at 20,000 dlrs each. Reuter 

FRENCH PROPOSE NEW WORLD BANK DEBT FACILITY

The French government said it proposed the creation of a new facility for development and for debt reduction under the framework of the World Bank. In a statement issued in conjunction with the meeting of the International Monetary Fund's policy-making Interim Committee, the French said the "multilateral resources thus collected would permit a partial refinancing on highly concessional terms of previously rescheduled official debts." The statement said the "French government believes it is necessary to take new steps to deal with the issue of the poorest countries' debt." The French statement said that Paris club reschedulings should have a lengthening of the repayment period up to between 15 and 20 years instead of the current limit of 10 years. And grace periods would be extended. "These measures would be confined to the poorest, heavily indebted countries and would be decided on a case-by-case basis," it said. The French also called for making the IMF's compensatory financing facility for export shortfalls more concessional. Reuter 

CADILLAC FAIRVIEW SAYS IT RECEIVED TAKEOVER BIDS

<Cadillac Fairview Corp Ltd> said it received proposals to acquire the company, following its announcement last August that it had retained investment dealers to solicit offers for all outstanding common shares. Cadillac Fairview said the offers are subject to clarification and negotiation and offered no further details. Reuter 

ONE CHRYSLER <C> PLANT TO WORK OVERTIME

Chrysler Corp said one of its U.S. car and truck assembly plants will work overtime next week. Six of its seven U.S. facilities will work during the week. The plant on overtime, both during the week and on Saturday, April 11, is the company's Sterling Heights, Mich., factory. The company's U.S. plants and offices will be closed Friday, April 17, and Monday, April 20, for the Good Friday and Martin Luther King Jr. holidays. Reuter 

EC WARNS AGAINST PASSAGE OF TEXTILE BILL

The European Community (EC) will retaliate against U.S. textile exports if Congress passes trade legislation damaging European interests, an EC official warned today. Roy Denman, head of the EC delegation here, issued the warning in a letter to Senator Lloyd Bentsen, chairman of the Finance Committee. A copy was provided to Reuters. The bill, backed by the textile industry and senators from textile-producing states, would impose global quotas on textile imports and for the first time include Europe. Denman said he was concerned about provisions in the bill that would limit, if not eliminate, the president's discretion in retaliating against nations that keep their home markets closed to foreign goods. Reuter 

WINTERHALTER <WNTLC> HOLDERS OKAY TAKEOVER

Winterhalter Inc said its shareholders approved the 525,000 dlr acquisition of Winterhalter by Interface Systems Inc <INTF>. The acquisition would be for 15 cts per Winterhalter share. Reuter 

LIBERTY FINANCIAL <LFG> PRESIDENT TO RESIGN

Harold H. Kline, 48, will resign on May one as president of Liberty Financial Group Inc and its Liberty Savings Bank unit to pursue other business opportunties, the company said. The company said Kline's post will be filled by Charles G. Cheleden, chairman and chief executive officer. Kline will continue to serve on the boards of Liberty Financial and Liberty Savings, the company added. Reuter 

IMMUNOMEDICS <IMMU> TO SELL COMMON STOCK

Immunomedics Inc said it filed a registration statement with the Securities and Exchange Commission for the proposed sale of 2,500,000 shares of common stock. The company said it will sell 2,100,000 shares and that certain stockholders will sell the remaining 400,000 shares. Proceeds from the offering will be used for product development, basic research, staff expansion, prepayment of debt, capital expenditures and working capital, the company said. The offering will be co-managed by E.F. Hutton and Co Inc and First Boston Corp, Immunomedics said. Reuter 

MOBIL <MOB> WILL NOT INCREASE BUDGET

Mobil Corp Chairman Allen E. Murray said the company's exploration and production budget would not be increased in the foreseeable future as it is "operating on the assumption that (oil) prices will remain on the lower end of the spectrum. "Our budget is at about the same level as it was last year and I think it is the right amount," said Murray who was in town for ceremonies celebrating the consolidation of Mobil's domestic exploration and production operations into a new, locally-based subsidiary. Last year, Mobil spent a total of 2.13 billion dlrs on exploration and production, 341 mln dlrs in the United States and 1.79 billion overseas. Murray said the new subsidiary, Mobil Exploration and Production U.S. Inc., was not created as "part of any cost saving effort" but instead to "increase our efficiency and ability to stay ahead of the pack." The consolidation will, however, save Mobil about 15 mln dlrs annually once relocation and reorganization costs have been absorbed, according to A.F. Stancell, vice president of U.S. producing operations for the company. Mobil, the nation's second largest oil company, responded to the collapse of oil prices last year -- from 30 dlrs a barrel at end-1985 to as low as 10 dlrs in mid-1986 -- by laying off 5,500 people and cutting its budget in midyear by 27 percent, or 1.1 billion dlrs. Of that amount, more than 900 mln dlrs was eliminated from its exploration and spending spending plans. But the company reported an increase in profits in 1986 over 1985 and a jump in per share earnings to 3.45 dlrs a share from 2.55 dlrs. Reuter 

<AMERICAN EAGLE PETROLEUMS LTD> YEAR LOSS

Shr loss 10 cts vs profit 17 cts Net loss 1,546,000 vs profit 4,078,000 Revs 22.6 mln vs 38.9 mln Reuter 

TREASURY'S BAKER SAYS DEBTOR NATIONS NEED TIMELY DISBURSEMENTS

GM'S<GM> HUGHES AIRCRAFT HAS BOEING<BA> CONTRACT

General Motors' Hughes Aircraft Co said it was awarded a contract worth more than 20 mln dlrs by Boeing's Boeing Commercial Airplane Co to provide an advanced cabin entertainment and service system for Boeing's new 747-400 airliners. Hughes said the new system uses advanced digital electronic techniques and also adds cabin lighting control, cabin advisory signs and seat information. Hughes said the first 747-400 is scheduled to be completed in early 1988. Reuter 

REAGAN HITS HOUSE-PASSED BUDGET

President Reagan criticized the House-passed budget by saying the Democratic budget plan was just business as usual. The budget cut defense by eight billion dlrs and called for 18 billion dlrs in new taxes. He said the defense cut potentially theratened national security and was asking the American taxpayers to pay for the Democrats' excesses. Reuter 

S/P DOWNGRADES ZENITH ELECTRONIC <ZE>

Standard and Poor's said it lowered its rating on 190 mln dlrs of Zenith Electronic Corp debt because of continued poor earnings results and increased debt leverage. Among the rating changes, the company's senior debt was lowered to BB-plus from BBB-plus. Reuter 

MOODY'S DOWNGRADES REPUBLICBANK <RPT>

Moody's Investors Service said it lowered the ratings on 464 mln dlrs of long-term debt issued by RepublicBank Corp and its two principal subsidiaries but upgraded 451 mln dlrs of securities of Interfirst Corp <IFC>. The rating adjustments are based on the likelihood that the proposed merger of the two Texas banks will be consummated. Moody's said Interfirst is considerably the weaker of the two institutions. Among the rating changes, RepublicBank's senior debt was downgraded to BA-1 from BAA-1 while Interfirst's was raised to BA-1 from B-1. Reuter 

TREASURY'S BAKER CALLS FOR MORE BANK FLEXIBILITY

Treasury Secretary James Baker said that commercial banks need to develop more flexibility in their concerted lending mechanisms "to help assure continued participation in new money packages." He said that major debtor nations need to be able to count on receiving timely disbursements on new loans essential to support well-conceived economic programs. His remarks were made to the afternoon session of the International Monetary Fund's policy making Interim Committee. Baker said, "The sense of urgency and willingness to cooperate in support of a larger general interest that helped to carry us through the difficult crisis period of 1982 and 1983 is now less evident." He said to address this problem, it is important for the commercial banks to "develop a menu of alternative new money options from which all banks with debt exposure can choose in providing continuing support for debtor reforms." He said the "continued implementation of the debt strategy may well rest on their doing so." Baker also said that growth prospects for the lowest income countries remain an issue of "critical concern to the United States." He said that he intended to address the problem of poor country prospects in greater detail at tomorrow's meeting of the joint IMF-World Bank Devlopment Committee. Baker said, however, that ministers should guard against what appear to be magical solutions to the complex debt problem. "I want to stress the need for all to guard against the ephemeral attraction of magical solutions, which may appear as tantalizing alternatives to the rigorous realities of grappling with our debt problems," he said. But he emphasized that the only lasting progress is to approach each situation on a case-by-case basis, "bringing to bear the policies and financing needed to bring the economy back to sustained economic growth." Reuter 

CHILEAN TRADE SURPLUS NARROWS SLIGHTLY IN FEBRUARY

chile's trade surplus narrowed to 102.2 mln dlrs in february, from 105.4 mln dlrs in the same month last year, but it was above the 18.2-mln-dlr surplus recorded in january 1987, the central bank said. Exports in february totalled 379.4 mln dlrs, 17.2 pct above the january figure. Imports fell 9.2 pct from the previous month to 277.2 mln dlrs. The figures for the same month last year were 314 mln and 208.6 mln dlrs, respectively. The accumulated trade surplus over the first two months of 1987 stands at 120.4 mln dlrs against 132.8 mln dlrs the previous year. Reuter 

ANALYSTS DOUBT FED FIRMED DESPITE BORROWING RISE

Economists said that they doubt the Federal Reserve is firming policy to aid the dollar, despite higher discount window borrowings in the latest two-week statement period and very heavy borrowings Wednesday. Data out today show net borrowings from the Fed averaged 393 mln dlrs in the two weeks to Wednesday, up from 265 mln dlrs in the prior statement period. Wednesday borrowings were 1.4 billion dlrs as Federal funds averaged a high 6.45 pct. "One could make a case that the Fed is firming, but it probably isn't," said William Sullivan of Dean Witter Reynolds. Sullivan said some may assume the Fed has firmed policy modestly to support the dollar because net borrowings in the two-weeks to Wednesday were nearly 400 mln dlrs after averaging around 250 mln dlrs over the previous two months. However, the Dean Witter economist noted that the latest two-week period included a quarter end when seasonal demand often pushes up borrrowings. "Some might argue that the Fed was firming policy, but it looks like it tried to play catchup with reserve provisions late in the statement period and didn't quite make it," said Ward McCarthy of Merrill Lynch Capital Markets. A Fed spokesman told a press press conference today that the Fed had no large net one-day miss of two billion dlrs or more in its reserve projections in the week ended Wednesday. Still, McCarthy said it may have had a cumulative miss in its estimates over the week that caused it to add fewer reserves earlier in the week than were actually needed. The Fed took no market reserve management action last Thursday and Friday, the first two days of the week. It added temporary reserves indirectly on Monday via two billion dlrs of customer repurchase agreements and then supplied reserves directly via System repurchases on Tuesday and Wednesday. Based on Fed data out today, economists calculated that the two-day System repurchase agreements the Fed arrranged on Tuesday totaled around 5.9 billion dlrs. They put Wednesday's overnight System repos at approximately 3.4 billion dlrs. "It is quite clear that the Fed is not firming policy at this time," said Larry Leuzzi of S.G. Warburg and Co Inc. Citing the view shared by the other two economists, Leuzzi said the Fed cannot really afford to seriously lift interest rates to help the dollar because that would harm already weak economies in the United States and abroad and add to the financial stress of developing countries and their lenders. "Those who believe the Fed tightened policy in the latest statement period have to explain why it acted before the dollar tumbled," said McCarthy of Merrill Lynch. He said the dollar staged a precipitous drop as a new statement period began today on disappointment yesterday's Washington meetings of international monetary officials failed to produce anything that would offer substantive dollar aid. In fact, currency dealers said there was nothing in Wednesday's G-7 communique to alter the prevailing view that the yen needs to rise further to redress the huge trade imbalance between the United States and Japan. The economists generally agreed that the Fed is aiming for steady policy now that should correspond to a weekly average Fed funds rate between six and 6-1/8 pct. This is about where the rate has been since early November. "I'm not so sure that the Fed is engineering a tighter policy to help the dollar, as some suspect," said Sullivan of Dean Witter. If it is, however, he said that Fed probably has just nudged up its funds rate goal to around 6.25 to 6.35 pct from six to 6.10 pct previously. Reuter 

PAKISTAN GETS 70 MLN DLR WORLD BANK LOAN

mln-dlr, 20-year loan to assist Pakistan in a project designed to improve power plant efficiency. Noting that a shortage of power constrains Pakistan's economic development, the Bank said one objective of the project is to provide at least 200 megawatts of additional generating capacity. Another objective is to improve the efficiency with which hydrocarbons are used by Pakistan's Water and Power Development Authority (WAPDA) in power production, it said. One effect of this would be reduced atmospheric pollution. Reuter 

VALEX PETROLEUM INC <VALP> YEAR DEC 31

Shr loss six cts vs loss 84 cts Net loss 219,632 vs loss 16.3 mln Revs 1.4 mln vs 2.8 mln NOTE:1985 net includes 15.5 mln dlrs of writedowns and tax benefit of 51,294. Reuter 

VALEX PETROLEUM <VALP> RECLASSIFIES DEBT

Valex Petroleum Inc said its 1.3 mln dlrs in long-term debt with a commercial bank was reclassified as a current liability, which resulted in its auditors giving it a qualified opinion. Earlier, Valex reported a net loss 219,632 for 1986. Reuter 

DATA ARCHITECTS <DRCH> TO MAKE OFFERING

Data Architects inc said it intends to make a public offering of 850,000 shares of its common stock, of which 672,000 shares will be sold by the company and 178,000 by certain shareholders. Proceeds will be used for general corporate purposes. Reuter 

FIVE DIRECTORS OF TERRAPET ENERGY RESIGN

<Terrapet Energy Corp> said five directors resigned because they could not obtain directors and officers liability insurance. It said the directors are Dean R. Fellows, Frederick B. Hegi Jr, W.D. Masterson, Thomas Sturgess and John C. Thomas. Reuter 

GOLDMAN, SACHS COMMENTS ON FREEMAN INDICTMENT

Goldman, Sachs and Co, responding to the indictment earlier today of Robert M. Freeman, who remains head of its risk arbitrage unit, said it believes the 44-year-old executive did not violate insider trading laws. "Based on all we now know, we continue to believe in him and to believe that he did not act illegally," the company said in a statement. Freeman was indicated by a federal grand jury along with two other top Wall Street executives, Richard Wigton and Timothy Tabor, for allegedly swapping insider information in a scheme that produced millions in illegal profits. The company said it based in belief in Freeman's innocence on an investigation conducted by its independent outside counsel after Freeman was arrested in February. Reuter 

MAURITIUS GETS 25 MLN DLR WORLD BANK LOAN

The World Bank said it approved a 25 mln dlr structural adjustment loan for Mauritius to aid that country's industrial sector. The Bank said the 17-year loan will support policy reforms designed to help increase the efficiency of the country's manufacturing sector, develop export enterprises and encourage efficient use of resources. It added, "The increased availability of foreign exchange for imports is expected to help the expansion of industrial output and exports." Reuter 

TORONTO FINANCIAL DISTRICT HIT BY POWER OUTAGE

Toronto's financial district, the business heart of Canada, slowed to a near halt this afternoon after being struck by a power blackout, utility and business officials said. The blackout occurred around 1515 EDT in about an eight-square-block section of the city's downtown core, home to most of the city's skyscrapers, containing the headquarters of many of Canada's major corporations and financial institutions. Ontario Hydro spokeswoman Christina Warren told Reuters the blackout occurred when a transformer cable went down during routine maintenance at a downtown hydroelectricity station. Power was restored after 10 minutes. The power loss halted floor trading for 15 minutes on the Toronto Stock Exchange, Canada's largest equity market, although computerized trading - accounting for about 20 per cent of the Exchange's normal volume - continued, Toronto Stock Exchange official John Kolosky said. Bank operations were also affected. The headquarters or major offices of Canada's six major banks line a small section of Bay Street, the Wall Street of Canada. Bank of Montreal spokesman Brian Smith told Reuters the blackout shut down electronic banking machines and caused a minor slowdown in money trading operations, although "all in all we were not seriously affected." Officials at various downtown skyscrapers said the blackout also briefly shut down elevators and disrupted business in the downtown core's extensive network of underground shopping malls. Workers at some of the buildings said several people were briefly trapped on elevators, but police and firefighters reported no serious problems. Reuter 

U.S. THRIFT OFFICIAL URGES MORE LENDER INSURANCE

The Administration's 15 billion dlr plan to recapitalize the Federal Savings and Loan Insurance Corporation is needed to ensure the future profitablity of the U.S. thrift industry, according to a top industry regulator. "Today thrifts in overwhelming numbers are profitable," Shannon Fairbanks, executive chief of staff of the Federal Home Loan Bank Board told a thrift industry conference. "But every thrift is paying a market tax for the inabliity of regulators to deal with problems carried forward from the past," she said, referring to the premium that thrifts have to pay in the marketplace to entice deposits away from banks. "The industry wants to see a five billion dlr plan passed now, and then to wait and see what happens," Fairbanks said. "They're saying, 'we don't want to pay more right away.' The argument is that it's a drain on the industry." "But the dollars paid out can be recaptured in the reduction in the market tax differential," she said. "The cost of recapitalization to the industry would be recaptured in bottom line profitability." Fairbanks said that the public's confidence in thrift instititutions eroded with the financial difficulties of savings and loan associations in Ohio and Maryland in 1985. As thrift institutions in economically distressed areas like Texas have continued to fall on hard times, this has increased depositors' demand for a higher premium on deposits in savings and loans compared with premiums paid on deposits in commercial banks, she said. Before 1983, thrift institutions paid a 25 basis point yield differential on savings deposits over that offered by commercial banks as mandated by U.S. financial regulations. With the elimination in 1983 of regulations that had drawn strict lines between savings and loans and commercial banks, the gap widened to as much as 50 to 75 basis points as wary depositors demanded a higher premium to place their funds in thrift institutions, Fairbanks said. "The market tax paid by today's thrift industry is the most significant impediment to future profits," she said. Depositor confidence is also eroded by the existence of thrifts that are failing but manage to stay in business by paying deposit rates well above prevailing market rates. Presently, the FHLBB cannot afford to close failing institiutions "because we can't afford it with the current FSLIC fund," she said. Fairbanks estimated that the high market tax differential paid by thrifts will drop by at least 10 to 20 basis points with an adequate recapitalization of FSLIC because it will help restore this lost confidence. Reuter 

N.Z. TRADING BANK DEPOSIT GROWTH EASES SLIGHTLY

New Zealand's trading bank seasonally adjusted deposit growth rose 2.1 pct in February compared with a 2.6 pct rise in January, the Reserve Bank said. Year-on-year total deposits rose 28.9 pct compared with a 30.6 pct rise in January and 34.4 pct rise in February a year ago period, the bank said in its weekly statistical release. Total deposits rose to 17.55 billion N.Z. Dlrs in February compared with 17.18 billion in January and 13.61 billion in February 1986. Reuter 

SENATE PASSES HOMELESS AID BILL

The Senate approved a 433 mln dlr bill to aid thousands of homeless people sleeping on streets around the country. The legislation was approved on an 85 to 12 vote but must be reconciled with a similar House-passed bill differing in some details. The bill passed after Senate leaders managed on a 68 to 29 vote to break a filibuster that had blocked final action. The filibuster was led by Republican Senator Gordon Humphrey of New Hampshire who was trying to force an amendment to reverse a 12,100 dlr pay raise Congress approved earlier this year that boosted the lawmakers' salaries to 89,500 dlrs annually. Reuter 

IDA GRANTS SRI LANKA 18.6 MLN DLR CREDIT

The International Development Association said it approved a 18.6 mln dlr credit to Sri Lanka to help that country strengthen its agricultural research and development. IDA, the World Bank arm that makes interest free loans to the poorest nations, said the credit will support changes designed to raise farm income by boosting production, developing better crop varieties and improving farm systems. It said these goals will be accomplished through the establishment of a Council of Agricultural Research which will formulate and institute an agricultural research strategy. Reuter 

BANK OF JAPAN INTERVENES TO BUY DOLLARS AROUND 143.70 YEN - DEALERS

DOLLAR OPENS AT RECORD TOKYO LOW 143.75 YEN (PREVIOUS RECORD 144.70) - DEALERS

DOLLAR OPENS AT TOKYO RECORD LOW OF 143.75 YEN

The dollar opened at a record Tokyo low of 143.75 yen despite aggressive Bank of Japan intervention, dealers said. The previous record low was 144.70 yen set on March 30. The opening compares with 143.90/144.00 yen at the close in New York. The central bank bought dollars through Tokyo brokers just before and after the market opening, the dealers said. The intervention took place when the dollar fell to 143.20 yen, one dealer said. The dollar opened at 1.8155/60 marks against 1.8187/97 in New York. The dollar fell as low as 142.90 yen despite central bank intervention at 143.00 yen, dealers said. Selling pressure was strong from securities houses and institutional investors in hectic and nervous trading on underlying bearish sentiment for the dollar, they said. Most dealers were surpised by the dollar's sharp fall against the yen in New York, although many had expected such a drop to happen eventually. Institutional investors are expected to sell the dollar aggressively if it rises to around 143.50 yen, dealers said. The U.S. Currency steadied well above 143.00 yen after Bank of Japan intervention and scattered short-covering, they said. The dollar opened at 1.5120/30 Swiss francs against 1.5085/00 at the New York close. Sterling started at 1.6190/00 dlrs against 1.6195/05. REUTER 

DOLLAR FALLS BELOW 143 YEN IN TOKYO

The dollar fell below 143 yen in hectic early Tokyo trading despite aggressive Bank of Japan intervention, dealers said. After opening at a Tokyo low of 143.75 yen, the dollar fell as low as 142.90 yen on heavy selling led by securities firms and institutional investors, they said. REUTER 

STOCKS PLUNGE IN EARLY TOKYO TRADE

Share prices plunged in early trade as an opening foreign exchange record low of 143.75 yen to the dollar and a weak stockmarket in New York withered investors' confidence, brokers said. After 32 minutes' trade, the average plummetted 313.00 to 22,609.20. Yesterday the market gained 9.21 to a record close. Brokers said the dollar's fall against the yen prompted a large selloff of export-related shares. But fears had spread throughout the market, depressing almost all issues. REUTER 

ARGENTINE GRAIN MARKET REVIEW

The Argentine grain market was quiet in the week to Wednesday, with prices rising slightly on increased interest in wheat, millet and birdseed. Wheat for domestic consumption rose six Australs per tonne to 118. For export it rose eight to 108 per tonne from Bahia Blanca, increased 0.50 to 104 at Necochea and was unchanged at Rosario at 108.30. Maize increased one to 90 per tonne at Buenos Aires, was unchanged at 82 in Bahia Blanca, increased 0.50 to 85 at Necochea and fell one to 88 at Parana River ports. Sorghum from Bahia Blanca increased 0.50 Australs to 76.50 per tonne and dropped one to 75 at Rosario. It was quoted at 75 at Villa Constitucion, San Nicolas and Puerto Alvear. Oats were unchanged at 168 per tonne at Buenos Aires. Millet from Buenos Aires and Rosario rose five per tonne to 140 and birdseed rose 15 to 205 at Buenos Aires. REUTER 

U.S. MARKETS OFFER GLIMPSE OF VOLCKER NIGHTMARE

Today's turmoil in the U.S. Financial markets, with bond and stock prices tumbling in the dollar's wake, is evidence of a major shift in investor psychology that is likely to spell more turbulence ahead, economists said. For two years, the markets had hailed the dollar's decline as the cure-all for the U.S. Trade deficit. Interest rates fell sharply and Wall Street became a one-way street, up. But that confidence is now cracking as the financial markets suddenly believe Fed chairman Paul Volcker's often-repeated warnings about the risks of a dollar collapse. "Volcker's been saying for a long time that a dollar freefall would be extremely dangerous - now he's got it," said David Jones, economist at Aubrey G. Lanston and Co Inc. The dollar fell below 144 yen today for the first time in 40 years as the Group of Seven finance ministers in Washington failed to convince the foreign exchange market that they have a credible strategy for redressing global trade imbalances, short of further depreciation of the dollar. Bonds suffered their biggest one-day drop in months amid worries that the dollar's slide will rekindle inflation, scare away foreign investors and force the Fed to tighten credit. The inflationary fears boosted gold bullion by more than 12 dlrs to a 1987 high of 432.20/70 dlrs an ounce, while the spike in interest rates pulled the Dow Jones Industrial Average down by 33 points to 2339. Norman Robertson, Mellon Bank chief economist, called the markets' instability frightening. He believes economic fundamentals do not justify the bearishness but said that "once you start the ball rolling it's difficult to stop." "There's a stark possibility that you could get a destabilizing drop in the dollar that forces up interest rates and drives us into recession. The markets are in a panic." Stephen Marris of the Institute for International Economics in Washington, has been warning for a long time that the controlled decline of the dollar since peaks of 3.47 marks and 264 yen in February 1985 could turn into a nightmare. "We're still more or less on track for a hard landing... But the agony may be fairly drawn out," Marris told Reuters. Marris does not expect the crisis to peak until later this year, but he warned that the situation is so fragile that it would take very little to touch off what he calls the second phase of the hard landing, whereby a loss of confidence in the dollar pushes up interest rates and leads to a recession. The stock market's reaction today and its sharp drop on March 30 shows how the loss of confidence could come about. The fact that it has not happened yet is consistent with historical experience, which teaches that domestic markets are not affected until a currency is in the final stages of its decline, Marris said. He has forecast a drop to about 125 yen. Marris felt that a major impetus for the dollar's latest weakness was the loss of credibility that central banks suffered when they failed to prevent the dollar from falling below 150 yen, the floor that the market believes was set as part of the G-7 Paris agreement in February. Robertson at Mellon, by contrast, said the loss of confidence was triggered last week when Washington announced plans to slap 300 mln dlrs of tariffs on Japanese electronic imports, raising the specter of a debilitating trade war. Many economists believe that long-run stability will not return to the markets until the root cause of the trade gap is addressed - excessive consumption in the U.S., Reflected in the massive budget deficit. But in the short term, given the failure of the G-7 and of central bank intervention, some feel that the Fed will have no choice but to tighten credit to restore faith in the dollar. "The only thing that will stop the dollar falling is a substantial increase in the discount rate and a corresponding cut abroad, at least by Japan," said Lanston's Jones. Marris expects the Fed to act quickly to raise interest rates, even at the risk of increasing the debt burden for American farmers, Latin American governments and others. But Robert Giordano, chief economist at Goldman Sachs and Co, scoffed at the notion. "It's ridiculous to think the Federal Reserve will raise interest rates when the dollar is weak against just one currency. This is yen strength, not dollar weakness," he said. Giordano said the market was ignoring the progress being made toward reducing the U.S. Budget deficit. "We're going to have one of the biggest reductions in the budget deficit relative to GNP in history this year, and nobody cares," he said, noting that only the deficit cut in 1968-69 will have been greater. He said he does not expect the dollar to collapse and thinks interest rates are likely to fall back later this year. But for now, market psychology has changed so abruptly that a further drop in the bond market cannot be ruled out. "Put on your helmets," Giordano said. REUTER 

MIYAZAWA TO HOLD PRESS CONFERENCE LATER TODAY

Finance Minister Kiichi Miyazawa is expected to hold a press conference later today after returning from Washington, a ministry spokesman told Reuters. Miyazawa is scheduled to arrive at 4.15 P.M. (0715 GMT) in Tokyo. The earliest time for the press conference would be 6.30 P.M. (0930 GMT). The minister attended a meeting of the Group of Seven (G-7) and other international monetary conferences in Washington. The G-7 -- Britain, Canada, France, Italy, Japan, the U.S. And West Germany -- reaffirmed that current exchange rates are in line with economic fundamentals. REUTER 

AVERAGE YEN CD RATES FALL IN LATEST WEEK

Average interest rates on yen certificates of deposit (CD) fell to 4.13 pct in the week ended April 8 from 4.33 pct the previous week, the Bank of Japan said. New rates (previous in brackets) - Average CD rates all banks 4.13 pct (4.33) Money Market Certificate (MMC) ceiling rates for week starting from April 13 - 3.38 pct (3.58) Average CD rates of city, trust and long-term banks - Less than 60 days 4.15 pct (4.41) 60-90 days 4.14 pct (4.29) Average CD rates of city, trust and long-term banks - 90-120 days 4.12 pct (4.25) 120-150 days 4.12 pct (4.23) 150-180 days unquoted (4.03) 180-270 days 4.05 pct (4.05) Over 270 days 4.05 pct (unqtd) Average yen bankers acceptance rates of city, trust and long-term banks - 30 to less than 60 days 3.98 pct (4.20) 60-90 days 4.03 pct (3.97) 90-120 days unquoted (unqtd) REUTER 

JAPAN HAS NO PLANS TO CUT DISCOUNT RATE

Bank of Japan sources said the bank has no plans to cut its discount rate. They told reporters that there was no pressure on Japan during the Group of Seven (G-7) meeting here yesterday to lower its discount rate. They added that they themselves do not feel any need for a cut at all. Chancellor of the Exchequer Nigel Lawson told reporters earlier today that some countries - those with strong currencies - might have to cut interest rates. The Bank of Japan sources also said that it was too soon to call the G-7 pact a failure. The central bank sources were commenting on the dollar's renewed tumble in New York and Tokyo, which was sparked by remarks by U.S. Treasury Secretary James Baker that the dollar's fall had been orderly. They said the market must have misinterpreted Baker's comments because he was referring to the dollar's fall since the Plaza agreement in September 1985, over a long-time span, not the currency's recent movements. They added that the foreign exchange markest seem to seize on anything to use as an excuse to drive the dollar one way or the other. The Bank of Japan sources said the U.S. Is putting more weight on the dollar/yen rate in terms of judging market stability than on other currencies. Throughout the G-7 meeting, Japan pointed to the dangers that would arise from a further dollar fall because it would reduce the flow of Japanese capital to the U.S., Hurting the U.S. And world economies, they said. In February and in March of this year, Japanese investors reduced their purchases of U.S. Treasury bonds, the sources said. Each country in the G-7 - Britain, Canada, France, Italy, Japan, the U.S. And West Germany - has a different view about currency stability, the Bank of Japan sources said. This is because the overall foreign exchange market is a triangle of dollar/yen, European currencies/yen and dollar/European currencies. At the time of the Louvre agreement, European countries did not want the yen to weaken against their currencies so they did not object to the yen strengthening, they said. REUTER 

AUSTRALIAN UNIONS AND NSW GOVERNMENT REACH DEAL

Union and New South Wales government officials have reached a compromise in a dispute over workers compensation, averting increased industrial action in the state, union sources said. But some unions, including those of building and mining workers, said they were dissatisfied with the deal and would continue their strikes for a few more days. State officials said the government had agreed to revise its proposals to cut compensation and would allow slightly higher cash benefits for injured workers. Under the original proposal, which sparked strikes and other industrial action in the state on April 7, workers' compensation would have been cut by one third. Full details of the compromise package are not yet known. The Labour Council, affiliated to the Australian Council of Trade Unions (ACTU), had threatened to paralyse New South Wales unless the government modified its pending legislation on the issue. State officials said the only sectors affected in the past three days were some government building projects, railway freight movement and cargo handling in Sydney's ports. REUTER 

ECUADOR CRUDE OIL OUTPUT TO RESUME NEXT MONTH

Ecuador is due to resume limited crude oil output on May 8 when a new 43 km pipeline to neighbouring Colombia should be finished, an energy ministry spokesman said. Oil output was halted on March 5 by an earthquake which damaged 50 km of the main pipeline linking jungle oilfields at Lago Agrio to the Ecuadorean port of Balao on the Pacific. About 13 km of the new link, capable of carrying some 50,000 barrels per day (bpd), has been built, he said. Ecuador pumped 245,000 to 250,000 bpd before the earthquake. The new link will connect Lago Agrio to Puerto Colon in Colombia, the starting point of Columbia's pipeline to the Pacific ocean port of Temuco. The government estimates it will take about four more months to repair the Lago Agrio to Balao pipeline and return output to normal levels, the spokesman said. REUTER 

JAPANESE GROUP WINS LOS ANGELES RAIL CAR ORDER

Sumitomo Corp <SUMT.T> and <Nippon Sharyo Ltd> have won a joint order for 54 railway cars worth 69.60 mln dlrs from California's Los Angeles County Transportation Commission, a Nippon Sharyo spokesman said. He told Reuters components totalling 20 pct of the value of the articulated light rail vehicles will be U.S.-made, and that delivery is due between early 1989 and early 1990. The cars will be used for a Long Beach to Los Angeles service due to start in May 1989. REUTER 

THAI RICE EXPORTS FALL IN WEEK TO APRIL 7

Thailand exported 56,652 tonnes of rice in the week ended April 7, down from 75,160 tonnes the previous week, the Commerce Ministry said. It said the government and private exporters shipped 41,607 and 15,045 tonnes respectively. Private exporters concluded advance weekly sales for 48,062 tonnes against 22,086 tonnes the previous week. Thailand exported 1.29 mln tonnes of rice so far in 1987, down from 1.39 mln tonnes a year ago. It has commitments to export a further 353,045 tonnes this year. REUTER 

JAPAN SEES MARGINAL RISE IN EDIBLE OIL DEMAND

The Agriculture Ministry estimates Japan's edible oil demand will rise 1.5 pct in calendar 1987 to 1.68 mln tonnes from 1.65 mln in 1986. Domestic consumption will rise to 1.66 mln tonnes in 1987 from 1.64 mln in 1986, while imports will rise to 77,000 tonnes from 70,000 and exports will be unchanged at 14,000. Edible oil supplies will total 1.75 mln tonnes in 1987 against 1.73 mln last year, including domestic output of 1.60 mln against 1.55 mln. Domestic supplies will comprise 725,000 of soybean oil (706,000 in 1986), 638,000 of rapeseed oil (609,000) and 235,000 of other origin oils (231,000). REUTER 

FRANCE APPROVES LARGE DEFENCE SPENDING INCREASE

The French parliament has approved a substantial increase in defence spending to modernise the country's nuclear and conventional forces. The bill provides 474 billion francs for defence expenditure over a five-year period starting next year, with 32 pct allocated to modernise the country's nuclear weapons systems. The budget represents a six pct annual increase, starting next year, well above the 3.5 pct NATO recommends for members of its military command. France is a member of NATO but does not belong to its integrated military command. The budget will help finance three new types of nuclear weapons, a military reconnaissance satellite, a nuclear powered aircraft carrier, the AMX Leclerc tank and the possible development of chemical weapons. The program also includes funds for design work on nuclear missile submarines and the M-5 submarine-launched missile. REUTER 

SWISS BANKER SAYS COUNTRIES SEEK NEW DEBT ANSWERS

Countries meeting at the International Monetary Fund (IMF) this week are looking at a variety of new ways to resolve the problem of third world debt, Swiss National Bank president Pierre Languetin said. Languetin said meetings of the Group of 10 and the IMF Interim Committee today reached a consensus that a rescheduling like that of Mexico's debt must be the last of its kind. The Mexico rescheduling has still not been finally resolved six months after it started. Various members suggested other options to break the deadlock between debtor countries and their creditors, he said. Languetin said no recommendations were agreed, but he listed some of the suggestions. One involved individual banking systems each resolving the problem of small banks which refused to participate in reschedulings. It was this problem that had prevented completion of the Mexican rescheduling, he said. Debt-equity swaps could be expanded, as could 'on-lending', which some banks had proposed for Argentine debt. 'On-lending' allows banks to select customers for rescheduled amounts. Small banks which did not wish to reschedule might be forced to sign "exit bonds," prohibiting them from lending to that country again, he said. Languetin said none of these represented a general view. But he added "People are trying to get out of the corset." REUTER 

INTEREST RATE DIFFERENTIALS TOO SMALL, BANKER SAYS

Swiss National Bank President Pierre Languetin said a wider interest rate differential between the dollar and stronger currencies was needed to brake the dollar's fall. At a news conference, he said Japan and West Germany could try to stimulate their economies further by expanding money supply, but he added "I'm not so sure it would be desirable if monetary policy became more expansive. "But what would be useful is a greater differential in interest rates," he said. REUTER 

THIRTY MINERS KILLED IN SOUTH AFRICA, MINE OWNERS

Thirty South African coal miners have been killed in an underground explosion at a colliery east of Johannesburg, mine owners said. reuter^M 

PACIFIC DUNLOP <PACA.ME> SETS ONE-FOR-TEN ISSUE

Pacific Dunlop Ltd said it will make a one-for-ten bonus issue from its asset revaluation reserve to shareholders registered June 15. The bonus involves the issue of about 45 mln shares, the diversified rubber and plastics group said in a statement. The new shares will not rank for the deferred annual dividend of not less than 12.5 cts that Pacific Dunlop will pay in August, but will rank pari passu thereafter, it said. As previously reported, it did not pay an interim dividend for the first half to December 31 pending a review of the new dividend imputation legislation. REUTER 

MOBIL AUSTRALIA REPORTS 38.6 MLN DLR 1986 LOSS

Wholly-owned Mobil Corp <MOB> unit, <Mobil Oil Australia Ltd>, reported a 38.63 mln dlr net loss in 1986, a turnaround from its 37.25 mln profit in 1985. The loss reflected a combination of strikes plus scheduled and unscheduled refinery shutdowns for maintenance and inventory losses caused by government controls on both crude and product prices, Mobil said in a statement. However, equity-accounting of associates' profits reduced the loss to 24 mln dlrs against a 37 mln profit in 1985. Mobil said it was confident 1987 would see a return to profit as it built further on its 1985 company restructuring. REUTER 

COR TEXACO <TX> SAYS IT CAN'T POST MORE THAN 1 BILLION

Texaco Inc, in documents filed with a Texas state appeals court, said a ruling forcing it to post a bond of more than one billion dlrs as security for a 10.53 billion dlr judgment would halt its credit agreements and force the company into bankruptcy. A hearing is scheduled Monday on Texaco's motion to reduce the amount of bond required by Texas state law to secure a 1985 judgment in favour of Pennzoil Co <PZL> in a dispute over the acquisition of Getty Oil. Pennzoil today said it proposed to the court that Texaco secure its bond with assets valued at about 50 pct of the bond. It said this would not force Texaco into bankruptcy. Richard Brinkman, Texaco's chief financial officer, said in a newly filed affidavit that the company was willing to use its 65 mln shares of <Texaco Canada Inc> as collateral for a letter of credit or loan to provide security to Pennzoil. The Canadian unit's stock, valued at about 1.8 billion dlrs, was returned to Texaco earlier this week after being held as security by a federal district court in New York while Texaco awaited a ruling by the U.S. Supreme Court. Brinkman estimated that Texaco could borrow no more than one billion dlrs using its Canadian subsidiary stock as collateral for a loan. Texaco, he said, was unwilling to pledge the stock of its other foreign subsidiary corporations as security because the stock is not widely traded and its market value was unclear. Brinkman also said the company had already lost access to a four billion dlr revolving credit line since the initial jury verdict against Texaco. Texaco had been able to raise working capital by selling about 700 mln dlrs in receivables to a group of banks since the judgment, he said. The banks earlier this week notified Texaco that they would not purchase any additional receivables because of the company's uncertain status, Brinkman said. Four other credit agreements for 1.15 billion dlrs would also be cut off if a judgment of more than four billion dlrs is outstanding against the company and it is unable to obtain a stay, Brinkman said. "Since the Supreme Court decision on April 6, many other suppliers to Texaco have notified Texaco that their dealings with it are under review and a number have demanded cash payment or terminated their dealings with Texaco," he said. The Supreme Court overturned a lower federal court decision to cut Texaco's bond to one billion dlrs, saying the issue should first be considered in Texas courts. In a separate affidavit, <Morgan Stanley & Co> Managing Director Donald Brennan also said Texaco would be forced into bankruptcy if the company were forced to provide Pennzoil with security exceeding one billion dlrs. REUTER 

JAPAN WARNS U.S. IT MAY RETALIATE IN TRADE DISPUTE

Japan warned the United States it may take retaliatory measures if the United States imposes its planned trade sanctions on April 17, a senior government official said. Shinji Fukukawa, Vice Minister of the International Trade and Industry Ministry, said in a statement Japan would consider measures under the General Agreement on Tariffs and Trade and other actions if the United States imposes 100 pct tariffs on some Japanese exports as planned next week. However, Fukukawa said Japan was ready to continue trade talks with the United States despite its failure to convince America to call off the threatened tariffs during two days of emergency talks which ended in Washington yesterday. Last month President Reagan announced the sanctions in retaliation for what he called Japan's failure to honour a July 1986 agreement to stop dumping computer microchips in markets outside the United States and to open its home market to American goods. Fukukawa said the United States had regrettably not listened to Japan's explanation of its efforts to live up the pact and said Washington had not given any detailed explanation of why it planned to impose the tariffs. REUTER 

JUDGE KEEPS JAL <JAPN.T> CRASH SUIT ALIVE IN U.S.

A judge ruled that questions of liability in the 1985 crash of a Japan Air Lines Boeing 747 which killed 520 people near Tokyo will be decided in Seattle. But he left open the possibility that monetary damages could be awarded in a Japanese court. The ruling, by King County Superior Court Judge Gary Rittle, came in a hearing on lawsuits in which survivors of 77 of the victims are seeking millions of dollars in compensation. Rittle said after the liability problems are settled, he will examine the question of where damages will be decided. Lawyers for both the airline and the Seattle-based Boeing Co (BA.N> argued that the suits should be handled in a Japanese court, saying it would be more costly and time-consuming to hear them in an American court. But lawyers for the victims' survivors said the two companies were trying to evade the liability question and reduce the amount of compensation they may have to pay. Court officials said the case was likely to go to trial here in eight to 10 months. A draft report by a Japanese Transport Ministry investigation team said faulty repairs in 1978 by Boeing and inadequate inspection by ministry inspectors had contributed to the cause of the disaster. The report, obtained by Reuters this week, is expected to be made public next month. Boeing has said it will probably not comment on the report until it is officially released. REUTER 

TWO UTAH FINANCIAL INSTITUTIONS FAIL

Two Utah financial institutions, the Bank of Iron County and Summit Savings and Loan Association, have failed, official spokesmen said. The board of directors of the Federal Deposit Insurance Corporation (FDIC) has approved the assumption of the deposit liabilities of Bank of Iron County, Parowan, Utah, by Dixie State Bank, St George, Utah, an FDIC spokesman said. The bank, which had total assets of 20.1 mln dlrs, was the first bank in Utah to fail this year and the 59th nationwide. Its three offices will reopen Monday as branches of Dixie State Bank and its depositors will automatically become depositors of the assuming bank. Dixie State Bank will assume about 19.9 mln dlrs in 6,300 deposit accounts and will purchase all of the failed bank's assets at a discount of 3.575 mln dlrs. The Federal Home Loan Bank Board closed Summit Savings and Loan Association, Park City, Utah, and directed the Federal Savings and Loan Insurance Corporation (FSLIC) to transfer an estimated 116.9 mln dlrs in insured deposits to United Savings and Loan Association, Ogden, Utah, an FSLIC spokesman said. Summit, a 120.8 mln dlr institution, was insolvent, the spokesman said. The bank board appointed the FSLIC as conservator for the association on April 14, 1986. Summit has since operated as part of the bank board's Management Consignment Program. United Savings has 205 mln dlrs in assets and nine offices in Utah, and one in Idaho. REUTER 

KUWAIT INCREASES STAKE IN SIME DARBY

The Kuwait Investment Office (KIO) has increased its stake in <Sime Darby Bhd> to 63.72 mln shares, representing 6.88 pct of Sime Darby's paid-up capital, from 60.7 mln shares, Malayan Banking Bhd <MBKM.SI> said. Since last November, KIO has been aggressively in the open market buying shares in Sime Darby, a major corporation with interests in insurance, property development, plantations and manufacturing. The shares will be registered in the name of Malayan Banking subsidiary Mayban (Nominees) Sdn Bhd, with KIO as the beneficial owner. REUTER 

IMF, WORLD BANK CRITICAL OF AGRICULTURE PROTECTION

A committee of the International Monetary Fund (IMF) and World Bank said protectionist agricultural policies of industrial countries were a major cause of depressed global commodity prices. The joint Development Committee, in a communique released following day-long discussions, said an improved environment for commodities was extremely important to the long-term viability of developing countries. The committee also criticised the slow-down in lending to debtor nations. Poorer countries, which rely primarily on raw commodity sales to industrial nations to pay their debts, have been highly critical of protectionist agricultural policies in the United States, Western Europe and Japan. "Ministers identified protectionist agricultural policies as a major cause of distortions including depressed commodity prices on world markets, of surplus production and of budgetary drain," the communique said. The communique, delayed because of disputes over specific language, was the final statement by the IMF and the bank after week-long semi-annual meetings of the two lending agencies. Earlier, the IMF's powerful Interim Committee added its voice to growing criticism of delays by commercial banks on critically needed loan packages for debt-laden developing countries. The committee said it welcomed the exploration of new procedures and financing techniques that will help mobilise new financial support for indebted countries. On Thursday, U.S. Treasury Secretary James Baker, in a statement to the policy-making committee, said commercial bank lending to debtor nations last year was disappointing and more flexibility in loan programs was needed. "Doubts about financing can clearly undermine the resolve to carry out needed reforms," Baker said. The Development Committee also joined in the criticism, noting that there had been a declining flow of capital to the developing countries that "has been particularly significant in the case of flows from commercial banks." A number of bank negotiations are bogged down over details including financial packages for Mexico, Nigeria and Argentina. The banks, acknowledging it has been difficult to complete deals, say part of the blame goes to the developing countries for not making sufficient reform to make them good credit risks. REUTER 

SMUGGLING BLAMED FOR CLOSURE OF HAITIAN SUGAR FIRM

A sugar mill which was this nation's second largest employer closed its doors yesterday, saying it had been run out of business by sugar smuggled from Miami and the neighbouring Dominican Republic. The closure of the Haitian American Sugar Company (HASCO) will idle 3,500 employees and affect as many as 30,000 to 40,000 small sugar cane planters in regions around the capital, the company said. "Because of unprecedented and ever-growing smuggling, HASCO regrets ... It cannot continue to accept delivery of sugar cane after April 10," the mill warned planters earlier this week. Since President Jean-Claude Duvalier fled Haiti fourteen months ago, widescale smuggling of basic goods such as cooking oil, flour, rice, sugar and canned milk has lowered consumer prices but bankrupted several local manufacturers, throwing hundreds of thousands of Haitians out of work. At the HASCO compound, where grim-faced workers lined up to receive their last pay, Spokesman Georges D. Rigaud showed a warehouse stocked with an estimated 445,000 unsold 100-pound (45-kg) bags of sugar. "We are closing because of our huge stock of unsold sugar. We have no money left to continue operations," Rigaud said. He said the company owed 7.6 mln dlrs and had borrowed an additional 1.5 mln dlrs in order to pay off workers. Rigaud blamed the mill's problems on an order by Duvalier two years ago forbidding HASCO from refining sugar. He said the government then began importing refined sugar at world market prices and reselling it at a huge profit and the provisional military-civilian government that replaced Duvalier last year continued the policy. "But now with all the smuggling even the state can't compete with smuggled Dominican refined sugar," Rigaud said. HASCO workers earned 4.20 dlrs daily, considerably above the usual minimum wage of three dlrs. It is generally estimated that every employed Haitian supports at least six people. Rigaud said HASCO's closing at a minimum would affect 280,000 to 300,000 people. Laid-off workers were bitter about the closure. "We're dead, and it's the government that's causing us to die," declared Lucien Felix, 34, who has five dependents. REUTER 

TAIWAN ANNOUNCES NEW ROUND OF IMPORT TARIFF CUTS

Taiwan announced plans for another round of import tariff cuts on 862 foreign goods shortly before trade talks with Washington which officials described as a move to help balance trade with the United States. Wang Der-Hwa, Deputy Director of the Finance Ministry's Customs Administration Department, told reporters the list of products included 60 items asked by Washington. "The move is part of our government efforts to encourage imports from our trading partners, particularly from the United States," he said. He said the ministry sent a proposal today to the cabinet that the tariffs on such products as cosmetics, bicycles, apples, radios, garments, soybeans and television sets be cut by between five and 50 pct. The cabinet was expected to give its approval next Thursday and the new tariff cuts would be implemented possibly starting on April 20, he added. Taiwan introduced a sweeping tariff cut on some 1,700 foreign products last January aimed at helping reduce its growing trade surplus with the United States, the island's largest trading partner. Washington however was not satisfied with the cuts and pressed for more reductions as a way of cutting its huge trade deficit with Taipei. Washington's deficit with Taipei rose to a record 13.6 billion U.S. Dlrs last year from 10.2 billion in 1985. It widened to 3.61 billion in the first quarter of 1987 from 2.78 billion a year earlier, Taiwan's official figures show. Today's announcement came before a departure later today of a 15-member Taiwan delegation for Washington for a series of trade talks with U.S. Officials. The delegation's leader, Vincent Siew, told reporters last night he was leaving with "a heavy heart," meaning that he would face tough talks in Washington because of rising protectionist sentiments in the U.S. Congress. Taiwan's 1986 trade surplus with Washington was the third largest, after Japan and Canada. Siew said the talks, starting on April 14, would cover U.S. Calls for Taiwan to open its market to American products, purchases of major U.S. Machinery and power plant equipment, import tariff cuts and protection of intellectual property. "I am afraid this time we have to give more than take from our talks with the U.S.," he said without elaborating. REUTER 

BRITISH MINISTER SAYS HE WARNED TOKYO OF SANCTIONS

A British minister said he had given the Japanese government a clear warning of sanctions against Japanese companies if Tokyo did not allow more access to its internal markets "and it was clearly understood." Corporate Affairs Minister Michael Howard said on his return from a visit to Japan he thought the Japanese were beginning to appreciate the need to be "fair and open" about access to their own markets. At an airport news conference Howard denied opposition charges that his trip had been a failure because he had returned empty-handed. "I did what I set out to do. I was sent to deliver a clear message to the Japanese government, and I delivered it very clearly, and it has been clearly understood." Howard said that under the Financial Services Act the govenment had considerable flexibility in taking sanctions against Japanese companies and finance houses operating in Britain. "It is not simply a question of withdrawing or refusing operating licences. We can ban firms from certain countries from carrying out certain kinds of business, while allowing them to carry out other kinds." "I hope we don't have to use these powers, but I made it clear in Japan that if our timetable isn't met, we shall use them." He said it would be unfortunate if Britain and Japan became involved in a tit-for-tat exchange, adding that Japan gained more than anyone else from an open trading relationship. "I think they are beginning to appreciate that if this relationship is to continue, it is very important for them to be fair and open about access to their own markets." On the question of the British firm Cable and Wireless Plc <CAWL.L>, which is trying to win a significant share of telecommunications contracts in Japan, Howard said he had told the Japanese this was being widely regarded as a test case. He said there were signs of movement on the case. Cable and Wireless was due to take part in talks in Japan next Tuesday, he said. Earlier this week British Prime Minister Margaret Thatcher said Britain could not go it alone on sanctions against Japan, but would have to coordinate action with its European Community partners. Community sources said after a meeting of trade officials yesterday that the group might impose steep new tariffs on a range of Japanese goods to prevent diversion from United States markets if Washington imposes trade sanctions against Tokyo as it has threatened. REUTER 

YIELD RISES ON 30-DAY SAMA DEPOSITS

The yield on 30-day Bankers Security Deposit Accounts issued this week by the Saudi Arabian Monetary Agency (SAMA) rose by more than 1/8 point to 5.95913 pct from 5.79348 a week ago, bankers said. SAMA decreased the offer price on the 900 mln riyal issue to 99.50586 from 99.51953 last Saturday. Like-dated interbank deposits were quoted today at 6-3/8, 1/8 pct -- 1/8 point higher than last Saturday. SAMA offers a total of 1.9 billion riyals in 30, 91 and 180-day paper to banks in the kingdom each week. REUTER 

UGANDA PULLS OUT OF COFFEE MARKET - TRADE SOURCES

Uganda's Coffee Marketing Board (CMB) has stopped offering coffee on the international market because it is unhappy with current prices, coffee trade sources said. The board suspended offerings last week but because of its urgent need for cash it was not immediately clear how long it could sustain, the sources added. Hundreds of Ugandan coffee farmers and processors have been waiting several months for payment from the CMB, which has had trouble finding enough railway wagons to move the coffee to the Kenyan port of Mombasa. Foreign banks have contributed to the cash crisis by holding up remittance of Uganda's hard currency earnings from coffee exports, the government newspaper New Vision said. The banks are holding up to seven mln dlrs in coffee money and President Yoweri Museveni is thinking of imposing a penalty for such delays, it added. Banking sources said a third factor in the crisis was that commercial banks have lent the board only 77 billion shillings -- the equivalent of 55 mln dlrs -- for crop finance in the current coffee year, while the government had asked for 100 billion. The CMB has 455,000 60-kg bags of coffee, about 15 pct of annual production, stockpiled in Kampala awaiting shipment. The crop accounts for over 90 pct of Uganda's export earnings and the recent slide in prices to four-year lows is likely to more than offset an expected increase in production. CMB officials have forecast that because the government has restored law and order in important growing areas, Uganda will produce over three mln bags of coffee in the year ending September 30, about 25 pct more than in 1985/6. REUTER 

W.GERMAN COCOA GRIND UP 2.9 PCT IN FIRST QUARTER

The West German cocoa grind rose 2.9 pct to 55,190 tonnes in the first quarter of 1987 from 53,643 tonnes in the same quarter of of 1986, the Bonn-based Confectionery Industry Association said in a statement. REUTER TAW 

DRY SPELL IN PHILIPPINES DAMAGES AGRICULTURE CROPS

A prolonged dry spell has damaged 111,350 hectares of rice and corn plantations in 10 provinces in the central and southern Philippines, agriculture officials said. They said some 71,070 tonnes of agricultural produce estimated at about 250 mln pesos was lost to the lack of rainfall. They warned of a severe drought if the prevailing conditions continued until next month. Agriculture Secretary Carlos Dominguez said he hoped the losses would be offset by the expected increase in output in other, normally more productive areas not affected by the dry spell. Affected were 14,030 hectares of palay (unmilled rice), representing a production loss of 22,250 tonnes valued at 77.8 mln pesos, Department of Agriculture reports said. About 48,820 tonnes of corn from 97,320 hectares valued at 170.8 mln pesos have also been lost, they said. Officials said the hectarage planted to palay that has been hit by the drought accounted for only one pct of national total thus the damage is considered negligible. In the case of corn, they said the loss can be filled by production from non-traditional corn farms which diversified into the cash crop from sugar two years ago. The Philippine Coconut Authority said coconut production in the major producing region of Bicol might drop by 25 pct to 320,000 tonnes if the dry spell continued. There were no reports of actual damage. REUTER 

SPANISH UNEMPLOYMENT FALLS SLIGHTLY IN MARCH

Spain's registered unemployment fell by 10,465 people to 2.97 mln or 21.4 pct of the workforce in March, Labour Ministry figures show. Registered unemployment in February was 2.98 mln people, or 21.5 pct of the workforce. The figures were nonetheless higher than those for March 1986 -- 2.8 mln people and 21 pct of the workforce. REUTER