BAHIA COCOA REVIEW SALVADOR Feb 26 Showers continued throughout the week in the Bahia cocoa zone alleviating the drought since early January and improving prospects for the coming temporao although normal humidity levels have not been restored Comissaria Smith said in its weekly review The dry period means the temporao will be late this year Arrivals for the week ended February 22 were 155,221 bags of 60 kilos making a cumulative total for the season of 5.93 mln against 5.81 at the same stage last year Again it seems that cocoa delivered earlier on consignment was included in the arrivals figures Comissaria Smith said there is still some doubt as to how much old crop cocoa is still available as harvesting has practically come to an end With total Bahia crop estimates around 6.4 mln bags and sales standing at almost 6.2 mln there are a few hundred thousand bags still in the hands of farmers middlemen exporters and processors There are doubts as to how much of this cocoa would be fit for export as shippers are now experiencing dificulties in obtaining Bahia superior certificates In view of the lower quality over recent weeks farmers have sold a good part of their cocoa held on consignment Comissaria Smith said spot bean prices rose to 340 to 350 cruzados per arroba of 15 kilos Bean shippers were reluctant to offer nearby shipment and only limited sales were booked for March shipment at 1,750 to 1,780 dlrs per tonne to ports to be named New crop sales were also light and all to open ports with June July going at 1,850 and 1,880 dlrs and at 35 and 45 dlrs under New York july Aug Sept at 1,870 1,875 and 1,880 dlrs per tonne FOB Routine sales of butter were made March April sold at 4,340 4,345 and 4,350 dlrs April May butter went at 2.27 times New York May June July at 4,400 and 4,415 dlrs Aug Sept at 4,351 to 4,450 dlrs and at 2.27 and 2.28 times New York Sept and Oct Dec at 4,480 dlrs and 2.27 times New York Dec Comissaria Smith said Destinations were the U.S. Covertible currency areas Uruguay and open ports Cake sales were registered at 785 to 995 dlrs for March April 785 dlrs for May 753 dlrs for Aug and 0.39 times New York Dec for Oct Dec Buyers were the U.S. Argentina Uruguay and convertible currency areas Liquor sales were limited with March April selling at 2,325 and 2,380 dlrs June July at 2,375 dlrs and at 1.25 times New York July Aug Sept at 2,400 dlrs and at 1.25 times New York Sept and Oct Dec at 1.25 times New York Dec Comissaria Smith said Total Bahia sales are currently estimated at 6.13 mln bags against the 1986/87 crop and 1.06 mln bags against the 1987/88 crop Final figures for the period to February 28 are expected to be published by the Brazilian Cocoa Trade Commission after carnival which ends midday on February 27 Reuter STANDARD OIL SRD TO FORM FINANCIAL UNIT CLEVELAND Feb 26 Standard Oil Co and BP North America Inc said they plan to form a venture to manage the money market borrowing and investment activities of both companies BP North America is a subsidiary of British Petroleum Co Plc BP which also owns a 55 pct interest in Standard Oil The venture will be called BP Standard Financial Trading and will be operated by Standard Oil under the oversight of a joint management committee Reuter TEXAS COMMERCE BANCSHARES TCB FILES PLAN HOUSTON Feb 26 Texas Commerce Bancshares Inc's Texas Commerce Bank Houston said it filed an application with the Comptroller of the Currency in an effort to create the largest banking network in Harris County The bank said the network would link 31 banks having 13.5 billion dlrs in assets and 7.5 billion dlrs in deposits Reuter TALKING POINT BANKAMERICA BAC EQUITY OFFER by Janie Gabbett Reuters LOS ANGELES Feb 26 BankAmerica Corp is not under pressure to act quickly on its proposed equity offering and would do well to delay it because of the stock's recent poor performance banking analysts said Some analysts said they have recommended BankAmerica delay its up to one billion dlr equity offering which has yet to be approved by the Securities and Exchange Commission BankAmerica stock fell this week along with other banking issues on the news that Brazil has suspended interest payments on a large portion of its foreign debt The stock traded around 12 down 1/8 this afternoon after falling to 11 1/2 earlier this week on the news Banking analysts said that with the immediate threat of the First Interstate Bancorp I takeover bid gone BankAmerica is under no pressure to sell the securities into a market that will be nervous on bank stocks in the near term BankAmerica filed the offer on January 26 It was seen as one of the major factors leading the First Interstate withdrawing its takeover bid on February 9 A BankAmerica spokesman said SEC approval is taking longer than expected and market conditions must now be re evaluated The circumstances at the time will determine what we do said Arthur Miller BankAmerica's Vice President for Financial Communications when asked if BankAmerica would proceed with the offer immediately after it receives SEC approval I'd put it off as long as they conceivably could said Lawrence Cohn analyst with Merrill Lynch Pierce Fenner and Smith Cohn said the longer BankAmerica waits the longer they have to show the market an improved financial outlook Although BankAmerica has yet to specify the types of equities it would offer most analysts believed a convertible preferred stock would encompass at least part of it Such an offering at a depressed stock price would mean a lower conversion price and more dilution to BankAmerica stock holders noted Daniel Williams analyst with Sutro Group Several analysts said that while they believe the Brazilian debt problem will continue to hang over the banking industry through the quarter the initial shock reaction is likely to ease over the coming weeks Nevertheless BankAmerica which holds about 2.70 billion dlrs in Brazilian loans stands to lose 15 20 mln dlrs if the interest rate is reduced on the debt and as much as 200 mln dlrs if Brazil pays no interest for a year said Joseph Arsenio analyst with Birr Wilson and Co He noted however that any potential losses would not show up in the current quarter With other major banks standing to lose even more than BankAmerica if Brazil fails to service its debt the analysts said they expect the debt will be restructured similar to way Mexico's debt was minimizing losses to the creditor banks Reuter RED LION INNS FILES PLANS OFFERING PORTLAND Ore Feb 26 Red Lion Inns Limited Partnership said it filed a registration statement with the Securities and Exchange Commission covering a proposed offering of 4,790,000 units of limited partnership interests The company said it expects the offering to be priced at 20 dlrs per unit It said proceeds from the offering along with a 102.5 mln dlr mortgage loan will be used to finance its planned acquisition of 10 Red Lion hotels Reuter USX X DEBT DOWGRADED BY MOODY'S NEW YORK Feb 26 Moody's Investors Service Inc said it lowered the debt and preferred stock ratings of USX Corp and its units About seven billion dlrs of securities is affected Moody's said Marathon Oil Co's recent establishment of up to one billion dlrs in production payment facilities on its prolific Yates Field has significant negative implications for USX's unsecured creditors The company appears to have positioned its steel segment for a return to profit by late 1987 Moody's added Ratings lowered include those on USX's senior debt to BA 1 from BAA 3 Reuter CHAMPION PRODUCTS CH APPROVES STOCK SPLIT ROCHESTER N.Y. Feb 26 Champion Products Inc said its board of directors approved a two for one stock split of its common shares for shareholders of record as of April 1 1987 The company also said its board voted to recommend to shareholders at the annual meeting April 23 an increase in the authorized capital stock from five mln to 25 mln shares Reuter COMPUTER TERMINAL SYSTEMS CPML COMPLETES SALE COMMACK N.Y. Feb 26 Computer Terminal Systems Inc said it has completed the sale of 200,000 shares of its common stock and warrants to acquire an additional one mln shares to Sedio N.V. of Lugano Switzerland for 50,000 dlrs The company said the warrants are exercisable for five years at a purchase price of .125 dlrs per share Computer Terminal said Sedio also has the right to buy additional shares and increase its total holdings up to 40 pct of the Computer Terminal's outstanding common stock under certain circumstances involving change of control at the company The company said if the conditions occur the warrants would be exercisable at a price equal to 75 pct of its common stock's market price at the time not to exceed 1.50 dlrs per share Computer Terminal also said it sold the technolgy rights to its Dot Matrix impact technology including any future improvements to Woodco Inc of Houston Tex for 200,000 dlrs But it said it would continue to be the exclusive worldwide licensee of the technology for Woodco The company said the moves were part of its reorganization plan and would help pay current operation costs and ensure product delivery Computer Terminal makes computer generated labels forms tags and ticket printers and terminals Reuter OHIO MATTRESS OMT MAY HAVE LOWER 1ST QTR NET CLEVELAND Feb 26 Ohio Mattress Co said its first quarter ending February 28 profits may be below the 2.4 mln dlrs or 15 cts a share earned in the first quarter of fiscal 1986 The company said any decline would be due to expenses related to the acquisitions in the middle of the current quarter of seven licensees of Sealy Inc as well as 82 pct of the outstanding capital stock of Sealy Because of these acquisitions it said first quarter sales will be substantially higher than last year's 67.1 mln dlrs Noting that it typically reports first quarter results in late march said the report is likely to be issued in early April this year It said the delay is due to administrative considerations including conducting appraisals in connection with the acquisitions Reuter NATIONAL INTERGROUPNII TO OFFER PERMIAN UNITS PITTSBURGH Feb 26 National Intergroup Inc said it plans to file a registration statement with the securities and exchange commission for an offering of cumulative convertible preferred partnership units in Permian Partners L.P. The Permian Partners L.P. was recently formed by National Intergroup to continue to business of Permian Corp acquired by the company in 1985 The company said Permian will continue to manage the business as a general partner retaining a 35 pct stake in the partnership in the form of common and general partnership units It did not say how many units would be offered or what the price would be Reuter ECONOMIC SPOTLIGHT BANKAMERICA BAC by Janie Gabbett Reuters LOS ANGELES Feb 26 BankAmerica Corp is not under pressure to act quickly on its proposed equity offering and would do well to delay it because of the stock's recent poor performance banking analysts said Some analysts said they have recommended BankAmerica delay its up to one billion dlr equity offering which has yet to be approved by the Securities and Exchange Commission BankAmerica stock fell this week along with other banking issues on the news that Brazil has suspended interest payments on a large portion of its foreign debt The stock traded around 12 down 1/8 this afternoon after falling to 11 1/2 earlier this week on the news Banking analysts said that with the immediate threat of the First Interstate Bancorp I takeover bid gone BankAmerica is under no pressure to sell the securities into a market that will be nervous on bank stocks in the near term BankAmerica filed the offer on January 26 It was seen as one of the major factors leading the First Interstate withdrawing its takeover bid on February 9 A BankAmerica spokesman said SEC approval is taking longer than expected and market conditions must now be re evaluated The circumstances at the time will determine what we do said Arthur Miller BankAmerica's Vice President for Financial Communications when asked if BankAmerica would proceed with the offer immediately after it receives SEC approval I'd put it off as long as they conceivably could said Lawrence Cohn analyst with Merrill Lynch Pierce Fenner and Smith Cohn said the longer BankAmerica waits the longer they have to show the market an improved financial outlook Although BankAmerica has yet to specify the types of equities it would offer most analysts believed a convertible preferred stock would encompass at least part of it Such an offering at a depressed stock price would mean a lower conversion price and more dilution to BankAmerica stock holders noted Daniel Williams analyst with Sutro Group Several analysts said that while they believe the Brazilian debt problem will continue to hang over the banking industry through the quarter the initial shock reaction is likely to ease over the coming weeks Nevertheless BankAmerica which holds about 2.70 billion dlrs in Brazilian loans stands to lose 15 20 mln dlrs if the interest rate is reduced on the debt and as much as 200 mln dlrs if Brazil pays no interest for a year said Joseph Arsenio analyst with Birr Wilson and Co He noted however that any potential losses would not show up in the current quarter With other major banks standing to lose even more than BankAmerica if Brazil fails to service its debt the analysts said they expect the debt will be restructured similar to way Mexico's debt was minimizing losses to the creditor banks Reuter NATIONAL HEALTH ENHANCEMENT NHES NEW PROGRAM PHOENIX Ariz Feb 26 National Health Enhancement Systems Inc said it is offering a new health evaluation system to its line of fitness assessment programs The company said the program called The Health Test will be available in 60 days Customers who use the program will receive a computer generated report and recommendations for implementing a program to improve their physical condition Reuter DEAN FOODS DF SEES STRONG 4TH QTR EARNINGS CHICAGO Feb 26 Dean Foods Co expects earnings for the fourth quarter ending May 30 to exceed those of the same year ago period Chairman Kenneth Douglas told analysts In the fiscal 1986 fourth quarter the food processor reported earnings of 40 cts a share Douglas also said the year's sales should exceed 1.4 billion dlrs up from 1.27 billion dlrs the prior year He repeated an earlier projection that third quarter earnings will probably be off slightly from last year's 40 cts a share falling in the range of 34 cts to 36 cts a share Douglas said it was too early to project whether the anticipated fourth quarter performance would be enough for us to exceed the prior year's overall earnings of 1.53 dlrs a share In 1988 Douglas said Dean should experience a 20 pct improvement in our bottom line from effects of the tax reform act alone President Howard Dean said in fiscal 1988 the company will derive benefits of various dairy and frozen vegetable acquisitions from Ryan Milk to the Larsen Co Dean also said the company will benefit from its acquisition in late December of Elgin Blenders Inc West Chicago He said the company is a major shareholder of E.B.I. Foods Ltd a United Kingdom blender and has licensing arrangements in Australia Canada Brazil and Japan It provides ann entry to McDonalds Corp MCD we've been after for years Douglas told analysts Reuter BONUS WHEAT FLOUR FOR NORTH YEMEN USDA WASHINGTON Feb 26 The Commodity Credit Corporation CCC has accepted an export bonus offer to cover the sale of 37,000 long tons of wheat flour to North Yemen the U.S. Agriculture Department said The wheat four is for shipment March May and the bonus awarded was 119.05 dlrs per tonnes and will be paid in the form of commodities from the CCC inventory The bonus was awarded to the Pillsbury Company The wheat flour purchases complete the Export Enhancement Program initiative announced in April 1986 it said Reuter CREDIT CARD DISCLOSURE BILLS INTRODUCED WASHINGTON Feb 26 Legislation to require disclosure of credit card fees and interest rates before the cards are issued have been introduced in the Senate and House Sen Chris Dodd D Conn a co sponsor of the bill said many banks and financial institutions do not disclose all the information about terms of their cards in promotional material sent to prospective customers By requiring card issuers to disclose the terms and conditions of their cards at the time of solicitation the legislation is intended to arm consumers with enough information to shop around for the best deal Dodd said in a statement Reuter HUGHES CAPITAL UNIT SIGNS PACT WITH BEAR STEARNS FORT LAUDERDALE Fla Feb 26 Hughes Conserdyne Corp a unit of Hughes Capital Corp said it made Bear Stearns and Co Inc BSC its exclusive investment banker to develop and market financing for the design and installation of its micro utility systems for municipalities The company said these systems are self contained electrical generating facilities using alternate power sources such as photovoltaic cells to replace public utility power sources Reuter MAGMA LOWERS COPPER 0.75 CENT TO 66 CTS NEW YORK Feb 26 Magma Copper Co a subsidiary of Newmont Mining Corp said it is cutting its copper cathode price by 0.75 cent to 66 cents a lb effective immediately Reuter BROWN FORMAN BFDB SETS STOCK SPLIT UPS PAYOUT LOUISVILLE Ky Feb 26 Brown Forman Inc said its board has approved a three for two stock split and a 35 pct increase in the company cash dividend The company cited its improved earnings outlook and continued strong cash flow as reasons for raising the dividend Brown Forman said the split of its Class A and Class B common shares would be effective March 13 The company said directors declared a quarterly cash dividend on each new share of both classes of 28 cts payable April one to holders of record March 20 Prior to the split the company had paid 31 cts quarterly Brown Forman today reported a 37 pct increase in third quarter profits to 21.6 mln dlrs or 1.00 dlr a share on a seven pct increase in sales to a record 337 mln dlrs Brown Forman said nine month profits declined a bit to 66.0 mln dlrs or 3.07 dlrs a share from 66.2 mln dlrs or 3.08 dlrs a share a year earlier due to a second quarter charge of 37 cts a share for restructuring its beverage operations The company said lower corporate tax rates and the restructuring are expected to substantially improve Brown Forman's earnings and cash flow in fiscal 1988 Reuter SHEARSON LEHMAN NAMES NEW MANAGING DIRECTOR NEW YORK Feb 26 Shearson Lehman Brothers a unit of American Express Co AXP said Robert Stearns has joined the company as managing director of its merger and acquisition department Shearson said Stearns formerly was part of Merrill Lynch Pierce Fenner and Smith Inc's MER merger and acquisitions department Reuter BANKERS REPORT BREAKTHROUGH ON VENEZUELAN DEBT NEW YORK Feb 26 Venezuela and its bank advisory committee have agreed in principle on revisions to the terms of a 21 billion dlr debt rescheduling package signed last February bankers said They declined to disclose details because two or three representatives on the panel have still to obtain the approval of their senior management for the new terms The committee was meeting in New York this afternoon and could put its final stamp of approval of the deal later today the bankers said A number of details have still to be finalized but the broad details of the new amortization schedules and interest rates are in place one senior banker said The interest rate on the rescheduling was originally set at 1 1/8 pct over Eurodollar rates but Venezuela requested easier terms because of a 40 pct drop in oil income last year It also asked for a reduction in the repayments it was due to make in 1987 1988 and 1989 after an earlier request that it make no amortizations at all in those years was rebuffed and sought a commitment from the banks to finance new investment in Venezuela The breakthrough in the Venezuelan talks which have been going on intermittently for several months follows the announcement earlier today of a 10.6 billion dlr debt rescheduling pact between Chile and its bank advisory panel And last night Citibank said Mexico's financing package including a 7.7 billion dlr loan will be signed on March 20 While the sudden progress is to some extent coincidental bankers acknowledge a desire to chalk up some quick successes after the shock of Brazil's unilateral interest suspension last Friday By striking swift deals banks hope to reduce the incentive for other debtors to emulate Brazil Reuter TOWER REPORT DIMINISHES REAGAN'S HOPES OF REBOUND By Michael Gelb Reuters WASHINGTON Feb 26 The Tower Commission report which says President Reagan was ignorant about much of the Iran arms deal just about ends his prospects of regaining political dominance in Washington political analysts said This is certification of incompetence private political analyst Stephen Hess told Reuters in commenting on the Tower report made public today It's as if he went before a professional licensing board and was denied credentials In one of the most direct criticisms board chairman John Tower a longtime Reagan supporter and former Republican senator from Texas told a press conference The president clearly did not understand the nature of this operation The report which lent credence to widespread opinion in Washington that Reagan is not in full command of the government was particularly damaging because it was prepared by a board of the Republican president's own choosing The three member panel made up of Tower former National Security Adviser Brent Scowcroft and former Secretary of State Edmund Muskie does not carry the partisan taint of criticism from a Congress controlled by the Democratic party We're falling by our own hand said one Republican political strategist What can we say except we're sorry we won't do it again The strategist who works for one of his party's top 1988 presidential contenders and asked not to be identified said the report was like an anvil falling on us Hess with the Brookings Institution public policy study group said the report is the final blow to Reagan's hopes of regaining the upper hand he once had in dealings with Congress the press and the Washington bureaucracy The report may also undermine the standing of Defense Secretary Caspar Weinberger and Secretary of State George Shultz who the report suggests were more interested in keeping their own skirts clean than supporting the president They protected the record as to their own positions on this issue They were not energetic in attempting to protect the president from the consequences it said White House chief of staff Donald Regan and former Central Intelligence Agency Director William Casey also received strong criticism but the blows were expected in their cases Regan expected to resign or be fired shortly was savaged for allegedly failing both to help Reagan conduct the Iran initiative and to avoid chaos in the disclosure process Casey who underwent surgery for removal of a cancerous brain tumor in December had already resigned for health reasons last month This is a story about people who came up somewhat short of being heroes Tower told reporters While Reagan retains considerable constitutional powers including command of the armed forces and the right to veto legislation analysts say it will be difficult for him to retake control of the country's policy agenda particularly with Congress controlled by the Democrats The crucial remaining question they said is whether the man in the street will forsake Reagan over the affair Although his job approval rating has fallen as much as twenty percentage points in some opinion polls since the arms deal with Iran became public last November his personal popularity is still relatively high A Los Angeles Times poll released earlier this week showed that just 37 pct of those surveyed thought Reagan was in control of the government but 55 pct still thought he was doing a good job as president American Enterprise Institute analyst William Schneider a Democrat says Reagan's loss of support among Washington power brokers could be offset by continued backing of the public In the past he has been able to go around the power elite by appealing directly to the public Schneider said Reagan will again plead his case that way in a televised address next week But one top Republican strategist warned against expecting a dramatic turnaround The White House has to avoid building expectations that cannot be met said the strategist who requested anonymity They have to recognize there is no quick fix Analysts also point out that Reagan's personal popularity has not always translated into public backing for his policies They note he was dramatically rebuffed in last November's elections when voters rejected his appeals and restored control of the Senate to the Democrats Reuter JANUARY HOUSING SALES DROP REALTY GROUP SAYS WASHINGTON Feb 26 Sales of previously owned homes dropped 14.5 pct in January to a seasonally adjusted annual rate of 3.47 mln units the National Association of Realtors NAR said But the December rate of 4.06 mln units had been the highest since the record 4.15 mln unit sales rate set in November 1978 the group said The drop in January is not surprising considering that a significant portion of December's near record pace was made up of sellers seeking to get favorable capital gains treatment under the old tax laws said the NAR's John Tuccillo Reuter SENATORS INTRODUCE EXPORT LICENSING REFORM BILL WASHINGTON Feb 26 Sens Alan Cranston D Cal and Daniel Evans R Wash said they introduced export licensing reform legislation that could save U.S. companies hundreds of thousands of dollars annually Our emphasis is two fold Decontrol and de license items where such actions will not endanger our national security and eliminate the Department of Defense's de facto veto authority over the licensing process Cranston said Our reforms should reduce licensing requirements by 65 to 70 pct he told reporters I am convinced that a more rational licensing process will boost exports U.S. export controls are intended to deny Eastern bloc countries access to technology that could further their military capabilities By refocusing our control resources on higher levels of technology technology that is truly critical we will do a better job of preventing diversion of critical technology to our adversaries while promoting more exports Cranston said We cannot expect to continue to play a leading role in new technology development in the future if we unduly restrict the activities of U.S. firms in the world market place Evans told reporters Reuter EXCELAN INC SETS INITIAL STOCK OFFER SAN JOSE Calif Feb 26 Excelan Inc said it is making an initial public offering of 2,129,300 shares of common stock at 12 dlrs per share Excelan said 1.6 mln of the shares are being sold by the company and 529,300 shares are being sold by stockholders Excelan designs and manufactures computer related products Reuter CCX NETWORK CCXN SECONDARY OFFERING UNDERWAY CONWAY Ark Feb 26 CCX Network Inc said it was offering 220,838 shares of stock at 15.75 dlrs a share though underwriters Stephens Inc and Cazenove Inc The company said it was selling the stock on behalf of some shareholders including those who recently received shares in the company in exchange for their businesses The company said it was receiving no proceeds from the offering Reuter FIRST UNION FUNC FILES 100 MLN DLR NOTES ISSUE NEW YORK Feb 26 First Union Corp said it has filed with the Securities and Exchange Commission for a proposed offering of 100 mln dlrs of fixed rate subordinated notes due 1997 The notes will be sold nationwide through underwriters managed by Shearson Lehman Brothers Inc Reuter OWENS AND MINOR INC OBOD RAISES QTLY DIVIDEND RICHMOND Va Feb 26 Qtly div eights cts vs 7.5 cts prior Pay March 31 Record March 13 Reuter DU PONT CO DD LAUNCHES IMPROVED ARAMID FIBERS WILMINGTON Del Feb 26 The Du Pont Co said it has devloped a new generation of high strength aramid fibers which is stiffer and less absorbant than previous generations Du Pont said the new product Kevlar 149 is up to 40 pct stiffer than first generation aramids and absorbs less than half the moister of other similar aramid fibers Kevlar was invented by Du Pont in the late 1960s and is five times stronger than steel and 10 times stronger than aluminum on an equal wieght basis and is used to replace metals in a variety of products according to the company Reuter STANDARD TRUSTCO SEES BETTER YEAR Toronto Feb 26 Standard Trustco said it expects earnings in 1987 to increase at least 15 to 20 pct from the 9,140,000 dlrs or 2.52 dlrs per share recorded in 1986 Stable interest rates and a growing economy are expected to provide favorable conditions for further growth in 1987 president Brian O'Malley told shareholders at the annual meeting Standard Trustco previously reported assets of 1.28 billion dlrs in 1986 up from 1.10 billion dlrs in 1985 Return on common shareholders equity was 18.6 pct last year up from 15 pct in 1985 Reuter ICO PRODUCERS TO PRESENT NEW COFFEE PROPOSAL LONDON Feb 26 International Coffee Organization ICO producing countries will present a proposal for reintroducing export quotas for 12 months from April 1 with a firm undertaking to try to negotiate up to September 30 any future quota distribution on a new basis ICO delegates said Distribution from April 1 would be on an unchanged basis as in an earlier producer proposal which includes shortfall redistributions totalling 1.22 mln bags they said Resumption of an ICO contact group meeting with consumers scheduled for this evening has been postponed until tomorrow delegates said Reuter SHULTZ SAYS NO RESIGNATION OVER IRAN REPORT ANCHORAGE Alaska Feb 26 Secretary of State George Shultz acknowledged failings in the Iran arms affair but declared he would not resign His role in the scandal that has scarred the Reagan administration attracted harsh criticism from the Tower commission in its report on the affair published today Shultz travelling to China for a week long visit refused to comment directly on the report published after he had left Washington But he repeated as he has done since the crisis broke last November that he was not going to resign You can wipe that off your slate he said Reuter MCLEAN'S MII U.S. LINES SETS ASSET TRANSFER CRANFORD N.J. Feb 26 McLean Industries Inc's United States Lines Inc subsidiary said it has agreed in principle to transfer its South American service by arranging for the transfer of certain charters and assets to Crowley Mariotime Corp s American Transport Lines Inc subsidiary U.S. Lines said negotiations on the contract are expected to be completed within the next week Terms and conditions of the contract would be subject to approval of various regulatory bodies including the U.S. Bankruptcy Court Reuter CHEMLAWN CHEM RISES ON HOPES FOR HIGHER BIDS By Cal Mankowski Reuters NEW YORK Feb 26 ChemLawn Corp CHEM could attract a higher bid than the 27 dlrs per share offered by Waste Management Inc WNX Wall Street arbitrageurs said Shares of ChemLawn shot up 11 5/8 to 29 3/8 in over the counter trading with 3.8 mln of the company's 10.1 mln shares changing hands by late afternoon This company could go for 10 times cash flow or 30 dlrs maybe 32 dollars depending on whether there is a competing bidder an arbitrageur said Waste Management's tender offer announced before the opening today expires March 25 This is totally by surprise said Debra Strohmaier a ChemLawn spokeswoman The company's board held a regularly scheduled meeting today and was discussing the Waste Management announcement She said a statement was expected but it was not certain when it would be ready She was unable to say if there had been any prior contact between Waste Management and ChemLawn officials I think they will resist it said Elliott Schlang analyst at Prescott Ball and Turben Inc Any company that doesn't like a surprise attack would Arbitrageurs pointed out it is difficult to resist tender offers for any and all shares for cash Schlang said ChemLawn could try to find a white knight if does not want to be acquired by Waste Management Analyst Rosemarie Morbelli of Ingalls and Snyder said ServiceMaster Companies L.P. SVM or Rollins Inc ROL were examples of companies that could be interested ChemLawn with about two mln customers is the largest U.S. company involved in application of fertilizers pesticides and herbicides on lawns Waste Management is involved in removal of wastes Schlang said ChemLawn's customer base could be valuable to another company that wants to capitalize on a strong residential and commercial distribution system Both Schlang and Morbelli noted that high growth rates had catapulted ChemLawn's share price into the mid 30's in 1983 but the stock languished as the rate of growth slowed Schlang said the company's profits are concentrated in the fourth quarter In 1986 ChemLawn earned 1.19 dlrs per share for the full year and 2.58 dlrs in the fourth quarter Morbelli noted ChemLawn competes with thousands of individual entrepreuers who offer lawn and garden care sevice Reuter U.S. SUGAR IMPORTS DOWN IN WEEK USDA WASHINGTON Feb 26 Sugar imports subject to the U.S. sugar import quota during the week ended January 9 the initial week of the 1987 sugar quota year totaled 5,988 short tons versus 46,254 tons the previous week the Agriculture Department said The sugar import quota for the 1987 quota year January December has been set at 1,001,430 short tons compared with 1,850,000 tons in the 1986 quota year which was extended three months to December 31 The department said the Customs Service has reported that weekly and cumulative imports are reported on an actual weight basis and when final polarizations are received cumulative import data are adjusted accordingly Reuter BRAZIL ANTI INFLATION PLAN LIMPS TO ANNIVERSARY RIO DE JANEIRO Feb 26 Brazil's Cruzado anti inflation plan initially hailed at home and abroad as the saviour of the economy is limping towards its first anniversary amid soaring prices widespread shortages and a foreign payments crisis Announced last February 28 the plan froze prices fixed the value of the new Cruzado currency and ended widespread indexation of the economy in a bid to halt the country's 250 pct inflation rate But within a year the plan has all but collapsed The situation now is worse than it was Although there was inflation at least the economy worked a leading bank economist said The crumbling of the plan has been accompanied by a dramatic reversal in the foreign trade account In 1984 and 1985 Brazil's annual trade surpluses had been sufficient to cover the 12 billion dlrs needed to service its 109 billion dlr foreign debt For the first nine months of 1986 all seemed to be on target for a repeat with monthly surpluses averaging one billion dlrs But as exports were diverted and imports increased to avoid further domestic shortages the trade surplus plunged to 211 mln dlrs in October and since then has averaged under 150 mln Reuter N.Z. OFFICIAL FOREIGN RESERVES FALL IN JANUARY WELLINGTON Feb 27 New Zealand's official foreign reserves fell to 7.15 billion N.Z. Dlrs in January from 7.20 billion dlrs in December and compared with 3.03 billion a year ago period the Reserve Bank said in its weekly statistical bulletin Reuter AGENCY REPORTS 39 SHIPS WAITING AT PANAMA CANAL WASHINGTON Feb 26 The Panama Canal Commission a U.S. government agency said in its daily operations report that there was a backlog of 39 ships waiting to enter the canal early today Over the next two days it expects 2/26 2/27 Due 27 35 Scheduled to Transit 35 41 End Day Backlog 31 25 Average waiting time tomorrow Super Tankers Regular Vessels North End 13 hrs 15 hrs South End 4 hrs 26 hrs Reuter AMERICA FIRST MORTGAGE SETS SPECIAL PAYOUT OMAHA Neb Feb 26 America First Federally Guaranteed Mortgage Fund Two said it is making a special distribution of 71.6 cts per exchangeable unit which includes 67.62 cts from return on capital and 3.98 cts from income gains Reuter REPUBLICANS EYE BIGGER U.S. CONSERVATION RESERVE WASHINGTON Feb 26 A group of Republican governors and members of Congress said they intended to explore expanding the conservation reserve program by up to 20 mln acres Under current law between 40 and 45 mln acres of erodible land must be enrolled in the program by the end of fiscal 1990 The Republican Task Force on Farm and Rural America headed by Senate Majority Leader Robert Dole Kan said they would consider drafting legislation to increase the reserve by between 15 and 20 mln acres Sen Charles Grassley R Iowa told Reuters he would offer a bill to expand the reserve to 67 mln acres Reuter ARVIN INDS ARV PROMOTES EVANS TO PRESIDENT COLUMBUS IND Feb 26 Arvin Industries Inc said L.K. Evans has been elected president succeeding James Baker who remains chairman Evans had been executive vice president Reuter EMHART CORP EMH QTLY DIVIDEND FARMINGTON Conn FEb 26 Qtly div 35 cts vs 35 cts prior Payable March 31 Record March nine Reuter U.S. DATA POINT TO CAPITAL SPENDING SLOWDOWN By Kathleen Hays Reuters NEW YORK Feb 26 A surprise 7.5 pct drop in U.S. January durable goods orders points to a slowdown in capital spending that could presage lackluster real growth in the U.S. economy in the first quarter of 1987 economists said With total orders excluding the volatile defense sector falling a record 9.9 pct economists agreed that the report painted a bleak picture for the U.S. economy But they stressed that the 1987 tax reform laws may be a primary factor behind the drop in orders for business capital investment It's a rather gloomy outlook for the economy said David Wyss of Data Resources Inc I'm particularly impressed by the 19.7 pct drop in non defense capital goods orders because it may be a sign that businesses are reacting more adversely to tax reform than we thought The Commerce Department pointed out that a record 14.8 pct decline in new orders for machinery was led by declines in office and computing equipment orders Economists said the drop in computer orders may have been a response to the lengthening of depreciation schedules and the end of the investment tax credit under the new tax laws It's more expensive to invest than it used to be so people just aren't doing it as much Wyss said Increases in durable goods orders at year's end reinforced the view that businesses anticipated the changing tax laws economists said November durable goods orders rose 5.1 pct and December's increased 1.5 pct revised upwards from a previously reported 0.9 pct But most acknowledged that the huge January drop was caused by more than tax reform The wash out that took place in January was far greater than the actual gains that took place in November and December said Bill Sullivan of Dean Witter Reynolds Inc The economy has a weakening bent to it early in the year The report definitely points to very sluggish capital spending over the next couple of quarters said Donald Maude of Midland Montagu Capital Markets Inc Maude pointed to a continuing decline in order backlogs as evidence that the outlook for new orders is not improving In November order backlogs rose 0.6 pct but in December they fell 0.6 pct and in January 0.7 pct he said It suggests orders in the pipeline are depleting which may quickly translate to a drop in production Midland Montagu's Maude said Wyss cautioned that too much should not be made of January's report given that other reports have reflected strength But he acknowledged that the decline occurred despite a 51 pct rise in defense orders compared with a 57.7 pct decline in December He also noted that there was a 6.9 pct drop in January shipments compared with a 5.4 pct rise in December Given these numbers there's no reason for the Fed to tighten Data Resources Wyss said But there's no reason to ease unless we see more numbers like this The Fed will wait and see he added Sullivan predicted the Fed will ease by Easter People aren't talking recession or Fed easing now but the Fed will have to ease to ensure global growth Reuter SENATORS INTRODUCE EXPORT LICENSING REFORM BILL WASHINGTON Feb 26 Sens Alan Cranston D Cal and Daniel Evans R Wash said they introduced export licensing reform legislation that could save U.S. companies hundreds of thousands of dollars annually Our emphasis is two fold Decontrol and de license items where such actions will not endanger our national security and eliminate the Department of Defense's de facto veto authority over the licensing process Cranston said Our reforms should reduce licensing requirements by 65 to 70 pct he told reporters I am convinced that a more rational licensing process will boost exports U.S. export controls are intended to deny Eastern bloc countries access to technology that could further their military capabilities By refocusing our control resources on higher levels of technology technology that is truly critical we will do a better job of preventing diversion of critical technology to our adversaries while promoting more exports Cranston said We cannot expect to continue to play a leading role in new technology development in the future if we unduly restrict the activities of U.S. firms in the world market place Evans told reporters Reuter AM INTERNATIONAL AM CITES STRONG PROSPECTS CHICAGO Feb 26 AM International Inc reporting an operating loss for the January 31 second quarter said prospects for the balance of the fiscal year remain good It said orders at its Harris Graphics subsidiary acquired in June 1986 continue to run at a strong pace For the six months orders rose 35 pct over the corresponding prior year period or on an annualized basis are running at about 630 mln dlrs The backlog at Harris is up 30 pct from the beginning of the fiscal year AM said AM International said its old division are expected to benefit from recent new product introductions and the decline in the value of the dollar Research development and engineering expenditures in fiscal 1987 will be in the 45 50 mln dlr range and the company said it has allocated another 30 40 mln dlrs for capital expenditures Earlier AM reported a fourth quarter operating loss of two cts a share compared to profits of seven cts a share a year ago Revenues rose to 291.8 mln dlrs from 151.1 mln dlrs Reuter CCC CREDITS FOR HONDURAS SWITCHED TO WHITE CORN WASHINGTON Feb 26 The Commodity Credit Corporation CCC announced 1.5 mln dlrs in credit guarantees previously earmarked to cover sales of dry edible beans to Honduras have been switched to cover sales of white corn the U.S. Agriculture Department said The department said the action reduces coverage for sales of dry edible beans to 500,000 dlrs and creates the new line of 1.5 mln dlrs for sales of white corn All sales under the credit guarantee line must be registered and shipped by September 30 1987 it said Reuter ASSETS OF U.S. MONEY FUNDS ROSE IN WEEK WASHINGTON Feb 26 Assets of money market mutual funds increased 720.4 mln dlrs in the week ended yesterday to 236.90 billion dlrs the Investment Company Institute said Assets of 91 institutional funds rose 356 mln dlrs to 66.19 billion dlrs 198 general purpose funds rose 212.5 mln dlrs to 62.94 billion dlrs and 92 broker dealer funds rose 151.9 mln dlrs to 107.77 billion dlrs Reuter GULF BARGE FREIGHT RATES UP FURTHER ON CALL ST LOUIS Feb 26 Gulf barge freight rates firmed again on the outlook for steady vessel loadings at the Gulf increasing the demand for barges to supply those ships dealers said No barges traded today on the St Louis Merchants Exchange call session versus 29 yesterday Quotes included Delivery this week on the Illinois River Joliet 135 pct of tariff bid 140 offered with next week same river ex Chicago quoted the same both up 2 1/2 percentage points Next week Mississippi River St Louis 120 pct bid 127 1/2 offered up five points Next week Ohio River Owensboro south 125 pct bid 132 1/2 offered up 7 1/2 points On station Illinois River south Chicago 135 pct bid 140 offered no comparison March Illinois ex Chicago 132 1/2 pct bid 140 offered up 2 1/2 points March Ohio River bid at yesterday's traded level of 125 pct offered at 132 1/2 March lower Mississippi River Memphis Cairo 112 1/2 pct bid 120 offered no comparison May Illinois River ex Chicago 100 pct bid 107 1/2 offered no comparison Sept Nov Lower Mississippi River Memphis Cairo 137 1/2 pct bid 145 offered with Sept Dec same section 125 pct bid 135 offered no comparison Reuter ARGENTINA COULD SUSPEND DEBT PAYMENTS DEPUTY BUENOS AIRES Feb 26 Argentina could suspend payments on its foreign debt if creditor banks reject a 2.15 billion dlr loan request to meet 1987 growth targets ruling Radical Party Deputy Raul Baglini told a local radio station Argentina does not discard the use of a moratorium if the negotiations do not produce a result that guarantees the growth of the country he added Baglini an observer at Argentina's negotiations in New York with the steering committee for its 320 creditors banks told the Radio del Plata in a telephone interview that the banks were divided on the loan request Baglini said that as a result today's scheduled second day of talks had been postponed He said Argentina was prepared to follow the example of Brazil which last week declared a moratorium on interest payments of a large portion of its 108 billion dlr foreign debt Argentina's prime objective in renegotiating the debt was to maintain growth which has been targeted at four pct in 1987 Baglini said Debtor nations should not have to take from their own pockets that is their commercial balance to meet interest payments he added Reuter KEY U.S. TAX WRITERS SEEK ESTATE TAX CURBS WASHINGTON Feb 26 The chairmen and senior Republican members of the House and Senate tax writing committees proposed legislation to curb estate tax deduction on sales of stock to an employee stock ownership plan The proposal would raise federal revenues of 6.7 billion dlrs over the fiscal year period 1987 to 1991 If adopted by Congress it would effect all transactions after Sept 26 1987 The plan was proposed by House Ways and Means Committee Chairman Dan Rostenkowski D Ill Rep John Duncan R Tenn Senate Finance Committee Chairman Lloyd Bentsen D Tex and Sen Bob Packwood R Ore In a statement Rostenkowski said the estate tax deduction enacted last year as part of the tax reform bill was too broad and would have cost the governmet seven billion dlrs over four years The narrower deduction would cost the government less than 300 mln dlrs for the same years He said it was designed to avoid sham transactions which allowed estates to avoid taxes by transferring stock to ESOPs Senate Finance Committee chairman Lloyd Bentsen said in a statement The Tax Reform Act contains a provision that allows many wealthy individuals to avoid the federal estate tax entirely when they die He added The provision was intended to encourage estates to sell stock to employee stock ownership plans as a way of promoting worker ownership however the provision was not meant to be broad enough to reduce federal revenues as much as is currently estimated He added The bill I have introduced today calls for the modification of the provision in accordance with its intended purpose Reuter TREASURY BALANCES AT FED ROSE ON FEB 25 WASHINGTON Feb 26 Treasury balances at the Federal Reserve rose on Feb 25 to 4.151 billion dlrs from 2.727 billion dlrs the previous business day the Treasury said in its latest budget statement Balances in tax and loan note accounts fell to 25.137 billion dlrs from 25.780 billion dlrs on the same respective days The Treasury's operating cash balance totaled 29.289 billion dlrs on Feb 25 compared with 28.507 billion dlrs on Feb 24 Reuter CANADA'S WILSON SEEKS TEMPORARY BORROWING OTTAWA Feb 26 Canadian Finance Minister Michael Wilson said he will use temporary authority under the Financial Administration act to borrow an additional 600 mln dlrs in next Thursday's treasury bill auction In a statement Wilson said the action would permit the government to proceed with its debt program during a period when there was not sufficient borrowing authority which is granted by Parliament to cover the government's needs Ottawa announced previously it was seeking Parliamentary approval for the additional authority to cover the financing of an increase in the government's foreign reserves Reuter GULF APPLIED GATS SELLS UNITS SEES GAIN HOUSTON Feb 26 Gulf Applied Technologies Inc said it sold its pipeline and terminal operations units for 12.2 mln dlrs and will record a gain of 2.9 mln dlrs in the first quarter It added that any federal taxes owed on the transaction will be offset by operating loss carryovers Reuter SPRINGBOARD SPBD IN DEAL MINNEAPOLIS Feb 26 Springboard Software INc said it signed a contract under which International Technology Development Corp will provide software designers programmers project supervisors and technical support personnel to Springboard International Technology based in San Francisco and Shanghai China employs Chinese computer specialists Reuter COFAB INC BUYS GULFEX FOR UNDISCLOSED AMOUNT HOUSTON Feb 26 CoFAB Inc said it acquired Gulfex Inc a Houston based fabricator of custom high pressure process vessels for the energy and petrochemical industries CoFAB said its group of companies manufacture specialized cooling and lubricating systems for the oil and gas petrochemical utility pulp and paper and marine industries Reuter U.S. WEEKLY SOYBEAN CRUSH 21,782,929 BUSHELS WASHINGTON Feb 26 Reporting members of the National Soybean Processors Association NSPA crushed 21,782,929 bushels of soybeans in the week ended Feb 25 compared with 22,345,718 bushels in the previous week and 16,568,000 in the year ago week the association said It said total crushing capacity for members was 25,873,904 bushels vs 25,873,904 last week and 25,459,238 bushels last year NSPA also said U.S. soybean meal exports in the week were 117,866 tonnes vs 121,168 tonnes a week ago and compared with 84,250 tonnes in the year ago week NSPA said the figures include only NSPA member firms Reuter SCHULT HOMES OFFERING PRICED AT FIVE DLRS UNIT NEW YORK Feb 26 The underwriters said the initial offering of 833,334 Schult Homes Corp units is being made at five dlrs per unit The underwriters managed by Janney Montgomey Scott Inc and Woolcott and Co Inc said each unit consits of one common share and one warrant to purchase one half a common share at 5.50 dlrs per share until September one 1989 and thereafter at 6.50 dlrs per share until March 1991 The underwriters were granted an over allotment option of 125,000 units They said the company will use its proceeds to pay a portion of its subordinated note payable to Inland Steel Urban Development Corp issued in connection with the acquisition of Schult from Inland Based in Elkhart Ind Schult is the country's oldest manufactured home producer Reuter TULTEX CORP TTX SETS QUARTERLY DIVIDEND MARTINSVILLE Va Feb 26 Qtly div eights cts vs eight cts prior Pay April one Record March 13 Reuter BURLINGTON BUR GETS 30.5 MLN DLR CONTRACT WASHINGTON Feb 26 Burlington Menswear of New York City a division of Burlington Industries Inc has received a 30.5 mln dlr defense contract for 3.69 mln yards of tropical cloth the Defense Logistics Agency said reuter ROCKWELL ROK GETS 28.3 MLN DLR B 1 CONTRACT WASHINGTON Feb 26 Rockwell International Corp has received a 28.3 mln dlr contract for work on the B 1B bomber in the current fiscal year the Air Force said reuter ATICO FINANCIAL CORP ATFC 4TH QTR NET MIAMI Fla Feb 26 Shr 30 cts vs 5.92 dlrs Net 1,142,000 vs 16.0 mln Revs 10.6 mln vs 24.2 mln Year Shr 90 cts vs 6.20 dlrs Net 3,320,000 vs 16.9 mln Revs 45.00 mln vs 26.2 mln NOTE 1986 4th qtr and yr amounts include acquisition of 98.8 pct of common of Atico formerly Peninsula Federal Savings and Loan Association on January 24 1986 1985 4th qtr and yr net include net gain of 15.9 mln dlrs or 5.86 dlrs per share on exchange of common of Pan America Banks Inc for common of NCNB Corp purusant to a merger of the companies Reuter ICO EXPORTERS TO MODIFY NEW PROPOSAL LONDON Feb 26 International Coffee Organization ICO exporters will modify their new proposal on quota resumption before presenting it to importers tomorrow ICO delegates said The change which will be discussed tonight informally among producers follows talks after the formal producer session with the eight member producer splinter group and will affect the proposed quota distribution for 12 months from April one they said The proposed share out would still include shortfall declarations they said Reuter QUEBECOR PQB HEAD SEES NEW VENTURES LIKELY By Jane Arraf Reuters MONTREAL Feb 26 Quebecor Inc one of Canada's largest publishing and printing companies is likely to launch a new daily newspaper in Montreal probably this fall president Pierre Peladeau told Reuters in an interview The company which last week won a bid to buy the Quebec government's 55 pct interest in pulp and paper company Donohue Inc will also likely go ahead with plans to build a new paper mill in Matane Quebec Peladeau said I would say we will move ahead with the daily This is not definite but i think we will he said adding that he plans to announce a decision early next week Quebecor which had revenues of 446 mln Canadian dlrs last year and profit of 16.2 mln dlrs already publishes three daily newspapers including the tabloid Le Journal de Montreal the second largest circulation paper in Canada A new daily would give Montreal its second English language paper and its sixth daily newspaper making the city the most crowded metropolitan newspaper market in North America analysts have said Peladeau said market studies have indicated a new English language tabloid would have circulation of 50,000 within six months He said he is waiting to determine whether the new venture would have the support of major advertisers Peladeau who together with family members owns about 55 pct of Quebecor said he has recieved offers from the heads of two major Canadian companies who are interested in the project but has not decided whether he would take partners in the newspaper venture He said he would consider launching the newspaper with one of the companies as a prelude to other joint ventures It would be the possibility of doing something else in the short term Peladeau said Peladeau said the joint acquisition of Donohue with Robert Maxwell's British Printing and Communications Corp plc BPCL.L does not mean Quebecor will have to hold off on other projects Peladeau and Maxwell's companies teamed up to buy the stake in Donohue which resulted in Quebecor buying 51 pct of the govvernment's stake for about 165 mln Canadian dlrs and British printing acquiring the other 49 pct In 1976 or 77 there was a tremendous shortage of newsprint There were days when we didn't have enough paper to print the paper Peladeau said When I lived that I said to myself next time we'll be ready Peladeau said most of Donohue's current total newsprint capacity however is already committed to other buyers Quebecor uses about 100,000 metric tons of newsprint a year and Maxwell's company which publishes Britain's Daily Mirror newspaper uses about 200,000 tonnes Peladeau said even with a new 170 mln dlr paper machine 49 pct owned by the New York Times NYT.A adding to Donohue's 540,000 metric tonne capacity this fall the companies will have to install another paper machine at Amos Quebec or build another mill to meet their demands He said a new mill which would produce either newsprint or other types of paper would cost 400 500 mln dlrs and could be on stream in two years He said a mill in Matane a depressed area with high unemployment would be heavily subsidized by the government Peladeau said he is interested in further joint ventures with Maxwell's company either in the newspaper market in France or in the U.S. where the company owns two large printing plants and is looking to expand its newspaper empire He said Maxwell's sons who are French citizens would provide an entree into the French market where foreigners are prevented from buying newspapers Peladeau said he would consider either buying into or starting daily newspapers in France or the U.S. Quebecor is also in the process of expanding its chain of about 40 weekly newspapers with the possible acquisition of two groups of weekly newspapers in the U.S. and is negotiating the acquisition of two weekly newspaper chains in Canada Peladeau said He said the company may consider starting daily newspapers in two small Quebec cities and buying radio stations in the province Peladeau said Quebecor may also consider trading in its listing on the American stock exchange for a New York Stock Exchange listing Reuter NEW YORK BUSINESS LOANS FALL 195 MLN DLRS NEW YORK Feb 26 Commercial and industrial loans on the books of the 10 major New York banks excluding acceptances fell 195 mln dlrs to 65.06 billion in the week ended February 18 the Federal Reserve Bank of New York said Including acceptances loans declined 114 mln dlrs to 65.89 billion Commercial paper outstanding nationally dropped 375 mln dlrs to 336.63 billion National business loan data are scheduled to be released on Friday Reuter N.Y. BANK DISCOUNT BORROWINGS 64 MLN DLRS NEW YORK Feb 26 The eight major New York City banks had 64 mln dlrs in average borrowings from the Federal Reserve in the week to Wednesday February 25 a Fed spokesman said The week marked the second half of the two week bank statement period that ended on Wednesday The banks had no borrowings in the prior week Commenting on the latest week a Fed spokesman said that all of the borrowing occurred yesterday and was done by fewer than half of the banks National data on discount window borrowings are due to be released at 1630 EST 2130 GMT Reuter PHILIPPINE LONG DISTANCE PHI YEAR NET NEW YORK Feb 26 Shr primary 95.30 pesos vs 29.71 pesos Shr diluted 61.11 pesos vs 18.49 pesos Qtly div 1.25 pesos vs 1.25 pesos Net 1.9 billion vs 779 mln Revs 6.1 billion vs 4.7 billion NOTE Full name Philippine Long Distance Telephone Co Figures quoted in Philippine Pesos Dividend payable April 15 to holders or record March 13 Exchange rate on day of dividend declaration was 20.792 pesos per dollar Reuter LIBERTY ALL STAR EQUITY FUND INITIAL DIV WESTPORT Conn FEb 26 Qtly div five cts vs N.A. Payable April two Record March 20 NOTE 1986 dividend includes special two cts per share for the period beginning with the fund's commencement of operations on Novebmer three through December 31 1986 Reuter COLUMBIA GAS SYSTEM INC CG REDEEMS DEBENTURES WILMINGTON Del Feb 26 The Columbia Gas Systems Inc said it will redeem 4.7 mln dlrs principal amount of its 9 1/8 pct debentures series due May 1 1996 and five mln dlrs principal amount of its 10 1/4 pct debentures series due May 1 1999 The company said it is redeeming the debentures to meet mandatory sinking fund requirements In addition Columbia said it will call for the optional sinking fund redemption on May 1 1987 the 4.7 mln dlrs principal amount of the 9 1/8 debentures and 7.5 mln dlrs of the 10 1/4 pct debentures Reuter COMBUSTION ENGINEERING INC CSP REGULAR DIV STAMFORD Conn Feb 26 Qtly div 25 cts vs 25 cts prior Pay April 30 Record April 16 Reuter TONKA CORP TKA RAISES DIVIDEND MINNETONKA MINN Feb 26 Qtly div two cts vs 1.7 cts Pay March 26 Record March 12 Reuter BDM INTERNATIONAL BDM INCREASES QTRLY DIVS MCLEAN Va Feb 26 Annual div Class A 14 cts vs 12 cts prior Annual div Class B 12.1 cts vs 10.4 cts prior Payable April one Record March 20 NOTE full name is BDM International Inc Reuter SORG SRG STOCKHOLDERS FORM GROUP NEW YORK Feb 26 Sorg Inc said a group composed of one third of the stockholders in Sorg agreed not to sell their holdings without the consent of the entire group Sorg said the group also agreed to vote as a body on any proposed merger or election of directors The company further said it retained the First Boston Corp to act as its financial advisor The company was not immediately available to provide further details on the group or its aims Reuter SYSTEMATICS INC SYST REGULAR PAYOUT LITTLE ROCK Ark Feb 26 Qtly div three cts vs three cts prior Pay March 13 Record February 27 Reuter TEXAS INSTRUMENTS TXN DEVELOPS NEW CHIP NEW YORK Feb 26 Texas Instruments Inc said it has developed the first 32 bit computer chip designed specifically for artificial intelligence applications The company said the new microprocessor measuring one centimeter square and containing 553,687 transistors is the densest chip ever made The chip was designed Texas Instruments said for use with the Lisp langugage which is used widely by software programmers in the artificial intelligence field The company added that it is working on a production version of the chip Reuter CONSOLIDATED GAS CNGUNIT SAYS NO RULES BROKEN CLARKSBURG W.Va Feb 26 Consolidated Natural Gas System's Consolidated Gas Transmission Corp said it is in compliance with all federal regulations regarding the disposal of polychlorinated biphenyls or PCBs The company said it successfully cleaned up the only earthen pit at which PCBs were reported to be above Environmental Protection Agency standards Reuter INVESTMENT FIRMS CUT CYCLOPS CYL STAKE WASHINGTON Feb 26 A group of affiliated New York investment firms said they lowered their stake in Cyclops Corp to 260,500 shares or 6.4 pct of the total outstanding common stock from 370,500 shares or 9.2 pct In a filing with the Securities and Exchange Commission the group led by Mutual Shares Corp said it sold 110,000 Cyclops common shares on Feb 17 and 19 for 10.0 mln dlrs Reuter FEDERAL RESERVE WEEKLY REPORT 1 FEB 26 Two weeks ended Feb 25 daily avgs mlns Net free reserves 644 vs 1,337 Bank borrowings 680 vs 425 Including seasonal loans 81 vs 56 Including extended loans 299 vs 265 Excess reserves 1,025 vs 1,497 Required reserves adj 55,250 vs 55,366 Required reserves N.A. vs N.A. Total reserves N.A. vs N.A. Non borrowed reserves N.A. vs N.A. Monetary base N.A. vs N.A. Two weeks ended Feb 25 Total vault cash N.A. vs N.A. Inc cash equal to req res N.A. vs N.A. One week ended Feb 25 Daily avgs Mlns Bank borrowings 614 down 131 Including seasonal loans 88 up 14 Including extended loans 304 up 10 Float 511 down 320 Balances adjustments 2,101 down 67 Currency 206,490 down 519 Treasury deposits 4,208 down 63 Reuter N.Z. TRADING BANK DEPOSIT GROWTH RISES SLIGHTLY WELLINGTON Feb 27 New Zealand's trading bank seasonally adjusted deposit growth rose 2.6 pct in January compared with a rise of 9.4 pct in December the Reserve Bank said Year on year total deposits rose 30.6 pct compared with a 26.3 pct increase in the December year and 34.5 pct rise a year ago period it said in its weekly statistical release Total deposits rose to 17.18 billion N.Z. Dlrs in January compared with 16.74 billion in December and 13.16 billion in January 1986 Reuter WORLD MARKET PRICE FOR UPLAND COTTON USDA WASHINGTON Feb 26 The U.S. Agriculture Department announced the prevailing world market price adjusted to U.S. quality and location for Strict Low Middling 1 1/16 inch upland cotton at 52.69 cts per lb to be in effect through midnight March 5 The adjusted world price is at average U.S. producing locations near Lubbock Texas and will be further adjusted for other qualities and locations The price will be used in determining First Handler Cotton Certificate payment rates Based on data for the week ended February 26 the adjusted world price for upland cotton is determined as follows in cts per lb Northern European Price 66.32 Adjustments Average U.S. spot mkt location 10.42 SLM 1 1/16 inch cotton 1.80 Average U.S. location 0.53 Sum of adjustments 12.75 Adjusted world price 53.57 Reuter GRAIN SHIPS LOADING AT PORTLAND PORTLAND Feb 26 There were seven grain ships loading and six ships were waiting to load at Portland according to the Portland Merchants Exchange Reuter IRAN ANNOUNCES END OF MAJOR OFFENSIVE IN GULF WAR LONDON Feb 26 Iran announced tonight that its major offensive against Iraq in the Gulf war had ended after dealing savage blows against the Baghdad government The Iranian news agency IRNA in a report received in London said the operation code named Karbala 5 launched into Iraq on January 9 was now over It quoted a joint statewment by the Iranian Army and Revolutionary Guards Corps as saying that their forces had dealt one of the severest blows on the Iraqi war machine in the history of the Iraq imposed war The statement by the Iranian High Command appeared to herald the close of an assault on the port city of Basra in southern Iraq The operation was launched at a time when the Baghdad government was spreading extensive propaganda on the resistance power of its army said the statement quoted by IRNA It claimed massive victories in the seven week offensive and called on supporters of Baghdad to come to their senses and discontinue support for what it called the tottering regime in Iraq Iran said its forces had liberated 155 square kilometers of enemy occupied territory during the 1987 offensive and taken over islands townships rivers and part of a road leading into Basra The Iranian forces are in full control of these areas the statement said It said 81 Iraqi brigades and battalions were totally destroyed along with 700 tanks and 1,500 other vehicles The victory list also included 80 warplanes downed 250 anti aircraft guns and 400 pieces of military hardware destroyed and the seizure of 220 tanks and armoured personnel carriers Reuter MERIDIAN BANCORP INC MRDN SETS REGULAR PAYOUT READING Penn Feb 26 Qtly div 25 cts vs 25 cts prior Pay April one Record March 15 Reuter U.S. BANK DISCOUNT BORROWINGS 310 MLN DLRS NEW YORK Feb 26 U.S. bank discount window borrowings less extended credits averaged 310 mln dlrs in the week to Wednesday February 25 the Federal Reserve said The Fed said that overall borrowings in the week fell 131 mln dlrs to 614 mln dlrs with extended credits up 10 mln dlrs at 304 mln dlrs The week was the second half of a two week statement period Net borrowings in the prior week averaged 451 mln dlrs Commenting on the two week statement period ended February 25 the Fed said that banks had average net free reserves of 644 mln dlrs a day down from 1.34 billion two weeks earlier A Federal Reserve spokesman told a press briefing that there were no large single day net misses in the Fed's reserve projections in the week to Wednesday He said that natural float had been acting a bit strangely for this time of year noting that there had been poor weather during the latest week The spokesman said that natural float ranged from under 500 mln dlrs on Friday for which he could give no reason to nearly one billion dlrs on both Thursday and Wednesday The Fed spokeman could give no reason for Thursday's high float but he said that about 750 mln dlrs of Wednesday's float figure was due to holdover and transportation float at two widely separated Fed districts For the week as a whole he said that float related as of adjustments were small adding that they fell to a negative 750 mln dlrs on Tuesday due to a number of corrections for unrelated cash letter errors in six districts around the country The spokesman said that on both Tuesday and Wednesday two different clearing banks had system problems and the securities and Federal funds wires had to be held open until about 2000 or 2100 EST on both days However he said that both problems were cleared up during both afternoons and there was no evidence of any reserve impact During the week ended Wednesday 45 pct of net discount window borrowings were made by the smallest banks with 30 pct by the 14 large money center banks and 25 pct by large regional institutions On Wednesday 55 pct of the borrowing was accounted for by the money center banks with 30 pct by the large regionals and 15 pct by the smallest banks The Fed spokesman said the banking system had excess reserves on Thursday Monday and Tuesday and a deficit on Friday and Wedndsday That produced a small daily average deficit for the week as a whole For the two week period he said there were relatively high excess reserves on a daily avearge almost all of which were at the smallest banks Reuter AMERICAN EXPRESS AXP SEEN IN POSSIBLE SPINNOFF By Patti Domm Reuter New York Feb 26 American Express Co remained silent on market rumors it would spinoff all or part of its Shearson Lehman Brothers Inc but some analysts said the company may be considering such a move because it is unhappy with the market value of its stock American Express stock got a lift from the rumor as the market calculated a partially public Shearson may command a good market value thereby boosting the total value of American Express The rumor also was accompanied by talk the financial services firm would split its stock and boost its dividend American Express closed on the New York Stock Exchange at 72 5/8 up 4 1/8 on heavy volume American Express would not comment on the rumors or its stock activity Analysts said comments by the company at an analysts meeting Tuesday helped fuel the rumors as did an announcement yesterday of management changes At the meeting company officials said American Express stock is undervalued and does not fully reflect the performance of Shearson according to analysts Yesterday Shearson said it was elevating its chief operating officer Jeffery Lane to the added position of president which had been vacant It also created four new positions for chairmen of its operating divisions Analysts speculated a partial spinoff would make most sense contrary to one variation on market rumors of a total spinoff Some analysts however disagreed that any spinoff of Shearson would be good since it is a strong profit center for American Express contributing about 20 pct of earnings last year I think it is highly unlikely that American Express is going to sell shearson said Perrin Long of Lipper Analytical He questioned what would be a better investment than a very profitable securities firm Several analysts said American Express is not in need of cash which might be the only reason to sell a part of a strong asset But others believe the company could very well of considered the option of spinning out part of Shearson and one rumor suggests selling about 20 pct of it in the market Larry Eckenfelder of Prudential Bache Securities said he believes American Express could have considered a partial spinoff in the past Shearson being as profitable as it is would have fetched a big premium in the market place Shearson's book value is in the 1.4 mln dlr range Shearson in the market place would probably be worth three to 3.5 bilion dlrs in terms of market capitalization said Eckenfelder Some analysts said American Express could use capital since it plans to expand globally They have enormous internal growth plans that takes capital You want your stock to reflect realistic valuations to enhance your ability to make all kinds of endeavors down the road said E.F. Hutton Group analyst Michael Lewis They've outlined the fact that they're investing heavily in the future which goes heavily into the international arena said Lewis That does not preclude acquisitions and divestitures along the way he said Lewis said if American Express reduced its exposure to the brokerage business by selling part of shearson its stock might better reflect other assets such as the travel related services business It could find its true water mark with a lesser exposure to brokerage The value of the other components could command a higher multiple because they constitute a higher percentage of the total operating earnings of the company he said Lewis said Shearson contributed 316 mln in after tax operating earnings up from about 200 mln dlrs in 1985 Reuter U.S. M 1 MONEY SUPPLY ROSE 2.1 BILLION DLRS NEW YORK Feb 26 U.S. M 1 money supply rose 2.1 billion dlrs to a seasonally adjusted 736.7 billion dlrs in the February 16 week the Federal Reserve said The previous week's M 1 level was revised to 734.6 billion dlrs from 734.2 billion dlrs while the four week moving average of M 1 rose to 735.0 billion dlrs from 733.5 billion Economists polled by Reuters said that M 1 should be anywhere from down four billion dlrs to up 2.3 billion dlrs The average forecast called for a 300 mln dlr M 1 rise Reuter GENERAL BINDING GBND IN MARKETING AGREEMENT MINNEAPOLIS Feb 26 General Binding Corp said it reached a marketing agreement with Varitronic Systems Inc a manufacturer and marketer of electronic lettering systems Under terms of the agreement General Binding will carry Varitronics Merlin Express Presentation Lettering System a portable battery operated lettering system which produces type on adhesive backed tape Reuter LIBERTY ALL STAR USA SETS INITIAL PAYOUT WESTPORT Conn Feb 26 Liberty All Star Equity Fund said it declared an initial dividend of five cts per share payable April two to shareholders of record March 20 It said the dividend includes a quarterly dividend of three cts a share and a special payout of two cts a share which covers the period from November three 1986 when the fund began operations to December 31 1986 The fund said its quarterly dividend rate may fluctuate in the future Reuter COCA COLA KO UNIT AND WORLD FILM IN VENTURE NEW YORK FEb 26 Coca Cola Co's Entertainment Business Sector Inc unit said it formed a joint venture with an affiliate of World Film Services to acquire produce and distribute television programming around the world World Film Services was formed by chairman John Heyman in 1963 to produce films Reuter FORD MOTOR CREDIT F TO REDEEM DEBENTURES DEARBORN MICH Feb 26 Ford Motor Co said its Ford Motor Credit Co on April One will redeem 4.0 mln dlrs of its 8.70 pct debentures due April 1 1999 It said the debentures are redeemable at a price of 100 pct of the principal Because April 1 1987 is an interest payment date on the debentures no accrued interest will be payable on the redemption date as part of the redemption proceeds Debentures will be selected for redemption on a pro rata basis Ford said Reuter STERLING SOFTWARE SSW NOTE HOLDERS OK BUY DALLAS Feb 26 Sterling Software Inc said it received consent of a majority of the holders of its eight pct convertible sernior subordinated debentures required to purchase shares of its common The company said it may now buy its stock at its discretion depending on market conditions Reuter SCHULT HOMES CORP MAKES INITIAL STOCK OFFER NEW YORK Feb 26 Schult Homes Corp announced an initial public offering of 833,334 units at five dlrs per unit said Janney Montgomery Scott Inc and Woolcott and Co managing underwriters of the offering They said each unit consists of one common share and one warrant to buy one half share of common The warrant will entitle holders to buy one half common share at 5.50 dlrs per full share from March one 1988 to September one 1989 and thereafter at 6.50 dlrs per full share until March 1991 they said Reuter FLUOR FLR UNIT GETS CONSTRUCTION CONTRACT IRVINE Calif Feb 26 Fluor Corp said its Fluor Daniel unit received a contract from Union Carbide Corp UK covering design procurement and construction of a 108 megawatt combined cycle cogeneration facility in Seadrift Texas The value of the contract was not disclosed Reuter SUFFIELD FINANCIAL CORP SFCP SELLS STOCK SUFFIELD Conn Feb 26 Suffield Financial Corp said Jon Googel and Benjamin Sisti of Colonial Realty West Hartford Conn purchased 175,900 shares of its stock for 3,416,624 The company said the purchase equals 5.2 pct of its outstanding shares Reuter HIGH POINT FINANCIAL CORP SETS OFFERING BRANCHVILLE N.J. Feb 26 High Point Financial Corp said it filed a registration statement with the Securities and Exchange Commission covering six mln dlrs principal amount of redeemable subordinated debentures due March one and cancellable mandatory stock purchase contracts requiring the purchase of 6.66 mln dlrs in common no later than March one It said the offering will be underwritten by Ryan Beck and Co West Orange N.J. Reuter CHINESE PORK OUTPUT SEEN LOWER USDA WASHINGTON Feb 26 High feed prices will cause the Chinese to reduce hog herd growth and pork production this year the U.S. Agriculture Department said In its World Production and Trade Report the department said hog numbers at the start of 1987 were estimated at 331.6 mln head up slightly from 1986 and 10 mln head above earlier projections for 1987 Pork production in 1986 was up 4.2 pct to 17.25 mln tonnes slightly below earlier estimates it said For 1987 production is projected to fall to 17.05 mln tonnes Feed prices at the end of January were reported 35 to 40 pct above year ago levels the department said Reuter LANDMARK BANCSHARES LBC TO BE LISTED ON NYSE ST LOUIS Feb 26 Landmark Bancshares Corp said it expects its stock to begin trading on March 26 on the New York Stock Exchange The company whose stock has traded on the American Stock Exchange since November 1984 said it will retain its symbol LBC when trading begins on the Big Board Reuter IVACO SEES MINIMAL FIRST QUARTER EARNINGS MONTREAL Feb 26 Ivaco Inc said price pressure on steel products particularly in the U.S. and the recent increase in the value of the Canadian dollar is expected to result in minimal first quarter earnings It said subsequent quarters should show substantial improvement from first quarter levels but 1987 earnings will not reach 1986 levels as long as those conditions continue Ivaco earlier reported 1986 profit rose to 44.1 mln dlrs after a one mln dlr extraordinary gain from 35.1 mln dlrs the previous year It said demand for the company's products are continuing at high levels and sales are expected to show further growth Revenues last year rose to 1.94 billion dlrs from 1.34 billion dlrs in 1985 Reuter U.S. GRAIN CARLOADINGS FALL IN WEEK WASHINGTON Feb 26 U.S. grain carloadings totaled 26,108 cars in the week ended February 21 down 2.2 pct from the previous week but 22.8 pct above the corresponding week a year ago the Association of American Railroads reported Grain mill product loadings in the week totalled 11,382 cars down 1.8 pct from the previous week but 7.6 pct above the same week a year earlier the association said Reuter HONG KONG FIRM UPS WRATHERWCO STAKE TO 11 PCT WASHINGTON Feb 26 Industrial Equity Pacific Ltd a Hong Kong investment firm said it raised its stake in Wrather Corp to 816,000 shares or 11.3 pct of the total outstanding common stock from 453,300 shares or 6.3 pct In a filing with the Securities and Exchange Commission Industrial Equity which is principally owned by Brierley Investments Ltd a publicly held New Zealand company said it bought 362,700 Wrather common shares between Feb 13 and 24 for 6.6 mln dlrs When it first disclosed its stake in Wrather earlier this month it said it bought the stock for investment purposes Reuter DIAMOND SHAMROCK DIA CUTS CRUDE PRICES NEW YORK FEB 26 Diamond Shamrock Corp said that effective today it had cut its contract prices for crude oil by 1.50 dlrs a barrel The reduction brings its posted price for West Texas Intermediate to 16.00 dlrs a barrel the copany said The price reduction today was made in the light of falling oil product prices and a weak crude oil market a company spokeswoman said Diamond is the latest in a line of U.S. oil companies that have cut its contract or posted prices over the last two days citing weak oil markets Reuter LIEBERT CORP LIEB APPROVES MERGER COLUMBUS Ohio Feb 26 Liebert Corp said its shareholders approved the merger of a wholly owned subsidiary of Emerson Electric Co EMR Under the terms of the merger each Liebert shareholder will receive .3322 shares of Emerson stock for each Liebert share Reuter COLECO INDUSTRIES CLC SEES PROFIT IN 1987 WEST HARTFORD Conn FEb 26 Coleco Industries Inc said it expects to return to profitability in 1987 Earlier Coleco reported a net loss of 111.2 mln dlrs for the year ended December 31 compared to a profit of 64.2 mln dlrs in the year earlier In a prepared statement the company said the dramatic swing in operating results was due primarily to the steep decline in sales of Cabbage Patch Kids products from 600 mln dlrs to 230 mln dlrs Coleco said it changed from a single product company to a more diversified organization through four major acquisitions last year Products from the new acquisitions and other new product introductions are expected to enable it to return to profitability it said At the annual Toy Fair earlier this month vice president Morton Handel said analysts 1987 projected earnings of 90 cts a share on sales of 600 mln dlrs are reasonable Reuter OLIN CORP OLM TO ELECT NEW CEO IN APRIL STAMFORD Conn Feb 26 Olin Corp said its board will elect in April John Johnstone Jr as its chief executive officer The company said he will succeed John M Henske who is also chairman It said Johnstone 54 is now president and chief operating officer Henske 53 has served as CEO since 1978 and chairman since 1980 He will continue as chairman until his retirement in June 1988 Reuter GULF APPLIED TECHNOLOGIES GATS SELLS UNITS HOUSTON Feb 26 Gulf Applied Technologies Inc said it sold its subsidiaries engaged in pipeline and terminal operations for 12.2 mln dlrs The company said the sale is subject to certain post closing adjustments which it did not explain Reuter INVESTMENT GROUP RAISES ROBESON RBSN STAKE WASHINGTON Feb 26 A group of affiliated Miami based investment firms led by Fundamental Management Corp said it raised its stake in Robeson Industries Corp to 238,000 shares or 14.6 pct of the total from 205,000 or 12.8 pct In a filing with the Securities and Exchange Commission the group said it bought 32,800 Robeson common shares between Jan 26 and Feb 9 for 175,691 dlrs The group said it may buy more shares and plans to study Robeson's operations Afterwards it may recommend that management make changes in its operations Fundamental Management Chairman Carl Singer was recently elected to the Robeson board Reuter GAO LIKELY TO SHOW CERTS MORE COSTLY THAN CASH WASHINGTON Feb 26 A study on grain certificates due out shortly from the Government Accounting Office GAO could show that certificates cost the government 10 to 15 pct more than cash outlays administration and industry sources said Analysis that the GAO has obtained from the Agriculture Department and the Office of Management and Budget suggests that certificates cost more than cash payments a GAO official told Reuters GAO is preparing the certificate study at the specific request of Sen Jesse Helms R N.C. former chairman of the senate agriculture committee The report which will focus on the cost of certificates compared to cash is scheduled to be released in mid March The cost of certificates said the GAO source depends on the program's impact on the USDA loan program If GAO determines that certificates encourage more loan entries or cause more loan forfeitures then the net cost of the program would go up However if it is determined that certificates have caused the government grain stockpile to decrease the cost effect of certificates would be less GAO will not likely suggest whether the certificates program should be slowed or expanded the GAO official said But a negative report on certificates will fuel the fire against certificates and weigh heavily on at least an increase in the certificate program an agricultural consultant said The OMB is said to be against any expansion of the program while USDA remains firmly committed to it Reuter Venezuela seeks flexibility from banks azpurua Caracas feb 26 venezuela is seeking a constructive and flexible attitude from its creditor banks in current talks to reschedule 21 billion dlrs in foreign debt finance minister manuel azpurua told a press conference He declined to comment on meetings this week in new york between public finances director jorge marcano and venezuela's 13 bank advisory committee except to say they are progressing Azpurua said venezuela has shown solidarity with brazil's decision to suspend payments but each country must negotiate according to its own interest Asked to comment on chile's agreement with its creditors today which includes an interest rate margin of one pct over libor azpurua said only that is good news According to banking sources the banks latest offer to venezuela is also a one pct margin as against the last february's 1 1/8 pct rescheduling accord and the 7/8 pct Venezuela wants Azpurua said four basic elements are being negotiated with the banks now spread reduction deferral of principal payments due in 1987 and 1988 lenghtening the 12 1/2 year repayment schedule and debt capitalization schemes Azpurua said the governent plans to pay 2.1 billion dlrs in public and private debt principal this year It was due to amortize 1.05 billion dlrs under the rescheduling and pay 420 mln dlrs in non restructured principal both public sector He said venezuela's original proposal was to pay no principal on restructured debt this year but is now insisting that if it makes payments they be compensated by new bank loans The banking sources said the committee has been prepared to lower amortizations to around 400 mln dlrs this year but that no direct commitment was likely on new loans debtors and bank creditors have a joint responsibility and there will be no lasting solution unless a positive flow of financing is guaranteed azpurua said However he appeared to discard earlier venezuelan proposals for a direct link between oil income and debt payments because circumstances change too quickly At the same time he said the government is presently studying possible mechanisms for capitlizing public and private sector foreign debt based on experience in other countries The rules would be published by the finance ministry and the central bank Reuter CITY NATIONAL CORP CTYN RAISES DIVIDEND BEVERLY HILLS Calif Feb 26 Shr 16 cts vs 13 cts Pay April 15 Record March 31 Reuter PAGE PETROLEUM LTD YEAR LOSS CALGARY Alberta Feb 26 Shr loss 1.98 dlrs vs loss 5.24 dlrs Net loss 23.3 mln vs loss 44.8 mln Revs 13.6 mln vs 29.6 mln Note 1986 net includes nine mln dlr extraordinary loss for oil and gas writedowns and unrealized foreign exchange losses vs yr ago loss of 32.5 mln dlrs Reuter THOMSON MCKINNON UNIT'S CMO OFFERING PRICED NEW YORK Feb 26 Thomson McKinnon Mortgage Assets Corp a unit of Thomson McKinnon Inc is offering 100 mln dlrs of collateralized mortgage obligations in three tranches that include floating rate and inverse floating rate CMOS The floating rate class amounts to 60 mln dlrs It has an average life of 7.11 years and matures 2018 The CMOs have an initial coupon of 7.0375 pct which will be reset 60 basis points above LIBOR said sole manager Thomson McKinnon The inverse floater totals 4.8 mln dlrs It has an average life of 13.49 years and matures 2018 These CMOs were given an initial coupon of 11 1/2 pct and priced at 104.40 Subsequent rates on the inverse floater will equal 11 1/2 pct minus the product of three times LIBOR minus 6 1/2 pct A Thomson officer explained that the coupon of the inverse floating rate tranche would increase if LIBOR declined The yield floats opposite of LIBOR he said The fixed rate tranche totals 35.2 mln dlrs It has an average life of 3.5 years and matures 2016 The CMOs were assigned a 7.65 pct coupon and par pricing The issue is rated AAA by Standard and Poor's and secured by Federal Home Loan Mortgage Corp Freddie Mac certificates Reuter ARMOR ALL PRODUCTS CORP ARMR QUARTERLY DIV SAN FRANCISCO Feb 26 Qtly div ten cts vs ten cts Pay April 1 Record March 9 Reuter OPEC MAY HAVE TO MEET TO FIRM PRICES ANALYSTS BY TED D'AFFLISIO Reuters NEW YORK Feb 26 OPEC may be forced to meet before a scheduled June session to readdress its production cutting agreement if the organization wants to halt the current slide in oil prices oil industry analysts said The movement to higher oil prices was never to be as easy as OPEC thought They may need an emergency meeting to sort out the problems said Daniel Yergin director of Cambridge Energy Research Associates CERA Analysts and oil industry sources said the problem OPEC faces is excess oil supply in world oil markets OPEC's problem is not a price problem but a production issue and must be addressed in that way said Paul Mlotok oil analyst with Salomon Brothers Inc He said the market's earlier optimism about OPEC and its ability to keep production under control have given way to a pessimistic outlook that the organization must address soon if it wishes to regain the initiative in oil prices But some other analysts were uncertain that even an emergency meeting would address the problem of OPEC production above the 15.8 mln bpd quota set last December OPEC has to learn that in a buyers market you cannot have deemed quotas fixed prices and set differentials said the regional manager for one of the major oil companies who spoke on condition that he not be named The market is now trying to teach them that lesson again he added David T Mizrahi editor of Mideast reports expects OPEC to meet before June although not immediately However he is not optimistic that OPEC can address its principal problems They will not meet now as they try to take advantage of the winter demand to sell their oil but in late March and April when demand slackens Mizrahi said But Mizrahi said that OPEC is unlikely to do anything more than reiterate its agreement to keep output at 15.8 mln bpd Analysts said that the next two months will be critical for OPEC's ability to hold together prices and output OPEC must hold to its pact for the next six to eight weeks since buyers will come back into the market then said Dillard Spriggs of Petroleum Analysis Ltd in New York But Bijan Moussavar Rahmani of Harvard University's Energy and Environment Policy Center said that the demand for OPEC oil has been rising through the first quarter and this may have prompted excesses in its production Demand for their OPEC oil is clearly above 15.8 mln bpd and is probably closer to 17 mln bpd or higher now so what we are seeing characterized as cheating is OPEC meeting this demand through current production he told Reuters in a telephone interview Reuter CENERGY CRG REPORTS 4TH QTR NET PROFIT DALLAS Feb 26 Cenergy Corp reported fourth quarter net income of 790,000 dlrs or seven cts per share on revenues of 7.7 mln dlrs For the year it reported a net loss of 6.5 mln dlrs or 70 cts per share as a result of writedowns in the book value of its oil and gas properties in the first two quarters Revenues were 37 mln dlrs Following the company's fiscal year ended March 31 1985 it changed to a calender year end For the nine months ended Dec 31 1985 it reported a loss of 63.4 mln dlrs or 6.54 dlrs per share on revenues of 47.6 mln dlrs which it said was a result of noncash writedowns of oil and gas properties For the year ended March 31 1985 Cenergy reported net income of 3,705,000 dlrs or 36 cts per share on revenues of 71 mln dlrs The company said its reserves during the year fell to five mln barrels from 6.4 mln barrels of oil and to 60.1 bilion cubic feet of gas from 63.7 BCF It said these reserves did not disappear but are available to produce as prices recover Reuter NORTHERN TELECOM LTD NT DECLARES STOCK SPLIT Toronto Feb 26 Two for one stock split Pay May 12 Note split is subject to approval of shareholders at April 23 annual meeting Company also said it will increase dividend on post split shares to six cts from five cts Reuter TORCHMARK TMK AUTHORIZES STOCK REPURCHASE BIRMINGHAM Ala Feb 26 Torchmark Corp said its board authorized the purchase from time to time of a significant portion of its 7 3/4 pct convertible subordinated debentures As of February 25 it said there were outstanding 150 mln dlrs of the principal amount of debenures The company also said it plans to redeem the debentures on June eight It also declared a regular quarterly dividend of 25 cts per share on its common payable May one to shareholders of record April 10 Reuter PAINEWEBBER GROUP PWJ TO REDEEM DEBENTURES NEW YORK Feb 26 Painewebber Group Inc said it will redeem all its outstanding 8 1/4 pct convertible subordinated debentures due 2008 It said it will redeem all the debentures for 1,060.50 dlrs plus accrued interest to the redemption date of March 30 The notes can be converted into common stock at a price of 42.35 dlrs per share Reuter R.P. SCHERER SCHC SETS PREFERRED STOCK OFFER TROY MICH Feb 26 R.P. Scherer Inc said it registered with the Securities and Exchange Commission a proposed public offering of 1.2 mln shares of convertible exchangeable preferred stock at 25 dlrs a share In addition the company said it is offering 200,000 preferred shares to Richard Manoogian a Scherer director at 25 dlrs a share Manoogian said he will buy the 200,000 shares Proceeds from the offering will be used to repay debt and to fund research and development it said Underwriters are led by Goldman Sachs and Co Reuter PARLUX FRAGRANCES COMPLETES INITIAL OFFERING NEW YORK Feb 26 Parlux Fragrances Inc said it completed the offering of 420,000 unis at 10 dlrs each through underwriters R.C. Stamm and Co and Rosenkrantz Lyon and Ross Inc Each unit consists of two shares of common stock and one redeemable warrant which entitles the holder to buy an additional common share for six dlrs between Feb 26 1988 and Feb 26 1992 The company creates and markets fragrances and beauty products including the Anne Klein line through department and specialty stores Reuter WILFRED AMERICAN EDUCATIONAL WAE REGULAR DIV NEW YORK Feb 26 Qtly div three cts vs three cts prior Pay April three Record March 13 Reuter DREXEL OFFICIAL HAS STAKE IN EPSILON DATA EPSI WASHINGTON Feb 26 A senior official of Drexel Burnham Lambert Inc and his father told the Securities and Exchange Commission they have acquired 258,591 shares of Epsilon Data Management Inc or 9.4 pct of the total outstanding Kenneth Thomas senior vice president investments at Drexel's Los Angeles office and his father retired university professor C.A. Thomas said they bought the stake for 2.1 mln dlrs primarily for investment purposes They said they may buy more stock or sell some or all of their stake depending on market conditions but have no plans to seek control of the company Reuter PROPOSED OFFERINGS RECENTLY FILED WITH THE SEC WASHINGTON Feb 26 The following proposed securities offerings were filed recently with the Securities and Exchange Commission Bio Technology General Corp BTGC Offering of 25 mln dlrs of convertible senior subordinated notes due March 1997 through Drexel Burnham Lambert Inc Reuter VARIAN VAR SIEMENS FORM JOINT VENTURE PALO ALTO Calif Feb 26 Varian Associates Inc and Siemens A.G. said they signed a letter of intent to form and jointly operate a nuclear magnetic resonance imaging spectroscopy business in Fremont Calif The systems are smaller than magnetic resonance imaging equipment currently used in clinical examinations the companies said They also said the products resulting from the venture are intended for use in small animal research certain limited medical research and materials testing Reuter DU PONT DD WINS SUIT AGAINST PHILLIPS P WILMINGTON Del Feb 26 Du Pont Co said the U.S. District Court for Delaware ruled that Phillips Petroleum Co had infringed on its patent covering certain melt processable ethylene copolymer resins and polyethylene pipe systems It also said the court ruled that Phillips infringed on various claims of its patent and enjoined Phillips from making selling or using any products covered by the patents It said the court ordrered an accounting to determine damages due for past infringement by Phillips Reuter NOVA WINS GOVERNMENT OKAY FOR HUSKY HYO DEAL CALGARY Alberta Feb 26 Nova the Canadian company that owns 56 pct of Husky Oil Ltd said it received government approval for a transaction under which Union Faith Canada Holding Ltd would buy a 43 pct stake in Husky Nova said the Minister of Regional and Industrial Expansion Michel Cote ruled that Union Faith's purchase of the Husky stake would not result in Husky ceding control to a non Canadian company It said this ruling was a key condition in completing the deal Union Faith is equally owned by Hutchison Whampoa Ltd and Hong Kong Electric Holdings Ltd Under the agreement with Union Faith Husky will become a private company with Union Faith and Nova each holding 43 pct of its stock Nine pct of Husky would be owned by relatives of Li Ka Shing chairman of Hutchison and five pct by the Canadian Imperial Bank of Commerice Reuter PRESIDENTIAL AIRWAYS PAIR PACT APPROVED WASHINGTON FEB 26 Presidential Airways Inc said its joint marketing and services agreement with Texas Air Corp's TXN Continental Airlines unit was approved by the U.S. Department of Justice According to the agreement Presidential Airways will operate scheduled service under the name Continental Express The company however will remain independent Reuter ARMY TO RENEGOTIATE ITT ITT RADIO CONTRACT WASHINGTON Feb 26 The Army said it will renegotiate a 400 mln dlr contract with ITT Corp for jam proof field radios after recent tests indicated the radios will work properly Full production of 44,600 of the Single Channel Ground and Airborne Radio System SINCGARS sets has been delayed since the contract was let in 1983 The radios did not meet specifications of operating for 1,250 hours before failing The Army said recent tests have indicated better reliability and that the contract will be renegotiated REUTERS TORCHMARK TMK SELLS SINKING FUND DEBENTURES NEW YORK Feb 26 Torchmark Corp is raising 200 mln dlrs through an offering of sinking fund debentures due 2017 yielding 8.65 pct said lead manager First Boston Corp The debentures have an 8 5/8 pct coupon and were priced at 99.73 to yield 100 basis points over the off the run 9 1/4 pct Treasury bonds of 2016 Non refundable for 10 years the issue is rated A 2 by Moody's and AA by Standard and Poor's A sinking fund starts in 1998 to retire 76 pct of the debentures by maturity giving them an estimated maximum life of 22.4 years Merrill Lynch co managed the deal Reuter SUFFIELD FINANCIAL SSBK GETS FED APPROVAL SUFFIELD Conn Feb 26 Suffield Financial Corp said the Federal Reserve Board approved its application to acquire Coastal Bancorp CSBK Portland Me Suffield said it still needs the approval of the superintendent of Maine's banking department Reuter AFG INDUSTRIES INC AFG QUARTERLY DIVIDEND IRVINE Calif Feb 26 Qtly div four cts vs four cts Pay April 3 Record March 23 Reuter SANTA ANITA REALTY SAR QUARTERLY DIVIDEND LOS ANGELES Feb 26 Qtly div 51 cts vs 51 cts Pay April 9 Record March 25 Santa Anita Realty Enterprises Inc Reuter LIQUID AIR CORP LANA QUARTERLY DIVIDEND SAN FRANCISCO Feb 26 Qtly div 40 cts vs 40 cts Pay March 31 Record March 16 Reuter MARSHALL STEEL LTD YEAR NET MONTREAL Feb 26 Oper shr five cts vs 36 cts Oper net 508,000 vs 3,450,000 Revs 296.7 mln vs 298.0 mln Note former name Marshall Drummond McCall Inc Results include extraordinary gains of 952,000 dlrs or 11 cts per share in 1986 and 2,569,000 dlrs or 29 cts in 1985 from income tax reduction Reuter MARSHALL STEEL DETAILS GAIN FROM UNIT SALE MONTREAL Feb 26 Marshall Steel Ltd formerly Marshall Drummond McCall Inc said it will report a 17 mln dlr net gain before taxes this year from the sale of its Drummond McCall division which was sold effective January one Reuter CORRECTED BANPONCE BDEP PLACES NOTES NEW YORK Feb 26 BanPonce Corp said it privately placed 30 mln dlrs of its 8.25 pct senior notes due 1992 through Lincoln National Investment Management Co New York Life Insurance Co and Dillon Read and Co Inc It said proceeds will be used to increase working capital for general corporate purposes and for possible future acquisitions Corrects dollar figure of notes placed in item appearing Feb 25 Reuter U.S. REGULATOR CLOSES BANKS IN TEXAS LOUISIANA WASHINGTON Feb 26 The Federal Deposit Insurance Corp FDIC said three troubled banks in Texas and Louisiana were merged with healthy financial institutions The FDIC said it subsidized the merger of Central Bank and Trust Co Glenmora La with the healthy Peoples Bank and Trust Co Natchitoches La after state regulators notified it that Central was in danger of failing Central had assets of 28.3 mln dlrs The FDIC said the deposits of the failed Farmers State Bank Hart Tex were assumed by Hale County State Bank Plainview Tex Farmers with 9.6 mln dlrs in assets was closed by Texas bank regulators The deposits of the failed First National Bank of Crosby Crosby Tex with total assets of 8.2 mln dlrs were assumed by Central Bancshares of the South Inc Birmingham Ala after First National was closed by federal bank regulators the FDIC said The number of federally insured banks to fail so far this year now totals 32 the FDIC said Reuter OLIN OLN NAMES SUCCESSOR FOR CHIEF EXECUTIVE STAMFORD Conn Feb 26 Olin Corp said John W Johnstone Jr 54 president and chief operating officer will succeed John M Henske as chief executive officer on April 30 Henske 63 will continue as chairman until he retires in June 1988 Olin said Reuter DAEWOO MOTOR TO BOOST IMPORTS OF U.S. GOODS WASHINGTON Feb 26 Daewoo Motor Corp the Korea based joint venture between Daewoo Group and General Motors Corp GM said it will boost its 1987 imports of U.S. goods to 200 mln dlrs from 104 mln dlrs in 1986 The company said U.S. imports will account for about 35 pct of its total planned imports of 565 mln dlrs in 1987 Last year U.S. goods accounted for about 19 pct of the company's imports up from 6.5 pct in 1985 The products slated for import include automobile and machinery parts catalytic converters fuel injection systems and electronic emission testing systems it said Reuter BANKS EXPRESS GRAVE CONCERN ON BRAZIL DEBT MOVES NEW YORK Feb 26 Brazil's 14 bank advisory committee expressed grave concern to chief debt negotiator Antonio Padua de Seixas over the country's suspension of interest payments according to a telex from committee chairman Citibank to creditor banks worldwide Bankers said the diplomatic phrase belied the deep anger and frustration on the committee over Brazil's unilateral move last Friday and its subsequent freeze on some 15 billion dlrs of short term trade and interbank lines Seixas director of the Brazilian central bank's foreign debt department met the full panel on Tuesday and Wednesday Seixas who met again this morning with senior Citibank executive William Rhodes and representatives from committee vice chairmen Morgan Guaranty Trust Co and Lloyds Bank Plc told the banks that the government was preparing a telex to explain and clarify the freeze on short term credits The telex could be sent to creditors as early as today bankers said Despite the rising tempers bankers said there are no plans for Brazilian finance minister Dilson Funaro to meet commercial bankers during his trip to Washington on Friday and Saturday Funaro will be explaining Brazil's actions to U.S. Treasury Secretary James Baker Federal Reserve Board chairman Paul Volcker and International Monetary Fund managing director Michel Camdessus before travelling to Europe at the weekend Meanwhile bankers were to hear in New York this afternoon what impact Brazil's hard line would have on Argentina with an initial presentation from Argentine Treasury Secretary Mario Brodersohn on his country's request for 2.15 billion dlrs in new loans and a multi year rescheduling agreement Argentina has threatened to emulate Brazil's payments moratorium if the banks do not grant its request Reuter LNG IMPORTS FROM ALGERIA UNLIKELY IN 1987 BY NAILENE CHOU WIEST Reuters NEW YORK Feb 26 Liquefied natural gas imports from Algeria are unlikely to happen in 1987 even though its economically feasible U.S. industry analysts sources said Youcef Yousfi director general of Sonatrach the Algerian state petroleum agency indicated in a television interview in Algiers that such imports would be made this year Contract negotiations filing with the U.S. government and the time required to restart mothballed terminals will delay the import until 1988/1989 Daniel Tulis a natural gas analyst with Shearson Lehman Bros said Sonatrach is currently negotiating with two of its former customers Panhandle Eastern PEL and Distrigas a subsidiary of Cabot Corp CBT to resume LNG export company officials told Reuters A third El Paso Gas a subsidiary of Burlington Northern BNI has expressed no interest Industry analysts said some imports of Algerian LNG were feasible On a marginal cost basis the companies that have made capital investment to handle LNG import can operate profitably even in the current price environment Frank Spadine an energy economist with Bankers Trust said Analysts did not forsee a major impact from Algerian imports on U.S. prices which are currently soft but expected to trend higher by the end of 1987 A decline in gas drilling and the time lag to bring Gulf of Mexico productions onstream will tighten gas supplies and firm prices Shearson's Tulis said In this context Algerian LNG import would be a source of supplemental supply to U.S. domestic production he added Company sources currently in talks with Algeria agree saying that Algerian LNG would only serve to meet peak demand Company sources also said that any negotiations with Algeria would emphasize looser arrangements which would relate volumes to market requirements and prices to U.S. spot market values Reuter U.S. FARM CREDIT RESCUE BILL SEEN BEFORE EASTER WASHINGTON Feb 26 The chairman of the Senate Agriculture subcommittee on credit said the panel will consider a farm credit rescue package by Easter even if the system and its regulator do not ask for help by then We're going to have a bill to markup I guarantee you before the Easter recess Sen David Boren D Okla said Senate Majority leader Robert Byrd D W.Va wants recommendations on farm credit presented by April 11 when Congress is scheduled to break for Easter Boren said Boren urged the Farm Credit Administration FCA the system's regulator to quickly make a formal request for aid Under the 1985 Farm credit law passed by Congress the FCA as regulator is to certify when the system has exhausted all its capital and needs federal government help However FCA chairman Frank Naylor said because much of the system's remaining capital is tied up in legal action he could not technically certify a rescue is needed this year and perhaps not even in 1988 The other Republican member of the three man FCA board Marvin Duncan agreed But Boren urged that even if FCA cannot technically certify aid is needed it should request help informally We all know we need a capital infusion Boren said Boren and the FCA officials spoke at a hearing on the plight of the farm credit system Also at the hearing Brent Beesely chief executive of the Farm Credit Council representing the system said that at the end of 1986 the system had only 1.5 billion dlrs in working capital remaining after losses of 4.6 billion dlrs over the last two years While he did not ask for government aid Beesley indicated the situation is serious in some of the 12 system districts A significant number of banks and associations in the most economically depressed areas have and will continue to suffer extraordinary losses Beesley said Jim Billington Democratic member of the FCA board said the troubles of the system have encouraged the flight of some one billion dlrs per month from the system as borrowers repay loans The system's total portfolio shrank to 54.6 billion dlrs by the end of last year from 66.6 billion the previous year FCA board members said both borrowers and holders of bonds in the system need to be assured their money is safe Naylor suggested the need for a federal assurance to bondholders The bondholders have no worry at this time Billington said Naylor said several proposals for revamping the farm credit system are circulating The proposals range from consolidation of the system into a centralized national lender to de centralizing into semi independent institutions But He and the system spokesman Beesley were cautious about proposals for a secondary market on farm loans Those proposals would package farm loans for resale to investors Naylor and Beesley said a secondary market set up outside the farm credit system would hurt the system But Beesley said a secondary market with the farm credit system as its agent could be developed without Congressional legislation Reuter REPORT COULD BE FINAL BLOW FOR REGAN By Sue Baker Reuters WASHINGTON Feb 26 The Tower Commission's scathing comments on President Reagan's embattled chief of staff Donald Regan could signal the death knell to his White House tenure but the impact of its strong criticism on two other top officials was less clear Regan has come in for tough criticism for his handling of Reagan's worst political crisis since details of the covert arms sales to Iran and diversion of profits to Nicaraguan rebels first emerged last November But criticism of the roles of Secretary of State George Shultz and Defense Secretary Caspar Weinberger who said they opposed the Iran arms initiative yet failed to end it had been muted until the release of the Tower Commission report Their obligation was to give the president their full support and continued advice with respect to the program or if they could not in conscience do that to so inform the president the report said after a three month probe Instead they simply distanced themselves from the program They protected the record as to their own positions on this issue They were not energetic in attempting to protect the president from the consequences of his personal commitment to freeing the hostages The report saved some of its most scathing language for Regan a gruff former Wall Street executive and close personal friend of Reagan whose autocratic rule in the White House angered some top Reagan officials and perhaps more importantly Reagan's wife Nancy More than almost any chief of staff of recent memory he asserted personal control over the White House staff and sought to extend this control to the national security adviser said the report Washington analysts said Regan's departure now appeared to be only a matter of timing Many expected the president to announce it when he addresses the nation on the Tower Commission's findings next week With Regan's departure apparently imminent and Poindexter and other key figures in the scandal already out of office the report's tough criticism of Shultz and Weinberger could turn the spotlight on their future Senate Republican leader Robert Dole a key Reagan ally told reporters the report disclosed colossal blunders and said people who had not served the president well should step aside but he did not specify who should go It would seem to me that if you don't protect the president you don't serve the president well then you should move on the Kansas Republican a likely presidential candidate next year said One Republican strategist said he believed Regan would not be the only White House official to leave in the near future Reuter SWISS ECONOMY IN EXCELLENT CONDITION OECD SAYS PARIS Feb 26 Switzerland's economy combining low unemployment financial stability and a large external payments surplus is in excellent condition and faces a satisfactory future the Organisation for Economic Cooperation and Development OECD said This reflected the success of stable and relatively tight fiscal and monetary policies followed by the government it said The OECD in its annual report on Switzerland picked out some signs of a slowdown in activity and a slight pick up in inflation this year but said these gave no cause for concern The study forecast a decline in Gross Domestic Product growth to 1.75 pct this year from an estimated two pct in 1986 and a small rise in consumer price inflation to 1.25 pct after last year's sharp fall to 0.75 pct from 3.6 pct in 1985 But it said job creation should continue to absorb a modest increase in the workforce leaving the unemployment rate unchanged at around one pct the lowest in the 24 industrial nation OECD area Assuming an average exchange rate of 1.71 Swiss francs to the dollar this year against 1.69 in the second half of 1986 the report forecast a 2.75 pct rise in exports and a 3.5 pct rise in imports this year after rises of 3.25 pct and 6.5 pct respectively in 1986 The faster growth of imports compared with exports this year and last reflecting buoyant private consumption meant that the contribution of the foreign payments balance to GDP would shrink in both years But given Switzerland's large external surplus there should be no concern if domestic demand grows faster than GDP Which if only in a small way would contribute to improving international balances the OECD said Real private consumption appeared to have been unusually buoyant last year with a 3.25 pct growth rate after several years of relative weakness it noted In 1987 private consumption was expected to slow somewhat to a 2.25 pct growth rate but should still outstrip overall GDP it added The outlook for investment in plant and machinery remained bright into 1987 and with capacity use at near record levels last year there was scope for rationalisation and modernisation in both the industry and service sectors it said As a consequence growth in machinery and equipment investment is likely to decelerate only slightly this year after vigorous growth in 1986 But the report raised a questionmark over the prospects for tourism and the banking industry two major service sector earners of foreign exchange The long term appreciation of the Swiss Franc and the accelerating deregulation of foreign banking markets could lead to a loss of international market share for both it said Particularly for the banks recent developments in international financial markets give rise to the question whether the Swiss financial system which has shown substantial flexibility in the past is adapting itself at the speed required To preserve its competitive position it said REUTER U.S. WHEAT BONUS TO SOVIET CALLED DORMANT WASHINGTON Feb 26 The U.S. Agriculture Department is not actively considering offering subsidized wheat to the Soviet Union under the export enhancement program EEP senior USDA officials said However grain trade analysts said the proposal has not been ruled out and that an offer might be made though not in the very near future The grain companies are trying to get this fired up again an aide to Agriculture Secretary Richard Lyng said But there just isn't much talk about it informally or formally Most analysts interviewed by Reuters were more confident than USDA officials that bonus wheat would be offered to the Soviets even though U.S. officials did not make such an offer when they held grain talks with Soviet counterparts earlier this week But administration and private sources agreed that if the Reagan administration did decide to offer subsidized wheat to Moscow it could take several months I just don't see any proposal like that sailing through any interagency process the aide to Lyng said An export enhancement offer is not consummated overnight said one former USDA official who noted that the administration took three months to decide in favor of selling China wheat under the subsidy program An official representing a large grain trade company said deliberations within USDA might be nudged along by members of Congress a number of whom urged USDA this week to make a wheat subsidy offer to the Soviets But Lyng's aide said that during a day long visit to Capitol Hill yesterday House members did not press the secretary on the subsidy question a single time The administration's interagency trade policy review group comprised of subcabinet level officials has not been asked to clear a request to offer Moscow wheat under the EEP officials at the U.S. Trade Representative's Office said In their talks this week the two sides discussed the administration's previous EEP offer but did not talk about any new initiative One USDA official who took part in the consultations this week described them as an exchange of calm basic factual economics Another USDA official said there was not even an informal suggestion or hint that the Soviets would live up to their pledge to buy four mln tonnes of wheat this year if they were granted more favorable terms USDA and private sources agreed that consideration of an EEP initiative by interagency review groups likely would be delayed because of disarray within the White House stemming from the Iran arms affair Reuter U.S. TREASURY PART OF ARGENTINE BRIDGE LOAN WASHINGTON Feb 26 The U.S. Treasury said it was willing to participate with several other industrial countries in providing a 500 mln dlr short term bridge loan to Argentina The Treasury announcecement did not name the other countries nor the amount of financing the United States was willing to supply Argentina announced a wage and price freeze on Wednesday night and is negotiating with New York bankers for about 2.15 billion dlrs in new loans and other financing Our willingness to participate in this multilateral short term financing indicates our support for Argentina's economic program to achieve sustainable growth and a viable balance of payments position the Treassury statement said In announcing a four month wage and price freeze Argentine officials said the country needed a more serene climate to carry out structural changes in the economy But Argentina did not suspend interest payments on its foreign debts as neighboring Brazil did last week The Treasury said the U.S. share of bridge financing for Argentina would come from its Exchange Stabilization Fund The one page statement noted the International Monetary Fund expressed confidence in Argentina's economic policies and prospects by approving a new stand by financing arrangement for it on February 18 Argentina is expected to qualify for IMF balance of payments financing which would enable Argentina to repay a multilateral bridge loan and support the implementation of its economic program the statement said The latest Argentine action marked the second time in less than two years its government has used a wage and price freeze to restrain inflation The debt talks in New York are being headed by Argentine Finance Minister Mario Brodersohn and are expected to last for several days Along with new financing Argentina reportedly wants lower interest rates on an existing total 53 billion dlrs in foreign debt and elimination of foreign banks control over how some of the money is loaned in Argentina Reuter COMPANIES SET BID FOR CANADA HELICOPTER CONTRACT MONTREAL Feb 26 E.H. Industries Canada Inc said it plans to bid its EH101 helicopter to replace Canada's fleet of Sea King aircraft It said it is joining with Bell Textron of Canada Canadian Marconi Co CMW IMP Group and Paramax Electronics Inc and is supported by Augusta S.P.A. Sikorsky Aircraft and Westland Group in the bid The Eh101 aimed at detecting and engaging submarines was designed for use by the British and Italian navies and is due to enter service in 1992 E.H. said Reuter AMERICAN TRAVELLERS ATVC EXPANDS OPERATIONS WARRINGTON Pa Feb 26 American Travellers Corp said its American Travellers Life Insurance Co unit has expanded its operations The company said the unit has begun marketing in Maryland Idaho and the District of Columbia Reuter VERSATILE TO SELL UNIT TO VICON VANCOUVER British Columbia Feb 26 Versatile Corp said it agreed in principle to sell its Alberta based Versatile Noble Cultivators Co division to Vicon Inc of Ontario for undisclosed terms The division manufactures tillage and spraying equipment Reuter VIDEOTRON BUYS INTO EXHIBIT COMPANY MONTREAL Feb 26 Groupe Videotron Ltd said it agreed to buy 50 pct of Groupe Promexpo Inc a company which specializes in product exhibits for three mln dlrs Reuter ROHR INDUSTRIES RHR SETTLES STRIKE CHULA VISTA Calif Feb 26 Rohr Industries Inc said it has agreed on a three year labor contract with the International Association of Machinists and Aerospace Workders ending a strike that began ten days ago Under the pact 4,600 union members at Rohr's Chula Vista and Riverside plants will receive lump sum payments of ten pct six pct and six pct annually with the first payment going out in April Rohr will also increase the pension benefit to 24 dlrs per month for each eligible year of service Reuter BANKS EXPRESS GRAVE CONCERN ON BRAZIL DEBT MOVE NEW YORK Feb 26 Brazil's 14 bank advisory committee expressed grave concern to chief debt negotiator Antonio Padua de Seixas over the country's suspension of interest payments according to a telex from committee chairman Citibank to creditor banks worldwide Bankers said the diplomatic phrase belied the deep anger and frustration on the committee over Brazil's unilateral move last Friday and its subsequent freeze on some 15 billion dlrs of short term trade and interbank lines Seixas director of the Brazilian central bank's foreign debt department met the full panel on Tuesday and Wednesday Seixas who met again this morning with senior Citibank executive William Rhodes and representatives from committee vice chairmen Morgan Guaranty Trust Co and Lloyds Bank Plc told the banks that the government was preparing a telex to explain and clarify the freeze on short term credits The telex could be sent to creditors as early as today bankers said Despite the rising tempers bankers said there are no plans for Brazilian finance minister Dilson Funaro to meet commercial bankers during his trip to Washington on Friday and Saturday Funaro will be explaining Brazil's actions to U.S. Treasury Secretary James Baker Federal Reserve Board chairman Paul Volcker and International Monetary Fund managing director Michel Camdessus before travelling to Europe at the weekend Meanwhile bankers were to hear in New York this afternoon what impact Brazil's hard line would have on Argentina with an initial presentation from Argentine Treasury Secretary Mario Brodersohn on his country's request for 2.15 billion dlrs in new loans and a multi year rescheduling agreement Argentina has threatened to follow Brazil in declaring a payments moratorium if the banks do not grant its request Reuter TEXACO CANADA TXC LOWERS CRUDE POSTINGS NEW YORK Feb 26 Texaco Canada said it lowered the contract price it will pay for crude oil 64 Canadian cts a barrel effective today The decrease brings the company's posted price for the benchmark grade Edmonton Swann Hills Light Sweet to 22.26 Canadian dlrs a bbl Texaco Canada last changed its crude oil postings on Feb 19 Reuter JURY FINDS FOR DOW DOW IN BIRTH DEFECT CASE PHILADELPHIA Feb 26 Dow Chemical Co's DOW Merrell Dow Pharmaceuticals Inc unit said a jury found that Bendectin did not cause the birth defects of a seven year old boy whose mother took the drug during pregnancy The anti nausea drug has been used to treat morning sickness and was discontinued in 1983 amid allegations that the drug caused birth defects Merrell said that to date there have been 12 other trials involving the drug 10 in the U.S. and two in West Germany It said verdicts or judgements in favor of the company were obtained in eight of the trials one of which included about 1,150 plaintiffs In two trials Merrell said verdicts were in favor of the plaintiffs In one it said the trial judge overruled the jury's verdict and issued a judgement in favor of the company and a three judge panel of the Court of Appeals overturned the trial judge's ruling Merrell is now awaiting a rehearing of this case by the full Court of Appeals Of the remaining two trials one ended in a mistrial and in the other the jury was unable to reach a verdict At one point about 1700 lawsuits had been filed alleging the drug caused birth defects said a company spokesman He said about 300 lawsuits are pending Bendectin was first introduced in the early 1950s and the Merrell spokesman said a valid application to make and market the drug is with the Food and Drug Administration should the company decide it wants to reintroduce it Reuter USDA SAID UNLIKELY TO BROADEN CORN BONUS OFFER WASHINGTON Feb 26 The U.S. Agriculture Department probably will not offer a two dlr per bushel bonus payment to corn farmers for any erodible cropland they enrolled in the conservation reserve program last year an aide to USDA Secretary Richard Lyng said Sen Charles Grassley R Iowa said yesterday that Lyng had indicated he would consider giving those farmers the same two dlr bonus offered corn farmers who are signing up for the 1987 program this month But the aide to Lyng said it was doubtful that the department would offer a retroactive bonus to farmers who enrolled land in the 10 year conservation reserve last year How are you going to stop the tide he said referring to demands that would follow from other commodity groups Reuter MARATHON PETROLEUM REDUCES CRUDE POSTINGS NEW YORK Feb 26 Marathon Petroleum Co said it reduced the contract price it will pay for all grades of crude oil one dlr a barrel effective today The decrease brings Marathon's posted price for both West Texas Intermediate and West Texas Sour to 16.50 dlrs a bbl The South Louisiana Sweet grade of crude was reduced to 16.85 dlrs a bbl The company last changed its crude postings on Jan 12 Reuter AGENCY VOTES TO END LOCAL NUCLEAR PLANT VETO WASHINGTON Feb 26 The Nuclear Regulatory Commission NRC proposed to ease evacuation standards for nuclear plants which could lead the way to the licensing of controversial plants in New York and New Hampshire The NRC voted 4 1 to offer the rule for 60 days of public comment before it reconsidered it and set emergency evacuation standards of its own Local authorites at the plants at Shoreham Long Island N.Y. and Seabrook N.H. had refused to take part in evacuation planning as required under existing NRC rules They had claimed the region was too populated for any safe evacuation plan holding up the NRC's authority to issue full power licenses of the two multi billon dollar plants A group of prominent politicians led by New York Governor Mario Cuomo charged at a public meeting on the proposed plan on Tuesday that NRC members were more interested in protecting the utilties'investments than protecting public safety An NRC spokesman said after the meeting that the agency had not yet scheduled a meeting to vote on the proposed plan In a statement today announcing its vote the commission said the proposed rule change would enable the NRC to act in cases where local authorities refused to take part in emergency evacuation planning Reuter RELIEF TO U.S. CORN OATS GROWERS SAID LIKELY WASHINGTON Feb 26 U.S. farmers who in the past have grown oats for their own use but failed to certify to the government that they had done so probably will be allowed to continue planting that crop and be eligible for corn program benefits an aide to Agriculture Secretary Richard Lyng said Currently a farmer to be eligible for corn program benefits must restrict his plantings of other program crops to the acreage base for that crop Several members of Congress from Iowa have complained that farmers who inadvertantly failed to certify that they had grown oats for their own use in the past now are being asked to halt oats production or lose corn program benefits USDA likely will allow historic oats farmers to plant oats but not extend the exemption to all farmers Lyng's aide said Reuter N.Z. MONEY SUPPLY RISES 3.6 PCT IN DECEMBER WELLINGTON Feb 27 New Zealand's broadly defined seasonally adjusted M 3 money supply grew an estimated 3.6 pct in December after rising a revised 2.4 pct in November and 4.04 pct in December last year the Reserve Bank said in a statement It said unadjusted M 3 increased to an estimated 30.07 billion N.Z. Dlrs from a revised 28.30 billion in November and 25.53 billion in December 1985 Year on year M 3 rose 17.77 pct from a revised 15.34 pct in November and 20.50 pct in December 1985 Narrowly defined year on year M 1 growth was 15.89 pct against a revised 27.52 pct in November and 12.3 pct a year earlier M 1 grew to an estimated 5.03 billion dlrs against a revised 4.77 billion in November and 4.34 billion in December 1985 Year on year private sector credit grew 30.68 pct in December against a revised 22.30 pct in November and 23.2 pct in December 1985 Private sector credit grew to 22.24 billion dlrs from a revised 20.92 billion in November and 17.01 billion in December 1985 Reuter CIRCUIT SYSTEMS CSYI BUYS BOARD MAKER ADDISON Ill Feb 26 Circuit Systems Inc said it has bought all of the stock of Ionic Industries Inc in exchange for 3,677,272 shares of its common Following the exchange there will be 4,969,643 shares of Circuit Systems stock outstanding Ionic holders will own about 74 pct of the outstanding stock of Circuit Systems it said Ionic a maker of circuit boards had revenues of 8.4 mln dlrs and pretax profits of 232,000 dlrs in 1986 up from revenues of 5.9 mln and pretax profits of 204,000 dlrs in 1985 Circuit Systems said Reuter FALLING SOYBEAN CRUSH RATIOS CUT OUTPUT by John Morrison Reuters CHICAGO Feb 26 The sharp decline in soybean crush ratios seen in the last few weeks accelerating in recent days has pushed margins below the cost of production at most soybean processing plants and prompted many to cut output of soybean meal and oil The weekly U.S. soybean crush rate was reported by the National Soybean Processors Association this afternoon at 21.78 mln bushels down from the 22 mln bushel plus rate seen over the past two months when crush margins surged to the best levels seen in over a year Active soymeal export loadings at the Gulf had pushed soybean futures and premiums higher prompting a pick up in the weekly crush number However much of that export demand seems to have been met with most foreign meal users now waiting for the expected surge in shipments of new crop South American soymeal over the next few months U.S. processors are now finding domestic livestock feed demand is very light for this time of year due to the milder than normal winter so they steadily dropped offering prices in an attempt to find buying interest soyproduct dealers said Soybean meal futures have also steadily declined in recent weeks setting a new contract low of 139.70 dlrs per ton in the nearby March contract today Many speculators down here bought March soymeal and sold May looking for no deliveries on first notice day tomorrow which would cause March to gain on deferreds one CBT crush trader said But they've been bailing out this week because the March has been acting like there will be a lot delivered if not tomorrow then later in the month he added As a result of the weakness in soymeal the March crush ratio The value of soyproducts less the cost of the soybeans fell from the mid 30s earlier this month to 22.6 cents per bushel today dropping over five cents in just the last two days The May crush ended today just over 17 cents so no processors will want to lock in a ratio at that unprofitable level the trader said Hopefully they will now start to cut back production to get supplies in line with demand he added With futures down processors are finding they must bid premiums for cash soybeans further reducing crush margins A central Illinois processor is only making about 30 cents for every bushel of soybeans crushed at current prices down sharply from levels just seen just a few weeks ago and below the average cost of production cash dealers said Most soybean processing plants are still in operation with little talk of taking temporary down time so far But processors will start halting production in the next few weeks it they continue to face unprofitable margins they added Reuter FED DATA SUGGEST STABLE U.S. MONETARY POLICY by Jeremy Solomons Reuters NEW YORK Feb 26 Latest Federal Reserve data suggest that the central bank voted to maintain the existing degree of pressure on banking reserves at its regular policy making meeting two weeks ago money market economists said The numbers were a little disappointing but I think we can take Mr Volcker at his word when he said that nothing had changed said Bob Bannon of Security Pacific National Bank Fed Chairman Paul Volcker told a Congressional committee last Thursday that the Fed's policy has been unchanged up to today Although Volcker's statement last Thursday allayed most fears that the Fed had marginally tightened its grip on reserves to help an ailing dollar many economists still wanted confirmation of a steady policy in today's data which covered the two week bank statement period ended yesterday This need for additional reassurance was made all the more acute by the Fed's decision yesterday to drain reserves from the banking system by arranging overnight matched sale purchase agreements for the first time since April of last year economists added Today's data showed that the draining action was for a fairly large 3.9 billion dlrs economists said The one thing that caught my eye were the relatively sizeable matched sales on Wednesday said Dana Johnson of First National Bank of Chicago But there was a clearly justified need for them There was nothing ominous The Fed couldn't have waited until the start of the new statement period today If it had it would have missed its reserve projections added Security Pacific's Bannon A Fed spokesman told reporters that there were no large single day net miss in reserve projections in the latest week Economists similarly shrugged off slightly higher than expected adjusted bank borrowings from the Fed's discount window which averaged 310 mln dlrs a day in the latest week compared with many economists forecasts of about 200 mln For the two week bank statement period as a whole the daily borrowing average more than doubled to 381 mln dlrs from 160 in the prior period There were wire problems at two large banks on Tuesday and Wednesday so I am not too bothered about the borrowings said Scott Winningham of J.S. Winningham and Co The Wednesday average rose to 946 mln dlrs from 148 mln a week earlier Lending further support to the stable policy view was a relatively steady federal funds rate of about six pct in the latest week and persistently high levels of excess reserves in the banking system economists said For the time being the Fed is following a neutral path with fed funds at about six to 6 1/8 pct said Darwin Beck of First Boston Corp I expect it to continue in that vein Excess reserves fell but they are still over a billion dlrs added First Chicago's Johnson Banks excess reserves averaged 1.03 billion dlrs a day in the latest statement period down from 1.50 billion in the previous one After the Fed declined to assign a 1987 target growth range to the wayward M 1 money supply measure last week little attention was paid to a steeper than anticipated 2.1 billion dlr jump in the week ended February 16 Looking ahead economists said the Fed will have to tread a fine line between the dollar's progress in the international currency markets and the development of the domestic economy The market has perhaps exaggerated the dollar's effect on Fed policy said First Chicago's Johnson Of course it will take the dollar into account in future policy decisions but if the economy is weak it won't pull back from easing Reuter FEDERAL INDUSTRIES LAUNCHES EUROBOND ISSUE Winnipeg Manitoba Feb 26 Federal Industries Ltd said it launched a 40 mln Canadian dlr Eurobond issue for five years bearing a coupon of 9 1/4 pct Issue price is 100 5/8 Lead manager is Union Bank of Switzerland Proceeds will be used to reduce short term debt Reuter NYSE TO STUDY REGULATION OF SECURITY INDUSTRY NEW YORK Feb 26 The New York Stock Exchange said it will begin a review of regulation in the securities industry to determine what changes may be needed to maintain the integrity of the market and protect investors in coming years The Exchange said the study is needed because of the rapid changes taking place in the securities industry Among the factors it cited were the increase in trading volume the proliferation of new trading instruments and the rise of computerized trading techniques The Exchange did not mention however the insider trading scandal that has caught several top Wall Street executives The NYSE said its study will be chaired by Richard R Shinn executive vice chairman of the Exchange and former chairman and chief executive officer of Metropolitan Life Insurance Co Other members of the study committee include Charles F Barbar former chairman of Arsarco Inc AR Roger Birk chairman emeritus of Merrill Lynch and Co MER and Irwin Guttag chairman of the NYSE special surveillance committee The committee's report should be completed by the end of the year the Exchange said Reuter KOREAN AIR ORDERS MCDONNELL DOUGLAS MD MD 11S LOS ANGELES Feb 26 McDonnell Douglas Corp said Korean Air signed formal orders for four MD 11 jets with options to buy four more The company said if the options are exercised the purchase will total about one billion dlrs McDonnell Douglas said on December 30 that Korean Air was among the initial 12 customers that placed orders and options for 92 aircraft valued at about nine billion dlrs Delivery of the first MD 11 is scheduled for the summer of 1990 Korean Airlines currently operates four McDonnell Douglas DC 10 jets In 1985 it ordered six MD 82s valued at about 150 mln dlrs Four of these are in service and two will be delivered this year Reuter DELTA ROCKET BLASTS OFF FROM CAPE CANAVERAL CAPE CANAVERAL Fla Feb 26 An unmanned Delta rocket carrying a 57 mln dlr hurricane tracking satellite blasted off here today in NASA's first successful launch of the year The 116 foot 35.4 meter Delta a reliable workhorse of the U.S. rocket fleet lifted off at 1805 EST from Cape Canaveral Air Force Station in a crucial test of the space agency's ability to recover from the Challenger disaster and a string of other failures The launch came after two delays in two days The first postponement was caused by fuel leak and the second by high speed crosswinds that NASA officials say could have torn the rocket apart during fiery ascent Reuter JAPAN TO TRY TO OPEN MARKET TO U.S. CAR PARTS WASHINGTON Feb 26 Japan has pledged to try to increase its purchase of U.S. car parts and also to exchange data to monitor the purchases the Commerce Department said U.S. negotiators opened talks last August with Japanese officials to try to force open the Japanese market to American made parts in an effort to redress an estimated five billion dlr deficit in car parts trade Japan had agreed to try to increase purchases of U.S. made parts by Japanese car makers and to begin long term contracts for parts purchases a Commerce department official said He added that the agreement also said Japan agreed to try to devise a way to collect purchasing information in order to monitor progress in stepping up Japanese orders The Commerce Department said in a statement last year that statistics support the perception in the United States that American auto parts suppliers are not welcome in the inner circles of Japan's auto companies and their traditional suppliers It estimated that while Japan's car firms sold almost five billion dlrs worth of parts in the United States in 1985 U.S. firms sold only one per cent of Japan's 55 billion dlr market reuter FRANCE FACES PRESSUE TO CHANGE POLICIES By Brian Childs Reuters PARIS Feb 26 France's right wing government is facing growing pressure to modify its economic policies after revising down its 1987 growth targets and revising up its inflation forecasts for this year Moving reluctantly into line with most private sector forecasts the government yesterday raised its 1987 inflation estimate a half percentage point to 2.5 per cent and cut its economic growth estimate to between two and 2.8 per cent from a 2.8 per cent target written into the annual budget last september Finance Minister Edouard Balladur said the revised figures would not push the government off its chosen mix of price deregulation budget cutting rigour and pay restraint But Trade Union leaders served immediate notice they would push to protect the purchasing power of their members raising the spectre of a vicious spiral of wage and price rises And bank economists contacted by Reuters said they believed Prime Minister Jacques Chirac could be forced by slow growth and rising unemployment to reflate the economy later this year perhaps in the autumn to boost his prospects in Presidential elections due by April 1988 The outlook is more worrying than it was a few weeks ago said Societe Generale economist Alain Marais We have the impression it may be difficult to get even two per cent growth this year The big question is whether the government's policy of wage moderation will be maintained he added The government has set public sector wage rises at aboout 1.7 per cent this year with a three per cent ceiling for rises justified by increased productivity But the head of the socialist CFDT union federation Edmond Maire meeting with Chirac today renewed union demands already rejected by the government for indexation clauses to be built into future pay contracts to safeguard workers against higher prices Calling the government's policies unbalanced and unjust he also demanded investment incentives to boost employment He announced after his meeting that Chirac had told him the government would spend two billion francs on a series of measures to boost employment and training Andre Bergeron a widely respected leader of the moderate Force Ouvriere labour group put similar demands to Chirac earlier in the week while the Communist led CGT the largest of France's unions declared the defence of its members earnings its top priority But with unemployment nearing 11 per cent last month and still rising government supporters and some economic analysts said they were confident Chirac could resist union pay demands Salary indexation was ended by the previous Socialist government and I dont think this administration is going to reverse that commented Michel Develle economist at recently privatised Banque Paribas Damaging transport and electricity strikes over Christmas and the New Year partly blamed by the government for higher inflation had undermined the unions power and popularity he said Develle said Paribas expected inflation to rise even more than the governments revised forecast perhaps to 2.6 or 2.7 per cent this year against last years 2.1 per cent But that would still be an exceptional achievement considering that for the first time since the Second World War all french prices have been freed he commented Finance Ministry officials said that the governments abolition of price and rent controls last year was responsible for nearly a quarter of a 0.9 per cent surge in January living costs But they claimed it was a once off phenomenon that should have no knock on impact on the rest of the year Both Marais and Develle said they agreed with that so long as the government kept wages under control Prices could rise 1.5 per cent in the first three months of 1987 and two per cent in the first half year fractionally more than forecast this week by the National Statistics Institute INSEE Marais said But the second half year should be better he added Ironically one side effect of higher inflation could be to help the government achieve its aim of cutting the state budget deficit several analysts said So long as public sector wages are held down higher Value Added Tax receipts resulting from rising prices should offset a loss in revenues that otherwise would result from slower than expected growth they said Reuter HOUSTON OIL HO RESERVES STUDY COMPLETED HOUSTON Feb 26 Houston Oil Trust said that independent petroleum engineers completed an annual study that estimates the trust's future net revenues from total proved reserves at 88 mln dlrs and its discounted present value of the reserves at 64 mln dlrs Based on the estimate the trust said there may be no money available for cash distributions to unitholders for the remainder of the year It said the estimates reflect a decrease of about 44 pct in net reserve revenues and 39 pct in discounted present value compared with the study made in 1985 Reuter JAPAN CONSUMER PRICES FALL 0.4 PCT IN JANUARY TOKYO Feb 27 Japan's unadjusted consumer price index base 1985 fell 0.4 pct to 99.7 in January from the previous month the government's Management and Coodination Agency said The fall compares with a decline of 0.2 pct in December The January index compared with a year earlier was down 1.1 pct the first drop larger than 1.0 pct since it fell 1.3 pct in September 1958 Food costs rose in January from December but prices fell for clothing footwear and utilities causing the overall decline for the month Housing medical and educations costs increased in January compared with a year earlier but the cost of utilities gasoline and vegetables fell The unadjusted consumer price index for the Tokyo area base 1985 was down 0.1 pct in mid February from a month earlier at 100.2 reflecting lower prices for food clothing and footwear Compared with a year earlier the index was down 0.7 pct due to lower vegetable fuel oil and utility costs REUTER AVERY AVY SETS TWO FOR ONE STOCK SPLIT PASADENA Calif Feb 26 Avery said its board authorizerd a two for one stock split an increased in the quarterly dividend and plans to offer four mln shares of common stock The company said the stock split is effective March 16 with a distribution of one additional share to each shareholder of record March 9 It said the quarterly cash dividend of 10.5 cts per share on the split shares a 10.5 pct increase from the 19 cts per share before the split Avery said it will register with the Securities and Exchange Commission shrortly to offer four mln additional common shares It will use the proceeds to repay debt finance recent acquisitions and for other corporate purposes Reuter MICROSOFT CORP MSFT HALTS MS DOS IMPORTS SAN FRANCISCO Feb 26 Microsoft Corp said it obtained a federal court order to seize a shipment of over 15,000 unauthorized copies of its MS DOS operating system labeled Falcon MS DOS Federal marshals made the seizure in San Francisco on Feb 17 Microsoft said the U.S. District Court for the Northern District of California also granted it a temporary restraning order against Wetex International Quadrant Corp and other persons prohibiting copyright infringement by reproducing Microsoft software Reuter JAPAN MARCH BOND COUPON SEEN UNCHANGED AT FIVE PCT TOKYO Feb 27 The Finance Ministry has proposed informally to its bond underwriting syndicate that the coupon on the January 10 year government bond remain unchanged from February at five pct underwriting sources said They said the ministry wants a 0.50 yen raise in issue price from February to 99.50 to yield a record low 5.075 pct The 5.151 pct February bond issue yield was itself a record low The proposed issue volume is 475 billion yen against the 600 billion in February The underwriting syndicate is likely to accept the proposed terms immediately the sources said REUTER U.S. LAUNCHES WEATHER SATELLITE CAPE CANAVERAL Fla Feb 26 An unmanned Delta rocket carrying a 57 mln dlr weather observation satellite blasted off here today in the first U.S. Space launch of the year The 116 foot rocket lifted off at 1805 local time 2305 GMT and placed in orbit a 1,850 pound Geostationary Operational Environmental Satellite GOES to replace an identical one that was destroyed last May when a Delta rocket exploded after liftoff Weather forecasters have had only a single satellite to cover the entire U.S. Since another GOES failed in orbit in August 1984 We'll have both our weather eyes open again said Thomas Pyke a spokesman for the National Oceanic and Atmospheric Administration which owns and operates the satellite The smooth launching came after two delays in as many days The first was caused by a fuel leak and the second by powerful crosswinds The Delta was the first of six rockets scheduled for launch by the National Aeronautics and Space Administration this year The launch marked the third straight success for the space program which was battered by a series of failures in 1986 including the loss of the Challenger shuttle REUTER ITALIAN COALITION MEETS AS GOVERNMENT CRISIS LOOMS ROME Feb 27 Leaders of Italy's five coalition parties have agreed to meet today to try to settle their differences which are mainly between Prime Minister Bettino Craxi's Socialist Party and the majority Christian Democrats Sources close to Deputy Prime Minister Arnaldo Forlani said Craxi told him he would announce his resignation next week allowing negotiations on a new government leader The conservative Christian Democrats demanded the meeting after Craxi said a pact agreed during a government crisis last August under which he was to hand over the prime minister's job next month was unlikely to be fulfilled Political sources said the Christian Democrats are likely to leave the coalition which also includes Republicans Social Democrats and Liberals unless they get the prime minister's job They said Craxi's plans to resign show he has decided to stick to the pact but talks on a leader a government program and sharing of ministries will not be easy They said there is dissent among the partners and that Forlani has been trying to mediate to avoid a crisis They said the five are likely to begin talks tomorrow on whether formation of a new government is feasible or early elections are inevitable Elections are not due until 1988 REUTER N.Z. CENTRAL BANK SEES SLOWER MONEY CREDIT GROWTH WELLINGTON Feb 27 Monetary and credit growth rates in New Zealand are not expected to continue at current levels following the Reserve Bank's move to tighten liquidity late last year Reserve Bank Governor Spencer Russell said The monetary and credit growth figures for the December quarter were probably artifically inflated by unusually high growth in inter institutional lending activity on the short term money market Russell said in a statement The bank moved to tighten liquidity when the initial signs of the recent expansion became apparent in September and October last year Russell said Broadly defined M 3 figures released today showed growth of 17.8 pct in the year ended December compared with 13.1 pct in the year ended September Annual growth of private sector credit in calendar 1986 was 30.7 pct compared with 16.5 pct in the September year Available evidence suggests that corporate customers including non bank financial institutions have been exploiting differences between interest rates on overdrafts with trading banks and rates in the call market Russell said REUTER BRITAIN'S ALLIANCE OPPOSITION WINS BY ELECTION LONDON Feb 27 Britain's centrist Liberal Social Democratic Alliance won a surprise victory in a parliamentary by election in the London borough of Greenwich a seat held by the main opposition Labour party for the past 50 years Rosie Barnes a Social Democratic member of the Alliance won with 18,287 votes or 53 pct and a majority of 6,611 seats over her nearest rival Labour candidate Deirdre Wood The Conservatives came third with 3,852 votes The result is expected to play a key role in determining when Prime Minister Margaret Thatcher leader of the ruling Conservatives might call a general election REUTER ECONOMIC SPOTLIGHT JAPAN EYEING FOREIGN STOCKS By Jeff Stearns Reuters TOKYO Feb 27 Japanese life insurers trust banks and corporations largely responsible for vitalising the U.S. Bond market in recent years are now eyeing stockmarkets in the U.S. Britain France and Hong Kong fund managers said After concentrating on U.S. Treasury bonds for years Japanese institutions now see a risk in relying too much on similar types of investments they said Japan's net buying in overseas stockmarkets this year may double or triple to 15 20 billion dlrs from seven billion in 1986 Shigeki Matsumoto of Nikko Securities Co Ltd said Matsumoto who manages Nikko's investment research and strategy said there is evidence Japanese investors began poking around in foreign stockmarkets around July last year but few made firm commitments until December when net purchases suddenly grew to 1.5 billion dlrs from around 500 mln in each of the previous five months Net buying in 1985 totalled only 995 mln dlrs he added This sudden penchent for overseas stocks is likely to draw the widest smiles from Wall Street because about 70 to 80 pct of funds will be invested in the U.S. Markets Matsumoto said The trend has been to head toward the U.S. Market first because of its size and next because it has been successful over the last couple of years said Eugene Atkinson managing director of Goldman Sachs International Corp Wall Street's massive turnover offers good liquidity enabling institutions to easily move large volumes of money in and out of shares with the minimum of risk he added However few see holdings in U.S. Treasuries dwindling They will remain a Japanese mainstay fund managers said Institutions particularly life insurance companies which concentrate on income rather than capital gains to cover payouts to policy holders are unlikely to sell their U.S. Treasuries but will put in less money said Shinichi Kobuse manager of Yamaichi Securities Co Ltd's international fixed income activities There has been some selling of U.S. Bonds by short term investors but the selling is unlikely to amount to a significant chunk of Japanese bond holdings because the liquidity of the U.S. Bond market remains attractive he added Kobuse said investment managers are bullish on the U.S. Equity markets despite predictions by economists the U.S. Economy will remain sluggish over the next couple of months Interest in Wall Street has been spurred by recent reports of significant growth in earnings by major U.S. Corporations he added Yutaka Hashimoto general manager of Nippon Life Insurance Co told an economic conference that insurance companies which are responsible for 26 pct of Japanese funds in foreign securities hold a lopsided proportion of U.S. Treasuries and intend to diversify into other instruments and currencies Insurance companies have put the dominant portion of their funds into the U.S. But will now invest in Britain West Germany France and other countries Hashimoto said Lower interest rates worldwide make the returns on stocks relatively high in comparison with bonds and in light of the strength in the yen the growth in stock values is expected to offset currency risks he added One trust bank official said his bank aims for a 10 pct annual return on overseas investments but the recent decline in U.S. 30 year bond yields has caused a rethink in pension fund investment stategies The bank is looking more at U.S. Equities and European bonds he said Japanese investments in British equities have already turned active and the pace is likely to increase said Andrew Sheaf general manager of international equity activities at County Securities Japan Last week was the busiest week we had he said Investments are being spurred by the growth in profits of British companies and the recent deregulation of government controlled firms fund managers said Deregulation in France is also attracting Japanese interest but stock investments there will be inhibited by worries about the French franc they said Investments in Hong Kong will be mostly short term and speculative due to uncertainty about the colony's long term political stability they added Japanese investors are cautious about West Germany particularly as German firms like their Japanese counterparts are concerned about the recent dollar fall Australia also poses some risks due to currency values they added REUTER TAIWAN OFFSHORE BANKING ASSETS RISE IN JANUARY TAIPEI Feb 27 The combined assets of Taiwan's offshore banking units obu rose to 6.28 billion U.S. Dlrs at end January from 6.21 billion in December and 6.34 billion in January 1986 the central bank said A bank official told Reuters the increase came mainly from increased local obu borrowings from their Asian counterparts He said the assets held by 15 foreign and local banks were mainly in U.S. Dollars with the remainder in certificates of deposit and bonds About 90 pct of the assets came from Asia and the rest from North America and Europe he added REUTER JAPAN EXPECTED TO CUT BASE RATE FOR STATE BODIES TOKYO Feb 27 Japan is expected to cut the base lending rate for state financial institutions to 5.5 pct from 6.2 as part of the recent pact by major industrial nations in Paris Finance Ministry sources said They said the cut is based on a revision of the Trust Fund Bureau Law which should be approved by parliament on March 3 abolishing the 6.05 pct minimum interest rate on deposits with the bureau The bureau channels funds to government financial institutions for public works and other official uses they said The base lending rate for state bodies such as the Japan Development Bank People's Finance Corp and the finance corporations of local public enterprises usually moves in tandem with long term prime rates the sources said However it was impossible for them to follow the last cut to 5.8 pct from 6.2 pct on January 28 because the Trust Fund Bureau rate was legally set at 6.05 pct The ministry will abolish the minimum rate and introduce a market related one to resolve the problem and stimulate the domestic economy they said On Tuesday the ministry allowed long term bankers to cut their prime to a record low of 5.5 pct effective February 28 The move suggested it had reached agreement with depositors using the bureau the postal savings system of the Posts and Telecommunications Ministry and the Japan welfare annuity of the Ministry of Health and Welfare the sources said These ministries are trying to determine which market rates should be considered when setting the bureau's deposit rate the ministry sources said Coupon rates on new 10 year government bonds minus 0.1 percentage points is the likeliest choice they added REUTER JAPAN HOUSE BUDGET TALKS TO REOPEN NEXT WEEK TOKYO Feb 27 Japan's ruling and opposition parties agreed to reopen talks on the budget for the fiscal year ending March 31 1988 when the Lower House Budget Committee meets next Tuesday a parliamentary official said He said officials of the ruling Liberal Democratic Party and the opposition parties agreed at a meeting of the committee's board of directors Strong opposition objection to government tax reform proposals including a controversial sales tax has delayed deliberation by the Lower House Budget Committee REUTER AUSTRALIA'S KEATING CHANGES ECONOMIC FORECASTS CANBERRA Feb 27 Domestic demand is now expected to make no contribution to Australian economic growth in fiscal 1986/87 ending June 30 while net exports will account for all of the overall increase Treasurer Paul Keating said here However he did not say in his speech to the Economic Planning Advisory Council EPAC if the forecast 2.25 pct rise in gross domestic product gdp had been revised But Keating said domestic demand could fall slightly this financial year and net export growth will provide the total source of gdp growth The August budget had forecast domestic demand would contribute 0.75 percentage points to non farm gdp growth of 2.5 pct while net exports would account for 1.75 points Keating said the overall impact of the changed economic parameters is welcome as it appears to have contributed to a slightly more rapid correction in the current account deficit than first anticipated The government initially forecast a current account deficit for 1986/87 of 14.75 billion our present expectation is that the result will be somewhat lower around 14 billion he said Partial indicators released since the last meeting of EPAC in December indicate that the 1986/87 budget strategy is broadly on track Keating said They indicate that domestic demand has been a little more sluggish than was expected at budget time he said On the other hand net exports seem to be expanding by more than expected at budget time and this is underpinning growth in domestic production and employment Keating said it now seems likely that the 1986/87 inflation rate will exceed the budget forecast of eight pct Nevertheless there is likely to be a marked slowing in inflation over coming quarters as depreciation and budgetary effects wane he said Keating said the government expects economic growth to pick up moderately in 1987/88 due to a further significant rise in net exports and a very moderate but positive contribution from private domestic demand He said domestic demand growth will be due to a strengthening in real household disposable income The moderate rise in economic growth next financial year should be sufficient to sustain employment growth at a level broadly equivalent to that of the current fiscal year The current account deficit will continue to show improvement in 1987/88 Keating said As the impact of the exchange rate depreciations of recent years recede further and given continued effective wage restraint inflation should moderate markedly in 1987/88 he said REUTER THAI RICE EXPORTS RISE IN WEEK ENDED FEBRUARY 24 BANGKOK Feb 27 Thailand exported 84,960 tonnes of rice in the week ended February 24 up from 80,498 the previous week the Commerce Ministry said It said government and private exporters shipped 27,510 and 57,450 tonnes respectively Private exporters concluded advance weekly sales for 79,448 tonnes against 79,014 the previous week Thailand exported 689,038 tonnes of rice between the beginning of January and February 24 up from 556,874 tonnes during the same period last year It has commitments to export another 658,999 tonnes this year REUTER TOKYO GRAIN EXCHANGE TO RAISE MARGIN REQUIREMENTS TOKYO Feb 27 The Tokyo Grain Exchange said it will raise the margin requirement on the spot and nearby month for U.S. And Chinese soybeans and red beans effective March 2 Spot April U.S. Soybean contracts will increase to 90,000 yen per 15 tonne lot from 70,000 now Other months will stay unchanged at 70,000 except the new distant February requirement which will be set at 70,000 from March 2 Chinese spot March will be set at 110,000 yen per 15 tonne lot from 90,000 The exchange said it raised spot March requirement to 130,000 yen on contracts outstanding at March 13 Chinese nearby April rises to 90,000 yen from 70,000 Other months will remain unchanged at 70,000 yen except new distant August which will be set at 70,000 from March 2 The new margin for red bean spot March rises to 150,000 yen per 2.4 tonne lot from 120,000 and to 190,000 for outstanding contracts as of March 13 The nearby April requirement for red beans will rise to 100,000 yen from 60,000 effective March 2 The margin money for other red bean months will remain unchanged at 60,000 yen except new distant August for which the requirement will also be set at 60,000 from March 2 REUTER MANILA SAID TO OFFER DEBT BONDS TO BANKS MANILA March 1 The Philippines will offer its commercial bank creditors an innovative pricing plan that will make debt payments through certificates of indebtedness as an alternative to cash the authoritative Business Day newspaper said Finance Secretary Jaime Ongpin told reporters yesterday the alternative proposal is designed to avoid an impasse when debt rescheduling talks reopen in New York on Tuesday He did not give details but said It is a very useful alternative and in the end will permit the banks to say that they achieved their pricing target and will likewise permit the Philippines to say exactly the same thing Quoting negotiation documents to be presented to the country s 12 bank advisory committee Business Day said the debt certificates will carry maturities of five or six years It said the certificates will be classified as zero coupon bonds or promissory notes with no interest but priced at a considerable discount from their redemption price It said the debt bonds will entitle holder banks to a guaranteed return on both interest and principal since no payment of any kind is made until the bond matures It said a bank can sell the bonds on the secondary bond market for either dlrs or pesos depending on its requirement The documents said peso proceeds can be invested in selected industries under the Philippines debt equity program Ongpin said Manila is sticking to its demand of a spread of 5/8 percentage points over London Interbank Offered Rates LIBOR for restructuring 3.6 billion dlrs of debt repayments The proposal will give the banks a choice of 5/8ths or the alternative Ongpin said Our representatives have gone to Washington to the International Monetary Fund the World Bank the Fed Federal Reserve Board and the U.S. Treasury to brief them in advance on this alternative and it has generally been positively received We don t believe that there is going to be a problem on the accounting side Ongpin said We have run this alternative proposal to the accounting firms Neither have the government regulators indicated that there will be a problem REUTER POLL MAJORITY DISAPPROVE OF REAGAN PRESIDENCY NEW YORK March 1 A majority of Americans disapprove of the way Ronald Reagan has handled the presidency and one third believe he should resign a new poll said The poll conducted by Newsweek magazine said 53 pct of the respondents gave Reagan a negative performance rating nearly double his disapproval rating before the Iran Contra scandal The magazine said however that Reagan remained personally popular By better than a three to one ratio a majority of those polled said they liked Reagan on a personal level And Newsweek said 52 per cent of those questioned believed the administration s accomplishments outweighed its failures REUTER PRODUCER SPLIT HEATS UP COFFEE QUOTA TALKS By Lisa Vaughan Reuters LONDON March 1 Talks on the possibility of reintroducing global coffee export quotas have been extended into today with sparks flying yesterday when a dissident group of exporters was not included in a key negotiating forum The special meeting of the International Coffee Organization ICO council was called to find a way to stop a prolonged slide in coffee prices However delegates said no solution to the question of how to implement quotas was yet in sight World coffee export quotas the major device used to regulate coffee prices under the International Coffee Agreement were suspended a year ago when prices soared in reaction to a drought which cut Brazil s output by nearly two thirds Brazil is the world s largest coffee producer and exporter Producers and consumers now are facing off over the question of how quotas should be calculated under any future quota distribution scheme delegates said Tempers flared late Saturday when a minority group of eight producing countries was not represented in a contact group of five producer and five consumer delegates plus alternates which was set up to facilitate debate The big producers want to have the ball only in their court and it isn t fair minority producer spokesman Luis Escalante of Costa Rica said The majority producer group has proposed resuming quotas April 1 using the previous ad hoc method of carving up quota shares with a promise to try to negotiate basic quotas before September 30 delegates said Their plan would perpetuate the status quo allowing Brazil to retain almost all of its current 30 pct share of the export market Colombia 17 pct Ivory Coast seven pct and Indonesia six pct with the rest divided among smaller exporters But consuming countries and the dissident producer group have tabled separate proposals requiring quotas be determined by availability using a formula incorporating exportable production and stocks statistics Their proposals would give Brazil a smaller quota share and Colombia and Indonesia a larger share and bring a new quota distribution scheme into effect now rather than later Brazil has so far been unwilling to accept any proposal that would reduce its quota share delegates said Delegates would not speculate on prospects for agreement on a quota package Anything is possible at this phase even adjournment of the meeting until March or April one said If the ICO does agree on quotas the price of coffee on the supermarket shelf is not likely to change sinnificantly as a result industry sources said Retail coffee prices over the past year have remained about steady even though coffee market prices have tumbled so an upswing probably will not be passed onto the consumer either they said REUTER ITALIAN TREASURY CUTS INTEREST ON CERTIFICATES ROME March 1 The Italian treasury said annual coupon rates payable March 1988 on two issues of long term treasury certificates CCTs would be cut by about four percentage points compared with rates this March Coupon rates on 10 year certificates maturing March 1995 will fall to 9.80 pct from 13.65 pct and rates on 10 year issues maturing in March 1996 would fall to 10.05 pct from 14.30 pct The Treasury also cut by 0.60 point six monthly coupons payable this September on six issues maturing between September 1988 and September 1991 The issues carry terms of between five and seven years and will have coupon rates of between 4.85 and 5.65 pct in September compared with 5.45 and 6.25 pct this March REUTER BRITISH CONSERVATIVES AHEAD OF LABOUR IN NEW POLLS LONDON March 1 Britain s ruling Conservatives have enlarged their lead over the opposition Labour Party according to results of two opinion polls released on Saturday A Market Opinion Research International MORI poll conducted for The Sunday Times showed the Conservatives with a six point lead while a poll by Telephone Surveys Limited for The Sunday Express found them to be four points ahead The Sunday Express poll is the first conducted since the Social Democratic Party scored an upset victory on Thursday in a parliamentary by election in the former Labour stronghold of Greenwich near London The MORI poll conducted in the six days leading up to the by election showed the Conservatives with 41 pct of the vote Labour with 35 pct and the Alliance of Social Democrats and Liberals with 21 pct The Sunday Express said its poll conducted on Friday found the Conservatives ahead with 35.6 pct of the vote Labour with 31.9 pct and the Alliance with 31.4 pct A Harris poll published in The Observer newspaper last Sunday gave the Conservatives only a two point lead over Labour In that survey the Conservatives had the support of 39 pct of the voters Labour 37 pct and the Alliance 23 pct REUTER INDONESIAN AGRICULTURE GROWTH EXPECTED TO SLOW JAKARTA March 1 Indonesia s agriculture sector will grow by just 1.0 pct in calendar 1987 against an estimated 2.4 pct in 1986 as the production of some commodities stagnates or declines the U.S. Embassy said in a report Production of Indonesia s staple food rice is forecast to fall to around 26.3 mln tonnes from an embassy estimate of 26.58 mln tonnes in 1986 according to the annual report on Indonesia s agricultural performance The government officially estimates 1986 rice production at 26.7 mln tonnes with a forecast 27.3 mln tonnes output in 1987 The report says wheat imports are likely to fall to 1.5 mln tonnes in calendar 1987 from 1.69 mln tonnes in 1986 because of a drawdown on stocks Growth prospects for agriculture in 1987 do not look promising as rice production is forecast to decline and the production of sugarcane rubber and copra show little or no gain the report says The modest overall increase which is expected will be due to significant gains in production of corn soybeans palm oil and palm kernels Constraints to significant overall increases in agricultural output include a shortage of disease resistant seeds limited fertile land insect pests and a reluctance by farmers to shift from rice production to other crops the report underlines The fall in rice production is caused by an outbreak of pests known as wereng or brown plant hoppers in 1986 which largely offset gains in yields The outbreak has forced the government to ban the use of 57 insecticides on rice because it was believed the wereng are now resistant to these varieties and to use lower yielding more resistant rice types The government is depending on increased production of export commodities such as coffee tea rubber plywood and palm oil to offset revenue losses brought on by falling crude oil prices Palm oil production is expected to increase by over 7.0 pct in 1987 to 1.45 mln tonnes from 1.35 mln with exports rising to an estimated 720,000 tonnes from 695,000 tonnes in 1986 the report says But while production of soybeans in 1987/88 Oct Sept will rise to 1.075 mln tonnes from 980,000 in 1986/87 imports will also rise to supply a new soybean crushing plant The report says that imports of wheat soybeans soybean meal and cotton are not likely to decline as a result of last September s 31 pct devaluation of the rupiah because of a rise in domestic demand The report said that Indonesia s overall economic performance in calendar 1986 was about zero or even a slight negative growth rate the lowest rate of growth since the mid 1960s It compares with 1.9 pct growth in 1985 and 6.7 pct in 1984 The dramatic fall in oil prices last year was responsible for the slump REUTER KUWAIT SAYS NO PLANS FOR EMERGENCY OPEC TALKS KUWAIT March 1 Kuwait s Oil Minister in remarks published today said there were no plans for an emergency OPEC meeting to review oil policies after recent weakness in world oil prices Sheikh Ali al Khalifa al Sabah was quoted by the local daily al Qabas as saying None of the OPEC members has asked for such a meeting He denied Kuwait was pumping above its quota of 948,000 barrels of crude daily bpd set under self imposed production limits of the 13 nation organisation Traders and analysts in international oil markets estimate OPEC is producing up to one mln bpd above a ceiling of 15.8 mln bpd agreed in Geneva last December They named Kuwait and the United Arab Emirates along with the much smaller producer Ecuador among those producing above quota Kuwait they said was pumping 1.2 mln bpd This rumour is baseless It is based on reports which said Kuwait has the ability to exceed its share They suppose that because Kuwait has the ability it will do so the minister said Sheikh Ali has said before that Kuwait had the ability to produce up to 4.0 mln bpd If we can sell more than our quota at official prices while some countries are suffering difficulties marketing their share it means we in Kuwait are unusually clever he said He was referring apparently to the Gulf state of qatar which industry sources said was selling less than 180,000 bpd of its 285,000 bpd quota because buyers were resisting official prices restored by OPEC last month pegged to a marker of 18 dlrs per barrel Prices in New York last week dropped to their lowest levels this year and almost three dollars below a three month high of 19 dollars a barrel Sheikh Ali also delivered a challenge to any international oil company that declared Kuwait sold below official prices Because it was charging its official price of 16.67 dlrs a barrel it had lost custom he said but did not elaborate However Kuwait had guaranteed markets for its oil because of its local and international refining facilities and its own distribution network abroad he added He reaffirmed that the planned meeting March 7 of OPEC s differentials committee has been postponed until the start of April at the request of certain of the body s members Ecuador s deputy energy minister Fernando Santos Alvite said last Wednesday his debt burdened country wanted OPEC to assign a lower official price for its crude and was to seek this at talks this month of opec s pricing committee Referring to pressure by oil companies on OPEC members in apparent reference to difficulties faced by Qatar he said We expected such pressure It will continue through March and April But he expected the situation would later improve REUTER INDONESIA SEEN AT CROSSROADS OVER ECONOMIC CHANGE By Jeremy Clift Reuters JAKARTA March 1 Indonesia appears to be nearing a political crossroads over measures to deregulate its protected economy the U.S. Embassy says in a new report To counter falling oil revenues the government has launched a series of measures over the past nine months to boost exports outside the oil sector and attract new investment Indonesia the only Asian member of OPEC and a leading primary commodity producer has been severely hit by last year s fall in world oil prices which forced it to devalue its currency by 31 pct in September But the U.S. Embassy report says President Suharto s government appears to be divided over what direction to lead the economy It appears to be nearing a crossroads with regard to deregulation both as it pertains to investments and imports the report says It primarily assesses Indonesia s agricultural sector but also reviews the country s general economic performance It says that while many government officials and advisers are recommending further relaxation there are equally strong pressures being exerted to halt all such moves This group strongly favours an import substitution economy the report says Indonesia s economic changes have been welcomed by the World Bank and international bankers as steps in the right direction though they say crucial areas of the economy like plastics and steel remain highly protected and virtual monopolies Three sets of measures have been announced since last May which broadened areas for foreign investment reduced trade restrictions and liberalised imports The report says Indonesia s economic growth in calendar 1986 was probably about zero and the economy may even have contracted a bit This is the lowest rate of growth since the mid 1960s the report notes Indonesia the largest country in South East Asia with a population of 168 million is facing general elections in April But the report hold out little hope for swift improvement in the economic outlook For 1987 early indications point to a slightly positive growth rate not exceeding one pct Economic activity continues to suffer due to the sharp fall in export earnings from the petroleum industry Growth in the non oil sector is low because of weak domestic demand coupled with excessive plant capacity real declines in construction and trade and a reduced level of growth in agriculture the report states Bankers say continuation of present economic reforms is crucial for the government to get the international lending its needs A new World Bank loan of 300 mln dlrs last month in balance of payments support was given partly to help the government maintain the momentum of reform the Bank said REUTER INDIAN BUDGET COMES IN FOR WIDE CRITICISM NEW DELHI March 1 Opposition politicians businessmen and newspapers criticised India s newly unveiled 1987/88 budget and large projected deficit of around 57 billion rupees They said the budget failed to provide incentives for economic growth and merely tinkered with tax reform But few politicians were prepared to criticise a sharp rise in defence expenditure in the Hindu majority nation where playing on fear of aggression by Moslem Pakistan has proved a vote winner The Indian Express the country s biggest selling paper said The defence cow has never been holier The Sunday Mail newspaper branded the budget shamelessly political It said in a front page commentary the budget is bad for growth bad for prices bad for the stock market and neutral in respect of everything else Businessmen polled by Reuters said the budget had done little for them Gandhi announced small increases in poverty alleviation and education outlays but he ordered a hold down on current expenditure in an attempt to rein in the budget deficit He told ministries to curb spending and promised a review of money losing public sector industries Gandhi lowered import tariffs on some computer parts but otherwise did little to extended the economic liberalisation policy launched two years ago Reaction in Bombay India s business capital was generally unfavourable Businessmen and economists said the budget had no proposals for closing the 1987/88 budget deficit It also failed to boost industrial investment and productivity needed to lift real economic growth above the five pct a year envisaged by the 1985 90 development plan Nalin Vissanji President of the Indian Merchants Chambers of Commerce said the budget gave no incentives to the capital market and had not fulfilled a government pledge to remove surtax on corporate income Shares on The Bombay Stock Exchange India s biggest fell in a post budget session yesterday but brokers welcomed Gandhi s proposal to set up a regulatory board for the securities industry The exchange was shaken last year by several scandals and trading was suspended several times Brokers said trading volume may increase with the change in capital gains tax on stock sales Stockholders can now sell shares after one year instead of three years without incurring capital gains tax Stock Exchange President Ramdas Dalal said yesterday the fall in share prices after the budget came as profits were taken and he expected to the market to firm in days to come REUTER CHINA TO BORROW 390 MLN DLRS PEKING March 1 China will receive loans totalling 390 mln dlrs from Japan and the World Bank for investment in new highways and port facilities The Japan Overseas Economic Co operation Fund is to provide 260 mln dlrs towards China s plans to improve its road network the official New China News Agency reported A 130 mln dlr World Bank loan will be used to build 12 new berths incorporating container handling systems at the northeast China port of Tianjin the agency said It gave no details of the repayment terms of the loans REUTER MANILA SAID TO OFFER DEBT BONDS TO BANKS MANILA March 1 The Philippines will offer its commercial bank creditors an innovative pricing plan that will make debt payments through certificates of indebtedness as an alternative to cash the authoritative Business Day newspaper said Finance Secretary Jaime Ongpin told reporters yesterday the alternative proposal is designed to avoid an impasse when debt rescheduling talks reopen in New York on Tuesday He did not give details but said It is a very useful alternative and in the end will permit the banks to say that they achieved their pricing target and will likewise permit the Philippines to say exactly the same thing Quoting negotiation documents to be presented to the country's 12 bank advisory committee Business Day said the debt certificates will carry maturities of five or six years It said the certificates will be classified as zero coupon bonds or promissory notes with no interest but priced at a considerable discount from their redemption price It said the debt bonds will entitle holder banks to a guaranteed return on both interest and principal since no payment of any kind is made until the bond matures It said a bank can sell the bonds on the secondary bond market for either dlrs or pesos depending on its requirement The documents said peso proceeds can be invested in selected industries under the Philippines debt equity program Ongpin said Manila is sticking to its demand of a spread of 5/8 percentage points over London Interbank Offered Rates LIBOR for restructuring 3.6 billion dlrs of debt repayments The proposal will give the banks a choice of 5/8ths or the alternative Ongpin said Our representatives have gone to Washington to the International Monetary Fund the World Bank the Fed Federal Reserve Board and the U.S. Treasury to brief them in advance on this alternative and it has generally been positively received We don't believe that there is going to be a problem on the accounting side Ongpin said We have run this alternative proposal to the accounting firms Neither have the government regulators indicated that there will be a problem REUTER CHINESE WHEAT CROP THREATENED BY PESTS DISEASE PEKING March 1 China's wheat crop this year is seriously threatened by plant pests and diseases the New China News Agency said More than 5 mln hectares of wheat producing land in North China could be affected because relatively warm and dry weather had allowed bacteria and insect eggs to survive the winter the agency added China s Ministry of Agriculture Animal Husbandry and Fisheries has called for measures including the timely supply of pesticides to farmers to combat the threat it said REUTER SAUDI RIYAL DEPOSIT RATES REMAIN FIRM BAHRAIN March 1 Saudi riyal interbank deposits were steady at yesterday's higher levels in a quiet market Traders said they were reluctant to take out new positions amidst uncertainty over whether OPEC will succeed in halting the current decline in oil prices Oil industry sources said yesterday several Gulf Arab producers had had difficulty selling oil at official OPEC prices but Kuwait has said there are no plans for an emergency meeting of the 13 member organisation A traditional Sunday lull in trading due to the European weekend also contributed to the lack of market activity Spot next and one week rates were put at 6 1/4 5 3/4 pct after quotes ranging between seven six yesterday One three and six month deposits were quoted unchanged at 6 5/8 3/8 7 1/8 6 7/8 and 7 3/8 1/8 pct respectively The spot riyal was quietly firmer at 3.7495/98 to the dollar after quotes of 3.7500/03 yesterday REUTER IRAN CLAIMS NEW VICTORIES NEAR BASRA LONDON March 1 Iran said its forces had captured one of Iraq's strongest fortifications east of Basra on the Gulf War southern front in a major battle overnight The Iranian National News Agency received here said Iranian forces smashed four Iraqi brigades killed or wounded 1,500 Iraqi soldiers and destroyed 45 enemy tanks and personnel carriers IRNA said the Iranian troops seized one of the strongest Iraqi fortifications and breached Iraqi defence lines southwest of Fish Lake 10 kilometres six miles east of Iraq's second largest city of Basra REUTER BANGLADESH MOVES AGAINST LOAN DEFAULTERS DHAKA March 1 Bangladesh police mounted a cross country hunt for defaulters on bank loans arresting four industrialists and issuing arrest warrants against 50 others for failure to repay overdue obligations No names were given Metropolitan police told reporters the four arrested put under six month pre trial detention owed nearly 50.7 mln taka the equivalent of about 1.7 mln dlrs to Bangladesh Shilpa Industrial Bank President Hossain Mohammad Ershad has said non payers are crippling the industrial sector But the Chamber of Commerce and industry said the crackdown would scare away entrepreneurs REUTER IRAQ SAYS IT REPELS IRANIAN ATTACK BAGHDAD March 1 Iraq said its troops repelled an overnight attack by three divisions of Iranian Revolutionary Guards near Basra in southern Iraq A military communique said the Iranians in a perfidious attack rushed forward positions last night and this morning A military spokesman later said the Iraqi Third Army Corps whose troops fought off the Iranians had a new commander revealing for the first time that the previous general had been replaced He said Lieutenant General Dhiya'uldin Jamal former commander of the Fifth Army Corps also positioned in the Basra area had replaced Major General Tala Khalil al Douri REUTER QATAR UNVEILS BUDGET FOR FISCAL 1987/88 DOHA March 1 The Gulf oil state of Qatar recovering slightly from last year's decline in world oil prices announced its first budget since early 1985 and projected a deficit of 5.472 billion riyals The deficit compared with a shortfall of 7.3 billion riyals in the last published budget for 1985/86 In a statement outlining the budget for the fiscal year 1987/88 beginning today Finance and Petroleum Minister Sheikh Abdul Aziz bin Khalifa al Thani said the government expected to spend 12.217 billion riyals in the period Projected expenditure in the 1985/86 budget had been 15.6 billion riyals Sheikh Abdul Aziz said government revenue would be about 6.745 billion riyals down by about 30 pct on the 1985/86 projected revenue of 9.7 billion The government failed to publish a 1986/87 budget due to uncertainty surrounding oil revenues Sheikh Abdul Aziz said that during that year the government decided to limit recurrent expenditure each month to one twelfth of the previous fiscal year's allocations minus 15 pct He urged heads of government departments and public institutions to help the government rationalise expenditure He did not say how the 1987/88 budget shortfall would be covered Sheikh Abdul Aziz said plans to limit expenditure in 1986/87 had been taken in order to relieve the burden placed on the country's foreign reserves He added in 1987/88 some 2.766 billion riyals had been allocated for major projects including housing and public buildings social services health education transport and communications electricity and water industry and agriculture No figure was revealed for expenditure on defence and security There was also no projection for oil revenue Qatar an OPEC member has an output ceiling of 285,000 barrels per day Sheikh Abdul Aziz said Our expectations of positive signs regarding oil price trends foremost among them OPEC's determination to shoulder its responsibilites and protect its wealth have helped us make reasonable estimates for the coming year's revenue on the basis of our assigned quota REUTER GULF BOND STOCK MARKETS LAG BEHIND GIB SAYS BAHRAIN March 1 Gulf money markets have grown reasonably well during the past decade but bond and stock markets remain to a large extent fragmented and lag behind Gulf International Bank BSC GIB said The bank's economist Henry Azzam said in a review of Gulf capital markets that investors have to relinquish traditional investment vehicles such as real estate foreign currency bank accounts and precious metals Greater financial sophistication is needed coupled with more diversified capital market instruments and a change in the disclosure requirements on company accounts he said The GIB study reviewed capital markets under three categories money markets stock and bond markets Azzam said Gulf states had been making greater use of short term money market instruments and banks in the region had floated various euronotes and underwriting facilities Nevertheless bond and stock markets remain to a large extent fragmented and lagging behind he said Most debt in the region is still raised by syndicated loans and bank facilities and very few companies had made use of stock or bond issues Only Kuwait has an official stock exchange while other Gulf nations have yet to establish exchanges But with dwindling financial surpluses in the Gulf governments are actively pursuing ways to develop capital markets and set up domestic stock exchanges Azzam said He said recession stemming from sliding oil prices had clearly had a negative impact on the development of capital markets in the region In addition family firms are reluctant to go public financial awareness among investors is still lacking and investment analysis and corporate reporting standards lack depth A sharp fall in share prices in the early 1980s prompted investors to hold on to shares hoping for an eventual recovery Azzam said the absence of proper commercial law in some Gulf countries and authorities apparent reluctance to adopt financial innovations had also hampered capital markets He called for clearly defined laws governing incorporation of joint stock companies and the flotation of debt instruments Azzam said capital market instruments should be made available to all citizens and institutions of Gulf Cooperation Council GCC states Bahrain Kuwait Qatar Oman Saudi Arabia and the United Arab Emirates UAE Some moves had been taken in this direction with Bahrain allowing GCC nationals to own up to 25 pct of locally incorporated companies Azzam said Gulf money markets had received greater depth from the introduction of treasury bill offerings in Bahrain and the expansion of securities repurchase regulations in Saudi Arabia But he added there is no bond market to speak of in Saudi Arabia Qatar Oman or the UAE with the last Saudi riyal denominated bond issued in 1978 While Bahrain plans an official stock exchange and trading in Saudi Arabia has picked up establishment of formal exchanges in Qatar Oman and the UAE does not appear imminent Azzam said REUTER SAUDI ARABIA REITERATES COMMITMENT TO OPEC PACT BAHRAIN March 1 Saudi Arabian Oil Minister Hisham Nazer reiterated the kingdom's commitment to last December's OPEC accord to boost world oil prices and stabilise the market the official Saudi Press Agency SPA said Asked by the agency about the recent fall in free market oil prices Nazer said Saudi Arabia is fully adhering by the Accord and it will never sell its oil at prices below the pronounced prices under any circumstance Nazer quoted by SPA said recent pressure on free market prices may be because of the end of the northern hemisphere winter season and the glut in the market Saudi Arabia was a main architect of the December accord under which OPEC agreed to lower its total output ceiling by 7.25 pct to 15.8 mln barrels per day bpd and return to fixed prices of around 18 dlrs a barrel The agreement followed a year of turmoil on oil markets which saw prices slump briefly to under 10 dlrs a barrel in mid 1986 from about 30 dlrs in late 1985 Free market prices are currently just over 16 dlrs Nazer was quoted by the SPA as saying Saudi Arabia's adherence to the accord was shown clearly in the oil market He said contacts among members of OPEC showed they all wanted to stick to the accord In Jamaica OPEC President Rilwanu Lukman who is also Nigerian Oil Minister said the group planned to stick with the pricing agreement We are aware of the negative forces trying to manipulate the operations of the market but we are satisfied that the fundamentals exist for stable market conditions he said Kuwait's Oil Minister Sheikh Ali al Khalifa al Sabah said in remarks published in the emirate's daily Al Qabas there were no plans for an emergency OPEC meeting to review prices Traders and analysts in international oil markets estimate OPEC is producing up to one mln bpd above the 15.8 mln ceiling They named Kuwait and the United Arab Emirates along with the much smaller producer Ecuador among those producing above quota Sheikh Ali denied that Kuwait was over producing REUTER COFFEE QUOTA TALKS CONTINUE NO ACCORD SEEN LIKELY LONDON March 2 The International Coffee Organization ICO council talks on reintroducing export quotas continued with an extended session lasting late into Sunday night but delegates said prospects for an accord between producers and consumers were diminishing by the minute The special meeting called to stop the prolonged slide in coffee prices was likely to adjourn sometime tonight without agreement delegates said The council is expected to agree to reconvene either within the next six weeks or in September they said The talks foundered on Sunday afternoon when it became apparent consumers and producers could not compromise on the formula for calculating any future quota system delegates said Coffee export quotas were suspended a year ago when prices soared in response to a drought which cut Brazil's crop by nearly two thirds Brazil is the world's largest coffee producer and exporter REUTER NEW ZEALAND CANCELS WEEKLY T BILL TENDER WELLINGTON March 2 The Reserve Bank said it cancelled the regular weekly treasury bill tender scheduled for March 3 It said in a statement it forecasts a net cash withdrawal from the system over the settlement week Cash flows to the government are expected to more than offset cash injections it added The bank said it expects to conduct open market operations during the week and after these cash balances should fluctuate around 30 mln N.Z. Dlrs REUTER SHARE TRADING IN CHEUNG KONG GROUP SUSPENDED HONG KONG March 2 Trading in the shares of three of the Cheung Kong group of companies will be suspended for two days at the request of the companies the Stock Exchange of Hong Kong said The three are Cheung Kong Holdings Ltd CKGH.HK Hongkong Electric Holdings Ltd HKEH.HK and Hutchison Whampoa Ltd HWHH.HK They will announce their 1986 results later today with market speculation of a major reorganisation within the group Cheung Kong rose 75 cents to 45.25 dlrs on Friday Hk Electric 60 to 16.00 and Hutchison 1.50 dlrs to 54.50 REUTER FEBRUARY U.S. PURCHASING MANAGER INDEX FALLS NEW YORK March 2 The U.S. Economy continued to expand in February but at a slower pace than in January which saw a spurt of activity the National Association of Purchasing Management NAPM said in a report The Association's composite survey index dropped to 51.9 pct in February from 55.8 pct in January the NAPM said It was the seventh consecutive month in which this leading indicator was over 50 pct A reading above 50 pct generally indicates that the economy is in an expanding phase One below 50 pct implies a declining economy The NAPM report based on a survey of purchasing managers at 250 U.S. Industrial companies also found that the growth rate in new orders and production slowed in February But production remained vigorous with more than three times as many members reporting it better rather than worse Vendor deliveries improved slightly last month but members reported that steel supplies were tight as USX Corp gradually resumed production The same number of members reported inventories were higher as reported them lower The NAPM said that had not happened since August 1984 For a sixth straight month more purchasers reported paying higher rather than lower prices this time by a ratio of nine to one Robert Bretz chairman of the NAPM's business survey committee said The economy continued to expand in February but at a more subdued rate than in January The slowing of new orders should not be significant enough to dampen prospects for a respectable first quarter The composite index is a seasonally adjusted figure based on five components of the NAPM business survey new orders production vendor deliveries inventories and employment REUTER CANADA EGYPT WHEAT NEGOTIATIONS TO CONTINUE CAIRO March 2 Canadian and Egyptian wheat negotiators failed to conclude an agreement on Canadian wheat exports to Egypt during talks last week but the Canadian team will return to Cairo for further negotiations Canadian embassy officials said An embassy official declined to identify which issues remained to be resolved and when the talks would resume In a five year protocol signed in 1985 Cairo agreed to purchase 500,000 tonnes of Canadian wheat a year REUTER INDONESIAN WHEAT IMPORTS EXPECTED TO FALL IN 1987 JAKARTA March 2 Indonesia's wheat imports are expected to fall to 1.5 mln tonnes in calendar 1987 from 1.69 mln in 1986 the U.S. Embassy's annual agriculture report said It said the drop was expected because there will be a drawdown on stocks built up near the end of 1986 It said wheat stocks at the end of 1986 were 390,000 tonnes up from 223,000 at end 1985 It forecast end 1987 stocks at around 290,000 tonnes The main suppliers in 1986 were Australia 44 pct the U.S. 29 pct Canada 12 pct Argentina 8 pct and Saudi Arabia 5 pct REUTER SHULTZ LIKELY TO VISIT MOSCOW SOON PEKING March 2 U.S. Secretary of State George Shultz is likely to visit Moscow soon for talks following new Soviet arms control proposals U.S. Officials said The officials told Reuters no decision had been reached on when the trip might take place but it was likely to be within a month Kremlin leader Mikhail Gorbachev proposed on Saturday that talks on medium range missiles be separated from other arms issues Schultz is currently visiting Peking REUTER ZAMBIA TO RETAIN CURRENCY AUCTION SAYS KAUNDA LUSAKA March 2 Zambia will retain its foreign exchange auction system despite the suspension of weekly auctions since January 24 President Kenneth Kaunda said We have not run away from the auction It hasn't been abolished at all he told Reuters in an interview He said the system would be reintroduced after current talks with the World Bank and the International Monetary Fund and he hoped would be backed by fresh foreign aid funds Kaunda dismissed central bank statements the new auction system would be used to allocate foreign exchange to private bidders but not to fix the exchange rate Kaunda said the auction system had faltered because of the government's shortage of foreign exchange to meet demand It was suspended when the kwacha's rapid devaluation and strong fluctuations made economic planning almost impossible for the government and the private sector he said Weekly foreign exchange auctions began in October 1985 The kwacha fell from 2.20 to the dollar to about 15 in 16 months In January 1987 the government was more than two months in arrears in paying foreign currency to successful bidders and the auction was suspended and replaced with a fixed exchange rate of nine kwacha to the dollar REUTER POLISH BANKER PLEASED WITH WORLD BANK IMF TALKS WARSAW March 2 Poland's talks in Washington with the World Bank and the International Monetary Fund IMF on the country's 33.5 billion dlr foreign debt were concrete open and frank a senior Polish banker was quoted as saying Wladyslaw Baka head of Poland's National Bank told the official news agency PAP yesterday the talks were a step towards possible fresh credits or easier terms Much attention was given to the Polish delegation and the talks at both institutions involved displayed a lot of understanding for Poland's difficult economic position PAP quoted Baka as saying Baka said he stressed Poland would meet its financial obligations to the U.S. but not in a short time and not without major changes in the Polish economy as well as a cooperative stand on the part of its foreign economic partners Since Poland rejoined the IMF last June after a 36 year absence IMF and World Bank teams have visited Warsaw on fact finding missions on at least three occasions A major report is expected to be issued in Washington soon Poland has said it will not be able to meet interest repayments and debt principle falling due this year REUTER RECORD N.Z. FUTURES VOLUMES TRADED IN FEBRUARY WELLINGTON March 2 The volume of contracts traded on the New Zealand Futures Exchange NZFE reached a record 25,559 contracts in February the International Commodities Clearing House ICCH said The previous high was 22,583 contracts in December 1986 The ICCH said the value of the contracts traded in February was 2.90 billion N.Z. Dlrs The seven contracts currently traded on the NZFE are five year government bonds the share price index 90 day bank bills 90 day prime commercial paper the U.S. Dollar crossbred wool and wheat REUTER INDONESIAN SUGAR OUTPUT SEEN SHORT OF TARGET JAKARTA March 2 Indonesia's raw sugar output is likely to be 1.8 mln tonnes in calendar 1987 unchanged from 1986 and below the government's 1987 forecast of 2.5 mln the U.S. Embassy said in its agricultural outlook for 1987 Indonesia bought 162,500 tonnes of raw sugar on world markets in late 1986 the report said The embassy estimated Indonesia's calendar 1986 raw sugar production at 1.8 mln tonnes against a government estimate of 1.99 mln It said that Indonesia's move into sugar self sufficiency in 1984 may have been short lived The report said The government continues to promote sugarcane production through its smallholder intensification program and a relatively high guaranteed price to sugarcane producers However there are considerable indications that farmers are reluctant to plant cane because its economic return is not as good as that of other crops REUTER NIPPON KOKAN STEEL AFFILIATES CONSIDERING MERGER TOKYO March 2 Toshin Steel Co Ltd TOSS.T and Azuma Steel Co Ltd affiliates of Nippon Kokan KK NKKT.T are considering a merger company spokesmen said Toshin Steel owned 41.9 pct by Nippon Kokan and Azuma Steel owned 41.3 pct by Nippon Kokan are expected to decide by the end of March they said Both firms have been struggling with losses caused by the recession in the steel industry and the yen's appreciation Azuma Steel's current losses are estimated at 3.1 billion yen in the year ending March 31 against a 6.99 billion loss a year earlier a spokesman said The firm employs 1,100 workers Toshin Steel with 1,700 workers has given no forecast for the year ending March 31 But industry sources said they expected the company to show current losses of about five billion yen or more in 1986/87 compared with a 2.98 billion loss in 1985/86 REUTER EGYPT TO HOST NINE NATION AFRICAN TALKS THIS MONTH CAIRO March 2 Representatives of nine African countries will meet here on March 11 to discuss the African debt crisis the Chad political situation and other issues Egypt's Minister of State for Foreign Affairs Boutros Boutros Ghali said He told reporters on his return from Ethiopia and Djibouti that the meeting and venue had been agreed by the Organisation of African Unity OAU He said Egypt Zambia Djibouti Zaire Uganda Sierra Leone Congo Algeria and Mali would be represented Foreign Ministry sources said Congo President Denis Sassou Nguesso would chair the meeting REUTER EC MINISTERS CONSIDER BIG AGRICULTURE PRICE CUTS BRUSSELS March 2 European Community EC agriculture ministers meet later today to consider a package of deep cuts in prices and subsidies after a week marked by strong protests by European farmers Community officials said The common target for the farmers wrath is the EC's Brussels Commission which for the fourth year running has called for radical changes in the price support system EC Agriculture Commissioner Frans Andriessen says huge food surpluses which have alienated international trade partners and pushed the Community to the edge of bankruptcy demand such action With Community warehouses stocked with some 16 mln tonnes of unwanted cereals over one mln tonnes of butter and huge stocks of wine and olive oil Andriessen says bluntly the days of open ended price guarantees must end EC agriculture ministers try to fix the guaranteed prices paid to Community farmers before an April 1 deadline for the new marketing year an increasingly difficult task as EC members cut funds and demand greater budget discipline Andriessen has proposed a freeze for most prices coupled with reductions in other support mechanisms which could lead to price cuts of as much as eight pct for some products A producer's right to sell into EC warehouses at a fixed guaranteed price when he finds no real market outlet is to be scaled back so it applies only in exceptional cases The latest proposals are designed to keep expenditure on agriculture virtually stable EC farm policies now swallow two thirds of an annual budget of about 36 billion European currency units Ecu and are mainly responsible for an expected shortfall this year of about five billion Ecus The most contentious aspects of the package are a new oils and fats tax and a change in the green exchange rate system which translates EC farm prices into national currencies The tax of up to 330 Ecus per tonne would be levied on imported and domestically produced oilseeds but could trigger a fresh trade dispute with the United States which provides the EC with the bulk of its soybeans It would increase the cost of margarines and low fat products in an attempt to increase both olive oil and butter consumption West Germany has flatly rejected green rate changes which would cause a fall in prices for producers as countries with weak and strong currencies were brought more into line REUTER QANTAS TO BUY FOUR 747 400'S FOR ONE BILLION DLRS SYDNEY March 2 Qantas Airways Ltd has placed a firm order with Boeing Co BA for four 747 400 aircraft at a cost of 250 mln Australian dlrs each chairman Jim Leslie said The first is due for delivery in April 1989 with the others arriving in May June and September of that year he said in a statement The 400 series is the latest model of the Boeing 747 family he said The purchase will take government owned Qantas's 747 fleet to 28 he said Leslie said Qantas is talking to three engine makers who are all offering engines for the Boeing 747 400 and it will announce a decision on engine purchases later this year He said they are United Technologies Corp UTX unit Pratt M and Whitney General Electric Co GE and Britain's Rolls Royce M Ltd He said the 747 400 which incorporates new technology such as extended wings with six feet high winglets and enhanced electronics should have its first flight next February The 400 series has a designed range of 12,500 kms 2,140 kms further than the current Qantas 747 300's he said The aircraft will be financed by foreign borrowings and foreign exchange earnings and Qantas believes they will pay for themselves in four to five years Leslie said The 747 400 has a take off weight of 870,000 pounds up from 833,000 for the 300 series and offers an eight pct fuel saving he said The higher range and payload means they will first be used on the route to Britain and Europe via Asia They will also be used on non stop flights between Sydney and Los Angeles REUTER IEL SETS 100 MLN DLR NOTE COMMERCIAL PAPER ISSUE SYDNEY March 2 Australian investment group Industrial Equity Ltd IEL said it will raise 100 mln U.S. Dlrs by the issue of medium term notes and commercial paper in the U.S. Domestic market IEL has mandated Merrill Lynch Capital Markets to arrange a letter of credit LOC facility in support of the notes and commercial paper making this the first facility of its kind the company said in a statement The notes will be issued by its IEL Finance Ltd unit Merrill Lynch will be the note and paper dealer and Sumitomo Trust and Banking Co Ltd will provide the LOC The term of the LOC is five years with an evergreen feature which provides for annual reinstatement of the five year term at the support banks option IEL said The LOC will be underwritten by a group of banks which will receive a facility fee of 20 basis points plus a utilisation fee of 25 basis points it added REUTER AMERICAN EXPRESS STUDIES OPTIONS FOR SHEARSON NEW YORK March 1 American Express Co AXP rumoured to be considering a spinoff of part of Shearson Lehman Brothers Inc said it is studying ways to improve Shearson's access to capital and help it meet stiffer international competition In a joint statement American Express and the brokerage unit said the actions under consideration are an integral part of American Express's worldwide financial services strategy The statement also said American Express and Shearson have been having both internal and external discussions on the matter but no final decision has been reached American Express said in its statement it would not comment on the rumours circulating on Wall Street last week Analysts said there was speculation that American Express would sell a stake of Shearson to a Japanese firm and also that 20 pct of the profitable brokerage would be sold to the public Shearson contributed 316 mln dlrs of American Express's 1.25 billion dlrs net in 1986 American Express remained silent last Thursday and Friday as rumours drove its stock up a total of 5.50 dlrs in two days It closed Friday at 74 REUTER INDONESIA UNLIKELY TO IMPORT PHILIPPINES COPRA JAKARTA March 2 Indonesia is unlikely to import copra from the Philippines in 1987 after importing 30,000 tonnes in 1986 the U.S. Embassy's annual agriculture report said The report said the 31 pct devaluation of the Indonesian rupiah an increase in import duties on copra and increases in the price of Philippines copra have reduced the margin between prices in the two countries Indonesia's copra production is forecast at 1.32 mln tonnes in calendar 1987 up from 1.30 mln tonnes in 1986 REUTER SRI LANKAN BANK OFFERS 250 MLN RUPEES T BILLS COLOMBO March 2 Sri Lanka's Central Bank offered 250 mln rupees worth of three month treasury bills at its weekly tender closing on March 6 a Bank spokesman said REUTER STRONG EARTHQUAKE HITS NEW ZEALAND WELLINGTON March 2 An earthquake measuring 6.5 on the Richter scale caused widespread damage in northern New Zealand and a civil defence emergency was declared in some areas officials and seismologists said There were no immediate reports of casualties The quake jolted the Bay of Plenty and Waikato areas The town of Whakatane was said by officials to be virtually isolated A civil defence emergency was declared in Whakatane which has about 16,000 people Officials said many roads and bridges in the area had been damaged No deaths were reported but one man was admitted to hospital in serious condition after his car was buried in a mud slip Seismologists said Whakatane was hit by three earthquakes the strongest measuring 6.5 on the Richter scale They were followed by a series of aftershocks The quakes were felt across the Bay of Plenty and Waikato regions in the northeast of the North Island Smaller tremors had been felt in the Bay of Plenty for more than a week Police said many districts lost power supplies and telephone links Energy Ministry officials ordered the release of water behind the Matahina hydro electric dam 32 kilometres above Whakatane on the Rangitaiki river The quake cracked the roadway and concrete abutment along the top of Matahina the largest earth dam in the North Island REUTER PHILIPPINES HEADS CONFIDENTLY INTO DEBT TALKS By Chaitanya Kalbag Reuters MANILA March 2 Philippine Finance Secretary Jaime Ongpin starts negotiations with the country's 12 bank advisory committee in New York tomorrow buoyed by an economy on the mend and political stability one year after President Corazon Aquino took power central bank officials said The country now has foreign debt totalling 27.8 billion dlrs and faces debt repayments of 3.6 billion dlrs due between January 1987 and December 1992 Manila also hopes to tack on another 5.8 billion dlrs rescheduled in a 1985 accord to any new agreement the officials said Chile's 15 1/2 year rescheduling accord at one percentage point over London Interbank Offered Rates LIBOR and Venezuala's 21 billion dlr package at 7/8 point over LIBOR portend well for the Philippines despite Brazil's repayment suspension last week the officials said Manila which has not made any principal repayments since 1983 wants terms better than the 20 year repayments at 13/16 percentage point over LIBOR offered in October to Mexico in a 77 billion dlr rescue Ongpin wants 5/8 point over the benchmark rate which is currently hovering around 6 1/2 pct The banks are said to be firm on the 1 1/8 points offered when the last round of negotiations collapsed on November 7 Ongpin said every 1/16 point over LIBOR meant an additional 5.1 mln dlrs in annual interest payments One banker said banks were wary of repeating a Mexico type accord which some 70 small creditor banks are still refusing to endorse five months after it was signed In Manila's case about 40 pct of the 15 billion dlrs outstanding to commercial banks is owed to the 12 large banks on the advisory committee while about 180 smaller banks have average exposures of 20 mln dlrs each REUTER JAPAN FEBRUARY INTERIM TRADE SURPLUS JUMPS TOKYO March 2 Japan's customs cleared trade surplus in the first 20 days of February jumped to 3.58 billion dlrs from 1.94 billion a year earlier the Finance Ministry said The February interim surplus was sharply up from a 965.04 mln dlr surplus in the same January period FOB exports rose 14.6 pct from a year earlier in the first 20 days of February to 10.91 billion while CIF imports fell 3.2 pct to 7.33 billion The average dollar yen rates were 152.32 for exports and 152.31 for imports against 196.61 for exports and 196.27 for imports a year earlier REUTER NIPPON LIGHT METAL CONTINUES ALUMINIUM OUTPUT CUT TOKYO March 2 Nippon Light Metal Co Ltd NLGT.T which has annual capacity of 63,000 tonnes will continue primary aluminium production at a rate of 35,000 tonnes owing to low domestic and world prices and low water supplies at its hydroelectric power plant a company official said Nippon which has no plans to restore output to the 48,000 tonnes a year at which it was working until late 1986 will become Japan's only smelter Ryoka Light Metal Industries Ltd will stop smelting in April owing to high power costs and low prices and Mitsui Aluminium Co Ltd has said it stopped smelting in February REUTER SAUDI FEBRUARY CRUDE OUTPUT PUT AT 3.5 MLN BPD ABU DHABI March 2 Saudi crude oil output last month fell to an average of 3.5 mln barrels per day bpd from 3.8 mln bpd in January Gulf oil sources said They said exports from the Ras Tanurah and Ju'aymah terminals in the Gulf fell to an average 1.9 mln bpd last month from 2.2 mln in January because of lower liftings by some customers But the drop was much smaller than expected after Gulf exports rallied in the fourth week of February to 2.5 mln bpd from 1.2 mln in the third week the sources said The production figures include neutral zone output but not sales from floating storage which are generally considered part of a country's output for Opec purposes Saudi Arabia has an Opec quota of 4.133 mln bpd under a production restraint scheme approved by the 13 nation group last December to back new official oil prices averaging 18 dlrs a barrel The sources said the two fold jump in exports last week appeared to be the result of buyers rushing to lift February entitlements before the month end Last week's high export levels appeared to show continued support for official Opec prices from Saudi Arabia's main crude customers the four ex partners of Aramco the sources said The four Exxon Corp XON Mobil Corp MOB Texaco Inc TX and Chevron Corp CHV signed a long term agreement last month to buy Saudi crude for 17.52 dlrs a barrel However the sources said the real test of Saudi Arabia's ability to sell crude at official prices in a weak market will come this month when demand for petroleum products traditionally tapers off Spot prices have fallen in recent weeks to more than one dlr below Opec levels Saudi Arabian oil minister Hisham Nazer yesterday reiterated the kingdom's commitment to the December OPEC accord and said it would never sell below official prices The sources said total Saudi refinery throughput fell slightly in February to an average 1.1 mln bpd from 1.2 mln in January because of cuts at the Yanbu and Jubail export refineries They put crude oil exports through Yanbu at 100,000 bpd last month compared to zero in January while throughput at Bahrain's refinery and neutral zone production remained steady at around 200,000 bpd each REUTER INDONESIAN PALM OIL OUTPUT EXPECTED TO RISE JAKARTA March 2 Indonesia's palm oil output is expected to rise and exports to increase the U.S. Embassy said in its annual report on Indonesia's agriculture sector The Indonesian government said crude palm oil CPO output is expected to rise to 1.56 mln tonnes in 1987 and 2.11 mln in 1988 up from a projected 1.45 mln tonnes in 1986 and 1.26 mln in 1985 The 1986 projection of 1.45 mln tonnes is up from a provisional figure of 1.3 mln tonnes A U.S. Embassy assessment puts 1987 output at 1.45 mln tonnes against 1.35 mln in 1986 and 1.208 mln in 1985 More realistic estimates indicate that 1988 production will be between 1.5 and 1.6 mln tonnes the report said The report said the abolition of the five pct CPO export tax the devaluation of the rupiah in September 1986 and higher international palm oil prices should lead to a modest increase in exports this year Exports are forecast to rise to 720,000 tonnes against 695,000 tonnes in 1986 the report added REUTER INDONESIAN TEA COCOA EXPORTS SEEN UP COFFEE DOWN JAKARTA March 2 Indonesia's exports of tea and cocoa will continue to rise in calendar 1987 but coffee exports are forecast to dip slightly in 1987/88 April March as the government tries to improve quality the U.S. Embassy said The embassy's annual report on Indonesian agriculture forecast coffee output in 1986/87 would be 5.77 mln bags of 60 kilograms each That is slightly less than the 5.8 mln bags produced in 1985/86 In 1987/88 coffee production is forecast to rise again to 5.8 mln bags but exports to dip to 4.8 mln from around 5.0 mln in 1986/87 Exports in 1985/86 were 4.67 mln bags The embassy report says coffee stocks will rise to 1.3 mln tonnes in 1987/88 from 1.15 mln in 1986/87 It bases this on a fall in exports as a result of the probable re introduction of quotas by the International Coffee Organisation Cocoa production and exports are forecast to rise steadily as the government develops cocoa plantations Production of cocoa in Indonesia increased to 32,378 tonnes in calendar 1985 from 10,284 tonnes in 1980 It is projected by the government to rise to more than 50,000 tonnes by 1988 Production in 1986 is estimated by the embassy at 35,000 tonnes as against 38,000 tonnes in 1987 The report forecasts cocoa exports to rise to 35,000 tonnes this year from 33,000 tonnes in 1986 and 31,000 in 1985 The Netherlands is at present the biggest importer of Indonesian cocoa beans The report forecasts that in calendar 1987 Indonesia's CTC crushed torn and curled tea exports will increase significantly with the coming on stream of at least eight new CTC processing plants Indonesia plans to diversify its tea products by producing more CTC tea the main component of tea bags Production of black and green teas is forecast in the embassy report to rise to 125,000 tonnes in calendar 1987 from 123,000 tonnes in 1986 Exports of these teas are likely to rise to 95,000 tonnes in 1987 from 85,000 in 1986 and around 90,000 in 1985 The embassy noted the ministry of trade tightened quality controls on tea in October 1986 in an effort to become more competititve in the world market REUTER SINGAPORE EXCHANGE SEEKING NASDAQ LONDON LINK SINGAPORE March 2 The Stock Exchange of Singapore SES plans to introduce electronic trading of shares listed on the National Association of Securities Dealers Automated Quotation System NASDAQ in the U.S. And on London's Stock Exchange Automated Quotation System banking sources said The SES is discussing the idea with the London and New York authorities Gordon Macklin president of the National Association of Securities Dealers in Washington said he was very optimistic about an early agreement possibly by the end of this month Monetary Authority of Singapore MAS sources told Reuters they supported the proposed linking of computer trading systems on the three exchanges and the banking sources said local financial support for the plan existed Macklin said if an agreement were reached it would move the three exchanges towards 24 hour trading with Singapore filling a gap when no trading takes place A small group of selected stocks would be used at the start of three centre trading to determine investor interest The Singapore London and New York authorities have agreed in principle on how the three exchanges would trade and transfer information among the different time zones but some details still have to be worked out a senior Singapore bank director said Questions remain concerning investor willingness to deploy sufficient capital in Singapore to ensure adequate market liquidity and communication links to the other three centres But if agreement is reached Singapore will have a head start over the other Asian financial centres in Hong Kong Toyko and Australia he said On February 18 the SES created the Stock Exchange of Singapore Dealing and Automated Quotation System SESDAQ modelled on NASDAQ At present SESDAQ is trading the shares of only one company the government owned Singapore National Printers Ltd SNP but its turnover has been fairly active and other small firms have said they plan to seek listings soon Market sources expect the next few companies listed will also be government owned entities which would have no problem meeting the listing conditions Approval for a listing of Trans Island Bus Service Pte Ltd is expected soon they said SNP previously wholly owned by the government's Temasek Holdings Pte Ltd issued seven mln 50 cent shares at one dlr each last month in a public offering oversubscribed 119 times In SESDAQ trading SNP shares have advanced from an initial 1.87 dlrs to a Friday close of 2.32 after a 2.80 high So far more than 900,000 shares have traded REUTER INDONESIA'S EXPORTS DROP IN CALENDAR 1986 JAKARTA March 2 The total value of Indonesia's exports fell in calendar 1986 to 15.995 billion dlrs from 18.762 billion in calendar 1985 according to the central bank's latest report The value of crude oil exports fell to 7.431 billion dlrs in 1986 from 8.976 billion in 1985 while liquefied natural gas exports dropped to 2.795 billion dlrs from 3.802 billion in 1985 The value of Indonesia's non oil exports also fell in calendar 1986 to 5.768 billion dlrs from 5.983 billion in 1985 REUTER GERMAN EUROBOND MARKET EXPECTS BREATHING SPACE By Alice Ratcliffe Reuters FRANKFURT March 2 After an onslaught of new paper fewer mark eurobonds issues are expected this week bankers said Most managers said they were planning a low issue volume for the Bundesbank's two week bond calendar beginning today We want to have a week's pause one manager said Last week borrowings totalled 1.775 billion marks including a 300 mln mark private placement for Deutsche Bank Issues for all of February rose to nearly five billion marks from 3.6 billion in January The heavy volume also meant most borrowers except the very best addresses were having to accept higher coupons I think the D mark market is still good but only if you can give a good coupon another manager said But even some government borrowers were not getting the best reception for bonds which would have been taken up more readily under other conditions Of the three mark eurobonds launched on Tuesday alone bonds for Den Danske Bank and Iceland were trading outside fees on Friday although prices had recovered from initial lows Den Danske's 5 3/4 1992 bond was quoted at midday on Friday at 97.35/65 compared with its par price and Iceland's 6 1/2 pct 1997 bond traded at 97.25/75 against a 100 1/4 issue price A 300 mln mark 6 1/8 pct 1997 issue for Nippon Telegraph and Telephone was also depressed but traded Friday within fees at 98.15 98.50 from its par price Some shorter maturities did better In contrast to the 10 year NTT and Iceland issues a five year six pct bond for Hoogovens traded at 98.40/75 from its 99 1/2 price thanks mainly to its shorter maturity dealers said The large amount of paper brought to the market in the last two months has also led many syndicate managers to complain about the Bundesbank's present fixed calendar system which they say is too inflexible Currently all mark denominated eurobonds have to be registered with the Bundesbank in the week preceding the two week issue period A bank may decline to issue a bond on the requested day in the calendar but then has to wait for the next calendar period to schedule the bond again Some managers said they would prefer to abolish the system The Bundesbank shortened the reporting period to two weeks from four weeks last July But few expect the calendar to be completely abolished I don't think the Bundesbank would give that up one banking analyst said I wouldn't have anything against getting rid of the system the analyst said adding banks were capable of regulating the volume of new issues themselves The Bundesbank plays a passive role in setting the calendar without trying to regulate the issues but it needs the registration to gauge the volume of mark bonds going through the euromarket he said For this reason few managers here foresee the Bundesbank sacrificing its present calendar system Bond activity in West German bond trading and syndication departments is also expected to be quieter than normal owing to the carnival holiday Carnival will close banks in Duesseldorf all day on Monday In Frankfurt banks will close on Tuesday in the afternoon REUTER JAPAN'S NTT FORECASTS PROFITS FALL IN 1987/88 TOKYO March 2 Nippon Telegraph and Telephone Corp NTT expects its profits to fall to 328 billion yen in the year ending March 31 1988 from a projected 348 billion this year the company said Total sales for the same period are expected to rise to 5,506 billion yen from a projected 5,328 billion this year NTT said in a business operations plan submitted to the Post and Telecommunications Ministry NTT said it plans to make capital investments of 1,770 billion yen in 1987/88 including 109 billion for research and development as against a total of 1,600 billion this year An NTT spokesman said increased competition from new entrants to the telecommunications field and the effect of a sales tax scheduled to be introduced next January were the major factors behind the projected decrease in profits The Japanese telecommunications industry was deregulated in 1985 REUTER SINO U.S. VENTURE IN CHINA TO MAKE RINSING AGENTS PEKING March 2 Ecolab Co of the United States signed a contract with North China Industrial Co to set up the first Sino U.S. Joint venture in China to make rinsing agents the New China News Agency said It said total investment in the new venture Ecolab Chemical Industrial Co is 2.4 mln dlrs It said the venture will be based in Shanghai and produce agents for use in hotels and industries It gave no further details REUTER CHINA SIGNS WORLD BANK LOAN FOR TIANJIN PORT PEKING March 2 China has signed a 130 mln dlr loan agreement with the World Bank to partly finance 12 new berths with an annual capacity of 6.28 mln tonnes at the 20 mln tonne a year capacity Tianjin port the New China News Agency said China will provide 370 mln yuan for the project and a Chinese company won a bid against 12 other firms from seven countries to do the foundation work it said It said 11 of the new berths will be able to handle ships of more than 10,000 tonnes three will handle containers and the expansion will enable the port to handle coke non metal mineral ores and mining equipment for the first time REUTER THAI AIRWAYS INTERNATIONAL TO ALMOST DOUBLE FLEET BANGKOK March 2 Thai Airways International plans to expand its fleet to 58 from 30 aircraft by 1995 company officials said Thamnoon Wanglee vice president for finance told a weekend marketing conference Thai would finance the expansion by borrowing but he did not give details He said the airline planned to reduce its yen borrowing to 36.4 pct of overall debt by September 1992 It is currently 64.3 pct of overall debt He said dollar borrowing should rise to 56.2 pct of overall debt in the same period compared to 15.7 pct now Other company officials said the state owned airline had no plans to go private They said the airline is studying a government proposal for it to merge with Thai Airways Company the state owned domestic carrier A report presented to the conference showed the airline expects passenger sales revenue to be 13 pct higher in 1987 than in 1986 This follows a 20 pct jump in passenger sales revenue in the past four months Executive vice president Chatrachai Bunya ananta said the current expansion of Bangkok airport would be completed this year REUTER JAPAN FEBRUARY RESERVES RECORD 51.73 BILLION DLRS TOKYO March 2 Japan's external reserves rose to a record 51.73 billion dlrs at the end of February from the previous record of 51.46 billion at end January the Finance Ministry said End February reserves last year were 27.58 billion dlrs In January the nation's foreign reserves showed the largest ever monthly increase at 9.22 billion dlrs due to massive Bank of Japan dollar buying intervention during the month as the dollar fell briefly to an all time low of 149.98 yen on January 19 foreign exchange dealers said REUTER SIMEX TRADING VOLUME HITS RECORD IN FEBRUARY SINGAPORE March 2 Trading volume on the Singapore International Monetary Exchange Simex hit a record 122,819 contracts in February surpassing the previous record of 116,767 in September last year the exchange said in a statement Volume in the Eurodollar contract hit a peak of 78,546 contracts against the previous record of 70,306 also set last September Open interest in the Nikkei Stock Average contract passed 2,000 contracts for the first time to hit a record high 2,697 on February 26 REUTER SHULTZ VISIT TO MOSCOW POSSIBLE SAY SOVIETS MOSCOW March 2 A senior Soviet official said a visit to Moscow by U.S. Secretary of State George Shultz for arms discussions was under consideration Deputy Foreign Minister Alexander Bessmertnykh told a news conference such a visit would be part of continuing contacts between the two powers in the framework of security questions Earlier U.S. Officials with Shultz in Peking said he was likely to go to Moscow soon following Kremlin leader Mikhail Gorbachev's weekend proposal for a separate agreement on withdrawing Soviet and American medium range missiles from Europe JAPAN DISTRIBUTOR MAY IMPORT MAZDA U.S. MADE CARS TOKYO March 2 Autorama Inc a distributor for Ford Motor Co F in Japan is considering importing cars made by Mazda Motor Manufacturing USA Corp MMUC a wholly owned U.S. Subsidiary of Mazda Motor Corp MAZT.T an Autorama spokesman said Mazda owned 24 pct by Ford is due to begin production of the 2,000 cc engine cars at the Michigan plant in September at an annual rate of 240,000 of which between 60 and 70 pct will go to Ford and the rest to Mazda's own U.S. Sales network REUTER IRAQ DEFERS PAYMENTS ON 500 MLN DLR EUROLOAN BAHRAIN March 2 Iraq has secured agreement to defer outstanding payments on a 500 mln dlr syndicated euroloan following five months of negotiations with creditor banks Banking sources said the rescheduling is part of Iraq's continuing effort to defer payments of foreign debt as its economy comes under strain from the Gulf War and soft world oil prices Iraq informed the 37 banks in the loan syndicate last September it could not meet the remaining four principal repayments totalling 285 mln dlrs and missed the first of these for 71.25 mln due on September 29 The 500 mln dlr credit under the lead management of Paris based Union de Banques Arabes et Francaises UBAF has a five year maturity and a margin of one percentage point over London Interbank Offered Rates LIBOR Banking sources said the agreement now worked out goes some way to meeting creditor bank demands that at least part of the first missing instalment of 71.25 mln dlrs be paid and not deferred One quarter or 17.8 mln dlrs will be paid on signature of the accord expected in late March with the remainder in three more instalments to be made every six months The remaining three principal instalments originally due in March 1987 September 1987 and March 1988 will each be deferred for two years from the due date banking sources said The margin for the loan remains unchanged and no penalty interest is being imposed the sources added Bank reaction to Iraq's rescheduling request has been one of resignation with many bankers seeing little alternative for Baghdad's economic planners Iraq is estimated to have foreign debt of about 50 billion dlrs although about half is thought to be in the form of loans from its Gulf Arab allies particularly Saudi Arabia and Kuwait The 500 mln dlr credit is in the name of the state owned Rafidain Bank The only other major eurocredit a 500 mln dlr deal under the agency of Gulf International Bank was signed in October 1985 and is still in a two year grace period The bulk of Iraq's commercial debt excluding loans by its allies in the Gulf War is in the form of trade financing But Rafidain bank stopped paying debt due on letters of credit last March and a series of negotiations with banks and western government export credit agencies has been underway Some banks have agreed to a three year deferrment of obligations due on letters of credit REUTER TAIWAN CENTRAL BANK ISSUES CERTIFICATES OF DEPOSIT TAIPEI March 2 The Central Bank issued 2.14 billion Taiwan dlrs of certificates of deposit CD bringing the total so far this year to 86.21 billion a bank official told Reuters The new CD have maturities of six months and one and two years and bear interest rates ranging from 3.9 pct to 5.15 pct The issues are aimed at curbing the growth of M 1B money supply which is the result of large foreign exchange reserves the official said REUTER ICO TALKS ON COFFEE QUOTAS TO RESUME AT NOON LONDON March 2 Talks on coffee export quotas at the International Coffee Organization ICO special council session will resume at noon gmt today following a last minute decision taken early this morning to extend the meeting 24 hours ICO officials said An 18 member contact group will meet at midday to examine new ideas and the full council is to convene at 1900gmt they said The extension resulted from a last ditch effort by Colombia to salvage the talks which by late yesterday looked perilously close to ending without agreement on quotas delegates said REUTER CAECL ISSUES 12 BILLION YEN EUROBOND LONDON March 2 Caisse d'Aide a l'Equipement des Collectives Locales CAECL is issuing a 12 billion yen eurobond due March 31 1994 paying 5 1/8 pct and priced at 102 pct lead manager Mitsubishi Trust International Ltd said The non callable bond is available in denominations of one mln yen and will be listed in Luxembourg The selling concession is 1 1/4 pct while management and underwriting combined pays 5/8 pct The payment date is March 31 REUTER CHINESE BANKS TO ISSUE MORE BONDS OFFICIAL SAYS PEKING March 2 China's state and collective firms do not have enough cash to operate imported equipment so banks will issue more bonds to raise funds a Chinese bank official was quoted by the China Daily as saying Xie was quoted as saying the present cash shortage means some state firms do not run at full capacity and are inefficient The central government does not have enough money to meet their needs The paper said Reliable sources disclosed that the country is running a budget deficit It gave no figure Xie said her bank sooner or later will have to punish the many firms that have failed to repay loans made to them over the past two years at high interest rates The bank financed the loans by issuing two billion yuan of bonds but she gave no other details REUTER INDIAN SUGAR OUTPUT RISES IN FIRST FOUR MONTHS NEW DELHI March 2 India's sugar output to January 31 in the 1986/87 season October September rose to 3.66 mln tonnes from 3.46 mln in the same 1985/86 period the Indian Sugar Mills Association said Total offtake in the first four months of the current year was 2.71 mln tonnes including 241,000 tonnes imported for domestic use and 4,000 tonnes for export against 2.81 mln tonnes including 993,000 imported for domestic use and 3,000 tonnes for export in the corresponding period of 1985/86 Factory stocks at end January were 3.05 mln tonnes 96,000 imported against 3.13 mln 96,000 imported a year earlier REUTER INTERNATIONAL LEISURE NEGOIATING ON BOEING LEASE LONDON March 2 International Leisure Group Plc said its Air Europe subsidiary was in advanced negotiations with manufacturers and banks for the lease of 10 Boeing Co and 13 Rolls Royce Ltd engines The deal would be for the lease with purchase options of five Boeing 757 200 planes and five 737 400s The Rolls Royce RB211 535E4 engines would be fitted to the Boeing 757s Delivery would be in 1988 and 1989 REUTER JAPAN PLANS MORE FLEXIBLE CORPORATE BOND ISSUES By Yoshiko Mori Reuters TOKYO March 2 Japanese securities houses will issue new corporate bonds more quickly accept issue requests throughout the month instead of at month end and introduce a competitive underwriting method from April 1 to bring Japanese firms back to the Tokyo bond market securities managers said Domestic issues have slowed to a trickle as more and more companies turn to more flexible overseas markets for cash but the proposed moves are expected to pave the way for a review of public bond issues they said Relaxation of issue rules would be better applied not only to straight corporate bonds but also convertible bonds and warrant bonds to call back issuers effectively from overseas markets a Nikko Securities house bond manager said Securities houses will launch an issue about 10 days after a corporate declaration of intent instead of 25 days as now the securities managers said Underwriters are expected to abolish the lump sum issuance system in which all corporate bonds are issued at month end and accept issue requests during the month they said Securities houses also plan to introduce free competition among underwriters when negotiating with issuers over terms in order to better reflect the market securities managers said Market participants expect the new issue methods to be applied beginning in April with the projected issue by Nippon Telegraph and Telephone Corp The so called proposal method abolishes the practice of taking lead managership and enables more market oriented decisions on terms securities sources said The four major Japanese securities houses now take turns underwriting corporate bonds Setting issue terms using financial criteria prepared by securities houses and in reference to coupon rates on latest public bonds is now almost automatic they said The new moves are based on wide ranging proposals made in late December by advisers to Finance Minister Kiichi Miyazawa They were aimed at revitalising the domestic corporate bond market securities house managers said The finance ministry commissioned banks and securities houses agreed in January to lower the eligibility ceiling for companies wanting to issue non collateral straight and convertible bonds from March 1 securities managers said The cut will more than double the number of corporations able to make non collateral issues from around 70 for straight bonds and 180 for convertibles now securities managers said The Bond Market Committee of the Securities Exchange Council also recommended introduction of a shelf registration system more use of corporate ratings systems and simplification of disclosure rules to help speed up the issuing process securities sources said It also called for a major review of the commissioned bank system which increases the cost of issuing domestic bonds and for deregulation of private placements they said Some of these proposals are likely to take some time to put into effect the sources said A shelf registration system would need a revision of Japanese commercial law expected in 1988 the sources said REUTER NEW DUTCH ADVANCES TOTAL 4.8 BILLION GUILDERS AMSTERDAM 2 March The Dutch Central Bank said it has accepted bids totalling 4.8 billion guilders at tender for new seven day special advances at 5.3 pct covering the period March 2 to 9 aimed at relieving money market tightness Subscriptions to 300 mln guilders were met in full amounts above 300 mln at 50 pct The new facility replaces old five day advances worth 8.0 billion guilders at the same rate Dealers expect this week's money market shortage to be around 12 billion guilders Reuter JAPAN BUYS SOME 95,000 TONNES SOYBEANS FROM CHINA TOKYO March 2 Japanese importers bought some 95,000 tonnes of Chinese soybeans late last month for May to September shipment under the semi annual trade accords trade sources said The FOB premium rose to 13.50 dlrs per tonne up 2.50 dlrs from the premium for the November to April shipment but down from 13.80 for the last May to September shipment Flat prices for Chinese beans are based on futures prices in Chicago plus the FOB premium Japanese purchases of Chinese soybeans including spot buying may have totalled 240,000 to 250,000 tonnes of the 1986 crop for November to April 1987 shipment down from some 300,000 tonnes the previous year the sources said Domestic demand for edible use soybeans is expected to remain stable at about 240,000 to 250,000 tonnes a year the sources said In recent years Japanese importers have overbought Chinese edible use soybeans and sold the surplus to domestic crushers but low 1986 U.S. Crop prices have discouraged the purchase of Chinese origin beans for crushing they said REUTER CHEUNG KONG HOLDINGS LTD CKGH.HK YEAR 1986 HONG KONG March 2 Shr 3.25 H.K. Dlrs vs 1.40 Final div 52 cents vs 38 making 75 cents vs 57 Net 1.28 billion dlrs vs 551.7 mln Note Earnings excluded extraordinary gains of 983.6 mln dlrs vs 81.3 mln Bonus issue one for four vs nil Share split four for one Dividend payable June 3 books close May 11 21 REUTER TRADING DELAYED ON SINGAPORE'S NEW BILL MARKET SINGAPORE March 2 The start of trading on the new Singapore Government Securities Market has been postponed until late March or early April because legislative amendments still need parliamentary approval banking sources said The new bill market intended to establish a base for a wider capital market and to encourage private bond issues in Singapore was supposed to be launched today William K.K. Wong managing director of Indosuez Asia Singapore Ltd said there is no real obstacle to prevent the new market from taking off Most dealers are optimistic it will provide more liquidity for operators to trade he said Lawrence Yeo director of Citicorp Investment Bank Singapore Ltd said the market's success depends on domestic participation The five primary dealers and the three registered dealers will all be local companies The primary dealers are Commercial Discount Co Ltd National Discount Co Ltd Oversea Chinese Banking Corp Ltd OCBM.SI Overseas Union Bank Ltd and United Overseas Bank Ltd UOBM.SI They will underwrite the Monetary Authority of Singapore MAS auctions maintain market liquidity and channel open market operations MAS said Citicorp Investment Bank Singapore Ltd Indosuez Asia Singapore Ltd and Credit Suisse First Boston Asia Ltd will be recognised as registered dealers They will act as market makers but will not bid directly at auctions MAS plans to launch trading by issuing taxable instruments grossing seven billion dlrs in the first year and a gross 38 billion dlrs of paper over the first five years Non competitive bids from primary dealers prepared to accept average yield will be allocated first to a maximum 500,000 dlrs for notes and bonds and to an unlimited amount for treasury bills The remaining amount will be awarded to competitive bidders from the lowest yield upwards In the secondary market the standard lot traded between dealers will be one mln dlrs worth of treasury bills and 500,000 dlrs worth of government notes and bonds REUTER MERRILL LYNCH ISSUES 100 MLN ECU EUROBOND LONDON March 2 Merrill Lynch and Co is issuing a 100 mln Ecu eurobond due March 30 1990 paying 7 3/8 pct and priced at 101 pct lead manager Banque Paribas Capital Markets said Merrill Lynch Capital Markets is co lead manager The issue is available in denominations of 1,000 and 10,00 Ecus and will be listed in Luxembourg The payment date is March 30 1990 The selling concession is 1 3/8 pct while management and underwriting combined pays 1/2 pct REUTER WALLENBERGS FIGHT BID FOR SWEDISH MATCH STAKE STOCKHOLM March 2 Sweden's Wallenberg group fought back a bid by the London based Swedish financier Erik Penser to secure a large stake in Swedish Match SMBS ST one of the companies at the core of their business empire A statement issued by the Wallenberg holding companies AB Investor and Forvaltnings AB Providentia said they had taken over an option held by Nobel Industrier Sweden AB to acquire 33 pct of the voting rights in Swedish Match Thre Wallenbergs paid Nobel Industrier NOBL ST in which Penser group has a 72 pct stake about 20 pct over the market price for the Swedish Match option the statement said Swedish Match's B shares open to foreign buyers closed at 424 crowns on Friday The A shares with increased voting rights closed at 450 crowns for the restricted and 455 for the free shares The statement said the deal increased Investor's stake to 49.4 pct of the voting rights and 14.8 pct of the share capital while Providentia is left holding 34.1 pct of the voting rights and 14.5 pct of the share capital in Swedish Match The Wallenbergs stake in Swedish Match had previously amounted to 52 pct of the voting rights in the company The Swedish Match deal will cost the Wallenbergs about 400 mln crowns share analysts said making it one of the most expensise moves the group has undertaken in the last four years to defend its far flung interests from outside predators The Wallenbergs originally sold Nobel Industrier an arms and chemicals group to Penser in 1984 to pay for buying Volvo VOLV ST out of two other key group companies Atlas Copco ASTS ST and Stora Koppabergs SKPS ST Since then the Wallenbergs were ousted as the largest shareholders in SKF SKFR ST by Skanska AB SKBS ST and Frederik Lundberg wrested control of Incentive AB from them Lundberg a Zurich based Swedish property tycoon also managed to acquire a 25 pct stake in another Wallenberg company the diary equipment firm Alfa Laval AB ALFS ST During 1986 the Wallenbergs have been concentrating on building up their stake in Investor and Providentia to prevent any raid on the heart of their business empire But analysts say the Wallenbergs position in the electrical engineering firm ASEA AB ASEA ST is also too small at 12.6 pct of the voting rights and there has been growing speculation that the group will be forced to sell off fringe interests to protect its core activities REUTER INDONESIAN SOYBEAN IMPORTS FORECAST TO RISE JAKARTA March 2 Soybean imports are forecast to rise to 425,000 tonnes in 1987/88 October September from an estimated 300,000 in 1986/87 and 375,000 in 1985/86 the U.S. Embassy said in its annual report on Indonesia's agriculture It said Indonesia did not achieve its goal of self sufficiency in soybean output in calendar 1986 because it did not meet a planned increase in area planted and because yields have remained below target Soybean meal imports are forecast to fall to around 190,000 tonnes in 1987/88 from 270,000 tonnes in 1986/87 and 295,000 tonnes in 1985/86 Domestic soybean production is forecast to rise steadily to 1.08 mln tonnes in 1987/88 from 980,000 in the current year and 890,000 in 1985/86 the report said Imports are forecast to fall in the current year but to rise in 1987/88 because of a new soybean crushing plant due to come on stream in early 1988 China is the main supplier with a 79 pct share while the U.S. Provides the rest it said This pattern will likely continue during 1986/87 since domestic soyfood processors prefer Chinese beans and are willing to pay a premium for them it said Area planted is expected to increase by 10 pct in both 1986/87 and 1987/88 Yield increases continue to be hampered by an insufficient supply of quality seeds along with pest and disease problems the report said REUTER SHV SAYS IT MAKING TENDER OFFER FOR IC GAS LONDON March 2 SHV United Kingdom Holding Co Ltd said it was making a tender offer for up to 33 mln ordinary shares in Imperial Continental Gas Association.ICGS.L. It said in a statement the offer was on the basis of 700p for each IC Gas ordinary and 252p for every one stg nominal of IC Gas loan stock SHV already holds 6.8 mln IC Gas ordinary stock units representing around 4.9 pct of the current issued share capital Successful completion of the offer would increase SHV's stake in IC Gas to 39.8 mln shares representing around 27.9 pct of issued share capital it said The offer capitalises IC Gas at around one billion stg It said it was tendering for both ordinary stock and loan stock which when fully converted gave a total of 33 mln IC Gas ordinary It is making the tender offer through N.M. Rothschilds IC Gas said in a statement it noted the SHV tender offer and the terms were being considered It said a further statement would be made as soon as possible REUTER NOBEL FINANCIERE ROBUR ISSUE FRENCH FRANC BONDS PARIS March 2 Nobel and Financiere Robur are issuing French franc domestic bonds with share warrants according to announcements in the Official Bulletin BALO Nobel is issuing a 200 mln franc 10 year bond with a 5.5 pct coupon in 1,000 franc denominations to which existing shareholders will have subscription rights in the ratio of one bond for every 120 shares held with a nominal 10 franc value The bonds will each carry eight warrants each giving the right to subscribe to one 100 franc Nobel share at 140 francs between June 1 1987 and May 31 1994 Payment date is April 28 In a second stage of the operation the company will issue 3.63 mln new 100 franc nominal shares at a price of 120 francs in the ratio of three new shares for 20 existing 10 franc nominal shares This will take the company's capital to 677.6 mln francs from the present 242 mln In a separate operation Financiere Robur is issuing a 147.73 mln French franc eight year bond with a six pct coupon denominated in 1,100 franc units and priced at par Payment date will be April 13 and existing shareholders will have a preferential right to subscribe to the issue in the ratio of one bond for every 10 shares held between March 9 and March 30 1987 Each bond will carry two warrants each giving the right to subscribe between January 1 1988 and March 31 1992 to one Financiere Robur share at a price of 210 francs REUTER JAPANESE BANKS COOL ON NIGERIAN DEBT TALKS By Kunio Inoue Reuters TOKYO March 2 Japanese banks are expected to give Nigerian debt negotiators a cool response when they arrive here tomorrow for talks banking sources said We're not very enthusiastic about Nigeria's debt rescheduling said a senior official at a leading Japanese bank A team of Nigerian officials will meet with Japanese creditor banks here later this week to seek Japanese support for a proposed refinancing of part of Nigeria's 19 billion dlr foreign debt bankers said The senior bank official said a majority of Japanese bank creditors are unwilling to provide any new credits to Nigeria although about 80 pct have reluctantly agreed to accept rescheduling of part of their existing loans The problem is Nigeria has so far neglected us Japanese creditors and we have yet to receive a clear cut picture of the nation's debt situation said another Japanese bank official He said Japanese bankers were unaware of the exact extent of Western commercial bank exposure to Nigeria and were uncertain about the proposed refinancing package details Some 21 Japanese banks have loans outstanding to Nigeria representing about four pct of the credit extended by Western commercial institutions banking sources said They said Nigeria would probably request about 320 mln dlrs in fresh private bank money and rescheduling of some 1.4 to 1.5 billion dlrs in existing loans due in 1986 and 1987 Japanese banks want Nigeria to make clear its debt repayment scheme as well as its economic reconstruction plans during the two day meeting here the sources added Otherwise our response will be very negative the senior official said Banking sources said some 80 pct of international creditor banks involved have responded positively to the Nigerian debt proposal Bank of Japan officials said they hope Japanese commercial banks will help Nigeria overcome its debt problems Barclays Bank plc BCS.L has the most exposure to Nigeria's debt and is chairing a bank steering committee looking at the problem the banking sources said BankAmerica Corp BAC.N is coordinating private bank creditors in the Far East and representing them on the committee they added REUTER U.K. MONEY MARKET DEFICIT FORECAST AT 800 MLN STG LONDON March 2 The Bank of England said it forecast a shortage of around 800 mln stg in the money market today Among the main factors affecting liquidity bills maturing in official hands and the take up of treasury bills will drain some 1.61 billion stg Partly offsetting this outflow exchequer transactions and a fall in note circulation will add around 425 mln stg and 360 mln stg respectively In addition bankers balances above target will add some 20 mln stg to the system today REUTER JAPAN SALES TAX MAY FORCE NAKASONE OUT OF OFFICE By Yuko Nakamikado Reuters TOKYO March 2 Prime Minister Yasuhiro Nakasone is likely to leave office this summer amid opposition to his controversial tax reform package political analysts said They said Nakasone's reputation as a skilled politician has suffered irreparable damage from his support of a five pct sales tax planned for January 1988 Nakasone is trying to carry out a drastic tax reform at the end of his administration which is not only impossible but also is very irresponsible as a politican Rei Shiratori professor of politics at Dokkyo University told Reuters Nakasone will almost certainly step down as soon as parliament approves the sales tax probably in the summer Shiratori said Some ruling Liberal Democratic Party LDP members of parliament have spoken against the tax which Nakasone says is needed to balance planned cuts in income and corporate taxes Nakasone today called for disciplinary action against LDP members who oppose the tax There are some who are objecting because of their constituencies he told a meeting of government and party leaders If the party discipline is broken I would like to see punishment considered A proposed sales tax has become a political issue partly because Nakasone breached his election pledge against introducing it Shiratori said Moreover the tax is being introduced when the public feels uncertainty about the sluggish economy stemming from the yen's appreciation and about the future when the Japanese society is rapidly aging he said Political analysts said the controversial tax could affect the more than 2,500 local elections scheduled for April involving governors mayors town and village heads and assemblies at all levels But the situation is complicated since opposition parties excluding the communists sometimes put up joint candidates with the LDP the political analysts added Shiratori said In the worst case implementation of the sales tax now scheduled for next January may be put off for some time before the government makes a final decision Another alternative is to modify the planned five pct to perhaps three pct A third alternative for the government is to ram through the bills only with the attendance of LDP MPs he said Seizaburo Sato professor of politics at Tokyo University thought the last possibility most likely I think the LDP alone will take a vote on the tax bills he said The LDP now holds 304 seats in the 512 seat Lower House and 143 in the 252 seat Upper House To lure opposition parties back to parliament after the LDP pushes through the tax bills the Nakasone cabinet will have to resign Sato said Boycotting opposition members will be more willing to return to parliament if a new cabinet has been formed he said REUTER BLACK MINERS SUPPORT S AFRICAN MINES TAKEOVER SOWETO South Africa March 2 Thousands of black mineworkers roared support for a union proposal to seize control of South Africa's gold uranium platinum and coal mines if the owners refuse to improve conditions for migrant black workers About 15,000 miners attended a rally here to endorse moves proposed by last week's annual meeting of the 200,000 strong National Union of Mineworkers NUM They also supported a proposal for a national strike at the end of this month if the owners refused to begin negotiations Migrant workers from surrounding countries make up more than half of the labour force in the mines It was not stated how the union would seize control The miners leaders also demanded an end to the system of single sex hostels for migrant workers to be replaced by housing schemes so that workers could live with their families The crowd one of the largest to attend a meeting since South Africa declared a state of emergency last June also shouted approval of a proposal to work closely with anti apartheid movements such as the United Democratic Front UDF which claims two mln members They also shouted their support for a demand that jailed black nationalist leader Nelson Mandela be released REUTER THAILAND ANNOUNCES THIRD TAPIOCA QUOTA FOR EC BANGKOK March 2 Thailand's Commerce Ministry announced a new tapioca export quota of 737,987 tonnes for the European Community against 762,860 tonnes for the previous allocation The ministry said the fresh allocation for the February 27 July 7 shipment period is the third under a maximum 5.5 mln tonne overall quota that Thailand obtained from the EC for calendar 1987 It said the quota allocation was based on a national tapioca pellet stock of 4.34 mln tonnes surveyed last week up from 3.05 mln in mid January REUTER ATPC MEMBERS FIND WAYS TO CURB TIN EXPORTS By Rajan Moses Reuters KUALA LUMPUR March 2 Mine and industry officials from most member states of the Association of Tin Producing Countries ATPC say they have found ways to limit group exports to 96,000 tonnes in the year started March 1 according to views polled by Reuter correspondents The plan to curb exports agreed in January is aimed at cutting the world surplus to 50,000 tonnes from 70,000 now and boosting prices to about 19 ringgit a kilo from just over 16 Members of the seven member Kuala Lumpur based ATPC account for some 65 pct of the world's tin output Under the ATPC plan Malaysia has been allocated an export quota of 28,526 tonnes Indonesia 24,516 Thailand 19,000 Bolivia 13,761 Zaire 1,736 and Nigeria 1,461 Australia has said it is not setting any export quota However the tonnage allocated to it 7,000 tonnes is roughly equal to its expected output this year Comment from officials in Zaire was unavailable Mine officials in Malaysia the world's leading producer said only 188 mines will be allowed to operate to ensure that output is limited to around 31,500 tonnes in the year started March 1 Chief Inspector of Mines Redzuan Sumun told Reuters that excess output of some 3,000 tonnes after exports of 28,500 in the one year quota period would be kept in the national stock Mine owners in Malaysia have welcomed the ATPC export curb and asked the government not to issue new mining licences More than 100 applications for licences are pending Redzuan said the Mines Department would approve new mining licences only if a six month review of production trends showed that local mines were not overproducing ATPC chairman and Indonesia's Mining and Energy Minister Subroto has pledged his country's support for the export curb A spokesman for the state owned tin mining company PT Tambang Timah told Reuters it would be easy for Indonesia to stick to an export quota of 24,516 tonnes because this was close to exports in calendar 1986 of 24,636 In Bangkok Thai Industry Minister Pramual Sabhavasu said Thailand would keep to its 19,000 tonne quota and added this would not cause the local industry hardship at current prices To insure adherence the industry ministry and sole tin exporter Thailand Smelting and Refining Co would encourage bigger stockpiles and income tax exemptions would be permitted he said The Thai Mineral Resources Department is expected to disallow new tin mines opening this year to prevent excessive production industry sources said But Mining Industry Council President Dam Teutong told Reuters that if the tin price rose above 18 ringgit a kilo Thai miners would press for the opening of more new mines Thailand exported 18,367 tonnes in 1986 up from 17,359 in 1985 Pramual said Bolivia said it expects to export less tin this year than its allocated 13,761 tonne quota Mining Minister Jaimie Villalobos told Reuters in La Paz that Bolivia expected to export about 9,000 tonnes of tin in calendar 1987 He said this was due to the sacking after the tin crisis of October 1985 of about 20,000 of the 28,000 workers at the state mining company Comibol which produces more than 80 pct of Bolivia's total exports He said there were risks in the ATPC plan to cut exports but added he was confident the goals set by the plan would be achieved He did not elaborate Mines Power and Steel Minister Bunu Sheriff Musa said in Lagos that Nigeria would have no difficulty keeping within its ATPC quota of 1,461 tonnes because its metals output had declined due to poor demand and high production costs Industry sources told Reuters that Nigeria's output was less than 1,000 tonnes last year ATPC officials said they would monitor member countries export figures every three months using customs documents and make projections from such data to see if quotas were likely to be breached within the year long quota period The ATPC officials said members that appeared likely to breach their quotas would be told to take remedial measures They added that if member countries were unable to fulfil their quotas their extra tonnage would be reallocated to other members at the ATPC's discretion The ATPC would have produced and exported an estimated 106,000 tonnes of tin in 1987 without the plan Non members Brazil and China have pledged to cooperate with the ATPC and limit their exports to 21,000 and 7,000 tonnes respectively during the quota period REUTER SOUTH KOREA TO HOLD CURRENT ACCOUNT SURPLUS DOWN SEOUL March 2 South Korea plans to take steps to keep its 1987 current account surplus below five billion dlrs Economic Planning Board Minister Kim Mahn je said Kim told reporters the government would repay loans ahead of schedule and encourage firms to increase imports and investment abroad to prevent the current account surplus from rising too quickly Last year South Korea's current account surplus was 4.65 billion dlrs It widened to 622 mln dlrs in January from 484 mln in December and compared with a deficit of 334 mln in January 1986 Bank of Korea figures show REUTER CHINA'S HEILONGJIANG PROVINCE BOOSTS GOLD OUTPUT PEKING March 2 Gold output in the northeast China province of Heilongjiang rose 22.7 pct in 1986 from 1985's level the New China News Agency said It gave no figures It said the province China's second largest gold producer after Shandong plans to double gold output by 1990 from the 1986 level China does not publish gold production figures However industry sources estimate output at about 65 tonnes a year with exports put between 11 and 31 tonnes China is selling more gold abroad to offset large trade deficits in recent years western diplomats said REUTER SALE TILNEY BUYS STAKE IN U.S. INSURANCE BROKER LONDON March 2 Sale Tilney Plc said it has purchased 80 pct of the ordinary share capital of B and R International Inc a U.S. Insurance broker for 5.6 mln dlrs Sale is paying 3.6 mln dlrs in cash on completion with the balance plus interest to be paid in equal instalments over the next six years B and R posted pretax profit of 855,000 dlrs in the year to Dec 31 1986 when it had net tangible assets of 563,000 dlrs REUTER SAN MIGUEL BOARD APPOINTMENT MAY MEAN CHANGES By Rosario Liquicia Reuters MANILA March 2 Disagreement over management of San Miguel Corp SMC may follow the Philippine government's appointment of a well known banker to the SMC board investment analysts said They told Reuters the presence of United Coconut Planters Bank UCPB president Ramon Sy to the board of SMC may mean changes in SMC management which for decades was controlled by the family of its president Andres Soriano Sy was appointed by a government commission that controls 51 pct of San Miguel's stock after another nominee resigned The Presidential Commission on Good Government PCGG holds six seats on the 15 member SMC board which represent 33.13 mln sequestered shares The stocks were seized on suspicion that they were owned by Eduardo Cojuangco then chairman of UCPB and San Miguel He was a close associate of deposed president Ferdinand Marcos and he left the country after Marcos's fall Before the seizure Soriano led a 3.3 billion peso bid for the shares paying UCPB a 500 mln peso deposit The bid valued the shares at about 100 pesos They traded at 93 pesos today down from 95.50 at Friday's close Finance Secretary Jaime Ongpin told reporters on Saturday that Sy would definitely sit on the SMC board despite the objections of some directors associated with Soriano I don't think there is a conflict of interest as such he said I was potentially concerned with seeing a situation where you have a contentious atmosphere on the board But Sy has assured the government that he does not intend to behave in a contentious manner Ongpin added The Soriano group cited conflict of interest in opposing Sy's directorship Its lawyer said in a letter to the PCGG that a pending suit seeking forfeiture of SMC's 500 mln peso deposit and major undisclosed damages against the brewery represented a clear conflict UCPB however sought board representation before Sy's appointment petitioning the PCGG so that the interests of the owners of the 33 mln shares would be adequately protected Investment analysts polled by Reuters said the UCPB had a right to a slot on the SMC board as trustee for coconut farmers who claim ownership of the disputed shares The analysts said Sy backed by the government would probably suggest replacements for PCGG nominees expected to resign soon in keeping with a new law prohibiting government officials from working for private companies SMC's annual election is scheduled for May A UCPB spokesman declined to comment saying it was up to the PCGG to decide whom to appoint One analyst said objections were understandable from the family that founded the company 97 years ago It is a natural instinct of self preservation for Soriano he said SMC posted a net income of 448.8 mln pesos in 1985 on net sales of 10.99 billion pesos against 422.3 mln in 1984 on sales of 10.36 billion REUTER ESTIMATED DROP IN JAPAN CORPORATE PROFITS TRIMMED TOKYO March 2 The combined profits of Japan's major corporations excluding financial institutions are forecast to fall 19.2 pct in the 1986/87 year ending March 31 compared to the 19.9 pct decline projected in late November Wako Research Institute of Economics said The private research body also said in a statement that 437 of the 1,084 firms listed on the first section of the Tokyo Stock Exchange foresee an 11.6 pct fall in sales in the year against an 11.4 pct fall estimated last November Current profits are projected to fall 4.4 pct in 1987/88 on sales seen increasing by 4.2 pct it said Rationalisation measures taken by manufacturing industries to cope with the yen's sharp rise are beginning to brighten their business outlook the institute said It said lower interest rates which are expected to reduce corporate borrowing costs are also behind the improved performance outlook Earnings performance in the non manufacturing sector will be supported by firm demand in the real estate and construction businesses it said The forecast was based on average exchange rate estimates of 160 yen to the dollar in 1986/87 and 155 yen in 1987/88 REUTER LEBANESE PRESIDENT AGREES NEW PEACE MOVES BEIRUT March 2 Lebanese President Amin Gemayel has agreed to three key points in a new Syrian brokered plan aimed at ending civil war in Lebanon official sources said They said the Maronite Christian leader has agreed to give up Cabinet voting rights to ensure that the Prime Minister is elected by parliament and to the abolition in principle of Lebanon's current power sharing system Gemayel had agreed to the proposals in two months of indirect negotiations with Syrian leaders the sources said REUTER INDIAN BUDGET DEFICIT SEEN FUELING INFLATION By Ajoy Sen Reuters NEW DELHI March 2 Prime Minister Rajiv Gandhi's fiscal 1987/88 budget has sparked speculation that a large deficit will push up India's moderate inflation rate and that the country's stock markets will experience prolonged uncertainty economists politicians and stockbrokers told Reuters The projected deficit for fiscal 1987/88 ending March is 56.88 billion rupees down from an upwardly revised estimate of a record 82.85 billion in fiscal 1986/87 The projected inflation rate for fiscal 1986/87 based on wholesale prices is 6.5 pct against 3.8 pct in 1985/86 Economists pointed out that the government itself had expressed concern about inflation in its most recent 1986/87 economic survey report published last week Presenting the budget to parliament on Saturday Prime Minister Gandhi said a cabinet committee would be appointed to trim large non development expenditures The deficit for 1987/88 will not be allowed to exceed the budgeted figure he said But few analysts have taken Gandhi's assurance seriously They say the deficit more than doubled in 1986/87 from an initial estimate of 36.5 billion rupees Lal Krishna Advani president of the opposition Bharatiya Janata party said Gandhi's failure to mention specific measures to cut non development expenses will push up prices Economists said increased liquidity in the economy as reflected by expansion of the M3 aggregate money supply may cause prices to rise The survey report showed the M3 rose by 15.7 pct or 185.78 billion rupees in the first nine months of 1986/87 against 13.37 pct or 136.42 billion in the same 1985/86 period Economists also said uncertain monsoon rain prospects after bad weather last year may strain prices further Economists said the deficit would also cause the government to rely increasingly on internal borrowing Market loans and bonds were projected at 981.50 billion rupees for 1987/88 up from the 1986/87 estimate of 852.13 billion No reduction has been proposed in personal income taxes which will discourage savings economists said Avinash Purulkar chief manager of the state owned Union Bank of India said the annual inflation rate may double to around 15 pct in 1987/88 as the government prints more currency notes to cover the deficit Brokers said stock market investors have started selling long term portfolios to take advantage of a proposal in the budget that reduces the holding period required to claim exemption from the capital gains tax to one year from three Delhi stockbroker B D. Aggarwal said There is uncertainty in the market There is going to be growing selling pressure But Bombay broker Dinesh Walji said the present hectic selling of shares will slow when more buyers appear on the scene Just now there is acute nervousness in the market he said Brokers said proposals to set up a mutual fund to help small investors buy equity shares and relaxations in the capital gains tax will inject further buoyancy into the market on a long term basis New equity and debenture issues both convertible and non convertible rose to an officially estimated 50.70 billion rupees in April January 1986/87 from an estimated 36.95 billion in all 1985/86 and 20 billion in all 1984/85 REUTER INDIA BUYS 46,000 TONNES OF VEGETABLE OILS LONDON March 2 The Indian State Trading Corporation purchased 46,000 tonnes of vegetable oils at its import tender on Friday market sources said The business was for April shipments and comprised 20,000 tonnes of European rapeseed oil at 318 dlrs 20,000 tonnes of soyoil believed South American origin at 314 and 6,000 tonnes of Malaysian rbd palm olein at 347 dlrs all per tonne cif Palm oil sellers were disappointed at the light purchase of rbd olein and early trading saw the market ease nearly 10 dlrs under Malaysian refiner and dealer selling April shipments traded down to 326 dlrs per tonne fob REUTER BEECHAM UNIT LAUNCHES ARTHRITIS DRUG LONDON March 2 Beecham Group Plc BHAM.L said its subsidiary Beecham Pharmaceuticals launched a new once a day prescription only medicine for the reduction of pain and inflammation caused by rheumatoid and osteoarthritis The launch took place simultaneously in the U.K. And West Germany The drug which has the approved name Nabumetone will be introduced to doctors in the U.K. Under the brand name of Relifex and will be known as Arthaxan in West Germany REUTER JAPAN TO PROMOTE INTEREST RATE LIBERALISATION TOKYO March 2 The Bank of Japan decided at a policy board meeting to promote further interest rate liberalisation by lowering the minimum denomination of regulation free large deposits and by raising the interest rate ceiling on money market certificates MMCs a central bank official said The new guideline will go into effect on April 6 the bank said Under the guideline the minimum denomination of regulation free large deposits will be lowered to 100 mln yen from 300 mln The interest rate ceiling of MMCs with maturities of between one year and two years will be set at 0.5 percentage point below the prevailing certificate of deposit rate the bank said But the ceiling on MMCs with maturities of one year or less will remain the same or 0.75 percentage point below the CD rates The minimum denomination of MMCs will be lowered to 10 mln yen from 30 mln The bank also said time deposit rates will be lowered by 0.37 point effective March 16 in line with the half point cut in the official discount rate on February 23 New interest rates on two year and one year deposits at banks for example will be 3.64 pct and 3.39 pct per annum respectively Demand deposit rates however will remain the same REUTER TAIWAN POWER FIRM PLANS MORE FOREIGN DEBT CUTS TAIPEI March 2 State owned Taiwan Power co will boost its domestic borrowings to further cut its foreign debt in line with a government policy to trim the island's huge foreign exchange reserves a company official said The company's foreign debt mainly from the Japanese and U.S. Banks was cut nearly by half to 66.2 billion taiwan dlrs equivalent in calendar 1986 from 124.6 billion in 1985 he said Its domestic borrowings however rose to 105.2 billion taiwan dlrs from 80.6 billion in the same period he added Taiwan's foreign exchange reserves now stood at 50 billion U.S. Dlrs due to its 1986 record trade surplus of 15.6 billion REUTER CREDITORS ALLOW TECK HOCK TO FULFIL CONTRACTS SINGAPORE March 2 The nine creditor banks of international coffee trader Teck Hock and Co Pte Ltd met today to discuss ways of letting it fulfil profitable contracts which would help it balance earlier losses a creditor bank official said No statement was made after the meeting and officials declined to comment on any decisions made An unidentified foreign commodities company is pursuing its offer to buy the company and a subsidiary Coffee Industries Singapore banking sources said The nine creditor banks have the buyer's detailed proposals covering the injection of new capital and payment of some outstanding debt to the creditor banks and are now discussing individual bank counterproposals to increase debt repayments Teck Hock owes over 100 mln Singapore dlrs and the nine banks have been extending debt repayments since December 23 They are Oversea Chinese Banking Corp Ltd OCBM.S United Overseas Bank Ltd UOBM.S Banque Paribas Bangkok Bank Ltd Citibank NA Standard Chartered Bank Ltd Algemene Bank Nederland NV ABNN.A Banque Nationale De Paris BNPP.P and Chase Manhattan Bank NA REUTER TESCO ISSUES 100 MLN STG CONVERTIBLE BOND LONDON March 2 Tesco Plc TSCO.L is issuing a 100 mln stg convertible eurobond due February 20 2002 paying an indicated coupon of four to 4 1/4 pct and priced at par lead manager Credit Suisse First Boston Ltd said The issue is callable after 90 days at 106 pct declining by one pct per annum to par thereafter It is not callable until 1992 unless the share price exceeds 130 pct of the conversion price Final terms will be set on or before March 9 The deal has an investor put option after five years which will be priced to give the investor an annual yield to the put of 8 3/4 to nine pct The selling concession is 1 1/2 pct while management and underwriting each pay 1/2 pct The payment date is March 25 and there will be a short first coupon period The issue is available in denominations of 1,000 and 5,000 stg and will be listed in London REUTER SNCF ISSUING THREE BILLION FRANC DOMESTIC BOND PARIS March 2 The French state railway company the Ste Nationale des Chemins de Fer Francaise SNCF is issuing a three billion French franc domestic bond in two tranches the bond issuing committee said Details of the issue will be announced later and it will be listed in the Official Bulletin BALO of March 9 The issue will be co led by Banque Nationale de Paris Caisse Nationale de Credit Agricole and the Societe Marseillaise de Credit REUTER DUTCH ANIMAL FEED USAGE DOWN IN FIRST HALF SEASON ROTTERDAM March 2 Dutch animal feed usage in the first half of the current season from July through December 1986 fell 7.6 pct to 6.5 mln tonnes from 7.1 mln in the same period of 1985 figures in the latest newsletter from the co operative Cebeco Handelsraad show Tapioca usage fell 9.1 pct to 1.4 mln tonnes from 1.6 mln in the first half of the 1985/86 season Grain usage fell 6.1 pct to 1.1 mln tonnes from 1.2 mln while soymeal usage fell 10 pct to 967,000 tonnes from 1.1 mln Cornglutenfeed usage fell 17.8 pct to 729,000 tonnes from 887,000 but cornfeedmeal usage nearly doubled to 399,000 tonnes from 201,000 Citruspulp usage dropped 62.8 pct to 149,000 tonnes from 400,000 tonnes while rapeseed and meal usage rose 9.6 pct to 217,000 tonnes from 198,000 and sunmeal rose 25.6 pct to 216,000 tonnes from 172,000 tonnes During the whole of the season from July 1985 to June 1986 Dutch soymeal usage fell 12 pct to 1.9 mln tonnes from 2.1 mln the previous season while sunmeal usage rose 25 pct to 408,000 tonnes from 325,000 Rapeseed and meal usage during the season also rose 14 pct to 409,000 tonnes from 360,000 but citruspulp fell 37 pct to 516,000 tonnes from 826,000 Meanwhile the value of exports of agricultural products from the Netherlands in calendar 1986 fell 5.4 pct to 48.7 billion guilders from 51.5 billion in calendar 1985 figures from the Ministry of Agriculture show During the same period imports of agricultural products dropped 13.1 pct to 31.2 billion guilders from 35.8 billion REUTER REUTERS TO CARRY JIJI FINANCIAL SERVICES LONDON March 2 Reuters Holdings Plc RTRS.L said it would display an English language financial news service provided by the Japanese Jiji Press from the second quarter of 1987 The service which will be provided through the Reuter Monitor and Composite Information Service CIS will offer 24 hour reports on Japanese economic and political developments as well as specialised news on money markets and rates securities and technology Another Jiji service offering information on Japanese equity bond and money markets is also available on CIS REUTER FIAT UNIT ISSUES 100 MLN DLR BOND AND WARRANTS LONDON March 2 Fiat Finance and Trade Ltd is issuing a 100 mln dlr eurobond due April 2 1991 at 7 1/4 pct and 101 1/8 pct lead manager Morgan Stanley International said The issue is guaranteed by Internazionale Fiat Holding SA and is accompanied by a 200,000 currency warrant package The bond is available in denominations of 5,000 dlrs and will be listed in Luxembourg Payment date for bond and warrants is April 2 1987 The selling concession is 1 1/8 pct while management and underwriting combined pays 1/2 pct The warrants indicated at 45 dlrs entitle the holder to buy a minimum of 500 dlrs at a rate of 1.79 marks per dlr The warrants are exercisable from the April 2 payment date until March 2 1989 A minimum of 200 warrants must be exercised They will also be listed in Luxembourg REUTER U.K. CONFIRMS JANUARY STERLING M3 RISE LONDON March 2 The Bank of England said the broad measure of U.K. Money supply Sterling M3 rose a seasonally adjusted 1.1 pct in January after a 0.2 pct rise in December The unadjusted year on year rise was 17.6 pct after 18.1 pct in the year to December The narrow measure of money supply M0 fell by a seasonally adjusted 0.6 pct in January and rose by a non adjusted 4.1 pct year on year the Bank said The figures confirm provisional data issued by the Bank two weks ago In December M0 grew by a seasonally adjusted 1.4 pct and by a non seasonally adjusted 5.2 pct year on year The Bank said sterling bank lending grew by a non seasonally adjusted 1.75 billion stg in January This also confirmed provisional figures issued in February The measure of private sector liquidity PSL2 fell 0.2 pct in January but after seasonal adjustment rose 0.6 pct the Bank said The Bank said the public sector contribution to the growth in Sterling M3 was contractionary by about 2.3 billion stg Within this the Public Sector Borrowing Requirement PSBR showed a repayment of 3.7 billion stg while the non bank private sector's holdings of government debt fell by about 1.1 billion stg There was a fall of 290 mln stg in notes and coin in January a fall of 1.5 billion stg in non interest bearing sight deposits and a rise of 1.6 billion stg in interest bearing sight deposits the Bank said REUTER EXCO BUYS U.S. GOVERNMENT SECURITIES BROKER LONDON Mar 2 Exco International Plc a subsidiary of British and Commonwealth Shipping Co Plc BCOM.L said it had agreed in principle to buy an 80 pct stake in RMJ Holdings Corp for about 79 mln dlrs Exco Chairman Richard Lacy told Reuters the acquisition was being made from Bank of New York Co Inc BK.N which currently holds a 50.1 pct and from RMJ partners who hold the remainder Bank of New York and the partners will retain about 10 pct each and these stakes will be bought over the next six years RMJ is the holding company of RMJ Securities one of the largest U.S. Government securities brokers It is also involved in broking notes obligations and other instruments sponsored by U.S. Federal agencies Lacy said Exco had been considering buying a U.S. Government securities broker for the past four years and had made an offer for RMJ when it was sold by Security Pacific Corp SPC.N in 1985 RMJ was then valued at about 50 mln dlrs B and C managing director Peter Goldie said RMJ would be bought at about the same multiple as Exco suggesting net income of around 16 mln dlrs The company's earnings had not been hit by the halving of brokerage fees some 14 months ago as volumes had since doubled Lacy said that RMJ employed some 300 people with 200 in the brokerage business and about 70 in its SMS unit which provided computer software for the financial services community RMJ Securities had offices in New York where total market turnover of U.S. Government securities was 110 billion dlrs a day and in London where it has 15 billion It was also given permission last week to open an office in Tokyo where total market turnover had lifted rapidly to about five billion dlrs a day The acquisition would contribute between five and 10 pct of B and C's share earnings in 1987 on a proforma basis REUTER PAKISTAN TO TENDER FOR RBD PALM OIL LONDON March 2 Pakistan will hold an import tender tomorrow for 6,000 tonnes of refined bleached deodorised palm oil for second half March shipments traders said REUTER HOECHST TO RESEARCH DISCS WITH U.S. JAPAN FIRMS FRANKFURT March 2 Hoechst AG HFAG.F Kerdix Inc Boulder Colorado and Nakamichi Corp Tokyo have agreed to pool their research and development on magneto optical memory discs Hoechst said in a statement Research will be carried out at each company and Hoechst will start to produce the discs by mid 1988 and distribute them worldwide under the brand name Ozadisc A Hoechst spokesman said an eventual joint venture was likely but could give no details REUTER COLOROLL AGREES TO BUY U.S. WALLCOVERINGS COMPANY LONDON March 2 Coloroll Group Plc said it has entered into a conditional agreement to acquire the business and assets of Wallco Inc and related companies for 14.5 mln dlrs Miami based Wallco manufactures and distributes wallcoverings and showed a pretax profit of 1.5 mln dlrs on turnover of 37 mln in the year ending June 1986 The total U.S. Market was estimated to be worth 840 mln dlrs in 1986 having grown by 47 pct in the previous five years Coloroll said The combined sales and profit of the enlarged Coloroll U.S. Business would be 67 mln and four mln dlrs respectively REUTER ECONOMIC SPOTLIGHT AUSTERITY MEASURES IN HUNGARY By David Lewis Reuters BUDAPEST March 2 Hungary is to embark on a new series of austerity measures to tackle a budget deficit which tripled last year after quadrupling in 1985 The target deficit in the 1987 budget approved by Parliament last December was 43.8 billion forints But Zoltan Boesze chief of the Finance Ministry's budget financing division told Reuters the government now saw this as too high and had decided quite severe measures were needed All the organizations of economic management have been charged with elaborating further savings measures he said Asked if these measures were being taken under pressure from the International Monetary Fund IMF Boesze said The Fund suggested it would be good to improve monetary results and of course the Fund would support these efforts IMF teams spent several weeks in Budapest late last year Boesze said preliminary figures showed that Hungary's state budget deficit rose to a preliminary 47 billion forints last year from 15.8 billion in 1985 and 3.7 billion in 1984 The economy overshot a target deficit of 23 billion forints because of poor performance by state firms which needed subsidies and tax incentives to export and earn hard currency The exact extent and nature of savings are still under discussion but subsidies to state enterprises the largest budget item must definitely fall Boesze said Subsidies to state firms including grants to maintain low consumer prices exceeded the plan by nine billion to reach 164 billion forints in 1986 up from 152.9 billion in 1985 Parliament approved 1987 subsidies of 170 billion forints I think that in 1987 it is quite impossible to keep up the former situation and we will be obliged to reduce subsidies Boesze said The central administration must be hard If we are not hard then we will not be successful Boesze said the budget could also make savings from reserve provisions of two billion forints for central expenditure and 800 mln forints for transfers to local authorities I believe these reserves should not be used at all he said Wage growth last year outstripped that of gross domestic product which expanded one pct instead of a planned 2.5 pct The authorities had already signalled a small fall in real wages for 1987 but Boesze said firms will suffer severe tax penalties if they award nominal rises of over one or two pct This would mean a severe cut in living standards as retail price inflation is forecast at seven pct after 5.3 pct in 1986 A four month basic wage freeze expires on April 1 About 40 pct of the 1986 subsidies to state enterprises and 33 pct in 1985 were made to maintain low consumer prices Boesze said pure economic policy would dictate significant cuts in price subsidies but that social considerations made this difficult But he added I think ultimately we will be able to make curtailments in subsidies in this area as well He said Hungary plans to introduce price reform at the beginning of 1988 at the same time as personal taxation and value added tax The IMF supports these aims Hungary introduced a bankrupcty law last September in an attempt to shake out surplus labour from inefficient firms Between 100,000 and 150,000 workers are expected to be unemployed at least temporarily by 1990 Labour discipline is being tightened and firms may fire workers more easily Boesze said the per capita employment tax paid to the state by firms was being raised this year to encourage enterprises to shed labour He gave no exact figures Istvan Nagy a senior Finance Ministry official responsible for drafting the bankrupcy law told Reuters last year he hoped the law would cut state subsidies to enterprises by 50 pct After subsidies to state enterprises the largest single budget items are social insurance 153 billion forints approved for 1987 and transfers to local councils 80 billion Interest payments on international debt are set to rise to more than 10 billion forints in 1987 from between six and seven billion in 1986 Boesze said Hungary's net hard currency debt leapt by 54 pct last year to 7.7 billion dlrs according to provisional figures while trade with Western countries plunged into a deficit of more than 400 mln dlrs from a 1.2 billion dlr surplus just two years earlier Boesze said last year's budget deficit was financed 90 pct by credits from the National Bank mostly from abroad and 10 pct by the issue of domestic state bonds Deputy Prime Minister Frigyes Berecz told Hungarian economists in a speech this month that the country's economy was in a very difficult situation but not in crisis There would have to be a turnround with tangible results this year however and borrowing must be used more effectively Any rise in our present loans may prove to be dangerous Berecz said REUTER U.K. MONEY MARKET SHORTAGE FORECAST REVISED DOWN LONDON March 2 The Bank of England said it revised its forecast of the shortage in the money market down to around 700 mln stg from its original estimate of 800 mln REUTER ALASKA HOUSING HAS 150 MLN DLR SYNDICATED LOAN London March 2 Alaska Housing Finance Corp a local U.S. Government agency has become the first municipal entity to tap the syndicated loan market receiving a 150 mln dlr seven year revolving loan said Merrill Lynch Capital Markets as arranger Merrill said the loan is a back up to a proposed euro commercial paper program The syndicated loan which is unsecured carries a commitment fee of 0.10 pct per year Advances will be priced at 31 1/4 basis points over the London Interbank Offered Rate while notes which need only be purchased by banks if third party investors agree to buy them as well will be priced at offering Alaska Housing Finance was established by the legislature of the state of Alaska in 1971 and has so far acquired 6.1 billion dlrs of mortgages originated in Alaska REUTER SWEDEN TO GO AHEAD WITH S AFRICAN TRADE SANCTIONS STOCKHOLM March 2 Sweden's ruling Social Democratic Party gave full power to the government to decree unilateral trade sanctions against South Africa Prime Minister Ingvar Calrsson said Carlsson told a news conference the party decided the fight against apartheid took priority over Sweden's traditional policy of only adopting sanctions with the backing of the U.N. Security Council The government will decide later what form the trade boycott will take and when it will come into force REUTER DIGITAL AUDIO TAPE PLAYERS GO ON SALE IN JAPAN By Steven Brull Reuters TOKYO March 2 Japanese consumers hesitated about buying the controversial digital audio tape player DAT as it went on sale in Tokyo today but said the DAT player's near perfect sound will make it a success once it becomes cheaper The sound is great but I'll wait until more machines hit the market and prices fall to about 100,000 yen before buying one said Terumi Fujitsuka 35 a steel firm employee Aiwa Sharp and Matsushita displayed their DAT players today although delivery will take about two weeks retailers said Aiwa's machine the cheapest is listed at 188,000 yen Machines by Sony Hitachi Toshiba and others will appear as early as the end of March industry sources said DAT players can play back and record with fidelity superior to even a compact disc They use a cassette half the size of the standard audio cassette and unlike conventional analogue machines they can make copies an infinite number of times with almost no loss of sound quality This aroused fears in the music industry of widespread tape piracy and loss of royalties In negotiations that delayed the DAT player's debut the industry demanded anti piracy circuitry be built into the machines Machines sold in Japan are fitted with a computer chip to prevent copying through a digital signal But copies can still be made if the signal is routed through a regular amplifier Nobody can tell the difference one salesman said DAT players have been kept off Western markets and some countries are considering banning them or imposing heavy duties unless tougher anti piracy circuitry is added But Japanese hardware makers hard pressed for profits in the era of the high yen and growing competition are eager to carve out a profitable niche Prices of DAT players will probably fall quickly possibly to around 70,000 yen by next year as other makers put their products on the market industry analysts said They said by 1990 sales could reach six mln units per year Philips of the Netherlands has said it will launch its DAT player on the world market later this year REUTER ECONOMIC SPOTLIGHT ITALIAN BOOM By Jane Leach Reuters ROME March 2 Italy's strong economic revival has led some observers to talk of miracles and created euphoria in some quarters about future growth prospects but many Italian experts warn that the current wave of optimism is excessive I think all this foreign interest in the so called Italian miracle is really exaggerated Foreign observers always oscillate in the case of Italy between complete pessimism and unwarranted optimism says Luigi Spaventa one of Italy's leading economists and a professor at Rome University According to Spaventa these violent swings of mood have been occurring for the last 15 years with Italy one minute seen as the bad boy of Europe and unable to raise a dollar and the next a worker of miracles and basking in admiration I think there's a lot of exaggeration Once it used to be the underground economy and all the correspondents of foreign newspapers flocked to Italy to study this That was another story about nothing like writing about a black cat in a dark room Spaventa in tune with other economists and industrialists here stress Italy's recent achievements particularly the dramatic and solid recovery in the fortunes of industrial enterprises but warns that the economy is still vulnerable Profits of private sector firms such as Fiat S.P.A. FIAT.M and ING C. Olivetti and C S.P.A. are booming the major state industries are back in the black after years of losses inflation has nosedived and the trade and balance of payments deficits have been slashed Expectations by some experts that Italy is poised to replace Britain as the world's fifth largest economy have also boosted optimism Italy itself has made it clear it is not happy with what it feels to be its second rate status among the major industrialised countries Only this week it angrily demanded clarification of this status after being excluded from a meeting of finance ministers from the Group of Five G 5 comprising the United States Japan West Germany France and Britain Italy said its exclusion from the meeting violated an agreement reached in Tokyo last year to let Italy and Canada attend meetings held by the five whenever discussions concerned managing the international monetary system But Italy needs first to tackle some fundamental problems still facing its economy economists and industrialists say We must not forget that ours is still a vulnerable economy warns Fiat managing director Cesare Romiti He says that while Italy's recent achievements are indeed cause for satisfaction and optimism the focus now should be on the problems still remaining rather than those already solved The country's huge state sector deficit high unemployment and a heavy dependence on imported oil are among the most worrying problems experts say The size of the state spending deficit estimated at 109,561 billion lire in 1986 and targetted at 100,000 billion lire this year means there is a risk inflation could spiral again says Carlo Scognamiglio head of the private Luiss university in Rome Inflation fell into single digits for the first time in a decade in September 1984 and by January this year was running at 4.5 pct but it is still not low enough to guarantee international competiveness economists and industrialists say And unemployment was running at 11.6 pct nationally last October according to the latest official data Recent official data showed that of a total 2.77 million people seeking work in October 1986 almost 73 pct were aged between 14 and 29 Unemployment in the south was running at 17.7 pct more than double that in the industrial north The Organisation for Economic Cooperation and Development OECD recently forecast that Italian gross domestic product GDP would rise rise three pct in 1987 after expanding 2.5 pct in 1986 But it warned that growth was unlikely to be enough to check rising unemployment Another problem is Italy's reliance on imported raw materials The country imports around 80 pct of its fuel needs This factor actually worked sharply in Italy's favour last year when lower energy costs helped slash the country's trade deficit to 3,717 billion lire by year end from 23,085 billion lire in 1985 But economists say the improvement owes little to any structural change in the Italian economy and that any reversal of the trend in costs could have serious consequences If Italy truly wants to be counted among the world's top industrialised nations it also needs to tighten up stockmarket operating procedures and encourage firms to supply more quality information about their activities economists say Italy has no controls on insider trading The country also needs to shed its rigid capital movements controls a European Community directive calls for these to be dismantled by 1992 but this too will require a less blinkered attitude and a change in traditional operating procedures economists say Even today if I wanted to invest in the Tokyo bourse I doubt I'd find the expertise in a brokerage firm or in banks which would allow me to do that says Spaventa REUTER U.K. MONEY MARKET RECEIVES 37 MLN STG ASSISTANCE LONDON March 2 The Bank of England said it had provided the money market with 37 mln stg assistance in the morning session This compares with the Bank's downward revised estimate of the shortfall in the system today of around 700 mln stg The central bank purchased bank bills outright comprising four mln stg in band one at 10 7/8 pct and 33 mln stg in band two at 10 13/16 pct REUTER JAPAN U.S. SET TO BEGIN HIGH LEVEL TRADE TALKS By Rich Miller Reuters TOKYO March 2 Japan and the U.S. Kick off top level trade talks tomorrow amid signs officials from both sides are growing increasingly irritated with each other The talks held annually at sub cabinet level to review the whole gamut of U.S. Japan economic relations will pave the way for American Secretary of State George Schultz's one day stop over here at end week on his way home from China Faced with growing Congressional protectionist pressure the U.S. Administration is pressing Japan for speedy action to reduce its still huge trade surplus U.S. Officials said We appreciate their frustration a senior Japanese government official said But we are also frustrated The official said the 40 pct rise of the yen over the last 18 months has hit Japan hard forcing exporters to slash spending and lay off workers to make up for lost sales abroad That has not yet shown up in dollar based statistics on trade but it will he said He said the U.S. Administration was ignoring the progress that has been made and instead emphasizing the problems that remain when it talks with Congress It would only take five minutes to list their accomplishments a senior U.S. Official replied The talks begin tomorrow with high level discussions on the economic structures of both countries and how they affect the bilateral trade imbalance which last year amounted to 51.48 billion dlrs in Japan's favour On the following two days the topics will range from multilateral trade talks under the auspices of the General Agreement on Tariffs and Trade GATT to such bilateral trade problems as super computers The structural talks are intended to be free wheeling discussions among senior officials Tomorrow's topics include savings and investment issues such as consumer credit and housing and the implications of government budget deficits These talks come at a particularly delicate time for the Japanese government which is facing increasing domestic pressure to abandon its tight fisted fiscal policy and stimulate the sagging economy by spending more Some U.S. Officials complained Japan has no intention of boosting domestic demand and imports as Washington wants Japanese officials in turn pointed the finger at the huge U.S. Budget deficit as one of the main culprits for the trade imbalance That budget deficit has meant that the U.S. Is buying more imports Japan seems particularly peeved at being singled in a draft trade bill before the Senate as a nation following adverserial trade practices It condemns Japan without due process one Japanese official said That reference spoils what is otherwise a well thought out bill introduced by Democratic Senator Lloyd Bentsen he said Japan is also not totally happy with the administration's trade bill particularly its proposal to establish reciprocal access to foreign markets as one criteria for retaliatory trade action by the U.S. Officials said Nevertheless Japanese officials said they remain in a weak bargaining position especially with the threat of a trade bill overhanging them We have no leverage one official admitted As a result Tokyo is striving to meet U.S. Complaints about its trade practices in a variety of fields including super computers The U.S. Is pressing for greater access to the Japanese super computer market The Japanese government has sent a long questionnaire to public institutions like universities which buy the sophisticated machines in hopes of eventually setting up informal bidding procedures easily understood by all potential sellers officials said REUTER INDIA TO HOLD WHITE SUGAR BUYING TENDER LONDON March 2 India will hold a buying tender on Wednesday March 4 for two to three cargoes of white sugar for March April shipment traders said REUTER QANTAS TO BUY FOUR 747 400'S FOR ONE BILLION DLRS SYDNEY March 2 Qantas Airways Ltd has placed a firm order with Boeing Co BA for four 747 400 aircraft at a cost of 250 mln Australian dlrs each chairman Jim Leslie said The first is due for delivery in April 1989 with the others arriving in May June and September of that year he said in a statement The 400 series is the latest model of the Boeing 747 family he said The purchase will take government owned Qantas's 747 fleet to 28 he said Leslie said Qantas is talking to three engine makers who are all offering engines for the Boeing 747 400 and it will announce a decision on engine purchases later this year He said they are Pratt and Whitney and General Electric Co GE a unit of United Technologies Corp UTX and Britain's Rolls Royce Ltd He said the 747 400 which incorporates new technology such as extended wings with six feet high winglets and enhanced electronics should have its first flight next February The 400 series has a designed range of 12,500 kms 2,140 kms further than the current Qantas 747 300's he said The aircraft will be financed by foreign borrowings and foreign exchange earnings and Qantas believes they will pay for themselves in four to five years Leslie said The 747 400 has a take off weight of 870,000 pounds up from 833,000 for the 300 series and offers an eight pct fuel saving he said The higher range and payload means they will first be used on the route to Britain and Europe via Asia They will also be used on non stop flights between Sydney and Los Angeles REUTER CARLTON COMMUNICATIONS OPTIMISTIC FOR 1987 LONDON March 2 Carlton Communications Plc has started the current financial year well with accounts for the first four months showing a healthy increase on the same period last year and Chairman M.P. Green told the annual meeting he looked forward to 1987 with optimism The issue of 4.6 mln shares in ADR form had now been successfully completed he added Carlton intended to increase its presence in the U.S. Which represented 50 pct of the world television market Conditions worldwide in the television industry continued to look buoyant the Chairman noted REUTER EC OPENS ANTI DUMPING ENQUIRY INTO SOVIET MERCURY BRUSSELS March 2 The European Community Commission said it has opened an enquiry into allegations that the Soviet Union is dumping mercury on the European market at below cost prices The Commission said its decision follows a complaint from EC non ferrous metals producers that the sales of Soviet mercury were harming their business and threatening jobs in the European industry According to the complaint Soviet mercury sales in the EC had risen from zero in recent years to 100 tonnes between August and October last year and threaten to capture 25 pct of the EC market if they continue at the same pace The industry said the mercury was being sold at more than 40 pct below prices charged by EC producers forcing them to cut their prices to levels that no longer covered costs The imports had caused producers heavy financial losses it said The Commission said the industry would probably be unable to hold prices at current levels and that any increase would result in loss of sales and jobs The so called anti dumping procedure opened by the Commission will allow all interested parties to state their cases to the authority REUTER MANILA SAID TO OFFER DEBT BONDS TO BANKS MANILA March 2 The Philippines will offer commercial bank creditors an innovative pricing plan that will make debt payments through certificates of indebtedness instead of cash the authoritative Business Day newspaper said Finance Secretary Jaime Ongpin told reporters Saturday that the alternative proposal is designed to avoid an impasse when debt rescheduling talks reopen in New York on Tuesday He did not give details but said It is a very useful alternative and in the end will permit the banks to say that they achieved their pricing target and will likewise permit the Philippines to say exactly the same thing Quoting negotiation documents to be presented to the country's 12 bank advisory committee Business Day said the debt certificates will carry maturities of five or six years It said the certificates will be classified as zero coupon bonds or promissory notes with no interest but priced at a considerable discount from their redemption price It said the debt bonds will entitle holder banks to a guaranteed return on both interest and principal since no payment of any kind is made until the bond matures It said a bank can sell the bonds on the secondary bond market for either dlrs or pesos depending on its requirement The peso proceeds can be invested in selected industries under the Philippines debt equity program Ongpin said Manila is sticking to its demand of a spread of 5/8 percentage points over London interbank offered Rates LIBOR for restructuring 3.6 billion dlrs of debt repayments The proposal will give the banks a choice of 5/8ths or the alternative Ongpin said Our representatives have gone to Washington to the International Monetary Fund the World Bank the Fed Federal Reserve Board and the U.S. Treasury to brief them in advance on this alternative and it has generally been positively received We don't believe that there is going to be a problem on the accounting side Ongpin said We have run this alternative proposal to the accounting firms Neither have the government regulators indicated that there will be a problem Reuter ARGENTINE DEBT NEGOTIATOR CONFIDENT OF ACCORD BUENOS AIRES March 2 Argentina's chief debt negotiator said he was confident of a prompt accord with international creditor banks for rescheduling the country's foreign debt I'm quite optimistic about carrying out a serious and quick negotiation Treasury Secretary Mario Brodersohn said on return from talks in New York with leading U.S. and world financial officials Argentina is currently negotiating terms with the steering committee for its creditor banks that will allow it to meet four pct economic growth targets in 1987 It has also asked for a reduction in interest rates and fresh credit Brodersohn said the growth targets were not negotiable but Argentina did not want to follow Brazil in suspending payments on its foreign debt He said Argentina was seeking 2.15 billion dlrs credit to meet the targets adding that the banks attitude had improved following Brazil's decision The United States and a group of other industrial nations on Thursday granted Argentina a 500 mln dlr bridge loan Brodersohn held talks in New York with U.S. Treasury Secretary James Baker Federal Reserve chief Paul Volcker and International Monetary Fund IMF head Michel Camdessus Reuter GULF ARAB DEPUTY OIL MINISTERS TO MEET IN BAHRAIN ABU DHABI March 2 Deputy oil ministers from six Gulf Arab states will meet in Bahrain today to discuss coordination of crude oil marketing the official Emirates news agency WAM reported WAM said the officials would be discussing implementation of last Sunday's agreement in Doha by Gulf Cooperation Council GCC oil ministers to help each other market their crude oil Four of the GCC states Saudi Arabia the United Arab Emirates UAE Kuwait and Qatar are members of the Organiaation of Petroleum Exporting Countries OPEC and some face stiff buyer resistance to official OPEC prices Reuter MANILA OFFICIALS SPLIT OVER DEBT STRATEGY MANILA March 2 A rift has occured among Philippine officials over debt talks opening tomorrow in New York with Economic Planning Secretary Solita Monsod accusing the chief negotiator of softening his stand to gain a quick agreement Monsod told Reuters Finance Secretary Jaime Ongpin had decided not to insist on Manila's creditor banks pledging to fund half of a projected 1988/92 financing gap of seven billion dlrs He Ongpin wants to finish the negotiations as fast as possible I'm saying that's very short sighted Monsod said Monsod said any pricing agreement on rescheduling 3.6 billion dlrs of the Philippines total foreign debt of 27.8 billion dlrs would ignore a looming 14 billion dlr net resource transfer in the same period Manila is seeking a spread of 5/8 percentage points over the London Interbank Offered Rates LIBOR Monsod said Right now we are saying to the banks let's share the financing burden Ongpin said last month the country's consultative group of multilateral and bilateral aid donors had endorsed a growth facility to bridge the funding gap He said the government and the consultative group would meet annually to gauge financing needs for each year The aid donors and commercial bank creditors would then be asked to finance any gap on a shared basis He told reporters on Saturday it would be unwise to try to pin the banks down on Monsod's proposed growth facility Ongpin acknowledged there was a dispute over tactics Secretary Monsod and I get along famously he said She talks and I listen but I don't necessarily agree Monsod said a firm commitment from the banks on bridging the financing gap would have aided the government's pump priming program and 1987/92 medium term development plan She said if private sector investment continued to be held back by the fear of a balance of payments crisis and rising interest rates the country would fail to achieve its gross national product GNP growth target of an average 6.5 pct over the next six years If you don't get those seven billion dlrs there is no plan How can there be a program if there is no finance she said adding Ongpin's stand was not good for the economy It Ongpin's stand is going to make it much more difficult for the economy to attain its growth targets Monsod said Considering what the Philippine negotiating team is going to press for there is absolutely no reason why they should not be able to come back from New York in a day she said Monsod the government's chief economic planner stressed Manila's policy was growth before debt She said if the banks refused to lend the new money the Philippines should copy Brazil's action last week in freezing all debt repayments If the banks do not cooperate by lending you back some of the money that you are sending abroad then of course you have an option Monsod said You just don't send it abroad You do a Brazil REUTER OECD SAYS JAPAN RESOLVED TO STIMULATE DEMAND TOKYO March 2 Japan appears resolved to encourage domestic demand for its goods instead of relying on exports to support its economy Jean Claude Paye Director General of the Organization for Economic Cooperation and Development OECD told a news conference Paye has been in Japan exchanging views on problems confronting the world economy and the role of the OECD He met with Prime Minister Yasuhiro Nakasone Foreign Minister Tadashi Kuranari Bank of Japan Governor Satoshi Sumita and other high ranking Japanese officials Reuter SAUDI ARABIA REITERATES COMMITMENT TO OPEC ACCORD BAHRAIN March 2 Saudi Arabian Oil Minister Hisham Nazer reiterated the kingdom's commitment to last December's OPEC accord to boost world oil prices and stabilize the market the official Saudi Press Agency SPA said Asked by the agency about the recent fall in free market oil prices Nazer said Saudi Arabia is fully adhering by the accord and it will never sell its oil at prices below the pronounced prices under any circumstance Saudi Arabia was a main architect of December pact under which OPEC agreed to cut its total oil output ceiling by 7.25 pct and return to fixed prices of around 18 dollars a barrel Reuter KUWAIT MINISTER SAYS NO EMERGENCY OPEC TALKS SET KUWAIT March 2 Kuwait's oil minister said in a newspaper interview that there were no plans for an emergency OPEC meeting after the recent weakness in world oil prices Sheikh Ali al Khalifa al Sabah was quoted by the local daily al Qabas as saying that none of the OPEC members has asked for such a meeting He also denied that Kuwait was pumping above its OPEC quota of 948,000 barrels of crude daily bpd Crude oil prices fell sharply last week as international oil traders and analysts estimated the 13 nation OPEC was pumping up to one million bpd over its self imposed limits Reuter TAIWAN PLANS NEW TARIFF CUTS By Andrew Browne Reuters TAIPEI March 2 Taiwan plans another round of deep tariff cuts this year to help narrow its trade surplus with the U.S. A senior economic planner said Wang Chao Ming vice chairman of the council for economic planning and development told Reuters Taiwan would further reduce import tariffs on 1,700 products sometime in the second half of this year Cuts of up to 50 pct on those items were made last year and Wang said further cuts would go much deeper We have to speed up liberalisation and cut import tariffs faster and more substantially he said The United States Taiwan's main trading partner has said the island's import tariffs still ranging from a high of almost 60 pct were unacceptable It has criticised the cuts as too selective Taiwan's trade surplus with the United States hit 13.6 billion dlrs last year The surplus has boosted foreign exchange reserves to 50 billion dlrs which Wang said made Taiwan a target for U.S. Protectionism Wang said the trade surplus and the reserves weakened Taiwan's position in talks with Washington over export quotas particularly for shoes textiles and machine tools which are among the island's main export earners A special Taiwanese trade delegation leaves for Washington tomorrow to try to renegotiate an agreement signed last year limiting exports of Taiwan textiles Under the accord Taiwan's textile export growth was limited to 0.5 pct each year until 1988 Taipei has said it is losing markets to South Korea and Hong Kong which were given more generous terms REUTER RHONE POULENC TO LAUNCH INVESTMENT CERTIFICATES PARIS March 2 French state owned chemicals group Rhone Poulenc RHON.PA said it will increase its capital with a 2.5 billion franc issue of preferential investment certificates on March 9 Company chairman Jean Rene Fourtou said 500 mln francs of the issue will be placed in the U.S. Details of the issue will be announced by Finance Minister Edouard Balladur on March 6 The group due to be privatised at an unspecified date said in January it was planning a capital increase to pursue its development strategy and make further acquisitions Rhone Poulenc shares were suspended from trading on the Paris Bourse last Thursday ahead of the capital increase The group's capital currently stands at 4.03 billion francs Fourtou speaking at a news conference did not give details of acquisitions the company planned for 1987 He said acquisitions in 1987 would complement an industrial investment program of around five billion francs and research spending of about 3.5 billion francs Rhone Poulenc spent 5.5 billion francs on acquisitions last year Chemistry is on the move and we face opportunities that must be seized Fourtou said REUTER HUTCHISON SEES HIGHER PAYOUT SATISFACTORY PROFITS HONG KONG March 2 Hutchison Whampoa Ltd HWHH.HK expects satisfactory profits in 1987 and will pay a higher dividend for the year chairman Li Ka shing said He did not make any specific projections for the company's earnings this year but he said the firm will pay a dividend of not less than 32.5 cents per share after a proposed four for one stock split and a one for four bonus issue It paid total dividends of 1.30 dlrs per share last year equal to 26 cents per share adjusting for the bonus and share split Hutchison which has operations ranging from trading to property and container terminals earlier reported after tax profits of 1.62 billion dlrs against 1.19 billion dlrs in 1985 The 1986 total excluded extraordinary gains of 563 mln dlrs partly from the sale of some of its stake in the South China Morning Post the leading English language newspaper compared with 369 mln dlrs the previous year It said it expects another 277 mln dlr gain in 1987 from the sale of the remaining shares Li said Hong Kong's property market remains strong while its economy is performing better than forecast with its largely export led growth Gross domestic product grew by nearly nine pct last year against an initial government projection of 4.5 pct But he said Hong Kong's large trade deficit with the U.S. May result in protectionist measures that will adversely affect the British colony He said all of the company's major operations showed improved results in 1986 Hutchison said earlier it will sell its entire 23.5 pct interest in Hongkong Electric Holdings Ltd HKEH.HK to Cavendish International Holdings Ltd itself a spin off from Hongkong Electric Under a reorganisation announced separately Hongkong Electric will spin off all its non electricity related activities into Cavendish which will be listed on the local stock exchange Hongkong Electric shareholders will receive one share in Cavendish for every Hongkong Electric share Cavendish will buy the 348.2 mln Hongkong Electric shares from Hutchison by issuing 975 mln new shares The spin off and the sale of Hongkong Electric shares will give Hutchison a 53 pct stake in Cavendish Li said the decision to spin off Cavendish is to relieve Hongkong Electric of public criticism of the power company for making risky investments But he denied there was pressure from the government for the spin off He said Cavendish will have seven billion dlrs of assets and will be almost debt free with 340 mln dlrs of liabilites Its major assets are the Hong Kong Hilton Hotel property development and interests in Husky Oil Ltd HYO.TO of Canada and Pearson Plc PSON.L of Britain REUTER BALLADUR EXPECTS IMPROVED FEBRUARY INFLATION DATA PARIS March 2 The French inflation rate is expected to show a substantial improvement in February after January's very high 0.9 pct monthly rate Finance Minister Edouard Balladur said He told a French television interviewer that half of the high January rise which took year on year inflation that month to three pct was due to higher oil prices Now taking account of this inflation index our forecast for price rises this year is two and a half pct he said Balladur said the upward revision of the inflation target which the government had initially set at two pct for this year should not affect wage expectations for this year There is no reason to envisage a change in our wage policy he said referring to the government's aim of holding public sector wage increases to three pct this year Price inflation last year fell to 2.1 pct from 4.7 pct in 1985 REUTER FEBRUARY U.S. PURCHASING MANAGER INDEX FALLS NEW YORK March 2 The U.S. economy continued to expand in February but at a slower pace than in January which saw a spurt of activity the National Association of Purchasing Management NAPM said in a report The Association's composite survey index declined to 51.9 pct in February from 55.8 pct in January the NAPM said It was the seventh consecutive month in which this leading indicator was over 50 pct A reading above 50 pct generally indicates that the economy is in an expanding phase One below 50 pct implies a declining economy The report based on questions asked of purchasing managers at 250 U.S. industrial companies also found that the growth rate in new orders and production slowed in February However production remained vigorous as more than three times as many members reported it better rather than worse Vendor deliveries improved slightly last month but members reported that steel supplies were tight as U.S. Steel X gradually resumed production An equal number of members reported inventories were higher and lower The NAPM said that had not happened since August 1984 For a sixth month more purchasers reported paying higher rather than lower prices this time by a ratio of nine to one Robert Bretz chairman of the NAPM's business survey committee and director of materials management at Pitney Bowes Inc PBI said the economy continued to expand in February but at a more subdued rate than in January The slowing of new orders should not be significant enough to dampen prospects for a respectable first quarter The composite index is a seasonally adjusted figure based on five components of the NAPM business survey new orders production vendor deliveries inventories and employment Reuter FUNARO SAYS BRAZIL NEEDS MORE FASTER FINANCE WASHINGTON March 2 Brazil would not have suspended payments on debt owed to foreign banks if it had received more and faster financing from official lending agencies Finance Minister Dilson Funaro said He said he would not seek more money from the International Monetary Fund to which Brazil paid 922 mln dlrs last year and said Brazil's problems could not be solved by IMF intervention It's a question of why the official lending agencies don't finance a little bit more quickly and easily Funaro told reporters at the Brazilian Embassy Asked if Brazil would have continued making payments of monthly interest to its foreign commercial bank lenders if official lending agencies had provided more funds he replied Yes because our country did not receive financing from these agencies Asked how long the payment suspension would last Funaro said It all depends on what kind of financing we are going to receive from the other side Brazil with foreign debt totaling 108 billion dlrs stunned the banking community last week by suspending payments on some 68 billion dlrs owed to private banks Funaro said Brazil had paid 44 billion dollars to the World Bank and other lending agencies and commercial banks in the past four years and got only 11 billion dlrs in loans He said the net transfer was hurting the country's continued growth and capacity to import goods Something is wrong with the system Some mechanism has to be found to finance a country like Brazil Funaro said He did not specify what steps he had in mind but said he would like to see automatic official lending when needed so that Brazil would not have to dip into its dwindling reserves now reported to be below four billion dlrs Funaro said Brazil had the world's third largest trade surplus and estimated the 1987 surplus would be at least eight billion dlrs But he said that without increased and faster lending from official institutions the nation could not rely on its export earnings to finance development and imports and also service its debt We must find an equilibrium between foreign adjustment and internal adjustment Funaro said He complained that official lending agencies had imposed tight control on credit over the past four years leaving commercial bank refinancing as the only credit available Funaro said U.S officials understand his position but they don't like it Later he left Washington for a tour of Europe and debt discussions with officials in Britain West Germany France Switzerland and Italy Brazil's central cank President Francisco Gros said he sent a telex to creditor banks Friday to clarify confusion over Brazil's request that banks expedite procedures for renewal of short term interbank credit and trade credit lines Reuter AMERICAN MOTORS AMO BREAKS OFF TALKS ON PLANT DETROIT March 2 American Motors Corp said that it broke off talks aimed at extending the life of its only U.S. car assembly plant after the union rejected its final proposal for wage concessions Negotiations which continued past a midnight Friday deadline ended Saturday after United Auto Workers negotiators voted to reject the unspecified concessions an AMC spokesman said by telephone from Milwaukee site of the talks Without a new agreement containing lower labor costs AMC said it would phase out vehicle production at the complex in Kenosha Wisconsin by 1989 Reuter SCIENTIFIC MICRO SYSTEMS SMSI ACUIRES SUPERMAC NEW YORK March 2 Scientific Micro Systems Inc said it has acquired Supermac Technology a rapidly growing supplier of enhancement products and disc drive subsystems for the Apple personal computer market Scientific Micro said it acquired all the common stock of Supermac in exchange for 1.05 mln shares of its own common stock The stock closed at 5.50 dlrs bid on Friday Supermac a privately held firm based in Mountain View California as is Scientific Micro reported a net profit of 300,000 dlrs on revenue of 9.5 mln dlrs in fiscal 1986 It expects its revenue to approximately double in 1987 Reuter AMERICAN EXPRESS AXP VIEWING SHEARSON OPTIONS By Patti Domm Reuters NEW YORK March 2 American Express Co rumored to be considering a spinoff of part of Shearson Lehman Brothers Inc said it is studying a range of options for its brokerage unit that could improve Shearon's access to capital and help it meet broadening international competition In a joint statement American Express and Shearson said the actions under consideration are an integral part of American Express worldwide financial services strategy and that the two companies have been having both internal and external discussions on the matters American Express said no decision has been reached on the strategic options and that it and Shearson could ultimately decide to follow growth plans already in place Last week rumors circulated on Wall Street that the financial services giant was considering a spinoff of part of Shearson and there was speculation it may be considering selling a stake to a Japanese firm Analysts said the speculation also focused on American Express selling 20 pct of the profitable brokerage firm to the public There was some speculation that American Express had also considered a total spinoff of Shearson but the plan was considered highly unlikely analysts said American Express said in the statement on Sunday that it will not comment on rumors and speculation and a spokesman would not go beyond the statement The company also remained silent last Thursday and Friday as rumors drove American Express stock up a total of 5 1/2 dlrs in two days to bring it to a Friday close at 74 It said it issued the statement on Sunday because a similar statement was being circulated to employees Analysts have been divided on whether it makes sense for American Express to give up a stake in the wholly owned brokerage which improved its after tax earnings by about 50 pct in the last year Some analysts said American Express may consider spinning off part of Shearson because it is concerned that its stock price does not fully reflect the value of the brokerage firm Shearson contributed 316 mln dlrs of American Express 1.25 billion dlr net in 1986 American Express ambitious plans for international growth may be also enhanced by the added cash that spinning out part of Shearson would bring Analysts speculated that all of Shearson would have a market value of about 3.5 billion dlrs To some however the need for added capital is puzzling American Express is in a position where they can raise capital if they need to said Larry Eckenfelder of Prudential Bache Securities Analysts said rumors were fed by the reorganization of Shearson management Wednesday Chief operating officer Jeffrey Lane got the added previously vacant post of president The reorganization also created four new positions for chairmen of Shearson's operating divisions a move analysts speculated would allow Shearson to be a stand alone company Analysts contacted on Sunday said the statement does little to clarify last week's market speculation It does confirm however that the financial services firm which unsuccessfully attempted to expand Shearson with a major acquisition last year is looking beyond its own walls for growth and positioning in the global market competition Late last year Shearson's takeover offer to the E.F. Hutton Group Inc was rejected by Hutton and analysts said there had been speculation that Shearson also was rebuffed when it approached another major Wall Street brokerage Reuter SPANISH FARMERS PROTEST THEN CALL TRUCE MADRID March 2 Spanish farmers demanding a better deal from the European Community blocked roads and staged protest rallies this weekend before their leaders announced a truce to negotiate with the government Spain joined the community at the start of last year and farmers say they have suffered competition from EC imports without sufficient compensation Leaders of three of the farmers organisations announced at a press conference in Madrid yesterday they were suspending protests to allow time for negotiations with the government on their grievances Reuter SWISS HAVE NET GAIN IN 1985 GOVERNMENT FINANCES BERNE March 2 Switzerland recorded last year its first overall surplus in government finances since 1974 ending with a net gain worth 905 mln Swiss francs the Finance Ministry said The surplus including cash transactions and long term investments contrasted with the 1985 shortfall of 1.06 billion francs and the 297 mln franc deficit proposed in the 1986 budget All categories of revenues were higher than forecast and expenditures were 433 mln francs under forecast The Finance Ministry said expenditures totalled 23.18 billion francs against 22.88 billion in 1985 and the 23.61 billion proposed in the original 1986 budget Tax receipts at 25.11 billion were well above the 1985 figure of 22.19 billion and the forecast for 1986 of 23.71 billion This left a surplus on cash transactions totalling 1.94 billion francs against a forecast 102 mln and the 1985 deficit of 696 mln Income and wealth taxes ended 749 mln francs above forecast 378 mln of which came from higher than expected receipts on the stamp duty on financial market transactions Taxes on comsumption brought in 638 mln francs more than planned and other taxes 16 mln francs more the ministry said The ministry said the improvement in the overall account reflected years of efforts by the government and parliament to introduce saving and the acceptance by people of necessary tax increases But economic factors including the low rate of inflation the weak dollar falling interest rates and low oil prices were also important factors A spokesman for the ministry said the government had used its improved cash position to retire about one billion francs of government debt which accounted for the difference between the 1.94 billion surplus on cash transactions and the 905 mln franc overall surplus REUTER TWO S L FAILURES RAISE U.S. 1987 TOLL TO 10 WASHINGTON March 2 The Federal Home Loan Bank Board FHLBB announced savings and loan association failures in Kansas and Colorado raising the U.S. 1987 total to 10 The FHLBB said it closed the First Federal Savings and Loan Association of Beloit Kansas and transferred its desposits and some other assets to Home Savings Association It said First Federal with 82.9 mln dlrs in assets was closed because he was insolvent The FHLBB said that due to insolvency it put Key S and L of Englewood Colo into receivorship and replaced it with a new Key Savings and Loan Association with new management Reuter ROPAK ROPK HAS 34 PCT OF BUCKHORN BKN FULLERTON Calif March 2 Ropak Corp said it received and accepted about 456,968 common shares and 527,035 Series A convertible preferred shares of Buckhorn Inc at four dlrs and 5.75 dlrs each respectively in response to its tender offer that expired Friday and it now owns 34.4 pct of Buckhorn voting power The company had owned 63,000 common and 25,100 preferred shares before starting the hostile tender Ropak said it is borrowing the funds needed to buy the Buckhorn shares from its bank lender and will not need to use any funds that another bank had committed to provide under a margin loan Ropak said it waived minimum acceptance requirements to buy the shares and intends to evaluate a number of possible ways of completing an acquisition of Buckhorn It said it hopes that Buckhorn's board will reevaluate its position and enter into meaningful negotiations Reuter APPLE COMPUTER AAPL UPGRADES MACINTOSH LINE By Dean Lokken SAN FRANCISCO March 2 Apple Computer Inc today will announce the addition of two new machines to its profitable Macintosh line of personal computers both aimed at the business market The Macintosh was first introduced in January 1984 and has been upgraded several times since then Both of the new machines the Macintosh SE and the Macintosh II will be faster and more versatile but considerably more expensive than earlier models The Mac SE SE stands for system expansion which Apple says will operate 15 20 pct faster than its current Mac Plus goes on sale today It carries a suggested retail price ranging from 2,899 to 3,699 dlrs depending on its features The Mac II designed to run about four times faster than the Mac Plus is to be ready for shipping in May and priced between 4,798 and 6,998 dlrs Mac Plus which went on the market one year ago sells for about 2,200 dlrs Both new computers are to be unveiled at the AppleWorld Conference in Los Angeles Company officials expressed high hopes for both computers at a press briefing on Friday especially the high performance Mac II which is designed to give Apple an entree to the expanding market for science and engineering workstations John Sculley Apple chairman and chief executive officer declined to estimate anticipated sales but he said the Mac SE should contribute significantly to Apple's bottom line this year He said it would appeal to the mainstream of PC users I believe the Mac SE will be the product of choice for most people he said My sense is that it will be a real power product for revenue Bruce Lupatkin senior technology analyst with Hambrecht Quist in San Francisco said he had not seen the new computers but expected the new products to do well Apple has recognized the need for a convergence of computer functions into one general all purpose workstation he told Reuters The graphics interface on the Mac products is significantly better than anything IBM has to date International Business Machines is expected to announce updated personal computers this spring The Mac II uses the new Motorola 68020 microprocessor an open architecture that allows for the addition of numerous peripheral devices a built in hard disk and one megabyte of memory expandable to eight megabytes It can be equipped with a 12 inch monochrome or a 13 inch color monitor In a demonstration of its speed and power company executives said they thought the Mac II would push the development of software for Apple computers in new directions that could include sophisticated video editing electronic mail systems and sound reproduction suitable for studio use The Mac II can be upgraded so that its monitor displays 256 colors or shades of gray The Mac SE is built around the 68000 microprocessor and will be shipped with one megabyte RAM expandable to four megabytes and a nine inch monochrome screen Both new computers have two optional keyboards a new feature in the Apple line of products Reuter PHILADELPHIA PORT CLOSED BY TANKER CRASH PHILADELPHIA March 2 The port of Philadelphia was closed when a Cypriot oil tanker Seapride II ran aground after hitting a 200 foot tower supporting power lines across the river a Coast Guard spokesman said He said there was no oil spill but the ship is lodged on rocks opposite the Hope Creek nuclear power plant in New Jersey He said the port would be closed until today when they hoped to refloat the ship on the high tide After delivering oil to a refinery in Paulsboro New Jersey the ship apparently lost its steering and hit the power transmission line carrying power from the nuclear plant to the state of Delaware Reuter PENRIL PNL SEEKS TO SELL TWO UNITS ROCKVILLE Md March 2 Penril Corp said it is seeking to sell its Triplett Electrical Instrument Corp subsidiary in Bluffton Ohio and Triplett's Alltest division in Hoffman Estates Ill as part of a plan to concentrate on its three profitable division and reduce its debt load The company also said it is evaluating a plan to satisfy its obligations under its 10 7/8 pct subordinated notes but gave no details Interest on the notes is due today Penril further said director Clifford L Alexander Jr has resigned from the board It gave no reason Penril said shareholders at the annual meeting approved the limitation of directors liability Reuter LL E ROYALTY LRT REVENUES MAY BE ESCROWED HOUSTON March 2 LL and E Royalty Trust said Louisiana Land and Exploration Co LLX the working interest owner for its oil and natural gas properties is entitled to start placing all or part of the revenues that would otherwise accrue to the trust LL and E said Louisiana Land has not yet escrowed any amounts and will monitor the siutuation to determine the necessity of doing so The trust said If the working interest owner does begin to escrow funds the effect on the royalties paid to the trust would be significant Royalties from the properties are the trust's only source of income The trust said independent petroleum engineers preliminary annual estimates of future net revenues and the discounted present value of future net revenues from proved oil and natural gas reserves attributable to properties in which the trust has an interest are off 64 pct and 56 pct respectively from those estimated in 1986 due to the drop in oil and natural gas prices It said however that oil and natural gas reserves have actually increased in physical amount The cost estimates reflect prices and costs only through September 30 The trust said using the September figures the engineers determined estimated future net revenues to the trust from total proved reserves of about 57 mln dlrs Usingprices received in January 1987 however it said the estimate would have been about 87 mln dlrs LL and E noted that there has been some weakening in prices since January The trust said the most significant portion of the drop in estimated future revenues cale from the Jay Field in Alabama and Florida a fall to seven mln dlrs from 92 mln dlrs in 1986 as prices recieved from Jay in September were near production costs after expenses of nitrogen injection Reuter DALE BURDETT INC FACES DAMAGE CLAIM WESTMINSTER Calif March 2 Dale Burdett Inc said it faces damages claims totalling about 420,000 dlrs from the former owners of Burdett Publications Inc The company said on February 20 1986 its predecessor Nolex Development Inc acquired Burdett Publications Inc in an exchange of 17 mln common shares for all Burdett Publications shares but the transaction was not qualified with the California Department of Corporations As a result it said the former Burdett Publications owners have a claim for damages against Dale Burdett as successor to Nolex for one yuear starting January 21 1987 with the damages measured by the difference in values of shares exchanged plus interest from February 20 1986 Reuter PUROLATOR PCC IN BUYOUT WITH HUTTON EFH By Patti Domm NEW YORK March 2 New Jersey based overnight messenger Purolator Courier Corp said it has agreed to be acquired for about 265 mln dlrs by a company formed by E.F. Hutton LBO Inc and certain managers of Purolator's U.S. courier business Analysts have said that Purolator has been for sale for some time Purolator announced earlier it was mulling a takeover bid but analysts wrongly predicted the offer was from another courier company Hutton LBO a wholly owned subsidiary of E.F. Hutton Group Inc will be majority owner of the company Hutton said the acquiring company PC Acquisition Inc is paying 35 dlrs cash per share for 83 pct of Purolator's stock in a tender offer to begin Thursday The rest of the shares will be purchased for securities and warrants to buy stock in a subsidiary of PC Acquisition containing Purolator's U.S. courier operations If all the shares of Purolator are tendered shareholders would receive for each share 29 dlrs cash six dlrs in debentures and a warrant to buy shares in a subsidiary of PC Acquisition containing the U.S. courier operations Hutton said in the merger shareholders would get 46 mln dlrs aggregate amount of guaranteed debentures due 2002 of PC Acquisition and warrants to buy 15 pct of the common stock of the PC courier subsidiary Hutton said the company has valued the warrants at two to three dlrs per share Purolator's stock price closed at 35.125 dlrs on Friday While some analysts estimated the company was worth in the mid 30s at least one said it would be worth 38 to 42 dlrs This follows sales of two other Purolator units It agreed recently to sell its Canadian Courier unit to Onex Capital for 170 mln dlrs and previously sold its auto filters business Purolator retains its Stant division which makes closure caps for radiators and gas tanks A Hutton spokesman said the firm is reviewing its options on Stant Purolator's courier business has been lagging that of its U.S. rivals because of the high price it paid in the past several years to add air delivery to its ground fleet E.F. Hutton will provide 279 mln dlrs of its funds to complete the transaction This so called bridge financing will be replaced later with long term debt most likely in the form of bank loans Hutton said Hutton LBO is committed to keeping the courier business its president Warren Idsal said Purolator lost 120 mln dlrs over the last two years largely due to U.S. courier operations which we believe the management is turning around We belive it will be a very serious competitor in the future said Idsal William Taggart chief executive officer of U.S. Courier division will be chief executive officer of the new company The tender offer will be conditioned on a minimum of two thirds of the common stock being tendered and not withdrawn to the expiration of the offer as well as certain other conditions The offer will begin Thursday subject to clearances from the staff of the Interstate Commerce Commission and will expire 20 business days after commencement unless extended Reuter NCR NCR SIGNS LICENSE AGREEMENT NEW YORK March 2 Willemijn Holding BV of Rotterdam said it has licensed NCR Corp to produce and sell products and services using token ring technology Reuter PAKISTAN COTTON OUTPUT REACHES 7.7 MLN BALES KARACHI March 2 Pakistan cotton production during the current crop season Sept March reached 7.7 mln bales of 375 pounds each up 500,000 from last season Shafi Niaz Chairman of the Agricultural Prices Commission said Official sources said Pakistan was likely to use 3.4 mln bales of cotton during the current financial year ending June after 2.96 mln in 1985/86 and 2.70 mln in 1984/85 They said consumption would increase due to a rise in demand for cotton yarn in domestic markets and abroad Pakistan produced 540 mln kilos of yarn in fiscal year 1985/86 and exported 157 mln The State owned cotton export corporation was likely to export 3.8 mln bales of cotton during the current fiscal year compared with 3.86 mln last year cotton traders said The traders said there would be 1.3 mln bales of cotton carryover this fiscal year compared with just over a mln bales last year Reuter IMPERIAL CHEMICAL IMP FORMS NEW UNIT NEW YORK March 2 Imperial Chemical Industries PLC said it is forming a new U.S. pharmaceuticals unit called ICI Pharma Combined sales of Imperial's existing Stuart Pharmaceuticals unit and the new ICI Pharma are projected to be 1.1 billion dlrs in 1990 the company said Stuart had 1986 sales of 582 mln dlrs Imperial said it plans to introduce several new drugs including diprivan an anaesthetic and zestril a heart drug over the next three years ICI Pharma and Stuart will operate as separate units of ICI Pharmaceuticals Group it said Stuart Pharmaceuticals and ICI Pharma will have 1987 sales of approximately 700 mln dlrs about 450 mln dlrs from the new ICI Pharma and 250 mln dlrs from Stuart officials said The combined sales force of about 900 sales people split about equally between the two units will be slightly larger than the existing sales force at Stuart Regulatory approval for the annesthetic diprivan is expected in late 1987 while zestril a hypertension and heart drug should be approved in mid or late 1988 company officials said Approval for oth new drugs including statil a treatment for diabetic complications is not expected until 1989 and 1990 the officials said Reuter FINANCIAL SANTA BARBARA FSB TO MAKE PURCHASE SANTA BARBARA Calif March 2 Financial Corp of Santa Barbara said it has signed a definitive agreement to purchase Stanwell Financial the lending operations unit of mortgage banking company Stanwell Mortgage for undisclosed terms Reuter ALCAN TO CLOSE WEST GERMAN ALUMINIUM SMELTER ESCHBORN West Germany March 2 Alcan Aluminiumwerke GmbH a subsidiary of Alcan Aluminium Ltd AL.N of Canada said it plans to close its aluminium smelter in Ludwigshafen at the end of June A spokesman said Alcan was closing the smelter with annual capacity of 44,000 tonnes and 320 employees because of high electricity costs and the low world market price of aluminium Alkan had said earlier this year it would close half the plant's capacity but decided to shut down completely when talks with potential cooperation partners failed the spokesman said He declined to name the other companies involved in the talks REUTER MARRIOTT MHS TO SELL HOTEL TORONTO March 2 Four Seasons Hotels said it and VMS Realty Partners of Chicago have agreed to purchase the Santa Barbara Biltmore Hotel from Marriott Corp for an undisclosed amount It said the venture will rename the hotel the Four Seasons Biltmore at Santa Barbara and invest over 13 mln dlrs in improvements on the 228 room property Reuter DH TECHNOLOGY DHTK CHAIRMAN SELLS SHARES SAN DIEGO March 2 DH Technology Inc said it has repurchased 500,000 of its shares from cofounder Helmut Falk at 4.25 dlrs each and Falks has sold another 500,000 shares to venture capital firm TA Associates at the same price The company said Falk has resigned as chairman of DHL and now owns 213,567 shares It said TA now owns 928,0000 shares The company said Falk who will remain on the board has agreed to sell no more than 75,000 of his remaining shares in the next year without company consent It said president and chief executive officer William H Gibb has assumed the added post of chairman Reuter BROWN BOVERI OMITS DIVIDEND PLANS WARRANT BOND BADEN Switzerland March 2 BBC AG Brown Boveri und Cie BBCZ.Z said it will omit dividend in 1986 for the second consecutive year It said it planned to invite shareholders and non voting stockholders to subscribe to a warrant bond issue of around 150 mln Swiss francs to be made after the June 2 annual meeting The value of the stock subscription rights should correspond roughly to the dividend of 30 francs per share paid in 1984 The company also plans to issue participation certificates with a par value of 70 mln Swiss francs from which existing shareholders are excluded Reuter U.S. CORPORATE FINANCE ASSET BACK MARKET GROWS By John Picinich Reuters NEW YORK March 2 The U.S. asset backed debt securities market which grew explosively last year is broadening and investment bankers say 1987 could see a variety of issuers It is interesting to note that the first two asset backed deals of the year were done by commercial banks said Anthony Dub who heads First Boston Corp's asset backed group BankAmerica Corp's BAC Bank of America unit last week issued 400 mln dlrs of securities backed by credit card receivables via sole manager First Boston Dub said the offering sold out quickly mostly to institutional investors The Bank of America offering followed a January 16 issue of 200 mln dlrs of similar debt by RepublicBank Corp's RPT RepublicBank Delaware unit Goldman Sachs and Co ran the books on that deal with First Boston acting as co manager However Dub said the Bank of America securities were more closely related to the so called cars deals that raced to market last year than were the RepublicBank securities The RepublicBank issue was secured by credit card receivables In contrast the Bank of America deal was the first public offering of credit card receivables because we used a grantor trust vehicle he said In a grantor trust investors buy asset backed certificates that represent a specified percentage of an undivided interest in the trust analysts explained The Bank of America certificates were issued by California Credit Card Trust A which the bank established for that single purpose investment bankers pointed out The debt has an average life of 1.79 years and matures in 1992 First Boston gave the issue a 6.90 pct coupon and priced it at 99.8125 to yield 6.95 pct or 65 basis points over comparable Treasury securities Non callable for life the deal was rated AAA by both Moody's and Standard and Poor's Underwriters away from the syndicate said they believed the Bank of America deal was priced too aggressively AAA rated auto paper was trading about 75 basis points over Treasuries when First Boston priced the deal one said However Dub said the offering sold out quickly anyway The First Boston executive attributed this to the deal's top flight rating by both agencies unlike many of last year's cars deals which were rated by S and P alone Investors receive interest only payments for the first 18 months and then interest and principal payments for the remaining five to seven months Dub detailed Investment bankers pointed out that because the Bank of America deal did not pay principal for a year and a half the issue had a longer average life than some of the cars deals that were brought to market late last year The collateral for the trust includes a pool of VISA credit card receivables backed by a letter of credit Bank of America has about four billion dlrs of credit card receivables making it one of the biggest in the U.S. analysts said Last week's deal was Bank of America's second foray into the young asset backed securities market analysts noted In mid December 1986 Bank of America sold via California Cars Grantor Trust 1986 A 514 mln dlrs of certificates backed by automobile receivables through Salomon Brothers Inc Upcoming asset backed issues include 200 mln dlrs of notes backed by the car leases of Volvo 1986 Lease Finance Corp a unit of Volvo Finance North America Inc via First Boston and 450 mln dlrs of notes secured by sales contracts of Mack Trucks Receivables Corp a unit of Mack Trucks Inc MACK via Shearson Lehmand Brothers Inc The asset backed market which began in March 1985 totals an estimated 11.9 billion dlrs Reuter ILC TECHNOLOGY ILCT OFFICER REMOVED SUNNYVALE Calif March 2 ILC Technology Inc said Raymond Montoya vice president of finance has been removed as an officer and terminated as an employee of the company and ILC has filed a civil action against him to recover alleged improprer disbursements of company funds The company said Montoya has been arrested by police in Hawthorne Calif and charged with grand theft and embezzlement It said the extent of the disbursements has not yet been determined In independent auditor is helping assess the alleged irregularities the company said Reuter APPLE COMPUTER AAPL HAS NEW MACINTOSH MODELS LOS ANGELES March 2 Apple Computer Inc said it has introduced two new models of its Macintosh personal computer the Macintosh II and SE offering users the ability to flexibly configure systems to suit their needs or expand the systems as their needs grow Apple said the Macintosh II features high performance open architecture designed for advanced applications The Macintosh II which is priced from 3,898 dlrs to 5,498 dlrs also has six internal printed circuit card slots for adding multiple functions including an optional color display network connections and MS DOS compatibility the company said Apple said the Macintosh SE priced from 2,898 dlrs to 3,698 dlrs has internal storage capacity and an additional slot for added functions Reuter REAGAN AND BAKER BEGIN TASK OF REBUILDING By Peter Szekely WASHINGTON March 2 After a week that left his presidency shaken and his popularity at a new low Ronald Reagan and his new chief of staff today begin trying to revive an administration tattered by the Iran contra arms scandal Reagan and former Senate Republican leader Howard Baker whose appointment as White House chief of staff won bipartisan praise will begin mapping strategy to deal with scathing criticism by a report on his failed bid to trade U.S. arms with Iran for help in freeing Ameican hostages in Lebanon Among the chores facing Reagan's new inner circle is assessing the damage the 300 page Tower commission report has done to the nomination of Robert Gates to succeed William Casey as the new head of the Central Intelligence Agency White House officials are checking to see how much support Gates a 43 year old career spy agency bureaucrat would have if his nomination is submitted to the full Senate for a vote Senate Republican leader Robert Dole said Appearing on the NBC News program Meet the Press the Kansas senator said the Gates nomination could be in some difficulty Aides said that Gates future would be given high priority by Baker Even though he was not deeply implicated in the arms sale scandal lawmakers said Senate confirmation of the Gates nomination is not assured and even if won would come only after months of congressional probes into the affair He has the smell of Iran on him said former Nevada Sen and Reagan confidant Paul Laxalt He is a victim Laxalt appearing on the ABC News program This Week With David Brinkley bluntly admitted the Gates nomination is in trouble Senate Armed Services Committee Chairman Sam Nunn said the odds are now slightly against confirmation of Gates When asked on the syndicated television program John McLaughlin One on One if he thought Gates would be confirmed the Georgia Democrat shot back I wouldn't bet any money on it I think this report hurts that Nunn said It indicates that the National Security Council had policy type influence over intelligence type activities and we're going to go into that with Mr Gates Only a day after it was issued last week the Tower report prompted the abrupt exit of Donald Regan as White House chief of staff Regan the former Wall Street executive and Treasury secretary who has been the president's top aide for the past two years was assigned the lion's share of the blame for the botched handling of the Iran arms sale The report blamed Regan for the chaos that descended on the White House since it was first revealed last November that profits from the Iran arms sales had been diverted to contra rebels fighting the leftist Nicaraguan government The two other victims of the scandal are former National Security Adviser Vice Adm John Poindexter who resigned and Marine Lt Col Oliver North who was fired after it was disclosed last November 23 that profits from the Iran arms sale were diverted to the contras The two pictured by the Tower commission as the key operators of the Iran arms deal have refused to testify Reagan who freely admits disliking details is portrayed in the Tower report as a befuddled chief executive whose inattention let his aides run away with his foreign policy That perception has wrecked Reagan's popularity and threatened to condemn him to lame duck status until he leaves office in January 1989 A recent Newsweek magazine poll found that just 40 pct of Americans approved of Reagan's leadership a record low and a third believed he should consider resignation After meeting with aides over the weekend and poring over the meaty report of the commission headed by former Texas Sen John Tower Reagan is now preparing for a nationwide television address this week to respond to the criticisms of his presidency Reuter LAROCHE STARTS BID FOR NECO NPT SHARES NEW YORK March 2 Investor David F La Roche of North Kingstown R.I. said he is offering to purchase 170,000 common shares of NECO Enterprises Inc at 26 dlrs each He said the successful completion of the offer plus shares he already owns would give him 50.5 pct of NECO's 962,016 common shares La Roche said he may buy more and possible all NECO shares He said the offer and withdrawal rights will expire at 1630 EST 2130 gmt March 30 1987 Reuter SENIOR ENGINEERING MAKES 12.5 MLN DLR US PURCHASE LONDON March 2 Senior Engineering Group Plc said it reached agreement with Cronus Industries Inc to acquire the whole share capital of South Western Engineering Co for 12.5 mln dlrs cash This sum is being financed by a term loan South Western is one of the U.S.'s leading manufacturers of heat transfer equipment with a turnover of 54.86 mln dlrs and pre tax profits of 1.72 mln in 1986 Completion of the deal is conditional on approval under U.S. Hart Scott Rodino regulations which is expected within 30 days Some 350,000 dlrs is payable immediately 12 mln dlrs payable on completion with the balance due by June 30 1987 Reuter CHEUNG KONG CHAIRMAN SEES STRONG RESULTS IN 1987 HONG KONG March 2 Cheung Kong Holdings Ltd CKGH.HK is expecting strong results this year after reporting better than expected profits in 1986 chairman Li Ka shing said He did not give a specific earnings projection but he told reporters the firm will pay total dividends of not less than 19 cents a share this year after a one for four bonus issue and a four for one stock split The company earlier declared total dividends equal to 15 cents a share for 1986 adjusting for the stock split and bonus issue Cheung Kong's earnings rose to 1.28 billion H.K. Dlrs in 1986 well above market expectations of 920 mln to one billion dlrs They compared with profits of 551.7 mln dlrs in 1985 Cheung Kong also reported extraordinary gains of 983.6 mln dlrs mainly from the firm's sale of the Hong Kong Hilton Hotel to Hongkong Electric Holdings Ltd HKEH.HK for one billion dlrs It had gains of 81.3 mln dlrs in 1985 Li attributed the surge in 1986 earnings to a buoyant local property market and substantial increases in contributions from associated companies Looking ahead 1987 should be another year of stability for the property market Li said The growth in Hong Kong's exports is expected to stimulate the demand for industrial buildings Cheung Kong is cash rich and is looking for new projects in the British colony Li said noting the firm is interested in a land reclamation project along the Hong Kong harbour and is exchanging views with the government on a proposal to build a second airport Reuter OCCIDENTAL OXY UNIT TO REDEEM DEBENTURES LOS ANGELES March 2 Occidental Petroleum Corp said its MidCon Corp subsidiary will redeem on March 31 all 269,000 dlrs of its outstanding 10 1/4 pct convertible subordinated debentures due 2009 at 107.18 pct of par It said interest payable March 31 will be paid in the usual manner to holders of record on March 15 The debentures convert to common stock at 14.168319 dlrs per share or 70.58 shares per 1,000 dlrs principal amount through March 31 Holders converting through March 17 will be entitled to receive Occidental's regular quarterly dividend of 62 1/2 cts per share on common stock that is payable April 15 The company said any holders surrendering debentures for conversion after March 15 other than those surrendering for conversion on March 31 will be required to pay to the conversion agent an amount equal to the interest paytable on the debentures on March 31 Reuter VIACOM VIA RECEIVES TWO REVISED OFFERS NEW YORK March 2 Viacom International Inc said it received revised merger offers from National Amusements Inc and MCV Holdings Inc The company said the special committee plans to meet later today to review both offers Viacom said National Amusements Arsenal Holdings Inc raised the value of its offer for the Viacom shares not held by National Amusements in three areas National Amusements holds 19.6 pct of Viacom's stock The cash value of the offer was raised to 42.00 dlrs from the 40.50 dlrs a Viacom share offered February 23 while the value of the fraction of a share of exchangeable preferred being offered was increased to 7.50 dlrs a share from six dlrs The interest rate to be used to increase the cash value of the merger if delayed beyond April 30 was raised to nine pct from eight pct and 12 pct after May 31 A Viacom spokesman said the Arsenal Holdings's offer continues to include a 20 pct interest in Arsenal for present Viacom shareholders Viacom said MCV Holdings a group which includes the company's senior management and the Equitable Life Assurance Society of the United States raised the value of its offer by increasing the value of the preferred being offered to 8.50 dlrs from 8.00 dlrs a share and raising the ownership in the new company to be held by present Viacom shareholders to 45 pct from 25 pct MCV called its previous offer made February 26 the final proposed revision of its agreement with Viacom Reuter DOW DOW TO OFFER 130 MLN DLRS IN SWISS NOTES MIDLAND MICH Mar 2 Dow Chemical Co said it will issue 200 mln Swiss franc denominated bonds worth about 130 mln dlrs U.S. at current exchange rates The 12 year bonds will carry a coupon of 4 3/4 pct and will be sold primarily to European investors for 100.25 pct of face value Dow said Proceeds from the offering will be used to refinance existing debt it said Underwriters are led by Union Bank of Switzerland The bonds will be listed on stock exchanges in Basle Berne Geneva Lausanne and Zurich Reuter FRENCH ESTIMATE 86/87 WHEAT DELIVERIES UNCHANGED PARIS March 2 The French Cereals Intervention Board ONIC left its estimate of French 1986/87 July June soft wheat deliveries unchanged from its last forecast at 21.98 mln tonnes This compared with deliveries of 24.38 mln tonnes in 1985/86 August July Estimated 1986/87 maize deliveries were also left unchanged from ONIC's previous forecast at the beginning of February at 9.91 mln tonnes against 10.77 mln the previous season Barley deliveries were also unchanged at 6.62 mln tonnes against 7.7 mln in 1985/86 Reuter WRITERS GUILD OF AMERICA STRIKES TWO NETWORKS NEW YORK March 2 The Writers Guild of America said its members have struck the news staffs of CBS Inc CBS and Capital Cities ABC Inc CCB this morning after negotiations for a new contract broke down The guild said there had been extensions prior to the strike deadline this morning but said the strike was called after the companies refused to negotiate The guild said the companies failed to put a final offer on the table made no money offer at all and did not deviate substantially from their original proposals which the guild said would have gutted the union contract The guild said the networks demanded the right to terminate employees at will and lay them off without the arbitration and the hiring of temporary employees to replace staffer employees The guild represents newswriters editors desk assistants researchers production assistants promotion writers and graphic artists The strike affects unions in New York Chicago Washington and Los Angeles Picketing will commence at corporate headquarters in New York and other locations the guild said Reuter MILLER TABAK HAS 91.8 PCT OF PENN TRAFFIC PNF NEW YORK March 2 Miller Tabak Hirsch and Co said it has received an accepted 3,424,729 common shares of Penn Traffic Co in response to its 31.60 dlr per share tender offer that expired Friday and together with the 380,728 shares it already owned it now has about 91.8 pct of Penn Traffic The company said Penn Traffic is expected to hold a special shareholders meeting later this month to approve a merger into Miller Tabak at the tender price It said two Miller Tabak representatives will be named to the Penn Traffic board on March Four to serve as the only directors with Penn Traffic president and chief executive officer Guido Malacarne The company said it received financing for the transaction from First National Bank of Minneapolis and Salomon Inc SB Reuter COFFEE QUOTA TALKS CONTINUE BUT NO AGREEMENT YET LONDON March 2 Coffee quota talks at the International Coffee Organization council meeting here continued this afternoon but producers and consumers still had not reached common ground on the key issue of how to estimate export quotas delegates said The 54 member contact group was examining a Colombian proposal to resume quotas April 1 under the ad hoc system used historically with a pledge to meet again in September to discuss how quotas would be worked out in the future they said Delegates would not speculate on the prospects for agreement at this time Anything could happen one delegate said Reuter FEDERAL INDUSTRIES SETS COMMERCIAL PAPER ISSUE WINNIPEG Manitoba March 2 Federal Industries Ltd said it introduced a commercial paper program with an authorization of 440 mln dlrs through agents Bank of Montreal Dominion Securities Inc and Wood Gundy Inc Net proceeds from the sale of notes will be used for general corporate purposes and will replace existing outstanding debt the company said It did not elaborate on financial terms of the issue Reuter WASTE MANAGEMENT WMX VOTES SPLIT UPS PAYOUT OAK BROOK ILL Mar 2 Waste Management Corp said its board voted a two for one stock split payable April 21 record March 30 In other action Waste Management directors approved an increase in the quarterly dividend to 18 cts from 14 cts payable April three record March 18 Reuter POREX TECHNOLOGIES PORX SETS INITIAL DIVIDEND FAIR LAWN N.J. March 2 Porex Technologies Corp said its board declared an initial annual dividend of 10 cts per share its first payout payable March 26 to holders of record March 12 Reuter DAVIS WATER DWWS DECLARES STOCK DIVIDEND THOMASVILLE Ga March 2 Davis Water and Waste Industries Inc said its board declared a 33 1/3 pct stock dividend payable March 23 to holders of record March 12 Reuter MEDCO CONTAINMENT MCCS SETS INITIAL PAYOUT ELMWOOD PARK N.J. March 2 Medco Containment Services Inc said its board declared an initial annual dividend of 10 cts per share its first payout payable March 19 to holders of record March 12 Reuter PITTSTON PCO AGREES TO ACQUIRE WTC WAF STAMFORD Conn March 2 Pittston Co said it has tentatively agreed to acquire WTC International N.V. in a tax free exchange of stock Pittston said it agreed to exchange 0.523 common share for each of the about 8,612,000 WTC common shares outstanding Pittston said WTC's three principal shareholders who own 62 pct of its stock are parties to this agreement They have granted Pittston the right of first refusal to their shares WTC has granted Pittston an option to buy WTC shares equal to 18.5 poct of its outstanding stock The agreement is subject to approval of both boards and WTC shareholders Pittston said described WTC as a fast growing air freight forwarding company with operations throughout the world Its revenues totaled nearly 200 mln dlrs in the year ended November 30 and for the quarter ended on that date it earned 1.3 mln dlrs on revenues of 55.8 mln dlrs Pittston said its Burlington Air Express subsidiary generates about two thirds of its 450 mln dlrs in annual revenes with its domestic air freight services Reuter SDC SYDNEY COST REVIEW MAY ELIMINATE PRODUCTS VANCOUVER British Columbia March 2 SDC Sydney Development Corp earlier reporting an increased nine month operating loss said a cost control review now underway may result in cost reduction and elimination of unprofitable and non strategic products and services The company's operating loss for the nine months ended December 31 1986 increased to 7.7 mln dlrs from a loss of 1.7 mln dlrs in the prior year it said earlier Revenues increased by 20 pct to 11.8 mln dlrs from year earlier 9.8 mln dlrs Reuter U.K. MONEY MARKET OFFERED BORROWING FACILTIES LONDON March 2 The Bank of England said it had offered borrowing facilities to those discount houses wishing to use them at 1430 GMT The Bank also said it provided the money market 456 mln stg assistance in the afternoon session bringing its total help so far today to 493 mln stg This compares with its forecast of a shortage in the system today of around 700 mln stg The central bank purchased bank bills outright comprising 41 mln stg in band one at 10 7/8 pct 361 mln stg in band two at 10 13/16 pct and 54 mln stg in band three at 10 3/4 pct Money market dealers said the Bank of England has recently used the offer of borrowing facilities to signal that it does not want to see an early reduction in U.K. Base lending rates The Bank does this by lending to the discount houses at rates of interest higher than its prevailing money market dealing rates REUTER ELECTRONIC MAIL EMCA FINANCING ATTEMPT FAILS OLD GREENWICH Conn March 2 Electronic Mail Corp of America said its efforts to secure additional financing for expansion have fallen through The company said that there are no immediate prospects for financing through other sources though efforts will continue The company said operations wil continue while further efforts are made Negotiations with an undisclosed company had been onging for four months the company said Reuter NETHERLANDS GRANTS 47 MLN DLRS TO BANGLADESH DHAKA March 2 Bangladesh will receive a grant equivalent to 47 mln U.S. Dlrs from the Netherlands during 1987 under an agreement signed here Saturday officials said This raised the amount of Dutch grants to Bangladesh to 759 mln dlrs since 1972 used mainly for commodity imports and implementing development projects they said Reuter QUEBEC'S CAISSE DES JARDINS ISSUES YEN EUROBOND LONDON March 2 Caisse Centrale Desjardins du Quebec is issuing a 10 billion yen step up eurobond maturing on March 25 1992 and priced at 101 3/4 pct joint bookrunner Warburg Securities said The issues pays a coupon of one pct in years one and two and then pays a coupon of 7 7/8 pct in years three four and five The selling concession is 1 1/4 pct while management and underwriting combined pays 5/8 pct The payment date is March 25 while the issue will be listed in Luxembourg The borrower is the wholesale financing arm of a major group of credit unions in the Province of Quebec REUTER DOW CHEMICAL LAUNCHES 200 MLN SWISS FRANC BOND ZURICH March 2 Dow Chemical Co has launched a 200 mln Swiss franc 12 year bond with a 4 3/4 pct coupon priced at 100 1/4 pct lead manager Union Bank of Switzerland said The issue carries a call option from 1993 at 102 pct declining thereafter by 1/2 percentage point per year Subscriptions close March 18 and payment date is April 2 REUTER SWISS SIGHT DEPOSITS RISE 3.10 BILLION FRANCS ZURICH March 2 Sight deposits by commercial banks at the Swiss National Bank rose by 3.10 billion Swiss francs to 10.53 billion in the last 10 days of February the National Bank said Foreign exchange reserves fell 3.06 billion francs to 30.64 billion Sight deposits are an important measure of Swiss money market liquidity The decline in foreign exchange reserves reflected the dismantling of swap arrangements the National Bank said Banknotes in circulation rose by 834 mln francs to 24.79 billion while other deposits on call mainly government funds fell 1.60 billion francs to 1.04 billion REUTER USDA LIFTS CROSS COMPLIANCE FOR 1987 CROP OATS REPEAT FROM LATE FRIDAY WASHINGTON Feb 27 The USDA said it is lifting the limited cross compliance requirement for 1987 crop oats Deputy Secretary Peter Myers said the action was being taken to help alleviate the short supply of oats Under limited cross compliance the plantings of other program crops on the farm may not exceed the crop acreage bases of those crops The lifting of the cross compliance on oats permits the planting of oats in excess of the oat acreage base without sacrificing eligibility for other crop program benefits Myers said soybean plantings are expected to decrease as a result of the action on oats planting of which are expected to increase by two to three mln acres Reuter BRAZIL CRITICISES ADVISORY COMMITTEE STRUCTURE By Sandy Critchley Reuters LONDON March 2 Brazil is not happy with the existing structure of the 14 bank advisory committee which coordinates its commercial bank debt Finance Minister Dilson Funaro said U.S. Banks have 50 pct representation on the committee while holding only 35 pct of Brazil's debt to banks he said adding This is not fair with the European and Japanese banks The committee had played a useful role in 1982 and 1983 however Noting the often different reactions of U.S. Japanese and European banks Funaro told journalists that Brazil might adopt an approach involving separate discussions with the regions Since debtor nations problems were normally treated on a case by case basis Perhaps the same principle should apply to creditors central bank president Francisco Gros said Brazil on February 20 suspended indefinitely interest payments on 68 billion dlrs owed to commercial banks followed last week by a freeze on bank and trade credit lines deposited by foreign banks and institutions worth some 15 billion dlrs Funaro and Gros spent two days at the end of last week in Washington talking to government officials and international agencies and will this week visit Britain France West Germany Switzerland and Italy for discussions with governments Funaro and Gros are today meeting British Chancellor of the Exchequer Nigel Lawson Foreign Secretary Geoffrey Howe and Governor of the Bank of England Robin Leigh Pemberton Bankers have estimated that Brazil owes U.K. Banks around 8.5 billion dlrs in long and medium term loans giving the U.K. The third largest exposure after the U.S. And Japan The crisis began when Brazil's trade surplus its chief means of servicing its foreign debt started to decline sharply and the problem was compounded by a renewed surge in the country'sate of inflation Reserves were reported to have dropped below four billion dlrs Funaro envisaged that any eventual solution to problems with Brazil's 108 billion dlr foreign debt would involve only partial servicing of the debt What we propose is to arrive at a mechanism of refinance for part of the service because we cannot service all that he said I really think we have to change the old rules Asked why Brazil was first approaching governments rather than the commercial banks themselves in its search for a solution to the crisis Funaro said We must first talk to the governments and then we can talk to the banks because the banks have some limits It is a political discussion from our point of view he said Funaro said he hoped next week to travel to talk to Japanese and Canadian government officials He would then talk to the commercial banks If I've got some solution from the governments I can't take the burden only to the banks He was not sure how long it would take to reach a solution In discussions with governments Brazil would review the mechanisms whereby finance was made available to nations in need Finance from official lending agencies had been virtually closed since 1982 You must open these mechanisms he said He said that while the U.S. Officials had been disturbed by Brazil's suspension of interest payments they understood Brazil had no other choice as it had to protect its reserves Also the financing mechanisms had to be discussed because we can't stay as we were the last few years I'm trying to put the problem on the table All of us would like to have a kind of equilibrium he said Although Brazil has rejected a substantive role for the International Monetary Fund IMF in managing its economy Funaro paid a call in Washington to IMF Managing Director Michel Camdessus and to World Bank President Barber Conable Funaro noted that inflation in February had started to decline again and he expected Brazil to achieve a minimum eight billion dlr trade surplus in 1987 Banking sources noted that Brazil's monthly surplus had declined to some 150 mln dlrs in the final three months of last year against a monthly one billion in the first nine months Brazil had the third largest trade surplus in the world Funaro said although its share of international trade was only one pct The solution is linked with growth not recession he said noting an IMF program would involve promoting exports and inducing an internal recession in order to service debt Banking sources said Brazil's debts to foreign governments as opposed to commercial banks now benefit from a sounder structure following last month's rescheduling by the Paris Club of creditor nations of 4.12 billion dlrs of official debt REUTER QUEBEC'S CAISSE DES JARDINS ISSUES YEN EUROBOND LONDON March 2 Caisse Centrale Desjardins du Quebec is issuing a 10 billion yen step up eurobond maturing on March 25 1992 and priced at 101 3/4 pct joint bookrunner Warburg Securities said The issues pays a coupon of one pct in years one and two and then pays a coupon of 7 7/8 pct in years three four and five The selling concession is 1 1/4 pct while management and underwriting combined pays 5/8 pct The payment date is March 25 while the issue will be listed in Luxembourg The borrower is the wholesale financing arm of a major group of credit unions in the Province of Quebec Reuter STOP AND SHOP COS INC SHP 4TH QTR JAN 31 NET BOSTON March 2 Oper shr 1.80 dlrs vs 1.46 dlrs Oper net 25.0 mln vs 20.2 mln Sales 1.09 billion vs 996.4 mln Avg shrs 13.9 mln vs 13.8 mln Year Oper shr 3.20 dlrs vs 2.57 dlrs Oper net 44.4 mln vs 35.4 mln Sales 3.87 billion vs 3.43 billion Avg shrs 13.9 mln vs 13.8 mln NOTES Operating net excludes losses of 12.1 mln dlrs or 87 cts a share vs 321,000 dlrs or two cts a share in quarter and 6.0 mln dlrs or 43 cts a share vs 5.1 mln dlrs or 37 cts a share from discontinued operations This includes provision in latest quarter of 12.2 mln dlrs for closing of Almys Department Store Co Operating net in latest quarter and year includes 750,000 dlrs charge for restructuring announced in early January Reuter JIM WALTER CORP JWC REGULAR DIVIDEND TAMPA Fla March 2 Qtly div 35 cts vs 35 cts in prior qtr Payable April one Record March 14 Reuter DIAGNOSTIC DRS MAKES A BID FOR ROSPATCH RPCH OAKLAND N.J. March 2 Diagnostic Retrieval Systems Inc said it has made an offer to acquire through a wholly owned unit all outstanding shares of Rospatch Corp's common stock for 22 dlrs a share cash or about 53 mln dlrs DRS a warfare systems producer said it would make the transaction through a cash tender offer for all but not less than 51 pct of Rospatch's outstanding common stock followed by a merger with Rospatch a labels high technology and wood producer at the same purchase price per share DRS said the deal is subject to approval by the Rospatch board and the tender offer expires on March 6 1986 Reuter RECORD N.Z. FUTURES VOLUMES TRADED IN FEBRUARY WELLINGTON March 2 The volume of contracts traded on the New Zealand Futures Exchange NZFE reached a record 25,559 contracts in February the International Commodities Clearing House ICCH said The previous high was 22,583 contracts in December 1986 The ICCH said the value of the contracts traded in February was 2.90 billion N.Z. Dlrs The seven contracts currently traded on the NZFE are five year government bonds the share price index 90 day bank bills 90 day prime commercial paper the U.S. Dollar crossbred wool and wheat Reuter AIR FORCE EXERCISES OPTION FOR AAR AIR ORDER ELK GROVE VILLAGE ILL Mar 2 AAR Corp said that the U.S. Air force exercised an option valued at about eight mln dlrs with its Brooks and Perkins Cadillac manufacturing subsidiary in Michigan for cargo pallet maintenence and overhaul Reuter DOW CHEMICAL LAUNCHES 200 MLN SWISS FRANC BOND ZURICH March 2 Dow Chemical Co has launched a 200 mln Swiss franc 12 year bond with a 4 3/4 pct coupon priced at 100 1/4 pct lead manager Union Bank of Switzerland said The issue carries a call option from 1993 at 102 pct declining thereafter by 1/2 percentage point per year Subscriptions close March 18 and payment date is April 2 Reuter TANZANIA SAYS NO NEED FOR NEW ECONOMIC MEASURES DAR ES SALAAM March 2 Tanzania's ruling Chama cha Mapinduzi CCM party has endorsed the government's economic reform programme but said it did not think more changes such as a further devaluation of the shilling would be needed Tanzania has devalued the shilling more than 65 pct in less than a year and has started to overhaul inefficient government firms in line with a package agreed with the IMF The CCM's national executive committee said it was satisfied with government efforts to implement IMF conditions Measures taken so far are satisfactory and there is no need to take other ones the devaluation of the shilling included it said The committee's statement was in response to a government report on the IMF package submitted last Thursday Reuter TAIWAN TO SEEK HIGHER TEXTILE EXPORTS TO U.S. TAIPEI March 2 A Taiwan mission will leave next week for Washington to renegotiate an agreement severely limiting the growth of the island's textile exports a Board of Foreign Trade official said Under the agreement signed last July Taiwan's textile export growth was limited to 0.5 pct each year until 1988 based on the value of 1985 exports The official said the pact was unfair because the United States had signed more favourable agreements with Hong Kong and South Korea They were each given about one pct growth until 1991 He said Taiwan now found it difficult to compete with its two main rivals and the problem had been made worse because of the surging value of the Taiwan dollar Reuter U.S. NON FARM PRODUCTIVITY FELL 2.2 PCT IN QTR WASHINGTON Mar 2 Productivity in the non farm business sector fell at a seasonally adjusted revised annual rate of 2.2 pct in the fourth quarter last year the Labor department said Previously the department said productivity fell 1.7 pct in the fourth quarter The decline followed a 0.3 pct drop in the third quarter For all of 1986 productivity increased 0.7 pct from 1985 reflecting rises of 4.3 pct in the first quarter and 0.5 pct in the second quarter Non farm productivity in 1985 increased 0.5 pct the department said For the fourth quarter output rose 1.9 pct while hours of all persons increased 4.3 pct Hourly compensation rose 2.7 pct but effectively was zero when the increase in CPI U is taken into account Unit labor costs rose 5.1 pct The implicit price deflator for non farm business fell 0.4 pct following a 3.6 pct increase in the third quarter Manufacturng productivity declined 0.1 pct after a 3.6 pct increase in the third quarter Manufacturing output rose 3.3 pct in the fourth quarter and as hours gained 3.4 pct and compensation per hour 2.1 pct the department said Real compensation per hour in manufacturing fell 0.6 pct in the fourth quarter when inflation was taken into account Business productivity including farms fell 2.8 pct in the fourth quarter after a 0.4 pct third quarter decline but was 0.7 pct higher overall in 1986 than in 1985 Hourly compensation increased three pct overall in 1986 in the non farm business sector the smal.0 pct.e since 1919 In 1985 hourly compensation rose 4.0 pct The implicit price deflator for non farm business rose 2.2 pct in 1986 after a 3.3 pct rise a year earlier and was the smallest increase since 1965 Unit labor costs were up 2.3 pct in 1986 after rising 3.5 pct in 1985 Productivity in manufacturing rose 2.7 pct last year after a 1985 rise of 4.4 pct the department said Reuter U.S. CONSTRUCTION SPENDING ROSE 1.0 PCT IN JAN WASHINGTON March 2 U.S. construction spending rose 3.6 billion dlrs or 1.0 pct in January to a seasonally adjusted rate of 378.5 billion dlrs the Commerce Department said Spending in December fell a revised 3.5 billion dlrs or 0.9 pct to 374.9 billion dlrs the department said Previously it said spending fell 0.5 pct in December The department said the value of all new construction in 1986 was 376.9 billion dlrs or six pct more than the 355.6 billion dlrs of building put in place in 1985 The department said January construction spending was 5.1 billion dlrs or 1.4 pct above the January 1986 total of 373.4 billion dlrs Residential construction spending rose in January to an annual rate of 180.7 billion dlrs from 178.6 billion dlrs in December Public construction outlays rose for a third successive month to 75.2 billion dlrs in January from 71.2 billion dlrs in December and were 7.2 billion dlrs or 10.6 pct higher than the January 1986 estimate of 68.0 billion dlrs the department said The department said a big increase in public spending occurred on highway construction where outlays rose in January to 23.8 billion dlrs from 18.9 billion dlrs in December In constant dlrs January construction outlays rose 3.6 billion dlrs or 1.1 pct from December levels the department said Reuter WHITTAKER WKR TO HAVE GAINS FROM SALES LOS ANGELES March 2 Whittaker Corp said it will have a gain on the sale of discontinued businesses after any operating losses from the businesses up until the dates of disposition but it will defer reporting the gain until its restructuring program hsa been substantially completed The company said in the first quarter ended January 31,m it completed the divestiture of its health maintenance organization operations to Travelers Corp TIC sold its Whittar Steel Strip operations to DofascoxInc and sold its equity investment in Bertram Trojan Inc to an affiliate of Investcorp The company said it has entered into definitive agreements to sell Whittaker General Medical Corp Bennes MArrel SA of France and Juster Steel Corp as well The company said to date it has received proceeds of about 90 mln dlrs from divestitures and has used the funds to reduce debt incurred in the repurchase of its common shares Whittaker today reported first quarter earnings from continuing operations fell to 1,522,000 dlrs from 3,501,000 dlrs a year before The year earlier figure excluded a 1,817,000 dlr loss from discontinued operations Reuter THE JAPAN FUND JPN GETS BUYOUT OFFER NEW YORK March 2 The Japan Fund Inc said it has received an unsolicited offer from Sterling Grace Capital Management LP acting together with certain other persons and entities to purchase all the assets of the fund at five pct below its aggregate net asset value The Japan Find said tne deal is subject to obtaining satisfactory financing and a due diligence review It added that the proposal has been referred to its Board of Directors for consideration Reuter STANSBURY MINING STBY GETS FUNDING FOR MINE ALPINE Utah March 2 Stansbury Mining Corp said it has arranged the financing it needs to bring its vermiculite mine into operation later this year The company said New York investment banking firm Matthews and Wright has arranged 7,300,000 dlrs in tax free industrial revenue bonds and 4,700,000 dlrs in conventional bonds It said it expects to produce saleable ore from the mine before year end The company said it has also signed an agreement for Wright Engineers Ltd of British Columbia to recoup the cost of its services to Stansbury by converting warrants The company said Wright Engineers would convert the warrants to Stansbury common on a monthly basis at the monthly market value as the 1,700,000 dlrs of engineering work is completed It said it does not expect more than 400,000 warrants to be converted over the next 12 months Reuter BANK OF NEW YORK BK TO HAVE GAIN ON UNIT SALE NEW YORK March 2 Bank of New York Co said it and the management of RMJ Securities Corp have agreed to sell 80 pct of their interests in RMJ Holding Corp to British and Commonwealth Holdings PLC and Bank of New York expects to realize a substantial gain on the transaction RMJ Holding is the holding company for RMJ Securities a large broker of U.S. government securities and agency obligations Bank of New York owns a majority interest in RMJ Holding and management of RMJ Securities the remainder Bank of New York said the sale is expected to be completed during the second quarter It said it and RMJ Securities management will continue to own 20 pct of RMJ Holding for now but the agreement provides for the sale of that remaining interest to British and Commonwealth over the next six years Reuter CORNING GLW HAZLETON HLC SET EXCAHNGE RATIO CORNING N.Y. March 2 Corning Glass Works said the exchange ratio for its previously announced acquisition of Hazleton Laboratories Corp has been established at 0.5165 Corning common share for each Hazleton common share Corning said the prospectus regarding the merger is expected to be mailed tomorrow to all Hazleton holders of record February 18 Hazleton shareholders will vote on the proposed merger at a special meeting on March 31 Reuter HEALTH EXPERTS URGE ERADICATION OF RINDERPEST ROME March 2 World animal health experts called for a campaign to eradicate the lethal cattle disease Rinderpest in Bangladesh Bhutan India Nepal and Pakistan a statement from a Food and Agriculture Organization FAO meeting here said Some 230 mln dlrs is needed over two years to vaccinate the entire susceptible cattle population in Bangladesh and Pakistan and high risk areas of the other three countries In India some 240 mln cattle are estimated to be at risk from the disease The experts recommended the campaign be funded mostly by the governments of the five nations with help from the FAO Similar campaigns are needed in Egypt Yemen Iraq and Iran Reuter XEROX CORP XRX ADDS CAPACITY TO SYSTEM ROCHESTER N.Y. March 2 Xerox Corp said it has added a system that can handle more than 3,000 calls per hour and store up to 526 hours of messages to its Voice Message Exchange product line Available with 12 to 64 ports the new System V is designed to serve 800 to 10,000 users the company said It is compatible with the company's entire voice message exchange line it added Xerox said the system may be rented annually with an option to purchase starting at 4,700 dlrs per month or purchased for 123,000 dlrs Reuter BALLY BLY COMPLETES PURCHASE OF GOLDEN NUGGET CHICAGO March 2 Bally Manufacturing Corp said it completed the acquisition of the Golden Nugget Casino Hotel in Atlantic City New Jersey from Golden Nugget Inc Bally also acquired from Golden Nugget various parcels of real estate in Atlantic City it noted The transaction included 140 mln dlrs in cash and stock and the assumption of a 299 mln dlrs mortgage Reuter CONSOLIDATED TVX TO BUY BRAZIL GOLD MINE STAKES TORONTO March 2 Consolidated TVX Mining Corp said it agreed to issue 7.8 mln treasury shares to acquire interests in three gold mining companies in Brazil and an option to increase the company's interest in a platinum property The company said the transactions will bring immediate production and earnings to Consolidated TVX enhance its precious metal potential and is expected to improve cash flow and earnings on a per share basis The company did not give specific figures Consolidated TVX said it will acquire 29 pct of CMP a public gold mining company in which TVX already holds a 15 pct interest making TVX the largest single shareholder The company also agreed to acquire a 19 pct stake in Novo Astro a private company and a 16 pct interest in Teles Pires Mining increasing the TVX's ownership to 51 pct In addition Consolidated TVX said it will acquire the right to add a 10 pct interest to a platinum property in which it already owns a 29.4 pct stake CMP earned 11 mln Canadian dlrs in 1986 and expects to produce 42,000 ounces of gold in 1987 at a cost of 160 U.S. dlrs an ounce Consolidated TVX said Novo Astro operates Brazil's richest gold mine located in Amapa State with an average grade of 0.8 ounces of gold a ton in a hardrock quartz vein Consolidated TVX said Mining of eluvial surface material produced 25,000 ounces in 1986 and is expected to produce 60,000 ounces in 1987 It also said Teles Pires Mining controls rights to a 350 kilometer section of the Teles Pires River where one dredge is expected to produce 10,000 ounces of gold in 1987 Reuter CANADA INDUSTRIAL PRICES UP 0.2 PCT IN MONTH OTTAWA March 2 Canada's industrial product price index rose 0.2 pct in January after falling 0.2 pct in each of the two previous months Statistics Canada said The rise was led by price gains for papers pharmaceuticals and petroleum and coal products Price declines were recorded for meat products lumber and motor vehicles On a year over year basis the federal agency said the index fell 0.9 pct in January the largest yearly decline on record Reuter OLIVER'S STORES OLVR FILES CHAPTER 11 RIDGEFIELD N.J. March 2 Oliver's Stores Inc said it has decided to reorganize under Chapter 11 of the federal bankruptcy laws and will file a petition by the end of this week The company said it has failed to reach agreement with primary lenders Manufacturers Hanover Corp MHC and Midlantic Corp MIDL on a debt restructuring It said Manufacturers has declared the company in default and demanded repayment of about six mln dlrs in debt Reuter HOWE OWNERS FEDERAL HFSL HOLDERS OK MORE STOCK BOSTON March 2 Howen Owners Federal Savings and Loan Association said its stockholders have approved an amendment to its charter increasing the number of authorized common to 32 mln shares from eight mln and the number of authorized preferred shares to eight mln from two mln Reuter COMMERZBANK UNIT ISSUES STERLING EUROBOND LONDON March 2 Commerzbank Overseas Finance NV is issuing a 50 mln stg eurobond due March 31 1992 paying 9 5/8 pct and priced at 101 1/4 pct joint lead manager Samuel Montagu and Co Ltd said Commerzbank AG is the other joint lead The non callable bond is available in denominations of 1,000 and 10,000 stg and will be listed in London The selling concession is 1 1/4 pct while management and underwriting combined pays 5/8 pct The payment date is March 31 REUTER NUCLEAR DATA NDI GETS EXTENSIONS ON LOANS CHICAGO March 2 Nuclear Data Inc said its bank lenders agreed to extend its secured loan agreement through June 30 1987 The agreement which covers about 9.5 mln dlrs in short term debt had been scheduled to expire February 28 Terms of the extension require Nuclear Data to obtain replacement financing from outside sources before June 30 it said If the company is unable to or fails to achieve certain projected operating results in the meantime it will be required to divest enough assets to retire its debt it said For the first nine months of its fiscal 1987 year ended November 30 1986 Nuclear Data reported a loss of almost nine mln dlrs or 4.98 dlrs a share on revenues of 32.6 mln dlrs Nuclear Data cited improvement in printed circuit board sales and said it is confident it will obtain replacement financing In other action Nuclear Data said it set up a 1.25 mln dlrs reserve to cover the revaluation of certain domestic medical inventory and the redirection of its U.S. medical sales efforts The reserve was taken to offset a decline in the U.S. dollar against the Danish Kroner and other factors adversely affecting sales of its Danish manufactured medical products in the U.S. market Nuclear Data said Reuter JUDGE RULES IN FAVOR OF DOW CHEM DOW UNIT FREEHOLD N.J. March 2 Dow Chemical Co said a judge on the New Jersey Superior Court for Monmouth County granted its Merrell Dow Pharmaceuticals Inc unit a motion for a directed verdict in its favor in a case alleging its morning sickness drug Bendectin caused a child's birth defects Merrell Dow said after plaintiffs had completed their presentation of evidence Judge Marshall Selikoff granted the company's motion and discharged the jury on grounds tha plaintiffs did not present evidence showing the drug caused the child problems Reuter U.K. SAYS HAS NO ROLE IN BRAZIL MORATORIUM TALKS LONDON March 2 U.K. Chancellor of the Exchequer Nigel Lawson has told Brazil's Finance Minister Dilson Funaro that negotiations on Brazil's debt to commercial banks are a matter for the commercial banks themselves a Treasury spokesman said The spokesman said the Chancellor had emphasised in talks this morning with Funaro the need for the Brazilian authorities to be able to present a convincing economic program to the country's creditors He added an accord with the International Monetary Fund IMF could be a very helpful support Brazil on February 20 suspended interest payments on 68 billion dlrs of its debts to commercial banks Lawson's attitude was interpreted by banking sources as a clear rebuff to Brazilian hopes of obtaining official cooperation in resolving its external debt crisis Funaro accompanied by central bank president Francisco Gros is on the first leg of a tour of European capitals in an attempt to explain to governments Brazil's indefinite suspension of interest payments earlier this month Brazil has in the past rejected a substantial role for the IMF in managing its economy arguing that an IMF austerity program by promoting exports and dampening domestic consumption would lead to recession and threaten democracy Funaro and Gros last week visited Washington as part of their trip to enlist support from governments for its attempts to change the means by which developing countries finance growth Funaro said on Saturday in Washington that Brazil would not have suspended payment on its debt if it had received more and faster financing from international agencies He said earlier today that Brazil was first approaching governments before talking to the commercial banks themselves about the interest payment moratorium because the banks have some limits It's a political discussion from our point of view Funaro said on Friday that his talks with U.S. Officials had resulted in no new financial arrangement to help resolve Brazil's debt crisis describing the meeting as an initial contact He had earlier met Federal Reserve Board Chairman Paul Volcker and U.S. Treasury Secretary James Baker The Treasury spokesman pointed out that today's talks had been at Funaro's request After travelling this week to France Germany Switzerland and Italy Funaro hopes to visit Canada and Japan next week before starting negotiations with banks REUTER BANK OF ENGLAND ANNOUNCES ONE BILLION STG TAP LONDON March 2 The Bank of Enlgand said it was creating and taking onto its own books a one stg tranche of the nine pct Exchequer stock due 2002 The issue is part paid with 20 stg pct payable on issue and the 76 stg pct balance due on April 27 First dealings will take place this Wednesday March 4 The initial reaction among dealers was to mark prices around 1/8 point easier The market had been untapped prior to this announcement REUTER BRENCO INC BREN DECLARES QTLY DIVIDEND PETERSBURG Va March 2 Qtly div three cts vs three cts prior Pay April six Record March 20 Reuter BLACK SOUTH AFRICAN MINERS SEEK WAGE RISE JOHANNESBURG March 2 The National Union of Mineworkers NUM said it will demand a 55 pct annual wage increase in upcoming negotiations with South Africa's mining companies The union representing some 360,000 black workers at about 118 mines last year sought a 45 pct boost in salaries and settled for 23.5 pct NUM General Secretary Cyril Ramaphosa told a news conference the miners were very angry at low wages And are prepared to press their struggle for as long as it takes to get their demands met Salaries for black miners currently range from a low of 195 rand or 94 dlrs a month to 800 rand or 384 dlrs with an average monthly wage of 345 rand or 165 dlrs Ramaphosa said He also said the union has asked the mining companies to begin new contract talks on April one instead of the usual May one starting time The current one year contract expires at the end of June REUTER PRIME COMPUTER PRM UNVEILS PC SOFTWARE NATICK Mass March 2 Prime Computer Inc said it has introduced the Prime Medusa pc software a two dimensional version of its Prime Medusa computer aided design software Prime said Prime Medusa pc is for use on an International Business Machines Corp IBM PC AT operating within a Prime 50 Series minicomputer environment The company said the software is available immediately to customers who have or are currently ordering a Prime Medusa license on one of Prime's 50 series systems Prime added the software costs 5,000 dlrs per license with monthly maintenance of 65 dlrs Prime said it also unveiled the Prime Medusa Revision 4.0 system with a new feature for developing applications that alows users to associate non graphic information with graphic elements on a drawing sheet The Prime Medusa Revision 4.0 is available immediately Prime said Reuter MASSACHUSETTS INVESTORS GROWTH STOCK FUND PAYOUT BOSTON March 2 Qtly div from income 5.1 cts vs 3.035 dlrs in prior qtr including capital gains of 2.978 dlrs Payable March 27 Record February 27 Reuter FEDERAL INDUSTRIES PAPER ISSUE JUST IN CANADA WINNIPEG Manitoba March 2 Federal Industries Ltd's earlier announced commercial paper issue of up to 440 mln dlrs will be made only in Canada a company spokesman said The issue currently underway is expected to be completed within the next few weeks The final amount of the issue depends on market conditions but will likely be close to 400 mln dlrs the spokesman said Reuter AMERICAN NURSERY ANSY BUYS FLORIDA NURSERY TAHLEQUAH OKLA March 2 American Nursery Products Inc said it purchased Miami based Heinl's Nursery Inc for undisclosed terms Heinl's Nursery has sales of about 4.5 mln dlrs and owns 100 acres of which 75 are in shade houses and about 58,300 square feet cover greenhouses shipping and office facilities Reuter JUTLAND TELEPHONE SETS 75 MLN SWISS FRANC BOND ZURICH March 2 Jutland Telephone Co plans to issue a 75 mln Swiss franc 4 3/4 pct bond with a par price and a maximum 10 year maturity lead manager Union Bank of Switzerland said The bond may be retired between 1991 and 1996 if the secondary price does not exceed par It may be called starting in 1992 at 101 with declining premiums thereafter or for tax reasons beginning in 1988 at 102 with declining premiums thereafter REUTER REGENCY CRUISES INC SHIP ELECTS NEW CHAIRMAN NEW YORK March 2 Regency Cruises Inc said its board elected William Schanz as its chairman and chief executive officer He replaces Anastasios Kyriakides who resigned in December Schantz has served as president treasurer and a director since its inception in 1984 The company also elected three directors They are Paul Hermann John Clive Bayley and Costas Galetakis The company said they replace Paul Wells and Douglas MacGarvey who also resigned in December One new director's post has been added Regency said Reuter MFS MANAGED SECTORS TRUST DIVIDEND INCREASED BOSTON March 2 Semi annual div from income of 7.3 cts vs 1.0 cent in prior period Payable March 27 Record February 27 Reuter UNOCAL UCL PLANS LUBE CENTERS AT TRUCKSTOPS CHICAGO March 2 Unocal Corp said it plans to introduce truck lube centers at most of the 148 Unocal 76 Auto TruckStops along the nation's interstate highways The company said the centers will be the first national program to offer over the road trucks a convenient and complete lube and oil change service The centers will offer a 20 point lubrication and oil change at a suggested price of 99.95 dlrs for most trucks Unocal said the price will be the same or lower than commercial grages and truckstops now charge in most areas Reuter GENZYME PFIZER PFE UNIT IN JOINT VENTURE BOSTON March 2 Genzyme Corp said it and Howmedica a Rutherford N.J. based company owned by Pfizer Inc have agreed to an initial joint research and development program The company said the venture will focus on using Genzyme's proprietary technologies to procued hyaluronic acid based products for use in orthopedic surgery Hyaluronic acid is a natural water retaining and lubricating component in the body's soft tissue and a key part of certain body fluids Reuter MULTI STEP TO SELL LADDER UNIT CANCEL SHARES TORONTO March 2 Multi Step Products Inc earlier reporting an initial six month loss said it agreed to sell wholly owned Multi Step Manufacturing Inc for 100,000 dlrs cash subject to shareholder and regulatory approval Multi Step also said it will pay 900,000 dlrs to cancel 711,192 of its own shares which will be acquired from Michael Penhale and his benficiaries Penhale will control and manage Multi Step Manufacturing following the transactions Multi Step had a 739,146 dlr loss for the six months ended December 31 The company received its initial public listing in December The company said its ladder making unit has been losing 300,000 dlrs quarterly The sale expected to close in April also calls for retirement of the unit's 400,000 dlr bank debt Multi Step said The unit also has agreed to pay a debt of 400,000 dlrs to Tarxien Company Ltd which is 40 pct owned by Multi Step Multi Step previously said it agreed to acquire the remaining 60 pct of Tarxien it does not already own Reuter ESSELTE BUSINESS ESB UNIT BUYS ANTONSON UNIT GARDEN CITY N.Y. March 2 Esselte Business Systems Inc's Esselte Meto division said it has acquired the Antonson America Co a subsidiary of Antonson Machines AB of Sweden Esselte said the Antonson unit based in LaPorte Indiana manufactures scales and label printers The company said the purchase is part of a plan to increase the range of retail electronic scales being offered by Esselte in the U.S. It said the acquisition will enble Esselte to increase its distribution base in its effort to grow in the U.S. Reuter FED EXPECTED TO ADD TEMPORARY RESERVES NEW YORK March 2 The Federal Reserve is expected to enter the U.S. Government securities market to add temporary reserves economists said They expect it to supply the reserves indirectly by arranging a fairly large round two billion dlrs or more of customer repurchase agreements The Fed may add the reserves directly instead via System repurchases Federal funds which averaged 6.02 pct on Friday opened at 6 1/8 pct and traded between there and 6 1/16 pct Funds are under upward pressure from settlement of recently sold two year notes and from a Treasury tax and loan call on banks Reuter REUTER DEALING SERVICE INTRODUCED IN CHINA LONDON March 2 Reuters Holdings Plc RTRS.L said it had its first subscriber installation in China of its foreign exchange dealing service The subscriber is the banking department of the China International Trust and Investment Corp's CITIC head office in Beijing The service is also due to be connected soon at the Bank of China's new headquarters in Beijing Reuters said REUTER CAMBRIDGE MEDICAL CMTC IN DEAL ON AIDS TEST BILLERICA Mass March 2 Cambridge Medical Technology corp said it has signed a letter of intent with Panbaxy Laboratories to jointly make a new AIDS test The company said it will have the exclusive right to market the product worldwide The new test will be used to detect specific viral antigens in serum and whole blood samples It said it hopes to design a simplified test for home use Reuter FOUR SEASONS BUYING MARRIOTT MHS HOTEL TORONTO March 2 Four Seasons Hotels Inc and VMS Realty Partners said they agreed to acquire the Santa Barbara Biltmore Hotel in California from Marriott Corp for undisclosed terms Closing was expected by March 31 they added The companies said they would jointly own the hotel and rename it the Four Seasons Biltmore at Santa Barbara They said they would spend more than 13 mln U.S. dlrs to enhance the Biltmore's position as one of the finest resort hotels in North America Chicago based VMS Realty is a real estate and development firm Reuter QUAKER OATS OAT FILES SHELF REGISTRATION CHICAGO March 2 Quaker Oats Co said it filed a shelf registration with the Securities and Exchange Commission covering up to 250 mln dlrs in debt securities The company said it may offer the securites in one or more issues from time to time over the next two years Proceeds will be used to repay short term debt issued in connection with Quaker Oats recent acquisitions and for other corporate purposes it said Underwriters may include Salomon Brothers Inc and Goldman Sachs and Co Reuter STONE STO SPLITS STOCK RAISES PAYOUT CHICAGO March 2 Stone Container Corp said it is splitting its common stock 2 for 1 and increasing its dividend 33 1/3 pct The dividend of 20 cts a share an increase of five cts over the prior 15 cts a share on pre split shares is payable June 12 to holders of record May 22 The stock split also is payable June 12 to holders of record May 22 Reuter TEMPLE INLAND INT'L PAPER UP ON RAISED OPINION NEW YORK MARCH 2 Shares of Temple Inland Inc TIN and International Paper Co IP rose sharply this morning following a recommendation by Prudential Bache Securities traders said Temple Inland jumped 2 7/8 to 73 and International Paper 1 1/4 to 91 1/4 Prudential Bache analyst Mark Rogers was not available for comment Traders said he raised his recommendation of Temple Inland to a buy to support his earnings outlook of 5.85 dlrs a share in 1987 and nine dlrs a share in 1988 The company earned 3.30 dlrs a share in 1986 Traders also said that Rogers reiterated a recommendation of International Paper another forest products company that scored large gains in January as the dollar floundered Rogers expects the company to earn 7.50 dlrs a share in 1987 and 10 dlrs a share in 1988 Last year the company earned 5.28 dlrs a share Reuter PRESIDENTIAL AIR PAIR TO START NEW SERVICE WASHINGTON March 2 Presidential Airways Inc said it will serve 12 cities when it starts operating Continental Express under a joint marketing agreement with Texas Air Corp's TEX Continental Airlines on March 23 From its base at Dulles Airport in Washington Presidential will serve Albany N.Y. Birmingham and Huntsville in Alabama Columbus Ohio Daytona Beach Melbourne and Sarasota all in Florida Indianapolis New York's Kennedy Airport Philadelphia Portland Me and Savannah Ga Under the agreement Presidential will continue as a separate company but its mileage plan and other services will be combined with those of Continental Airlines Reuter COUPON REDUCED ON BEST DENKI WARRANT BOND LONDON March 2 The coupon on the 70 mln dlr equity warrant eurobond for Best Denki Co Ltd has been set at three pct compared with the indicated 3 1/8 pct lead manager Nikko Securities Co Europe Ltd said The exercise price was set 1,640 yen per share representing a premium of 2 1/2 pct over today's closing price of 1,600 yen The foreign exchange rate was set at 154.40 yen to the U.S. Dollar The five year deal is priced at par REUTER CARGILL U.K. STRIKE TALKS POSTPONED LONDON March 2 Talks due today between management and unions to try to end the strike at Cargill U.K. Ltd's Seaforth oilseed crushing plant have been rescheduled for Thursday a company spokesman said Oilseed processing at the plant has been halted since December 19 when mill workers walked out in protest at new contract manning levels Reuter LOTUS LOTS INTRODUCES NEW SOFTWARE CAMBRIDGE Mass March 2 Lotus Development Corp said it has unveiled a new software product named Galaxy to complement the newly introduced Apple Computer Inc AAPL Macintosh II and Macintosh SE Lotus said Galaxy will be formally introduced over the summer Lotus said Galaxy will include Command language and dynamically linked modules unlike any other software product currently available for the Macintosh product family which enables the user to execute a series of commands with a single learned keystroke Reuter AMAX AMX IN GOLD SILVER FIND GREENWICH March 2 AMAX Incx said it has identified additional gold and silver ore reserves at its AMAX Sleeper Mine near Winnemucca Nev. It said as a result of recent drilling reserves at thhe mine are now estimated at 2,470,000 short tons of ore grading 0.24 ounce of gold and 0.50 ounce of silver per ton that is treatable by conventional milling techniques AMAX said additional reserves amenable to heap leaching are estimated at 38.3 mln tons averaging 0.025 ounce gold and 0.24 ounce silver per ton Further drilling is being conducted it said Reuter STUDY GROUP URGES INCREASED U.S. OIL RESERVES WASHINGTON March 2 A study group said the United States should increase its strategic petroleum reserve to one mln barrels as one way to deal with the present and future impact of low oil prices on the domestic oil industry U.S. policy now is to raise the strategic reserve to 750 mln barrels from its present 500 mln to help protect the economy from an overseas embargo or a sharp price rise The Aspen Institute for Humanistic Studies a private group also called for new research for oil exploration and development techniques It predicted prices would remain at about 15 18 dlrs a barrel for several years and then rise to the mid 20s with imports at about 30 pct of U.S. consumption It said instead that such moves as increasing oil reserves and more exploration and development research would help to guard against or mitigate the risks of increased imports Reuter FORD F INCREASES 2ND QTR OUTPUT PLANS REPORT DETROIT March 2 Ford Motor Co has increased its U.S. production schedule for the second quarter by 52,000 cars and 32,000 trucks from previous plans the trade paper Ward's Automotive Reports said The paper which tracks industry production said Ford plans to build 485,000 cars in the April June period compared with 497,000 a year ago Ford's new production schedule represents a 12 pct increase from previous production plans for cars and 10 pct for trucks Ward's said Reuter FNMA FNM ARRANGES MORTGAGE SECURITIES SWAP WASHINGTON March 2 The Federal National Mortgage Association said it arranged a swap of 250 350 mln dlrs in stripped mortgage backed securities with Shearson Lehman Brothers Inc The exact amount of the swap will be determined later it said Fannie Mae said the swap includes 15 year mortgages for Fannie Mae stripped mortgage back securities that bear a nine pct coupon The stripped securities consist of two classes One receives all the principal payments from the underlying pool of mortgages and the other receives all the interest Reuter MCI MCIC GETS PENNEY JCP CONTRACT RYE BROOK N.Y. MArch 2 MCI Communications Corp said it has received a contract to provide telecommunications services to J.C. Penney Co Inc to accomodate much of Penney's nationwide vboice and information transfer requirements via a privatge satellite network It said video teleconferencing will be provided at five locations data will be transmitted among seven locations and voice service will be provided to 350 locations The company said Penney's use of the services is expected top exceed four mln call minutes per month of voice traffic Value was not disclosed Reuter FORD INCREASES 2ND QTR OUTPUT PLANS REPORT SAYS DETROIT March 2 Ford Motor Co has increased its U.S. production schedule for the second quarter by 52,000 cars and 32,000 trucks from previous plans the trade paper Ward's Automotive Reports said The paper which tracks industry production said Ford plans to build 485,000 cars in the April June period compared with 497,000 a year ago Ford's new production schedule represents a 12 pct increase from previous production plans for cars and 10 pct for trucks Ward's said Reuter REDSTONE DETAILS SWEETENED VIACOM VIA OFFER WASHINGTON March 2 Investor Sumner Redstone who leads one of the two groups vying for control of Viacom International Inc offered to sweeten his bid for the company by 1.50 dlrs a share cash and 1.50 dlrs in securities In a filing with the Securities and Exchange Commission Redstone who controls Dedham Mass based National Amusements Inc a theater chain operator offered to raise the cash portion of its Viacom offer to 42 dlrs a share from 40.50 dlrs Redstone also raised the face value of the preferred stock he is offering to 7.50 dlrs from six dlrs The Redstone offer which is being made through Arsenal Holdings Inc a National Amusements subsidiary set up for that purpose which also give Viacom shareholders one fifth of a share of Arsenal common stock after the takeover Viacom said earlier today it received revised takeover bids from Redstone and MCV Holdings Inc a group led by Viacom management which is competing with Redstone for control of the company and already has a formal merger agreement with Viacom The company did not disclose the details of the revised offers but said a special committee of its board would review them later today The Redstone group which has a 19.5 pct stake in Viacom and the management group which has a 5.4 pct stake have both agreed not to buy more shares of the company until a merger is completed unless the purchases are part of a tender offer for at least half of the outstanding stock The two rivals also signed confidentiality agreements which give them access to Viacom's financial records provided they keep the information secret In his SEC filing Redstone who estimated his cost of completing the takeover at 2.95 billion dlrs said Bank of America is confident it can raise 2.275 billion dlrs Besides the financing it would raise through a bank syndicate Bank of America has also agreed to provide a separate 25 mln dlr for the limited purpose of partial financing and has committed to provide another 592 mln dlrs Redstone said Merrill Lynch Pierce Fenner and Smith Inc has increased its underwriting commitment to 175 mln dlrs of subordinated financing debt for the Viacom takeover from the 150 mln dlrs it agreed to underwrite earlier Redstone said Redstone said his group would contribute more than 475 mln dlrs in equity toward the takeover The Redstone equity contribution to the takeover would consist of all of his group's 6,881,800 Viacom common shares and at least 118 mln dlrs cash he said The new offer the second sweetened deal Redstone has proposed in his month long bidding war with management also contains newly drawn up proposed merger documents he said Last week the management group submitted what it called its last offer for the company valued at 3.1 mln dlrs and consisting of 38.50 dlrs a share cash preferred stock valued at eight dlrs a share and equity in the new company Redstone's previous offer had been valued at 3.2 billion dlrs Reuter MONTEDISON CONCLUDES TALKS WITH ANTIBIOTICOS MILAN March 2 Montedison Spa MONI.MI said it has concluded its negotiations with Spanish pharmaceuticals company Antibioticos SA A company spokesman told Reuters We have concluded the talks and we are now awaiting authorization from Spanish authorities He declined to comment further Earlier today the Italian company postponed a scheduled press conference on its talks with Antibioticos An Italian press report today said Montedison has agreed to acquire Antibioticos for 500 billion lire REUTER UTILICORP UCU COMPLETES ACQUISITION KANSAS CITY March 2 UtiliCorp United Inc said it completed the acquisition of West Virginia Power from Dominion Resources for about 21 mln dlrs The sale was approved by the West Virginia Public Service Commission in January and became effective March one West Virginia's management will continue to be responsible for operating the utility it said Reuter ARMCO AS CHANGES EUROPEAN MARKETING UNIT BUTLER Pa March 2 Armco Inc said its former European Steel Mill Merchandising department has become a unit of the parent's specialty steels division based in Butler The unit newly named Specialty Steels Europe is based in Cologne West Germany It will market and sell in Europe the division's U.S. made products and specialty products made in Europe Reuter FAA FINES DELTA DAL 140,400 DLRS ON SAFETY WASHINGTON March 2 The Federal Aviation Administration fined Delta Air Lines Inc 140,400 dlrs for alleged violations of federal air safety rules FAA officials said The FAA had reviewed Delta safety and maintenance operations early last year as part of a series of special inspections of U.S. air carriers The Delta fine is the smallest to come out of the special inspections the officials said As a result of the inspections Eastern Air Lines was fined a record 9.5 mln dlrs American Airlines was penalized 1.5 mln dlrs and Pan American World Airways 1.95 million dlrs Reuter TRADERS DETAIL FRENCH CEREAL EXPORT REQUESTS PARIS March 2 French operators last Friday requested licences to export 10,500 tonnes of free market maize 11,950 tonnes of free market barley and 13,000 of soft wheat flour to non EC countries at prefixed daily droit commun rebates French trade sources said The latest requests for the maize were for export to Switzerland Austria and Lichtenstein at a maximum daily rebate prefixed last Friday at 141 Ecus a tonne against a previous 20 Ecu daily rebate The special daily rebate for maize was set in the context of a Commission commitment to grant this season rebates for the export of 500,000 tonnes of French maize to non EC countries in compensation for concessions to the U.S. in the recent dispute over grain sales to Spain If the latest French requests are accepted as expected this will bring the total of French maize exported in this context to 25,500 tonnes The Commission last Thursday granted weekly rebates for the sale of 15,000 tonnes of free market maize to non EC countries Requests for barley were for export to Switzerland Austria and Lichtenstein Ceuta and Melilla at an unchanged pre fixed restitution of 125 Ecus a tonne while requests for soft wheat flour were for export to various non EC countries at an unchanged 178 Ecus a tonne Reuter STUDY GROUP URGES INCREASED U.S. OIL RESERVES WASHINGTON March 2 A study group said the United States should increase its strategic petroleum reserve to one mln barrels as one way to deal with the present and future impact of low oil prices on the domestic oil industry U.S. policy now is to raise the strategic reserve to 750 mln barrels from its present 500 mln to help protect the economy from an overseas embargo or a sharp price rise The Aspen Institute for Humanistic Studies a private group also called for new research for oil exploration and development techniques It predicted prices would remain at about 15 18 dlrs a barrel for several years and then rise to the mid 20s with imports at about 30 pct of U.S. consumption The study cited two basic policy paths for the nation to protect the U.S. industry through an import fee or other such device or to accept the full economic benefits of cheap oil But the group did not strongly back either option saying there were benefits and drawbacks to both It said instead that such moves as increasing oil reserves and more exploration and development research would help to guard against or mitigate the risks of increased imports Reuter NCR CORP NCR UNIT SIGNS DISTRIBUTION PACT DAYTON Ohio March 2 NCR Corp's Personal Computer division said it signed an agreement to distrubute its personal computer products to 544 Computerland Corp stores in the U.S. The company said the agreement covers its entire PC line which will be sold by Computerland franchises Computerland Stores Inc and for major corporate bids through the Computerland National Accounts Program Computerland said it is planning a direct mail campaign and other publicity on its private satellite network to promote the NCR line The primary products to be sold by Computerland stores include the PC8 AT compatible unit the PC6 dual speed model and the 2114 PC Retail Management System according to NCR Reuter CARBIDE UK LOOKS TO ACQUISITIONS FOR GROWTH NEW YORK March 2 Union Carbide Corp is looking to acquisitions and joint ventures to aid its chemicals and plastics growth according the H.W. Lichtenberger president of Chemicals and Plastics Describing this as a major departure in the company's approach to commercial development he told the annual new business forum of the Commercial Development Association We are looking to acquisitions and joint ventures when they look like the fastest and most promising routes to the growth markets we've identified Not very long ago Union Carbide had the attitude that if we couldn't do it ourselves it wasn't worth doing Or if it was worth doing we had to go it alone Lichtenberger explained He said there are times when exploiting a profitable market is done best with a partner Nor do we see any need to plow resources into a technology we may not have if we can link up profitably with someone who is already there He said Carbide has extended its catalyst business that way and is now extending its specialty chemicals business in the same way Reuter CORRECTED BANKAMERICA NEGOTIATING SALE OF UNITS FRANKFURT February 27 Bank of America NT and SA's BAC.N West German branch said it is negotiating the sale of Bankhaus Centrale Credit AG a small local West German bank it acquired in 1965 and of its West German Visa credit card operation Michael Seibel Bank of America vice president and regional manager said the negotiations were proceeding well He declined to give further details Bank of America's West German branch lost some 32 mln marks in 1985 The result includes profit and loss transfers from Bankhaus Centrale Credit and the Visa organisation The sale of the units is part of the bank's worldwide restructuring plan REUTER FRANKLIN GOLD FUND CUTS DIVIDEND SAN MATEO Calif March 2 Semi div 13 cts vs 18 cts prior Pay March 13 Record March Two Reuter COLUMBIA GAS CG FORMS ERIE PIPELINE SUBIDIARY WILMINGTON Del March 2 Columbia Gas System Inc said it has formed Columbia Erie Pipeline Corp as a subsidiary to participate with Coastal Corp's CGP ANR Pipeline Co in construction and operation of the Erie Pipeline System As previously announced Columbia Gas and ANR Pipeline signed a letter of intent to form a partnership to construct and operate the Erie system which will run from ANR's facilities in Defiance County Ohio to Clinton County Pa Columbia said specific terms of participation are to be spelled out in a partnership agreement to be negotiated within the next 60 days Reuter FRANKLIN CALIFORNIA TAX FREE INCOME FUND PAYOUT SAN MATEO Calif March 2 Mthly div 4.5 cts vs 4.5 cts prior Pay March 13 Record March Two Reuter FRANKLIN AGE HIGH INCOME FUND SETS PAYOUT SAN MATEO Calif March 2 Mthly div 3.6 cts vs 3.6 cts prior Pay March 13 Record March Two Reuter R.J.R. NABISCO UNIT FORMS OVERSEEING COMMITTEE WINSTON SALEM N.C. March 2 R.J. Reynolds Tobacco Co a unit of R.J.R. Nabisco Inc RJR said it has formed an executive management committee to oversee the company's worldwide tobacco operations Reynolds Tobacco said the committee's members will be senior managers of Reynolds Tobacco Co R.J. Reynolds Tobacco USA and R.J. Reynolds International Inc R.J.R. Nabisco is reportedly attempting to form a master limited partnership out of its tobacco unit part of which will be sold to the public Reuter FRANKLIN FEDERAL TAX FREE INCOME FUND PAYOUT SAN MATEO Calif March 2 Mthly div 7.7 cts vs 7.7 cts prior Pay March 13 Record March Two Reuter FRANKLIN NEW YORK TAX FREE INCOME FUND PAYOUT SAN MATEO Calif March 2 Mthly div 7.3 cts vs 7.3 cts prior Pay March 13 Record March Two Reuter FRANKLIN U.S. GOVERNMENT SECURITIES FUND PAYOUT SAN MATEO Calif March 2 Mthly div six cts vs six cts prior Pay March 13 Record March Two Reuter GM GM UNIT TO OFFER PRE APPROVED CREDIT DETROIT March 2 General Motors Corp's GMAC Financial Services said it plans to offer 25 billion dlrs in pre approved credit to more than two mln preferred customers in a nationwide direct mail campaign The GM unit said the program is the largest automotive credit offer of its kind in history GMAC Financial Services said the mailing will be completed by early March Selected current GMAC customers will receive offers of pre approved credit equal to the cash selling price of the vehicles they are currently financing rounded up to the next 1,000 dlrs Within this group Buick owners will also receive a special discount of 300 dlrs that would be provided by GM's Buick motor division if they accept GMAC's offer to finance or lease a new Buick Reuter CANADA RULING ON U.S. CORN INJURY DUE THIS WEEK WASHINGTON March 2 The Canadian government is expected to announce later this week its final ruling whether U.S. corn exports to Canada have injured Ontario corn growers U.S. government and farm group representatives said The deadline for a final determination is March 7 U.S. officials said they are encouraged by the outcome in a similar case covering European pasta imports In that case Canada decided pasta imports which take about ten pct of the Canadian market did not injure domestic producers U.S. corn exports represent only about five pct of the Canadian market Canada slapped a 1.05 dlrs per bushel duty on U.S. corn imports in November 1986 but reduced the duty to 85 cts last month because the Canadian government said U.S. subsidies to corn producers were less than Canada earlier estimated Reuter FIRST MISSISSIPPI CORP FRM SETS PAYOUT TAMPA Fla March 2 Qtly div six cts vs six cts prior Pay April 28 Record March 31 Reuter ROTTERDAM PORT UNION AND EMPLOYERS TO MEET ROTTERDAM March 2 Dutch port and transport union FNV agreed to an employers request to reconvene abandoned peace talks tonight to try to end strikes that have disrupted Rotterdam's general cargo sector for the past six weeks a union spokesman said Talks broke down Thursday when the union walked out after employers tabled their final offer to end the strikes which started January 19 in protest at planned redundancies of 800 from the sector's 4,000 workforce starting with 350 this year The employers invitation to restart the talks comes on the day a deadline set by Minister of Social Affairs Louw de Graaf for a resolution of the dispute expires De Graaf said if the dispute had not ended by today he would withdraw the 10 mln guilder annual labour subsidy to the sector No comment was immediately available from the employers organization Reuter AIRGAS AGA DECLINES TO COMMENT ON STOCK MOVES NEW YORK March 2 The New York Stock Exchange said Airgas Inc declined to comment on its stock activity after a request for an explanation by the exchange The company's stock was up 1 1/8 points to 11 dlrs Reuter JIM WALTER CORP JWC SETS PAYOUT TAMPA Fla March 2 Qtly div 35 cts vs 35 cts prior Pay April One Record March 14 Reuter FED ADDS RESERVES VIA CUSTOMER REPURCHASES NEW YORK March 2 The Federal Reserve entered the U.S. Government securities market to arrange 1.5 billion dlrs of customer repurchase agreements a Fed spokesman said Dealers said Federal funds were trading at 6 3/16 pct when the Fed began its temporary and indirect supply of reserves to the banking system Reuter SONY TO EXPAND U.K. TELEVISION OUTPUT LONDON March 2 Sony U.K. Ltd said it would be doubling capacity at its Bridgend Wales television and components factory over the next three years in a 30 mln stg expansion The expansion backed by Welsh office grants would make Bridgend Sony's biggest tv manufacturing plant in Europe with output of about 500,000 tv sets per year a spokesman said The move will add 300 jobs at Bridgend bringing the total workforce to 1,500 at the end of the three year period The expansion is part of a wider move by Sony Corp SNE.T to locate more production capacity nearer its markets a spokesman said Reuter JAPAN'S NTT FORECASTS PROFITS FALL IN 1987/88 TOKYO March 2 Nippon Telegraph and Telephone Corp NTT expects its profits to fall to 328 billion yen in the year ending March 31 1988 from a projected 348 billion this year the company said Total sales for the same period are expected to rise to 5,506 billion yen from a projected 5,328 billion this year NTT said in a business operations plan submitted to the Post and Telecommunications Ministry NTT said it plans to make capital investments of 1,770 billion yen in 1987/88 including 109 billion for research and development as against a total of 1,600 billion this year Reuter EC COMMISSION GIVEN PLAN TO SAVE STEEL INDUSTRY By Gerrard Raven Reuters BRUSSELS March 2 European Community steelmakers presented the Executive Commission with a controversial plan for the future of the industry which diplomats say it may be forced reluctantly to accept Under the plan steel output would remain subject to restrictive quotas and imports would be firmly controlled for years to come while steel firms undertook a massive slimming down operation to adjust capacity to lower demand Industry Commissioner Karl Heinz Narjes has proposed the ending of the quota system by December 1988 He has proposed a return to the free market which under EC law is supposed to exist except in times of manifest crisis But diplomats said some ministers who meet to discuss this idea on March 19 will argue that steel firms are in crisis in their countries with orders falling as customers switch to alternative products and accounts firmly in the red Ministers from the EC's major steel producing countries are likely to shy away from Narjes proposals and could back the industry's own plan instead in the hope of minimising the political impact of plant closures they said Industry sources said the plan presented to Narjes by the EC steelmakers lobby group Eurofer would retain the quota production system at least until the end of 1990 Eurofer said in a statement consultants working for it identified scope for closing plants on a voluntary basis to reduce capacity by 15.26 mln tonnes a year Cuts were still insufficient in one production area that of hot rolled coils and further talks were needed Eurofer added the industry would need the support of the Commission and governments in carrying out a closure program particularly with social costs such as redundancy payments The EC steel industry has already shed 240,000 jobs this decade while reducing annual capacity by 31 mln tonnes Reuter LONDON STOCK EXCHANGE TO CLOSE TRADING FLOOR LONDON March 2 The London Stock Exchange said its ruling council has decided to close the trading floor for government bonds gilts and equities in due course because most of the business is now done between brokers offices A trading floor for traded options will be retained Dwindling activity on the exchange floor reflects the introduction of the new dealing system known as SEAQ which was part of the Big Bang restructuring of the market last October Since then brokers and market makers have been dealing on the basis of competing share quotes displayed on screens REUTER EAGLE TELEPHONICS EGLA SELLS TELEPHONES HAUPPAUGE N.Y. March 2 Eagle Telephonics Inc said it signed a two year agreement under which Pacific Telesis Group's PAC Pacific Bell unit will buy its Eagle line of electronic key telephone systems for internal use Terms of the contract were not disclosed Reuter FRANKLIN UTILITIES FUND SETS PAYOUT SAN MATEO Calif March 2 Qtly div 14 cts vs 14 cts prior Pay March 13 Record March Two Reuter GELCO CORP GEL 2ND QTR JAN 31 NET EDEN PRAIRIE MINN March 2 Shr 67 cts vs 23 cts Net 5,220,000 vs 3,143,000 Revs 236.1 mln vs 256.2 mln Avg shrs 7.8 mln vs 13.7 mln Six Mths Shr 85 cts vs 59 cs Net 8,919,000 vs 8,158,000 Revs 483.8 mln vs 515.5 mln Avg shrs 10.4 mln vs 13.7 mln NOTE Fiscal 1987 second quarter and first half earnings include a gain of 3.4 mln dlrs and exclude preferred dividend requirements of five mln dlrs in the quarter and 5.6 mln dlrs in the first half Fiscal 1986 net reduced by currency losses equal to six cts a share in the second quarter and equal to nine cts in the six months Reuter INTERNCHANGE FINANCIAL SERVICES ISBJ PAYOUT UP SADDLE BROOK N.J. March 2 Qtly div 10 cts vs 8 1/3 cts prior Pay April 21 Record March 20 NOTE Interchange Financial Services Corp Reuter KAPOK CORP KPK IN TECHNICAL DEFAULT CLEARWATER Fla March 2 Kapok Corp said it is in techical default of its loans from Southeast Banking Corp STB and Murray Steinfeld but is negotiating with the lenders It said neither has declared the loans due The company said it has agreed to sell the Peter Pan Restaurant in Urbana Md for 1,100,000 dlrs or one mln dlrs after the payment of expenses Reuter TRANZONIC COS TNZ SETS QUARTERLY CLEVELAND March 2 Qtly div 11 cts vs 11 cts prior Pay April 17 Record March 20 Reuter NUEUTROGENA NGNA TO BUY BACK STOCK LOS ANGELES March 2 Neutrogena Corp said it may purchase up to 100,000 shares of its outstanding common stock from time to time in the open market to reduce dilution from the future issue of employee stock options The company said it currently has 9.2 mln shares outstanding It said the shares that may be purchased and those currently outstanding will be adjusted to reflect a three for two stock split effective March two Reuter MERCURY ENTERTAINMENT CORP MCRY YEAR NOV 30 LOS ANGELES March 2 Shr loss four cts vs loss one ct Net loss 413,021 vs loss 163,932 Revs 600,971 vs 665,800 Reuter CME PLANS RULE CHANGES TIGHTENING S P TRADING By Brad Schade Reuters CHICAGO March 2 Directors of the Chicago Mercantile Exchange will meet Wednesday to consider a membership petition asking the exchange to tighten rules covering trading activities in the widely popular Standard and Poor's 500 Stock Index futures pit an exchange executive said The petition calls for elimination of dual trading a legal practice where traders execute customer orders as well as trade for their own account But exchange officials noted this practice also provides an opportunity for a trader to engage in what is called front running where traders enter orders for their own account before executing orders for their customers Leo Melamed CME special counsel said directors will rule on the petition on Wednesday but added that a special S and P Advisory Committee has been studying S and P 500 futures trading conditions for the last six months and is expected to submit a complete list of recommendations within 30 days In addition to a recommendation on dual trading Melamed said the special committee will also make suggestions about a possible automatic order entry and execution system for S and P 500 futures and futures options and rule changes that would alleviate congested conditions in the trading pit Melamed said directors are likely to approve the recommendations of the special committee because most actions of the board are in line with committee recommendations CME senior vice president Gerald Beyer said if the board accepts the member's petition this week a rule change will be submitted to the Commodity Futures Trading Commission for approval If the board does nothing or rejects the petition request a rule change must then be submitted to the exchange membership for a vote within 15 days Beyer said Melamed also added that if the petition must be ruled on before the recommendations from the special committee are made it will confuse the issue Not all traders agree on the need to eliminiate or restrict dual trading Although Jonathan Wolff senior vice president at Donaldson Lufkin and Jenrette noted dual trading is evident on most exchanges It's a question of the integrity of the person you do business with Wolff said Futures traders who act as brokers however maintain that trading for their own accounts is necessary in order to make up for errors they inevitably make when filling customer orders in chaotic futures trading pits To have an absolute ban on dual trading makes it difficult for a broker to function because of his errors said John Michael vice president at First Options of Chicago What it comes down to is the ethics of the people involved he said Furthermore the competitive nature of futures brokerage makes front running risky to a broker's livelihood he said If I ever discovered a broker doing it front running or even suspected him of doing it I would cut him off Michael said An average broker in the Treasury bond futures pit for instance will fill orders for 5,000 to 10,000 contracts a day at 1.25 dlrs per contract floor sources said Even figuring what is considered a typical 25 pct loss for errors such brokerage can be lucrative Front running by brokers not only runs the market risk of an adverse price move but also the risk of losing the brokerage business Michael said Reuter POGO PPP CONSOLIDATES TWO DIVISIONS HOUSTON March 2 Pogo Producing Co said it has consolidated its onshore and offshore Gulf Coast divisions into a Southern Division responsible for its onshore and offshore oil and gas exploration and development activities in the Gulf Coast and Gulf of Mexico areas Reuter UNOCAL UCL UNIT CUTS CRUDE OIL POSTED PRICES LOS ANGELES March 2 Unocal Corp's Union Oil Co said it lowered its posted prices for crude oil one to 1.50 dlrs a barrel in the eastern region of the U.S. effective Feb 26 Union said a 1.50 dlrs cut brings its posted price for the U.S. benchmark grade West Texas Intermediate to 16 dlrs Louisiana Sweet also was lowered 1.50 dlrs to 16.35 dlrs the company said No changes were made in Union's posted prices for West Coast grades of crude oil the company said Reuter PANHANDLE'S PEL TRUNKLINE REDUCES GAS RATES HOUSTON March 2 Panhandle Eastern Corp's Trunkline Gas Co pipeline subsidiary said it is reducing the commodity component of its wholesale natural gas rate four pct effective immediately In a filing with the Federal Energy Regulatory Commission Trunkline said it is reducing its commodity rate the portion of the total rate based on the price of gas to 2.58 dlrs per mln Btu from 2.69 dlrs per mln Btu The company said the lower rate results from a reduction in the average price the pipeline is paying for gas adding this reflects contract reformation agreemats with producers Reuter INVESTOR GROUP HAS TALKS WITH PESCH ON AMI AMI WASHINGTON March 2 WEDGE Group Inc a Houston investment firm with a 5.5 pct stake in American Medical International Inc said it has had talks with Pesch and Co which is seeking control of the company In a filing with the Securities and Exchange Commission WEDGE which is owned by Issam Fares a Lebanese citizen living in Switzerland also said it discussed the possibility of joining with others in its own bid to seek control of AMI WEDGE stressed that it has no current plans to seek control of AMI but refused to rule out a takeover try in the future WEDGE said it has had discussions with AMI management Pesch the closely held health care and investment concern controlled by Chicago physician LeRoy Pesch and other AMI shareholders It did not specify in its SEC filing which issues selling its AMI stake or joining with others in a takeover try were discussed with which group But it said the talks did not produce any agreements or understandings WEDGE said it believes that some form of restructuring of AMI and its business would be highly desirable and appropriate at this time WEDGE which holds 4.8 mln shares of AMI common stock said it plans to hold further talks with company management Pesch and other shareholders Pesch last week sweetened his bid for the company to 22 dlrs a share in cash and securties or 1.91 billion dlrs based on AMI's total outstanding from an all cash 20 dlr a share bid which the company rejected Reuter I.M.S. INTERNATIONAL INC IMSI SETS QUARTERLY NEW YORK March 2 Qtly div four cts vs four cts prior Pay March 27 Record March 13 Reuter BANNER BNR COMPLETES TENDER FOR REXNORD REX NEW YORK March 2 Banner Industries Inc said 19.8 mln of the outstanding 20 mln shares in Rexnord Inc were tendered pursuant to its 26.25 dlr a share offer that closed at midnight EST Feb 27 Together with the five mln Rexnard shares it already owns the company said it now holds a 97 pct stake in the company It said the completion of the deal is subject to approval by Rexnard holders and to other closing conditions It expects the deal to close in about 60 days Reuter MUTUAL OF OMAHA INTEREST SHARES MUO QTLY DIV OMAHA Neb March 2 Qtly div 36 cts vs 36 cts prior Pay April one Record March 13 Reuter MOBIL MOB UNIT TO PRODUCE FOOD PACKAGING NEW YORK March 2 Mobil Corp's Mobil Chemical Co's subsidiary the world's largest producer of disposable plastic products said it will enter the food packaging market Mobil said it will begin making clear container food packaging for supermarkets and institutions in March and will sharply raise production in the fall to an annual rate of more than 20 mln pounds of finished products It said industry demand for the products is projected to rise 15 pct annually over the next five years and it is prepared to boost production substantially with future plant additions Mobil's Chemical's Plastic Packaging Division which will make and sell the new product line operates nine plants in the U.S. and one in Canada It also said the clear containers seen in packaging for cookies candy and bakery trays grocery sald bar items and other items will be made from oriented polystyrene at the company's Canandiagua N.Y. plant Reuter CORRECTED BANKAMERICA NEGOTIATING UNITS SALE FRANKFURT March 2 Bank of America NT and SA's BAC.N West German branch said it is negotiating the sale of Bankhaus Centrale Credit AG a small local West German bank it acquired in 1965 and of its West German Visa credit card operation Michael Seibel Bank of America vice president and regional manager said the negotiations were proceeding well He declined to give further details Bank of America's West German branch lost some 32 mln marks in 1985 The result includes profit and loss transfers from Bankhaus Centrale Credit and the Visa organisation The sale of the units is part of the bank's worldwide restructuring plan corrects year of loss in third paragraph in item which originally ran February 27 Reuter OSR OSRC TO MAKE ACQUISITION OLD BETHPAGE N.Y. March 2 OSR Corp said it has agreed to acquire the properties and assets of Telcom International Group for 10.5 mln common shares which would give former Telcom owners an 84 pct interest in the combined company Telcom is an international film and television distributor The assets being acquired consist mostly of distribution rights to films valued at over one mln dlrs the company said OSR said as part of the acquisition agreement is is required to sell its 80 pct interest in Standard Knickerbocker Ltd which makes jeans in Canada OSR said it expects to net about 150,000 dlrs on the sale of Standard Knickerbocker The company said both transactions are subject to approval by shareholders at a meeting to be held in April or May it said Reuter MERCURY ENTERTAINMENT MCRY SEES BETTER RESULTS LOS ANGELES March 2 Mercury Entertainment Corp said it expects improved results in 1987 The company today reported a loss for the year ended November 30 of 413,021 dlrs on revenues of 600,971 dlrs compared with a loss of 163,932 dlrs on revenues of 665,800 dlrs a year before Reuter CRONUS INDUSTRIES INC CRNS SELLS UNIT DALLAS March 2 Cronus Industries Inc said it agreed to sell its heat transfer equipment business Southwestern Engineering Co for a slight premium over book value plus a release of Cronus from liability on approximately three mln dlrs of subsidiary indebtedness The company said the sale to a subsidiary of Senior Engineering Group PLC a British company will take place this month Reuter UNISYS CORP UIS SETS QUARTERLY BLUE BELL Pa March 2 Qtly div 65 cts vs 65 cts prior Pay May Seven Record April Seven Reuter JACOBSON JCBS VOTES SPLIT INCREASES PAYOUT JACKSON MICH March 2 Jacobson Stores Inc said its board voted a three for two stock split payble March 30 record March 13 In other action Jacobson's directors approved an increase in its quarterly dividend to 11 cts on a post split basis payable April 14 record March 30 The new dividend rate represents a 32 pct increase over the 12 1/2 cts paid quarterly on a pre split basis Reuter AW COMPUTER AWCSA IN SUPPLY AGREEMENT MOUNT LAUREL N.J. March 2 AW Computer Systems Inc said it signed an 850,000 dlr agreement with TEC America Inc TCK to develop and supply intelligent cash register controllers Under terms of the agreement AW Computer said it will design and manufacture intelligent controllers for resale by TEC worldwide The company said the controller will allow TEC's new FT 70 point of sale terminal system to communicate with IBM PC AT personal computers and compatibles The controller will be ready for shipment by October the company said Reuter HOECHST AG COMPLETES CELANESE CZ ACQUISITION SOMERVILLE N.J. March 2 Hoechst AG of West Germany said it has completed the acquisition of Celanese Corp Hoechst acquired a majority of Celanese shares in a recent tender offer at 245 dlrs per common share Reuter AMERICUS TRUST HPU EXTENDS DEADLINE NEW YORK March 2 Americus Trust for American Home Products Shares said it extended its deadline for accepting tendered shares until November 26 an extension of nine months The trust which will accept up to 7.5 mln shares of American Home Products AHP said it has already received tenders for about four mln shares The trust is managed by Alex Brown and Sons Inc ABSB and was formed November 26 1986 Reuter BENETTON IN FINANCIAL SERVICES JOINT VENTURE TREVISO Italy March 2 Benetton Group Spa BTOM.MI said it reached agreement with textiles concern GFT Gruppo Finanziario Tessile Spa for a joint venture in the financial services sector A Benetton spokeswoman said details of the accord would be outlined at a news conference on Thursday in Milan The Italian clothing group has targeted financial services as a sector in which to expand its activities In January Benetton acquired a large minority stake in the Italian unit of the U.K. Financial services group Prudential Corp PLC PRUL.L Reuter ICO QUOTA TALKS CONTINUE OUTCOME HARD TO GAUGE LONDON March 2 Talks at the extended special meeting of the International Coffee Organization ICO on the reintroduction of export quotas continued but chances of success were still almost impossible to gauge delegates said Producer delegates were meeting to examine a Colombian proposal to resume historical quotas from April 1 to September with a promise to define specific new criteria by which a new quota system would be calculated in September for the new crop year they said Opinions among delegates over the potential for reaching a quota agreement varied widely Some consumers said the mood of the meeting seemed slightly more optimistic But Brazil's unwillingness to concede any of its traditional 30.55 pct of its export market share looks likely to preclude any accord other delegates said No fresh proposals other than the Colombian initiative had been tabled formally today delegates said A full council meeting was set for 1900 hours for a progress report delegates said Reuter SEC STAFF ADVISES FRAUD CHARGES AGAINST WPPSS WASHINGTON March 2 The staff of the federal Securities and Exchange Commission SEC plans to recommend that the Washington Public Power Supply System WPPSS be charged with securities fraud in connection with its July 1983 default on 2.25 billion dlrs of bonds a WPPSS official told Reuters WPPSS attorney Ron English said the system was advised by SEC staff attorneys that the five SEC commissioners would be asked to charge WPPSS in connection with its official statements about its plans to build its No 3 and No 4 nuclear power plants in the Pacific Northwest at the time it was selling the bonds English in a telephone interview said the SEC staff planned to allege that WPPSS had overstated the demand for power in the region and had understated the cost of the plants which were to built with the bonds proceeds English denied the allegations He said WPPSS had made no public forecasts of power demand in connection with the bond sale and had never understated the cost of the plants We at all times told the public everything we knew about the costs he said English said WPPSS had no indication when the SEC might meet on the staff's recommendations The SEC as a matter of policy never comments on its enforcement activities The SEC's WPPSS investigation began in late 1983 and the agency's slow pace on the probe has been publicly criticized on several occasions since then by Rep John Dingell the Michigan Democrat who chairs the House panel responsible for the SEC's budget and operations Of the five nuclear plants originally envisioned by WPPSS one has been completed two remain under construction and two others those for which the defaulted bonds were sold have been terminated Reuter PACIFIC WESTERN FUSES MANAGEMENT WITH CP AIR CALGARY Alberta March 2 Pacific Western Airlines Corp said it integrated the senior management of Pacific Western and recently acquired Canadian Pacific Air Lines Ltd in preparation for the companies merger this summer Pacific Western said it appointed president and chief executive Rhys Eaton as chairman and chief executive in the new management structure and Murray Sigler as president Sigler was previously president of Pacific Western's airline unit Pacific Western Airlines Ltd Pacific Western acquired Canadian Pacific Air Lines for 300 mln dlrs last December from Canadian Pacific Ltd CP Canadian Pacific Air Lines said president and chief executive Donald Carty and four senior vice presidents resigned last week Carty said in a company memorandum that he accepted another senior post in commercial aviation and that some of the vice presidents were taking early retirment and others were resigning for personal reasons Pacific Western said the new management structure will facilitate our objective of proceeding quickly to successfully position ourselves in the marketplace as a single airline network beginning this summer Reuter AMGEN AMGN TO FORM PARTNERSHIP THOUSAND OAKS Calif March 2 Amgen Inc said it signed a letter of intent for an estimated 75 mln dlr research and development limited partnership to fund the clinical investigation of certain pharmaceutical products currently under development Neither terms of the arrangement nor the products covered by the partnership were disclosed but Amgen said the limited partnership units will include warrants to purchase Amgen common stock Reuter BENETTON IN FINANCIAL SERVICES JOINT VENTURE TREVISO Italy March 2 Benetton Group Spa BTOM.MI said it reached agreement with textiles concern GFT Gruppo Finanziario Tessile Spa for a joint venture in the financial services sector A Benetton spokeswoman said details of the accord would be outlined at a news conference on Thursday in Milan The Italian clothing group has targeted financial services as a sector in which to expand its activities In January Benetton acquired a large minority stake in the Italian unit of the U.K. Financial services group Prudential Corp PLC PRUL.L Reuter AIBD CEDEL EUROCLEAR JOIN IN TRADE MATCH SYSTEM LONDON March 2 The Association of International Bond Dealers AIBD said it will cooperate with major clearing agencies Cedel and Euroclear on a eurobond trade confirmation and matching system to come into force by September this year The system designed to give market participants a fast and reliable way of checking whether transactions are matched will initially cover reporting of confirmed and mismatched trades It will include recording additional trade data checking comparison and matching any new elements but will only apply initially to delivery against payment transactions AIBD said The AIBD said in a statement it would be responsible for developing suitable rules to back up the two clearing systems when they introduce their new matching matching facilities and confirmation systems by September this year Euroclear and Cedel intend to bring a trade date plus one matching capacity reporting on a given day on trades entered by 1000 London time designed to work with a planned AIBD rule requiring the entry of previous day's trades by that time The confirmation system covering critical trade data is designed to aid the trader and the settlements department and also reduce trading risks in volatile markets AIBD said REUTER ZAPATA ZOS WON'T PAY INTEREST ON DEBENTURES HOUSTON March 2 Zapata Corp said it does not intend to pay the interest due March 15 on its 10 1/4 pct subordinated debentures due 1997 or the interest due May One on its 10 7/8 pct subordinated debentures due 2001 Zapata said the results of continuing discussions with its bank lenders and the company's future financial position will determine Zapata's ability to meet its obligations to holders of the subordinated debentures The company said deferrals of payment obligations and covenant waivers provided by all of its bank lenders which were scheduled to expire February 28 have been extended through April 30 Zapata stopped paying interest on the debentures in April 1986 Reuter IRISH OIL CONCERN HAS 8.5 PCT OF CYNERGY CRG WASHINGTON March 2 Bryson Oil and Gas Plc a Belfast Northern Ireland oil company said it has acquired an 8.5 pct stake in Cynergy Corp and took steps to help it consider the possibility of seeking control or influencing the company In a filing with the Securities and Exchange Commission in which it disclosed its stake Bryson said it also asked Cynergy for a list shareholder list in case it decided to communicate with the holders Shareholder information would be vital to anyone planning a tender offer and is commonly requested by individuals or groups mulling takeover attempts Bryson told the SEC it may review the feasibility of trying to influence the management policies of Cynergy or of trying to gain control of the company through representation on its board of directors A shareholder list would also be necessary for a group trying to mount a campaign for the election of directors Bryson which said it has retained D.F. King and Co Inc to work on its Cynergy dealings said it bought 841,887 Cynergy common shares for 5.4 mln dlrs to gain an equity position in the company Last week Texas developer James Sowell told the SEC he sold his entire 823,387 share stake in the company Reuter FRANKLIN RESOURCES BEN FORMS THREE FUNDS SAN MATEO Calif March 2 Franklin Resources Inc said it formed three mutual funds that free Pennsylvania residents of taxes levied by the state's counties on stocks bonds and mutual fund shares The funds include the Franklin Pennsylvania Investors U.S. Government Securities Fund which invests in Ginnie Mae securities and the Franklin Pennsylvania Investors High Income Fund investing in high yield corporate bonds Both funds pay monthly dividends The Franklin Pennsylvania Investors Equity Fund invests in stocks of U.S. companies and pays semi annual dividends Reuter CINCINNATI BELL INC CSN RAISES QUARTERLY CINCINNATI March 2 Qtly div 48 cts vs 44 cts prior Pay May One Record April One Reuter CINCINNATI BELL CSN SETS STOCK SPLIT CINCINNATI March 2 Cincinnati Bell Inc said its board declared a two for one stock split subject to two thirds approval at the annual meeting on April 20 of an increase in authorized common shares to 120 mln from 60 mln It said the split would be payable May 20 to holders of record May Five Reuter BRT REALTY TRUST BRT RAISES QUARTERLY PAYOUT GREAT NECK N.Y. March 2 BRT Realty Trust said it raised its quarterly dividend to 50 cts a share from the 42 cts paid in the previous quarter It said the dividend is payable March 31 to shareholders of record March 17 BRT also said it filed a registration statement with the Securities and Exchange Commission for the public offering of 1.2 mln shares of common stock BRT which has about 3.3 mln common shares currently outstanding said Merrill Lynch Capital Markets will be the sole manager of the offering Reuter UNIVERSAL HEALTH REALTY UHT IN INITIAL PAYOUT KING OF PRUSSIA Pa March 2 Universal Health Realty Income Trust which recently went public said its board has declared an initial quarterly dividednd of 33 cts per share payable MArch 31 to holders of record March 16 Reuter AOI COAL CO AOI 4TH QTR NET MIDLAND Texas March 2 Oper shr one ct vs one ct Oper net 147,000 vs 40,000 Revs 13.5 mln vs 14.1 mln Year Oper shr five cts vs 20 cts Oper net 621,000 vs 2,274,000 Revs 54.3 mln vs 56.0 mln NOTE 1986 net excludes tax credits of 60,000 dlrs in quarter and 218,000 dlrs in year Results reflect acceleration of depreciation on certain classes of mining equipment that resulted in the assets being fully depreciated in 1986 Reuter AIBD CEDEL EUROCLEAR JOIN IN TRADE MATCH SYSTEM LONDON March 2 The Association of International Bond Dealers AIBD said it will cooperate with major clearing agencies Cedel and Euroclear on a eurobond trade confirmation and matching system to come into force by September this year The system designed to give market participants a fast and reliable way of checking whether transactions are matched will initially cover reporting of confirmed and mismatched trades It will include recording additional trade data checking comparison and matching any new elements but will only apply initially to delivery against payment transactions AIBD said The AIBD said in a statement it would be responsible for developing suitable rules to back up the two clearing systems when they introduce their new matching matching facilities and confirmation systems by September this year Euroclear and Cedel intend to bring a trade date plus one matching capacity reporting on a given day on trades entered by 1000 London time designed to work with a planned AIBD rule requiring the entry of previous day's trades by that time The confirmation system covering critical trade data is designed to aid the trader and the settlements department and also reduce trading risks in volatile markets AIBD said Reuter WESTERN DIGITAL WDC ADDS E MAIL PACKAGE IRVINE Calif March 2 Western Digital Corp said it signed a licensing agreement under which it will sell an electronic mail software package from Consumers Software Gilroy Calif Western Digital said the software package named Network Courier allows computer users operating on a local area network to exchange messages and files without having to exit their current applications Western Digital said the agreement marks its intention to widen the market for local area network products by selling specific applications rather than components Reuter MIDWAY MDWY TO EXPAND SERVICE CHICAGO March 2 Midway Airlines Inc said will begin to serve several new cities in the United States this year starting April five with new flights to Atlanta from Chicago The carrier will fly three daily Atlanta flights out of Chicago's Midway Airport using two new airplanes and aircraft acquired from KLM Reuter FOOTHILL GFI ARRANGES DEBT PLACEMENT LOS ANGELES March 2 Foothill Group Inc said its Foothill Capital Corp unit arranged the private placement of 23 mln dlrs in senior debt and 27 mln in senior subordinated debt The senior and senior subordinated debt was purchased by institutional lenders and will bear interest at 9.4 pct and 10.15 pct respectively Foothill said It said completion of the transaction will increase the company's capital funds to 138 mln dlrs Reuter WESTERN UNION WU NAMES NEW PRESIDENT UPPER SADDLE RIVER N.J. March 2 Western Union said John Pope Jr has been elected president of the telegraph company and executive vice president of the corporation Western Union said Pope formerly the executive vice president of the company succeeds Robert Leventhal The company said Leventhal will remain chairman and chief executive officer of the corporation and company the prinipal subsidiary of Western Union Corp Reuter NORTH ATLANTIC INDUSTRIES INC NATL YEAR NET HAUPPAUGE N.Y. March 2 Shr 40 cts vs 30 cts Net 1,408,000 vs 1,038,000 Sales 35.2 mln vs 31.6 mln NOTE Results restated for change to FIFO inventory accounting from LIFO which reduced 1985 net 192,000 dlrs or five cts a share Reuter CHURCHILL TO MARKET WESTERN UNION WU SERVICES NEW YORK march 2 Churchill Communications Corp said it signed an agreement under which it will sell and service Western Union Corp's telex electronic mail and long distance services to customers not directly assigned to Western Union representatives Churchill a privately held firm that processes electronic mail services said the agreement extends for two years with options for renewal Reuter COMBUSTION ENGINEERING CSP SETS CHINA PACT STAMFORD Conn March 2 Combustion Engineering Inc said it won a contract worth more than 50 mln dlrs for parts and services for a 600 megawatt coal fired power plant run by the China National Technical Import Corp It said it will supply plant engineering steam generator components and air quality control systems Initial delivery is set for early 1988 Reuter ALCAN ALUMINIUM LTD AL SETS STOCK SPLIT MONTREAL March 2 Alcan Aluminium Ltd said its board declared a three for two stock split subject to shareholder approval at the April 23 annual meeting The company said the split would be payable to shareholders of record on May Five and the split would take effect at the close of business on that date New certificates will be issued around June Five Reuter COMMERCIAL CREDIT CCC TO HAVE GAIN ON SALE BALTIMORE March 2 Commercial Credit Co said it has completed the sale of its domestic vehicle leasing unit McCullagh Leasing Inc the New England Merchants Leasing Corp for an after tax gain of 17 mln dlrs Commercial Credit said it received 68 mln dlrs and the repayment of 250 mln dlrs in debt for McCullagh It said its Canadian vehicle leasing unit Commercial Credit Corp Ltd will also be sold to New England Merchants with closing expected in March subject to Canadian regulatory approval Reuter OPEC PRESIDENT SAYS OIL MARKET BEING MANIPULATED KINGSTON March 2 OPEC president Rilwanu Lukman accused oil market manipulators of drawing down their own stocks and spreading rumours to give the impression OPEC was breaking its 15.8 mln barrels per day output ceiling set last December Lukman told reporters the aim was to pull prices below the 18 dlrs per barrel reference level set by OPEC People are playing a waiting game to test the will of OPEC by drawing down more on their stock than normal and this is having the effect of giving an apparent excess supply on the market which we know is not real Lukman said Lukman Nigeria's oil minister said that despite probable minor deviations by one or two member countries basically OPEC is producing around what it said it would produce After OPEC's price and production accord last December the market firmed steadily but spot prices fell in the last week to around 16 dlrs Industry reports estimated the organization was producing up to one mln bpd above its ceiling during February But Lukman was confident OPEC would maintain its discipline in view of past experience We have the experience of what happened in 1986 behind us when violations of agreements led to the collapse of the market he said Lukman was in Kingston as a guest of the state owned Petroleum Corp of Jamaica REUTER EPITOPE EPTO SETS THREE FOR ONE STOCK SPLIT BEAVERTON Ore March 2 Epitope Inc said its board of directors has authorized a three for one common stock split for which shareholder approval is expected in the next two weeks The company announced a two for one split last week but said the board reconvened and agreed to change it to a three for one split Epitope is involved in the production of monoclonal antibodies for diagnostic and therapeutic use in AIDS and other immunological diseases Reuter PROPOSED OFFERINGS RECENTLY FILED WITH THE SEC WASHINGTON March 2 The following proposed securities offerings were filed recently with the Securities and Exchange Commission Rockwell International Corp ROK Shelf offering of up to 200 mln dlrs of debt securities on terms to be determined at the time of the sale in addition to another 300 mln dlrs of debt securities already registered with the SEC but unsold Pennsylvania Power and Light Co PPL Shelf offering of up to 500,000 shares of series preferred stock on terms yet to be determined through an underwriting group led by First Boston Corp Rollins Environmental Service Inc REN Offering of 900,00 shares of common stock through Merrill Lynch Capital Markets Quaker Oats Co OAT Shelf offering of up to 250 mln dlrs of debt securities on terms to be set at the time of the sale through Goldman Sachs and Co and Salomon Brothers Inc Paine Webber Group Inc PWJ Offering of 3.6 mln shares of convertible exchangeable preferred stock through and underwriting group led by its PaineWebbber Inc subsdiary Reuter INTERNATIONAL HYDRON CORP HYD 4TH QTR NET WOODBURY N.Y. March 2 Oper shr profit six cts vs loss 20 cts Oper net profit 634,000 vs loss 2,312,000 Sales 16.8 mln vs 13.9 mln Year Oper shr profit 30 cts vs profit three cts Oper net profit 3,342,000 vs profit 318,000 Sales 67.5 mln vs 52.6 mln NOTE Operating net excludes loss of 41,000 dlrs vs profit 7,000 dlrs in quarter and profit 247,000 dlrs or two cts a share vs profit 88,000 dlrs or one cent a share in year from net operating loss carryforwards Reuter SNET SNG COMPLETES PRATT WHITNEY UTC ORDER NEW HAVEN Conn March 2 Southern New England Telecommunications Inc said it completed the installation of a multi million dlr telecommunications system for United Technologies Corp's Pratt and Whitney unit The company said the system is built around the American Telephone and Telegraph Co T 5ESS switch which has the capacity to provide telephone service to a medium sized city Reuter INTRERFACE FLOORING IFSIA FILES FOR OFFERING LAGRANGE Ga March 2 Interface Flooring Systems Inc said it has filed for an offering of 2,800,000 Class A common shares through underwriters led by Robinson Humphrey Co Inc and PaineWebber Group Inc PWJ The company said as previously announced it will use proceeds to finance a tender offer to acquire the 50 pct of Debron Investments PLC it does not already own and to repay debt It said if it acquires all of Debron it will repurchase 900,000 Class A shares now owned by Debron and hold them in its treasury Reuter CORRECTION TRANSALTA UTILITIES CORP YEAR NET IN CALGARY STORY OF FEB 27 HEADLINED TRANSALTA UTILITIES CORP YEAR NET PLS READ IN FOURTH LINE REVS 915.5 MLN VS 836.0 MLN.INSTEAD OF 581.0 MLN VS 524.5 MLN.CORRECTING REVENUES Reuter SCOTTY'S SHB SALES UP FIVE PCT IN FEBRUARY WINTER HAVEN Fla March 2 Scotty's Inc said sales for the four weeks ended February 21 rose five pct to 41.7 mln dlrs from 39.8 mln dlrs for the corresponding period last year Scotty's said sales for the 34 weeks ended February 21 totaled 323.2 mln dlrs up six pct over sales of 305.7 mln dlrs for the same period in 1986 The company which operates 137 stores said sales were up in both the consumer do it yourself and professional builders markets Reuter STANDARD OIL SRD TO ISSUE SWISS FRANC NOTE CLEVELAND Ohio March 2 Standard Oil Co said it will issue at par 154 mln Swiss francs of non callable 10 year notes with an annual coupon of 3 1/4 pct and detachable currency warrants Credit Suisse will lead manage the issue Payment date is March 19 Each 50,000 Swiss franc note will carry a warrant entitling the holder to sell 50,000 francs for dollars at an exchange rate of 1.5930 per dollar The warrants are exercisable weekly from March 27 1987 until March 19 1990 The dollar was trading today between 1.5340 and 1.5475 francs Reuter CORRECTED TRANSALTA UTILITIES CORP YEAR NET CALGARY Alberta March 2 Shr 81 cts vs 2.78 dlrs Net 53.5 mln vs 180.9 mln Revs 915.5 mln vs 836.0 mln Note 1986 net includes 125 mln dlr or 1.90 dlr shr writedown of investment in Canada Northwest Energy Ltd vs yr ago extraordinary loss of 17 cts shr net fig not given Reuter ALBERTSON'S ABS TO INCREASE NEW STORE OPENINGS BOISE Idaho March 2 Albertson's said it plans to open 33 to 35 new stores during 1987 and remodel about 20 25 stores This compares to 21 new store openings in 1986 and 17 remodelings Albertson's a grocery chain said total capital expenditures for these projects will be in excess of 200 mln dlrs in 1987 Reuter PALL CORP PLL SECOND QUARTER SALES ORDERS UP CHICAGO March 2 Pall Corp said sales for the second quarter ended January 31 were up 17.5 pct to 94.0 mln dlrs from 80.0 mln dlrs a year before and orders were up 15.5 pct to 101.1 mln from 87.4 mln For the first half it said sales were up 16.0 pct to 174.6 mln dlrs from 150.3 mln dlrs a year before with orders up 13.0 pct to 189.6 mln from 167.7 mln Reuter NAVISTAR NAV DEBT UPGRADED BY S P NEW YORK March 2 Standard and Poor's Corp said it upgraded 500 mln dlrs of debt of Navistar International Corp and its unit Navistar Financial Corp Raised were the companies senior debt to BB from B and subordinated debt to B plus from CCC plus S and P cited Navistar's recent issuance of 104 mln shares of common stock and planned redemption of 515 mln dlrs of debt The recapitalization would save Navistar about 86 mln dlrs in annual interest expense the rating agency said However the ratings remain speculative because of severe pricing pressures in the trucking industry S and P stressed Reuter SPANISH FARMERS BATTLE POLICE IN N.E. SPAIN SARAGOSSA March 2 Thousands of Spanish farmers battled police in this northeastern city during a march to demand a better deal from the EC protest organisers said The farmers traded stones for tear gas and rubber pellets and occupied local government buildings in Saragossa In the southern city of Malaga citrus growers dumped more than 20 tonnes of lemons on the streets to protest against duties levied by the EC against their exports Spain joined the community in January last year and farmers say they have suffered competition from EC imports without sufficient compensation Reuter TANDEM TNDM HAS HOME SHOPPING DEAL CUPERTINO Calif March 2 Tandem Computers Inc said the Telaction Corp unit of J.C. Penney Co Inc JCP selected the Tandem NonStop computer system for a new interactive home shopping system scheduled to go into operation during the summer Tandem said the new system will be the first consumer controlled home shopping and information service delivered by cable television The Telaction service will be initially available to more than 125,000 households in the Chicago test area Tandem also said Reuter MURGOLD RESOURCES HAS PARTIAL GOLD ASSAYS TORONTO March 2 Murgold Resources Inc said the number three vein zone at its Timmins Ontario property yielded partial assay results of 1.08 ounces gold a short ton across an average width of 4.2 feet and length of 200 feet It said many of the individual assays were more than one ounce a ton but had not been cut The company said these results were expected because the structure was known from previous drilling as a narrow but very high grade gold vein Its known length is 2,800 feet and will be explored and tested as part of the underground work Murgold said Reuter CHRYSLER TO SELL CARS IN EUROPE BEFORE YEAR END GENEVA March 2 Chrysler Corp C will begin exporting vehicles before the end of this year to Europe the world's second largest market which it left in 1978 Robert Lutz executive vice president told a news briefing After a lapse of almost nine years Chrysler is about to re enter the European market And we are here to stay Michael Hammes vice president of international operations said Chrysler planned to market a few hundred vehicles by year end By the end of 1988 we hope to reach 5,000 The first cars would be sold in West Germany Austria and Switzerland he said The European base would be in West Germany but no final decision had been made on other sites The company will not set up its own dealer franchises but intends to work through distributors who will wholesale the vehicles to a franchised dealer organisation Lutz commented We prefer to export to Europe rather than manufacture here because it will allow us to take full competitive advantage of the favourable exchange rates due to the declining value of the dollar The vehicles on show at this week's Geneva motor show include Chrysler LeBaron Turbo coupe and convertible the Dodge Lancer ES four door hatchback the Dodge Shadow ES compact the Plymouth Voyager miniwagon and the Dodge Daytona Shelby Z Chrysler is aiming for the mainstream European buyer who appreciates sporty cars with 2.2 litre engines officials said Prior to negotiating a loan guarantee program with the U.S. Government in 1978 Chrysler sold its European operations to Peugeot SA PEUP.P. Chrysler now owns 24 pct of Mitsubishi Motors Corp MIMT.T and 15 pct of Maserati which may serve as European distribution channels in future Hammes said Reuter U.S. DELEGATION PLANS TO LEAVE ICO TALKS TUESDAY LONDON March 2 The U.S. Delegation at the International Coffee Organization ICO talks on export quotas is planning to leave tomorrow morning but will ask a representative from the U.S. Embassy in London to attend the negotiations if they continue a U.S. Spokesman said One delegate said If the U.S. Delegation is going home and the Brazilians are not budging then there's no negotiation A full ICO council meeting is set for 1900 hours local for a progress report Opinions among delegates over the potential for reaching an agreement vary widely and several delegates have said the chances of success were almost impossible to gauge Reuter FORD F AIR BAG PROGRAM FLAGGING REPORT DETROIT March 2 Ford Motor Co's program to introduce air bags in its compact cars is facing widespread resistance from both consumers and dealers a trade paper said As of February 20 Automotive News said Ford dealers had sold only 455 1987 model Ford Tempos equipped with airbags and 294 similarly equipped Mercury Topaz models compared with more than 100,000 of the standard equipped compact models Ford has projected output of 12,000 Tempo and Topaz models equipped with airbags in the 1987 model year but Automotive News said the current inventory of unsold cars represents a disastrously high 1 1/2 year supply at current selling rates Most of Ford's sales of the compact cars equipped with air bags have been made to fleet buyers such as the U.S. government the paper said with 11,000 having been sold since they were announced in late 1985 Ford executives recently said their goal is to sell annually between 500,000 and one mln cars equipped with air bags by 1990 if the federal government will relax certain regulatory standards as has been urged by some traffic safety administrative staff Reuter MURGOLD RESOURCES MGDVF HAS PARTIAL ASSAYS TORONTO March 2 Murgold Resources Inc said the number three vein zone at its Timmins Ontario property yielded partial assay results of 1.08 ounces gold a short ton across an average width of 4.2 feet and length of 200 feet It said many of the individual assays were more than one ounce a ton but had not been cut The company said these results were expected because the structure was known from previous drilling as a narrow but very high grade gold vein Its known length is 2,800 feet and will be explored and tested as part of the underground work Murgold said Reuter PACCAR PCAR AND UNIT DEBT DOWNGRADED BY S P NEW YORK March 2 Standard and Poor's Corp said it downgraded to A plus from AA minus about 350 mln dlrs of senior debt of PACCAR Inc and its unit PACCAR Financial Corp S and P said PACCAR has experienced earnings weakness But the company remains profitable and should achieve significant cost reductions from its recent shut down of two assembly plants S and P noted The rating agency pointed out that price discounting has eroded some of PACCAR's pricing advantage in the premium custom built segment of the trucking industry which is PACCAR's traditional market niche Reuter S P MAY DOWNGRADE MACK TRUCKS MACK DEBT NEW YORK March 2 Standard and Poor's Corp said it placed on creditwatch with negative implications Mack Trucks Inc's 140 mln dlrs of BB plus senior debt S and P said Mack lost significant market share in heavy duty trucks last year Through the nine months ended September 30 1986 the company's pretax loss before restructuring costs equity income and extraordinary items widened to 30 mln dlrs from 23 mln dlrs in the year earlier period it noted S and P withdrew the BB plus ratings on the unit Mack Financial Corp's 9 5/8 pct debentures due 1990 and 9 3/4 pct debentures of 1991 as they were called for redemption Reuter ZIMBABWE'S MAIZE MOUNTAIN POSES ECONOMIC PROBLEM By Peter Gregson Reuters HARARE March 2 More than two mln tonnes of surplus maize dotted across Zimbabwe in huge piles is posing an economic headache for the country The grain Southern Africa's staple has been bought by the Grain Marketing Board GMB at prices guaranteed before it was planted and is costing the GMB about 27 mln dlrs a month in storage and interest payments to make the purchases Accumulated over the past two years of bumper harvests the surplus represents about two years of domestic consumption and is set to grow as further deliveries are due shortly Some deals have been made with aid donors such as European countries and Australia to provide Zimbabwe with wheat in return for maize sent to neighbouring Mozambique where the United Nations has urged greater world efforts to feed the hungry But transport constraints keep those figures low and the only significant dent was a sale of 250,000 tonnes to South Africa last year Because of the costs it has incurred the GMB cannot afford to give the maize away and the standard 90 kg bags have been accumulating economists here said But failure to find buyers on glutted world grain markets is damaging Zimbabwe as it needs foreign exchange to finance imports for other areas of the economy the economists added At present it is a no win situation Let us hope some of the extra aid UN Secretary General Javier Perez de Cuellar called for at the weekend will be spent here a Western aid specialist said At least this year's poor rains haven't exacerbated the situation too badly he added Rainfall during the current rainy season has been far below average ravaging all but the irrigated lands of large commercial farmers While this may curb the amount of maize delivered this year to the GMB the government also acted late last year to slash maize production and force diversification Calling for a switch to other crops such as oilseeds Agriculture Minister Moven Mahachi said an economically viable price of 180 dlrs a tonne would be paid this year for only half the amount of maize bought by the GMB in 1986 and above that growers would be paid an unprofitable 100 dlrs The poor rains have also adversely affected other crops such as sorghum soybeans groundnuts tobacco and cotton the Agriculture Ministry reported at the end of February Reuter TECHNOLOGY CHIP INDUSTRY SEEKS CUSTOM DESIGNS By Catherine Arnst Reuters NEW YORK March 2 U.S. semiconductor manufacturers struggling to stem a river of red ink are increasingly looking toward customized designs rather than mass market chips for future profits The market for customized chips semiconductors designed for a very specific application or product is expected to expand by 25 to 30 pct this year compared with only about six pct for the entire integrated circuit industry Market researcher Dataquest Inc estimates that sales of customized chips totaled about 4.5 billion dlrs worldwide last year about 12 pct of the total chip market By 1990 however customized chips are expected to represent a 12 billion to 15 billion dlr market about 25 pct of total chip sales More important for their vendors because they are not a standard design customized chips represent a sellers market and prices and profit margins can be set accordingly High volume memory chips have become a perfect commodity market Robert Brodersen a professor of electrical engineering at the University of California at Berkeley told an industry forum The product is interchangeable between one manufacturer and another and customers base their buying decisions almost entirely on price Brodersen said He predicted that in the next few years only a handful of the world's largest chip manufacturers most of them Japanese will produce memory chips the standard electronic component found in everything from digital watches to computers The rest of the industry just won't be involved Last week's International Solid State Circuits Conference the chip industry's annual forum for new developments seemed to support Brodersen's prediction Of the 116 papers presented at the conference some 40 pct had Japanese authors the first time they have outnumberd the United States Most of the Japanese chip designs were in the memory category including Nippon Telephone and Telegraph Co's attention grabbing 16 mln bit dynamic random access memory dram chip 16 times more powerful than anything now available The most advanced memory chip described by a U.S. company was International Business Machine Corp's IBM four mln bit chip and IBM only manufactures chips for its own internal use not for the open market The problem with memory chips is that they are all based on the same well known design standards so they are easy to copy and inexpensive to manufacture Because such large Japanese conglomerates as Sony Corp SNE NEC Corp NIPNY Matushita and Mitsui have their own enormous consumer and electronics product lines they also have a guaranteeed internal market for their chips so they can produce huge amounts at a very low cost per unit Customized chips however are designed for a specific customer manufactured in small quantities and expensive relative to standard chips Computer markets are increasingly looking to customized chips because they are difficult to copy thus making the final product harder to clone as well Intel Corp INTC the leading manufacturer of the microprocessors that form the brains of most computers alerted the industry to its intention to switch to customized chips last fall The company which just reported a loss for 1986 said it will spend 75 mln dlrs over the next three years to turn itself into a leading manufacturer of custom and semi custom chips Intel joins some 275 companies already competing for a piece of the customized chip business but it has an advantage that the others do not IBM which owns a 20 pct stake in Intel has agreed to share the designs for many of the 15,000 chips it makes for its own use Intel will customize those designs and sell them to others It will also get to use IBM's proprietary computer system for designing chips considered by experts to be one of the most advanced in the world Intel's success is still not guaranteed however Industry analysts noted that it is far different to design a mass market item than a customized chip that requires a close working relationship with the customer Intel spent five years and 100 mln dlrs developing its newest 30386 microprocessor A much faster turnarouond time and much lower development costs will be required for customized chips if the firm is to succeed Reuter CONTINENTAL ILL CIL TO RECHARACTERIZE LOSS WASHINGTON March 2 Continental Illinois Corp settled an administrative complaint by the Securities and Exchange Commission by agreeing to recharacterize 425 mln dlrs previously reported in the second quarter 1984 as a loss of sale on loans Under the settlement which was announced simultaneously with the filing of the SEC's administrative action Continental agreed to restate earlier financial reports to single out the 425 mln dlrs as a separate loan loss item instead of lumping it together with another item The bank holding company said the change does not affect its operating results for 1984 The SEC stressed in the complaint that it was not challenging Continental's reported net loss for the second quarter of 1984 But it said it was misleading for the bank to split the 950 mln dlr loan loss provision in half attributing 425 mln dlrs of it to the event of sale The 425 mln dlrs should have been part of a 950 mln dlr billion dlr loan loss provision required by the Office of the Comptroller of the Currency the SEC said Continental had originally listed 565 mln dlrs of the loan loss provision as a credit loss and another 425 mln dlrs as a loss on sale of loans the SEC said It was misleading for the bank to list the 425 mln dlrs as loss on sale which implied the loss would not have occurred had there not been a sale of distressed loans to the Federal Deposit Insurance Corp the SEC said The bank should have listed 990 mln dlrs as a credit loss instead of 565 mln dlrs and should not have charecterized the other 425 mln dlrs as a provision for loss on sale of loans the SEC said Continental agreed to the settlement with the SEC without admitting or denying any violations the SEC said But it agreed to restate its 1984 financial statements to accommodate the SEC's objections and to report to its shareholders a summarized version of the SEC's administrative action against it the agency said A Continental official stressed that the settlement in no way will result in any change or restatement of the company's earnings for that period Reuter MORRISON KNUDSEN MRN GETS NAVAL STATION JOB BOISE Idaho March 2 Morrison Knudsen Corp said its National Projects Inc subsidiary was awarded a contract worth about 27 mln dlrs for construction of improvements at the U.S. Navy's Fallon Naval Air Station in Nevada The company said the work scheduled for completion in Early 1989 involves revamping of the base's utility systems paving of a runway apron contruction of a control tower and aircraft hanger and improvements on the base target range Reuter MOLECULAR BIOSYSTEMS MOBI OFFERS NEW PRODUCTS ATLANTA March 2 Molecular Biosystems Inc said it announced new SNAP DNA Probe Kits for the detection of rotavirus and malaria The company said it also introduced the Extractor a new DNA RNA sample preparation column The company based in San Diego Calif said the Extractor dramatically simplifies the isolation and purification of DNA and RNA from actual clnical samples Reuter WESTERN DIGITAL WDC ADDS ELECTRONIC MAIL IRVINE Calif March 2 Western Digital Corp said it is adding the Network Courier an electronic mail software package by Consumers Software to its Local Area Network LAN products The company said The Network Courier allows LAN users to exchange messages and complete files without having to exit their current applications and to exchange mail and files with remote networks Reuter TRIANGLE INDUSTRIES INC TRI 4TH QTR LOSS NEW YORK March 2 Oper shr loss three cts vs profit 27 cts Oper net loss 178,000 vs profit 4,165,000 Sales 783.7 mln vs 464.6 mln Avg shrs 25.3 mln vs 10.3 mln Year Oper shr profit 2.61 dlrs vs profit 2.75 dlrs Oper shr diluted profit 2.05 dlrs vs profit 2.66 dlrs Oper net profit 47.6 mln vs profit 31.0 mln Sales 2.67 billion vs 1.65 billion Avg shrs 16.0 mln vs 9.8 mln Avg shrs diluted 24.5 mln vs 10.2 mln NOTES Results include American Can Packaging Inc and National Can Corp from acquisition on Nov 1 1986 and April 16 1985 respectively 1986 4th qtr oper results reduced 3.0 mln dlrs or 12 cts a share by retroactive elimination of investment tax credits 1985 operating profit includes gains of 1.8 mln dlrs or 17 cts a share in quarter and 6.8 mln dlrs or 67 cts a share in year from sale of investments Operating net excludes loss of 647,000 dlrs or three cts a share vs profit 173,000 dlrs or two cts a share in quarter and loss 647,000 dlrs or four cts a share vs profit 5,847,000 dlrs or 60 cts a share in year from discontinued operations 1986 operating results also exclude charges of 1,271,000 dlrs or five cts a share in quarter and 34.0 mln dlrs or 2.12 dlrs a share in year from early extinguishment of debt Reuter FLUOR CORP FLR DEBT DOWNGRADED BY MOODY'S NEW YORK March 2 Moody's Investors Service Inc said it lowered the ratings on about 390 mln dlrs of Fluor Corp's long term debt and commercial paper Moody's said the action which completes a review begun February 6 reflects expectations that pressure on earnings and cash flow are likely to continue for some time This will result in stress on debt protection measures although the firm's continuing core businesses have strong positions within their industries Ratings cut include those on senior notes Eurobonds and pollution control bonds to BA 2 from BAA 3 and commercial paper to not prime from prime 3 Reuter ELECTRONIC CONTROL ECSIU INITIAL OFFER STARTS EAST ORANGE N.J. March 2 Electronic Control Security Inc said an initial public offering of 1,250,000 units is under way at 1.60 dlrs each through underwriters led by Jersey Capital Markets Group Inc Reuter TYLAN TYLN RENEWS CREDIT LINE CARSON Calif March 2 Tylan Corp said it renewed its eight mln dlr annual credit agreement with Bank of America and First Los Angeles Bank The agreement includes a revolving credit line and a term loan through December 31 1987 both of which are secured by the assets of the company Tylan said It said both lines bear interest at one pct over the prime rate subject to upward adjustment based on certain contingencies Terms of the agreement include warrants for the banks to buy up to 200,000 Tylan shares the company also said Reuter NACCO INDUSTRIES NC UNIT TO BE SOLD CLEVELAND March 2 Nacco Industries Inc said a group of utilities called the Capco group has taken actions to exercise its option to acquire the Quarto Mining Co unit of Nacco's North American Coal Co The purchase would be for about 10 mln dlrs and would if completed generate a substantial capital gain for Nacco the company said The price is equal to the value of coal reserves contributed to Quarto by North American Coal In 1986 Quarto produced about 3.6 mln tons of coal and net earnings of 5.9 mln dlrs Nacco said Capco is a group of utilities that includes Ohio Edison Co OEC and Centerior Energy Corp CX Reuter VALLEY FEDERAL VFED NAMES NEW OFFICERS VAN NUYS Calif March 2 Valley Federal Savings and Loan Association said it appointed Joseph Biafora to the post of chairman and the company's president Donald Headlund was named to the additional post of chief executive The new appointments follow the death of former chairman and chief executive Robert Gibson the company said It said Biafora had been vice chairman of the board Reuter SEARS S DEAN WITTER UNIT AGREES TO SEC CENSURE WASHINGTON March 2 Federal regulators said Dean Witter Reynolds Inc the brokerage subsidiary of Sears Roebuck and Co agreed to a censure to settle charges that it failed to fully report cash transactions In a complaint which was issued simultaneously with the settlement the Securities and Exchange Commission charged Dean Witter the fourth largest U.S. brokerage house with failing to report more than one mln dlrs of cash transactions In its administrative complaint the SEC stressed that was not charging Dean Witter with taking part in a scheme to launder cash But it said it found 35 single lump sum cash deposits in excess of 10,000 dlrs made with Dean Witter's branch offices and another three multiple cash deposits made by a customer on a single day which totaled more than 10,000 dlrs The total unreported cash was 1,062,234 dlrs the agency said Federal law requires brokerage firms and banks to report to the Treasury Department all cash deposits greater than 10,000 dlrs After examining seven pct of the Dean Witter's branch offices between July 1983 and April 1985 the SEC said it found that the firm reported 1,880,376 dlrs in cash deposits each of which had been greater than 10,000 dlrs but failed to report another 1,062,234 dlrs Besides agreeing to the censure Dean Witter agreed to tighten its oversight of its branch offices Another major brokerage firm E.F. Hutton Group Inc recently disclosed in an SEC filing that a federal grand jury in Providence R.I. was probing its compliance with cash deposit reporting requirements at its Providence office Reuter BANKEAST CORP BENH COMPLETES ACQUISITION MANCHESTER N.H. March 2 BankEast Corp said it has completed the acquisition of United Banks Corp in an exchange of 1.86 BankEast shares for each United share It said the acquisition is worth about 11.3 mln dlrs Reuter U.S. SAYS TIN DISPOSALS WILL NOT AFFECT ACCORD WASHINGTON March 2 U.S. tin disposals should have little effect on an agreement reached last weekend by tin producing countries to limit group exports to 96,000 tonnes in the year started March 1 a government official said The agreement by the seven member Association of Tin Producing Countries ATPC aimed to cut the world surplus and boost prices Following the accord ATPC Chairman Subroto appealed to the United States to restrict its tin releases from its strategic stockpile We don't think that the U.S. government has a large influence in the tin market at this stage of the game said Thomas O'Donnell Director of International Commodities at the State Department Last year the United States released about 4,900 tonnes of tin to two ferroalloy firms Reuter BANNER BNR TO ACCEPT REXNORD REX SHARES NEW YORK March 2 Banner Industries Inc said it plans to accept for payment after the close of business today all the common shares of Rexnord Inc that were tendered under its 26.25 dlr per share tender offer Banner said its offer for all of the roughly 20 mln shares of Rexnord it did not already own expired last Friday and will not be extended Based on a preliminary count about 19.8 mln Rexnord shares were tendered under the offer Banner said Combined with the roughly five mln shares it already holds Banner said it will own about 97 pct of Rexnord's shares Banner said last Friday that it had arranged bank credit to finance most of the tender offer and the subsequent merger with Rexnord under which remaining Rexnord holders may receive 26.25 dlrs a share It said the balace of the funds will be obtained through a private placement for which Drexel Burnham Lambert Inc is acting as agent Banner said it expects to complete the merger with Rexnord within 60 days Reuter AMERICAN NURSERY ANSY MAKES ACQUISITION TAHLEQUAH Okla March 2 American Nursery Products Inc said it has purchased Heini's Nursery Inc of Miami which grows indoor foliage plants for wholesale distribution and had sales of 4,472,0000 dlrs for the year ended August 31 Terms were not disclosed Reuter DOT REJECTS SMOKING BAN ON DOMESTIC FLIGHTS WASHINGTON March 2 The U.S. Department of Transportation DOT has concluded that a ban on smoking on all domestic airline flights is not justified at this time The department made known its conclusions in a report to Congress made public today on a recommendation by the National Academy of Sciences that such a ban be adopted We agree that exposure to environmental tobacco smoke could be viewed as a problem by some crew and passengers However we believe that further study is needed before the department can propose a definitive response to this recommendation the DOT report said The National Academy of Sciences NAS had studied the issue of smoking on airlines under a DOT grant It recommended a ban in August after concluding that tobacco smoke when confined to an airliner's cabin posed potential health hazards to cabin crew members irritated passengers and crew and created a risk of fires The DOT said more study was needed of the health effects of environmental tobacco smoke and of the concentration and distribution of pollutants on various aircraft types It also called for more study of possible changes in aircraft ventilation systems and said it wanted to spend more time considering whether a ban should be extended to international as well as domestic flights Reuter AMC AMO SAYS STEPS TAKEN AFTER UAW TALKS FAIL By Richard Walker Reuters DETROIT March 2 American Motors Corp said it will take steps to build a proposed new jeep vehicle at an unspecified alternative location after the weekend breakdown of talks with the United Automobile Workers union on a concessionary contract covering workers at AMC's Wisconsin operations AMC spokesman Lloyd Northard told Reuters that the company will not build its new Jeep ZJ sports utility vehicle at its Kenosha Wisc assembly plant as a result of the talks failure We sincerely regret this outcome but the responsibility for it rests entirely with the local union bargaining committees the company said in a statement We will therefore initiate the actions necessary to place the new Jeep product in an alternative location rather than at Kenosha UAW officials said during the weekend they did not regard the collapse of talks as final after the company's final proposal on a new contract was unanimously rejected by union bargainers But AMC said the union's rejection of its concessions package means that plants in Kenosha and Milwaukee will lose 6,500 jobs because the assembly complex in Kenosha will not be getting new work as had been proposed with a new contract This unfortunate outcome demonstrates the difficulty of maintaining existing working and bringing new work to existing U.S. operations AMC said Asked if the company considered the decision to phase out the Kenosa plant by 1989 as previously detailed to be final Northard said If the union came to us and said they would accept our final proposal that's another matter But the company charged bargainers for UAW Locals 72 and 75 had reneged on commitments for a new agreement with lower labor rates made in 1985 when the union locals negotiated a concessionary agreement covering AMC's Wisconsin operations AMC which last week reported its first profitable quarter in two years said it wanted a contract for the plants with labor rates and work rules comparable to agreements between the UAW and Japanese automakers operating in the U.S. Wall Street investors reacted to the AMC UAW impasse by driving down AMC's stock price In active trading AMC was off 3/8 to 3 1/2 a 9.7 pct decline since Friday's close Reuter ARCHIVE CORP ACHV SIGNS DISTRIBUTOR AGREEMENT COSTA MESA Calif March 2 Archive Corp said it signed an agreement under which Microamerica a value added reseller of personal computers peripherals and supplies will distribute its Archive XL tape drive Archive said Microamerica will carry both models of the XL drive a 40 megabyte 5.25 inch drive based on the QIC 40 standard that is compatible with the IBM PC XT and PC AT PCs Reuter INSPEECH INSP MAKES ACQUISITIONS VALLEY FORGE Pa March 2 InSpeech Inc said it has acquired Northwest Rehabilitation Inc and Len M House and Associates and United Rehabilitation Inc for undisclosed terms Northwest provides physical therapy services and has annual sales of about six mln dlrs and Houyse provides speech therapy services and has annual sales of about 4000,000 dlrs Both are based in Minneapolis Reuter STATUS GAME STGM TO INTRODUCE VIDEO BINGO LAS VEGAS March 2 Status Game Corp said it is introducing a new Video Bingo game that enables the player to buy up to four bingo cards and at the same time play against computer simulated bingo games Reuter BAYER BAYRY MAKES U.S. ACQUISITION PITTSBURGH MArch 2 Bayer AG of West Germany said it has acquired Wyrough and Loser Inc of Trenton a maker of rubbr processing chemicals for undisclosed terms It said its Mobay Corp subsidiary will transfer its entire U.S. Rhein Chemie Rheinau GmbH specialty chemicals business for the rubber plastics and lube oil industries to Wyrough and Loser later this year Reuter EAGLE ENTERTAINMENT EEGL TO MANAGE AFFILIATE LOS ANGELES March 2 Eagle Entertainment Inc said it signed a 10 year management and consulting agreement with 47.5 pct owned Performance Guarantees Inc to manage the affiliate's business and retain 90 pct of its revenues PGI provides independent film producers and their investors or lenders with completion bonds which guarantee that a film will be completed and delivered within budget and on schedule Reuter GULF ARAB OIL MEETING ENDS BAHRAIN March 2 Deputy oil ministers of the six nation Gulf Co operation Council GCC ended a meeting here after discussing co ordination and co operation in the oil field the Bahrain based Gulf News Agency GNA said The deputy ministers who declined to talk to reporters on the outcome of the 90 minute formal session later concluded a round of informal talks The GCC groups four OPEC members Saudi Arabia Kuwait Qatar and the United Arab Emirates and non OPEC nations Bahrain and Oman Before the formal session had begun chairman Yousef Shirawi Bahrain's Development and Industry Minister told reporters the gathering was a follow up to talks held last Sunday in Qatar at full ministerial level GNA gave no details on the outcome of today's talks It said only The deputy ministers discussed current developments in the oil market particularly those relating to production and prices The meeting in Qatar had reaffirmed the six Gulf Arab countries commitment to OPEC's pricing and production accord forged in December last year It also discussed ways of marketing crude oil on behalf of those GCC states encountering resistance to official OPEC prices Oil industry sources have said Qatar has faced particular difficulty in selling its full quota of production Reuter APPLE AAPL AST ASTA OFFER MS DOS PRODUCTS LOS ANGELES March 2 Apple Computer Inc and AST Research Inc said they are offering two products that allow MS DOS software compatibility with Apple's new Macintosh SE and Macintosh II Apple understands the importance of information sharing in multiple vendor environments said Apple Chairman John Sculley at a seminar where the new products were released The products allow the new Macintosh computers to run MS DOS applications in a window at the speed of an IBM PC XT and IBM PC AT The products will require an external MS DOS drive which Apple also announced today Apple also introduced a host of other products including storage devices memory upgrade kits keyboards and two display monitors In addition it announced jointly with Dow Jones and Co DJ and MCI Communications Corp MCIC new electronic mail software called Desktop Express that lets users send graphic documents over telephone wires Reuter NOLAND NOLD FEBRUARY SALES OFF TWO PCT NEWPORT NEWS Va March 2 Noland Co said February sales were off 2.3 pct to 29.4 mln dlrs from 300.1 mln dlrs a year earlier with year to date sales off 9.6 pct to 55.3 mln dlrs from 61.2 mln dlrs The company blamed extremely disruptive winter weather in many of its markets Reuter GOVERNMENT BOND BROKER SEES WIDER DATA ACCESS LONDON March 2 The major U.S. Government bond brokers are likely to give in to pressure from regulators and investors within the next 18 months making their direct dealing screens available to many of those firms that are not now eligible to receive them said Richard Lacy Chairman of Exco International Inc Earlier today Exco said it purchased an 80 pct interest in RMJ Holdings Corp one of the largest of the four bond brokers that dominate the business In a telephone interview Lacy said Within 18 months we think the number of players will be expanded Currently the four major brokers will sell their direct dealing screens to only primary dealers in U.S. Government securities or those that have applied to the Federal Reserve Bank of New york to become a primary dealer The U.S. Justice department is looking into whether limiting access to the screens to just a small group of dealers is a violation of U.S. Anti trust laws Primary dealers of which there are now 40 are an elite group of firms approved to buy Treasury securities directly from the Fed But Lacy said that any agreement to expand access to the brokers direct dealing screens is likely to be not as far reaching as some would like Instead of making screens available to any firm willing to pay for one he said it is more likely that a second tier will be established He also said that RMJ is not willing to break away from the group of bond brokers and be the only firm to make its screens widely available to any one who wants them Bond market sources had speculated that RMJ is better prepared to offer its services nationwide than its three major competitors Lacy also said that he does not see any immediate pressure for a further cut in commissions paid on bond transactions any time soon In late 1985 transaction fees paid to brokers were cut in half to 39 dlrs per mln dlr transaction from 78 dlrs Some U.S. primary bond dealers have been suggesting that with further increases in transaction volume fees can be cut without hurting the brokers profits REUTER EC MINISTERS STRUGGLE TO AGREE ON DAIRY CUTS BRUSSELS March 2 European Community EC agriculture ministers struggled today to finalise new rules aimed at limiting sales into public cold stores of unwanted butter at high guaranteed EC prices diplomats said The plan is the key element in a landmark accord to cut dairy output by 9.5 pct over two years agreed in outline last December after virtually nine days of non stop negotiations The accord which is due to operate from the start of the new milk marketing year on April 1 was hailed as the most significant step in an on going campaign to reform costly EC farm policies and cut embarrassing food surpluses Diplomats say the December agreement itself is not threatened but that its effect could be considerably weakened if the proposals are altered too radically West Germany and Ireland are opposed to proposed limits on a farmer's now automatic right to sell surplus butter into public stores when market prices and stocks are high Faced with a butter mountain of a record 1.2 mln tonnes costing over two mln dlrs per day just to store EC farm Commissioner Frans Andriessen says farmers must be encouraged to cut production to meet demand He is keen to reach an agreement on the milk problem before the ministers move on to consider this year's annual price review which proposes extending the new system for butter sales to other sectors such as cereals Reuter CORRECTION CONTINENTAL ILL CIL In WASHINGTON story CONTINENTAL ILL CIL TO RECHARACTERIZE LOSS please read in second paragraph to report the 425 mln dlrs together with other required loan loss provisions instead of singling it out as a separate item Reverses previous Reuter SEARS S TO RESTRUCTURE DISTRIBUTION CHICAGO March 2 Sears Roebuck and Co said it will restructure its distribution operations resulting in a 20 mln dlr after tax charge against earnings in its first quarter The retailer on April 30 will close its major Chicago distribution center as the first part of the restructuring A spokesman said up to 1,800 workers will be affected with many of them laid off Some of the workers may be transferred to other Sears operations Sears said the restructuring and consolidation will save about 150 mln dlrs by 1991 Sears said it will set up a nationwide network of seven regions to handle all aspects of distribution of its products The closing of the Chicago plant will be followed by the shutdown of four other distribution units over the next several years Distribution centers will be closed in Boston Atlanta Memphis and Minneapolis with the Boston shutdown coming early next year No other closings are planned before 1989 A spokesman said that while there will be layoffs at those facilities the company does not yet know how many workers will be let go Sears distribution will be consolidated under regional management in Columbus Ohio Dallas Greensboro N.C. Jacksonville Fla Kansas City Mo Los Angeles and Philadelphia However Sears said it will also evaluate the productivity of the Los Angeles and Philadelphia facilities to determine whether they will be modernized or relocated Responsibility for ordering distribution center inventory will be centralized in Chicago Reuter DELTA AIR DAL BEGINS ATLANTA TOKYO SERVICE ATLANTA March 2 Delta Air Lines Inc said it began service from Atlanta to Tokyo today The carrier will fly single plane through service departing daily from Atlanta and Tokyo five days a week it said Reuter VERSATILE TO BUILD POLAR ICE BREAKER OTTAWA March 2 Versatile Corp's shipbuilding subsidiary has a letter of intent to build a 320 mln dlr polar icebreaker for the Canadian coast guard Transport Minister John Crosbie said In a Vancouver address Crosbie said Versatile Pacific Shipyards Inc was the low bidder to build the Arctic Class 8 icebreaker but the company must meet certain financial and engineering conditions before the contract is awarded The government also announced it will provide up to 13 mln dlrs in loan insurance to help Versatile prepare for the construction of the vessel said before the contract can be awarded Versatile will be required to offer assurances that the shipyard is technically and financially capable of performing the work Crosibie said Versatile's bid was 100 mln dlrs lower than competing bidders and will generate 1,000 person years of direct employment Work on the vessel which Crosbie said would be the most powerful icebreaker in the world would begin next year and completed in 1992 The government announced plans to build the icebreaker last year following the controversial passage of the U.S. Coast Guard's vessel the Polar Sea through the disputed Northwest Passage The U.S. government did not seek permission for the journey claiming the area was an international water way The government said the icebreaker was needed to back up the country's claim of sovereignty in the Arctic Reuter CHRYSLER C UNIT SELLS NOTES AT 7 5/8 PCT NEW YORK March 2 Chrysler Financial Corp a unit of Chrysler Corp is raising 250 mln dlrs through an offering of notes due 1992 with a 7 5/8 pct coupon and par pricing said lead manager Salomon Brothers Inc That is 93.5 basis points above the yield of comparable Treasury securities Non callable for life the issue is rated Baa 1 by Moody's and BBB by Standard and Poor's Merrill Lynch Capital Markets co managed the deal On February 10 Chrysler Financial sold 200 mln dlrs of same rated seven year notes priced to yield 8.13 pct or 100 basis points over Treasuries Reuter PANTRY INC INB TALKS ON BEING ACQUIRED SANFORD N.C. March 2 Privately held Pantry Inc which operates 477 convenience stores in five Southeastern states said it has engaged Alex Brown and Sons Inc ABSB to explore a possbile sale of the company It said it expects to start talks with prospective acquirers shortly The company said it has been approached by a number of parties in recent months Reuter FIRST FINANCIAL MANAGEMENT FFMC REVISES PACT ATLANTA March 2 First Financial Management Corp said it revised the agreement under which it provides data processing services to First Union Corp of Georgia FUNC The company said the revised agreement establishes specific minimum payments to be made by First Union and shortens the duration of the original pact by 16 months with the new agreement expiring on December 31 1989 Under terms of the amended contract First Financial said it received 19.8 mln dlrs in cash and is guaranteed an additional 50.3 mln dlrs in service revenues The company said the agreement calls for minimum payments of 16.5 mln dlrs for the balance of 1987 18 mln dlrs in 1988 and 15.8 mln dlrs in 1989 Reuter RENOUF CORP TO PROCEED WITH BENEQUITY BH BID LOS ANGELES March 2 Renouf Corp of New Zealand said it has decided to proceed with its offer for all outstanding units of Benequity Holdings at 31 dlrs per unit The company had been required to redice by March Two whether to proceed with the offer or terminate it based on its ability to obtain financing and on its review of Benequity operations The offer is to expire March 13 Reuter INTEGRATED GENERICS IGN WILL NOT COMMENT BELLPORT N.Y. March 2 Integrated Generics Inc said it is in the midst of several developments which could be favorable for the company but can make no further comments at the present time The company said it released this brief statement in response to the American Stock Exchange's inquiry on the activity of the company's common stock which was up 5/8 to five in midafternoon trading Reuter CUBA TELLS TRADERS SUGAR EXPORTS MAY BE DELAYED LONDON March 2 Cuba has told international sugar operators who have bought its sugar for shipment in March that these contracts will take second place to Cuba's direct shipments to its export markets dealers here said Some traders who have received telexes from Cuba said the language of the message was not totally clear and some believed shipments would be honoured if the traders declare the Soviet Union as the destination of their contracts The telexes have fueled rising world prices in the last week and reflect a poor Cuban crop worry over Brazil's export availability and increasing Soviet demand analysts said Traders said signs of Cuba's shortage of immediately available raw sugar to supply its traditional martkets was probably the factor behind Syria calling a snap buying tender last month Normally Syria calls white sugar buying tenders for forward delivery and last month's spot requirement resulted in the sale of several cargoes Cuba in its telex told operators they would not receive March shipments as Cuba has to meet its contracts to export markets traders said Reuter GOODRICH GR TO PHASE OUT SOME BUSINESSES AKRON Ohio March 2 B.F. Goodrich Co said it will phase out the production of aircraft tires missile and marine products and molded rubber products in Akron Ohio by the end of 1987 laying off about 790 salaried production maintenance and support services employees The company said layoffs will start within the next few weeks Goodrich said it will continue to make chemicals and adhesives in Akron employing about 356 Another 5000 salaried employees in Akron work for Goodrich The company said it has not been able to operate the businesses being discontinued in Akron profitably enough to justify the large investment that it has in them Goodrich said it will continue to make aircraft tires at Norwood N.C. and sonar domes at Jacksonville Fla and will relocate its molded rubber products business to a site not yet chosen It said it will stop making insulators for missiles Goodrich said it is prepared to discuss with officials of the United Rubber Workers Union severance benefits for affected employees and issues related to the continued operation in Akron of the chemical and adhesives businesses and to the phaseout of the Akron aircraft tire missile and marine and molded rubber products manufacturing A company spokesman said it does not expect any adverse impact on earnings from the move Reuter FINAL TRUST FOR THRIFT INSTITUTIONS PAYOUT SET BOSTON March 2 Massachusetts Financial Services Co said it has set the final income and capital gain distributions for Trust for Thrift Institutions High Yield Series of 1.069 dlrs and 7.645 dlrs respectively payable today Reuter RPT U.S. SAYS TIN DISPOSALS WILL NOT AFFECT ACCORD WASHINGTON March 2 U.S. tin disposals should have little effect on an agreement reached last weekend by tin producing countries to limit group exports to 96,000 tonnes in the year started March 1 a government official said The agreement by the seven member Association of Tin Producing Countries ATPC aimed to cut the world surplus and boost prices Following the accord ATPC Chairman Subroto appealed to the United States to restrict its tin releases from its strategic stockpile We don't think that the U.S. government has a large influence in the tin market at this stage of the game said Thomas O'Donnell Director of International Commodities at the State Department Last year the United States released about 4,900 tonnes of tin to two ferroalloy firms Reuter FRANKLIN INSURED TAX FREE SETS PAYOUT SAN MATEO Calif March 2 Mthly div 7.1 cts vs 7.1 cts prior Pay March 31 Record March 16 NOTE Franklin Insured Tax Free Income Fund Reuter FRANKLIN MINNESOTA INSURED SETS PAYOUT SAN MATEO Calif March 2 Mthly div 6.6 cts vs 6.6 cts prior Pay March 31 Record March 16 NOTE Franklin Minneosta Insured Tax Free Income Fund Reuter FRANKLIN MICHIGAN INSURED SETS PAYOUT SAN MATEO Calif March 2 Mthly div 6.9 cts vs 6.9 cts prior Pay March 31 Record March 16 NOTE Franklin Michigan Insured Tax Free Income Fund Reuter FRANKLIN MASSACHUSETTS INSURED CUTS PAYOUT SAN MATEO Calif March 2 Mthly div 6.5 cts vs 6.8 cts prior Pay March 31 Record March 16 NOTE Franklin Massachusetts Insured Tax Free Income Fund Reuter FRANKLIN CALIFORNIA TAX FREE SETS PAYOUT SAN MATEO Calif March 2 Mthly div 6.5 cts vs 6.5 cts prior Pay March 31 Record March 16 NOTE Franklin California Insured Tax Free Income Fund Reuter DIAGNOSTIC PRODUCTS DPCZ SEES EARNINGS GROWTH NEW YORK March 2 Diagnostic Products Corp president and chief executive officer Sigi Ziering said he expects to maintain the same compound average annal net income growth in 1987 as the company has for the past five years We expect the same performance in net income over the next five years as we have had in the past Ziering said Over the past five years Ziering said the company has had average compound net income growth of 32 pct annually with a 27 pct per year growth in earnings per share For 1986 the company had net income of 6.3 mln dlrs or 1.07 dlrs per share vs 3.9 mln dlrs or 73 cts per share in 1985 Diagnostic manufactures medical immunological diagnostic test kits Ziering said he expects the earnings growth to result from positive effect of the weaker dollar on the company's exports sales as well as accelerated market penetration Ziering said he expected the Food and Drug Administration to approve three more of its drug abuse test kits by the end of the year which depending on approval should also help earnings growth Ziering said as a result of the new tax laws he expected the company's taxes to decrease by five pct to 31 pct of net income in 1987 Reuter CURRENCIES COULD INFLUENCE BULLION AGAIN MONTAGU LONDON March 2 Currency fluctuations may reassert their influence on the bullion market in the near future bullion bankers Samuel Montagu and Co Ltd said in a market report But the firm said silver may lag behind gold in any reactions to movements on foreign exchanges OPEC's failure to address the recent decline in oil prices remains a worrying factor however and on balance it appears that the market should be approached cautiously Montagu said The bank said the US economy has shown no noticeable long term improvement and that both Latin American debt and the Iranian arms affair could undermine confidence in the dollar Reuter FRANKLIN PUERTO RICO TAX FREE SETS PAYOUT SAN MATEO Calif March 2 Mthly div 7.1 cts vs 7.1 cts prior Pay March 31 Record March 16 NOTE Franklin Puerto Rico Tax Free Income Fund Reuter FRANKLIN OHIO INSURED TAX FREE SETS PAYOUT SAN MATEO Calif March 2 Mthly div 6.1 cts vs 6.1 cts prior Pay March 31 Record March 16 NOTE Franklin Ohio Insured Tax Free Income Fund Reuter FRANKLIN HIGH YIELD TAX FREE SETS PAYOUT SAN MATEO Calif March 2 Mthly div 7.1 cts vs 7.1 cts prior Pay March 31 Record March 16 NOTE Franklin High Yield Insured Tax Free Income Fund Reuter CONVERGENT TECHNOLOGIES CVGT TO BUY OAKLEAF SAN JOSE Calif March 2 Convergent Technologies Inc said it has reached an agreement in principle to buy Oakleaf Corp which supplies finance insurance and leasing computers to auto dealers The transaction will involve an exchange of Oakleaf stock for cash and debt and is subject to a definitive agreement the companys said No other terms were disclosed Oakleaf had 1986 sales of about 26 mln dlrs Reuter NYMEX WILL EXPAND OFF HOUR TRADING APRIL ONE By BERNICE NAPACH Reuters NEW YORK March 2 The New York Mercantile Exchange set April one for the debut of a new procedure in the energy complex that will increase the use of energy futures worldwide On April one NYMEX will allow oil traders that do not hold a futures position to initiate after the exchange closes a transaction that can subsequently be hedged in the futures market according to an exchange spokeswoman This will change the way oil is transacted in the real world said said Thomas McKiernan McKiernan and Co chairman Foreign traders will be able to hedge trades against NYMEX prices before the exchange opens and negotiate prices at a differential to NYMEX prices McKiernan explained The expanded program will serve the industry because the oil market does not close when NYMEX does said Frank Capozza secretary of Century Resources Inc The rule change which has already taken effect for platinum futures on NYMEX is expected to increase the open interest and liquidity in U.S. energy futures according to traders and analysts Currently at least one trader in this transaction called an exchange for physical or EFP must hold a futures position before entering into the transaction Under the new arrangement neither party has to hold a futures position before entering into an EFP and one or both parties can offset their cash transaction with a futures contract the next day according to exchange officials When NYMEX announced its proposed rule change in December NYMEX President Rosemary McFadden said Expansion of the EFP provision will add to globalization of the energy markets by providing for in effect 24 hour trading The Commodity Futures Trading Commission approved the rule change in February according to a CFTC spokeswoman Reuter CCR VIDEO CCCR NOW MEETS NASDAQ REQUIREMENTS LOS ANGELES March 2 CCR Video Corp said it is now current in its filing requirements with both the Securities and Exchange Commission and NASDAQ and meets the trading system's net worth requirements The company reported a first quarter ended November 30 profit of 156,726 dlrs compared to a year earlier loss of 776,000 dlrs CCR also said its previously reported refinanceing in December resulted in an extraordinary gain of 456,004 dlrs leaving the company with a net worth of 633,581 dlrs at the end of December At the end of November a spokesman noted CCR did not meet NASDAQ's requirement of a net worth of 100,000 dlrs and has been trading on an exception to those rules Reuter ROSPATCH RPCH TO RESPOND TO DIAGNOSTIC DRS GRAND RAPIDS Mich March 2 Rospatch Corp said it will have a news release later in response to today's acquisition bid by Diagnostic Retrieval Systems Inc for 22 dlrs a share Rospatch earlier requested its stock be halted in over the counter trading last trade 24 1/8 Diagnostic said its bid was for a total 53 mln dlrs through a cash tender offer for all but not less than 51 pct of Rosptach outstanding common For its fourth quarter ended December 31 1986 Rospatch reported net loss 2,649,000 or 1.10 dlrs a share compared a loss of 627,500 or 35 cts profit for the 1985 period In December the Brookehill Group in New York said it had 9.7 pct stake J.A. Parini Rospatch chief executive responded on January eight by saying the investment was a vote in confidence in the company Reuter ARGENTINE OIL PRODUCTION DOWN IN JANUARY 1987 BUENOS AIRES March 2 Argentine crude oil production was down 10.8 pct in January 1987 to 12.32 mln barrels from 13.81 mln barrels in January 1986 Yacimientos Petroliferos Fiscales said January 1987 natural gas output totalled 1.15 billion cubic metrers 3.6 pct higher than 1.11 billion cubic metres produced in January 1986 Yacimientos Petroliferos Fiscales added Reuter HUGHES U.S. RIG COUNT SLIPS TO 801 THIS WEEK HOUSTON March 2 U.S. drilling activity continued to slow last week as the number of active rotary rigs fell by 38 to a total of 801 against 1,248 working rigs one year ago Hughes Tool Co said Most of the decrease came among rigs used for onshore drilling which dropped to a total of 707 from last week's 744 A total of 77 rigs were active offshore and 17 in inland waters during the week Hughes Tool said Among individual states Texas lost 24 working rigs Michigan dropped by six and California New mexico and Kansas were each down by one Colorado reported a gain of eight rigs and Louisiana was up by four In Canada the rig count was up 14 to 164 against 422 one year ago Reuter GULF OF MEXICO RIG COUNT FALLS THIS WEEK HOUSTON March 2 Utilization of offshore mobile rigs in the Gulf of Mexico declined by 0.7 pct during the past week to 35.6 pct reflecting a decrease of two working rigs Offshore Data Services said The total number of working rigs fell to 83 for the week compared to 85 last week and 134 rigs one year ago Offshore Data Services said the worldwide utilization rate rose 0.1 pct to 54.2 pct with a total of 333 rigs without work The number of rigs contracted worldwide was 394 In the European Mediterranean area rig utilization also rose by a full percentage point to 41.3 pct with 64 of 155 rigs contracted Reuter NORTH AMERICAN GROUP NAMG BUYS GEORGIA FIRM CHICAGO March 2 North American Group Ltd's North American Acquisition Corp said it has a definitive agreement to buy 100 pct of Pioneer Business Group Inc of Atlanta Terms of the acquisition were not disclosed Closing of the acquisition is scheduled for April North American Acquisition said the agreement is subject to due diligence and a satisfactory review of Pioneer's operation Pioneer makes business forms Reuter TALKING POINT VIACOM INTERNATIONAL VIA By Cal Mankowski Reuters NEW YORK March 2 A bidding war for Viacom International Inc one of the largest U.S. entertainment companies pitted a management group and other investors against National Amusements Inc a closely held theater operator Both sides raised their bids over the weekend A source close to the management side insisted that timing was on his side He said if outside directors approve the management proposal a merger plan could be put to a vote of shareholders with proxy material going out late this week It would take 20 days from the day we mail said the source The source predicted National Amusements controlled by investor Sumner Redstone would need half a year to complete a tender offer because of the regulatory approvals that must accompany any change in control of Viacom's broadcast licenses and cable television franchises Redstone was not available for comment Some of Wall Street's arbitrage players said it was a rare situation that could only be enjoyed a true bidding war One said Redstone could begin a tender offer whenever he wanted and if enough people were convinced his proposal was superior to the Viacom management plan he would have a chance to win The independent directors of Viacom were called into a meeting today Word on a decision was expected early tomorrow Viacom shares climbed 2 1/2 to 50 3/8 by midafternoon One major Wall Street firm issued a sell recommendation We think we're at the end now in terms of bidding said the firm's arbitrageur who spoke on condition he not be identified Both Redstone's proposal and the management proposal would create a restructured company heavily leveraged with debt The management plan would result in a balance sheet with about 2.5 billion dlrs in debt and nearly 500 mln dlrs in preferred stock convertible into 45 pct of the common stock Redstone's newest proposal offers holders 42 dlrs in cash a fraction of a share of exchangeable preferred stock with a value of 7.50 dlrs and one fifth of a share of common stock stock of Arsenal Holdings representing 20 pct of the equity interest in the restructured Viacom One arbitrageur calculated the equity in the Redstone plan was worth 2.50 dlrs making the total package worth 52 dlrs per share Management offered 38.50 dlrs in cash exchangeable preferred stock worth 8.50 dlrs and a fractional share of convertible preferred The arbitrageur said the equity portion was worth about 4.00 dlrs for a total of 51 dlrs Redstone's newest plan raised the amount of interest he would pay on the cash portion of his offer for every day beyond April 30 that a merger with Arsenal is not consummated The plan calls for intest to be paid at an annual rate of nine pct during May and 12 pct thereafter Previously Redstone offered eight pct interest Other arbitrageurs said both Redstone and the management group led by president and chief executive Terrence Elkes were offering high prices Redstone really wants to own the company one said Another said management seemed to have the edge on the timing issue Redstone's company owns 19.6 pct ov Viacom's 35 mln shares A Wall Street analyst said it was hard to determine what the equity in the newly leveraged company would be worth He noted as an example that new stock in FMC Corp FMC which adopted a highly leveraged structure last year inititally traded at 12.50 dlrs per share dipped to nine dlrs and is now just over 30 dlrs Last week Viacom reported fourth quarter earnings fell two two cts per share from 23 cts The company said interest costs from several acquisitions affected results Shares of Warner Communications Inc WCI rose 7/8 to 31 1/8 Analysts noted Warner owns warrants to purchase 3.25 mln Viacom shares at 35 dlrs and another 1.25 mln shares at 37.50 dlrs Chris Craft Industries CCN which owns a stake in Warner rose 1 1/4 to 22 3/4 Viacom was created in 1970 and spun off from CBS Inc CBS The company has 940,000 cable television subscribers operates nine satellite television services and owns television and radio stations It is one of the largest distributors of films and other programs for television Reuter CANADA LAUNCHES 1.2 BILLION DLR BOND ISSUE OTTAWA March 2 Canada will offer a 1.2 billion dlr four part bond issue tomorrow which will be dated March 15 and delivered March 16 the finance department said The issue will consist of four maturities 8 pct bonds due July 1 1990 8 1/4 pct bonds due March 1 1994 8 1/4 pct bonds due March 1 1997 8 1/2 pct bonds due June 1 2011 The 2011 maturity will be issued to a maximum of 374 mln dlrs The Bank of Canada will buy 100 mln dlrs of the new issue including 10 mln dlrs of the 2011 maturity Reuter U.S. ELECTRONIC SALES FLAT IN 1986 PALO ALTO Calif March 2 U.S. electronic companies sales last year totalled 226.5 billion dlrs slightly below the 228.7 billion dlrs reported in 1985 the American Electronic Association said Despite the decline the fourth quarter total of 61.1 billion dlrs matched the industry record for the same period of 1984 the AEA said AEA senior vice president Ralph Thomson said that although the 1986 sales trend was mostly positive with an upturn at the end of the year the industry is waiting early 1987 figures before trying to forecast the future Many of our companies including the semiconductor sector are still being impacted by the enormous and growing trade deficit with Japan he said Fourth quarter orders totalled 60 billion dlrs for a 3.1 pct increase over the same quarter of 1985 December sales were 22.2 billion dlrs up 2.8 pct from the same month in 1985 The association represents more than 2,800 firms that produce electronic goods and services Reuter TALKS SHOW NEW CANADIAN CONFIDENCE GROUP SAYS WASHINGTON March 2 Canada's decision to raise the issue of a free trade pact with the U.S. was a sign of what many see as a new spirit of Canadian self confidence a public policy study group said It suggests the Canada of the immediate post war period when it was a major player in the process of building a postwar world the Washington based Atlantic Council said U.S. and Canadian negotiators opened talks last summer aimed at dismantling trade barriers between the two countries the world's biggest trading partners with crossborder shipments of about 150 billion dlrs annually The council's study said the trade talks with a deadline of October for an agreement are the biggest issue in U.S. Canadian relations The study said liberalized trade between the two countries would improve the competitiveness of their economies in world markets and lessen trade irritants which now mar their ties The council said in the past most Canadians have shied away from the notion of a free trade arrangement fearing to be overwhelmed economically and politically by a closer association with a country 10 times their size in population But at the same time it added Canadians realized their domestic market was too small to permit the mass production and sales needed to raise productivity to the level demanded by an increasingly competitive world The council said that in the talks Canada is chiefly interested in minimizing the imposing of U.S. duties against allegedly subsidized exports A recent example was the 15 per cent duty the U.S. imposed on Canadian lumber exports on grounds the shipments were being subsidized The council said the chief U.S. concerns included ending curbs against U.S. banking insurance telecommunications and the so called cultural industries publishing broadcasting and films It said other major U.S. Canadian issues were defense cooperation acid rain and the U.S. rejection of a Canadian assertion of sovereignty over waters of the Northwest Passage Reuter U.S. ACTS TO PROTECT KAISER STEEL RETIREES WASHINGTON March 2 The Pension Benefit Guaranty Corp a federal agency said it took action to protect pensions of employees and retirees of Kaiser Steel Corp which filed for bankruptcy reorganization last month The agency said it entered into an agreement to terminate the Kaiser plan and was appointed its trustee It said that Kaiser retirees will receive their March pension checks without interruption and thereafter at levels guaranteed by law REUTER DAIWA SECURITIES CO TO SUPPLY MARKET UPDATE NEW YORK March 2 Daiwa Securities Co Ltd said it will provide Financial News Network FNNI with an exclusive daily market update from Tokyo The report can be seen on FNN's World Business Update the company said Daiwa Securities said the new program describes major business developments around the world using videotaped news and feature stories as well as market and commodities information Viewers will be able to get closing prices in Tokyo prior to opening trading in New York due to the time difference Reuter UAL UAL UNIT ATTACKED ON MINORITY HIRING CHICAGO March 2 UAL Inc's United Airlines was accused in a congressional hearing today of locking blacks out of key jobs but the company said it had made tremendous progress in minority hiring The issue was aired during a hearing of a House Government Operations subcommittee whose chairman Rep Cardiss Collins called the treatment of minorities by the country's largest airline pathetic It strikes me odd said the Illinois Democrat that the number of white women pilots is more than double that of black pilots and that white women are more fairly represented in upper management United has been under a court order since 1976 to increase its minority employment David Pringle United's senior vice president for human resources said We take a very aggressive approach to minority hiring and have made tremendous progress we will continue to pursue even wider goals Reuter ALBERTSON'S INC ABS RAISES QTLY DIVIDEND BOISE Idaho March 2 Shr 24 cts vs 21 cts Pay May 25 Record May eight Reuter CHEMICAL NEW YORK CHL TO CLOSE DUBAI OFFICE NEW YORK March 2 Chemical Bank the main subsidiary of Chemical New York Corp is closing its representative office in Dubai United Arab Emirates a spokeswoman said in response to an enquiry She said the decision to close the office was made as a result of changes in Chemical's regional customer base and to improve efficiency by centralizing the bank's Gulf activities in Bahrain The Bahrain office will assume the local contact role for all of Chemical's corporate and institutional customers now served by the Dubai office the spokeswoman added Reuter WAVEHILL INTERNATIONAL TO MAKE ACQUISITION NEW YORK March 2 Wavehill International Ventures Inc said it has agreed to acquire Personal Computer Rental Corp of Coral Gables Fla in a transaction in which shareholders of Personal Computer will receive shares respresenting about a 25 pct interest in the combined company The company said it will have about two mln shares outstanding on a fully diluted basis after the transaction It said after the acquisition it will infuse Perconal computer with cash for expansion It said Personal Computer now has 26 franchised locations and plans to add over 30 in 1987 seeking eventually to expand into 420 markets in the U.S. and abroad Reuter SECURITY PACIFIC SPC COMPLETES MERGER LOS ANGELES March 2 Security Pacific Corp said it completed its planned merger with Diablo Bank following the approval of the comptroller of the currency Security Pacific announced its intention to merge with Diablo Bank headquartered in Danville Calif in September 1986 as part of its plan to expand its retail network in Northern California Diablo has a bank offices in Danville San Ramon and Alamo Calif Security Pacific also said Reuter PALL CORP PLL 2ND QTR SALES RISE 17 PCT CHICAGO March 2 Pall Corp said sales in the second quarter rose about 17 pct to 94 mln dlrs from 80 mln dlrs a year ago bringing sales for the six months to 174.6 mln dlrs up 16 pct from 150.3 mln dlrs Orders in the quarter ended Jan 31 rose about 15 pct to 101.1 mln dlrs and 13 pct to 189.6 mln dlrs in the six months Reuter J.P. INDUSTRIES JPI FORMS TWO OPERATING GROUPS ANN ARBOR Mich March 2 J.P. Industries Inc said it has formed two operating groups to serve major markets in its transportation components business an Engine Products Group to serve original equipment manufacturers and an Automotive Aftermarket Group to serve repair market customers The company said senior vice president Gareth L Reed has been appointed president and general manager of the Engine Products Group Gerald W McGrath was appointed vice president and general manager of the Automotive Aftermarket Group He was formerly vice president of sales with the Engine Parts Division of Clevite Industries Inc recently acquired by J.P. Industries Reuter LODGISTIX LDGX TO BUYBACK 100,000 SHARES WICHITA Kansas March 2 Lodgistix Inc said its board authorized a program for the company to purchase up to 100,000 of its shares from time to time The company said the shares will be used for general purposes including incentive programs Reuter ICI ICI SEEKS GAINS IN SPECIALTY BUSINESSES NEW YORK March 2 Imperial Chemical Industries PLC the largest chemical company in the United Kingdom will expand its specialty chemicals and drug businesses this year and better its 1986 results said chairman elect Denys Henderson We expect to shift our company toward higher value added businesses and continue to broaden our base Henderson told reporters at an informal meeting here ICI today announced the formation of a new U.S. drug company ICI Pharma which with its Stuart Pharmaceuticals unit it said will double its current pharmaceutical sales to 1.1 billion dlrs by 1990 Henderson said Our pharmaceutical business gets lost in the way that Glaxo's Glaxo Holdings PLC does not ICI's pharmaceutical division is the second largest drug maker behind Glaxo in the U.K. Last year U.S. drug sales were about 40 pct of its worldwide drug sales of 1.5 billion dlrs which in turn brought in 27 pct of its total profits He estimated that by 1990 ICI's pharmaceutical division would account for about 30 pct of total company profits The drug division far and away brings in the highest rate of return said A.W. Clements finance director of ICI who was also at the meeting Henderson said the new U.S. drug concern would basically act as a second sales force to double the exposure of its drugs to doctors ICI will hire 145 new salespeople by October one Henderson said the major new products in the company's pipeline expected to each bring in sales of over 200 mln dlrs annually were Statil a treatment for diabetic complications Zoladex a treatment for advanced prostate cancer and Carwin a treatment for mild to moderate congestive heart failure Henderson said U.S. Food and Drug Administration approval to market Statil and Zoladex both under joint licensing agreements with Merck and Co Inc MRK is not expected until about 1989 ICI expects to file for permission to market Carwin in the U.S. later this year Henderson said the company's 1987 results would top 1986 income of 888 mln dlrs or 5.45 dlrs per ADR on sales of 15 billion dlrs but he declined to specify by how much Henderson said 1987's results would be boosted by Glidden Paints which ICI bought last November for 580 mln dlrs from a unit of Hanson Industries Inc Henderson also said that ICI has about nine billion dlrs available for acquisitions Last year the company made 40 acquisitions the largest being Glidden He said that more acquisitions may be made this year but he ruled out an acquisition of a pharmaceutical concern as too expensive Henderson said that in his new role of chairman effective April one when he takes over from Sir John Harvey Jones who will retire the biggest challenge ahead lay in continuing the earnings momentum ICI has established over the past few years after restructuring and selling off unprofitable businesses Reuter INT'L HYDRON CORP HYD 4TH QTR OPER NET WOODBURY N.Y. March 2 Oper shr profit six cts vs loss 20 cts Oper net profit 734,000 vs loss 2,312,000 Revs 16.8 mln vs 13.9 mln Year Oper shr profit 30 cts vs profit three cts Oper net profit 3,342,0000 vs profit 318,000 Revs 67.5 mln vs 52.6 mln NOTE Excludes loss of 41,000 dlrs or nil vs gain 7,000 dlrs or nil in qtr and gain 247,000 dlrs or two cts vs gain 88,000 dlrs or one ct in year from net operating loss carryforwards Reuter ALBERTSON'S ABS ADOPTS STOCKHOLDER RIGHTS PLAN BOISE Idaho March 2 Albertson's Inc said its board has adopted a stockholder rights plan intended to protect them in the event of any proposed takeover of the company Under the plan stockholders will receive a dividend distribution of one right for each share of common stock held on March 23 The rights are exercisable ten days after a person or group acquires 20 pct or more of Alberston's common stock or announces a tender offer for 30 pct or more of the stock Each right will entitle the shareholder to buy one newly issued share of Alberston's common stock for 150.00 dlrs Reuter ROSPATCH RPCH REJECTS DIAGNOSTIC DRS BID GRAND RAPIDS MICH March 2 Rospatch Corp said it rejected a proposal by Diagnostic Retrieval Systems Inc to acquire its stock at 22 dlrs a share Rospatch's board believes that the long term interests of its shareholders will be best served by continuing as an independent public company at this time the company said in response to an unsolicited offer from Diagnostic Retrieval Rospatch said Diagnostic's offer of February 27 is a variation of a previous offer in January the nature of which was not disclosed Rospatch said it advised Diagnostic Retrieval that it would be contrary to the best interests of the corporation to engage in any discussions concerning a business combination with Diagnostic Retrieval Reuter INT'L MINERALS IGL BUYS ANIMAL PRODUCTS UNIT NORTHBROOK Ill March 2 International Minerals and Chemical Corp said it completed its acquisition of Johnson and Johnson Co's Pitman Moore unit a producer of animal health products Terms of the acquisition were not disclosed International Minerals and Chemical said annual sales of the unit are about 45 mln dlrs Pitman Moore makes health products for pets and for farm and feedstock animals Reuter JWT JWT NOT APPROACHED BY GROUP SEEKING SHARES NEW YORK March 2 JWT Group Inc has not been approached by former Ted Bates Worldwide Chairman Robert Jacoby about the possibility of a syndicate buying a 35 pct stake in JWT Group on a friendly basis a company spokesman said He said JWT would have no comment on an Advertising Age report that Jacoby is considering heading up a venture capital syndicate to purchase a 35 pct stake in JWT group Jacoby was not immediately available for comment on the report Ted Bates is now owned by Saatchi and Saatchi the world's largest advertising agency Reuter UAW WANTS TO REVIVE AMERICAN MOTORS AMO TALKS DETROIT March 2 The United Auto Workers said it is willing to enter renewed negotiations to end the impasse between American Motors Corp and two UAW locals in Wisconsin American Motors earlier said it broke off talks with the UAW on a new labor contract for its plant at Kenosha Wis The company's move came after its latest contract offer was rejected by union negotiators UAW vice president Marc Stepp said he strongly recommends new meetings be scheduled at the earliest possible time Stepp heads the UAW's American Motors department Reuter BANC ONE ONE HAS MICHIGAN AFFILIATE COLUMBUS Ohio March 2 Banc One Corp said the First National Bank of Fenton has become Bank One Fenton bringing the number of its affiliates to three in Michigan Reuter FUNARO REJECTS UK SUGGESTION OF IMF BRAZIL PLAN LONDON March 2 Brazilian Finance Minister Dilson Funaro flatly rejected a U.K. Suggestion that his country seek International Monetary Fund help in order to facilitate debt negotiations with commercial creditor banks Talking to reporters Funaro said this attitude would not help resolve the crisis started when Brazil suspended indefenitely interest payments on 68 billion dlrs in external debt on February 20 Funaro was in Britain on the first leg of a tour of European capitals to explain the motives of the Brazilian debt moratorium and to seek support for intiatives to improve capital flows between developed countries and third world debtor nations Talking before his departure for Paris he said there could be no question of Brazil adopting another IMF austerity plan after a similar package four years ago put Brazil in a very big recession We had an IMF program it simply meant export more and import less We are not going to go the IMF he said Funaro was reactnng to a British statement following his talks with Chancellor of the Exchequer Nigel Lawson saying the U.K. Government had no part to play in what it viewed as a problem between Brazil and its commercial creditor banks Britain also believed an IMF program would help along negotiations between Brazil and the commercial banks the statement which banking sources interpreted as an outright rebuttal of all Brazilian demands said That was not my impression of the meeting Funaro said But if the British answer is more or less like this then that means nothing is helping to find a solution Funaro stressed that his talks in Washington last week and in Europe this week were aimed at gaining official support to unblock lending from official credit agencies rather than to deal with Brazils ties with commercial banks Since 1982 all official agencies have been closed to my country he said He said Lawson had made no commitments to support Brazil's efforts Lawson would officially state his position when the two meet again next month for the IMF and World Bank spring meetings in Washington Funaro said Stressing there was no binding time schedule for Brazil's debt problem to be resolved Funaro said Brazil had not come to Europe with specific proposals to overcome the present crisis We didn't come here to make a cash flow programme he said We will have meetings at the IMF next month let's see what happens Neither did Brazil plan a major overhaul of current domestic economic policies which Funaro said would likely lead to a five pct economic growth this year Over the past five years we paid back 45 billion dlrs and received 11 billion This is a very big effort he said What we have to offer is our cooperation Reuter FOOTE MINERAL FTE SELLS CAMBRIDGE PLANT EXTON Pa March 2 Foote Mineral Co said it signed a letter of intent with Shieldalloy Corp a wholly owned subsidiary of Metallurg Inc for the sale of its Cambridge Ohio business The company said the sale which will be explained in greater detail after the definitive agreement has been signed is part of Foote's previously announced plan to sell the entire company Reuter U.S. WHEAT GROUPS CALL FOR GLOBAL ACTION WASHINGTON March 2 All major grain producing countries must do their part to help reduce global surpluses and the recent Australian farm policy proposals are flawed two U.S. wheat organizations said The recent Australian proposals were a good starting point for discussions but we do not want the Australians to feel they are alone in developing an agenda for discussions on world grain trade the president of the National Association of Wheat Growers NAWG and the chairman of U.S. Wheat Associates said in a letter to U.S. Agriculture Secretary Richard Lyng and U.S. Trade Representative Clayton Yeutter Future discussions on international wheat trade should include three topics a commitment to privatization of government run export trading entities a commitment to public disclosure of sales and other terms if government entities are involved and a recognition that supply reductions by the U.S. have kept world prices higher than they otherwise would be the two organizations said While the Australian proposals are welcome the two organizations said they are not in total agreement with their assessments Australia's proposals which aim to reduce U.S. target prices and quarantine U.S. wheat stocks would continue to place the burden of supply adjustment and reform on U.S. farmers they said Other countries including Australia have benefitted from the higher world prices that have resulted from past U.S. acreage and crop reduction programs the organizations said We will not continue to hurt ourselves economically and subsidize foreign wheat production by unilaterally stocking grain and changing programs which protect our growers Jim Miller president of NAWG said We sincerely hope for some type of agreement among the world's major grain producing nations to reduce stocks and restore profitability to agriculture Miller said Reuter GELCO GEL SEES FLAT 1987 PRETAX OPERATING NET EDEN PRAIRIE MINN March 2 Gelco Corp said that excluding the effects of a restructuring plan it expects pre tax operating earnings for the year to end July 31 1987 to be about the same as those of last year For the year ended July 31 1986 Gelco reported pre tax operating earnings of 14.8 mln dlrs or 1.08 dlrs a share However final results will be affected by certain charges including legal and investment advisors fees preferred stock dividends and other costs of restructuring it said Expenses associated with restructuring are expected to be offset by significant gains from the sale of some of Gelco's business units it said The final outcome for the fiscal year will be determined by the timing and proceeds from the sale it added Reuter U.S. TROOPS GET COST OF LIVING INCREASE WASHINGTON MARCH 2 Defense Secretary Caspar Weinberger ordered an increase in cost of living allowances for many U.S. military personnel abroad because of the decreased value of the dollar against foreign currencies the Pentagon said The allowances are expected to rise between 10 and 20 per cent in many areas beginning this month the Pentagon said. Weinberger also is providing for some family members of financially pressed troops to fly home from West Germany Japan Italy and Spain on military transports if they desire He said in a statement to the military that the cost of living increases will help keep your overseas purchasing power close to your stateside counterparts REUTER UTILICORP UCU ACQUIRES DOMINION D SUBSIDIARY KANSAS CITY Mo March 2 UtiliCorp United Inc said it has closed the previously announced acquisition of West Virginia Power from Dominion Resources Inc for about 21 mln dlrs Reuter DAISY SYSTEMS DAZY INTRODUCES WORKSTATIONS MOUNTAIN VIEW Calif March 2 Daisy Systems Corp said it has introduced a line of computer aided engineering workstations The workstation family includes the Personal Logician 386 the Logician 386 and the Personal Logicial 286 The Personal Logician 386 is a desktop 32 bit IBM Personal Computer AT compatible workstation base priced at 20,000 dlrs The Logician 386 is a 32 bit accelerated graphics workstation priced at 50,000 dlrs The Personal Logician 286 is based on the IBM PC AT and the EGA graphics standard base priced at 15,000 dlrs Daisy said the products will be available in 90 days Reuter WESTERN TELE COMMUNICATIONS WTLCA JOINS GROUP ENGLEWOOD Colo March 2 Western Tele Communications Inc said that through its subsidiary Westlink Inc it has joined Netlink USA a general partnership consisting of Telluride Cablevision Inc and McCaw Satellite Programming Investments Inc Western said it will act as a 40 pct investor converting its cable television signals to satellite distribution in selected markets The conversion is expected to improve reception of Denver television signals delivered to cable operators and other customers in underserved rural or remote areas of the U.S. the company said Reuter PESCH SEES SHAREHOLDER SUPPORT IN AMI AMI BID By Patti Domm Reuters New york March 2 Chicago physician LeRoy Pesch said he has had discussions with several American Medical International Inc shareholders and sees support for a restructuring of the company Pesch said he has discussed his sweetened 1.91 billion dlr takeover bid for American Medical with several large shareholders including the biggest investor the Bass family of Texas However the Bass family has not indicated support one way or the other for his offer he said Pesch in an interview with Reuters said based on the conversations he held with shareholders he could not guage whether he had majority support He said however there is support for his offer Pesch would not identify shareholders with whom he held discussions other than the Bass family and the Wedge Group Inc the only other holder of more than five pct of American Medical stock Earlier today Wedge Group which has a 5.5 pct stake said it held discussions with Pesch American Medical management and other American Medical shareholders Wedge in a filing with the Securities and Exchange Commission said it believes a restructuring of American Medical and its business would be highly desirable and appropriate at this time That's the sort of position that I find a large segment of shareholders of AMI really share said Pesch Pesch said he held discussions with Wedge about joining his takeover effort in which he is offering 17 dlrs cash four dlrs in preferred stock and one dlr in common stock for each American Medical share Wedge said it has no plans to join in an effort to seek control of American Medical but it would not rule out a future takeover try Pesch said he did not discuss a joint takeover proposal with the Bass family Some analysts saw the Wedge statement as a boost to Pesch's takeover effort and a further sign that there could be some shareholder dissatisfaction following American Medical's previous rejection of a 20 dlr per share all cash offer from Pesch American Medical is expected to resist Pesch's latest bid Larry Feinberg an analyst with Dean Witter Reynolds Inc said a management led leveraged buyout cannot be ruled out An American Medical spokesman said the company will comment on the new Pesch offer by March 10 Analysts continue to view the Bass family as a factor in the outcome of the bid for control of American Medical The Bass family holds an 11 6 pct stake in American Medical and the company has previously said the investors support management's internal plan to improve the company's performance The Bass family would not comment on American Medical or Pesch Pesch who led the leveraged buyout of Republic Health Corp last year continues to face a credibilty problem on Wall Street because of the long time it took to finish the Republic acquisition Republic also has substantial debt and has left wall street questioning whether financing can be completed for the much larger American Medical takeover proposal Pesch's first offer for American Medical was made without an investment banking firm another cause for concern to Wall Street However Pesch entered his second offer with representation from Donaldson Lufkin and Jenrette Securities and Security Pacific Merchant Banking Group I don't have any doubt that the current transaction can be worked out and completed provided we get to the point where Ami management will sit down and talk in a friendly environment Pesch said Pesch would not elaborate on what type of financing arrangements are being made He did say if he succeeds in acquiring American Medical he plans to keep much of American Medical management in place He said he plans to combine the company with Republic to form an efficient network of hospitals Analysts said they do not believe a much higher offer could be made for American Medical Byron Nimocks of E.F. Hutton Group said improved second fiscal quarter earnings could make American Medical stock worth about 20 dlrs per share Nimocks estimates American Medical earnings for the second quarter ended February 28 could be 35 cts compared to a 95 ct loss last year Nimocks said Pesch's revised offer is not worth much more than the 20 dlrs cash offered previously But Feinberg said there is a better chance a transaction could be completed because of the revised structure of the offer I think it's much more doable he said Analysts have said American Medical has begun a turnaround by replacing some members of management and reducing costs Reuter THREE CONVICTED IN HOME STATE FAILURE CINCINNATI March 2 Marvin Warner and two fellow officers of the former Home State Savings Bank were convicted on charges connected with the collapse of Home State Warner the owner of Home State was found guilty of six counts of performing unauthoriazed acts investing some Home State money without authorization from the board of directors and three counts of securities violations in the 1985 collapse He was acquitted on 76 counts of willful misapplication Burton Bongard former Home State president was convicted of all 81 counts willful misapplication David Schiebel also a former president was convicted on three of four counts of securities violations but was acquitted on 84 charges of willful misapplication corrects warner's conviction The irregularities in which the men were charged led to a state imposed moratorium on all state insured savings and loan companies in Ohio which was lifted on an individual basis as the firms were able to show proof of their solvency Judge Richard Niehaus of Hamilton County Common Pleas Court ordered Warner jailed in lieu of 3.5 mln dlrs bond He set a 1.5 mln dlr bond for Bongard and 25,000 dlr bond for Schiebel pending the appearance of the trio for sentencing March 30 Lawrence Kane special prosecutor said that Warner and Bongard could receive a maximum of 15 years in prison He said that Schiebel could receive a maximum of 5 to 6 years on his convictions All three were accused in the draining of 144 mln dlrs of Home State funds through investments with ESM Government Securities Inc of Fort Lauderdale Fla which went bankrupt and triggered the collapse of Home State On March 5 1985 Ohio Governor Richard Celeste closed all of the state's privately insured savings and loan companies and they remained closed until they could obtain federal deposit insurance or merge with other companies which had federal deposit insurance Reuter VIDEO SHOPPING MALL ADDS FLORIDA STATION JENKINTOWN Pa March 2 Video Shopping Mall Inc said it signed WJTC TV Pensacola Fla to carry its self improvement and specialized business opportunity programs Video Shopping said the station carried over UHF channel 44 in the Pensacola area reaches about 120,000 households Reuter NATIONAL EARLY WARNING SEEKS OMEGA BALLISTICS TAMARAC Fla March 2 National Early Warning Systems Inc said it has offered to purchase Omega Ballistics Systems Inc for an undisclosed amount of cash stock and notes Valley Cottage N.Y. based Omega is a developer and designer of lightweight custom crafted ballistic assault flame and fire resistant paroducts Reuter UNITED MERCHANTS UMM TO BUY ITS OWN STOCK NEW YORK March 2 United Merchants and Manufactuerers Inc said its board has authorized the repurchase of up to one mln shares of the company's common stock The company now has about 9.1 mln shares outstanding It said the stock will be acquired from time to time on the open market depending on market conditions and other factors The number of shares purchased and the timing of the purchases are also subject to restrictions under certain of the company's debt instruments it added Reuter WESTINGHOUSE WX MATSUSHITA MC SET VENTURE PITTSBURGH March 2 Westinghouse Electric Corp said it agreed in principle to form a joint venture in factory automation with Matsushita Electric Industrial Co Ltd of Japan The company said the venture aims to combine Matsushita's experience in high volume electronics manufacturing and Westinghouse's knowledge of computer integrated manufacturing The venture will design sell and service automated manufacturing systems and is expected to begin operations by the summer it added Reuter SENIOR DELEGATES PESSIMISTIC ON ICO TALKS LONDON March 2 Efforts to break an impasse between coffee exporting and importing countries over regulating the world coffee market in the face of falling prices appear to have failed senior delegates said after a contact group meeting The full ICO council is due to meet this evening President of the Brazilian Coffee Institute IBC Jorio Dauster told Reuters after the contact group meeting there had been no agreement on quotas as consumers had tried to dictate market shares rather than negotiate them Dauster said there are no plans yet to renew negotiations at a later date Reuter EDO CORP EDO UNIT WILL BUILD AIRCRAFT PARTS NEW YORK March 2 EDO Corp said McDonnell Aircraf Co has invoked its 1987 production option calling for ejection release units for the F 15E aircraft The company said the contract is not to exceed 10.1 mln dlrs and will be handled by its government systems division in College Point N.Y. The company said the contract is a follow up to the full scale development and 1986 contracts previously awarded to EDO Reuter U.S. APPROVES BUYOUT OF COASTAL BANCORP CSBK PORTLAND Maine March 2 Coastal Bancorp said the U.S. Federal Reserve Board approved the acquisition of Coastal by Suffield Financial Corp SSBK The acquisition still requires approval from the Banking Department in Maine the company noted Reuter LITTLE PRINCE PRODUCTIONS LTDLTLP1ST QTR LOSS NEW YORK March 2 Qtr ended Dec 31 Shr profit nil vs loss nil Net profit 858 vs loss 3,957 Revs 7,372 vs 1,500 Reuter BRAZIL CRITICISES ADVISORY COMMITTEE STRUCTURE By Sandy Critchley Reuters LONDON March 2 Brazil is not happy with the existing structure of the 14 bank advisory committee which coordinates its commercial bank debt Finance Minister Dilson Funaro said U.S. Banks have 50 pct representation on the committee while holding only 35 pct of Brazil's debt to banks he said adding This is not fair with the European and Japanese banks The committee had played a useful role in 1982 and 1983 however Noting the often different reactions of U.S. Japanese and European banks Funaro told journalists that Brazil might adopt an approach involving separate discussions with the regions Since debtor nations problems were normally treated on a case by case basis Perhaps the same principle should apply to creditors central bank president Francisco Gros said Brazil on February 20 suspended indefinitely interest payments on 68 billion dlrs owed to commercial banks followed last week by a freeze on bank and trade credit lines deposited by foreign banks and institutions worth some 15 billion dlrs Funaro and Gros spent two days at the end of last week in Washington talking to government officials and international agencies and will this week visit Britain France West Germany Switzerland and Italy for discussions with governments Funaro and Gros are today meeting British Chancellor of the Exchequer Nigel Lawson Foreign Secretary Geoffrey Howe and Governor of the Bank of England Robin Leigh Pemberton Bankers have estimated that Brazil owes U.K. Banks around 8.5 billion dlrs in long and medium term loans giving the U.K. The third largest exposure after the U.S. And Japan The crisis began when Brazil's trade surplus its chief means of servicing its foreign debt started to decline sharply and the problem was compounded by a renewed surge in the country'rate of inflation Reserves were reported to have dropped below four billion dlrs Reuter CORRECTION THREE CONVICTED IN HOME STATE TRIAL In the CINCINNATI item headlined THREE CONVICTED IN HOME STATE FAILURE please read in the second and subsequent paragraphs Warner the owner of Home State was found guilty of six counts of willful misapplication of funds and three counts of securities violations in the 1985 collapse He was acquitted on 76 counts sof willful misapplication Burton Bongard former Home State president was convicted of all 81 counts against him of willful misapplication The third defendant David Schiebel also a former Home State president was found guilty on three of four counts of securities violations but was acquitted on 84 charges of willful misapplication corrects convictions VANGUARD TECHNOLOGIES VTI WINS CONTRACT FAIRFAX Va March 2 Vanguard Technologies International Inc said it was awarded a 2.2 mln dlr contract from the Office of the Secretary of Defense to provide facilities management services Under the one year contract which also has two one year optional performance periods the company said it will provide local area network operations coordination of hardware installation and maintenance user support services and systems and applications programming Reuter AMCA AIL TO SELL SOME DOMINION BRIDGE ASSETS TORONTO March 2 AMCA International Ltd said it finalized agreement to sell certain assets and inventories of its Dominion Bridge steel service center operations to Federal Industries Ltd s Russelsteel Inc unit Terms were undisclosed It said the sale involved assets and operations of the general line of steel service centers in Toronto and Edmonton Alberta and steel from inventories of closed AMCA branches The company said the sale was part of a previously announced restructuring program to allow it to focus on certain core businesses and generate cash to cut debt Reuter CONDOR COMPUTER INTRODUCES DATABASE PRODUCT ANN ARBOR Mich March 2 Condor Computer Corp said it is offering a 3.5 inch floppy diskette version of its Condor 3 Database Management System Th company said the new version contains all the features of its 5.25 inch package including report writer and applications automation functions Reuter SCOTT'S HOSPITALITY ACQUIRES CAPITAL FOOD TORONTO March 2 Scott's Hospitality Inc said it acquired Capital Food Services Ltd Ottawa's largest catering and food service company for undisclosed terms Scott's said it would operate Capital Food as a separate unit under Capital's current name and management Reuter FUNARO REJECTS SUGGESTION OF IMF BRAZIL PLAN LONDON March 2 Brazilian Finance Minister Dilson Funaro flatly rejected a U.K. Suggestion that his country seek International Monetary Fund IMF help in order to facilitate debt negotiations with commercial creditor banks Talking to reporters Funaro said this attitude would not help resolve the crisis started when Brazil suspended indefinitely interest payments on 68 billion dlrs in external debt on February 20 Funaro was in Britain on the first leg of a tour of European capitals to explain the motives of the Brazilian debt moratorium and to seek support for intiatives to improve capital flows between developed countries and third world debtor nations Reuter SAATCHI AND SAATCHI SACHY COMBINES UNITS NEW YORK March 2 AC and R Advertising a subsidiary of Ted Bates Worldwide a unit of one of the largest advertising agencies in the U.S. Saatchi and Saatchi said it will merge with two other Bates units to form a new entity under Bates called AC and R DHB and Bess The company said the other units are Diener Hauser Bates DHB and Sawdon and Bess AC and R chairman Stephen Rose said the combined billings will be 311 mln dlrs representing a total of 157 clients Reuter UNION NATIONAL UNBC SIGNS DEFINITIVE PACT MASONTOWN PA March 2 Union National Corp said it signed a definitive agreement under which its First National Bank and Trust Co of Washington unit will merge with Second National Bank of Masontown Under a previously announced merger agreement each share of Second National's common stock will be converted into 25 shares of Union National common Reuter ANALYSTS SEE NO OTHER BIDDER FOR PUROLATORPCC New York March 2 Several analysts said they do not believe another suitor will top the 265 mln dlr bid for Purolator Courier Corp by E.F. Hutton LBO Inc and a management group from Purolator's courier division There had been speculation another offer might be forthcoming but analysts mostly believe the 35 dlrs per share price being paid by Hutton and the managers PC Acquisition Inc is fully valued Analysts and some Wall Street sources said they doubted another bidder would emerge since Purolator had been for sale for sometime before a deal was struck with Hutton Friday Purolator's stock slipped 3/8 today to close at 34 3/4 It had been trading slightly higher than the 35 dlr offer on Friday At least one analyst Friday speculated the company might fetch 38 to 42 dlrs per share analysts and wall street sources doubted a competitive offer would emerge since the company has been for sale for sometime before the deal with Hutton was struck Friday Hutton had been in talks with Purolator's adviser Dillon Read and Co since late December a Hutton spokesman said Hutton is offering 35 dlrs cash per share for 83 pct of the shares If all shares are tendered shareholders would receive 29 dlrs cash six dlrs in debentures and warrants for stock in a subsidiary of PC Acquisition containing the Purolator U.S. courier operation Hutton values the warrants at two to three dlrs per share Wall Street sources also said today that a rival bidder might be discouraged by a breakup fee Purolator would have to pay if it ends its agreement with Hutton The sources would not reveal the amount of the fee which will be noted in documents on the transaction to be made public later this week Reuter FORMER BROKER INVESTOR SENTENCED FOR TRADING NEW YORK March 2 A former stock broker and an investor who pleaded guilty last June to insider trading as a participant in the scheme that involved lawyer Michael David were sentenced by the Manhattan federal court today Morton Shapiro who was employed as a broker at Moseley Hallgarten Stabrook and Weeden Inc drew a two month jail sentence and a 25,000 dlr fine Daniel J Silverman who pleaded guilty to securities fraud was sentenced to three years probation a 25,000 dlr fine and ordered to provide 250 hours of community service As a result of trading on information supplied by David while he was at the firm of Paul Weiss Rifkind Wharton and Garrison the defendants gained about 160,000 dlrs in their insider trading scheme according to U.S. Attorney Rudolph W Giuliani The prosecutor also said Shapiro attempted to conceal his unlawful trading by lying in testimony before the Securities and Exchange Commission Reuter ANNUAL MAILING TO DELINQUENT FARMERS USDA WASHINGTON March 2 The Farmers Home Admininstration FmHA is undertaking its annual mailing of notices to delinquent farm borrowers the U.S. Agriculture Department said It said about 26,400 FmHA farm borrowers were delinquent on December 31 1986 and will be sent letters by early March They should get in touch with the FmHA county office as soon as possible to make an appointment to discuss the account it said The letter requests the borrower choose one or more servicing options listed on an accompanying form and return the form within 30 days the department said Reuter ANTITRUST LAWYER NOMINATED CLAIMS COURT JUDGE WASHINGTON March 2 Roger Andewelt deputy assistant attorney general for litigation in the Justice Department's antitrust division since last June is being nominated by President Reagan as a judge of the United States Claims Court the White House said The nomination which is subject to Senate approval is for a 15 year term Andewelt who has served in a number of antitrust division posts since 1972 would succeed Thomas Lydon at the Claims Court Reuter PAN AM PN FEBRUARY LOAD FACTOR UP NEW YORK March 2 Pan Am Corp said February load factor at Pan American World Airways rose two points to 51.9 pct from 49.9 pct a year ago Traffic in February increased 11 pct to to 1.50 billion revenue passenger miles from 1.35 billion and rose 7.8 pct in the two months year to date to 3.31 billion from 3.07 billion Available seat miles grew 6.7 pct in February to almost 2.90 billion from 2.72 billion and rose 4.8 pct to 6.11 billion from 5.83 billion in the two months Year to date load factor increased to 54.1 pct from 52.6 pct Reuter SERVICE CORP INTERNATIONAL SRV 3RD QTR NET HOUSTON March 2 Qtr ended Jan 31 Shr 33 cts vs 29 cts Net 14.8 mln vs 11 mln Revs 108.6 mln vs 70.0 mln Avg shrs 45.2 mln vs 37.6 mln Nine mths Shr 88 cts vs 76 cts Net 36.7 mln vs 28.7 mln Revs 260.4 mln vs 193.0 mln Avg shrs 41.9 mln vs 37.8 mln Note Net for nine mths includes gains from dispositions of 1,783,000 dlrs or four cts a share vs 900,000 dlrs or two cts a share Avg shrs and shr data restated to reflect three for two stock split in January Reuter WARNER COMMUNICATIONS WCIIN CONTRACT WITH ROSS NEW YORK March 2 Warner Communications Inc said its board has approved a 10 year employment contract with Chairman Steven J Ross The company said the contract was opposed by the six board members who are nominees of Chris Craft Inc CCN It said the new contract calls for new bonus awards to be paid out over the period of the contract based on the price of the company's stock Its statement provided no details Warner said the contract which has been under discussion for a lengthy period assures the stability and creative future of the company Reuter PEOPLES BANCORPORATION PEOP QUARTERLY DIVIDEND SEATTLE March 2 Qtly div 25 cts vs 25 cts Pay April 24 Record March 31 Reuter CAREMARK CMRK CHANGES FISCAL YEAR END NEWPORT BEACH Calif March 2 Caremark Inc said it is changing its fiscal year end to a calendar year from the previous fiscal year ending June 30 Reuter STAR TECHNOLOGIES TO TRADE ON NASDAQ STERLING Va March 2 Star Technologies Inc said its shares will begin trading on the Nasdaq national market system tomorrow The company a manufacturer of very high speed computers for scientific applications has annual revenues of about 40 mln dlrs In the nine months ended Dec 31 the company earned 1.9 mln dlrs against a loss of 16.5 mln dlrs in the year ago period as sales rose to 32.6 mln dlrs from 9.3 mln dlrs Reuter REALMERICA CO RACO YEAR NOV 30 NET LEXINGTON Ky March 2 Shr profit four cts vs loss 16 cts Net profit 155,383 vs loss 577,336 Note Net includes tax credit of 51,226 dlrs or one ct per share Reuter CYBERTEK CKCP FORMING NEW DIVISION LOS ANGELES March 2 Cybertek said it is forming a General Products division which will be located in Dallas The new division will market personal computer software products targeted at the Fortune 500 companies Cybertek said Reuter HOLIDAY CORP HIA TO REDEEM TWO BOND ISSUES NEW YORK March 2 Holiday Corp said it would redeem on March 11 all outstanding 9 1/2 pct first mortgage bonds due 1995 of its Holiday Inns Inc unit and all 9 1/2 pct first mortgage bonds Series A due 1996 of its Harrah's subsidiary The Holiday bonds will be bought back at 101.6 pct of the bonds principal amount plus accrued interest or 1,038.69 dlrs per 1,000 dlr face amount Holiday will redeem the Harrah's bonds at 104.5 pct of the principal amount plus accrued interest or 1,079.31 dlrs per 1,000 dlr face amount Reuter ANCHOR GLASS AGLS CLEARED FOR LISTED ON NYSE TAMPA Fla March 2 Anchor Glass Container Corp said it has been cleared to apply for listing on the New York Stock Exchange and expects to file its formal application for listing later this month with trading to begin during the week of April 20 The company said the NYSE advised it management that the company meets the criteria for listing following successful completion of a preliminary eligibility review Anchor also said its stock is being split two for one effective March 24 to holders of record March three After the split it said it will have 13.3 mln shares outstanding Reuter BLOCKBUSTER BBEC UNIT GETS TWO MORE LICENSES DALLAS March 2 Blockbuster Entertainment Corp's Blockbuster Distribution Corp said it executed two additional area licenses to own and operate Blockbuster Videos Rental stores It said these exclusive licenses were granted to Videoco Inc for the Greensboro Winston Salem Raleigh Durham and Highpoint N.C. metropolitan areas It said the licenses require a minimum of six Blockbuster superstores to be opened within a 25 month period Reuter FERRO CORP FOE SETS JOINT VENTURE LOS ANGELES March 2 Ferro Corp said it has formed a joint venture with Paris based Alsthom Inudstrial Group to export U.S. epxertise in specialty composite materials to the European market Ferro said although the airframe and aerospace industries are the prime users of composite materials today it plans to develop applications for the ground transportation and industrial markets in the near future Ferro also announced it has agreed to purchase CompositAir a developer of composit materials applications for an undisclosed sum Reuter COMPUTER LANGUAGE CLRIUNIT OFFERS TAX PRODUCT DALLAS March 2 Computer Language Research Inc said its CLR Micro Tax unit introduced a Micro Tax W 4 Generator a new software package for accounts and corporate personnel departments The company said the package takes the user through each question on the new W 4 gives explanatory instructions automatically calculates entries checks tables and generates the completed W 4 Reuter NYMEX RULE CHANGE SEEN BOOSTING ENERGY TRADE NEW YORK March 2 The New York Mercantile Exchange said it will introduce exchanges for physicals EFPS to its energy futures markets April one An exchange spokeswoman said the change will allow oil traders that do not hold a futures position to initiate after the exchange closes a transaction that can subsequently be hedged in the futures market EFPs already in effect for platinum futures on NYMEX are expected to increase the open interest and liquidity in U.S. energy futures according to traders and analysts The Commodity Futures Trading Commission approved the rule change in February according to a CFTC spokeswoman Reuter U.S. REFINERY COPPER STOCKS FALL IN JANUARY NEW YORK March 2 Refined copper stocks held by U.S. refineries fell to 109,200 short tons at the end of January from 145,400 short tons at the end of December the American Bureau of Metal Statistics reported Commodity Exchange Comex copper stocks climbed to 103,000 tons in January from 93,300 tons in December Combined refinery and Comex stocks eased to 212,200 tons in January from 238,700 tons in December U.S. refined production declined to 117,600 tons in January from 137,400 tons in December Crude output increased to 98,600 tons in January from 93,300 tons revised lower in December Preliminary figures showed U.S. refined deliveries rose to 151,800 tons in January from 124,800 tons in December Reuter WHITE HOUSE WITHDRAWS GATES NOMINATION AS CIA CHIEF WASHINGTON March 2 The White House announced it was withdrawing the controversial nomination of Robert Gates as CIA director at Gates's request and has not yet decided on a replacement Withdrawal of the Gates nomination was announced by new White House Chief of Staff Howard Baker who said President Reagan had several names under consideration to replace Gates but had made no decision on that score Baker said Gates had sent Reagan a letter today requesting his name be withdrawn from nomination to succeed the ailing and resigned William Casey and that Reagan had accepted with great regret Reuter DIAMOND SHAMROCK DIA SETS MEETING RECORD DATE DALLAS MARCH 2 Diamond Shamrock Corp said it set March 26 as the record date for stockholders entitled to vote at its April 30 annual meeting Reuter CCL UNIT ACQUIRES NESTLE CANADA CAN OPERATIONS TORONTO March 2 CCL Industries Inc s Continental Can Canada Inc unit said it acquired the Wallaceburg Ontario metal can making operations of Nestle Enterprises Ltd wholly owned by Nestle SA of Switzerland Terms were undisclosed Continental Can said it would supply Nestle's equivalent can requirements under a long term agreement Nestle said it decided to stop manufacturing cans in order to be in a better position to take full advantage of the changes underway or on the horizon in food packaging technology Reuter AMERICAN PORK CONGRESS KICKS OFF TOMORROW CHICAGO March 2 The American Pork Congress kicks off tomorrow March 3 in Indianapolis with 160 of the nations pork producers from 44 member states determining industry positions on a number of issues according to the National Pork Producers Council NPPC Delegates to the three day Congress will be considering 26 resolutions concerning various issues including the future direction of farm policy and the tax law as it applies to the agriculture sector The delegates will also debate whether to endorse concepts of a national PRV pseudorabies virus control and eradication program the NPPC said A large trade show in conjunction with the congress will feature the latest in technology in all areas of the industry the NPPC added Reuter BURLINGTON'S EL PASO UNITBNI FILES GAS PRICES EL PASO TEXAS March 2 Burlington Northern Inc's El Paso Natural Gas Co said it filed its regularly scheduled gas cost adjustment that will leave its rates unchanged But still pending is El Paso's proposal to the Federal Energy Regulatory Commission to directly bill its wholesale customers for deficiencies in natural gas liquid revenues It said its filing called for a commodity rate of about 2.57 dlrs per dekatherm but noted that the rate could drop to 1.84 dlrs if the Commission approves its proposal to bill wholesale customers directly for the revenue deficiencies Reuter COPPER STOCKS OUTSIDE U.S. INCREASE IN DECEMBER NEW YORK March 2 Refined copper stocks held by refineries outside the U.S. increased to a preliminary 277,500 short tons at the end of December from a preliminary 270,000 short tons revised higher at the end of November the American Bureau of Metal Statistics said London Metal Exchange stocks fell to 193,100 tons in December from 194,400 tons in November Combined refinery and LME stocks rose to a preliminary 470,600 tons from 464,400 tons revised higher January LME stocks were 193,400 tons Preliminary figures showed refined production outside U.S. lower at 377,300 tons in December versus 384,000 tons in November Crude output decreased to 421,500 tons from 427,000 tons revised higher Refined copper deliveries decreased to 359,800 tons from 375,400 tons revised lower Reuter REAGAN TO ADDRESS NATION WEDNESDAY NIGHT WASHINGTON March 2 White House Chief of Staff Howard Baker said President Reagan will address the nation in a nationally televised speech Wednesday night at 2100 EST on the Tower Commission Report on the arms to Iran scandal Baker in his first news conference as chief of staff also said that Robert Gates asked that his name be withdrawn from nomination as director of the Central Intelligence Agency Gates said in a letter to the president that it became apparent it would be a long and difficult process to win Senate confirmation of the nomination Reuter CANADA GOVERNMENT SPENDING TO RISE 3.8 PCT OTTAWA March 2 The federal government's expenditures will rise 3.8 pct in the fiscal year beginning April 1 to 110.14 billion dlrs from 107.01 billion dlrs in fiscal 1987 the Treasury Board said The board noted the growth in the main estimates is the lowest since 1962 and below last year's 3.9 pct increase After inclusion of two special accounts an unemployment insurance fund and a grain stabilization fund total expenditures amount to 122.55 billion dlrs the same as the estimate in the government's budget last month The budget also estimated a deficit of 29.3 billion dlrs for fiscal 1988 Reuter ADVANCE CIRCUITS ADVC GETS LOAN AGREEMENT MINNETONKA Minn March 2 Advance Circuits Inc said it has signed a 9,500,000 dlrs borrowing agreement with Washington Square Capital Inc The new loan consists of a revolving credit facility of seven mln dlrs based on accounts receivable and a term loan of 2,500,000 The interst rate on the loans is 2.75 pct over the prime rate with future rate reductions scheduled if certain income levels are achieved It said the entire loan is due March 1990 with monthly payments of 29,800 due on the term loan The money was used to completely repay its debt to First National Bank of St Paul It would not say how much that was The bank took a discount on its gross amount and accepted 125,000 shares of Class C preferred stock which is convertible into 375,000 shares of common Reuter BAKER SAYS REAGAN TO MEET PRESS VERY SOON WASHINGTON March 2 White House Chief of Staff Howard Baker said President Reagan will meet the press very soon Baker told a brief news conference I expect you'll see the president very soon when asked by reporters when Reagan expected to resume his news conferences Reagan has not met the press since November 19 Baker said Reagan had intended to conduct today's news conference and only the lack of a firm announcement of a replacement for Robert Gates as CIA director prevented him Reagan will address the nation wednesday night in response to the Tower Commission's report on the Iran arms scandal reuter TEXAS AIR TEX UNIT TO BEGIN NEW SERVICE MIAMI March 2 Texas Air Corp's Eastern Airlines said it will offer low fare night time service from Chicago's O'Hare International Airport to 18 U.S. cities It had previously offered similar service out of Houston The company said one way fares range from 39 dlrs to St Louis to 89 dlrs to Los Angeles San Francisco and other cities They are available at all times with no restrictions Flights depart between 0100 and 0415 CST and arrive around 0600 local time Normal baggage checking services are not available because the flights carry air freight cargo so passengers are limited to two pieces of carry on baggage Reuter TONKA TKA EXPANDS AUSTRALIAN OPERATIONS MINNETONKA MINN March 2 Tonka Corp said it agreed to become the exclusive distributor of Tokyo based Bandai Co Ltd toy lines in Australia and New Zealand and also agreed to buy the business of Bandai Australia Terms of the transaction were not disclosed The Bandai agreement and other actions are expected to add 15 mln dlrs to Tonka's international sales in 1987 International sales accounted for 11 pct of Tonka's 293.4 mln dlrs of revenues in 1986 Reuter BARNETT BANKS OF FLORIDA BBF REDEEMS STOCK JACKSONVILLE Fla March 2 Barnett Banks of Florida Inc called for redemption of all outstanding shares of its Series E 4.25 dlrs cumulative convertible preferred stock The company said the redemption date will be May 8 1987 Under the terms of the redemption shareholders may convert or redeem their shares The bank said shares may be converted into 2.25 shares of Barnett common stock if surrenderred by April 23 Shares surrendered after will be redeemed for 51.50 dlrs per share plus dividends accured through May 8 the bank said Reuter HECK'S HEX SAYS CREDIT AGREEMENT EXPIRED NITRO W.Va March 2 Heck's Inc said that its credit agreement with a group of banks expired on February 28 and that the banks are demanding payment on the loans Heck's which did not disclose the amount being sought by the banks said it is holding discussions with its lenders that should be completed sometime this week Heck's added however that it could not predict whether a new credit agreement will be reached Reuter TURNER CORP TUR UNIT BUILDS HOSPITAL ADDITION FONTANA Calif March 2 The Turner Corp's construction company New York said its Orange County office has begun building a 23 mln dlr addition to Kaiser Permanente Medical Center The five story 197,000 square foot adition will be used primarily as an outpatient treatment clinic it said Developer for the project is Kaiser Foundation Hospitals in Pasadena Calif the company said The completion date is October 1988 according to the company Reuter GREY ADVERTISING GREY FORMS NEW DIVISION NEW YORK March 2 Grey Advertising Inc's GreyCom Inc subsidiary said it established a new division GreyCom Corporate and Financial Reuter MFS MANAGED MUNCIPAL BOND TRUST SETS PAYOUT BOSTON Mass March 2 MFS Managed Muncipal Trust Bond said it declared a monthly payout income distribution of 5.7 cts a share compared with 5.6 cts for the previous month It said the distribution is payable March 20 to shareholders of record March two Reuter COMMERCIAL CREDIT CCC SELLS 10 YEAR NOTES NEW YORK March 2 Commercial Credit Co is raising 150 mln dlrs through an offering of notes due 1997 yielding 8.217 pct said lead manager Morgan Stanley and Co Inc The notes have an 8 1/8 pct coupon and were priced at 99.375 to yield 105 basis points more than comparable Treasury securities Non callable for life the issue is rated Baa 2 by Moody's and BBB plus by Standard and Poor's First Boston Corp and Shearson Lehman Brothers Inc co managed the deal Reuter ATT ATT GETS 57.3 MLN DLR CONTRACT WASHINGTON March 2 American Telephone and Telegraph Co has received a 57.3 mln dlr contract to develop laboratory equipment for an Enhanced Modular Signal Processor the Navy said reuter AMC AMO EXTENDS INCENTIVE PROGRAM SOUTHFIELD Mich March 2 American Motors Corp said it is offering up to 700 dlrs on 1986 and 1987 Jeep Cherokee and Wagoneer vehicles bought until March 31 Rebates are 700 dlrs for two door vehicles and 500 dlrs on four door models This is the first time cash rebates are available on these two Jeeps a spokesman said Not included is the 1987 Jeep Cherokee Limited The expanded program is intended to keep AMC competitive in the marketplace and enable it to maintain its sales momentum with Jeep products said William Enockson group vice president North American sales and marketing AMC continues to offer low interest rate loans on most new 1986 and 1987 Jeep Comanche models from 2.9 pct for 24 month loans up to 9.9 pct on 60 month loans These loans are available until March 31 AMC has been offering up to 500 dlrs rebates on its 1986 Encore and Alliance cars and 1987 Alliance and GTA models the spokesman said Reuter ADVANCED SYSTEMS ASY TO DISTRIBUTE COURSES CHICAGO March 2 Advanced Systems Inc said it acquired distribution rights to three interactive video courses developed by NCR Corp NCR The three courses for data processing professionals and bankers are delivered through interactive video which combines video discs personal computers and touch screen monitors Reuter U.S. BRASS MILL COPPER STOCKS LOWER IN JANUARY NEW YORK March 2 U.S. brass mill copper stocks fell to 185,400 short tons copper content at the end of January from 191,200 short tons at the end of December according to the American Bureau of Metal Statistics Consumption by brass mills increased to 60,700 short tons in January from 48,900 short tons in December Mills consumed 29,600 tons of refinery shapes in January versus 24,000 tons in December Scrap consumption increased to 31,100 tons in January from 24,900 tons in December Total brass mill shipments increased to 69,600 tons in January from 54,400 tons in December while receipts rose to 63,800 tons from 47,100 tons Reuter MFS MUNICIPAL INCOME TRUST MFM SETS PAYOUT BOSTON March 2 MFS Municipal Income Trust said it declared a monthly income distribution of 5.7 cts a share compared with 5.5 cts a share paid in the previous month It said the distribution is payable March 27 to shareholders of record March 13 Reuter SIEMENS AG U.S UNIT TO BEGIN MAKING SYSTEMS BOCA RATON Fla March 2 Siemens AG's U.S. subsidiary Siemens Public Switching Systems Inc said two existing plants have been selected to allow immediate start up of manufacturing on an interim basis of EWSD digital central office switching systems in the U.S. The company said the two facilities one in Cherry Hill N.J. the other in Hauppauge N.Y. will be used while a rigorous review process for selecting a facility devoted only to EWSD manufacturing continues Siemens Public is part of Siemens Communication Systems Inc also headquartered in Boca Raton Reuter ARMTEK ARM TO SELL INDUSTRIAL TIRE UNIT NEW HAVEN CONN March 2 Armtek Corp previously the Armstrong Rubber Co said it agreed to sell its industrial tire and assembly division to a Dyneer Corp DYR for an undisclosed sum It said the agreement covers the division's tire production facility in Clinton Tenn and its plants serving original equipment and replacement markets Armstrong Tire Co an Armtek unit will continue to sell replacement industrial tires the company said Final closing is expected in the third fiscal quarter ending June 30 Reuter U.S. SIGNS TAX TREATY WITH VIRGIN ISLANDS WASHINGTON March 2 The Treasury Department said the United States and the Virgin Islands have signed a tax treaty to exchange tax information and provide mutual assistance in tax matters The agreement was needed to trigger provisions of the Tax Reform Act of 1986 allowing the Virgin Islands to offer investment incentives by reducing Virgin Islands taxes on non U.S. source income the Treasury said The treaty will be a model for similar agreements to be negotiated with three other U.S. possessions American Samoa the Mariana Islands and Guam the Treasury said The new agreement which expands and replaces a prior agreement with the Virgin Islands was signed on February 24 the Treasury said Reuter CME SETS FEBRUARY TRADING VOLUME RECORD CHICAGO March 2 The Chicago Mercantile Exchange CME posted record trading volume for the month of February when 6,556,464 futures and options contracts changed hands up 15.2 pct from last February's volume of 5,693,243 contracts Interest rate futures trading was the most active segment at the exchange with Eurodollar futures setting a monthly record of 1,472,184 contracts up 78.4 pct from volume of 825,087 contracts in February last year and surpassing the previous record of 1,288,729 contracts set in September 1986 Options on Eurodollar futures also set a monthly record of 235,916 contracts up 92.4 pct from 122,616 a year ago Trading in currency futures and options at the CME fell 4.6 pct during February from a year ago with 2,012,148 contracts changing hands compared to 2,119,198 contracts in the same period last year Volume in most currency futures contracts fell in February while options on the currency futures rose 28.2 pct Options on mark futures set a monthly record at 273,749 contracts up from the previous record of 268,831 contracts in January Agricultural futures volume rose 17.1 pct during the month with live hog futures volume leading the market segment rising 27.7 pct to 138,543 contracts Reuter SOFTWARE COS SUPPORT NEW APPLE AAPL PRODUCTS LOS ANGELES March 2 Over 30 software companies announced programs to support Apple Computer Inc's new Macintosh II and Macintosh SE computers At a seminar where the products were introduced software makers such as Ashton Tate TATE Microsoft Corp MSFT and Lotus Development Corp LOTS announced new or existing products now accessible to the Macintosh computers Lotus announced Lotus Galaxy software that will deliver six programmable business modules which it said will be formally introduced this summer In addition National Semiconductor NSM said it will provide a series of products for the Macintosh computers including a 16 megabyte memory expansion module Reuter AMERICAN ELECTRIC AEP UNIT REDEEMING BONDS NEW YORK March 2 Appalachian Power Co a unit of American Electric Power Co said it will redeem on May one an additional 1.38 mln dlrs of its 12 7/8 pct first mortgage bonds due 2013 That increases to 2.88 mln dlrs the amount of bonds the utility will buy back Appalachian Power said it will redeem the bonds at par plus accrued interest Reuter AVX CORP AVX DEBT AFFIRMED BY S P NEW YORK March 2 Standard and Poor's Corp said it affirmed the B plus rating on AVX Corp's 28 mln dlrs of subordinated debt The company's implied senior debt rating is BB S and P said AVX's purchase offer for CTS Corp CTS has expired and the acquisition does not appear likely to occur AVX was listed on S and P's creditwatch with negative implications on December 17 1986 because of the proposed acquisition Reuter FDA OKAYS DRUG TO LESSEN HEMOPHILIACS BLEEDING WASHINGTON March 2 The federal Food and Drug Administration said it approved for U.S. marketing a drug that reduces bleeding in hemophiliacs requiring dental work The FDA said the drug tranemaxic acid would lessen and in some cases eliminate altogether the need for blood transfusions in hemophiliacs who must have teeth extracted The drug will be made by Kabivitrum of Stockholm Sweden and distributed here under the trade name Cyklokapron by Kabivitrum Inc of Alameda Calif Hemophilia is a hereditary diseease whose victims lack the particular proteins that promote blood clotting Reuter KIDDER UNIT SELLS CMOS INCLUDING FLOATERS NEW YORK March 2 Kidder Peabody Mortgage Assets Trust Five a unit of Kidder Peabody and Co Inc is offering 500 mln dlrs of collateralized mortgage obligations in seven classes including floating rate and inverse rate tranches Sole manager Kidder Peabody said the first floating rate class has an initial rate of 6.755 pct that will be reset quarterly at 40 basis points over three month LIBOR with an 11 pct cap Totaling 53.3 mln dlrs this floating rate class contains a so called catchup provision that allows investors to recapture possible lost interest according to Kidder Peabody For instance if three month LIBOR rises to 15 pct during the life of the floating rate tranche and falls back below the 11 pct cap investors would be paid back dollar for dollar the amount of interest they would have received if the CMOs did not carry a maximum interest rate a Kidder officer said Kidder Peabody introduced this concept on February 12 The other floating rate class totals 132.4 mln dlrs and has an initial rate of 6.975 pct that will be reset quarterly at 60 basis points over three month LIBOR with a 13 pct cap This tranche does not have a catch up provision the Kidder officer said The inverse rate tranche totals 71.3 mln dlrs and has an initial rate of 10.903 pct The rate will be reset quarterly according to the formula of 22.44027 minus the product of 1.8097 times three month LIBOR Yields on the remaining fixed rate CMOs the balance of the 500 mln dlr issue range from 7 1/4 to 9.27 pct or 90 to 160 basis points over comparable Treasuries The issue is rated a top flight AAA by Standard and Poor's Reuter PETROLITE CORP PLIT SETS PAYOUT ST LOUIS March 2 Qtly dividend 28 cts vs 28 cts Pay April 24 Record April 10 Reuter NYMEX TO SUBMIT PROPANE PROPOSAL TO CFTC NEW YORK March 2 The New York Mercantile Exchange expects to submit a propane futures contract for federal regulatory approval within a few days according to an exchange spokeswoman As previously announced the Board of Governors of the exchange approved the contract last month The exchange will now submit the contract to the Commodity Futures Trading Commission according to the spokeswoman Contract specifications will resemble those of heating oil and gasoline futures The contract size will be 1,000 barrels or 42,000 U.S. gallons The minimum price fluctuation for the propane futures contract will be 0.01 cent per gallon or 4.20 dlrs a barrel according to the exchange The maximum daily price limit will be two cts a gallon on all contracts except spot Trading will terminate on the last business day of the month preceding the delivery month The exchange said delivery will be F.O.B from the seller's pipeline storage or fractionation facility in Mont Belvieu Texas which has a direct pipeline access to the Texas Eastern Transmission Pipeline TET in Mont Beliview Delivery method will be by in line or in well transfer inter facility transfer or pumpover or book transfer and cannot be done earlier than the tenth calendar day of the delivery month according to the exchange Deliveries must be completed no later than two business days prior to the end of the delivery month Buyers taking delivery of the propane must pay the seller by certified check and the deadline for payment is 1200 EST noon of the second business day following receipt of the propane Reuter GM GM OUTPUT FELL LAST MONTH DETROIT March 2 General Motors Corp said its February U.S. car production declined to 358,661 from 398,823 a year ago GM said its U.S. truck production declined to 128,099 from 135,434 a year ago Year to date GM said car output declined to 669,370 from 839,097 and truck production eased to 250,999 from 279,181 Reuter YEUTTER BLASTS PROPOSED EC OILS AND FATS TAX WASHINGTON March 3 U.S. trade representative Clayton Yeutter today said that if the European Community's Council of Ministers approves a tax on vegetable oils and fats another major transatlantic trade row will erupt over agriculture In a statement issued by the trade representative's office following a speech to the American Soybean Association's board of directors Yeutter said the proposed tax would have a severe impact on American soybean farmers who export some 2.4 billion dlrs in soybeans and products annually to the EC This is an unacceptable situation for us and its vegetable oils tax enactment would leave us no choice but to vigorously protect our trade rights and defend our access to the European market Yeutter said Yeutter said the proposed vegetable oils tax would violate EC obligations under the GATT He said the effect of the tax would be to double the price of soyoil produced from imported soybeans making margarine made from soyoil more expensive than tallow based margarine and closer in price to expensive European butter I am astonished that the EC commission would propose such a provocative measure so soon after we successfully resolved the agricultural dispute over the enlargement of the EC to include Spain and Portugal Yeutter said It serves no purpose to embark on another confrontational course before the recent wounds have healed and as we are beginning to make progress on the Uruaguay round of global trade talks he said Reuter EXXON XON CUTS HEATING OIL BARGE PRICE NEW YORK March 2 Oil traders in New York said Exxon Corp's Exxon U.S.A. unit reduced the price it charges contract barge customers for heating oil in New York harbor 0.75 cent a gallon effective today They said the reduction brings Exxon's contract barge price to 43.25 cts The price decrease follows sharp declines in heating oil prices on spot and futures markets traders said Reuter GREECE SAYS IT HAS RIGHT ON AEGEAN OIL DRILLING ATHENS March 2 Greece responding to a warning by Turkey against conducting oil activities in the Aegean Sea said today it had the right to decide where and how to do research or drilling work in the area A government spokesman said the Greek position was made clear to Turkey's ambassador Nazmi Akiman when he met Greek Foreign Affairs Undersecretary Yannis Kapsis last week Acting Turkish Prime Minister Kaya Erdem said earlier today Greek activities in the northern Aegean contravened the 1976 Berne Agreement which set the framework for talks on the Aegean continental shelf disputed between Ankara and Athens The Greek statement today said Greece is not prepared to give up even a trace of its sovereignty rights to the seabed It has been stressed to Mr Akiman that the decision where or how to drill belongs exclusively to the Greek government The Greek government has repeatedly let the Turkish side know that it considers the 1976 Berne protocol as inactive through the fault of Turkey it said The Greek statement said Athens was ready to put the continental shelf issue before international courts Reuter LEUCADIA LUK HAS 7.2 PCT OF MINSTAR MNST WASHINGTON March 2 Leucadia National Corp said two of its subsidiaries have acquired a 7.2 pct stake in Minstar Inc a corporation controlled by corporate raider Irwin Jacobs and used by him in his forays to acquire stock in companies In a filing with the Securities and Exchange Commission Leucadia said its LNC Investments Inc a Newark Del investment firm and Charter National Life Insurance Co a St Louis joint stock life insurance company bought their combined 1,261,000 Minstar common shares for investment purposes only The Leucadia subsidiaries had held an 11.0 pct stake in Minstar but cut to 1.8 pct or 313,200 shares last July Since July Leucadia said its companies have bought 947,800 Minstar common shares for a total of 24.7 mln dlrs Leucadia said it bought the Minstar stake to obtain an equity position in the company and has no intention of seeking control of it Nearly half of Leucadia's common stock is owned by TLC Associates a Salt Lake City Utah general partnership whose partners include the chairman and president of Leucadia and other investors Reuter BASIX CORP BAS 4TH QTR LOSS NEW YORK March 2 Oper shr loss eight cts vs profit 20 cts Oper net loss 768,000 vs profit 1,962,000 Revs 49.0 mln vs 43.6 mln 12 mths Oper shr loss 1.41 dlrs vs profit 96 cts Oper net loss 13.6 mln vs profit 9,305,000 Revs 175.3 mln vs 140.7 mln Note Oper excludes loss from discontinued operations of 4,676,000 dlrs or 48 cts a share for year ago qtr and 7,571,000 dlrs or 78 cts a share for year ago 12 mths Oper includes charge of 1.1 mln dlrs for cumulative effect of repeal of the investment tax credit for qtr and writedown of 21.6 mln dlrs on gas and oil facilities for 12 mths Year ago shr data restated to reflect two pct stock dividend of December 1986 Reuter MONTREAL EXCHANGE NAMES NEW PRESIDENT MONTREAL March 2 The Montreal Exchange said it named Bruno Riverin president of Quebec's Caisse centrale Desjardins as its new president and chief executive officer Riverin replaces former exchange president Andre Saumier who resigned in January to set up a brokerage firm Riverin's appointment is effective March 26 the exchange Canada's second largest said The Caisse central is the main investment arm of Quebec's huge credit union movement Reuter AUSTRALIAN JANUARY ANNUAL BROAD MONEY UP 10.3 PCT Sydney March 3 Australia's broad money supply rose 10.3 pct in the year ended January up from a revised 9.6 pct in December the Reserve Bank said This compares with the previous January's 13.9 pct In January broad money growth slowed to 0.7 pct from December's 1.5 pct and compared with nil growth in January 1986 Within the broad money total non bank financial intermediaries rose by 0.2 pct from a revised decline of 0.2 in December and a previous January's 0.8 pct increase In the January year NBFI's borrowings rose by 9.5 pct from a revised 10.1 in December and compared with a previous January's 12.8. At the end of January broad money stood at 175,866 mln dlrs dlrs from December's 174,668 mln dlrs and a January 1986 level of 159,453 mln In the same period borrowings from the private sector by the NBFIs rose to 70,389 mln dlrs from December's 70,237 mln and the previous January's 64,299 mln Reuter MICROBIO MRC PLANS ACQUISITION FINANCING BOUNTIFUL Utah March 2 Microbiological Research Corp said it entered into a letter of intent for a proposed business combination with privately owned DataGene Scientific Laboratories Inc and Milex Corp a newly formed company through a stock swap It also said it received 100,000 dlrs from the sale of a convertible note to Ventana Growth Fund as part of an overall 1,100,000 equity financing plan with Ventana Under that plan a minimum of 400,000 dlrs and a maximum of one mln dlrs of additional new capital is to be provided to fund the combined operations of the three companies Microbiological also said that if the maximum additional capital is raised it will own about 49 pct of 4,550,00 shares of common outstanding in the new combined company DataGene holders will own 29 pct and Ventana and others will own 13 pct It said the remaining nine pct will be held by Milex shareholder Norman Monson who will become chief executive officer of the combined companies Reuter NATIONAL BANK ISSUES MORTGAGE BACKED SECURITIES MONTREAL March 2 National Bank of Canada said it is issuing 25 mln dlrs worth of mortgage backed securities recognized by the federal government's Canada Mortgage and Housing Corp The bank said the issue is divided into two pools one bearing annual interest of 8 3/4 pct and the other 8 5/8 pct with interest calculated semi annually and paid monthly It said the securities are available in denominations of 5,000 dlrs for a term of slightly less than five years Underwriters are Levesque Beaubien Inc and McLeod Young Weir Ltd National Bank said the issue is part of a program by Canada Mortgage and Housing introduced late last year which provides investors with high quality securities similar to government bonds but with a higher rate of return Reuter ICO COUNCIL ENDS IN FAILURE TO AGREE QUOTAS LONDON March 2 A special meeting of the International Coffee Organization ICO council failed to agree on how to set coffee export quotas ICO delegates said Producers and consumers could not find common ground on the issue of quota distribution in eight days of arduous often heated talks delegates said Export quotas the major device of the International Coffee Agreement to stabilise prices were suspended a year ago after coffee prices soared in reaction to a drought in Brazil which cut its output by two thirds Delegates and industry representatives predicted coffee prices could plummet more than 100 stg a tonne to new four year lows tomorrow in response to the results of the meeting Reuter FRANCE HAS LITTLE ROOM FOR MANOEUVRE OECD SAYS PARIS March 3 French industry is failing to produce the goods its markets need and its loss of competitiveness has left the government little room for manoeuvre to reflate the economy the Organisation for Economic Cooperation and Development said With gross domestic product likely to grow only 2.1 pct this year the same rate as last year unemployment could climb to 11.5 pct of the workforce by mid 1988 from its present 10.9 pct it said in an annual review of the French economy The report said the French economy was increasingly ill adapted to demand selling goods at uncompetitive relative prices on both domestic and export markets France's poor export performance reflects a geographical bias in favour of markets less dynamic than the average And A substantial loss of market share In the past 18 months it said Pointing to a likely widening of the French trade deficit to around 2.9 billion dlrs this year from 2.4 billion in 1986 it warned that a further depreciation of the dollar against the franc could lead to a renewed loss of competitiveness relative not only to the United States but also to the newly industrialised countries This could result in further major losses of market share particularly in the non OECD area which accounts for almost a quarter of French exports it said Until the competitive ability of industry improved the authorities would have little scope for macroeconomic manoeuvre even if the unemployment situation or the need to encourage a pickup in investment could require demand to grow more briskly it added But rising unemployment could help to hold down wage demands contributing to a slowdown in inflation to around a two pct annual rate this year and early next the OECD said Written mainly in December last year the report took no account of a rise in oil prices early in 1987 and a 0.9 pct surge in January consumer prices caused partly by the government's deregulation of service sector tariffs We took a bet that the freeing of prices would not provoke runaway rises and it is not absolutely certain that bet has been lost one OECD official commented OECD officials said the January data and a rise in oil prices above the 15 dlrs a barrel average assumed in the report indicated an upward revision in the inflation forecast to around 2.5 or three pct The government last week revised its forecast up to between 2.4 and 2.5 pct from two pct against last year's 2.1 pct But the OECD backed the government's view that the underlying trend for inflation remained downwards this year with a slowdown in domestic costs taking over from last year's fall in oil and commodity prices as the chief cause of disinflation With French unit productivity costs now among the lowest in the OECD area the inflation differential between France and its main trading rival West Germany could fall to just one pct this year it said On the other hand the report noted consumer prices for industrial goods and private services have been rising steeply as companies built up their profits For the disinflationary process to continue and price competitiveness to become lastingly compatible with exchange rate stability it is essential that wage restraint continue it said REUTER PAINEWEBBERPWJ UNIT UPS SHAER SHOE SHS STAKE WASHINGTON March 2 Mitchell Hutchins Asset Management Inc a New York investment firm and subsidiary of PaineWebber Group Inc said it raised its voting stake in Shaer Shoe Corp to 76,000 shares or 7.5 pct from 52,100 shares or 5.1 pct In a filing with the Securities and Exchange Commission Mitchell Hutchins said it bought 11,900 shares between Jan 8 and Feb 24 at prices ranging from 12.125 to 12.75 dlrs a share and obtained voting control over another 12,000 shares The firm has said it bought the stake as an investment on behalf of its clients but said it has had discussions with Shaer management It did not disclose the topic of the talks Reuter ORACLE SYSTEMS CORP ORCL TO OFFER STOCK BELMONT Calif March 2 Oracle Systems Corp said it plans to register with the Securities and Exchange Commission to offer two mln share of its common stock If these shares about 1.5 mln shares woll by sold by the company and up to 500,000 shares by be sold by certain shareholders Oracle which recently announced a two for one stock split said it will have about 28 mln shares outstanding after the offering Reuter COUSINS HOME FURNISHINGS CUZZ GET CREDIT LINE SAN DIEGO March 2 Cousins Home Furnishings Inc said it obtained a 5.0 mln dlr working capital line of credit from Lloyds Bank PLC through its Los Angeles branch The credit is supported by a guarantee from the company's Canadian affiliate The Brick Warehouse Ltd which will receive 200,000 dlrs worth of the company's stock The line of credit which expires in July 1989 will be used to pay off a 1,750,000 dlr working capital loan the company owes Wells Farg Bank Reuter REXNORD REX TO REDEEM RIGHTS BROOKFIELD Wis March 2 Rexnord Inc said it will redeem all of its preferred stock purchase rights for 10 cts a right effective today Rexnord said the rights will be redeemed because it is expected its shares will be tendered under a January 30 takeover offer from Banner Acquisition Corp The rights trade in tandem with Rexnord's common stock Reuter CANTREX UNIT TO MERGE WITH ONTARIO GROUP MONTREAL March 2 Groupe Cantrex Inc said it plans to merge a new wholly owned subsidiary a merger agreement with CAP Appliance Purchasers Inc of Woodstock Ontario a group of about 400 appliance and electronics retailers It said CAP shareholders will receive 140,700 first preferred Groupe Cantrex shares entitling the holders to receive 6.05 dlrs per share or the equivilant in class A subordinate voting Cantrex shares The merger is effective April one and is subject to shareholder approval Reuter INVESTMENT FIRM BOOSTS LDBRINKMAN DBC STAKE WASHINGTON March 2 Two affiliated investment firms and the investment funds they control said they raised their combined stake in LDBrinkman Corp to 653,600 shares or 10.9 pct of the total outstanding from 585,600 shares or 9.7 pct In a filing with the Securities and Exchange Commission Fidelity International Ltd a Bermuda based firm said its funds bought 68,000 LDBrinkman common shares between Jan 5 and Feb 19 at prices ranging from 5.30 to 5.445 dlrs a share Funds controlled by FMR Corp a Boston based investment firm affiliated with Fidelity hold 251,100 shares bringing the combined total to 653,600 shares Fidelity said Reuter ITT'S ITT HARTFORD UNIT POSTS 4TH QTR GAIN HARTFORD Conn March 2 Hartford Insurance Group a unit of New York based ITT Corp said higher worldwide premiums help boost net income for the 1986 fourth quarter to 88.6 mln dlrs from net income of 36.7 mln dlrs for the 1985 quarter For the full year Hartford said it earned 329 mln dlrs up from 151.4 mln dlrs in 1985 Hartford said results for the year were aided by a gain of 46.5 mln dlrs on the sale of its remaining 52 pct stake in Abbey Life Group PLC For 1985 the company posted a gain of 14.3 mln dlrs on the sale of 48 pct of Abbey Life Hartford said total property casualty and life health written premiums rose 25 pct in 1986 to eight billion dlrs from 6.4 billion dlrs in 1985 Reuter SEC PROBES 1986 TRE TRE TAKEOVER ATTEMPT WASHINGTON March 2 The federal Securities and Exchange Commission SEC is looking for possible securities laws violations in connection with an unsuccessful 1986 bid by Hollywood producer Burt Sugarman to take over TRE Corp attorneys contacted by SEC investigators said During the takeeover attempt a unit of Sugarman's Giant Group Ltd at one point held a 9.9 pct stake in TRE It had help in that effort from Jefferies Group Inc a Los Angeles investment banking firm which sold it an option on a portion of the shares Sugarman eventually acquired In addition a company controlled by Sugarman raised 35 mln dlrs in a debt offering underwritten by Drexel Burnham Lambert Inc with help from Jefferies and used a portion of the proceeds to buy TRE stock Finally Reliance Group Holdings Inc acquired nearly six pct of TRE according to an SEEC filing The attorneys who asked not to be identified said the SEC was investigating whether Sugarman and other firms with TRE holdings were working together without disclosing their cooperation as would be required by the federal securities laws One attorney said SEC probers also were examining whether Sugarman and Drexel had made adequate disclosures of its intended usage of the proceeds in the prospectus for the 35 mln dlr bond offering A TRE spokesman confirmed that TRE since December a unit of Aluminum Co of America had been contacted by SEC investigators and was cooperating with the probe The spokesman added that TRE Chairman Leopold Wyler had been interviewed by the SEC probers A Jefferies spokesman said the SEC had asked for information a few months ago as part of an informal probe The spokesman said Jefferies had cooperated with the agency and had heard nothing more since that time To the best of our knowledge Jefferies is not the target of a formal SEC investigation in connection with the TRE bid he said A Drexel spokesman acknowledged that his firm had underwritten the debt offering for Sugarman but added We had nothing to do with TRE As a matter of policy the SEC routinely declines to comment on its enforcement activities Reuter REGAN DEPARTURE MAKES 3RD VOLCKER TERM LIKELY By Peter Torday Reuters WASHINGTON March 2 Last week's White House shake up has increased the odds that Federal Reserve Board chairman Paul Volcker a symbol of strength in a government reeling from the arms to Iran scandal will serve a third term sources close to the Fed say But they said that no decision on the appointment which must be filled this August has been taken by the White House and Volcker too has not made up his mind Former White House Chief of Staff Donald Regan who resigned last week when ex senator Howard Baker was named as his replacement was implacably opposed to Volcker and tried often to undermine him It is an open secret in Washington that Regan tried to ensure that Volcker first appointed in 1979 by President Carter will not be offered a third term by President Reagan Only Volcker's key allies in the Reagan administration Vice President George Bush and Treasury Secretary James Baker kept Regan's recent maneuvering at bay the sources said Sources close to the administration say Regan leaked a story quickly shot down by others in the administration that Beryl Sprinkel chairman of the council of economic advisers had been chosen to replace Volcker But as the administration's credibility was increasingly under fire it became clear that Regan's power to bring about such changes was on the wane The sources said New White House Chief of Staff Howard Baker has a very good relationship with his namesake at the Treasury Department and is likely to respect his views on the Fed chairmanship As a moderate Republican Baker is also unlikely to share the right wing's opposition to Volcker This new White House is going to need all the strength it can get said one source when asked about the possibility of Volcker's reappointment Paul Volcker is deeply respected in financial markets both in the United States and around the world At a time when the stability of the dollar and the viability of major debtor nations are in question Volcker's departure would definitely undermine U.S. leadership foreign exchange analysts say U.S. officials say Volcker works very closely with Treasury Secretary Baker on issues like international debt and global economic cooperation The two men seem only to differ on how far to deregulate the banking industry but recent statements by Volcker in which he adopted a more liberal attitude on deregulation signalled the politically independent central bank is coming around at least partially to the Treasury position And a recent statement by a Reagan administration official that the two men saw exactly eye to eye on the dollar was seen as an indication of Baker's support for the Fed chairman Baker is understood to have played a key role in Volcker's reappointment to the Fed in mid 1983 The sources said Baker respects Volcker and when appointed Treasury Secretary in February 1985 he decided to ensure a good working relationship in part because he believed the two key government economic institutions have to work closely Regan Treasury Secretary during President Reagan's first term was formerly head of Wall Street's largest brokerage firm Merrill Lynch and came to Washington determined to be America's pre eminent economic spokesman He developed a deep antipathy for Volcker whose political skills undermined that ambition and who financial markets took much more seriously But the sources said Volcker would have to be invited to stay Is the president going to ask him he wouldn't stay otherwise said one He'd have to be asked said Stephen Axilrod formerly staff director of monetary policy at the Fed and now vice chairman of Nikko Securities Co International Otherwise the list of potential candidates is not awe inspiring And if Volcker left this Augsut he would leave behind one of the most inexperienced Fed Boards in years Many analysts believe this lack of collective experience the four sitting members were all appointed within the last three years is dangerous coming at a time when the global economy is threatened by instability An experienced successor therefore would seem a necessity One widely mentioned possibility is Secretary of State George Shultz whose experience as Treasury Secretary under Preesident Nixon and background as a trained economist would make him ideal But Shultz too may have been damaged by the arms to Iran scandal while vice chairman Manuel Johnson is regarded at 37 years old as too young for the job Other potential candidates include economist Alan Greenspan frequently an informal presidential economic adviser New York Fed President E Gerald Corrigan Federal Deposit Insurance Corp chairman William Seidman and Sprinkel Long a Regan protege Sprinkel's chances may be damaged by his patron's departure from the White House Reuter CBT FEBRUARY VOLUME DOWN 14 PCT FROM YEAR AGO CHICAGO March 2 February volume at the Chicago Board of Trade CBT declined 14 pct from the year ago month to 8,191,266 contracts the exchange said A relatively steady interest rate climate reduced volume in the most active contract Treasury bond futures by 17.5 pct from a year ago to 4,307,645 contracts However trading in most agricultural futures contracts increased last month led by oats and corn futures Oats volume tripled to 27,662 contracts and corn volume increased 35 pct to 580,204 contracts Wheat and soybean oil futures activity also rose from a year ago while soybean and soybean oil volume slipped the exchange said Major Market Index futures increased activity 37 pct during the month with 194,697 contracts changing hands Reuter USSR WHEAT BONUS RUMORS PERSIST DESPITE DENIALS WASHINGTON March 2 Grain trade representatives continued to speculate that the Reagan administration will offer subsidized wheat to the Soviet Union while U.S. Agriculture Department officials said there was no substance to the reports It's pure fiction said one senior official at USDA's Foreign Agricultural Service referring to the rumor that the administration would make an export enhancement offer to Moscow in the next two to three weeks An aide to Agriculture Secretary Richard Lyng who asked not to be identified said there was nothing to substantiate the speculation which he said was started by somebody fanning the wheat market Wheat futures strengthened today partly on the basis of the speculation One lobbyist with close connections to the Reagan administration said a Soviet trade team told private grain trade officials in New York last week that Moscow would buy as much as four mln tonnes of U.S. wheat much of it before mid year if it was competitively priced Alexander Ivlev an official with Amtorg a Soviet trading organization told Reuters he had no information to substantiate the rumors of an imminent wheat subsidy offer but said that Moscow would consider buying U.S. wheat if it was competitively priced We don't care if it is EEP what we the Soviets are looking for is competitive prices Ivlev said If they the administration are interested in selling it wheat they should find ways to do it Reuter CANADIAN SEAFARERS THREATEN STRIKE MONTREAL March 2 Canadian seafarers are almost certain to go on strike this spring in a refusal to meet rollbacks in wages and benefits asked for by their employers Seafarers International Union official Roman Gralewicz said It's 99.9 percent I guarantee you a strike Gralewicz said in an interview The union represents about 2,300 workers on the Great Lakes and Canada's East and West coasts Contract talks broke off in January and a conciliator has been appointed to try to help settle the dispute The current contract expires at the end of March The seafarers employers are also asking for a reduction in crew levels a move which the union said would cost about 400 jobs Reuter REUTERS RTRSY IN REAL ESTATE MARKET VENTURE NEW YORK March 2 Reuters Holdings PLC said its Reuters Information Services Inc unit will join Real Estate Financing Partnership Philadelphia to offer an electronic market access system for commercial property financing Reuters said the system named Real Estate Select View Program or RSVP will use its private communications network to provide a confidential method for the purchasing selling and financing of commercial property The system set for testing in August in selected U.S. cities is expected to be operational 90 days after initial testing Reuters said Reuter CONSTRUCTION CONTRACTING DOWN THREE PCT IN JAN NEW YORK March 2 Contracting for future construction work declined by three pct in January to an annualized rate of 236.1 billion dlrs a report on the industry said The report by the F.W. Dodge Division of McGraw Hill Information Systems Co said a 10 pct reversal of nonbuilding construction was largely responsible for the month's setback from December's higher level Residential building eased three pct in January while contracts for commercial industrial and institutional buildings rebounded slightly according to the report Nonbuilding construction which soared to an annualized rate of 47.8 billion dlrs in December when last year's only major electric power plant was started fell back 10 pct to 43.1 billion Dodge said contracting for highway and bridge construction advanced five pct in January However available funding for 1987 construction could dry up if Congress fails to act after the Federal highway program runs out of carryover spending authority Nonresidential buildings edged up one pct in January to an annualized rate of 77.6 billion Contracting for institutional structures such as schools and health facilities was the reason for the gain the report said Residential building was valued at 115.4 billion dlrs in January a decrease of three pct from December's seasonally adjusted rate the report stated However demand will be strong for single family units supported by falling mortgage rates but multi family buildings will not be in high demand as a result of the tax reform according to the report Reuter EC MINISTERS BID TO SAVE DAIRY ACCORD By Jonathan Clayton Reuters BRUSSELS March 3 European Community EC farm ministers were fighting hard early today to prevent a deal on cutting overflowing milk production from turning sour before trying to agree widescale reforms in other surplus sectors Meanwhile protests from angry European farmers over successive attempts to scale down unwanted Community food production appeared to be gathering strength In the northeastern Spanish city of Saragossa thousands of Spanish farmers battled with police during a march to demand a better deal from Brussels The farmers traded stones for tear gas and rubber pellets and occupied local government buildings while in the southern city of Malaga citrus growers dumped more 20 tonnes of lemons on the streets in protest at EC duties Towards the end of last week about 10,000 angry West German farmers marched through the streets of Hanover burning effigies of Agriculture Minister Ignaz Kiechle while in France pig farmers barricaded roads in protest at falling prices Europe's 12 mln farmers are furious over plans by the European Commission to cut subsidised prices and severely limit farmers automatic right to sell unwanted food into public stores at high guaranteed EC prices In the toughest ever proposals for the annual price review at which EC ministers set the levels of subsidies Agriculture Commissioner Frans Andriessen has included measures that could result in price cuts for some products of up to 11 pct The plans form part of an on going campaign to reform surplus creating farm policies that have become a political embarrassment at home and commercial flash point abroad and threatened to leave the Community with no cash for other areas Andriessen's latest package comes only months after a decision to cut dairy production by 9.5 pct over two years and to slash beef prices by around 10 pct That decision agreed in outline last December after virtually nine days of non stop negotiations was hailed as the most significant step yet in the reform offensive but has since run into difficulties over the fine print West Germany and Ireland are objecting to the new rules governing the sales of surplus butter into cold stores but the Commission is loathe to abandon its position as the accord has been used as the inspiration for Andriessen's latest package Ministers failed yesterday to overcome the problem and resumed negotiations in a bid to finalise the details before starting the price review which is confidently predicted to last many months EC farm spending currently swallows two thirds of an overall annual budget of around 40 billion dlrs and is almost entirely blamed for a projected budget shortfall later this year of some 5.7 billion dlrs Reuter CALNY INC CLNY SUES PEPSICO INC PEP SAN MATAO Calif March 2 Calny Inc said it has filed a multi million dlr suit against PepsiCo Inc and its La Petite Boulangerie unit Calny which holds 15 La Petite Boulangerie franchises alleges it and PepsiCo breached their agreements with Calny by failing to support the franchises in a number of ways The company further alleges that PepsiCo and La Petite Boulangerie had fiduciary responsibilities to Calny because of the longstanding relationship between Calny and Taco Bell also a PepsiCo subsidiary Calny operates 143 Taco Bell restaurants Calny said Pepsico misrepresented the readiness of the La Petite Boulangerie to expand outside San Francisco and misrepresented costs involved in operating the restaurants Reuter BRANIFF BAIR FEBRUARY LOAD FACTOR UP SLIGHTLY DALLAS March 2 Braniff Inc said its load factor or precentage of seats filled was 50.5 pct in February up slightly from 50.2 pct for the same month last year Braniff said traffic for the month rose 44 pct to 210.5 mln revenue passenger miles from 146.2 mln a year ago A revenue passenger mile is one paying passenger flown one mile The airline said capacity for February was up 43.3 pct to 417.2 mln available seat miles from 291.1 mln in 1986 Year to date it said load factor was 50.5 pct vs 48.3 pct traffic was 436 mln revenue passenger miles vs 295.4 mln and capacity was 863.3 mln available seat miles vs 611.4 mln Reuter KENTUCKY CENTRAL LIFE KENCA SETS PAYOUT LEXINGTON Ky March 2 Kentucky Central Life Insurance Co said it declared a semi annual dividend of 55 cts per share payable March 31 to shareholders or record March 19 The dividend is equal to the company's previous semi annual payout Reuter BANK OF NEW ENGLAND CORP BKNE QTLY DIVIDEND BOSTON March 2 Qtly div 28 cts vs 28 cts prior Pay April 20 Record March 31 Reuter JAPAN UNEMPLOYMNENT RISES TO RECORD IN JANUARY TOKYO March 3 Japan's seasonally adjusted unemployment rate rose to a record 3.0 pct in January the worst since the Government started compiling unemployment statistics under its current system in 1953 up from the previous record 2.9 pct in December the government's Management and Coordination Agency said Unemployment was up from 2.8 pct a year earlier Unadjusted January unemployment totalled 1.82 mln people up from 1.61 mln in December and 1.65 mln a year earlier Male unemployment in January remained at 2.9 pct equal to the second worst level set last December Record male unemployement of 3.1 pct was set in July 1986 Female unemployment in January remained at 3.0 pct equal to the record level marked in April August September and December last year January's record 3.0 pct unemployment rate mainly stemmed from loss of jobs in manufacturing industries particularly in export related firms due to the yen's continuing appreciation against the dollar officials said Employment in manufacturing industries fell 380,000 from a year earlier to 14.30 mln including 1.83 mln employed in the textile industry down 190,000 from a year earlier and 1.06 mln in transport industries such as carmakers and shipbuilders down 170,000 REUTER FORD F EUROPE EARNINGS UP 71 PCT LAST YEAR GENEVA March 3 Ford Europe's net earnings soared by 71 per cent last year to 559 mln dlrs Kenneth Whipple chairman of Ford Europe said Whipple here to attend the Geneva Auto Show which opens on Thursday said that the Ford Motor Co unit had sold a record 1.5 million vehicles in Europe in 1986 Net earnings were 326 mln dlrs in 1985 Sales in 1986 represented 11.8 per cent of the European market share Whipple said Ford will invest 1.2 billion dollars in Europe in 1987 and a total of seven billion over the next seven years he added Reuter REAGAN'S CIA MAN WITHDRAWS VICTIM OF IRAN SCANDAL WASHINGTON March 2 President Reagan's nominee as director of the Central Intelligence Agency CIA Robert Gates withdrew his name from consideration by the Senate in the face of a long battle for confirmation His withdrawal was announced at a White House news conference by Reagan's new Chief of Staff Howard Baker who said the President had accepted it with great regret Gates now deputy head of the CIA had been questioned about CIA involvement in the Iran contra scandal and leading senators had warned his nomination was in trouble Baker said Gates would remain as deputy director of the spy agency REUTER SOUTH KOREA'S LEADING INDICATORS FALL IN DECEMBER SEOUL March 3 South Korea's index of leading indicators fell 0.1 pct to 164.1 base 1980 in December after a 0.1 pct rise in November representing a 16.1 pct year on year gain from December 1985 Economic Planning Board provisional figures show The index is based on 10 indicators which include export values letters of credit received warehouse stocks M 1 and M 3 money supply figures and the composite stock exchange index REUTER DENG SAYS CHINA'S TROUBLES OVER PEKING March 3 Chinese leader Deng Xiaoping told visiting U.S. Secretary of State George Shultz China's recent troubles were over The two discussed Washington's scandal over U.S. Arms sales to Iran and China's political situation after the fall of Communist Party leader Hu Yaobang Deng said I know the President has had some difficulties but I think now it doesn't matter When one is running a government one has to deal with troubles As for the troubles we recently encountered they are over Deng added REUTER JAPANESE ECONOMIST SEES STABLE YEN DOLLAR RATES KUALA LUMPUR March 3 The yen should stabilize at around 152 to 153 to the U.S. Dollar for about a year the Bank of Tokyo's economic adviser Koei Narusawa said Both sides are showing clear interest to secure stability of the currencies The major target of the Japanese government is to maintain the yen at above 150 at least for the rest of the year he told reporters during a brief visit to Malaysia Narusawa said the U.S. Is unlikely to push the yen up further because this might spark off inflation and depress the U.S. Economy before the 1988 presidential election The yen is trading at around 153.70 to the dollar REUTER OPEC WITHIN OUTPUT CEILING SUBROTO SAYS JAKARTA March 3 Opec remains within its agreed output ceiling of 15.8 mln barrels a day and had expected current fluctuations in the spot market of one or two dlrs Indonesian Energy Minister Subroto said He told reporters after meeting with President Suharto that present weakness in the spot oil market was the result of warmer weather in the U.S. And Europe which reduced demand for oil Prices had also been forced down because refineries were using up old stock he said He denied that Opec was exceeding its agreed production ceiling Asked what Opec's output level was now he replied Below 15.8 mln barrels per day He did not elaborate He said there appeared to have been some attempts to manipulate the market but if all Opec members stick by the cartel's December pricing agreement it would get through present price difficulties He predicted that prices would recover again in the third and fourth quarters of 1987 He also reiterated that there was no need for an emergency Opec meeting He said Opec had expected to see some fluctuations in the spot price We hope the weak price will be overcome and predict the price will be better in the third and fourth quarters Refiners he said appeared to have used up old stock deliberately to cause slack demand in the market and the price to fall But Opec would get through this period if members stuck together REUTER OFFICIAL INQUIRY SET FOR AUSTRALIAN WHEAT INDUSTRY CANBERRA March 3 The government's industry aid and protection review body the Industries Assistance Commission IAC will hold a 12 month inquiry into the Australian wheat industry Primary Industry Minister John Kerin said The IAC has been asked to report on the need for assistance to the industry and the nature duration and extent of any aid he said in a statement He said the inquiry will be the first step in setting marketing arrangements to apply after June 30 1989 when the underwriting and pricing provisions of the 1984 Wheat Marketing Act expire Kerin said the broad ranging reference would allow a full examination of all aspects of the wheat marketing system The inquiry will be required to take into account changes which have taken place in the industry as a result of the agricultural policies of major wheat producing countries and the industry's capacity to adjust to any recommended changes he said The inquiry is at an important time for the wheat industry as the substantial fall in world prices is likely to trigger underwriting support from the government for the first time he said Kerin was referring to the government's underwriting of the guaranteed minimum price paid to wheatgrowers by the Australian Wheat Board near the start of the season The IAC's report will be due at the same time as the findings of the current Royal Commission into Grain Storage Handling and Transport Kerin said He said the timing of the IAC inquiry would allow its findings and those of the Royal Commission to be considered in later negotiations on wheat marketing arrangements between the federal and state governments and the industry REUTER COFFEE TRADERS EXPECT SELLOFF AFTER ICO TALKS FAIL By Lisa Vaughan Reuters LONDON March 3 The failure of the International Coffee Organization ICO to reach agreement on coffee export quotas could trigger a massive selloff in London coffee futures of at least 100 stg per tonne today coffee trade sources said Prices could easily drop to as low as 1.00 dlr or even 80 cents a lb this year from around 1.25 dlrs now they said A special meeting between importing and exporting countries ended in a deadlock late yesterday after eight days of talks over how to set the quotas No further meeting to discuss quotas was set delegates said Quotas the major device used to stabilize prices under the International Coffee Agreement were suspended a year ago after prices soared following a damaging drought in Brazil With no propects for quotas in sight heavy producer selling initially and a price war among commercial coffee roasting companies will ensue the trade sources predicted Lower prices are sure to trickle down to the supermarket shelf this spring coffee dealers said The U.S. And Brazil the largest coffee importer and exporter respectively each laid the blame on the other for the breakdown of the talks Jon Rosenbaum U.S. Assistant trade representative and delegate to the talks said in a statement after the council adjourned A majority of producers led by Brazil were not prepared to negotiate a new distribution based on objective criteria We want to insure that countries receive export quotas based on their ability to supply the market instead of their political influence in the ICO Brazilian Coffee Institute IBC President Jorio Dauster countered Negotiations failed because consumers tried to dictate quotas not negotiate them Previously quotas were determined by historical amounts exported which gave Brazil a 30 pct share of a global market of about 58 mln 60 kilo bags A majority of producers wanted quotas to continue under this basic scheme But most consumers and a maverick group of eight producers proposed carving up the export market on the basis of exportable production and stocks which would reduce Brazil's share to 28.8 pct Consumer delegates said this method would reflect changes in many countries export capabilities and make coffee more readily available to consumers when they need it A last minute attempt by Colombia the second largest exporter to rescue the talks with a compromise interim proposal could not bring the two sides together Delegates speculated Brazil's financial problems illustrated by its recent suspension of interest payments on bank debt have increased political pressure on the country to protect its coffee export earnings Developing coffee producing countries that depend heavily on coffee earnings particularly some African nations and Colombia are likely to be hurt the most by the ICO's failure to agree quotas analysts said The expected drop in prices could result in losses of as much as three billion dlrs in a year producer delegates forecast The ICO executive board will meet March 31 but the full council is not due to meet again until September delegates said REUTER EC MINISTERS POSTPONE TALKS ON SAVING DAIRY PACT BRUSSELS March 3 European Community EC farm ministers early today abandoned talks aimed at saving an agreement on cutting excessive milk production after making no progress in over 12 hours of negotiations The ministers will resume talks at 10.00 local time in a bid to clear the way for a full scale review of proposed reforms for other surplus sectors Diplomats said member states were unable to settle differences over new rules limiting farmers automatic right to sell unwanted butter at high guaranteed prices into EC cold stores West Germany and Ireland are opposed to the steps REUTER REAGAN APPROVAL RATING FALLS TO FOUR YEAR LOW NEW YORK March 3 President Reagan's approval rating fell after the Tower Commission criticised his handling of the Iran arms scandal a New York Times CBS poll indicates The poll found 51 pct of those surveyed thought he was lying when he said he did not remember if he had approved the original arms sales to Iran and 35 pct thought he was telling the truth The poll found 42 pct of those surveyed approved Reagan's handling of his job and 46 pct disapproved The approval rating was the lowest since January 1983 when 41 pct approved of the way Reagan was doing his job REUTER EARTHQUAKES CONTINUE TO SHAKE NORTHERN NEW ZEALAND WELLINGTON March 3 Earthquakes and aftershocks are still shaking areas of northern New Zealand following yesterday's strong tremor which left 3,000 people homeless Four earthquakes measuring up to 4.5 on the Richter scale have hit the Bay of Plenty and Waikato region in the north east since midnight yesterday 1200 GMT No casualties have been reported and no further major damage civil defence sources said Twenty five people were treated for bone fractures after yesterday's shock A government seismologist said from Rotorua in the North Island some five tremors were being recorded every 10 minutes Today's quakes were felt over an area of 100 square km the seismologist added A state of civil defence emergency in the area was declared yesterday and is still in force with schools closed and access to the worst hit towns of Edgecumbe Whakatane and the forestry town of Kawerau severely restricted Yesterday's quake measured 6.25 on the Richter scale The seismologist said if the pattern of other large earthquakes was followed the shocks would continue for one to several weeks declining in frequency and magnitude But the chance of a further large shock could not be ruled out Civil defence officials said major roadslips and landslides in the area are being cleared with power and water restored to most areas Rail lines twisted by earth movements are being repaired Prime Minister David Lange visited the region today before flying to Auckland to attend a South Pacific Forum conference of foreign ministers A small force of troops was moved into the area to assist civil defence workers and volunteers Civil defence sources said people would shortly begin to return to their homes when the buildings are declared safe REUTER N.Z. QUARTERLY CURRENT ACCOUNT DEFICIT NARROWS WELLINGTON March 3 New Zealand's current account deficit for the quarter ended December 31 1986 narrowed to 567 mln dlrs from 738 mln revised down from 742 mln for the September quarter and from 733 mln a year earlier the statistics department said The deficit for the year ended December narrowed to 2.75 billion dlrs from 2.91 billion dlrs revised down from 2.92 billion for the year ended September The deficit for calendar 1985 was 2.61 billion The December quarter showed a 182 mln dlr surplus for merchandise trade unchanged from the September quarter surplus which was revised down from 271 mln dlrs The 1985 December quarter showed a 13 mln dlr deficit Imports for the December 1986 quarter were 2.655 billion against 2.883 billion in the September quarter and 2.454 a year earlier Exports were 2.837 billion against 3.065 billion and 2.440 billion Imports for the year ended December 1986 were 10.74 billion dlrs compared with 11.14 billion in 1985 Exports were 11.20 billion against 11.36 billion Government borrowing stood at 9.26 billion dlrs for calendar 1986 against 3.15 billion for 1985 Borrowing in the December quarter rose to 3.92 billion from 1.79 in the September quarter and 611 mln a year earlier Repayments stood at 5.5 billion for the year up from 3.1 billion in 1985 Repayments in the December quarter accounted for 1.4 billion dlrs against 260 mln in the September quarter and 334 mln a year earlier Official reserves totalled 7.205 billion dlrs at end December compared with 4.723 billion at end September and 3.255 billion one year earlier REUTER AMERICAN AIRLINES TO ANNOUNCE BUYS NEWSPAPER SAYS NEW YORK March 3 American Airlines Inc is expected to announce purchases from Airbus Industrie Boeing Co BA and General Electric Co GE amounting to 2.5 billion dlrs the New York Times said The paper quoted unnamed industry sources as saying American will buy 25 wide bodied planes from Airbus 15 wide bodies from Boeing and 80 engines from GE It said American split the order between Airbus and Boeing to get better prices and conditions It said the 80 CF6 80C2 engines are worth more than five mln dlrs each REUTER TRANSAMERICA SELLS OCCIDENTAL LIFE AUSTRALIA MELBOURNE March 3 Equity investment company Battery Group Ltd said it had agreed to buy Occidental Life Insurance Co of Australia Ltd from TransAmerica Corp TA of the U.S. For 105 mln Australian dlrs The acquisition has been made possible by the efforts of its major shareholder Pratt and Co Financial Services Pty Ltd Battery Group said in a statement The purchase will be partly funded by the issue of eight mln shares at 4.50 dlrs each and four mln free options to the Pratt Group controlled by entrepreneur Dick Pratt plus four mln shares to professional investors at 4.50 each it said The balance will be funded by debt Battery Group said The acquisition is subject to the approval of its shareholders On completion of the share placements Pratt Group will effectively have 51 pct of Battery's enlarged capital assuming exercise of all options it said Battery now has 22 mln shares on issue Battery said Occidental Life is a major underwriter of individual term life insurance and a recent but fast growing entrant in the individual account superannuation market It has some 200 mln dlrs in funds under management REUTER MALAYSIA RE IMPOSES EXPORT DUTIES ON RUBBER KUALA LUMPUR March 3 The Malaysian government said it has re imposed export duties on rubber at 3/8 cent per kilo after the gazetted price moved above the threshold price of 210 cents per kilo The gazetted price effective March 1 rose to 213 1/2 cents per kilo from February's 207 The duty for research remains at 3.85 cents per kilo and the replanting duty is also unchanged at 9.92 cents REUTER MALAYSIA RAISES DUTY ON PROCESSED PALM OIL KUALA LUMPUR March 3 The government said it raised the export duty on processed palm oil PPO to 64.06 ringgit per tonne from 40.96 ringgit effective from March 1 Export duty on crude palm oil CPO was unchanged at 16.06 ringgit per tonne The gazetted price of PPO rose to 796.8604 ringgit per tonne from 719.8286 That of CPO remained at 617.8238 ringgit The export duty and gazetted price of palm kernel were left unchanged at 191.15 and 955.75 ringgit per tonne respectively REUTER JAPANESE DEMAND FOR U.K. GILTS SEEN RISING TOKYO March 3 Japanese investor interest in British gilt edged securities is growing rapidly due to expectations sterling will remain stable despite the drop in oil prices and on calculations gilt prices will firm bond managers said Japanese British and U.S. Securities houses have been expanding inventories of gilts to meet demand from investors seeking capital gains including city and trust banks which have been active on the U.S. Treasury market they said Dealing demand for gilts with coupons around 10 pct has been getting stronger the general manager of the local office of a British securities firm said On the other hand major long term investors such as Japanese insurance companies are not very enthusiastic about buying British securities ahead of the March 31 close of the Japanese financial year traders said These investors who must convert yen into sterling through dollars for British securities purchases appear to be buying in London rather than in Tokyo a bond manager for a British securities house said The sterling yen rate was about 240.34/44 today up from 234.50 at the start of the calendar year and a narrow range of 230 to 234 late last year Many bond traders in Tokyo are doubtful that sterling will further appreciate steeply However gilts may benefit from further declines in U.K. Interest rates they said The U.K. Government is in no hurry to issue more bonds suggesting further market improvement and continuing demand from brokers here said Laurie Milbank and Co assistant manager Machiko Suzuki She said she expected the yield on the actively traded 11 3/4 pct gilt due March 2007 to dip below 9.5 pct against 9.581 pct at yesterday's close in London REUTER JAPAN'S UNEMPLOYMENT RATE SEEN RISING TO 3.5 PCT By Jeff Stearns Reuters TOKYO March 3 Japan's unemployment rate is expected to continue to climb to about 3.5 pct within the next year from January's three pct record senior economists including Susumu Taketomi of Industrial Bank of Japan said December's 2.9 pct was the previous worst level since the government's Management and Coordination Agency began compiling statistics under its current system in 1953 There is a general fear that we will become a country with high unemployment said Takashi Kiuchi senior economist for the Long Term Credit Bank of Japan Ltd The government which published the January unemployment figures today did not make any predictions At present we do not have a forecast for the unemployment rate this year but it is difficult to foresee the situation improving a Labour Ministry official said Finance Minister Kiichi Miyazawa said the government had expected the increase and had set aside money to help 300,000 people find jobs in fiscal 1987 beginning in April Prime Minister Yasuhiro Nakasone told a press conference the record rate underlines the need to pass the 1987 budget which has been held up by opposition to proposed tax reforms The yen's surge has caused layoffs in the mainstay steel and shipbuilding industries Other export dependent industries such as cars and textiles have laid off part time employees and ceased hiring economists said Although the growing service industry sector has absorbed a great number of workers the trend is starting to slow down said Koichi Tsukihara Deputy General Manager of Sumitomo Bank Ltd's economics department However other economists disagreed saying the service sector would be able to hire workers no longer needed by the manufacturing sector over the next five years The economists said the service sector should grow as the government stimulates domestic demand under its program to transform the economy away from exports Although Japanese unemployment rates appear lower than those of other industrialised nations methods for calculating statistics make them difficult to compare economists warned The three pct figure could translate into a relatively high figure if European methods were used one economist said More than half of January's 170,000 increase in jobless from a year earlier were those aged between 15 and 24 Sumitomo's Tsukihara said REUTER SOUTH KOREAN TRADE SURPLUS NARROWS IN FEBRUARY SEOUL March 3 South Korea's customs cleared trade surplus narrowed to 110 mln dlrs in February from 525 mln in January provisional trade ministry figures show In February 1986 there was a deficit of 264 mln dlrs February exports rose to 2.87 billion dlrs fob from 2.83 billion in January and 2.30 billion in February 1986 CIF imports were 2.76 billion against 2.31 billion in January and 2.57 billion in February last year REUTER TAIWAN REJECTS TEXTILE MAKER PLEA ON EXCHANGE RATE TAIPEI March 3 Central bank governor Chang Chi cheng rejected a request by textile makers to halt the rise of the Taiwan dollar against the U.S. Dollar to stop them losing orders to South Korea Hong Kong and Singapore a spokesman for the Taiwan Textile Federation said He quoted Chang as telling representatives of 19 textile associations last Saturday the government could not fix the Taiwan dollar exchange rate at 35 to one U.S. Dollar due to U.S. Pressure for an appreciation of the local currency The Federation asked the government on February 19 to hold the exchange rate at that level The federation said in its request that many local textile exporters were operating without profit and would go out of business if the rate continued to fall It said the Taiwan dollar has risen almost 14 pct against the U.S. Dollar since September 1985 while the South Korean won climbed only four pct The Singapore and Hong Kong dollars remained stable against the U.S. Unit in that period it said Many local bankers and economists predict Taiwan's dollar will rise to between 32 and 33 per U.S. Dollar by year end Chang was quoted as saying this would depend on Taiwan's ability to reduce its trade surplus with the U.S. This year The surplus widened to a record 13.6 billion U.S. Dlrs in calendar 1986 from 10.2 billion in 1985 official figures show Taiwan's textile exports fell by almost four pct in January to 562 mln U.S. Dlrs from 583 mln in January 1986 the same figures show Textiles are Taiwan's second largest export earner after electrical and electronic products Textile exports surged to 7.8 billion U.S. Dlrs last year from 6.2 billion in 1985 Exports to the U.S. Last year were worth 2.8 billion U.S. Dlrs REUTER EGYPT ALLOWS FUGITIVE LIBYANS STAY CAIRO March 3 Egypt allowed five fugitive Libyan soldiers who landed in a military plane in the far south of the country last night to stay and flew them to Cairo official sources said It appeared the government had agreed to demands by the five two officers and three privates for political asylum but there was no immediate announcement Official sources said Egyptian servicemen flew the Libyans north from Abu Simbel in their C 130 transport plane The status of the sixth Libyan on board the pilot was not immediately known REUTER U.S. ASKS JAPAN TO END AGRICULTURE IMPORT CONTROLS TOKYO March 3 The U.S. Wants Japan to eliminate import controls on agricultural products within three years visiting U.S. Under Secretary of State for Economic Affairs Allen Wallis told Eishiro Saito Chairman of the Federation of Economic Organisations Keidanren a spokesman for Keidanren said The spokesman quoted Wallis as saying drastic measures would be needed to stave off protectionist legislation by Congress Wallis who is attending a sub cabinet level bilateral trade meeting made the remark yesterday in talks with Saito Wallis was quoted as saying the Reagan Administration wants Japanese cooperation so the White House can ensure any U.S. Trade bill is a moderate one rather than containing retaliatory measures or antagonising any particular country He was also quoted as saying the U.S. Would be pleased were Japan to halve restrictions on agricultural imports within five years if the country cannot cope with abolition within three the spokesman said Japan currently restricts imports of 22 agricultural products A ban on rice imports triggered recent U.S. Complaints about Japan's agricultural policy REUTER JAPAN MOVES TO TIGHTEN CHIP EXPORT CURBS TOKYO March 3 The Ministry of International Trade and Industry MITI acted to tighten restrictions on microchip exports to countries other than the U.S. To preserve a U.S. Japan pact on semiconductor trade but major Japanese chipmakers doubt its usefulness A MITI spokesman said his ministry had asked chipmakers to issue certificates to specified trading houses stating they are authorised exporters Trading houses applying for a MITI export licence will be required to show such a certificate but those without it will not automatically be denied licences he said But some industry officials predicted any government measures were likely to have limited effect as long as the world semiconductor market remained weak U.S. Government and industry officials have complained repeatedly that Japanese chipmakers continue to sell at below cost to third countries despite the July agreement Japanese firms and officials in turn argue the flow of cheap chips to third countries is due to grey market sales by third party brokers who seek to profit from the gap between low prices in Japan and higher prices based on production costs and set for Japanese makers under the agreement The MITI spokesman said If the percentage of grey market is increasing for one specific company it suggests they are distributing their products through their sales network knowing they will be exported by some means In that case we will ask them what they are doing to reduce the figure MITI earlier asked makers to cut output of certain chips by 10 pct in first quarter 1987 spokesmen for the firms said But they doubt the usefulness of the latest move As long as there is a gap between prices set under the pact and market prices there will be people who want to exploit the gap to make money a Hitachi Ltd HIT.T spokesman said REUTER FINNISH UNEMPLOYMENT AT 6.7 PCT IN DECEMBER HELSINKI March 3 Finnish unemployment was 6.7 pct in December last year compared with 6.8 pct in November and 6.1 pct in December 1985 the Central Statistical Office said It said 173,000 people were unemployed in December 1986 174,000 in November and 157,000 in December 1985 REUTER BANKERS SEE SHARP RISE IN THAI FOREIGN RESERVES BANGKOK March 3 Thailand's improving economy will likely cause foreign reserves to increase to at least five billion dlrs by end 1987 from a record of nearly 4.2 billion at end February private bankers said Bank of Thailand statistics show foreign reserves rose to 3.95 billion at end January from 3.03 billion a year earlier Nimit Nonthapanthawat chief economist at the Bangkok Bank Ltd said Thailand's strong export performance its relatively high interest rates foreign participation in its stock market and growing foreign investment especially from Japan contributed to the projected sharp rise Thai exports rose 19.4 pct in 1986 and are expected to expand another 15 pct this year bankers said A U.S. Embassy report said last month Thailand could achieve five pct real gross domestic product growth in 1987 up from a projection of 3.8 pct for 1986 and 3.7 pct in 1985 Nonthapanthawat said if economic growth continues at its current pace and oil prices and major currencies remain stable the five billion 1987 reserves target can easily be reached Thailand calculates foreign reserves to include gold special drawing rights and convertible currencies The target is equivalent to five and a half months worth of imports REUTER SWEDEN HAS CURRENT PAYMENTS SURPLUS IN 1986 STOCKHOLM March 3 Sweden had a 1986 current balance of payments surplus of 7.6 billion crowns compared with a deficit of 10.1 billion the preceding year according to preliminary figures from the central bank The December current account had a 100 mln crowns deficit against a yearago 200 mln deficit.December trade balance was 2.3 billion surplus against yearago two billion The trade balance showed a 1986 surplus of 33.2 billion crowns compared with a 15.8 billion surplus in 1985 the bank said REUTER NEUTRAL BUDGET EXPECTED IN SINGAPORE SINGAPORE March 3 Singapore's Finance Minister Richard Hu is expected to announce a neutral budget tomorrow with no major tax changes for the 1987/88 year starting April 1 bankers and economists told Reuters They said with real growth at an estimated 1.9 pct in calendar 1986 indicating signs of recovery from the 1.7 pct shrinkage in 1985 the government was likely to hold its course and wait for measures introduced in last year's budget to work Last March Hu cut corporation tax to 33 pct from 40 pct and income tax was reduced by the same margin Last year the government also reduced wage costs by introducing a wage freeze and cutting employer contributions to the mandatory state savings scheme the Central Provident Fund CPF to 15 pct of salaries from 25 pct I don't foresee any new or additional stimulus because the economy is now improving said Clemente Escano vice president of the Union Bank of Switzerland The government's economic report for calendar 1986 issued last week said the CPF reduction and other cost cutting measures only started to bite in the third quarter of 1986 But the report said over half the economy especially the commerce financial and business services sectors continued to be depressed by weakness in the surrounding regional economies and an excess of domestic property The sources said the fragility of the economic recovery suggested the government would not introduce much of its planned consumption tax in the coming financial year In last year's budget Hu said he planned to set up collecting machinery for the tax Economists said a campaign against smoking this year might be the opportunity for him to levy the tax on tobacco as a first step towards its wider use The sources said the government does not look likely to raise more revenue in this year's budget Last year's budget projected a 3.22 billion dlr budget deficit for fiscal 1986/87 but the economic report projected an overall calendar 1986 surplus of three billion Lower tax revenue was balanced by rising investment income and stringent controls on government operating expenditure helped by the wage freeze policy Anthony K.P. Lee vice president and deputy general manager of American Express Bank Ltd said he expected nothing exciting from this year's budget Lee said It will probably be a non event as most of the tax benefits were given last year The economy has already started moving so it does not need government support Last week's economic report attributed the one pct decline in domestic demand last year mainly to a sharp decline in private construction so this sector hopes for some relief from the budget economists said The economic report said the sector's activity declined by 25.3 pct in calendar 1986 after a 13.9 pct contraction in 1985 A further decline is expected in 1987 But in last year's budget a 30 pct rebate on tax for industrial and commercial properties was raised to 50 pct until the end of 1988 so the most Hu is likely to do is add incentives for creating property investment unit trusts The only measures known to be in tomorrow's budget are incentives to encourage population growth including incentives to families who have three children Deputy Prime Minister Goh Chok Tong has already announced the government will try to encourage three child families instead of the two child families it encourages now REUTER FISONS SEES STRONG INTERNATIONAL GROWTH IN 1986 LONDON March 3 Fisons Plc FISN.L said strong international growth had been the main feature of the group's 1986 progress with the pharmaceutical division reporting a 50 pct increase in U.S. Sales during the period The rise was due to a sustained marketing programme a larger sales force and the introduction of an aerosol form of its Intal anti asthma drug which pushed U.S. Sales up 70 pct The company was commenting on 1986 results which saw pre tax profits rising to 85.1 mln stg from 72.3 mln in 1985 The result was in line with market forecasts but its shares nevertheless eased in a falling market to 634p at 0857 GMT from 643p Fisons said the potential for future growth of Intral as well as its Opticrom and Nasalcrom products was clearly indicated by a strong 1986 performance The scientific equipment business had raised the proportion of high technology products it manufactures and also raised its ability to generate higher margins The horticulture operations had demonstrated outstanding marketing ability Underlying cash flow from all three operations had been positive despite a full programme of capital investment Action to protect the group against foreign currency movements resulted in a small net gain to profits REUTER PHILIPPINE PLANNING CHIEF URGES PESO DEVALUATION By Chaitanya Kalbag Reuters MANILA March 3 The Philippines must devalue the peso if it wants its exports to remain competitive Economic Planning Secretary Solita Monsod told Reuters The peso dollar rate has to be undercut to make our exports more competitive Monsod said an interview No question about it I'm saying you cannot argue with success Taiwan South Korea West Germany Japan all those miracle economies deliberately undervalued their currencies The peso has been free floating since June 1984 It is currently at about 20.50 to the U.S. Dollar Finance Secretary Jaime Ongpin has said the government does not intend to devalue the peso and wants it to be flexible and able to continue to respond to market conditions Monsod said Ongpin was looking at the exchange rate from the point of view of finance If the dollar rate goes higher our debt service in terms of pesos gets higher so the financing is very difficult she said But I am looking at it in terms of the economy She said she was not trying to oppose official policy I'm just saying keep it competitive I do not want it to become uncompetitive because then we are dead Monsod said The ideal movement in the peso dollar rate is a movement that will reflect differences in inflation rates of the Philippines versus the other country It's an arithmetic thing Official figures show Philippine inflation averaged 0.8 pct in calendar 1986 Ongpin told reporters on Saturday it was expected to touch five pct this year He said the government and the International Monetary Fund had set the peso dollar 1987 target rate at 20.80 The peso lost 22.2 pct in value to slump to 18.002 to the dollar when it was floated in 1984 REUTER U.K. CLEARS CONS GOLD U.S. PURCHASE LONDON March 3 The U.K. Trade Department said it would not refer Consolidated Goldfields Plc's CGLD.L purchase of American Aggregates Corp to the Monopolies Commission Cons Gold said last month that its ARC America Corp unit had agreed to buy the Ohio based company for 30.625 dlrs a share cash or 242 mln dlrs in a deal recommended by the Aggregates board REUTER NEDERLANDSE GASUNIE ISSUES 100 MLN DLR EUROBOND LONDON March 3 NV Nederlandse Gasunie is issuing a 100 mln dlr eurobond due April 15 1992 paying 7 1/4 pct and priced at 101 1/8 pct lead manager Citicorp Investment Bank Ltd said The non callable bond is available in denominations of 5,000 dlrs and will be listed in Luxembourg The selling concession is 1 1/4 pct while management and underwriting combined pays 5/8 pct The payment date is April 15 REUTER SAAB SCANIA ISSUES 150 MLN DLR EUROBOND LONDON March 3 Saab Scania AB is issuing a 150 mln dlr eurobond due April 2 1992 paying 7 3/4 pct and priced at 101 3/4 pct lead manager Morgan Guaranty Ltd said The bond is available in denominations of 5,000 and 50,000 dlrs and will be listed in London Payment date is April 2 1992 Fees comprise 1 1/4 pct selling concession and 5/8 pct management and underwriting combined and listing will be in London REUTER MERRILL MANDATED FOR IEL U.S. NOTE LONDON March 3 Merrill Lynch Capital Markets said it received a mandate from Industrial Equity Ltd IEL of Australia to arrange a letter of credit facility in support of 100 mln dlrs of medium term notes and U.S. Commercial paper to be sold in the U.S. Domestic market Merrill which will be the dealer for the medium term notes and commercial paper said this was the first facility of its kind Sumitomo Trust and Banking Co Ltd has agreed to provide the letter of credit The letter of credit has a five year term with an evergreen feature allowing for extension at the support banks option The notes and paper will be issued by IEL's Sydney based subsidiary IEL Finance Ltd The letter of credit will be underwritten by a group of banks who will be paid a 20 basis point facility fee and a 25 basis point utilisation fee IEL itself is 51 pct owned by Brierley Investments Ltd of New Zealand Merrill Lynch said REUTER ZAIRE ACCEPTS TIN EXPORT QUOTA ATPC SAYS KUALA LUMPUR March 3 Zaire agreed to limit its tin exports to 1,736 tonnes for 12 months from March 1 in line with an Association of Tin Producing Countries ATPC plan to curb exports the ATPC said ATPC Executive Director Victor Siaahan told Reuters he received a telex from Zaire indicating its willingess to take part in the plan to limit total ATPC exports to 96,000 tonnes for a year from March 1 Siaahan said Zaire is expected to produce 1,900 tonnes of tin in calendar 1987 and that in 1986 its output and exports were about 1,200 tonnes The ATPC hopes to cut the 70,000 tonne world surplus by 20,000 tonnes and boost prices All ATPC members except Zaire and Australia recently agreed to adhere to the export quotas allocated them under the plan Australia said its quota of 7,000 tonnes was roughly equal to its expected output this year The ATPC consists of Malaysia Indonesia Thailand Bolivia Australia Nigeria and Zaire China and Bolivia important producers of tin are not members REUTER JAPANESE BANKS PLAN JOINT FIRM TO AVOID DEBT RISK TOKYO March 3 Japan's major commercial banks plan to set up a joint company to which they will transfer assets acquired by lending to developing countries to build up a reserve against possible bad loans a senior official of a major bank told Reuters He said about 10 banks are likely to finish details of the project in a few weeks The intent is to avoid risk arising from unrecoverable debt owed by Third World countries he said REUTER JAPANESE FINANCIAL FUTURES PLAN REVEALED TOKYO March 3 The Federation of Bankers Associations of Japan released its proposal for early creation of a comprehensive financial futures market in Tokyo The market should include a comprehensive range of futures and options trading so Tokyo can develop into a real global money centre where a variety of risk hedging instruments is available the proposal said It should provide currency and interest rate futures and incorporate the existing yen bond futures and planned stock index futures contracts The proposal said transactions in all these contracts must be conducted on the same market so participants can readily engage in arbitrage between various financial instruments To make this possible the proposal calls for new legislation which would administer all related futures and options transactions under the same legal framework Banking sources said they expect that initially the currency futures would be dollar yen and interest futures would include Japanese domestic yen certificates of deposit three month Eurodollar deposits and 20 year U.S. Treasury bonds Banking sources quoted federation chairman Yoshiro Araki as saying he hoped the market would be created as soon as possible because it would help promote the liberalisation of Japan's financial markets Araki said he had no intention of limiting prospective market participants to banks but was willing to accept those from wider business circles the sources said Japan's only current financial futures market in yen bonds began on the Tokyo Stock Exchange in October 1985 But the Osaka Stock Exchange plans to start futures trading in a basket of leading stocks in April REUTER EC EURATOM FRENCH FRANC EUROBONDS EXPECTED PARIS March 3 The European Community EC and Euratom the European atomic energy agency are expected to issue French franc eurobonds this month a Treasury spokesman said Other eurofranc bonds this month are likely to include issues by a bank and a company both unidentified but no other details were available The spokesman said the March calendar would be flexible to take account of market conditions REUTER AUSTRALIAN POLICE ARREST FORMER WESTPAC CLERK SYDNEY March 3 Australian police said they charged a former currency clerk of Westpac Banking Corp WSTP.S with misappropriating 8,300 dlrs in July in an alleged foreign exchange fraud A spokeswoman for the New South Wales Corporate Affairs Commission CAC said the arrest was part of its investigation stemming from complaints from Westpac and Kleinwort Benson Australia Ltd CAC and Westpac officials said they were working out how much money was involved but said press reports it was as much as five mln dlrs were probably exaggerated Police told reporters it was alleged the former clerk quoted an incorrect dealing price relationship between the yen and the Swiss franc They said the CAC was investigating 14 other cases involving 214,000 dlrs A Kleinwort Benson spokesman declined to comment on the case but the company said in a statement yesterday a small loss incurred in 1986 in its foreign exchange division was unrelated to certain alleged forex irregularities REUTER U.K. MONEY MARKET DEFICIT FORECAST AT 350 MLN STG LONDON March 3 The Bank of England said it forecast a shortage of around 350 mln stg in the money market today Among the main factors affecting liquidity bills maturing in official hands and the take up of treasury bills will drain some 525 mln stg while bankers balnces below target will take out around 175 mln stg Partly offsetting these outflows exchequer transactions and a fall in note circulation will add some 300 mln stg and 40 mln stg to the system respectively REUTER JAPAN LIKELY TO LET U.S. BANKS DEAL SECURITIES By Tsukasa Maekawa Reuters TOKYO March 3 Japan looks likely to allow U.S. Banks to conduct securities business here a move that will probably cause the barriers separating Japanese commercial banks from brokerage houses to break down financial analysts said But the timing of the approval remains uncertain due to conflicting domestic interests J.P.Morgan and Co JPM Bankers Trust New York Corp BT Manufacturers Hanover Corp MHC and Chemical Bank New York Corp CHL are expected to win approval to conduct securities business in Japan U.S. Bank officials said There is no reason for extended delay of approval one official at a U.S. Bank said The four U.S. Banks have been seeking finance ministry approval for months To date Japan has allowed European banks to do securities business here through 50 pct owned subsidiaries As Japanese banks can conduct securities business in European countries this was seen as a reciprocal move and did not pave the way for Japanese banks to enter the domestic securities market But if U.S. Banks win approval Japanese banks will press hard for similiar status since they are not allowed to conduct securities business in the U.S. Many U.S. Bank officials expect their applications to be approved before June But Japanese banking sources said the decision will be delayed until next year A spokesman for the finance ministry declined comment U.S. Bankers will meet with ministry officials for talks on financial market deregulation sometime in the next few months Ministry sources said the talks are likely to be held in April or June At the last round of financial negotiations in September U.S. Officials said Japan's commitment to deregulation was flagging Analysts said the finance ministry has been seriously considering the U.S. Request since the U.S. Federal Reserve Bank of New York approved five new primary government securities dealers including two Japanese brokerages last December They said the ministry will have to approve the U.S. Request soon to head off criticism its markets are not as open to foreigners as those of the U.S. Analysts said Japan has proceeded rapidly with financial deregulation since 1984 but has not touched upon the clear division between the securities and banking businesses Japanese banks and securities houses have fought hard to protect their interests but analysts said the banks are finding it increasingly difficult to earn money in traditional fields Officials of major Japanese banks said they will pay special attention to the ministry's reaction to U.S. Bank requests because approval would accelerate market liberalization in Japan The Japanese bankers hope approval will pave the way for their own entry into the domestic securities market REUTER SAUDI RIYAL DEPOSIT RATES EASE BAHRAIN March 3 Saudi riyal interbank deposit rates eased across the board in a dull market which was long in day to day funds dealers said Today's quiet market continued a lull of several days in which traders were said to be waiting on the sidelines ahead of further clues to the direction of oil prices and the Saudi economy Dealers cited some borrowing interest in two three and six month deposits but said activity focused on short dates and one month deposits as banks tried to lend surplus funds Spot next was put at 5 3/4 5 1/4 pct down from six 5 1/2 yesterday while one week rates were steady at six 5 1/2 pct One month deposits declined to 6 1/4 1/8 pct from 6 1/2 1/4 on Monday while three months was barely changed at seven 6 15/16 pct The spot riyal was little changed at 3.7501/03 to the dollar after quotes of 3.7498/7501 yesterday REUTER CURRENCY SECTORS CONTINUE TO FEATURE EUROBOND TRADE LONDON March 3 Early dollar straight eurobond trade was quiet with currency sectors particularly eurosterling continuing to perform strongly closely reflecting current trading patterns on the foreign exchanges dealers said Eurosterling bonds continued to rise steadily bolstered by the extremely ebullient tone of the U.K. Government bond market on a combination of positive U.K. Economic fundamentals The dollar was initially stabler but most dollar straight bonds were static in dull trade A handful of issues showed signs of weakness but dealers said investors were awaiting today's release of U.S. Leading indicators for January The U.S. Data due out this afternoon is expected to be weak placing the U.S. Unit under renewed pressure and robbing the market in dollar denominated eurobonds of fresh trading impetus one dollar straight trader said It's going to be another tedious day and I can't see how anybody is going to make any money he said Eurosterling issues continued to rally on the back of general sterling euphoria with the U.K. Currency trading at six month highs on interest rate optimism and the strength of the domestic equity markets Eurosterling bonds saw early gains of up to half a point However some eurosterling dealers noted the bonds could soon fall back marginally if as expected professionals stepped in to take profits at current healthy levels Trade in mark denominated bonds was expected to be subdued today due to pre Lenten carnival festivities in West Germany There were signs of reawakened investor nerves affecting trade in the floating rate note market which yesterday started the week extremely quietly after a hectic sell off last week FRN dealers said paper of U.S. and also of Canadian banks was seeing some pressure as a result of recent press reports focussing on their exposure to Latin American debt Brazilian Finance Minister Dilson Funaro's visit to Europe has also brought the spotlight back onto the debt crisis after things had more or less quietened down following the first shock statements last week one FRN specialist said Despite the dearth of activity in the dollar straight secondary market two new dollar issues were the only early features on the primary market These were a five year 150 mln dlr deal launched by Morgan Guaranty Ltd for Saab Scania at 7 3/4 pct priced at 101 3/4 pct The other issue was a 100 mln dlr deal also due 1992 for NV Nederlandse Gasunie paying 7 1/4 pct and priced at 101 1/8 pct with Citicorp Investment Bank Ltd as lead manager Dealers predicted reasonable demand for both issues due mainly to a lack of fresh good name paper in the market REUTER FRENCH TREASURY DETAILS PLANNED TAP ISSUE PARIS March 3 The French Treasury will issue between eight and 12 billion francs worth of tap stock depending on market conditions at its monthly tender on Thursday the Bank of France said The planned issue will be of two fixed rate tranches of the 8.50 pct June 1997 and the 8.50 pct December 2012 stock and one tranche of the variable rate January 1999 stock The minimum amount of each tranche to be sold will be one billion francs REUTER PEMEX SIGNS 500 MLN DLR JAPAN LOAN FOR PIPELINE TOKYO March 3 Mexican state oil firm Petroleos Mexicanos Pemex signed for a 500 mln dlruntied loan from the Export Import Bank of Japan to finance its Pacific Petroleum Project Pemex Japan representative Tito Ayal said No further details on the loan were immediately available Ayala told an oil seminar the project due for completion in 1988 is aimed at improving distribution of oil products in the domestic market mainly along the Pacific coast The project consists of a pipeline linking Nueva Teapa on the Gulf of Mexico with Salina Cruz on the Pacific Coast and construction of the second phase of the Salina Cruz refinery The project also includes construction of liquified petroleum gas LPG storage tanks at Santa Cruz additional crude oil storage at both ends of the pipeline an ammonia complex at Lazaro Cardenas on the Pacific Coast and expansion of the infrastructure of the port of Salina Cruz Ayala said Pemex will buy 80 mln dlrs worth of foreign equipment and materials for the project he said The new pipeline will enable Japan to load Mexico's Maya crude oil at Salina Cruz rather than in the Gulf of Mexico Pemex will also have some LPG surplus available in Salina Cruz that may help Japan diversify its supply sources of that product he added REUTER SUPPLIES OF U.K. INDEX LINKED BOND EXHAUSTED LONDON March 3 The Government broker's supplies of a 400 mln stg issue of two pct Treasury index linked stock due 1992 were exhausted in early trading on the U.K. Government bond market this morning the Bank of England said The Bank said that the issue was no longer operating as a tap having been supplied at a price of 94 stg pct this morning The issue was undersubscribed at a tender on February 18 but the Government broker has supplied amounts of the stock on a number of occasions since then The relatively small quantity remaining in the authorities hands was quickly sold out on a small upturn in demand early today REUTER COMALCO SAYS LOWER COSTS HELPED RETURN TO PROFITS MELBOURNE March 3 Comalco Ltd CMAC.S said its return to profit reflected reduced costs improved primary aluminium prices and its withdrawal from a Japanese smelter venture It said the earlier reported 57.1 mln dlr profit for the year ended December 31 against a 69.13 mln dlr loss in 1985 was also aided by lower interest rates on U.S. Dollar debt and greater sales of bauxite and aluminium Comalco said it expected to pay at least a four cents per share final dividend delayed until July 1 to take advantage of proposed dividend imputation laws This would make five cents for the year against a first and final of one cent in 1985 Comalco said the aluminium industry continued to suffer from low prices and excess capacity though the weak Australian dollar had helped earnings Withdrawal from the Showa Aluminium Industries KK joint venture had been recapitalised in expansion by the New Zealand Aluminium Smelters Ltd project with Japan's Sumitomo Aluminium Smelting Co Ltd permitting repayments and increases in liquid funds totalling 165 mln dlrs it said As previously reported Comalco's Commonwealth Aluminium Corp unit has conditionally agreed to sell its smelter at Goldendale Washington and port facilities at Portland Oregon to Columbia Aluminium Corp Comalco said it had made a 27.3 mln dlr extraordinary provision for Goldendale losses and closure costs but that if the sales agreement were completed it would reduce the provision made in the 1986 accounts The other items in the total extraordinary loss of 140.5 mln dlrs were a 102.9 mln write off of unrealised exchange losses and 10.3 mln for an increase in future tax provision REUTER CRA EXPECTS TO PAY FINAL DIVIDEND OF 10 CENTS ME LBOURNE March 3 CRA Ltd CRAA.S said it expected to pay a final 1986 dividend of not less than 10 cents a share after July 1 making 13 cents forthe year against 15 in 1985 The mining and smelting group earlier reported 1986 net earnings rose to 138.2 mln dlrs from 87.8 mln in 1985 against analysts forecasts yesterday of 125 mln to160 mln CRA said it was deferring consideration of a dividend until later this year to provide the benefit of dividend imputation to its shareholders After July 1 dividends will be tax free to shareholders provided they come out of earnings on which the full 49 pct company tax rate has been pid The company operates on a substituted tax year not the fiscal year ending June 30 and as a result has incurred tax at the 49 pct rate on 1986 earnings CRA said in a statement Consequently it has funds available for distribution with dividend imputed but is waiting to see the imputation legislation before determining the final payout it said Despite the higher net earnings CRA said 1986 was a poor year for the minerals industry with the notable exception of gold producers Prices for major metals expressed in real U.S. Dollars declined to the lowest levels in about 50 years it said Fluctuating exchange and interest rates added volatility and uncertainty while the revaluation of the yen is leading to substantial restructuring of Japanese industry CRA said World demand for metals is growing slowly Inventories have steadily declined with supply and demand in better balance but overcapacity continues CRA said Turning to contributions to its earnings CRA said Bougainville Copper Ltd BUVA.S contributed 31.3 mln dlrs while its share of Comalco Ltd's CMAC.S net was 37.8 mln Net earnings from iron ore operations were 111.8 mln dlrs against 149.2 mln in 1985 it said Lead zinc and silver mining and smelting operations incurred a net loss of 66.8 mln dlrs against a 38.1 mln loss in 1985 CRA said Coal activities resulted in a net profit of 36.7 mln dlrs against 34.1 mln while salt raised its contribution to 4.7 mln from 2.8 mln CRA's share of earnings from the Argyle diamond project amounted to 12.0 mln dlrs against nine mln in 1985 CRA said the main item in its 250.28 mln dlr extraordinary loss was a 172.9 mln writeoff of unrealised foreign exchange losses on borrowings as required by a new accounting standard Other extraordinary items were 63.3 mln dlrs provided for closures and writedown of assets and a 14.1 mln increase in future tax provisions CRA said Cash flow continued at a high level being 950.6 mln dlrs before capital expenditure against 1.02 billion in 1985 The strong cash flow coupled with the proceeds of the 1986 rights issue and the use of existing cash balances enabled group debt to be reduced by nearly 500 mln dlrs CRA said it held forward contracts at year end to buy 985 mln U.S. Dlrs to hedge part of its foreign debt This cost 47.0 mln dlrs after tax included in the net interest cost REUTER MONTEDISON UNIT ISSUES 50 MLN AUSTRALIAN DLR BOND LONDON March 3 Montedison Finance Overseas Ltd a unit of Montedison SpA is issuing a 50 mln Australian dlr eurobond due April 3 1990 paying 15 1/2 pct and priced at 101 3/8 pct lead manager Orion Royal Bank Ltd said The non callable bond is guaranteed by the parent The selling concession is one pct while management and underwriting combined pays 1/2 pct The issue will be listed in Luxembourg and is available in denominations of 1,000 and 10,000 Australian dlrs The payment date is April 3 REUTER SWISS CAPITAL EXPORTS RISE IN JANUARY ZURICH March 3 Swiss capital exports rose to 4.64 billion francs in January after 2.54 billion in December and a year earlier 3.64 billion the Swiss National Bank said New bond issues accounted for 4.12 billion of the total after December's 2.15 billion and credits 525.1 mln after 389.9 mln In January 1985 before the National Bank ended the distinction between notes and bonds bond issues totalled 1.66 billion francs notes 1.39 billion and credits 597.5 mln REUTER CHINA CALLS FOR BETTER TRADE DEAL WITH U.S. By Mark O'Neill Reuters PEKING March 3 China called on the United States to remove curbs on its exports to give it favourable trading status and ease restrictions on exports of high technology But the U.S. Embassy replied that Chinese figures showing 13 years of trade deficits with the U.S. Out of the last 15 are inaccurate and said Peking itself would have to persuade Congress to change laws which limit its exports The official International Business newspaper today published China's demands in a editorial to coincide with the visit of U.S. Secretary of State George Shultz It is extremely important that the U.S. Market reduce its restrictions on Chinese imports provide the needed facilities for them and businessmen from both sides help to expand Chinese exports the editorial said The U.S. Should quickly discard its prejudice against favourable tariff treatment for Chinese goods and admit China into the Generalised System of Preference GSP Despite easing of curbs on U.S. Technology exports in recent years control of them is still extremely strict and influences normal trade between the two countries it added The paper also printed an article by China's commercial counsellor in its Washington embassy Chen Shibiao who said that all kinds of difficulties and restrictions were preventing bilateral trade fulfilling its full potential He named them as U.S. Protectionist behaviour curbs on technology transfer and out of date trade legislation The paper also printed a table showing that since bilateral trade began in 1972 China has had a deficit every year except 1972 and 1977 It shows the 1986 and 1985 deficits at 2.09 billion and 1.722 billion dlrs A U.S. Embassy official said the U.S. Did not accept Peking's trade figures at all mainly because they exclude goods shipped to Hong Kong and then trans shipped to U.S. While U.S. Figures are based on country of origin He said that if China wants to obtain GSP status it will have to lobby Congress itself to persaude it to amend several laws which currently prevent Peking getting such status The U.S. Trade Act of 1974 says that to qualify for GSP China must be a member of the General Agreement of Tariffs and Trade GATT for which it applied in July 1986 and not be dominated or controlled by international Communism The official said China was well aware of the laws some of which date to the anti Communist early 1950's but that there is not sufficient political will in the U.S. To change them China has been the subject of about a dozen cases involving anti dumping in the U.S. Within the last two years which the U.S. Side won he said But for the first time China signed last week an agreement which it itself initiated to voluntarily restrain exports of at least two categories of steel goods which may lead the U.S. Side to withdraw the anti dumping case he added Another diplomat said willingness to provide such voluntary export restraints would be an important issue in bilateral trade issues and in Peking's application to GATT China has the potential to disrupt world markets especially in textiles Other GATT countries will be nervous about China in this respect But there is a precedent for other centralled planned economies in GATT the diplomat said Poland Czechoslovakia Hungary and Romania are members of GATT but none has China's massive market potential for imports or its vast labour pool to produce cheap exports In a speech today in the northeast city of Dalian U.S. Secretary of State George Shultz said his country welcomed China's interest in participating in GATT The process of Chinese accession will not be accomplished overnight the GATT rules were not designed for a large economy of the Chinese type Shultz said China can play an important role by actively joining GATT discussions seeking to expand general trading opportunities and enhance market access for exports worldwide China can further develop its foreign trade system so as to gain the maximum benefit from its GATT participation he said The problems facing U.S. China trade and GATT membership are similar a pricing system which many foreign businessmen regard as arbitrary and not related to actual costs especially for exports and a de facto dual currency system In a memorandum backing its application presented to GATT last month China said it was gradually reforming its economic system and replacing mandatory instruction with guidance planning and economic levers The diplomat said that to join GATT China had much to do REUTER NO BUNDESBANK POLICY CHANGES EXPECTED THURSDAY FRANKFURT March 3 The Bundesbank is unlikely to change its credit policies at its central bank council meeting on Thursday as exchange rates and short term interest rates have stabilized over the past few weeks money market dealers said Attention in the money market is focused on tomorrow's tender for a securities repurchase pact from which funds will be credited on Thursday when an earlier pact expires draining 16 billion marks from the system The tender was announced last Friday because carnival festivities closed banks in Duesseldorf yesterday and will close banks here this afternoon Because of the disruption to business from carnival minimum reserve figures for the start of the month are unrealistic making it difficult for banks to assess their needs at the tender Dealers said the Bundesbank would want to inject enough liquidity in this week's pact to keep short term rates down But because of uncertainty about banks current holdings the Bundesbank may well allocate less than 16 billion marks this week and top it up if necessary at next week's tender I would not be surprised if the Bundesbank cuts the amount a little to say 14 or 15 billion marks one dealer said They would then stock it up at the next tender when the need is clearer he added An earlier pact expires next week draining 8.5 billion marks from the system Banks also face a heavy but temporary drain this month from a major tax deadline for customers Banks held 52.0 billion marks on February 27 at the Bundesbank averaging 51.0 billion over the whole month just clear of the 50.5 billion February reserve requirement Call money traded today at 3.85/95 pct up from 3.80/90 yesterday REUTER TAIWAN BANKS ASKED TO TAKE PART IN INDONESIA LOAN TAIPEI Mar 3 Chase Manhattan Asia Ltd of Hong Kong has approached Taiwan banks to take part in a syndicated loan of 300 mln U.S. Dlrs to finance a liquefied natural gas LNG project in Indonesia local banking sources said The project calls for construction of a 400 mln U.S. Dlr facility which could produce two mln tonnes of LNG for supply by Taiwan's state owned Chinese Petroleum Corp This was the first time Taiwanese banks including the Bank of Taiwan and Bank of Communications were invited to form a syndicated loan they added Pertamina has initialled a 20 year contract with Chinese Petroleum Corp CPC for the supply of 1.5 mln tonnes of LNG for Taiwan starting October 1989 a CPC official said CPC is building an LNG receiving terminal in southern Taiwan city of Kaohsiung at a cost of 820 mln U.S. Dlrs The terminal will be completed in mid 1989 A Taiwanese banker said It will be a good idea for our banks to take part in the loan if we want to start in the international lending market REUTER COUNCIL OF EUROPE ISSUES LUXEMBOURG FRANC BOND LUXEMBOURG March 3 The Council of Europe is issuing a 125 mln luxembourg franc private placement bond carrying a 7 1/4 pct coupon and priced at par lead manager Banque Internationale a Luxembourg SA BIL said The non callable bullet issue maturing in August 1992 follows an earlier private placement bond announced last month for 250 mln francs but with the same conditions The new issue is for payment on March 31 and coupon payments annually on August 11 with the first coupon a long coupon REUTER ITALY CONSUMER PRICES RISE 0.4 PCT IN FEBRUARY ROME March 3 Italy's consumer price index rose 0.4 pct in February compared with January after rising 0.6 pct in January over December the national statistics institute Istat said The year on year rise in February was 4.2 pct down from 4.5 pct in January and compared with 7.6 pct in February 1986 Istat said its consumer prices index for the families of workers and employees base 1985 was 109.1 in February against 108.7 in January and 104.7 in February 1986 REUTER MOBIL PLAN TO OPEN PEKING OFFICE CHINA DAILY SAYS PEKING March 3 Mobil Corp MOB.N of the U.S. Plans to open an office in Peking to develop oil exploration opportunities in China the China Daily said It quoted Mobil president Richard Tucker currently in Peking as saying he is optimistic about investment prospects in China and that Peking will continue to encourage foreign private businesses to invest here It said Mobil bought 73 mln dlrs of crude oil and oil products from China in 1986 and sold it lubricant and fertiliser but gave no more details REUTER EC ISSUES 600 MLN FRENCH FRANC EUROBOND PARIS March 3 The European Community EC is issuing a 600 mln franc 8 3/4 pct bond due April 7 1997 at 99 1/2 pct lead manager Banque Nationale de Paris said Fees total two pct with 1 3/8 pct for selling and 5/8 pct for management and underwriting combined Payment date is April 7 denominations are of 10,000 and 50,000 francs and listing is in Luxembourg and Paris REUTER KLM TO TAKE 15 PCT STAKE IN AIR UK AMSTERDAM March 3 KLM Royal Dutch Airlines KLM.A said it agreed to take a 15 pct stake in Air U.K. Ltd a subsidiary of British and Commonwealth Shipping Plc BCOM.L in a transaction worth around two mln stg A KLM spokesman said KLM already cooperated closely with Air UK which runs 111 flights a week to Amsterdam's Schipol airport from nine UK cities British and Commonwealth Shipping said last week it held preliminary talks about a KLM minority stake in Air U.K. But gave no further details KLM said it hoped the move would attract more British feeder traffic to Amsterdam Airport REUTER AIRBUS SIGNS ONE BILLION DLR JAPANESE CONTRACT PARIS March 3 The European Airbus Industrie consortium has signed a one billion dlr contract to sell 10 A320 short haul jets to All Nippon Airways of Japan with an option on the sale of a further 10 planes an Airbus spokesman said today The 10 planes on firm order will be delivered between September 1990 and November 1991 and will be powered either by CFM 56 5S engines made by the Franco U.S. CFM International consortium or V2500S engines built by the International Aero Engine group The spokesman declined to comment on a New York Times report that Airbus is about to announce a sale to American Airlines But industry sources said American was about to announce the purchase of 25 wide bodied planes from Airbus as well as 15 747s from Boeing Co BAN Airbus has already signed large deals with Pan Am Corp PNN NWA Inc NWA and Eastern Airlines Inc EALN as well as a smaller contract with Continental Airlines The A320 made its first flight on February 22 and is not due to enter commercial service until March next year The All Nippon purchase brings the total number of commitments to the A320 to 439 from 16 airlines comprising 275 firm orders and 164 options REUTER ZIMBABWE MAIZE HARVEST LOWER AFTER BUMPER CROPS HARARE March 3 Zimbabwe's maize crop in 1986/87 April March is likely to be slightly over 1.6 mln tonnes against 1.83 mln in 1985/86 Grain Marketing Board figures show Maize exports for 1986/87 to January 31 1987 totalled 315,000 tonnes with about a further 40,000 tonnes expected to be exported in February and March against 285,000 tonnes in 1985/86 Domestic usage is estimated at 650,000 900,000 tonnes depending on how other crops are affected by current poor rains Last year's consumption was around 700,000 tonnes Zimbabwe has around two mln stonnes of surplus maize in storage accumulated after two years of bumper harvests REUTER FRENCH BOND COMMITTEE APPROVES THREE ISSUES PARIS March 3 The French domestic bond issuing committee said it has approved three new issues totalling 1.8 billion francs Credit Lyonnais will lead manage a 1.2 billion franc issue for the Caisse Centrale de Credit Cooperatif Banque Francaise de l'Agriculture will lead with Union de Garantie et de Placement a 300 mln franc issue for its own account Caisse Centrale des Banques Populaires will lead a 300 mln issue for the Groupement des Industries pour le Batiment et Travaux Publics No further details were immediately available REUTER DEGUSSA COMBINES PHARMACEUTICAL INTERESTS FRANKFURT March 3 Degussa AG DGSG.F is combining its foreign and domestic pharmaceutical activities into the Frankfurt based Asta Pharma AG so as to promote its business in that sector the company said Group consolidated turnover in Degussa's pharmaceuticals sector rose to 380 mln marks in 1985/86 to September 30 from 377 mln marks in the preceding year the company said Turnover from all pharmaceutical interests including minority holdings was 700 mln marks in 1985/86 somewhat higher than in the preceding year The company did not disclose exact 1984/85 results in that sector a spokesman said REUTER U.K. RESERVES SHOW UNDERLYING RISE IN FEBRUARY LONDON March 3 Britain's gold and currency reserves showed an underlying rise of 287 mln dlrs in February after a 72 mln dlrs rise in January the Treasury said The underlying trend which is a guide to Bank of England operations to support the pound on foreign exchanges is net of borrowings and repayments This was above market expectations for a 100 mln dlrs rise The Treasury said the Bank of England used the opportunity of strong demand to rebuild reserves after losses last autumn and said the underlying rise was still relatively modest Actual reserves rose by 305 mln dlrs in February to 22.26 billion dlrs after rising 29 mln in January to 21.95 billion Accruals of borrowings under the exchange cover scheme were 36 mln dlrs last month after 163 mln in January while repayments were 16 mln dlrs after the previous 151 mln a Treasury spokesman said Capital repayments totalled two mln dlrs In January capital repayments totalled 14 mln dlrs with a valuation change that resulted in a fall of 41 mln dlrs due to the quarterly rollover from the European Monetary Cooperation Fund swap The Treasury would not comment on the Bank of England's market operations but currency traders reported moderate Bank of England intervention to curb upward pressure on the pound today A Treasury spokesman commenting on the reserves figures said that the government does not want sterling either to rise too far or to fall substantially from current levels He noted that the Chancellor of the Exchequer Nigel Lawson stressed this after the recent Paris currencies meeting REUTER COMALCO SAYS LOWER COSTS HELP RETURN TO PROFITS MELBOURNE March 3 Comalco Ltd said its return to profit reflected reduced costs improved primary aluminium prices and its withdrawal from a Japanese smelter venture It said the earlier reported 57.1 mln dlr profit for the year ended December 31 against a 69.13 mln dlr loss in 1985 was also aided by lower interest rates on U.S. Dollar debt and greater sales of bauxite and aluminium Comalco said it expected to pay at least a four cents per share final dividend delayed until July 1 to take advantage of proposed dividend imputation laws This would make five cents for the year against a first and final of one cent in 1985 Comalco said the aluminium industry continues to suffer from low prices and excess capacity though the weak Australian dollar had helped earnings Comalco's Commonwealth Aluminium Corp unit said earlier it has conditionally agreed to sell its Goldendale smelter in Washington and port facilities at Portland Oregon to Columbia Aluminium Corp Comalco said its extraordinary provision of 27.3 mln dlrs costs for Goldendale losses and closure may be reduced if the sales agreement were completed REUTER ULTRAMAR SELLS U.K. MARKETING UNITS FOR 50 MLN STG LONDON March 2 Ultramar Plc UMAR.L said it had reached agreement in principle to sell its wholly owned U.K. Marketing companies to Kuwait Petroleum Corp for around 50 mln stg Ultramar's marketing units include Ultramar Golden Eagle Ltd which in 1985 made a profit of around 1.4 mln stg before financing and group administration charges A small loss was recorded for the first nine months of 1986 The sale is due to take place on April 1 with the proceeds intended to reduce group debt in the short term But Ultramar said the funds would ultimately be used for further development of its core businesses in the U.K. And North America REUTER HONG KONG M3 RISES 2.2 PCT IN JANUARY HONG KONG March 3 Hong Kong's broadly defined M3 money supply rose 2.2 pct to 607.17 billion H.K. Dlrs in January after a 3.1 pct rise in December for a year on year rise of 23.3 pct the government said in a statement Local currency M3 rose 3.6 pct to 280.36 billion dlrs from December when it was up 3.4 pct from November for a rise of 16.3 pct on the year Total M2 rose 3.3 pct to 535.26 billion dlrs in January from December when it rose 3.5 pct on the previous month Local M2 rose 4.7 pct to 249.03 billion dlrs in January from December when it climbed 4.2 pct Total M2 and local M2 rose 32.5 pct and 23.9 pct on the year ago month respectively Total M1 rose 12 pct to 62.84 billion dlrs in January after a 5.0 pct rise the previous month Local M1 rose 12.3 pct to 57.97 billion dlrs after a 6.2 pct rise Total M1 and local M1 year on year growth was 32.5 and 32.6 pct respectively Total loans and advances rose 3.3 pct to 517.19 billion dlrs from December when they rose 1.2 pct Loans for financing Hong Kong's visible trade rose 3.4 pct to 36.72 billion dlrs after a 1.8 pct rise in December REUTER WOOLWORTH UNDERWOODS FAIL TO AGREE ON BID LONDON MARCH 3 Underwoods Plc said it had not been possible to agree terms on a bid to be made by Woolworth Holdings Plc WLUK.L during talks The two companies had been holding exploratory discussions No spokesman for either company was immediately available to say why terms could not be agreed nor whether the possibility of a bid was now being abandoned Last week Underwoods shares rose 49p to 237p ahead of any announcement of the talks The announcement today brought them back down to 214p from last night's close at 241p Woolworth was unchanged at 758p REUTER NO BUNDESBANK POLICY CHANGES EXPECTED THURSDAY FRANKFURT March 3 The Bundesbank is unlikely to change its credit policies at its central bank council meeting on Thursday as exchange rates and short term interest rates have stabilized over the past few weeks money market dealers said Attention in the money market is focused on tomorrow's tender for a securities repurchase pact from which funds will be credited on Thursday when an earlier pact expires draining 16 billion marks from the system The tender was announced last Friday because carnival festivities closed banks in Duesseldorf yesterday and will close banks here this afternoon Because of the disruption to business from carnival minimum reserve figures for the start of the month are unrealistic making it difficult for banks to assess their needs at the tender Dealers said the Bundesbank would want to inject enough liquidity in this week's pact to keep short term rates down But because of uncertainty about banks current holdings the Bundesbank may well allocate less than 16 billion marks this week and top it up if necessary at next week's tender I would not be surprised if the Bundesbank cuts the amount a little to say 14 or 15 billion marks one dealer said They would then stock it up at the next tender when the need is clearer he added An earlier pact expires next week draining 8.5 billion marks from the system Banks also face a heavy but temporary drain this month from a major tax deadline for customers Banks held 52.0 billion marks on February 27 at the Bundesbank averaging 51.0 billion over the whole month just clear of the 50.5 billion February reserve requirement Call money traded today at 3.85/95 pct up from 3.80/90 yesterday REUTER U.K. MONEY MARKET SHORTAGE FORECAST REVISED UP LONDON March 3 The Bank of England said it revised up its forecast of the shortage in the money market today to around 500 mln stg from its initial estimate of 350 mln REUTER PAKISTAN TO RETENDER FOR RBD PALM OIL TOMORROW LONDON March 3 Pakistan will retender for 6,000 tonnes of refined bleached deodorised palm oil for second half March shipment tomorrow after failing to take up offers today palm oil traders said REUTER MOBIL PLANS TO OPEN OFFICE IN PEKING PEKING March 3 Mobil Oil Corp of U.S. Plans to open an office in Peking to develop oil exploration opportunities in China the China Daily said It quoted Mobil president Richard Tucker currently in Peking as saying he is optimistic about investment prospects in China and that Peking will continue to encourage foreign private businesses to invest here It said Mobil bought 73 mln dlrs of crude oil and oil products from China in 1986 and sold it lubricant and fertiliser but gave no more details Reuter MERRILL MANDATED FOR IEL U.S. NOTE LONDON March 3 Merrill Lynch Capital Markets said it received a mandate from Industrial Equity Ltd IEL of Australia to arrange a letter of credit facility in support of 100 mln dlrs of medium term notes and U.S. Commercial paper to be sold in the U.S. Domestic market Merrill which will be the dealer for the medium term notes and commercial paper said this was the first facility of its kind Sumitomo Trust and Banking Co Ltd has agreed to provide the letter of credit The letter of credit has a five year term with an evergreen feature allowing for extension at the support banks option The notes and paper will be issued by IEL's Sydney based subsidiary IEL Finance Ltd The letter of credit will be underwritten by a group of banks who will be paid a 20 basis point facility fee and a 25 basis point utilisation fee IEL itself is 51 pct owned by Brierley Investments Ltd of New Zealand Merrill Lynch said REUTER EC EURATOM FRENCH FRANC EUROBONDS EXPECTED PARIS March 3 The European Community EC and Euratom the European atomic energy agency are expected to issue French franc eurobonds this month a Treasury spokesman said Other eurofranc bonds this month are likely to include issues by a bank and a company both unidentified but no other details were available The spokesman said the March calendar would be flexible to take account of market conditions REUTER AUSTRALIAN POLICE ARREST FORMER WESTPAC CLERK SYDNEY March 3 Australian police said they charged a former currency clerk of Westpac Banking Corp WSTP.S with misappropriating 8,300 dlrs in July in an alleged foreign exchange fraud A spokeswoman for the New South Wales Corporate Affairs Commission CAC said the arrest was part of its investigation stemming from complaints from Westpac and Kleinwort Benson Australia Ltd CAC and Westpac officials said they were working out how much money was involved but said press reports it was as much as five mln dlrs were probably exaggerated Reuter GERMAN BANKS SEEK GREATER BRAZIL LINK WITH IMF By Anthony Williams Reuters BONN March 3 West German banks would like Brazil to work more closely with the International Monetary Fund IMF with a view to seeking a solution to the country's debt problems senior West German banking sources said The sources speaking ahead of a meeting later today between Brazilian Finance Minister Dilson Funaro and his West german counterpart Gerhard Stoltenberg also believed Brazil should come up with a convincing economic recovery program Their comments echoed those of British Chancellor of the Exchequer Nigel Lawson who met Funaro yesterday Funaro is currently on a European trip seeking to involve governments in negotiations with commercial banks on rescheduling part of Brazil's foreign debt which totals some 109 billion dlrs But Lawson told Funaro Brazil had to solve its problems with the banks rather than governments Diplomatic sources in Bonn said Funaro would leave early tomorrow morning for Zurich after meeting Stoltenberg this evening Funaro has rejected suggestions for negotiations with the IMF and said there is no question of Brazil agreeing to an austerity program with the Fund However the West German banking sources said institutions here felt it was particularly important that Brazil presented a credible recovery program and that there be a rapprochement with the IMF Consultations are the least that can be expected said one banker Funaro's trip follows the decision by Brazil 10 days ago to suspend interest payments on 68 billion dlrs of commercial debt It has also frozen bank and credit lines deposited by foreign banks and institutions worth about 15 billion dlrs One senior banker closely involved in Brazilian debt negotiation offered qualified support for a call from Funaro for a change in the structure of the advisory committee of banks which has coordinated Brazilian debt since 1982 Funaro said yesterday that U.S. Banks holding 35 pct of Brazilian debt were over represented on the 14 bank advisory committee with 50 pct of the committee seats He said Brazil might adopt a different approach to its creditor banks involving separate discussions with the regions Such a move would be in Brazil's interest since European banks have been more supportive than U.S. Banks of alternative debt solutions such as interest capitalisation The senior banker was strongly opposed to a purely regional approach saying There must be one committee and one solution But he added There must be an understanding that special requests from special regions be taken into account German banks had objected to the fact that the idea of interest capitalisation had been rejected in the committee It was imperative that alternative options be considered The menu must become richer the banker said Banking sources said commercial banks would not be involved in today's talks with Funaro A spokesman for the Bundesbank in Frankfurt said the central bank would also not be represented West German banks have taken a more relaxed attitude to the Brazilian suspension of interest payments than institutions in the United States because of their lower exposure According to Bundesbank data from September last year West German bank exposure to Latin America of slightly under 16 billion marks represented less than five pct of all foreign credit REUTER AQUINO ANNOUNCES LAND REFORM PLANS MANILA March 3 President Corazon Aquino announced government plans to devote to land reform an estimated 24 billion pesos about one billion U.S. Dlrs raised from the sale of failed businesses taken over by the government Aquino said she was willing to have her family's sugar estate broken up in compliance with Philippine land reform programmes but hinted it would not be offered voluntarily Whatever laws will be enacted I say that nobody is above the law and that includes me My brothers and sisters are Filipino citizens We will abide by whatever laws are enacted as far as sugar land is concerned she told reporters A committee was now formulating guidelines for the plan including the question of whether land operated by multinational companies should also be covered she added Agrarian Reform Secretary Heherson Alvarez said recently the government planned to distribute 9.7 mln hectares of land to impoverished farmworkers under a revised land reform programme The plan requiring about 1.7 billion dlrs now also covers sugar and coconut areas apart from rice and corn lands he said It was expected to benefit about three mln landless peasants he added Land reform pressure groups have called on Aquino to break up her family's 6,000 hectare sugar estate to demonstrate her sincerity on the issue political analysts have called one of the most pressing problems facing the Philippines It was not known whether government would wait for the Congress to convene by mid year to formalise the programme or have Aquino carry it out through an executive order Under the plan government will purchase land mainly from landowners with holdings over seven hectares It will include vacant and untenanted farmland as well as 50,000 hectares seized from former associates of deposed president Ferdinand Marcos REUTER OPEC WITHIN OUTPUT CEILING SUBROTO SAYS JAKARTA March 3 Opec remains within its agreed output ceiling of 15.8 mln barrels a day and had expected current fluctuations in the spot market of one or two dlrs Indonesian Energy Minister Subroto said He told reporters after meeting with President Suharto that present weakness in the spot oil market was the result of warmer weather in the U.S. And Europe which reduced demand for oil Prices had also been forced down because refineries were using up old stock he said He denied that Opec was exceeding its agreed production ceiling Asked what Opec's output level was now he replied Below 15.8 mln barrels per day He did not elaborate He said there appeared to have been some attempts to manipulate the market but if all Opec members stick by the cartel's December pricing agreement it would get through present price difficulties He predicted that prices would recover again in the third and fourth quarters of 1987 He also reiterated that there was no need for an emergency Opec meeting He said Opec had expected to see some fluctuations in the spot price We hope the weak price will be overcome and predict the price will be better in the third and fourth quarters Refiners he said appeared to have used up old stock deliberately to cause slack demand in the market and the price to fall But Opec would get through this period if members stuck together REUTER U.K. MONEY MARKET GIVEN 24 MLN STG ASSISTANCE LONDON March 3 The Bank of England said it provided 24 mln stg help to the money market in the morning session This compares with the bank's upward revised shortage forecast of around 500 mln stg The central bank purchased bank bills outright comprising two mln stg in band one at 10 7/8 pct and 22 mln stg in band two at 10 13/16 pct REUTER COUPON ON MITSUBISHI WARRANT BOND CUT LONDON March 3 The coupon on the 300 mln dlr equity warrant bond deal for Mitsubishi Estate Co Ltd has been cut to three pct from the 3 1/4 pct initially indicated Nikko Securities Co Europe Ltd said as lead manager of the deal Exercise price for the warrants has been fixed at yen 2,817 representing a 2.53 pct premium over the latest Tokyo close adjusted for a free share issue this month Foreign exchange fix is yen 154.65 dlr and payment date on the deal is March 20 REUTER JAPAN'S UNEMPLOYMENT RATE SEEN RISING TO 3.5 PCT By Jeff Stearns Reuters TOKYO March 3 Japan's unemployment rate is expected to continue to climb to about 3.5 pct within the next year from January's three pct record senior economists including Susumu Taketomi of Industrial Bank of Japan said December's 2.9 pct was the previous worst level since the government's Management and Coordination Agency began compiling statistics under its current system in 1953 There is a general fear that we will become a country with high unemployment said Takashi Kiuchi senior economist for the Long Term Credit Bank of Japan Ltd The government which published the January unemployment figures today did not make any predictions At present we do not have a forecast for the unemployment rate this year but it is difficult to foresee the situation improving a Labour Ministry official said Finance Minister Kiichi Miyazawa said the government had expected the increase and had set aside money to help 300,000 people find jobs in fiscal 1987 beginning in April Prime Minister Yasuhiro Nakasone told a press conference the record rate underlines the need to pass the 1987 budget which has been held up by opposition to proposed tax reforms The yen's surge has caused layoffs in the mainstay steel and shipbuilding industries Other export dependent industries such as cars and textiles have laid off part time employees and ceased hiring economists said Although the growing service industry sector has absorbed a great number of workers the trend is starting to slow down said Koichi Tsukihara Deputy General Manager of Sumitomo Bank Ltd's economics department However other economists disagreed saying the service sector would be able to hire workers no longer needed by the manufacturing sector over the next five years Reuter TAIWAN REJECTS TEXTILE MAKER PLEA ON EXCHANGE RATE TAIPEI March 3 Central bank governor Chang Chi cheng rejected a request by textile makers to halt the rise of the Taiwan dollar against the U.S. Dollar to stop them losing orders to South Korea Hong Kong and Singapore a spokesman for the Taiwan Textile Federation said He quoted Chang as telling representatives of 19 textile associations last Saturday the government could not fix the Taiwan dollar exchange rate at 35 to one U.S. Dollar due to U.S. Pressure for an appreciation of the local currency The Federation asked the government on February 19 to hold the exchange rate at that level Reuter JAPANESE DEMAND FOR U.K. GILTS SEEN RISING TOKYO March 3 Japanese investor interest in British gilt edged securities is growing rapidly due to expectations sterling will remain stable despite the drop in oil prices and on calculations gilt prices will firm bond managers said Japanese British and U.S. Securities houses have been expanding inventories of gilts to meet demand from investors seeking capital gains including city and trust banks which have been active on the U.S. Treasury market they said Dealing demand for gilts with coupons around 10 pct has been getting stronger the general manager of the local office of a British securities firm said On the other hand major long term investors such as Japanese insurance companies are not very enthusiastic about buying British securities ahead of the March 31 close of the Japanese financial year traders said These investors who must convert yen into sterling through dollars for British securities purchases appear to be buying in London rather than in Tokyo a bond manager for a British securities house said The sterling yen rate was about 240.34/44 today up from 234.50 at the start of the calendar year and a narrow range of 230 to 234 late last year Many bond traders in Tokyo are doubtful that sterling will further appreciate steeply However gilts may benefit from further declines in U.K. Interest rates they said The U.K. Government is in no hurry to issue more bonds suggesting further market improvement and continuing demand from brokers here said Laurie Milbank and Co assistant manager Machiko Suzuki She said she expected the yield on the actively traded 11 3/4 pct gilt due March 2007 to dip below 9.5 pct against 9.581 pct at yesterday's close in London REUTER DAIMLER OUTPUT COULD BE AFFECTED BY DISPUTE STUTTGART March 3 Daimler Benz AG DAIG.F said its car production could fall by 150 cars a day in the foreseeable future if works councils continue to refuse to approve the firm's requests for employees to work overtime when necessary A company spokesman said the works council at Daimler's Unterturkheim plant which makes axles and other components for Daimler cars has withheld approval for overtime since the beginning of the month The IG Metall metalworkers union in the state of Baden Wuerttemberg has called on works councils in the state to reject overtime in a bid to get industry to employ more workers The Daimler spokesman said the lack of overtime work at the Unterturkheim plant could eventually affect car output at other plants but added he was unable to say when this might occur A spokesman for Dr Ing H.C. F Porsche AG PSHG.F which is also located in Baden Wuerttemberg said he did not think Porsche would suffer any loss of production because of a ban on overtime by its own works councils A strike by IG Metall in Baden Wuerttemberg in 1984 closed down the German car industry for about seven weeks as the union sought to win a 35 hour working week for its members It later settled for a reduction in the working week to 38.5 hours The spokesman said Daimler's total output of cars was currently around 2,500 a day REUTER HK HOTELS SOARS ON TAKEOVER SPECULATION HONG KONG March 3 The price of Hongkong and Shanghai Hotels Ltd SHLH.HK's stock soared on speculation of a takeover battle between major shareholders the Kadoorie family and the Evergo Industrial Enterprise Ltd EVGH.HK group stock brokers said They noted heavy buying in Hk Hotel shares after an announcement by Evergo's China Entertainment and Land Investment Co Ltd unit that it bought about 20 pct of Hk Hotels from the firm's deputy chairman David Liang for 1.06 billion dlrs The stock rose 12 H.K. Dlrs to 62 dlrs today Thomas Lau Evergo's executive director declined comment on whether the group is seeking a further stake in Hk Hotels But he told Reuters the group will hold the 20 pct stake bought from Liang as long term investment He said Evergo was attracted by the underlying strength of Hk Hotels Analysts said Evergo may be looking for a possible redevelopment of the Peninsula Hotel one of Asia's best known hotels and another site on Hong Kong island Both are owned by Hk Hotels Lai Sun Garment Co ltd yesterday said it acquired a 10 pct stake in Hk Hotels from Liang for 530 mln dlrs Lau denied any link between China Entertainment and Lai Sun on their acquisitions of the Hk Hotels stake It is purely coincidence he said But analysts were not so certain saying that the Evergo group which has a reputation as a corporate raider may team up with Lai Sun Garment for a takeover Lau also denied any contact with the Kadoorie family which analysts estimate has more than 20 pct of Hk Hotels Michael Kadoorie is chairman of Hk Hotels Lau said two representatives of Evergo will be nominated to the Hk Hotels board A source close to the Kadoorie family said the family has not considered any countermoves so far Analysts said it would be difficult for Evergo and the Kadoorie family to cooperate because of different management styles Evergo may want to split up the hotel management and property developments of Hk Hotels but that strategy may not fit the conservative Kadoorie family said an analyst who asked not to be named Another analyst noted the price of Hk Hotels had been distorted by the takeover talks because its net asset value is only worth about 50 dlrs a share The offers by Evergo and Lai Sun were for 53 dlrs a share though that is well below the current trading price Trading was suspended today in shares of Lai Sun Evergo China Entertainment and the group's associate Chinese Estates Ltd Chinese Estates lost 25 cents to 20.15 dlrs yesterday China Entertainment five to 8.60 dlrs and Evergo one to 74 cents Lai Sun gained 50 cents to 70.50 dlrs REUTER OERLIKON UNIT REJECTS DUTCH PATENT CHARGES ZURICH March 3 Oerlikon Buehrle Holding AG OEBZ.Z unit Contraves AG unequivocally rejects charges by NV Philips Gloeilampenfabrieken PGLO.AS subsidiary Hollandse Signaalapparaten BV that it violated patent rights in a radar system developed by the latter a Contraves official said Max Baumann a member of the Contraves board told Reuters his company was awaiting judgement in the case before a Zurich court quite calmly but he declined to discuss it in detail Signaal claims Contraves included the Dutch firm's patented X KA double frequency radar in an anti aircraft system Baumann said he expected judgement to take several months at least REUTER CASSA DI RISPARMIO DI ROMA LAUNCHING CD PROGRAM LONDON March 3 Italian savings bank Cassa di Risparmio di Roma is launching a 100 mln dlr euro certificate of deposit issuance program Chase Investment Bank Ltd said as arranger Chase will also be a dealer for the program along with Swiss Bank Corporation International Ltd Chase Manhattan Bank NA London Branch will be issuing and paying agent The paper will be issued in denominations of 500,000 and one mln dlrs REUTER BRYSON PAYS 5.4 MLN DLRS FOR CENERGY CORP STAKE LONDON March 2 Bryson Oil and Gas Plc said it paid a cash consideration of around 5.4 mln dlrs for about 8.6 pct of Cenergy Corp a U.S. Oil and gas exploration and production company Bryson said its board has been considering a number of possible investments to expand the company's interests and believes the opportunity to acquire an investment in Cenergy provides a suitable extension to its existing U.S. Interests Cenergy reported a net loss of 7.27 mln dlrs in the nine months to September 30 1986 while total stockholders equity on the same date was 40.72 mln dlrs REUTER REAGAN APPROVAL RATING FALLS TO FOUR YEAR LOW NEW YORK March 3 President Reagan's approval rating fell after the Tower Commission criticised his handling of the Iran arms scandal a New York Times CBS poll indicates The poll found 51 pct of those surveyed thought he was lying when he said he did not remember if he had approved the original arms sales to Iran and 35 pct thought he was telling the truth The poll found 42 pct of those surveyed approved Reagan's handling of his job and 46 pct disapproved The approval rating was the lowest since January 1983 when 41 pct approved of the way Reagan was doing his job REUTER REGAN DEPARTURE MAKES 3RD VOLCKER TERM LIKELY By Peter Torday Reuters WASHINGTON March 3 Last week's White House shake up has increased the odds that Federal Reserve Board chairman Paul Volcker a symbol of strength in a government reeling from the arms to Iran scandal will serve a third term sources close to the Fed say But they said that no decision on the appointment which must be filled this August has been taken by the White House and Volcker too has not made up his mind Former White House Chief of Staff Donald Regan who resigned last week when ex senator Howard Baker was named as his replacement was implacably opposed to Volcker and tried often to undermine him It is an open secret in Washington that Regan tried to ensure that Volcker first appointed in 1979 by President Carter will not be offered a third term by President Reagan Only Volcker's key allies in the Reagan administration Vice President George Bush and Treasury Secretary James Baker kept Regan's recent maneuvering at bay the sources said Sources close to the administration say Regan leaked a story quickly shot down by others in the administration that Beryl Sprinkel chairman of the council of economic advisers had been chosen to replace Volcker But as the administration's credibility was increasingly under fire it became clear that Regan's power to bring about such changes was on the wane The sources said New White House Chief of Staff Howard Baker has a very good relationship with his namesake at the Treasury Department and is likely to respect his views on the Fed chairmanship As a moderate Republican Baker is also unlikely to share the right wing's opposition to Volcker This new White House is going to need all the strength it can get said one source when asked about the possibility of Volcker's reappointment Paul Volcker is deeply respected in financial markets both in the United States and around the world At a time when the stability of the dollar and the viability of major debtor nations are in question Volcker's departure would definitely undermine U.S. leadership foreign exchange analysts say U.S. officials say Volcker works very closely with Treasury Secretary Baker on issues like international debt and global economic cooperation The two men seem only to differ on how far to deregulate the banking industry but recent statements by Volcker in which he adopted a more liberal attitude on deregulation signalled the politically independent central bank is coming around at least partially to the Treasury position And a recent statement by a Reagan administration official that the two men saw exactly eye to eye on the dollar was seen as an indication of Baker's support for the Fed chairman Baker is understood to have played a key role in Volcker's reappointment to the Fed in mid 1983 The sources said Baker respects Volcker and when appointed Treasury Secretary in February 1985 he decided to ensure a good working relationship in part because he believed the two key government economic institutions have to work closely Regan Treasury Secretary during President Reagan's first term was formerly head of Wall Street's largest brokerage firm Merrill Lynch and came to Washington determined to be America's pre eminent economic spokesman He developed a deep antipathy for Volcker whose political skills undermined that ambition and who financial markets took much more seriously But the sources said Volcker would have to be invited to stay Is the president going to ask him he wouldn't stay otherwise said one He'd have to be asked said Stephen Axilrod formerly staff director of monetary policy at the Fed and now vice chairman of Nikko Securities Co International Otherwise the list of potential candidates is not awe inspiring And if Volcker left this Augsut he would leave behind one of the most inexperienced Fed Boards in years Many analysts believe this lack of collective experience the four sitting members were all appointed within the last three years is dangerous coming at a time when the global economy is threatened by instability An experienced successor therefore would seem a necessity One widely mentioned possibility is Secretary of State George Shultz whose experience as Treasury Secretary under Preesident Nixon and background as a trained economist would make him ideal But Shultz too may have been damaged by the arms to Iran scandal while vice chairman Manuel Johnson is regarded at 37 years old as too young for the job Other potential candidates include economist Alan Greenspan frequently an informal presidential economic adviser New York Fed President E Gerald Corrigan Federal Deposit Insurance Corp chairman William Seidman and Sprinkel Long a Regan protege Sprinkel's chances may be damaged by his patron's departure from the White House Reuter GM GM CUTS WAGE BOOSTS FOR SALARIED EMPLOYEES DETROIT March 3 General Motors Corp has changed its method of disbursing merit raises for salaried employees and is reducing the size of the merit raise pool to 3.5 pct of the total amount available for salaries from 5.5 pct last year a company spokesman said He said GM will no longer include merit raises in the calculation of base pay but will make them simply lump sum payments As a result the merit raises will not be included in the calculation of pensions and other benefits The change affects about 109,000 salaried workers in the U.S. and Canada GM last year eliminated cost of living increases for salaried workers making pay increases based on merit alone As a result of the new action GM has effectively frozen the base pay rates of salaried employees The spokesman said GM is making the change to remain cost competitive with other U.S. automakers GM is currently in thje midst of a program to cut employment of salaried workers by 25 pct Reuter PRE PAID LEGAL PPD GETS I.C.H. ICH FINANCING ADA Okla March 3 Pre Paid Legal Services Inc said it has signed a letter of intent under which it would receive financing from I.C.H. Corp The company said under the proposed transaction I.C.H. would loan it up to 100 mln dlrs and the loan balance would be convertible at any time by either party into Pre Paid common stock at 11 dlrs per share In addition it said it would grant I.C.H. a five year option to purchase new shares at the same price It said the option would enable I.C.H. to acquire up to 500 pct plus one share of Pre Paid common Pre Paid said until expiration of the option and as long as Pre Paid maintained a mutually agreeable combined loss and expense ratio I.C.H. would on Pre Paid's request exercise as much of the option as may be necessary to meet Pre Paid's funding needs The company said I.C.H. has requested the right to buy 90,909 Pre Paid shares from Pre Paid chairman Harland C Stoneciphjer for 11 dlrs each Stonecipher now owns or has the right to acquire 1,965,269 Pre Paid shares and will agree to restrictions on the sale of his remaining shares it said The company saiod Stonecipher will remain chairman Pre Paid said the transactions are subject to approval by boards of both comnpanies and regulatory agencies Reuter NEITHER SIDE OPTIMISTIC ON ROTTERDAM PORT ISSUES ROTTERDAM March 3 Employers and the port union FNV are to meet again this afternoon to attempt a settlement of the six week old dispute in Rotterdam's general cargo sector but neither side is optimistic spokesmen for both sides told Reuters Little progress was made in last night's three hours of talks with both sides largely reiterating their positions There is still a very large gap between the employers and the FNV and I can't say that we expect to reach any agreement But at least we are still talking a union spokesman said Employers organization chairman Jacques Schoufour accused the FNV of intransigence in refusing to alter its stance at all over the past two months The FNV is not serious about our discussions and I am really not optimistic about it changing its point of view at all If we find this afternoon that the FNV still refuses to accept the necessary redundancies in the general cargo sector then we will break off the talks and the redundancies may begin later this month Schoufour said The series of strikes which employers say has cost them more than seven mln guilders in lost import business in the past six weeks began on January 19 in protest at plans for 800 redundancies from the sector's 4,000 workforce starting with 350 this year Late last month Social Affairs minister Louw de Graaf said unless the dispute was settled by yesterday he would withdraw the sector's 10 mln guilder annual labour subsidy Both sides wrote to the minister yesterday setting out their cases but Schoufour said he did not expect to hear from him before Wednesday at the earliest Reuter AMR AMR TO HOLD PRESS CONFERENCE THIS MORNING DALLAS FORT WORTH Texas March 3 AMR Corp will hold a press conference this morning in New York at 0900 EST a company spokesman said He would not comment on the subject of the press conference or would he confirm published reports that AMR will today announce a 2.5 billion dlr purchase of aircraft and engines According to a New York Times report AMR is expected to announce the purchase of 25 widebodied longrange A300's from Airbus Industrie and 15 Boeing Co BA 767's and the choice of General Electric Co GE to supply all 80 engines for the craft The engine order alone for 80 CF80C 2's would be worth about 500 mln dlrs The Airbus plane order would be worth about 1.25 billion dlrs and the Boeing order about 750 mln dlrs according to the report Reuter UNILEVER IMPROVES IN MOST SECTORS DURING 1986 LONDON March 3 The Unilever Plc and NV UN.A group saw improved performance in almost all sectors during 1986 the Anglo Dutch group said in its results statement Very good progress was made last year while the recent acquisition of Chesebrough Pond's Inc CBM.N was a significant addition which will greatly benefit the group in the years to come Earlier Unilever reported combined fourth quarter pre tax profit of 276 mln stg level with the year earlier period making 1.14 billion stg compared with 953 mln for the 1986 full year Unilever said it plans to change its depreciation policy to the more conventional practice of depreciating assets individually rather than depreciating fixed assets at average rates The new method is expected to lead to a reduction in the accumulated provision for depreciation and thereby increase the net book value of tangible asssets by about 300 mln stg as at January 1 1987 Unilever Plc shares are up 25p since yesterday at 2,575p in buoyant response to the results and share split proposal though 1986 profits were not ahead of market forecasts dealers added REUTER U.S. LEADING INDEX FELL 1.0 PCT IN JANUARY WASHINGTON March 3 The U.S. index of leading indicators fell a seasonally adjusted 1.0 pct in January after a revised 2.3 pct December gain the Commerce Department said The department previously said the index rose 2.1 pct in December The decline in January was the biggest for any month since July 1984 when the index fell 1.7 pct The January decrease left the index at 183.8 over its 1967 base of 100 and was led by a fall in contracts and orders for plant and equipment A total of six of 10 indicators available for January contributed to the decline Besides contracts and orders for plant and equipment they were building permits manufacturers new orders for consumer goods a change in sensitive materials prices slower deliveries from vendors and higher average weekly claims for state unemployment insurance Four of 10 indicators were positive including stock prices new business formation average work week and money supply The main factor for the December upward revision was new business formation There was no revision in the 0.9 pct increase in the leading indicators index for November The index of coincident indicators which measures the current economy fell 0.1 pct in January after increases of 0.7 pct in December and 0.2 pct in November The index of lagging indicators which measures past economic activity rose 0.5 pct in January after a decrease of 0.5 pct in December and an increase of 0.2 pct in November Reuter BRAZIL FINANCE MINISTER MEETS FRENCH OFFICIALS PARIS March 3 Brazilian Finance Minister Dilson Funaro held separate meetings with French Finance Minister Edouard Balladur and Bank of France Governor Jacques de Larosiere on the second stage of a European mission to explain his country's latest debt crisis French officials said They declined to disclose details of the talks Monetary sources described them as a preliminary diplomatic effort to see if France could help to negotiate financial concessions sought by Brazil from Western banks governments and official lending agencies REUTER COFFEE PRICE FALL SHORT TERM DUTCH ROASTERS ROTTERDAM March 3 This morning's sharp decline in coffee prices following the breakdown late last night of negotiations in London to reintroduce International Coffee Organization ICO quotas will be short lived Dutch roasters said The fall is a technical and emotional reaction to the failure to agree on reintroduction of ICO export quotas but it will not be long before reality reasserts itself and prices rise again a spokesman for one of the major Dutch roasters said The fact is that while there are ample supplies of coffee available at present there is a shortage of quality he said Average prices fell to around 110 cents a lb following the news of the breakdown but we expect them to move back again to around 120 cents within a few weeks the roaster added Dutch Coffee Roasters Association secretary Jan de Vries said although the roasters were disappointed at the failure of consumer and producer ICO representatives to agree on quota reintroduction it was equally important that quotas be reallocated on a more equitable basis There is no absolute need for quotas at this moment because the market is well balanced and we must not lose this opportunity to renegotiate the coffee agreement he said There is still a lot of work to be done on a number of clauses of the International Coffee Agreement and we would not welcome quota reintroduction until we have a complete renegotiation de Vries added With this in mind and with Dutch roasters claiming to have fairly good forward cover the buying strategy for the foreseeable future would probably be to buy coffee on a hand to mouth basis and on a sliding scale when market prices were below 120 cents a lb roasters said Reuter GREENWOOD RESOURCES GRRL SELLS COMPANY STAKE DENVER March 3 Greenwood Resources Inc said it has sold its 4,300,000 common share majority holding in New London Oil Ltd of London to an affiliate of Guinness Peat Group PLC of London and an affiliate of Sidro SA of Belgium for a total of 1,700,0000 dlrs in cash The company said it will apply the proceeds of the sale to support its line of credit and as part of a proposed debt restructuring with Colorado National Bancshares COLC and Greenwood shareholders It said it will retain a seat on the New London board Reuter AMR AMR TO ACQUIRE 40 LONG RANGE JET AIRCRAFT NEW YORK March 3 AMR Corp's American Airlines said it will buy 40 long range jet aircraft to support international expansion including routes in the Caribbean Under one agreement the airline said it will acquire 15 Boeing Co BA 767 300 planes Under a separate agreement American will acquire A 300 600 aircraft from Airbus Industrie a European consortium The company's announcement included no value for the order Published reports put the value of the aircraft order including engines at 2.5 billion dlrs A total of 98 General Electric Co GE CF6 80C2 engines is involved in the orders American Airlines said The published reports valued the engines at five mln dlrs each The company said it will acquire the planes and engines using rental leases that can be terminated on relatively short notice The arrangement allows the airline to acquire the planes without adding to its debt it explained The Boeing 767s to be delivered from February 1988 to October 1988 will be used on routes between the U.S. and Europe American said It said the Airbus A300s scheduled for delivery from April 1988 through June 1989 will be assigned to the Caribbean where American has developed a major new hub at San Juan Puerto Rico Reuter VDO UNIT AND THOMSON CSF IN JOINT VENTURE FRANKFURT March 3 VDO Luftfahrtgeraete Werk Adolf Schindling GmbH 75 pct owned by autoparts maker VDO Adolf Schindling AG said it set up a joint venture with Thomson CSF TCSF.PA of France to produce liquid crystal displays It said in a statment that it held 20 pct of the new company called Eurodisplay and Thomson CSF the remaining 80 pct Thomson owns the remaining 25 pct of VDO Luftfahrtgeraete The two companies have also agreed to pool their research on development construction and assembly of the systems for use in vehicles and aircraft with General Electric Company GEN of the U.S. Reuter HEINZ INTERESTED IN BUYING GUINNESS BREWING DUBLIN March 3 H.J. Heinz HNZ.N chairman Tony O'Reilly would be interested in buying Guinness PLC GUIN.L's brewery division if it were for sale a spokesman said The spokesman reacting to Irish and British press reports said He continues to be interested were the group to offer the brewery side of Guinness for sale But he has not put together a consortium nor has he been buying shares He was quoted by the Irish magazine Business and Finance as saying he would be interested if it came on the market and that he had the support of two international banks if he decided such a purchase might be worthwhile In the magazine article he suggested that if brewing profits were calculated to be in the region of 80 mln punts the asking price would not be higher than 800 mln punts A multiple of ten times earnings would be the top whack for the brewing division in the current Guinness situation he said This would mean an expensive exercise right on the edge but not impossible he added The deal would mean buying the Dublin London Nigerian and Malaysian breweries because It could only be sold as an integral unit if it was going to be sold at all O'Reilly said Reuter EQUATORIAL COMMUNICATIONS EQUA TO HAVE LOSSES MOUNTAIN VIEW Calif March 3 Equatorial Communications Co said it expects to report losses of about 57 mln dlrs for the fourth quarter and 68 mln dlrs for the full year 1986 on revenues of about 10 mln dlrs for the quarter and 52 mln dlrs for the year Equatorial said the losses will include a charge of about 45 mln dlrs from costs associated with the restructuring of its business including adjustments to reflect the market value of transponders owned and leased by Equatorial and other reserves for inventory receivables and excess facilities Equatorial said the fourth quarter operating results will also include restructuring costs of about 5,500,000 dlrs in addition to the 45 mln dlr charge Equitorial also said that as of March One it is operating in technical default under its lease of transponders on the Galaxy III satellite due to its inabiliuty to maintain agreed upon financial ratios It said it is in talks with the lessors in an attempt to restructure lease obligations Further Equitorial said it is in default of two other oblitations in connection with the purchase or lease of transponders as a result of cross default provisions Equatorial said it has signed a memorandum of understanding for Contel Corp CTC to purchase 10 mln dlrs of Equatorial master earth stations micro earth stations and associated equipment and loan Equatorial six mln dlrs over a six month period for repayment starting in December 1988 The company said Conteol under the agreement would assume a portion of Equatorial's rights and obligations under the Galaxy III transponder lease with Burnham Leasing on the occurrence of certain events Equatorial said it would grant Contel an option to buy about 3,600,000 common shares at 3.25 dlrs each Equatorial said its understandings with Contel are subject to Equatorial's ability to restructure a significant portion of its obligations and to obtain concessions from lenders and lessors in particular under its Galaxy III transponder lease It said it hopes to finalize a Contel agreement by April 15 Equatorial in 1985 earned 1,807,000 dlrs after a 3,197,000 dlr gain from early debt retirement on revenues of 56.1 mln dlrs For the first nine months of 1986 the company lost 9,476,000 dlrs on revenues of 45.4 mln dlrs compared with a 1,784,000 dlr profit after the early retirement gain on revenues of 38.5 mln dlrs Reuter TRANSAMERICA TA TO HAVE AUSTRALIAN SALE GAIN LOS ANGELES March 3 Transamerica Corp said it will have an after tax gain of about 10 mln U.S. dlrs on the sale of its Occidental Life Insurance Co of Australia Ltd affiliate to Pratt and Co Financial Services Pty Ltd of Melbourne for 105 mln Australian dlrs The sale was announced earlier today in Australia Proceeds will be used to enhance the growth of North American operations of its Transamerica Occidental Life subsidiary the company said Reuter GM GM CUTTING SALARIED MERIT RAISES DETROIT March 3 General Motors Corp told employees it was reducing the funds available for merit raises for 109,000 salaried workers GM which has been taking wide ranging steps to cut costs said in a letter it cut the amount available for raises to 3.5 pct of the payroll from 5.5 pct in 1986 The letter also said raises will be given in one annual lump sum payment from April rather than being folded into salaries and thus increasing the base for benefit payments Reuter BP OIL RAISES OPERATING PROFIT LONDON March 3 BP Oil Ltd the U.K. Marketing and refining arm of British Petroleum Co Plc BP.L raised its pretax operating profit on a replacement cost basis to 182 mln stg in calendar 1986 compared with 66 mln stg in 1985 Sales and operating revenue fell to 3.1 billion stg from 4.2 billion on a replacement cost basis Historical cost operating profit was 61 mln stg up from 16 mln BP Oil said 1985 profits had been depressed by exceptional items Its profit figures were stated before interest charges Chief executive David Kendall said improved results mirrored benefits of a restructuring program undertaken in recent years However he warned future financial pressure on the industry will be severe The U.K. Oil marketing and refining industry will need to invest larger sums probably around 500 mln stg a year for a good many years he said in a statement Reuter CANADA PRICES 1.2 BILLION DLR BOND ISSUE OTTAWA March 3 The finance department announced the new 1.2 billion dlr four part bond issue to be dated March 15 and delivered March 16 will be priced as follows 8 pct bonds due July 1 1990 at a price of 100.30 pct todmpB w about 7.89 pct to maturity 8 1/4 pct bonds due March 1 1994 at a price of 100.25 pct to yield about 8.20 pct to maturity 8 1/4 pct bonds due March 1 1997 at a price of 99.50 pct to yield about 8.32 pct to maturity 8 1/2 pct bonds due June 1 2011 at a price of 98.625 pct to yield about 8.63 pct to maturity The 2011 maturity will be issued to a maximum of 375 mln dlrs The Bank of Canada will buy 100 mln dlrs of the new issue including a minimum of 10 mln dlrs of the 2011 maturity Reuter EARTHQUAKES CONTINUE IN NORTHERN NEW ZEALAND WELLINGTON March 3 Earthquakes and aftershocks are still shaking areas of northern New Zealand following yesterday's strong tremor which left 3,000 people homeless Four earthquakes measuring up to 4.5 on the Richter scale have hit the Bay of Plenty and Waikato region in the north east since midnight yesterday 1200 GMT No casualties have been reported and no further major damage civil defence sources said A government seismologist said from Rotorua in the North Island some five tremors were being recorded every 10 minutes The seismologist said if the pattern of other large earthquakes was followed the shocks would continue for one to several weeks declining in frequency and magnitude But the chance of a further large shock could not be ruled out Reuter U.S. ASKS JAPAN END AGRICULTURE IMPORT CONTROLS TOKYO March 3 The U.S. Wants Japan to eliminate import controls on agricultural products within three years visiting U.S. Under Secretary of State for Economic Affairs Allen Wallis told Eishiro Saito Chairman of the Federation of Economic Organisations Keidanren a spokesman for Keidanren said The spokesman quoted Wallis as saying drastic measures would be needed to stave off protectionist legislation by Congress Wallis who is attending a sub cabinet level bilateral trade meeting made the remark yesterday in talks with Saito Wallis was quoted as saying the Reagan Administration wants Japanese cooperation so the White House can ensure any U.S. Trade bill is a moderate one rather than containing retaliatory measures or antagonising any particular country He was also quoted as saying the U.S. Would be pleased were Japan to halve restrictions on agricultural imports within five years if the country cannot cope with abolition within three the spokesman said Japan currently restricts imports of 22 agricultural products A ban on rice imports triggered recent U.S. Complaints about Japan's agricultural policy Reuter U.S. FINANCIAL ANALYSTS March 3 Wilcox Gibbs New York Sarich Technologies Trust New York Health Management Associates New York Reuter U.S. DIVIDEND MEETINGS MARCH 3 Mickelberry Corp Premier Industrial Reuter U.S. SHAREHOLDER MEETINGS MARCH 3 None Reportedd Reuter FIRSTCORP FCR SEES GAIN ON CONDEMNATION RALEIGH N.C. March 3 Firstcorp Inc said it weill report an after tax gain of 1,827,000 dlrs or 56 cts per share primary and 42 cts fully diluted from the proposed condemnation and acquisition of a parking deck it operates by Wake County The company said if it reinvested proceeds in a similar property within 24 months the gain on the sale would be deferred for tax purposes Reuter ASHTON TATE TATE TO OFFER COMMON SHARES TORRANCE Calif March 3 Ashton Tate said it intends to file for an offering of about two mln shares within the next 30 days It said proceeds would be used for working capital and other general corporate purposes including the possible acquisition of other businesses or additional technology Ashton Tate now has about 23.6 mln shares outstanding Reuter KEYCORP KEY REGISTERS SUBORDINATED NOTES ALBANY N.Y. Marc 3 KeyCorp said it has filed with the Securities and Exchange Commission for the offering of 75 mln dlrs of subordinated capital notes due March 1 1999 The company said it is anticipated the notes will be offered this week through underwriters led by First Boston Corp Proceeds will be used for general corporate purposes including the acquisition of Seattle Trust and Savings Bank which is scheduled for July one KeyCorp said Reuter U.K. MONEY MARKET SHORTAGE FORECAST REVISED DOWN LONDON March 3 The Bank of England said it had revised its forecast of the shortage in the money market down to 450 mln stg before taking account of its morning operations At noon the bank had estimated the shortfall at 500 mln stg REUTER NATIONAL AMUSEMENTS AGAIN UPS VIACOM VIA BID NEW YORK March 3 Viacom International Inc said National Amusements Inc has again raised the value of its offer for Viacom's publicly held stock The company said the special committee of its board plans to meet later today to consider this offer and the one submitted March one by MCV Holdings Inc A spokeswoman was unable to say if the committee met as planned yesterday Viacom said National Amusements Arsenal Holdings Inc subsidiary has raised the amount of cash it is offering for each Viacom share by 75 cts to 42.75 dlrs while the value of the fraction of a share of exchangeable Arsenal Holdings preferred to be included was raised 25 cts to 7.75 dlrs National Amusements already owns 19.6 pct of Viacom's stock Reuter SANDOZ PLANS WEEDKILLER JOINT VENTURE IN USSR BASLE March 3 Sandoz AG said it planned a joint venture to produce herbicides in the Soviet Union The company said it had signed a letter of intent with the Soviet Ministry of Fertiliser Production to form the first foreign joint venture the ministry had undertaken since the Soviet Union allowed Western firms to enter into joint ventures two months ago The ministry and Sandoz will each have a 50 pct stake but a company spokeswoman was unable to give details of the size of investment or planned output Reuter TAIWAN REJECTS TEXTILE MAKERS EXCHANGE RATE PLEA TAIPEI March 3 Central bank governor Chang Chi cheng rejected a request by textile makers to halt the rise of the Taiwan dollar against the U.S. Dollar to stop them losing orders to South Korea Hong Kong and Singapore a spokesman for the Taiwan Textile Federation said He quoted Chang as telling representatives of 19 textile associations last Saturday the government could not fix the Taiwan dollar exchange rate at 35 to one U.S. Dollar due to U.S. Pressure for an appreciation of the local currency The Federation asked the government on February 19 to hold the exchange rate at that level The federation said in its request that many local textile exporters were operating without profit and would go out of business if the rate continued to fall Reuter OCCIDENTAL OXY OFFICIAL RESIGNS LOMBARD Ill March 3 MidCon Corp a subsidiary of Occidental Petroleum Corp OXY said William C Terpstra has resigned as president and chief operating officer and his reponsibilities will be assumed by MidCon chairman O.C. Davis No reason was given Reuter ITALY'S BNL TO ISSUE 120 MLN DLR CONVERTIBLE BOND ROME March 3 Italy's state owned Banca Nazionale del Lavoro BNL said it would issue 120 mln dlrs of five year convertible eurobonds an operation to be lead managed by Credit Suisse First Boston Ltd BNL president Nerio Nesi told a news conference that the issue to be placed on the main international markets and listed in Luxembourg would be the first equity linked issue by an Italian bank on the Euromarket BNL officials said the issue is scheduled for mid March and additional financial details were not immediately available They said the operation would be through the issue of depositary receipts by BNL's London branch They said the bonds would carry warrants issued by its Efibanca subsidiary and convertible into BNL saving shares within five years The officials said a banking consortium led by Credit Suisse First Boston would at the same time arrange for the private placing of an unspecified number of BNL savings shares with foreign institutional investors The operation was to further its aim of obtaining a listing on foreign stock exchanges with a view to future capital increases through ordinary share issues they said REUTER GE GE SAYS AMR AMR ORDER WORTH 650 MLN DLRS EVENDALE Ohio March 3 General Electric Co said AMR Corp's oprder of GE CFG 80C2 engines to power 25 new Airbus Industrie A300 600R and 15 Boeing Co BA 767 300ER twinjets is worth over 650 mln dlrs The company said the order is the largest single one it has ever received for commercial aircraft engines AMR announced the order earlier today GE said deliveries will start in early 1988 Reuter U.K. MONEY MARKET GIVEN FURTHER 437 MLN STG HELP LONDON March 3 The Bank of England said it had provided the money market with a further 437 mln stg assistance in the afternoon session This brings the Bank's total help so far today to 461 mln stg and compares with its revised shortage forecast of 450 mln stg The central bank made purchases of bank bills outright comprising 120 mln stg in band one at 10 7/8 pct and 315 mln stg in band two at 10 13/16 pct In addition it also bought two mln stg of treasury bills in band two at 10 13/16 pct REUTER MINSTAR INC MNST 4TH QTR NET MINNEAPOLIS MINN March 3 Oper shr loss 31 cts vs loss 30 cts Oper net loss 5,429,000 vs loss 5,216,000 Revs 257.5 mln vs 243.6 mln Avg shrs 17.5 mln vs 13.5 mln Year Oper shr loss eight cts vs profit 28 cts Oper net loss 1,324,000 vs profit 4,067,000 Revs 989.5 mln vs 747.9 mln Avg shrs 17.6 mln vs 15.7 mln NOTE 1986 operating net loss excludes income from discontinued operations equal to 11 cts in the quarter and 66 cts in the year compared with 1.07 dlrs in the quarter and 1.23 dlrs in the respective periods of 1985 1986 operating net loss also excludes extraordinary charges of 14 cts in the quarter and 54 cts in the year 1985 operating net profit excludes an extraordinary gain of 47 cts Reuter DAI ICHI HOTEL SWISS FRANC NOTES COUPON CUT ZURICH March 3 The coupon on Dai Ichi Hotel Ltd's 50 mln Swiss franc issue of five year notes with equity warrants has been cut to 1 5/8 pct from the indicated 1 7/8 pct lead manager Swiss Volksbank said The warrants have an exercise price of 1,507 yen per share compared with the last traded price of 1,470 yen it said The notes are guarantees by Long Term Credit Bank of Japan Ltd Payment is due on March 25 REUTER MARK RESOURCES INC YEAR LOSS CALGARY Alberta March 3 Shr not given Loss 54.9 mln Revs 27.2 mln Note Prior year results not given 1986 results include accounts of 89 pct owned Precambrian Shield Resources Ltd acquired November 5 1986 Reuter SAAB SCANIA ISSUES 150 MLN DLR EUROBOND LONDON March 3 Saab Scania AB is issuing a 150 mln dlr eurobond due April 2 1992 paying 7 3/4 pct and priced at 101 3/4 pct lead manager Morgan Guaranty Ltd said The bond is available in denominations of 5,000 and 50,000 dlrs and will be listed in London Payment date is April 2 1992 Fees comprise 1 1/4 pct selling concession and 5/8 pct management and underwriting combined and listing will be in London REUTER TRANSFORM LOGIC TOOG REVISES RESULTS DOWNWARD SCOTTSDALE Ariz March 3 Transform Logic Corp said it has revised downward its previously reported fourth quarter and year ended October 31 results to reflect compensation expense for employee stock options The company said resolution of this disagreement with its auditors came as a result of Securities and Exchange Commission involvement The company will amend its option granting procedure to conform to the SEC decision which will eliminate future charges it added Transform said its fourth quarter profit was revised to 305,082 dlrs or two cts a share from the previously reported 580,955 dlrs which left the company with a fiscal 1986 loss of 249,814 dlrs or two cts a share instead of the reported 26,195 dlrs profit Reuter AMERICAN STORES ASC SEES LOWER YEAR NET SALT LAKE CITY March 3 American Stores Co said it expects to report earnings per share of 3.70 to 3.85 dlrs per share on sales of slightly over 14 billion dlrs for the year ended January 31 The supermarket chain earned 4.11 dlrs per share on sales of 13.89 billion dlrs last year The company did not elaborate Reuter KASLER CORP KASL 1ST QTR JAN 31 NET SAN BERNARDINO Calif March 3 Shr profit three cts vs loss seven cts Net profit 161,000 vs loss 367,000 Revs 24.3 mln vs 26.5 mln Reuter CARIBBEAN SELECT CSEL TO REDEEM WARRANTS TAMPA Fla March 3 Caribbean Select Inc said it has elected to redeem on April 10 all its Class A warrants and all Class B warrants at 0.01 ct each At the same time it said its board has decided to reduce the exercise price of the Class B warrants to 3.50 dlrs per common share from four dlrs to encourage the exercise of the warrants Each Class B warrant allows the purchase of one common share It said each Class A warrant is still exercisable into one common share at two dlrs each Reuter UNILEVER HAS IMPROVED MARGINS VOLUMES IN 1986 LONDON MARCH 3 Unilever Plc UN.A and NV group reported improvements in margins and underlying sales volume growth of five pct in 1986 after stripping out the effects of falling prices disposals and currency movements Unilever Plc chairman Michael Angus said He told reporters that volumes in North America increased some 10.5 pct while European consumer goods rose about 2.5 pct after being flat for some years Much of the disposal strategy aimed at concentrating activities on core businesses had now been completed he noted But the process of acquisitions would go on with strategic acquisitions taking place from time to time he said The company earlier reported a 20 pct rise in pre tax profits for 1986 to 1.14 billion stg from 953 mln previously In guilder terms however profits at the pre tax level dropped three pct to 3.69 billion from 3.81 billion Angus said the recent purchase of Chesebrough Pond's Inc CBM.N for 72.50 dlrs a share was unlikely to bring any earnings dilution However it would not add much to profits with much of the company's operating profits paying for the acquisition costs Finance director Niall Fitzgerald added that while gearing debt to equity plus debt rose to about 60 pct at end 1986 from 35 pct last year this was expected to drop back to about 40 pct by end 1987 The same divergence was made in full year dividend with Unilever NV's rising 3.4 pct to 15.33 guilders and Unilever Plc's increasing 29.9 pct to 50.17p approximately in line with the change in attributable profit Angus said the prospectus for the sale of parts of Chesebrough was due to be published shortly However he said that there was no target date for completing the process He also declined to say what sort of sum Unilever hoped to realise from the operation beyond noting that Chesebrough had paid around 1.25 billion dlrs for Stauffer Chemical Co which operates outside Unilever's core activities In the U.S. Organic growth from the Lipton Foods business considerable expansion in the household products business and in margarine had been behind the overall sales increase However he noted that the U.S. Household products business had turned in a planned loss with fourth quarter performance better than expected despite the anticipated heavy launch costs of its Surf detergents Reuter SARA LEE SLE TO BUY 34 PCT OF DIM CHICAGO March 3 Sara Lee Corp said it agreed to buy a 34 pct interest in Paris based DIM S.A. a subsidiary of BIC S.A. at a cost of about 84 mln dlrs DIM S.A. a hosiery manufacturer had 1985 sales of about 260 mln dlrs The investment includes the purchase of 360,537 newly issued DIM shares valued at about 51 mln dlrs and a loan of about 33 mln dlrs it said The loan is convertible into an additional 229,463 DIM shares it noted The proposed agreement is subject to approval by the French government it said Reuter HOLIDAY CORP HIA HOTEL GROUP ADDS PROPERTIES MEMPHIS Tenn March 3 Holiday Corp's Holiday Inn Hotel Group said it will add a record 17 hotels with 4,440 rooms to its international division as part of its plan to double its presence abroad by 1995 The company said its international division will reach 50,000 rooms by this spring classifying it as the eighth largest hotel chain in the world Holiday said by the end of the year there will be approximately 220 Holiday Inn hotels in 54 countries The company said it plans to expand from 28 to 55 hotels in its Asia Pacific region and to 192 in its Europe Middle East Africa regionby 1995 For 1987 the hotel group will focus on expansion on Western Europe and Asia citing China as an untapped source for the international lodging industry Holiday also said it will concentrate on city center hotels in key destination cities in Western Europe catering primarily to business travelers Some of those cities where Holiday said it will open new properties this year include Amsterdam Lyon Atlas and Lisbon Reuter CHINA CALLS FOR BETTER TRADE DEAL WITH U.S. PEKING March 3 China called on the United States to remove curbs on its exports to give it favourable trading status and ease restrictions on exports of high technology But the U.S. Embassy replied that Chinese figures showing 13 years of trade deficits with the U.S. Out of the last 15 are inaccurate and said Peking itself would have to persuade Congress to change laws which limit its exports The official International Business newspaper today published China's demands in a editorial to coincide with the visit of U.S. Secretary of State George Shultz It is extremely important that the U.S. Market reduce its restrictions on Chinese imports provide the needed facilities for them and businessmen from both sides help to expand Chinese exports the editorial said The U.S. Should quickly discard its prejudice against favourable tariff treatment for Chinese goods and admit China into the Generalised System of Preference GSP Despite easing of curbs on U.S. Technology exports in recent years control of them is still extremely strict and influences normal trade between the two countries it added The paper also printed an article by China's commercial counsellor in its Washington embassy Chen Shibiao who said that all kinds of difficulties and restrictions were preventing bilateral trade fulfilling its full potential He named them as U.S. Protectionist behaviour curbs on technology transfer and out of date trade legislation Reuter U.S. COMMERCE SECRETARY SAYS EXPORT RISE NEEDED WASHINGTON March 3 Commerce Secretary Malcolm Baldrige said after the release of a sharply lower January leading indicator index that a pickup in exports is needed The best tonic for the economy now would be a pickup in net exports he said in a statement after the department reported the index fell 1.0 pct in January from December the sharpest drop since a 1.7 pct fall in July 1984 The main reasons for the January decline after a 2.3 pct December rise were declines in building permits new orders for plant and equipment and for consumer and industrial goods Reuter PRECAMBRIAN SHIELD TAKES 51 MLN DLR WRITEDOWN CALGARY Alberta March 3 Precambrian Shield Resources Ltd earlier reporting a large loss against year ago profit said the 1986 loss was mainly due to a 51,187,000 dlr writedown on its U.S. operations uneconomic coal and other mineral properties Precambrian which is 89 pct owned by Mark Resources Inc said it took the writedown in accordance with new Canadian Insititute of Chartered Accountants guidelines for full cost method accounting by oil and gas companies Precambrian earlier reported a 1986 loss of 53.4 mln dlrs compared to profit of 4.5 mln dlrs in the prior year Reuter AERO SERVICES AEROE GETS NASDAQ EXCEPTION TETERBORO N.J. March 3 Aero Services Inc said its common stock will continue to be included for quotation in the National Association of Securities Dealers NASDAQ system due to an exception from filing requiements which it failed to meet as of January 15 The company said while it believes it can meet conditions the NASD imposed for the exception there can be no assurance that it will do so Reuter KENYAN ECONOMY FACES PROBLEMS PRESIDENT SAYS NAIROBI March 3 The Kenyan economy is heading for difficult times after a boom last year and the country must tighten its belt to prevent the balance of payments swinging too far into deficit President Daniel Arap Moi said In a speech at the state opening of parliament Moi said high coffee prices and cheap oil in 1986 led to economic growth of five pct compared with 4.1 pct in 1985 The same factors produced a two billion shilling balance of payments surplus and inflation fell to 5.6 pct from 10.7 pct in 1985 he added But both these factors are no longer in our favour As a result we cannot expect an increase in foreign exchange reserves during the year he said The price of coffee Kenya's main source of foreign exchange fell in London today to about 94 cents a pound from a peak of 2.14 dlrs in January 1986 Crude oil which early last year slipped below 10 dlrs a barrel has since crept back to over 18 dlrs Moi said the price changes coupled with a general decline in the flow of capital from the rest of the world made it more difficult to finance the government's budget deficit Kenya was already spending over 27 pct of its budget on servicing its debts and last year it was a net exporter of capital for the first time in its history he added This is a clear indication that we are entering a difficult phase as regards our external debts and it is imperative that we raise the rate of domestic savings and rely less on foreign sources to finance our development he said It will be necessary to maintain strict discipline on expenditure And members of this house will have to take the lead in encouraging wananchi ordinary people to be more frugal in satisfying immediate needs the president added REUTER TRI STAR TRSP CHANGING FISCAL YEAR NEW YORK March 3 Tri Star Pictures Inc said it is changing its fiscal year to year ending at the end of February from a calendar year to reflect the traditional business cycles of its two principal businesses motion picture distribution and motion picture exhibition It said it expects to file a report for the two month fiscal year ended February 28 1987 by May 28 and to report earnings for the new first quarter in June Reuter LIFETIME LFT TO MAKE ANNOUNCEMENT NEW YORK March 3 Lifetime Corp said it will make an announcement this morning between 1000 EST and 1030 EST A company spokesman said the company preferred not to comment until that time The American Stock Exchange delayed trading in Lifetime shares this morning for news pending Reuter SCOTT'S HOSPITALITY ACQUIRES CAPITAL FOOD TORONTO March 3 Scott's Hospitality Inc said it acquired all issued shares of Capital Food Services Ltd of Ottawa Terms were not disclosed Scott's said Capital Food had 1986 sales of more than 20 mln dlrs and will continue to operate under its present name with existing management Capital Food provides food services to several Ottawa institutions the company said Reuter ZIMBABWE COFFEE OUTPUT SET TO RISE HARARE March 3 Zimbabwean coffee output will reach 13,000 tonnes this year up on just over 11,000 tonnes produced in 1986 the Commercial Coffee Growers Association said Administrative Executive Robin Taylor told the domestic news agency ZIANA that Zimbabwe earned the equivalent of 33 mln U.S. Dlrs from coffee exports last year He would not say how much the country would earn in 1987 Taylor said the 173 commercial coffee growers under his association had increased production from 5,632 tonnes in 1980 to more than 11,000 tonnes in l986 Reuter YANKEE YNK SWAPS STOCK FOR DEBENTURES COHASSET Mass March 3 Yankee Cos Inc said it has acquired 3,916,000 dlrs of 7 1/2 pct convertible subordinated debentures due May 15 1998 of its YFC International Finance NV affiliate for 501,807 common shares from an institutional investor Reuter VIDEO DISPLAY VIDE TO SELL CABLE TV UNIT ATLANTA March 3 Video Display Corfp said it has reached a tentiative agreement to sell its existing cable television business for undisclosed terms and expects to report a gain on the transaction The buyer was not named The company said it will redeploy its service assets into manufacturing and distribution It said the operations being sold accounted for about five pct of revenues for the year ended February 28 and lost money Reuter BERYLLIUM INT'L SIGNS JOINT VENTURE PACT SALT LAKE CITY Utah March 3 Beryllium International Corp said it has signed a joint venture agreement with Cominco American Inc a unit of Cominco Ltd CLT to develop a beryllium mine and processing plant on Beryllium International's property in the Topaz Mountains southwest of Salt Lake City Beryllium said as a 49 pct owner of the venture iot would be contributing the mine while Cominco as operator and 51 pct owner would conduct drilling metallurgical studies process testing and other preliminary work for a feasibility study Beryllium said the cost of the preliminary work in 1987 which will start immediately should be about 250,000 dlrs to 300,000 dlrs Reuter U.S. HOME SALES FELL 6.8 PCT IN JANUARY WASHINGTON March 3 Sales of new single family homes in the United States fell 6.8 pct in January from December to a seasonally adjusted annual rate of 716,000 units the Commerce Department said The department revised downward December's sales to a 12.1 pct rise to 768,000 units from the previously reported 12.7 pct increase The January decline in sales was the largest since last October when sales fell 9.3 pct Before seasonal adjustment the number of homes actually sold in January was 53,000 up from 49,000 in December but down from 59,000 in January 1986 The January fall brought home sales to a level 1.6 pct below January 1986 when they were a seasonally adjusted 728,000 units The average price was a record 127,100 dlrs surpassing the previous record 119,100 price set in December The median price of a home in January reached 100,700 dlrs the first time the price has exceeded 100,000 dlrs That compared with a median price of 94,600 dlrs in December and 94,000 dlrs in January a year ago New homes available on the market in January totaled a seasonally adjusted 362,000 units unchanged from December and equal to a 6.3 months supply The supply in December was 5.9 months Reuter DIMIS DMS EXTENDS LIFE OF WARRANTS BRIEFLY EATONTOWN N.J. March 3 Dimis Inc said it has extended by five business days the expiration of its common stock purchase warrants until March Nine It said over one mln have already been exercised The warrants became effective February 17 Holders exercising will receive a new warrant expiring March 31 allowing the purchase of half a common share at one dlr Reuter AMERICAN BARRICK ABX UNIT COMPLETES ISSUE TORONTO March 3 American Barrick Resources Corp said wholly owned Barrick Resources USA Inc completed the previously announced 50 mln U.S. dlr issue of two pct gold indexed notes which are guaranteed by American Barrick Reuter COMMUNITY BANK CBSI TO MAKE ACQUISITION SYRACUSE N.Y. March 3 Community Bank System Inc said it has entered into a definitive agreement to acquire Nichols Community Bank for 2,800,000 dlrs in common stock It said subject to approval by Nichols shareholders and regulatory authorities the transaction is expected to be completed later this year Reuter BELGIAN UNEMPLOYMENT FALLS IN FEBRUARY BRUSSELS March 3 Belgian unemployment based on the number of jobless drawing unemployment benefit fell to 12.1 pct of the working population at the end of February from 12.6 pct at the end of January the National Statistics Office said The rate compares with 12.4 pct at the end of February 1986 The total number of jobless stood at 508,392 compared with 530,587 at the end of January and 521,219 at the end of February 1986 the Statistics Office said REUTER KODAK EK HAS NEW DATA STORAGE USAGE SYSTEMS NEW YORK March 3 Eastman Kodak Co said it is introducing four information technology systems that will be led by today's highest capacity system for data storage and retrieval The company said information management products will be the focus of a multi mln dlr business to business communications campaign under the threme The New Vision of Kodak Noting that it is well known as a photographic company Kodak said its information technology sales exceeded four billion dlrs in 1986 If the Kodak divisions generating those sales were independent that company would rank among the top 100 of the Fortune 500 it pointed out The objective of Kodak's new vision communications campaign it added is to inform others of the company's commitment to the business and industrial sector Kodak said the campaign will focus in part on the information management systems unveilded today The Kodak optical disk system 6800 which can store more than a terabyte of information a tillion bytes The Kodak KIMS system 5000 a networked information management system using optical disks or microfilm or both The Kodak KIMS system 3000 an optical disk based system that allows users to integrate optical disks into their current information management systems The Kodak KIMS system 4500 a microfilm based computer assisted system which can be a starter system Kodak said the optical disy system 6800 is a write once ready many times type its Mass Memory Division will market on a limited basis later this year and in quantity in 1988 Each system 6800 automated disk library can accommodate up to 150 14 inch optical disks Each disk provides 6.8 gigabytes of randomly accessible on line storage Thus Kodak pointed out 150 disks render the more than a terabyte capacity Kodak said it will begin deliveries of the KIMS system 5000 in mid 1987 The open ended and media independent system allows users to incorporate existing and emerging technologies including erasable optical disks high density magnetic media fiber optics and even artificial intelligence is expected to sell in the 700,000 dlr range Initially this system will come in a 12 inch optical disk version which provides data storage and retrieval through a disk library with a capacity of up to 121 disks each storing 2.6 gigabytes Kodak said the KIMS system 3000 is the baseline member of the family of KIMS systems Using one or two 12 inch manually loaded optical disk drives it will sell for about 150,000 dlrs with deliveries beginning in mid year The company said the system 3000 is fulling compatibal with the more powerful KIMS system 5000 It said the KIMS system 4500 uses the same hardware and software as the system 5000 It will be available in mid 1987 and sell in the 150,000 dlr range Reuter BANGOR HYDRO BANG SEEKS RATE CUT BANGOR Maine March 3 Bangor Hydro Electric Cor said it has filed with the Maine Public Utilities Commission MPUC for a two stage base rate reduction Bangor Hydro said the first stage which could take effect on April 1 and would stay effective until the MPUC makes a final decision on the filing could cut revenues by 6.149 mln dlrs or 9.7 pct The company said lower federal income taxes and lower capital costs prompted the filing The second stage Bangor Hydro said effective when the MPUC makes a final decision calls for an additional revenue reduction of 712,000 dlrs or 1.1 pct Bangor Hydro said if approved the cuts would reduce residential base rates by 8.5 pct with 7.5 pct cut by April 1 The utility company also said it is seeking to increase its fuel cost adjustment rate by April 1 Bangor said if the increase is approved it could offset much of the base rate cut and may cause a net increase in some customers rates Reuter BROWNING FERRIS BFIWASTE DISPOSAL SITE CLEARED HOUSTON March 3 Browning Ferris Industries Inc said the Colorado Department of Health and the U.S. Environmental Protection Agency have awarded the company permits to build and operate a hazardous waste disposal site near Last Chance Colo The company said construction will start this year and take about 12 months costing about 14 to 16 mln dlrs It said it has already spent 10 mln dlrs on development costs The site will not accept materials that react rapidly with air or water explosives shock sensitive materials or radioactive wastes the company said Reuter PHARMACIA AB PHAB ST 1986 YEAR STOCKHOLM March 3 Sales 3.65 billion crowns vs 3.40 billion Profit after financial items 821.2 mln crowns vs 740.2 mln The 1986 results include a once off writedown of 520 mln crowns for intangible assets mainly the know how paid for in the takeover of a number of high tech companies by the group Pharmacia said Earnings per share after real tax including the writedown 1.94 crowns vs 12.05 crowns Earnings per share after real tax not including the writedown 12.38 crowns vs 12.05 Earnings per American Depository Receipt ADR according to U.S. Accounting principles after real tax including the writedown 1.96 crowns vs 9.49 crowns Earnings per ADR according to U.S. Accounting principles after real tax without the writedown 9.8 crowns vs 9.49 One ADR represents 0.75 pct of one B Free share in Pharmacia The board proposed a dividend of 1.55 crowns vs 1.25 REUTER VWR CORP VWRX FORMS NEW UNIT SEATTLE March 3 VWR Corp said it has formed a new subsidiary Momentun Textiles to handle the distribution of upholstery fabrics leathers and naugahyde to contract and consumer furniture manufacturers It said its VWR Textiles and Supplies unit which had handled that business will continue to distribute non woven textiles construction fabrics and manufacturing supplies Reuter HALLWOOD GROUP HWG OFFICIAL GET SAXON POST DALLAS March 3 Saxon Oil Development Partners Saxon Oil Co said its chairman Bill Saxon and chief executive officer Steven Saxon have resigned effective immediately Saxon said Anthony Gumbiner chairman and chief executive officer of The Hallwood Group Inc succeeds Bill Saxon as chairman Hallwood owns a substantial number of shares of preferred stock in Saxon which if converted into common stock would constitute approximately 37 pct of the company according to a source Hallwood specializes in bailing out financially troubled companies and restructuring their debt according to the source In exchange sometimes the group receives a small portion of the company's common stock At times the group also receives a position in the company as was the case at Saxon the source explained Reuter PHARMACIA FORECASTS HIGHER 1987 EARNINGS STOCKHOLM March 3 Pharmacia AB PHAB ST forecast earnings after financial items of one billion crowns in 1987 vs 821.2 mln last year on condition that exchange rates remained at their present parities Sales would in such circumstances go up to six billion crowns from 3.65 billion in 1986 it said A weakening Dollar was mainly responsible for a five pct negative impact on sales during 1986 which the company blamed on currency movements Last year's results were also badly hit by a once off writedown of 520 mln crowns for intangible assets The company said mainly this represented the premium the group had paid for the know how of various high tech firms it had taken over The accounts also showed a financial deficit of 1.87 billion crowns vs a deficit of 133 mln which was covered partly by drawing down company liquidity to 738 mln vs one billion and partly by increasing borrowing to 2.23 billion vs 621 mln Pharmacia said the financial deficit was caused by it having used more funds than generated by group operations mainly because of the 1.36 billion it paid in cash for shares in LKB Produkter AB and the assets of Intermedics Intraocular Inc REUTER BERYLLIUM INT'L SETS JOINT VENTURE WITH COMINCO SALT LAKE CITY Utah March 3 Beryllium International Corp said it has signed a joint venture agreement with Cominco American Inc a unit of Cominco Ltd to develop a beryllium mine and processing plant on Beryllium International's property in the Topaz Mountains southwest of Salt Lake City Beryllium said as a 49 pct owner of the venture it would be contributing the mine while Cominco as operator and 51 pct owner would conduct drilling metallurgical studies process testing and other preliminary work for a feasibility study Beryllium said the cost of the preliminary work in 1987 which will start immediately should be about 250,000 dlrs to 300,000 dlrs Reuter UNITED GUARDIAN UNIR FEDERAL SIGN CONTRACT SMITHTOWN N.Y. March 3 United Guardian Inc said it signed a contract with Federal Health Corp covering the exclusive marketing of Warexin a disinfectant for kidney dialysis machines hospital equipment and instruments Under the contract United Guardian said Federal will continue to supply Hospal a subsidiary of Sandoz Ltd and Rhone Poulenc S.A. with all its Warexin requirements Reuter MCLEAN INDUSTRIES MII UNIT TRANSERS SERVICE CRANFORD N.J. March 3 McLean Industries Inc said its shipping subsidiary United States Lines Inc reached an agreement in principle to transfer its South American service to American Transport Lines Inc a subsidiary of Crowley Maritime Corp Under the terms of the agreement United States Lines will lease five vessels to American Transport for 15 months with an option to extend the period up to 10 years the company said In return U.S. Lines will receive a fixed payment and a percentage of revenues for at least three years and possibly as long as American Transport utilizes its vessels and conducts trade in South America the company said The companies will consummate the transactions as soon as the required approvals are obtained McLean said Reuter PROXMIRE VOWS QUICK ACTION ON U.S. BANKING BILL WASHINGTON March 3 Senate Banking Committee Chairman William Proxmire said modified legislation to help a federal deposit insurance fund and prohibit new limited service banks and thrifts could be ready for a Senate vote in two to three weeks Proxmire said he agreed to demands from committee members for a one year moratorium on granting new business powers sought by commercial banks to increase the bill's chances In its new form the bill would proscribe regulators from granting new powers to banks Proxmire told reporters after a speech to the U.S. League of Savings Institutions A vote on the bill by the committee is scheduled for Thursday If approved it will go to the full Senate I have spoken to the majority leader and he has agreed to bring it up promptly on the Senate floor in two or three weeks Proxmire told the thrift executives The bill would recapitalize the Federal Savings and Loan Insurance Corp fund with 7.5 billion dlrs It also would prohibit establishment of new nonbank banks and nonthrift thrifts so called because they provide financial services but do not meet the regulatory definition of both making loans and receiving deposits Reuter U.S. LARD CONSUMPTION IN JANUARY WASHINGTON March 3 U.S. factory usage of lard in the production of both edible and inedible products during January totaled 21.3 mln lbs vs a revised 25.6 mln lbs in December according to Census Bureau figures In the year earlier period usage which includes hydrogenated vegetable and animal fats and other oils in process amounted to 33.3 mln lbs Usage in January comprised 15.7 mln lbs of edible products and 5.6 mln lbs of inedible products Total lard usage in the 1986/87 marketing season which began October 1 amounted to 104.3 mln lbs vs 154.2 mln lbs in the year ago period Reuter SOCIETE GENERALE DUTCH UNIT LAUNCHES CD PROGRAMME AMSTERDAM March 3 The Amsterdam unit of French bank Societe Generale said it is launching a 50 mln guilder five month certificate of deposit programme starting March 6 and ending September 7 Denominations will be in one mln guilders The price is to be set on March 4 issue date is March 6 and redemption at par is on September 7 Subscriptions are to be placed with Societe Generale Oolders en de Jong C.V or Haighton en Ruth B.V. A global note for the issue will be deposited with the Dutch central bank REUTER MONY FUNDING ISSUES 125 MLN DLR EUROBOND LONDON March 3 Mony Funding Inc is issuing a 125 mln dlr eurobond due April 7 1997 paying 8 1/8 pct and priced at 101 1/2 pct sole lead manager Citicorp Investment Bank Ltd said The non callable bond is guaranteed by Mutual Life Insurance Co of the U.S. And is available in denominations of 5,000 dlrs and will be listed in Luxembourg The selling concession is 1 3/8 pct while management and underwriting combined pays 5/8 pct The payment date is April 7 REUTER SMALL QUANTITY OF UK WHEAT SOLD TO HOME MARKET LONDON March 3 A total of 2,435 tonnes of British intervention feed wheat were sold at today's tender for the home market out of requests for 3,435 tonnes the Home Grown Cereals Authority HGCA said Price details were not reported No bids were submitted for intervention barley Reuter FIRST FEDERAL SAVINGS FFKZ YEAR NET KALAMAZOO MICH March 3 Shr 78 cts vs one dlr Net 1,413,000 vs 1,776,000 Assets 705.3 mln vs 597.3 mln Deposits 495.6 mln vs 493.9 mln Loans 260.0 mln vs 379.7 mln Qtly div six cts vs six cts prior qtr Pay April 1 Record March 6 NOTE 1986 net includes charges from accounting changes from one time expenses associated with a proxy contest and an increase in loan reserves First Federal Savings and Loan Association of Kalamazoo is full name of company Reuter BOEING BA SAYS ORDER WORTH ONE BILLION DLRS SEATTLE March 3 Boeing Co said its order for 15 extended range 767 300's from AMR Corp AMR is worth over one billion dlrs The company said AMR is its first customer for the 767 300ER twinjet a derivative of its 767 200 designed for increased passenger and cargo capability on flights of up to 6,600 miles It said the first delivery is scheduled for February 1988 and the jet will seat 215 in tri class configuration Boeing said it now has orders for 47 767 300's In New York Airbus Industrie said AMR is also the launch customer for its A300 600R widebody AMR today announced the order of 15 of the Boeing and 25 of the Airbus twinjets Airbus said in AMR's configuration the A300 600R will seat 16 in first class and 251 in economy Deliveries will be made bewtween April 1988 and June 1989 Airbus did not disclose the value of the order Boeing said AMR will operate the 767's on North Atlantic routes while Airbus said AMR will operate the A300's on Caribbean routes Reuter INLAND IAD FILES FOR 1.5 MLN SHARES OFF CHICAGO March 3 Inland Steel Industries Inc said it registered with the Securities and Exchange Commission for a proposed public offering of 1.5 mln shares of Series C cumulative convertible exchangeable preferred shares 50 dlrs a share liquidation value Goldman Sachs and Co and First Boston Corp are underwriters They have an option to buy 225,000 additional shares to cover overallotments Proceeds are for general corporate purposes including to fund a portion of the investment needed for a continuous cold mill joint venture under discussion with Nippon Steel Corp Reuter ACUSTAR CORP HAS UNAUTHORIZED ACCOUNT ACTION BLOOMINGTON Minn March 3 Acustar Corp said it has discovered significant unauthorized activity in its corporate accounts but has not yet determined the full extent of the problem It said it has requested that all over the counter trading in its stock be halted until it can make a further announcement An investigation is underway it said Reuter UNICORP AMERICAN UAC IN JOINT VENTURE NEW YORK March 3 Unicorp American Corp said it has formed a joint venture with Sybedon Corp a New York real estate investment banking firm to pursue real estate projects It said a total of 20 mln dlrs is being committed to the joint venture Reuter PILLSBURY CO PSY VOTES QUARTERLY DIVIDEND MINNEAPOLIS MINN March 3 Qtly div 25 cts vs 25 cts prior qtr Pay 31 May Record 1 May Reuter BERKSHIRE GAS CO BGAS PAYS REGULAR QTLRY DIV PITTSFIELD Mass March 3 Qtrly div 28.5 cts vs 28.5 cts Pay April 15 Record March 31 Reuter U.K. WHEAT AND BARLEY EXPORTS ADJUSTED UPWARDS LONDON March 3 The U.K. Exported 535,460 tonnes of wheat and 336,750 tonnes of barley in January the Home Grown Cereals Authority HGCA said quoting adjusted Customs and Excise figures Based on the previous January figures issued on February 9 wheat exports increased by nearly 64,000 tonnes and barley by about 7,000 tonnes The new figures bring cumulative wheat exports for the period July 1 February 13 to 2.99 mln tonnes and barley to 2.96 mln compared with 1.25 and 1.89 mln tonnes respectively a year ago January wheat exports comprised 251,000 tonnes to European Community destinations and 284,000 tonnes to third countries The Soviet Union was prominent in third country destinations taking 167,700 tonnes while Poland was credited with 54,500 and South Korea 50,000 tonnes Italy was the largest EC recipient with 75,000 tonnes followed by West Germany with 55,200 and France 52,000 tonnes Barley exports for January comprised 103,700 tonnes to the EC and 233,000 to third countries The Soviet Union was the largest single importer with 133,265 tonnes followed by Saudi Arabia with 53,800 tonnes Reuter CANADA GDP RISES 3.1 PCT IN 1986 OTTAWA March 3 Canada's real gross domestic product seasonally adjusted rose 1.1 pct in the fourth quarter of 1986 the same as the growth as in the previous quarter Statistics Canada said That left growth for the full year at 3.1 pct which is down from 1985's four pct increase The rise was also slightly below the 3.3 pct growth rate Finance Minister Michael Wilson predicted for 1986 in February's budget He also forecast GDP would rise 2.8 pct in 1987 Statistics Canada said final domestic demand rose 0.6 pct in the final three months of the year after a 1.0 pct gain in the third quarter Business investment in plant and equipment rose 0.8 pct in the fourth quarter partly reversing the cumulative drop of 5.8 pct in the two previous quarters Reuter EAST EUROPE WHEAT WINTERKILL POSSIBLE ACCU SAYS STATE COLLEGE Pa March 3 Winter wheat crops in the western Soviet Union Poland and eastern Czechoslovakia through northern Romania may suffer some winterkill over the next two nights private forecaster Accu Weather Inc said Western USSR winter wheat areas have had only light and spotty snow and winterkill is possible tonight and tomorrow night as temperatures drop to minus 10 to 0 degrees F Snow cover is scant in Poland with only about 50 pct of the winter wheat areas reporting one to two inches of snow as of this morning The remaining 50 pct of winter wheat crops do not have snow cover making winterkill possible on each of the next two nights Lowest temperatures will be minus 10 to 0 degrees F Winter wheat areas from eastern Czechoslovakia through northern Romania had light snow flurries yesterday and last night but amounts were an inch or less With temperatures expected to fall to near 0 degrees F over the next two nights some light winterkill is possible Accu Weather added Reuter PANSOPHIC SYSTEMS PNS SPLITS STOCK 2 FOR 1 OAK BROOK Ill March 3 Pansophic Systems Inc said it will split its stock two for one effective April two to shareholders of record March 13 It also said it will pay a six cts per share dividend on the pre split shares a regular quarterly dividend on April two to shareholders of record March 13 Reuter LAC LAC INTERSECTS MORE GOLD AT DOYON MINE TORONTO March 3 Lac Minerals Ltd and Cambior Inc said they completed a second hole at their jointly owned Doyon mine in Quebec which showed two significant gold intersections One intersection graded 0.33 ounce gold a short ton over 44 feet at depth of 1,411 feet while the other graded 0.22 ounce gold a ton over 23 feet at 2,064 feet the companies said The hole is 460 feet east of the previously reported first hole They said they were now drilling another hole 460 feet to the west of the first drill hole and expected to report results in late March or early April Reuter AMR AMR DISCOUNTS TALK ON PAN AM PN DEAL NEW YORK March 3 AMR Corp chairman Robert Crandall denying industry speculation said the company is not interested in acquiring shuttle routes in the northeast region of the U.S. from Pan Am Corp But in remarks at a press conference announcing a major aircraft order he said AMR would be interested in certain other Pan Am assets But he noted that none had been made available Pan Am earlier today announced an order for 40 new aircraft from Boeing Co BA and Airbus Industrie a European consortium for an estimated 2.5 billion dlrs AMR the parent of American Airlines has said it is not interested in acquiring Pan Am as a whole and Crandall reiterated that position today Assets are one thing and companies are another Crandall said referring to the possibility of acquiring assets from Pan Am He said Pan Am has not offered its transatlantic routes for sale adding that it would not make much sense for them to do so Reuter CALMAR CLMI SEEKS TO BE ACQUIRED BY KEBO AB WATCHUNG N.J. March 3 Calmar Inc said KEBOO Ab of Sweden which now owns about 64 pct of Calmark has approved the acquisition of remaining Calmar shares at 25.375 dlrs in cash at the request of the Calmar board Calmar said a special meeting of its board will be held March Nine to form a special committee of directors not affiliated with KEBO to evaluate the transaction KEBO is in turn 60 pct owned by Investment AB Beijar of Sweden Reuter FRUIT OF THE LOOM INC INITIAL OFFERING STARTS CHICAGO March 3 Fruit of the Loom Inc said an initial public offering of 27 mln Class A common shares is underway at nine dlrs per share through underwriters led by Drexel Burnham Lambert Inc Merrill Lynch and Co Inc MER E.F. Hutton Group Inc EFH and Sears Roebuck and Co Inc's S Dean Witter Reynolds Inc unit Reuter ITALY'S BNL NEGOTIATING PURCHASE OF GERMAN BANK ROME March 3 Italy's state owned Banca Nazionale Del Lavoro BNL said it is negotiating to buy a West German bank as part of its foreign expansion policy BNL president Nerio Nesi told a news conference the Italian bank was currently involved in talks but declined to name the German institution He said the takeover move could be seen as BNL's reply to Deutsche Bank AG DBKG.F which entered the Italian market in December 1986 with the purchase of BankAmerica BACN subsidiary Banca D'America e D'Italia Nesi said BNL had also approved a 200 mln dlr credit line to the Soviet Union aimed at enabling Soviet companies to pay for Italian imports He gave no further details BNL officials said the group had also decided to increase its activities in the Soviet Union by opening a representative office in Moscow this month through its subsidiary Sogecred which specialises in Italian Soviet trade REUTER THREE KILLED IN SOUTH AFRICA ZINC REFINERY CLASH JOHANNESBURG March 3 Three black workers were killed and seven injured in fighting at a South African zinc refinery last night Gold Fields of South Africa Ltd said The company said two groups of workers began attacking each other at about 1000 local time with machetes knives and sticks at a hostel at the Zincor plant some 40 kms east of Johannesburg It said the fighting was quelled after 25 minutes by its own security staff Police were called but the fighting had ended by the time they arrived A company spokesman said he had no idea of the cause of the fighting An investigation was underway he said Reuter FED EXPECTED TO ADD TEMPORARY RESERVES NEW YORK March 3 The Federal Reserve is expected to enter the U.S. Government securities market to add temporary reserves economists said They expect it to supply the reserves indirectly by arranging 1.5 to two billion dlrs of customer repurchase agreements The Fed may add the reserves directly instead via System repurchases Federal funds which averaged 6.18 pct yesterday opened at 6 3/16 pct and stayed there in early trading Analysts said the rate is under upward pressure partly from settlement of 8.25 billion dlrs of five year Treasury notes Reuter EC INDUSTRY OUTPUT GROWTH SLOWS IN 1986 LUXEMBOURG March 3 European Community industrial output increased by an average of around two pct last year compared with 3.3 pct growth recorded in 1985 against a year earlier the EC statistics office Eurostat said Growth was highest in Portugal at five pct while in Greece output contracted by 0.3 pct Eurostat said in a statement Eurostat noted output growth also fell in the U.S. And Japan U.S. Production increased 1.1 pct after 2.0 pct in 1985 while in Japan output contracted by 0.5 pct after rising 4.5 pct a year earlier Eurostat said EC industrial production in December rose 3.1 pct compared with 12 months earlier but added that after adjustment for seasonal factors output growth had been clearly slowing down since the beginning of the summe REUTER LSB INDUSTRIES INC LSB 4TH QTR NET Oklahoma City March 3 Shr profit five cts vs loss 2.11 dlrs Net profit 375,061 vs loss 10.4 mln Revs 39.9 mln vs 37.8 mln Avg shrs 6,536,008 vs 4,939,895 12 mths Shr profit 47 cts vs loss 3.37 dlrs Net profit 2,837,288 vs loss 16.6 mln Revs 169.1 mln vs 149.4 mln Avg shrs 6,037,640 vs 4,937,378 NOTE primary earnings per share are based on the weighted average number of common and dilutive common equivalent shares outstanding during each period after accounting for preferred stock dividends The qtr and year 1985 includes a 6,000,000 provision for restructuring costs related to the sale of its Energy business and parts of its Bearing business The qtr and year 1986 includes charges of 1,200,000 and 5,200,000 respectively for restructuring costs and operating losses which were charged against the previously provided accruals for restructuring costs The qtr and year 1986 includes deferred income taxes of 244,000 and 785,000 respectively Year net 1986 includes operations of Friedrich Climate Master Inc which the company acquired in August 1985 for the full period while the comparable period for 1985 includes only operations from August 16 1985 to Dec 31 1985 Third qtr 1986 Includes extraodinary tax gain of 270,000 from early extinquishment of certain drafts payable Reuter GM GM HOPES FOR FIVE FOLD RISE IN EUROPEAN SALES GENEVA March 3 U.S. Carmaker General Motors hopes to sell between 7,000 and 8,000 vehicles in Europe this year a five fold rise over the year before James Fry vice president of GM Overseas Distribution Corporation told a news briefing The low dollar makes our prices very attractive he said at a GM preview before the opening of the Geneva Motor Show We would like to sell between 7,000 and 8,000 units in Europe for the year to August 1987 he told Reuters later Officials said GM sold 1,500 vehicles in the 1986 model year Fry said that at an average price of 13,000 dlrs his projected sales figures would mean turnover of between 91 mln and 104 mln dlrs in Europe GM sales in Europe in the 1985 model year totalled 500 vehicles due largely to uncompetitive prices because of the then strong dollar Fry said All GM vehicles sold in Europe are manufactured in the United States and Canada he said adding that most sales were in Switzerland followed by Sweden and West Germany Reuter MORE GOLD DETECTED AT DOYON MINE TORONTO March 3 Lac Minerals Ltd and Cambior Inc said they completed a second hole at their jointly owned Doyon mine in Quebec which showed two significant gold intersections One intersection graded 0.33 ounce gold per short ton over 44 feet at depth of 1,411 feet while the other graded 0.22 ounce gold per ton over 23 feet at 2,064 feet the companies said The hole is 460 feet east of the previously reported first hole Another hole is being drilled 460 feet to the west of the first drill hole and results are expected in late March or early April Reuter PIZZA INN PZA TO MAKE ANNOUNCEMENT DALLAS March 3 Pizza Inn Inc said it will be making an announcement sometime this morning The company declined to discuss details of the announcement The American Stock Exchange delayed trading Pizza Inn shares this morning for news pending Pizza Inn recently received a buyout proposal from Concept Development Inc CDII for an exchange of stock and cash subject to Concept's ability to get the necessary financing Reuter GULF RESOURCES AND CHEMICAL CORP GRE 4TH QTR BOSTON March 3 Oper shr profit 34 cts vs loss 53 cts Oper net profit 3,337,000 vs 4,881,000 Revs 32.7 mln vs 49.6 mln Year Oper shr profit 20 cts vs loss 90 cts Oper net profit 2,374,000 vs loss 9,381,000 Revs 126.9 mln vs 160.5 mln NOTES Operating net excludes loss 6,050,000 dlrs or 64 cts a share vs loss 24,839,000 dlrs or 2.61 dlrs a share in quarter and loss 6,050,000 dlrs or 64 cts a share vs profit 64,013,000 dlrs or 6.27 dlrs a share from discontinued operations 1986 loss from discontinued operations includes 6.0 mln dlrs charge equal to 64 cts a share to provide for additional liabilities resulting from the 1981 closure of lead zinc and silver mining smelting and refining business 1986 year operating net includes pre tax gain of 5.3 mln dlrs equal to 56 cts a share from pension plan termination and gain of 5.2 mln dlrs or 56 cts a share from reduction in deferred taxes Effective Jan 1 1987 company changed oil and gas accounting to successful efforts from full cost increasing 1986 year net 9.2 mln dlrs or 98 cts a share and increasing 1985 loss 4.3 mln dlrs or 43 cts a share The cumulative effect of the change was to decrease retained earnings at Dec 31 1986 by 14.0 mln dlrs Reuter COFFEE TALKS COLLAPSE EASES NEED FOR U.S. BILL WASHINGTON March 3 The collapse of International Coffee Organization ICO talks on export quotas yesterday removes the immediate need to reinstate U.S. legislation allowing the customs service to monitor coffee imports analysts here said The Reagan administration proposed in trade legislation offered Congress last month that authority to monitor coffee imports be resumed That authority lapsed in September 1986 A bill also was introduced by Rep Frank Guarini D N.J. However the failure of the ICO talks in London to reach agreement on export quotas means the U.S. legislation is not immediately needed one analyst said Earlier supporters of the coffee bill hoped it could be passed by Congress quickly You're going to have a hard time convincing Congress now this is an urgent issue the coffee analyst said Reuter SCOTIA MORTGAGE ISSUES 100 MLN CANADIAN DLR BOND LONDON March 3 Scotia Mortgage Corp is issuing a 100 mln Canadian dlr eurobond due April 9 1992 paying 8 3/4 pct and priced at 100 3/4 pct lead manager Wood Gundy Ltd said The non callable bond is available in denominations of 1,000 and 10,000 Canadian dlrs and will be listed in Luxembourg It is guaranteed by the Bank of Nova Scotia The selling concession is 1 1/4 pct while management pays 1/4 pct and underwriting pays 3/8 pct The payment date is April 8 and there will be a long first coupon period REUTER FORMER TREASURY OFFICIAL URGES CURRENCY REFORMS WASHINGTON March 3 Former Treasury official C Fred Bergsten said a new exchange rate system is needed to replace the fixed and flexible exchange rate systems which he said had not worked I prefer a move to target zones in which the major countries would determine ranges of 15 20 pct within which they would pledge to hold their exchange rates by direct intervention and as necessary by changes in monetary and other policies Bergsten now the director of the Institute for International Economics said in a statement to a House Banking subcommittee The substantial correction of the exchange rate that has occurred since early 1985 is enormously welcome and should produce a sizeable reduction in the U.S. trade deficit this year and next but the imbalance will not fall much below 100 billion dlrs on present policies so much more is needed he said Reuter SCOTIA MORTGAGE ISSUES 100 MLN CANADIAN DLR BOND LONDON March 3 Scotia Mortgage Corp is issuing a 100 mln Canadian dlr eurobond due April 9 1992 paying 8 3/4 pct and priced at 100 3/4 pct lead manager Wood Gundy Ltd said The non callable bond is available in denominations of 1,000 and 10,000 Canadian dlrs and will be listed in Luxembourg It is guaranteed by the Bank of Nova Scotia The selling concession is 1 1/4 pct while management pays 1/4 pct and underwriting pays 3/8 pct The payment date is April 8 and there will be a long first coupon period Reuter KNUTSON MORTGAGE CORP KNMC SETS QUARTERLY BLOOMINGTON Minn March 3 Qtly div 10 cts vs 10 cts prior Pay April 13 Record March 13 Reuter AUSIMONT COMPO AUS TO CHANGE NAME WALTHAM Mass March 3 Ausimont Compo NV said it will change its name to Ausimont NV on May Six subject to shareholder approval Reuter SYRIA SAYS ISRAEL BLOCKS CITRUS EXPORT FROM GAZA UNITED NATIONS March 3 Syria has complained to the United Nations that Israeli occupation authorities were blocking the export of citrus fruit from the Gaza Strip to the countries of the European Community EC In a letter to Secretary General Javier Perez de Cuellar published here today Syrian U.N. charge d'affaires Abdul Mou'men Al Atassi said These measures threaten to create a slump in citrus production which constitutes the primary source of income in the Gaza Strip They are causing heavy losses to farmers and all those working in the field of citrus production and threaten to bring about economic disaster The Syrian envoy said the Israel action was a violation of the Geneva Conventions the U.N. Charter and the legitimacy of the economic rights endorsed by the United Nations The Gaza Strip occupied by Egypt in the 1948 Arab Israel war was captured by Israel in the 1967 Middle East war Reuter YUGOSLAVIA WHEAT FREE OF WINTERKILL USDA WASHINGTON March 3 There was no evidence of winterkill in Yugoslavian winter wheat during field travel along a line running northwest from Belgrade to near Maribor the U.S. Agriculture Department's counselor in Belgrade said in a field report The report dated February 26 said there is evidence of delayed germination in most areas due to late seeding last fall because of dry conditions However warm temperatures over the past three weeks have promoted some early growth and will help the crop catch up on last fall's late seeding it said Some Yugoslav agriculture officials are concerned about the situation because warm temperatures have brought the grain out of dormancy and taken away snow protection a little early the report said Cold temperatures over the next month could cause damage under these conditions they said The report said all wheat farmers contacted during the field trip were optimistic about the crop and the way it emerged from winter Reuter ATT T SETS SOME PHONE EQUIPMENT DISCOUNTS PARSIPPANY N.J. March 3 American Telephone and Telegraph Co said small businesses can win up to a 10 pct discount on telephone equipment under a new program According to the America's Choice Bonus Program customers that rent certain phone systems can earn credits each time they pay their monthly or fixed term lease bills The credits can be used in the purchase of ATT products including communications systems and the System 25 PBX a telephone switch for voice and data communications Customers will receive a 50 dlrs initial credit and additions to their account equivalent to 10 pct of their rental payments Reuter LYPHOMED LMED IN JOINT MARKETING PACT ROSEMONT Ill March 3 LyphoMed Inc said it has tentatively agreed to form a joint venture with privately held Novopharm Ltd of Canada whereby each will market the other's drug in their home country LyphoMed will sell Novopharm's oral pharmaceutical drugs in the U.S. and Novopharm will sell Lyphomed's injectable pharmaceutical drugs in Canada it said The joint venture gives LyphoMed entry into the hospital and retail oral pharmaceutical market with Novopharm's product line Novopharm in turn will strengthen its position in the Canadian hospital market using LyphoMed's injectable products The first product to be marketed will be cephalexin monohydrate now marketed by Eli Lilly Co LLY as Keflex a product whose patent expires in April Keflex is an antibiotic with a current market in excess of 250 mln dlrs It will be made by Novopharm in Canada sold to the new joint venture and distributed by LyphoMed in the U.S. it said Reuter REGAL INT'L RGL HOLDS BELL PETROLEUM OPTION MIDLAND Texas March 3 Bell Petroleum Services Inc currently in Chapter 11 said Regal International Inc has acquired an option to buy its secured notes held by its banks Bell said Regal also expressed interest in discussing an acquisition offer but Bell's board rejected the offer saying it wanted to remain independent and proceed with its chapter 11 reorganization The company said that its ability to reorganize will be hampered because a major competitor now holds an option on its notes Reuter NORTON NRT TO SELL SOUTH AFRICAN OPERATIONS WORCESTER Mass March 3 Norton co said it has agreed to sell its remaining South African business Norton co Pty Ltd to Global Mining and Industrial Corp of South africa for undisclosed terms The company said the unit accounts for less than two pct of Norton revenues and is being sold because Growing societal pressures in the United States and the unsettled situation in south Africa had required a disproportionate amount of management tiome to oversee Norton said the unit is profitable Norton said it will provide the South Afrcian unit with future technical support and products makde under that agreement will continue to be marketed under the Norton trademark Reuter CANADA CURRENT ACCOUNT DEFICIT UP IN QUARTER OTTAWA March 3 Canada's current account deficit widened to a seasonally adjusted 2.27 billion dlrs in the fourth quarter from a deficit of 1.94 billion dlrs in the third Statistics Canada said The shortfall for the full year rose to 8.81 billion dlrs from 1985's 584 mln dlr deficit the federal agency said The agency said the rise in the merchandise surplus to 2.77 billion dlrs from 2.20 billion dlrs in the third quarter was more than offset by high deficits in servicies and investment The total non merchandise deficit grew to 5.04 billion dlrs from 4.14 billion dlrs The current account deficit was 912 mln dlrs in the fourth quarter of 1985 In the capital account not seasonally adjusted there was a total net inflow of 4.76 billion dlrs in the fourth quarter up from a net inflow of 3.22 billion dlrs in the third quarter quarter The total net capital inflow rose to 13.74 billion dlrs in 1986 from 7.68 billion dlr in 1985 Reuter CANADA DECEMBER GDP GAINS 1.2 PCT OTTAWA March 3 Canada's gross domestic product by industry rose a seasonally adjusted 1.2 pct in December the largest monthly gain since April 1986 Statistics Canada said GDP which fell 0.2 pct in November was 2.1 pct above the December 1985 level the federal agency said Output of goods producing industries rose 1.6 pct in the month with virtually all the growth occurring in manufacturing and mining Services producing industries expanded 1.0 pct Reuter SAATCHI AND SAATCHI BUYS CLEVELAND CONSULTING LONDON March 3 Advertising agents Saatchi and Saatchi Co Plc SACHY said it was buying Cleveland Consulting Associates Inc for an initial consideration of 2.0 mln dlrs Additional payments may be made annually through the year ending March 31 1991 to bring the total consideration up to 9.5 pct of Cleveland's average post tax profits in the last two years of the period The purchase of Cleveland is a further step in Saatchi and Saatchi's fast growing consulting industry the company said It said its consulting operations now provide a platform for major future expansion For the 12 months ended 31 March 1986 Cleveland had 479,000 dlrs in pretax profits and forecasts one mln for 1987 At the Saatchi and Saatchi annual meeting today the company reported a particularly strong start to the current year with profits sharply higher than the same period last year Saatchi and Saatchi shares rose one pence on the Cleveland announcement to 885p after yesterday's 870p close Reuter UNILEVER'S UN CHESEBROUGH OFFERS TO SELL BASS WESTPORT Conn March 3 Chesebrough Pond's Inc recently acquired by a unit of Unilever N.V. said it is offering to sell its Bass shoe division as a result of an ongoing evaluation of the long term direction of its businesses The diversified maker of health and beauty aids said it acquired Falmouth Maine based G.H. Bass and Co in 1978 when the company reported annual sales of 59 mln dlrs Bass is known for its high quality casual shoes Chesebrough said Bass's 1986 sales exceeded 170 mln dlrs Reuter CONTINENTAL GIC SEES 1987 NET UP FROM TAX LAW NEW YORK March 3 Continental Corp said the fresh start provision of the Tax Reform Act of 1986 may add 1.30 to 1.60 to 1987 earnings per share The insurance holding company had net earnings of 449.6 mln dlrs or or 7.42 per share in 1986 John Loynes Continental chief financial officer said the fresh start provision allowed the company to discount opening tax reserves to January 1 1987 which released deferred taxes into earnings Loynes said the provision's potential benefit would decline gradually over the next four years during which time Continental will pay 250 mln to 350 mln dlrs more in taxes Loynes added however the higher taxes are not expecetd to have a significant impact on earnings Reuter ONTARIO TREASURY BILL YIELD EDGES UP TORONTO March 3 This week's Ontario government auction of 50 mln dlrs worth of 91 day treasury bills yielded an average of 7.28 pct up slightly from 7.26 pct last week a treasury department spokesman said Average price was 98.217 Reuter BELGIAN MINISTER SEES NEW ACCORD ON EC OILS FATS WASHINGTON March 3 Belgian Foreign Trade Minister Herman De Croo said he believed there would be a compromise within the European Community EC on its proposed tax on vegetable fats and oil averting a pledged tough trade response by the United States De Croo in Washington for talks with Administration officials and Congressional leaders said at a news conference there is a battle within the community on the tax on fats and oils used in the 12 EC countries But he added I do not think it will be a big issue because there will be a big debate inside Europe adding so there will be a compromise U.S. Trade Representative Clayton Yeutter said yesterday that if the community went ahead with the tax the United States would respond vigorously to protect its trade rights and access to community markets De Croo also said he thought the community would postpone its April 28 deadline for imposing new slaughterhouse rules to cover all meats brought into EC nations if some progress was made toward resolving differences with the United States U.S. officials say its rules now meet health standards and the EC should require equivalent but not identical standards He also told reporters he hoped the community could deal with another controversial health proposal that would forbid the feeding of hormones to cattle which is also opposed by the United States De Croo gave no deals on how he though the issue might be resolved That rule is go into effect on January 1 1988 He said U.S. cattlemen say there is no reason to change slaughterhouse practices in April if the meat is to be banned a few months later by the hormone rule Reuter DUTCH MONEY MARKET DEBT BARELY CHANGED IN WEEK AMSTERDAM March 3 Loans and advances from the Dutch central bank to the commercial banks were barely changed at 12.9 billion guilders in the week up to and including March 2 the central bank weekly return showed The Treasury's account with the bank dropped 1.3 billion guilders Dealers said a larger amount of funds in the form of interest and repayments on state loans went out than came in the form of tax payments to the state Notes in circulation rose 360 mln to 27.7 billion as the public withdrew cash to celebrate this week's Carnival festival or take an end of winter holiday break dealers said Current money market rates are at 5 3/4 to 6 1/4 pct for call money against 5 1/4 to 5 3/8 a week ago and between 5 5/16 and 5 9/16 pct against 5 1/4 to 5 1/2 for one to 12 month periods dealers said The cause for the rise was a rather tight 4.8 billion guilders of special advances set by the Bank yesterday compared with 8.0 billion guilders for the previous set dealers added They expect the money market shortage to continue around 12 billion guilders this week The weekly return showed total Dutch gold and currency reserves rose 11.3 mln guilders to 56.0 billion guilders REUTER NEXXUS NEXX SIGNS CONTRACTS WORTH 10 MLN DLRS BEVERLY HILLS Calif March 3 Nexxus Technologies Inc said it has signed production contracts totaling about 10 mln dlrs with three major U.S. gem wholesalers The company said it expects to start operations on these contracts in May adding the work will continue through late 1989 Additional contracts with international gem wholesalers are expected in the near future it added without providing details Reuter CHRYSLER C FEBRUARY U.S. CAR OUTPUT OFF DETROIT March 3 Chrysler Corp said its U.S. car production in February totalled 110,552 units compared with 123,092 a year ago The company said its U.S. truck production in the month totalled 21,177 compared with none a year ago Year to date Chrysler said its U.S. car output was 216,987 compared with 257,941 and truck production is 39,834 compared with none a year ago The figures exclude Canadian truck production much of which is earmarked for the U.S. Reuter U.S. BANKING CHAIRMAN URGES CAUTION ON FSLIC BILL WASHINGTON March 3 House Banking committee chairman Fernand St Germain D R.I. called for caution in giving savings associations forbearance in paying their debts as part of a bill providing three billion dlrs in new capital for the Federal Savings and Loan Insurance Corp We cannot let forbearance stretch to protect the mismanaged or terminal cases that would serve to further drain the FSLIC fund St Germain said at the start of a hearing on FSLIC legislation Forbearance must be designed to help the well managed institution temporarily on hard times It must not be forgiveness for the speculators the high flyers and the fast buck artists The use of forbearance for well managed institutions was endorsed at the hearing by Texas Savings and Loan Commissioner L.L. Bowman the Federal Home Loan Bank of Dallas and the Texas Savings and Loan League Reuter COMPUTER COMPANIES FORM NETWORKING GROUP BOSTON March 3 A number of computer companies said they formed Network Computing Forum an industry group focusing on ways to tie computers workstations and networks together The participants include Apollo Computer Inc APCI Alliant Computer Systems Corp ALNT Apple Computer Inc AAPL Concurrent Computer Inc CCUR and a number of other companies The Forum said its aim was to adopt protocols services and architectures that support integrated network computing It also hopes to promote industry standards The first meeting of the group is set for the Spring 1987 Reuter GROUP TRIMS MATERIAL SCIENCES MSC STAKE WASHINGTON March 3 An investor group led by Central National Gottesman Inc a New York investment firm and its executive vice president Edgar Wachenheim said they cut their stake in Material Sciences Corp to less than five pct In a filing with the Securities and Exchange Commission the group said it sold 19,500 Material Sciences common shares between Feb 11 and 19 at prices ranging from 24.00 to 27.648 dlrs a share leaving it with 239,500 shares or 4.7 pct As long as the group's stake remains below five pct it is not required to disclose further dealings in Material Sciences common stock Reuter SAPPORO BREWERIES PLANS 100 MLN SWISS FRANC NOTES ZURICH March 3 Sapporo Breweries Ltd is launching a 100 mln Swiss franc 4 5/8 pct five year guaranteed notes issue priced at 100 1/4 pct lead manager Swiss Bank Corp said The issue is guaranteed by Fuji Bank and payment date is March 17 REUTER CHRYSLER C FEBRUARY U.S. CAR OUTPUT DOWN DETROIT March 3 Chrysler Corp said its February U.S. car production was 110,552 compared with 123,092 a year ago The number three automaker said U.S. truck production totalled 21,177 compared with nine last year The figures exclude Canadian truck production much of which is sold to U.S. dealers Year to date Chrysler said car output declined to 216,987 from 257,941 and U.S. truck production totalled 39,834 compared with none a year ago Reuter TYLAN CORP TYLN TO SELL FURNACE PRODUCT LINE CARSON Calif March 3 Tylan Corp aid it has retained the investment banking firm Kahn and Harris to sell its furnace product line The company said it has already been contacted by several potential buyers In 1986 Tylan's furnace product shipments in the U.S. represented 10.3 mln dlrs of the company's total net sales of 28.4 mln dlrs Reuter FED ADDS RESERVES VIA CUSTOMER REPURCHASES NEW YORK March 3 The Federal Reserve entered the U.S. Government securities market to arrange 1.5 billion dlrs of customer repurchase agreements a Fed spokesman said Dealers said Federal funds were trading at 6 1/4 pct when the Fed began its temporary and indirect supply of reserves to the banking system Reuter HOME SHOPPING HSN SETS STOCK OPTIONS CLEARWATER Fla March 3 Home Shopping Network Inc said its board approved plans to offer a stock option plan for its cable television operators The company said it will offer the options in exchange for a commitment to operate the company's programs to a set number of subscribers for five years The agreement also includes a five year extension option If the operator agrees to the plan they will receive options to buy 10 dlrs worth of common stock for each cable subscriber committed or 20 dlrs per subscriber if they agree to run both programs the company explained The company said the option will vest over a five year period at the rate of 20 pct per year The company which offered a similar program last year said the current one is directed for those who did not sign up last year and for new carriers of the company's home shopping video shows Reuter BOGERT OIL BOGO BUYS WELLS DRILLING RIGS OKALHOMA CITY March 3 Boget Oil Co said it has purchased interests in about 200 wells in Oklahoma and seven medium depth drilling rigs for 4.5 mln dlrs The company said it will be able to incorporate the 150 operated wells within its field organization and intends to dispose of the rigs by private sale or auction in the near future Reuter ITALIAN PRIME MINISTER CRAXI SAYS HE WILL RESIGN ROME March 3 Socialist Prime Minister Bettino Craxi said his five party coalition government would resign Craxi Italy's prime minister for a postwar record of 3 1/2 years told the Senate upper house he would hand his and the government's resignation to President Francesco Cossiga immediately after leaving the chamber Craxi has been prime minister at the head of two separate but identical five party coalitions since August 1983 Reuter ADOBE SYSTEMS ADBE SETS PACT WITH IBM IBM PALO ALTO Calif March 3 Adobe Systems Inc said it signed a contract with International Business Machines giving IBM licensing rights to its PostScript page description language interpreter Adobe said IBM plans to use PostScript as one of the foundation elements of its preferred environments for IBM electronic publishing products Reuter U.S. SETS CORN DEFICIENCY PAYMENT HALF PIK CERTS WASHINGTON March 3 The upcoming five month deficiency payments to corn and sorghum farmers will be made half in cash and half in generic commodity certificates a senior Agriculture Department official told Reuters Around 300 mln dlrs of the in kind certificates or certs will be mailed out to farmers around March 15 or 16 Tom von Garlem Assistant Deputy Administrator for USDA's state and county operations said The decision to make the payments in a 50/50 cash certs ratio was made Monday but payments to producers will be delayed until mid month due to a problem with USDA's computer program von Garlem said get 11.5 cts per bushel in this next payment 5.75 cts in certs and around 5.5 cts cash 5.75 cts minus Gramm Rudman Farmers who did not receive advance deficiency payments at signup will receive 63 cts per bushel Slightly more than half of this payment will be in cash von Garlem said but he said this will not markedly upset the 50/50 ratio since most farmers got advance payments The final certificate payments will be very close to 300 mln dlrs he said When asked if the Office of Management and Budget had resisted the cash certs ratio the USDA official said that we proposed 50/50 and OMB accepted it Reuter FORD CANADA FC PROFIT DOWN ON CHANGEOVER COST OAKVILLE Ontario March 3 Ford Motor Co of Canada Ltd 90 pct owned by Ford Motor Co F said the earlier reported decline in full year net profit was mainly due to changeoover costs at its Essex Ontario engine plant Ford Canada also said sharply improved fourth quarter results were due to improved cost recovery and lower product program costs partially offset by lower engine production The company earlier said consolidated 1986 net income fell to 101.9 mln dlrs from year ago 199.0 mln dlrs Fourth quarter profit improved to 67.7 mln dlrs from 4.5 mln dlrs in the prior year Ford Canada said full year earnings from its Canadian operations declined 75.4 mln dlrs to 104.0 while fourth quarter profit increased to 49.1 mln dlrs from 16.1 mln dlrs in the prior year Ford Canada reported a full year loss of 2.9 mln dlrs from its overseas operations compared to a 19.6 mln dlr profit in 1985 Fourth quarter earnings from overseas operations rose to 18.6 mln dlrs from a loss of 11.6 mln dlrs in the prior year The company reported full year domestic sales in Canada of 4.35 billion dlrs compared to 3.95 billion dlrs in 1985 excluding export sales to its U.S. parent Ford Canada said it had 1986 export sales to its parent company of 7.97 billion dlrs up from year earlier 7.18 billion dlrs The company reported 1986 overseas sales fell 205.7 mln dlrs to 2.01 billion dlrs from 2.21 billion dlrs in 1985 The company attributed the improvement in fourth quarter results from overseas operations to manufacturing efficiencies cost reduction programs and improved cost recovery which were partially offset by lower industry volumes Ford Canada's net loss for the year from overseas operations resulted from lower industry volumes and increased interest costs the company said Despite increased competition Ford Canada's market share of car sales rose to 17.2 pct from 17.0 pct in 1985 it said The company's share of industry truck sales rose to 29.7 pct in 1986 from year earlier 29.2 pct Ford Canada said sales were boosted by its Ford Tempo car and Ford light truck both manufactured in Oakville which were Canada's best selling car and truck nameplates in 1986 Reuter FIRESTONE FIR TO CLOSE THREE TIRE PLANTS AKRON Ohio March 3 Firestone Tire and Rubber Co has notified the United Rubber Workers the company will close its Des Moines Iowa Bloomington Ill and Oklahoma City tire plants on or before September 15 A Firestone spokesman said the cost of the closings will be covered by the 65 mln dlrs restructuring charge the company took in the fourth quarter of 1986 The company said it was notified by the union March one that the agreement reached with Local 998 at the Oklahoma City tire plant had been rejected by union members at the other plants Firestone said it has been discussing the possible sale of its Des Moines and Bloomington plants with prospective buyers for several months Those discussions are continuing the company said adding it could not predict their outcome Firestone is willing to work with any organization wishing to consider the purchase of the three tire plants it added Last October Firestone advised the union the tire plants in Des Moines Bloomington and Oklahoma City were being designated as distressed under the terms of its master agreement with the rubber workers Firestone said it has twice reached agreement with the leadership and members of the local in Oklahoma City on plans to reduce operating costs through revisions in wages benefits and work rules Union procedures however require approval by the Firestone section of the union's International Policy Committee membrs of other locals covered by the master contract and by the rubber workers executive board The company said the rejection of the Oklahoma City package by union locals at Des Moines and other locations and the limited sales and profit opportunities for agricultural and off the road tires in North America led Firestone to conclude the parties would be unable to reach agreements that would permit the continued operation of the Des Moines and Bloomington plants Reuter INTL FINANCE CORP IN 50 MLN DLR PRIVATE PLACEMENT LONDON March 3 The International Finance Corp is privately placing a 50 mln dlr bond due April 7 1997 carrying a 7 5/8 pct coupon and priced at 99 3/4 pct Bank of Tokyo International Ltd said as sole lead manager for the issue The bond is available in denominations of 25,000 dlrs and will be listed in Luxembourg REUTER OMNICOM GROUP INC OMCM 4TH QTR NET NEW YORK March 3 Shr profit 27 cts vs profit 51 cts Net profit 6,600,000 vs profit 12,231,000 Revs 211.7 mln vs 193.4 mln 12 mths Shr loss 17 cts vs profit 1.27 dlrs Net loss 4,077,000 vs profit 30,142,000 Revs 753.5 mln vs 673.4 mln NOTE in qtr ended 1986 the company recognized expenses of 5,948,000 for restructing the combined operations of BBDO Doyle Dane Bernbach and Needham Harper Worldwide in August 1986 before tax gains These relate primarily to the conosolidation and elimination of duplicate facilities and staff for the year 1986 the provisions for mergers and restructuring expenses brought non recurring expenses to 40,292,000 before tax gains of which 8,863,000 represented merger costs and 31,429,000 related to restructuring of the combine operations Reuter AMC AMO FEBRUARY CAR OUTPUT DECLINES DETROIT March 3 American Motors Corp said its February U.S. car production declined to 2,978 units from 3,808 a year ago AMC said its U.S. jeep production rose to 18,651 from 16,673 last year Year to date AMC said its car output declined to 6,6069 from 6,631 and jeep production declined to 37,207 from 40,586 in the comparable 1986 period Reuter VENEZUELA PLANS NEW BORROWING WITH LIMITS CARACAS March 3 Venezuela will limit new loans to 50 pct of the interest and principal it repays on its 31 billion dlr foreign debt President Jaime Lusinchi told political leaders Speaking last night at a new session of congress he said last week's agreement to reschedule 21 billion dlrs in public sector foreign debt at lower interest rates reflected Venezuela's improved credit image Our priority is development but I insist that there cannot be development if we don't fulfil our obligations he said Venezuela agreed last Friday with its 13 bank advisory committee to lower the interest margin to 7/8 pct over libor from 1 1/8 and reduce amortisations in the next three years to 1.35 billion dlrs from 3.35 billion The important thing is that this rate of 7/8 pct is a marker for new negotiations and will save us 50 mln dlrs this year Lusinchi said He said the country had been loyal to the principles of the Cartagena group of Latin American debtors but had decided to reach an agreement convinced that Venezuela is a specal case because of the vulnerability of its economy Venezuela signed a 12 1/2 year rescheduling accord in February 1986 but immediately sought new terms because of falling oil income which dropped 40 pct last year Finance Minister Manuel Azpurua told reporters he hopes to sign the new rescheduling accord early in the second quarter but that in any case it would become effective from April 1 Azpurua said Venezuela's 450 or so creditor banks have been contacted with details of the new agreement and that Public Finances Director Jorge Marcano may visit financial centres to round up support Azpurua said that among the details still to be finalised were the exact timetable for reprogrammed payments and the outlines of a government plan to allow public and private sector debt capitalisation He said banks had shown willingness to consider new loans to Venezuela a fundamental achievement in the new accord Substantial progress has been made in talks and we will now have to define more precisely what projects can be financed from foreign borrowing he said adding that loans for steel and aluminium and iron ore sectors could be the first to materialise REUTER DEUTSCHE BANK UNIT ISSUES 75 MLN STG EUROBOND LONDON March 3 Deutsche Bank Finance NV Curacao is issuing a 75 mln stg eurobond due April 2 1997 paying 9 7/8 pct and priced at 101 3/4 pct joint lead manager Kleinwort Benson Ltd said Deutsche Bank Capital Markets is the other joint lead manager The issue is guaranteed by Deutsche Bank AG and is callable at 100 3/8 pct after seven years declining by 1/8 point per annum to par thereafter The selling concession is 1 3/8 pct while management and underwriting combined pays 5/8 pct The issue is available in denominations of 1,000 and 10,000 stg and will be listed in Luxembourg The payment date is April 2 REUTER BBL SHAREHOLDERS AUTHORISE CAPITAL RAISE BRUSSELS March 3 Shareholders in Banque Bruxelles Lambert BBLB.B BBL authorised the bank to increase capital by five billion francs to 20 billion in the next five years a bank spokesman said BBL Belgium's second largest commercial bank had failed to win shareholder approval for the move last month because of a lack of quorum No quorum was required today BBL has already raised over 5.5 billion francs in new capital since April 1985 Board President Jacques Thierry reiterated at the meeting that BBL had no plans to raise more capital in the near future REUTER CORRECTION ASHTON TATE ITEM In Torrance Calif item ASHTON TATE TATE 4TH QTR NET please read 1986 quarter average shares as 24.7 mln not 200.7 mln Reuter ANITEC IMAGE ANTC FILES FOR DEBT OFFERING BINGHAMTON N.Y. March 3 Anitec Image Technology Inc said it filed a registration statement with the Securities and Exchange Commission for a proposed offering of 60 mln dlrs in convertible subordinated debentures Anitec said the proceeds will be used for acquisitions joint ventures and other investments Anitec said the offering is being underwritten by Smith Barney Harris Upham and Co Donaldson Lufkin and Jenrette Securities Salomon Inc SB and Mabon Nugent and Co Reuter AMC FEBRUARY CAR OUTPUT DECLINES DETROIT March 3 American Motors Corp said its February U.S. car production declined to 2,978 units from 3,808 a year ago AMC said its U.S. jeep production rose to 18,651 from 16,673 last year Reuter SAVIN SVB IN PACT WITH SUN CHEMICAL SNLA STAMFORD Conn March 3 Savin Corp said it has reached an agreement for Sun Chemical Corp to study the potential of Savin infrared technology for possible use in classified U.S. military applications It said a royalty bearing license could result Reuter CHILEAN CONSUMER PRICES RISE 1.7 PCT IN FEBRUARY SANTIAGO March 3 Chile's consumer price index rose 1.7 pct in February to 562.01 December 1978 equals 100 after increases of 2.0 pct in January and 0.9 pct in February 1986 the government's National Statistics Institute said Inflation as measured by the index rose to 17.5 pct over the 12 months to the end of February compared with 16.6 pct last month and 24.5 pct to the end of February 1986 In the first two months of the year inflation was 3.8 pct against 3.6 pct in the same period of 1986 REUTER COPPER STUDY GROUP CONSIDERED AT GENEVA MEETING GENEVA March 3 Major copper producing and consuming countries are considering a U.S. proposal to set up a study group to review the world copper market delegates said The U.S. initiative was introduced last December at a meeting held here under the auspices of the United Nations Conference on Trade and Development UNCTAD The U.S. the world's largest copper consumer and second biggest producer after Chile has proposed setting up a body to improve statistics and market transparency of the copper economy and provide a forum for discussion The new body would not aim at negotiating measures to stabilise depressed world prices This week's meeting which began yesterday is due to end Friday Reuter CRAY CYR INSTALLS COMPUTER FOR GRUMMAN GQ MINNEAPOLIS March 3 Cray Research Inc said it installed a Cray X MP 14 supercomputer valued at eight mln dlrs at Grumman Corp's Grumman Aerospace Corp Cray said the system which includes a 550 solid state storage device was installed in the first quarter at Grumman's scientific computer facility in Bethpage N.Y. The system replaces a Cray 1M 2300 computer system installed in 1983 It will be used for engineering and scientific applications in the design of aircraft systems Reuter RESERVE OIL ROIL HOLDERS APPROVE NAME CHANGE ALBUQUERQUE N.M. March 3 Reserve Oil and Minerals Corp said its shareholders approved changing the name of the company to Reserve Industries Corp The company said it has contracted to purchase process and recycle various waste materials generated at the Ogden Utah zirconium plant of Westinghouse Electric Corp's WX Western Zieconium subsidiary Reuter JAPAN BUYS 5,000 TONNES CANADIAN RAPESEED WINNIPEG March 3 Japan bought 5,000 tonnes of Canadian rapeseed overnight at an undisclosed price for April shipment trade sources said Reuter ROYAL BANK CANADA SEES HIGHER 1987 LOAN LOSSES MONTREAL March 3 Royal Bank of Canada said it estimates 1987 loan losses at one billion dlrs a 25 mln dlr increase over last year Royal Bank said it set its provisions given the continued debt servicing problems in the North American energy industry and the uncertain outlook for energy prices and also continued to add to its general provisions for loans to troubled borrower countries The bank's loan loss provision for the first quarter ended January 31 rose to 223 mln dlrs from 187 mln dlrs in the year ago quarter The bank said non accrual loans net of provisions for loan losses totalled 2.2 billion dlrs on January 31 up from 2.0 billion dlrs a year ago In reporting lower first quarter earnings chairman Allan Taylor said problems with credit quality particularly in loans associated with the energy sector continue to have a substantial adverse effect on the bank's earnings Taylor said profitability of the bank's international operations remains weak reflecting resource related difficulties of private and public sector borrowers and unsatisfactory results from capital market activities Taylor said it would be premature to speculate on the outcome of debt resturcturing negotiations with Brazil or their potential impact on the Royal Bank The bank earlier reported first quarter profit fell to 114.1 mln dlrs from 140.4 mln dlrs a year ago Reuter PANTERA PANT AND PIZZA PZA AGREE TO MERGE ST LOUIS MO March 3 Pantera's Corp said it agreed in principle to acquire Pizza Inn Inc in a cash and stock transaction Under terms of the proposed transaction each Pizza Inn share can be exchanged for either three dlrs in cash plus the lesser of 1.4 shares of Pantera's common stock or 11.50 dlrs market value of Pantera's stock or four dlrs in cash plus a unit consisting of one share of Pantera's stock and a non transferrable right to receive up to 0.55 share of Pantera's stock under certain conditions it said Completion of the transaction is subject to arrangement of financing negotiation of a definitive agreement and various regulatory approvals it said Pantera's said Pizza Inn's largest shareholder F.J. Spillman previously granted Pantera's an option to buy more than one mln shares of Pizza Inn common stock owned by him Pantera's also said it retained Drexel Burnham Lambert Inc to act as its financial advisor in connection with the merger Pizza Inn has retained Dean Witter Reynolds Inc to act as its financial advisor Pantera's said Yesterday Pantera's stock closed at 9.50 dlrs on NASDAQ while Pizza Inn's stock was quoted at 12 dlrs when the Amex halted trading pending the announcement of the proposed merger From its Dallas headquarters Pizza Inn said completion of the transaction is subject to certain conditions including that the price of Pantera's stock average not less than seven dlrs during the 20 trading days before the merger Under the agreement Pizza Inn said it will still be permitted to complete a leveraged buyout agreement with Pizza Inn Acquiring Corp which has been approved by its shareholders but is subject to otaining financing More SWISS MONEY MARKET PAPER YIELDS 3.286 PCT ZURICH March 3 The Swiss Federal Government's new series of six month money market certificates raised 177.5 mln Swiss francs at an issue price of 98.401 pct to give an average annual yield of 3.286 pct the National Bank said Payment date is March 5 The last series of six month paper issued in January raised 159.6 mln francs at 98.392 pct to give an average yield of 3.251 pct REUTER BBL SHAREHOLDERS AUTHORISE CAPITAL RAISE BRUSSELS March 3 Shareholders in Banque Bruxelles Lambert BBLB.B BBL authorised the bank to increase capital by five billion francs to 20 billion in the next five years a bank spokesman said BBL Belgium's second largest commercial bank had failed to win shareholder approval for the move last month because of a lack of quorum No quorum was required today BBL has already raised over 5.5 billion francs in new capital since April 1985 Board President Jacques Thierry reiterated at the meeting that BBL had no plans to raise more capital in the near future Reuter NIGERIA GUINEA SET UP IRON ORE FIRM WITH LIBERIA LAGOS March 3 Nigeria and Guinea agreed to set up a new company with Liberia to carry out the 14 year old Mifergui Nimba iron ore project an official communique said The communique was issued after two days of talks here between Guinean natural resources minister Ousmane Sylla and Nigerian minister of mines and power Bunu Sheriff Musa Originally Guinea held 50 pct in the project and Nigeria 16.2 pct with firms from several other countries also involved but the project ran into problems over funding and the slump in world iron ore markets Musa said Liberia was invited to join and its share will be decided after a project feasibility study This would be completed in May after which finance will be sought Officials said the study will be undertaken with the help of the World Bank which is also expected to give financial support Production originally estimated at 15 mln tonnes a year will be 12 mln initially and is expected to begin in early 1990 On an agreement between the two countries to prospect for uranium in Guinea the communique said Musa and Sylla agreed that because of poor market conditions it would be extended to cover exploration for gold diamonds cobalt nickel and silver Reuter CANADA INDUSTRIAL PRODUCTION UP 2.53 PCT OTTAWA March 3 Canadian industrial production rose 2.53 pct in December after falling 0.51 pct in November Statistics Canada said The federal agency said year over year production was off 0.65 pct in December compared with a decline of 1.65 pct in November Reuter LIFETIME LFT TO BUY SHARES OF NIPPON LACE NEW YORK March 3 Lifetime Corp said it agreed to buy five mln shares or 16 pct of Nippon Lace Co Ltd for 3.28 dlrs a share or 16.5 mln dlrs It said it plans to enter the health care business in Japan In addition it said Koba Electronics Co Ltd an affiliate of Lifetime will buy four mln unissued shares or a 12 pct stake of Nippon for 20 mln dlrs or five dlrs a share The company said Ohta Shoji chief executive officer of Toho Mutual Life Insurance Co owns the majority of Koba Electronics shares Toho Mutual Life is also the largest shareholder in Nippon Lace the company said Lifetime also said the Private Bank and Trust of Zurich on behalf of Lifetime director and shareholder Terence Ramsden intends to subscribe for two mln shares of Nippon Lace at the same price paid by Lifetime Reuter INTERMEDICS INC ITM 1ST QTR NET ANGLETON Tex March 3 Oper shr 26 cts vs 18 cts Oper net 2,877,000 vs 1,363,000 Revs 44.3 mln vs 40.8 mln Avg shrs 10.9 mln vs 10.5 mln NOTE prior qtr excludes loss 475,000 or five cts per share for discontinued operations for the sale of subsidiaries Intermedics Intraocular Inc Electronics Inc and Intermedics Infusaid Inc Excludes 1987 qtr 1,694,000 operating loss carryforwards vs 78,000 qtr prior Reuter MODULAR TECHNOLOGY MTIK NAMES PRESIDENT CHICAGO March 3 Modular Technology Inc said its board of directors elected Frederick H Goldberger a business consultant to be president of the company Modular Technology's former president Harvey T Lyon was named senior managing director and will continue on the board Reuter CANONIE ENVIRONMENTAL CANO GETS CONTRACT PORTER Ind March 3 Canonie Environmental Services Corp said it signed a contract to design and build a ground water cleanup system for Purex Industries Inc to be installed at a Mitchel Field Transit Authority site in Nassau County N.Y. Canonie said the contract for work which will complete a project begun earlier at the site is worth several million dlrs Reuter VICTORIA STATE BODY ISSUES CANADIAN DLR EUROBOND LONDON March 3 Victorian Public Authorities Finance Agency is issuing a 100 mln Canadian dlr bond due April 15 1992 paying 8 1/2 pct and priced at 100 5/8 pct lead manager Wood Gundy Ltd said The non callable bond is available in denominations of 1,000 and 10,000 Canadaian dlrs and will be listed in Luxembourg It is guaranteed by the State of Victoria The selling concession is 1 1/4 pct while management and pays 1/4 pct and underwriting 3/8 pct The payment date is April 15 REUTER ELECTROSPACE ELE GETS ARMY OK FOR CONTRACT RICHARDSON Texas March 3 Electrospace Systems Inc said it was ordered by the U.S. Army to immediately proceed with the design and production of a computer based control system for the army's tactical voice and data communications network in a contract potentially worth 101 mln dlrs It said the order followed a favorable ruling by the General Accounting Office on two protests that earlier caused a stop work order on the 26.8 mln dlr contract awarded last September It said that order covers 59 mobile shelter based systems and 44 remote terminals with options for 279 mobile units and 178 remote units for a total of 101 mln dlrs Reuter PAINE WEBBER RESIDENTIAL REALTY INC PWM DIV COLUMBIA Md March 3 Qtrly 25 cts vs 16 cts Pay March 30 Record March 13 NOTE Prior qtr is for two months operation October and November and represents a parital dividend Reuter OMNICOM GROUP OMCM SETS REGULAR PAYOUT NEW YORK March 3 Qtlry div 24.5 cts vs 24.5 cts Pay April 6 Record March 16 Reuter DATACORPY DCPY IN PACT WITH XEROX XRX MOUNTAIN VIEW Calif March 3 Datacopy Corp said it has signed a joint marketing agreement for its Model 730 office image scanner with Xerox Corp Under the pact Xerox sales force will reference sell the scanner as its choice for desktop publishing applications Datacopy will supply Xerox with technical support and respond to customer orders within 30 days of the purchase order Reuter ARGOSYSTEMS ARGI WINS GOVERNMENT CONTRACT SUNNYVALE Calif March 3 ARGOSystems Inc said it won a 15 mln dlr contract with the U.S. Government to deliver 25 digital signal processing systems with spares over the next three years The company said it how has a record backlog of over 155 mln dlrs up 30 pct from a year ago Reuter KNUTSON MORTGAGE KNMC SEES STRONG SECOND QTR BLOOMINGTON Minn March 3 Knutson Mortgage Corp said it expects strong earnings performance for its initial fiscal second quarter earnings ending March 31 since going public in September 1986 Albert Holderson Knutson chairman said he expects earnings of about 40 cts per share for the quarter as a result of a strong mortgage business during the quarter Knutson earlier declared a quarterly dividend of 10 cts a share versus 10 cts a share prior payable April 13 to shareholders of record March 13 Reuter DANISH RESERVES RISE IN FEBRUARY COPENHAGEN March 3 Denmark's net official reserves rose to 36.34 billion crowns in February from 28.00 billion in January against a revised 45.85 billion in February 1986 the central bank said in its monthly balance sheet report Total net reserves including reserves held by commercial and major savings banks rose to 38.26 billion crowns from 30.11 billion in January compared with a revised 35.99 billion in February last year The bank said provisional figures showed net registered private and public capital imports of 10.3 billion crowns in February REUTER WORLD BANK TEAM ARRIVES IN UGANDA KAMPALA March 3 A World Bank team led by senior economist Katrine Saito arrived in Uganda for talks on an economic recovery program projected to cost one billion dlrs over three years The four member mission is expected to stay two to three weeks An International Monetary Fund IMF team is due here over the same period a World Bank offical said The World Bank last year criticised Uganda's policies on deficit financing and exchange and interest rates issues likely to dominate talks on the government's proposed recovery program Finance Minister Chrispus Kiyonga said last month that most of the one billion dlrs would go towards rehabilitating industries repairing and maintaining roads and buying tractors and other agricultural needs He did not say where the money would come from but diplomats expect the government to ask the World Bank and other foreign donors to provide most of the foreign exchange portion REUTER WALGREEN WAG FEBRUARY SALES RISE DEERFIELD Ill March 3 Walgreen Co said its sales in February rose 18.8 pct over sales during the same month last year Walgreen said it sold 328.5 mln dlrs worth of goods in February up from 276.5 mln in February 1986 This year's February figures include sales from 65 Medi Mart drugstores acquired last June by the company At February 28 Walgreen operated 1,410 retail units in 30 states and Puerto Rico compared to 1,263 last year Calendar year to date sales were up 17.2 pct at 666.7 mln compared to 569 mln last year Reuter FORD MOTOR CO OF CANADA LTDFC CUTS ANNUAL DIV OAKVILLE Ontario March 3 Annual div six dlrs vs 12 dlrs prior Pay March 19 Record March 13 Note 1986 payout includes two dlrs a share extra dividend 1985 payout includes four dlrs a share extra dividend Reuter ITALIAN GOVERNMENT RESIGNS ROME March 3 Italian Prime Minister Bettino Craxi and his five party coalition government have resigned officials said A statement from the Quirinal presidential palace said head of state Francesco Cossiga had reserved his decision on whether to accept the resignation normal procedure when a government stands down The statement said Cossiga had asked Craxi who has been prime minister for a post war record of three and a half years to continue to handle current government business REUTER TOTAL U.S. COPPER STOCKS LOWER IN JANUARY NEW YORK March 3 Total copper stocks held by U.S. rod mills and refiners including wirebars cathodes scrap rod and in process material dropped to 155,467,000 lbs at the end of January from 203,513,000 lbs at the end of December the American Bureau of Metal Statistics said Rod stocks held by refiners and rod mills decreased to 61,384,000 lbs in January from 69,986,000 lbs in December Cathode inventories at rod mills fell to 86,456,000 lbs in January from 124,409,000 lbs in December while wirebar stocks were lower at 3,508,000 lbs versus 4,913,000 lbs in December December rod mill wirebar use nearly doubled to 3,148,000 lbs in January from 1,540,000 lbs in December Cathode use by mills and refiners increased to 255,266,000 lbs in January from 238,821,000 lbs in December Reuter ONE OFFER FOR SRW WHEAT ON CALL SESSION NO MILO ST LOUIS March 3 One offer but no bid was posted for SRW wheat on the call session at the St Louis Merchants Exchange today There were no bids or offers for milo June 15 July 15 bill of lading for wheat was offered at 17 over July no comparison no bid Reuter LORAL LOR DEBT LOWERED BY S P NEW YORK March 3 Standard and Poor's Corp said it lowered the ratings on Loral Corp's subordinated debt to BBB from A minus The issue is removed from creditwatch where it was placed with negative implications in January after Loral said it planned to acquire Goodyear Aerospace Corp for 640 mln dlrs S P said the acquisition enhances Loral's competitive position in the defense electronics industry by broadening its technology and program base But most measures of financial risk deteriorate it said Reuter GUARANTEE GFCC UNIT'S DEBT ON S P WATCH NEW YORK March 3 Standard and Poor's Corp said it placed the subordinated debt of Guarantee Savings and Loan Association the principle unit of Guarantee Financial Corp on creditwatch with positive implications About 57 mln dlrs of debt is affected S P said the move follows Gurantee's definitive agreement to be acquired by Glendale Federal Savings and Loan the fifth largest S and L in the U.S. The combination with Glendale should enhance the creditworthiness of Guarantee's debt S P said Gurantee's subordinated debt is currently rated B Reuter GENERAL AUTOMATION GENA SETS LEASING PACT ANAHEIM Calif March 3 General Automation Inc said it has arranged a ten mln dlr leasing facility with Wells Fargo and Co's WFC Wells Fargo Leasing Corp The program is a one year facility that will allow financing for ZEBRA computers other General Automation systems and applications sofware the company said Reuter LONDON OPTIONS MARKET SEES CONTINUED HIGH GROWTH LONDON March 3 The London Stock Exchange's traded options market plans volume growth of at least 80 pct a year and will more than double the range of options available by the end of 1988 options committee chairman Geoffrey Chamberlain said He told a news conference that more options contracts were traded in 1986 than in the previous seven years of the market's existence Chamberlain said the daily average volume of contracts traded in February this year almost tripled to 53,056 from 19,034 in the same month last year and further rapid growth was expected We're aiming for 100 stock option classes by the end of 1988 said Chamberlain These would correspond to the eligible constituents of the FT SE 100 share index Chamberlain added that two new equity options were to be introduced this month Options will be available in Sears Plc SEHL.L from March 4 and in Plessey Co Plc PLYL.L from March 19 The London Stock Exchange is the largest outside the United States for options trading Forty five equity options two currency options two government bond gilt options and an option on the FTSE 100 index are available at present Chamberlain said the Stock Exchange aimed to consolidate the London options market's leading position in Europe especially important with French and Swiss equity options trading planned to start this year I'd go so far as to say the plans for growth are conservative one leading options analyst said predicting continuing volume growth of around 20 pct a month for at least the next year He said much of the recent growth in options had come from inter market maker trading aimed at hedging book positions But now the retail options market was beginning to take off The market trades from a corner of the now largely deserted floor of the London Stock Exchange The floor has been left almost empty in the wake of the recent regulatory changes in the equity and gilts government bond markets which have encouraged a move to electronic off floor trading Yesterday the Stock Exchange decided to close the floor to equities trading altogether and said it expected to make a final decision on the floor's future by the end of 1987 The floor space could be used for a purpose built options market but Chamberlain said that it was unlikely that the options market would need more than half of the available space REUTER ROYAL BANK SEES IMPROVED RESULTS MONTREAL March 3 Royal Bank of Canada in reporting a 19 pct drop in first quarter earnings said it expects to report improved results in future earnings periods Healthy consumer credit growth record fee based income highly profitable securities and foreign exchange trading and a solid capital position combined with the restraint of non interest expenses should lead to improved results in the periods ahead chairman Allan Taylor said in a statement The bank earlier reported profit for the first quarter ended January 31 fell to 114 mln dlrs from 140 mln dlrs a year ago Taylor said loans to the energy sector continue to substantially hurt earnings while profitability of the bank's international operations remains weak reflecting resource related difficulties of private and public sector borrowers and unsatisfactory results from capital market activities The bank said earnings from domestic operations rose to 103 mln dlrs in the first quarter from 98 mln dlrs a year ago while earnings from international operations plunged to 11 mln dlrs from 42 mln dlrs last year Royal Bank said first quarter international net interest income declined from last year reflecting reduced revenues from international investment banking as well as a significant loss on disposal of its affiliate in Trinidad and Tobago Other income rose to 251 mln dlrs from 220 mln dlrs last year The rise was due to higher commercial banking and retail deposit service fees and higher foreign exchange revenue but lower securities commissions from international investment bank operations partly offset the gains Royal Bank said The bank said a two billion dlr increase in total assets to 98.7 billion dlrs was due mainly to continued growth in consumer lending particularly residential mortgages Reuter WORLD BANK LAUNCHES 300 MLN MARKKA BOND ISSUE HELSINKI March 3 The World Bank is launching a 300 mln markka seven year straight issue due March 11 1994 with a coupon of 10 pct payable semi annually and an issue price of 101 1/8 lead manager Postipankki said It said fees totalled 1 3/4 pct of which 1 3/8 pct for selling and 3/8 pct for managment and underwriting combined including a 1/8 pct praecipuum Denominations are 10,000 100,000 and one mln markka and listing is in Helsinki it said REUTER SUN MICROSYSTEMS SUNW SETS PACT WITH PHILIPS SEATTLE March 3 Sun Microsystems Inc said it has agreed to cooperate with Philips Corporate Group Home Interactive Systems a Dutch electronics firm to develop a multi media authoring computer system The system will be based upon the integration of Sun workstation and Compact Disc Interactive technologies the company said The authoring systems are collections of hardware system utilities and software to enable Comact Disc Interactive application developers to design assemble and test interactive multi media applications in entertainment education and information for consumer and institutions Reuter STEELHEAD RESOURCES SHZ LEASES FELDSPAR MINE PHOENIX Ariz March 3 Steelhead Resources Ltd said it has leased some feldspar deposits and will begin feldspar mining operations near Wickenburg Arizona The company said the deposits contain in excess of 500,000 tons of feldspar Reuter BELGIAN SAYS EC WOULD REACT TO TEXTILE BILL WASHINGTON March 3 Belgian Foreign Trade Minister Herman De Croo said if Congress passed legislation curbing world textile imports the only way the European Community EC could react was to retaliate De Croo said at a news conference if you limit textile imports you will re orient textiles to Europe And that he said would trigger EC taxes on U.S. goods Congress passed a textile bill two years ago but it was vetoed by President Reagan on grounds that curbing imports to protect the domestic textile industry would trigger retaliation U.S. trading partners A similar bill has been introducted this year in a Congress with a bigger Democratic majority and with a President weakened by the Iran scandal De Croo here for talks with Administration officials and Congressmen said if a textile bill passed the only way we could react would be retaliation and it would cause more retaliation which is not a good way to deal with problems He said if a textile bill was enacted we will impose taxes on a lot of American products He said it would be stupid We have to avoid that He said Congressmen seem upset mosty with Japan because of its massive trade suprlus with the United States and not with EC nations but EC nations will be hurt by the diverted shipments of Asian textiles De Croo also criticized the way U.S. officials try to solve EC trade issues saying each time we come in contact it a conflict contact The clouts are coming fom the West He said it then is a crisis atmosphere with officials cross the Atlantic and dramatized with headlines This is not the way to work in a serious way between two big powers De Croo said reuter KAY CORP KAY 4TH QTR NET NEW YORK March 3 Oper shr 25 cts vs 1.21 dlrs Oper net 1,366,000 vs 6,287,000 Revs 251.3 mln vs 107.1 mln Year Oper shr 1.10 dlrs vs 1.06 dlrs Oper net 5,552,000 vs 4,982,000 Revs 827.5 mln vs 434.4 mln NOTE Oper net excludes results of Kay Jewelers Inc a former subsidiary On Dec 31 1986 company distributed remaining 80.4 pct interest in subsidiary to Kay Corp holders 1985 amts restated in connection with company's distribution of investment in Kay Jewelers Inc 1986 4th qtr and yr oper net excludes 8,308,000 dlrs or 1.52 dlrs per share and 7,774,000 dlrs or 1.54 dlrs per share respectively for equity in net income of spun off unit 1985 4th qtr and yr oper net excludes 6,806,000 dlrs or 1.28 dlrs per share and 5,770,000 dlrs or 1.09 dlrs per share respectively for equity in net earnings of spun off unit 1985 oper net also excludes 2,778,000 or 52 cts per share for adoption of new pension accounting rules and ine cts per share for gain from assets sales Reuter ROSTENKOWSKI OPPOSES PROTECTIONIST TRADE BILL WASHINGTON March 3 House Ways and Means Committee Chairman Dan Rostenkowski said Congress must avoid a temptation to pass a protectionist trade bill this year In remarks prepared for delivery before the National Press Club Rostenkowski D Ill predicted major trade legislation will be sent to President Reagan by the end of this year But he warned that his conciliatory message on the trade bill did not mean he would oppose a proposal that would warn other countries their access to the American market would be curtailed unless they opened their markets to U.S. goods Complaints about foreign trade restraints are not a smoke screen for protectionism they a plea for fairness Rostenkowski said It is only reasonable to ask the nations that have denied us access to open up in return for continued freedom in the American market he added However he said there would likely be changes in the market access proposal from the plan which cleared the House last year That plan would have set a specific time table for foreign countries to ease import restraints or they would face a 25 pct cut in exports to the United States Reuter CORRECTED GM SEES RISE IN EUROPEAN SALES GENEVA March 3 General Motors hopes to sell between 7,000 and 8,000 North American made vehicles in Europe this year a five fold rise over the year before James Fry vice president of GM Overseas Distribution Corporation said The low dollar makes our prices very attractive he told a news briefing before the opening of the Geneva Motor Show We would like to sell between 7,000 and 8,000 units in Europe for the year to August 1987 he told Reuters later Officials said GM sold 1,500 North American made vehicles in the 1986 model year More IMTEC IMTC GETS MERGER OFFER BELLOWS FALLS Vt March 3 Imtec Inc said some shareholders of Computer Identics Inc CIDN have proposed a merger of the two companies The company said the shareholders had previously expressed dissatisfaction with Computer Identics management and had informed Computer Identics that the present board no longer had the support of a majority of shares held It said the shareholders had called for the resignation of all but one of Computer Identics directors and suggested that a new board pursue merger talks with Imtec But Imtec said no merger talks havew yet taken place Reuter CORRECTED GM SEES Fry said at an average price of 13,000 dollars his projected sales figure for North American made GM cars in Europe would mean turnover of between 91 million and 104 million dollars GM sales in Europe of North American made cars in the 1985 model year totalled 500 vehicles due largely to uncompetitive prices because of the then strong dollar Fry said The North American made GM vehicles sold in Europe are manufactured in the United States and Canada he said with most sales in Switzerland followed by Sweden and West Germany inserting dropped words to make clear story refers only to North American made GM cars Reuter ICO PACT UNLIKELY BY AUTUMN ITALIAN ADVISER TRIESTE Italy March 3 The prospects of the International Coffee Organization ICO reaching an agreement on coffee export quotas before September appear dim Alberto Hesse former president of the European Coffee Federation said There is no real goodwill in certain delegations to go to quotas Hesse who advises the Italian Foreign Affairs Ministry on coffee issues told Reuters He declined to name the delegations A special meeting between importing and exporting countries ended in a deadlock late yesterday after eight days of talks over how to set quotas The ICO executive board will meet from March 30 to April 1 but the full council is not due to meet again until September I am not optimistic about an agreement soon Hesse said Reuter WALL STREET STOCKS ANACOMP INC AAC CHICAGO March 3 Anacomp Inc one of the most actively traded NYSE issues rose today as at least one analyst expected earnings to be boosted by its planned acquisition of a micrographics company Anacomp rose 1/2 to 6 3/4 on volume of 950,000 shares after trading as high as seven earlier Howard Harlow analyst at Whale Securities Corp said Anacomp's earnings for fiscal 1987 ending September 31 could be doubled to 80 cts a share from the 40 cts a share he had forecast before Anacomp agreed to buy DatagraphiX a micrographics firm from General Dynamics Corp GD The company can earn 80 cts a share in fiscal 1987 maybe as much as a dlr a share because of DatagraphiX Harlow said Most of the benefit will be in the fourth qtr because it will integrate the company in the second half Anacomp's earnings will be less if it has problems integrating DatagraphiX Harlow said A spokesman at Anacomp said the company expects to complete its deal for DatagraphiX later this month She would not say how much it will pay for DatagraphiX but noted that DatagraphiX contributed 10 mln dlrs in earnings to General Dynamics on revenues of 239 mln dlrs in 1986 Harlow said a fellow analyst at Whale Securities estimates that Anacomp will pay between 100 mln dlrs to 150 mln dlrs for DatagraphiX The estimates on the street narrow it down to between 110 mln dlrs and 130 mln dlrs Harlow added Anacomp reported net of 2.8 mln dlrs or nine cts a share in its first qtr ended December 31 up from 301,000 dlrs or one ct a share In Anacomp's fiscal 1986 it earned 4,073,000 dlrs or 13 cts a share Whale Securities recommends buying the stock Harlow said Reuter CORRECTED LIFETIMELFT TO BUY NIPPON LACE SAHRES NEW YORK March 3 Lifetime Corp said it agreed to buy five mln shares or 16 pct of Nippon Lace Co Ltd for 3.28 dlrs a share or 16.5 mln dlrs It said it plans to enter the health care business in Japan In addition it said Koba Electronics Co Ltd an affiliate of Nippon will buy four mln unissued shares or a 12 pct stake of Lifetime for 20 mln dlrs or five dlrs a share Corrects to show Nippon's affiliate Koba buying stake in Lifetime Reuter U.K. EXPORTS BODY GETS NEW EXECUTIVE DIRECTOR London March 3 Export Credits Guarantee Department has named Malcolm Stephens director of export finance at Barclay's Bank Plc and a former career civil servant at ECGD for 17 years to the post of executive director a department spokesman said Stephens replaces Jack Gill who is retiring early aged 57 A drop in the ECGD's business volume and a rise in its debt to the Exchequer have led to criticism in Parliament in recent years Stephens said the fall in business volume was a top convern adding that the department may have to compete more aggressively with private insurance firms providing similar services The department's annual report for the year ended March 31 1986 showed exports insured by the department fell to 15.7 billion stg from 17.4 billion the year before while its debt to the Exchequer almost doubled to 756 mln stg Stephens said he had no specific list of changes But among his chief concerns was the weakened condition of lesser developed countries and their ability to pay for their imports The agency will have to review its policies on insuring export credits to lesser credits on a country by country basis he said Large lump political risk insurance is the sort of thing we want to take a look at You have to try to look forward to see if you are simply in a peak and trough situation or it is a more long term thing Stephens said in response to a qustion about whether ECGD will strike more countries from its list of political risk insurance recipients He noted that certain countries have already been removed from the list REUTER OILS FATS STOCKS SEEN FALLING SHARPLY IN 1986/87 HAMBURG March 3 Visible stocks of 17 oils and fats are probably peaking now and are likely to fall sharply by October 1 this year the Oil World newsletter said Oil World forecast that stocks of oils and fats may be cut to only 9.8 mln tonnes at the end of this season compared with 10.6 mln a year earlier Its survey covered 13 oils soy cotton groundnut sun rape sesame corn olive coconut palmkernel palm lin and castor and four animal oils and fats butter fish oil lard and tallow greases Oil World's analysis predicted only a slight production increase of 0.5 mln tonnes in the year to end September 1987 compared with increases of 3.6 mln and 4.0 mln tonnes in the previous two seasons It said world consumption was continuing to rise Unusually low prices prevailing since early 1986 had stimulated demand for both food and non food purposes it said World consumption could increase by a record 2.8 mln tonnes to 71.8 mln tonnes this season and would be even higher if the Indian government did not artificially curb domestic demand Oil World said it did not expect the European Community EC to introduce a vegetable oils tax but if such a tax were introduced it would have a negative impact on EC consumption Reuter COLOMBIA TRADERS SAY NEW COFFEE STRATEGY VITAL BOGOTA March 3 Coffee producing countries must quickly map out a fresh common strategy following the failure of the International Coffee Organization ICO to reach agreement on export quotas Gilberto Arango president of Colombia's private coffee exporters association said Arango told Reuters that the most intelligent thing now would be to seek a unifying stand from producers including Brazil in order to map out a strategy to defend prices An ICO special meeting ended last night in London with exporting and consuming nations failing to agree on a resumption of export quotas suspended one year ago after prices soared following a prolonged drought in Brazil Arango said there would be no imminent catastrophe but predicted that over the short term prices would undoubtedly plummet However he said the market should also take into account evident factors such as Brazil's low stocks and the sale of the near totality of the Central American crop Trade sources said Colombia's coffee was today quoted at 1.14 dlrs a lb in New York its second lowest price in the past 10 years Cardenas said these countries apparently fail to understand the true impact of such a failure for coffee producing nations as well as for industrialized countries It is difficult to believe that while efforts are made to solve the problem of the developing world's external debt decisions are being taken which cut earnings used for repaying those debts he said In Colombia's case we watch with consternation that while we try to effectively combat drug trafficking countries which support us in this fight seek to cut our jugular vein Cardenas said Reuter TENDER LOVING TLCI STAFF STAF EXTEND PACT LAKE SUCCESS N.Y. March 3 Tender Loving Care Health Care Services Inc said it and Staff Buildiers Inc have extended the term of their merger agreement until May 31 Tender Loving Care also said Norrell Corp agreed not to acquire any additional Staff Builders shares until September 30 adding Norrell was paid 750,000 dlrs for the standstill arrangement Tender Loving Care said it agreed to buy the 610,000 Staff Builders common held by Norrell about 19.1 pct of those outstanding for 6,950,000 dlrs immediately prior to the consummation of the merger Tender Loving Care said the extended merger agreement continues to provide for the exchange of 1.6 of its shares for each Staff Builders share outstanding As announced February 26 the Staff Builders shareholders meeting to vote on the merger originally convened and adjourned December 23 will be reconvened on April 22 Tender Loving Care said its payment to Norrell will include 1,950,000 dlrs in cash and five mln dlrs of a new series of eight pct Tender Loving Care convertible preferred Tender Loving Care said it and Staff Builders have filed a revised registration and proxy statement with the Securities and Exchange Commission Upon clearance of the revised proxy statement by the commission and its distribution to Staff Builders shareholders that company's management will continue to solicit proxies for approval of the merger Tender Loving Care said it will have the power to vote about 15.8 pct of Staff Builders shares at the adjourned meeting with a spokesman explaining that this represents the proxies held by Norrell which started buying the stock after the record date for the meeting In addition Staff Builders officers and directors own about 13.8 pct of its stock and have agreed to vote in favor of the merger Accordingly the vote of an additional 37.1 pct of the outstanding shares will be required to approve the merger Tender Loving Care said Reuter TALKING POINT AUTO SUPPLIER STOCKS By Richard Walker Reuters DETROIT March 3 The 1987 outlook for U.S. auto sales is clouded by a decidedly mixed sales forecast and analysts who follow the industry say it is also true for companies that sell parts and equipment to the major car and truck manufacturers But while there are only four major U.S. based automakers whose shares are traded on stock exchanges there are thousands of big and small suppliers who sell a flood of original and replacement parts Analysts who follow the parts industry say there are many opportunities for investors brought on by the auto industry's intensified competition and the large volume of production in North America planned by Japanese automakers But assessing the supplier arena is far more complicated than for investors considering the stocks of the Detroit Big Three General Motors Corp GM Ford Motor Co F and Chrysler Corp C Despite widespread predictions that U.S. vehicle sales will decline about 10 pct from the record 1987 levels Wall Street financial experts are still generally bullish on Ford and somewhat less so on Chrysler And analysts remain largely neutral to bearish on GM the industry giant whose earnings have been dropping along with its sales as it struggles to reorganize and shed its unprofitable parts making businesses more SOVIET SOYMEAL IMPORTS SEEN RISING IN 1987 HAMBURG March 3 Soviet imports of soymeal may reach or exceed one mln tonnes between January and September this year the Oil World newsletter said Oil World said it was likely the Soviet Union would reduce soybean imports and step up significantly its imports of meal At least 500,000 tonnes of soymeal may be shipped from the European Community and South America in the January March quarter with additional large quantities likely to be imported in the April and July quarters from Argentina and Brazil it said No figures were given for imports in the corresponding periods of 1986 The change made sense in view of the recent purchases of probably 250,000 tonnes of West European and Polish rapeseed and large scale butter imports that were expected from March onward it said Oil World said substantial losses of Soviet winter grain area due to recent severe frosts were probably behind the recent pick up in Soviet purchases of U.S. Corn It noted that an additional one mln tonnes of U.S. Corn had been bought recently by the Soviet Union Reuter COLOMBIA TO SELL SUGAR LONDON TRADERS SAY LONDON March 3 Colombia is holding a snap selling tender tonight for one cargo of world market raw sugar traders said The sugar is for March 15 April 15 shipment and bids are being sought based on the New York May delivery futures contract they added Reuter VARIAN VAR IN TALKS WITH PHILIPS ELECTRONICS PALO ALTO Calif March 3 Varian Associates Inc said it is holding discussions with Philips Electronics regarding the purchase of Philips broadcast transmission unit in the United Kingdom Pye TVT Limited Pye TVT designs and manufactures broadcast transmission equimpment specializing in television frequencies Reuter JAGUAR JAGRY FEBRUARY U.S. SALES FALL LEONIA N.J. March 3 Jaguar PLC's Jaguar Cars Inc U.S. subsidiary said February sales were 1,466 down from 1,673 a year before The company said it expects a resumption of U.S. sales growth towards the latter half of 1987 Jaguar said year to date U.S. sales were 2,523 down from 2,684 a year before Reuter