. .



1_popup_home.gif (1391 bytes) news.gif (6529 bytes)

INTERNATIONAL

 

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade

Beijing's entry into WTO

Chinese and Japanese ministers agreed on a protocol for Beijing's bid to join the World Trade Organization (WTO), a Japanese official said.

At the ministerial level, the agreement was reached, the official said.

The agreement between the two countries will be formally announced on Friday, when Prime Minister Keizo Obuchi meets Chinese Premier Zhu Rongji, the official said.

Australia vows WTO action over US lamb tariffs

Australian Prime Minister John Howard said on Thursday he was "appalled" by punitive new US lamb tariffs and would fight the measures through the World Trade Organization.

The restrictions were announced on the eve of the premier's trip to Washington to promote free trade.

Howard said the sanctions were taken for US domestic political reasons despite his personal warning to US President Bill Clinton, who he is to meet on Monday.

I rang him about this matter about three-and-a-half weeks ago and I said that it had aroused particular anger in Australia, the premier told a Sydney radio interviewer by telephone.

Asian stock markets higher

Most Asian stock markets ended higher on Thursday as buyers returned to snap up bargains after a record high close on Wall Street overnight.

But gains and losses were limited in the absence of major buying incentives, dealers said.

Stock markets in Singapore, Japan, Australia, Malaysia, Philippines, Taiwan, China and New Zealand ended in positive territory. Markets in Thailand, Indonesia and South Korea fell.

On Wednesday, Wall Street's blue-chip barometer, the Dow Jones Industrials Average set a record closing high, ending the session up 52.24 points at 11,187.36.

In Singapore, share prices closed 0.7 per cent higher on bargain hunting, consolidating from a selloff the previous day, dealers said.

The Straits Times Index rose 15.33 points to end at 2,159.86, while the broader All-Singapore Index rose 6.42 points to 587.96.

The key Nikkei average of 225 selected issues on the Tokyo Stock Exchange rose 8.75 points to end at 17,967.65.

But the market is hungry for fresh leads to make more strides, brokers said.

The Topix index of all first section issues was down 7.93 points at 1,469.09.

Hong Kong share prices dropped 0.2 per cent on profit taking amid a lack of fresh buying incentives, dealers said.

The Hang Seng index fell 31.14 points to close at 14,226.30—its third consecutive daily loss.

Malaysian share prices closed 0.9 per cent higher on light buying of bluechip issues but trading was directionless, dealers said.

The Kuala Lumpur Stock Exchange composite index rose 7.84 points to finish at 847.36.

A third day of buying interest in Telecom helped fuel a healthy 1.1 per cent rise in the New Zealand sharemarket on Thursday.

The NZSE40 index was up 23.18 to 2,194.21.

Dollar up against euro, yen in Tokyo

The dollar extended gains against the euro in Tokyo on Thursday amid concerns about unified policies in the euro zone and a split in the German government, dealers said.

After sinking to a low of 1.0176, the euro recouped part of its losses on short-covering, dealers said, mostly moving between 1.0180 and 1.0190 through morning trade.

The dollar was quoted at 122.37: 40 yen, up from 122.31-33 yen three hours earlier here and 122.26 yen in New York late Wednesday.

Oil prices surge to 20-month highs

Oil prices surged to a 20-month high point on Thursday, pushing through $18.50 a barrel as US figures showed another drop in crude reserves.

The price of Brent North Sea crude for August delivery hit 18.61 dollars a barrel in morning trading on the International Petroleum Exchange, its highest level since November 28, 1997.

It opened at $18.37 from $18.15 at the close on Wednesday.

IMF to mull sales plan

The International Monetary Fund's board met to discuss how to sell part of its gold reserves without the bruising effect on prices seen after the Bank of England sold 25 tonnes of gold bullion on Tuesday.

The IMF plans to sell up to 10 million ounces of a total gold reserve of 104 million ounces over several years to help relieve the debt of 41 of the world's poorest countries.

European mergers seen reaching $1 trillion

European mergers will reach the $1 trillion level in 2000 as fragmented industries in Europe consolidate, according to Morgan Stanley Dean Witter & Co.

Merger activity in Europe will be driven by the European Union and the euro, resulting in companies looking outside their borders for acquisition targets. Businesses which have been government-regulated are opening up to competition and are buying other companies or being bought. European companies are also not as competitive globally as companies in other areas, according to the Morgan Stanley report.

European mergers in the first half of this year reached a value of $692 billion, according to Securities Data Co. Morgan expects mergers to increase among paper companies, building materials, gas, oil, pharmaceuticals, healthcare and financial services, Funnell said.

If the stock market next year remains strong, more merger and acquisition transactions will be paid for with stock, there will be more absolute mergers than acquisitions, and there will be cash offers in businesses where the stocks fell, the report said.

Korea predicts robust growth

The central Bank of Korea said the economy was poised to grow an average 6.8 per cent year-on-year in 1999 and 7.2 per cent in the second half fuelled by low interest rates and a reviving manufacturing sector.

Private consumption was expected to rise 6.4 per cent this year against a 9.6 per cent drop last year, it said.

Investment in plants and equipment was seen surging 22.5 per cent from last year's 38.5 per cent drop, but construction investment would remain sluggish, down another 11.2 per cent after last year's 10.2 per cent drop, Bank of Korea said.

The current account surplus would reach $20 billion this year in line with the government's original target, it said.

The current account surplus was expected to shrink sharply in the second half to $7.2 billion from an estimated $12.8 billion in the first half due to rising imports as the economy recovers.

Gold nosedives as UK sells 25 tonnes

Britain launched its plan to cut gold holdings in half with a successful first auction, angering critics and leaving bullion dealers to drive prices to fresh 20-year lows.

The controversial sale met heavy bidding for a settlement price of $261.20 a troy ounce, netting the Bank of England $210 million for investment in dollars, euros and yen.

Gold fell more than $5 an ounce to a 20-year low of $256.80 after the Bank of England sold 25 tonnes at auction, while the U.S. dollar briefly touched an all-time high against the struggling euro.

Gold dropped sharply once New York trade got underway, with dealers reading the auction outcome as bearish despite it having been heavily oversubscribed.

Shares in South African gold producers tumbled after the bullion sale.

The Johannesburg bourse's Gold index, which houses the world's biggest producer AngloGold, fell just under three per cent, with AngloGold dropping two per cent.

Peter Hillyard, commodity trading group vice-president with Bank of America, said it was impossible to read any demand implications into the auction outcome.

"I'm not sure that means a damn thing. I could have bid for the whole 25 tonnes at $180.00 and it would have been 6.2 times oversubscribed. We don't know how meaningful those bids were," he said, adding that the sales method itself went smoothly.

Britain announced in May plans to cut reserves from 715 tonnes to 300 tonnes over the next few years, stunning the market and causing prices to drop $3D to 20-year lows.

Britain's next 25-tonne sale is due on September 21.

Japan cautious on recovery

Despite a raft of encouraging indicators, Japanese economic ministers cautioned against over-optimism about the nation's recovery from its worst recession since World War II.

"Although the worst is over, I don't expect to see an economic recovery by leaps and bounds," Finance Minister Kiichi Miyazawa said, the day after the Bank of Japan reported a sharp improvement in business sentiment.

Private consumption and corporate capital spending on plants and equipment, key engines for economic growth, remained weak, Miyazawa told a news conference after a regular cabinet meeting.

Singapore to revise upwards growth

Singapore will revise upwards its economic growth forecast for 1999 following faster than expected recovery from a slowdown caused by the Asian financial crisis, Deputy Prime Minister Lee Hsien Loong said.

Lee also assured citizens that cuts to employers' contributions to a state pension fund for workers would be restored earlier than planned if recovery was sustained.

The government only two months ago revised the gross domestic product (GDP) forecast for 1999 to a range of zero-to-two per cent from a previous minus one-to-plus one per cent.

The manufacturing sector grew a strong 8.2 per cent in the first five months of 1999 on the back of robust expansion in electronics and chemical clusters, he said.

Analysts hail Elf, TotalFina merger

TotalFina's $43 billion paper bid for Elf Aquitaine might not be welcomed by its fellow French oil company, but the proposed combination was given the thumbs up by analysts for its operational merits.

"There would be a substantial overlap of assets and great degree of complementarity. It would create a much more balanced oil company," said a London industry analyst.

The combined group's upstream assets would be geographically evenly divided with 27 per cent in Europe, 28 per cent in Africa, 25 per cent, the Middle East and 20 per cent elsewhere, he added.

Greek bank merger may be stalled

A merger between Ergobank and Piraeus Bank to create Greece's third largest bank could stall temporarily if separate bidder EFG Eurobank gets control of more than a third of Ergobank.

A Capital Market Commission official said a two thirds majority is needed to approve merger proposals at an initial extraordinary shareholder meeting. A 50.1 per cent vote would suffice at a second meeting.

The rule could mean that Eurobank parent Consolidated Eurofinance Holdings (CEH) and its allies can garner enough strength to put the deal on hold— at least for the time being.

New euro payment guidelines

Europe's banks will this week adopt new guidelines on making high-value euro payments aimed at eradicating liquidity problems that have arisen since the currency's launch, industry sources have told.

The euro payment guidelines, due to be published after a meeting on Thursday, are a response to concerns voiced by the European Central Bank in its June bulletin of "imbalances between payment systems" caused by a lack of harmonised conventions covering the various transfer mechanisms now on offer.

Taiwan's ASE acquires two Motorola plants

Taiwan's Advanced Semiconductor Engineering Inc said it completed a $367 million purchase of one Motorola plant in Taiwan and one in South Korea, adding capacity and a strategic partner.

The ASE group said it acquired a Motorola chipprocessing facility at Chungli, Taiwan, for $150 million, and another at Paju, South Korean, for $140 million.