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
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
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
The Topix index of all first section issues was down 7.93 points at
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 14,226.30its
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,
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
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
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
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
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
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
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
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
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.