Hong Kong unveils major
The Hong Kong Monetary Authority (HKMA) unveiled a series of
liberalisation measures to make the territory's banking sector more competitive, including
a phased-in deregulation of interest rates.
The moves were in response to a far-reaching Banking Consultancy Study
commissioned by the authority in 1998.
HKMA Deputy Chief Executive David Carse said the study pointed to
increases in competitive pressures globally.
Intel: Santa Clara, Calif-based Intel Corp said its fiscal
second-quarter net income rose to $1.7 billion, or 51 cents per share, from $1.2 billion,
or 33 cents, in the comparable period a year ago.
Ford: Ford Motor Co, the worid's No. 2 automaker, reported
record operating profits of $2.48 billion for the second quarter up 4 per cent from a year
earlier amid strong results in North America. Ford's fully diluted operating earnings rose
to $2 per share from $1.91 in the 1998 second quarter.
Motorola: Wireless communications and semiconductor maker
Motorola Inc has reported a larger than expected second quarter operating profit of $273
million. The maker of wireless phones, pagers and computer chips said it earned 44 cents a
share before one-time items, well above last year's profit of $6 million, or one cent a
share, which also excludes unusual items.
Joblessness hits fresh low in Britain
Unemployment in Britain fell for the fourth month in a row in June,
taking the number of jobless to a fresh 19-year low of 1.28 million, while upward pressure
on pay eased again, official data showed.
The Office for National Statistics said 5,200 fewer people were
claiming unemployment benefit in June than in May and the jobless rate fell to 4.4 per
cent, also a new, 19-year low.
Mergers & Acquisitions
DoubleClick Inc. a leader in the
emerging Internet advertising business said it would acquire its Silicon Valley rival
NetGravity Inc in a merger that creates a one-stop shop for sending targeted ads to
hundreds of the largest Web sites.
BOC: British industrial gases company BOC Group Plc agreed to a
£7.2 billion ($11.2 billion) takeover by industry rivals France's Air Liquide and
U.S.based Air Products and Chemicals. The Franco-U.S. deal pitched at £14.60 cash per
share, signals the break-up of BOC, a company formed more than 100 years ago.
Dutch office products firm
Buhrmann said it was buying U.S. Corporate Express in a $2.3 billion deal that will create
the world's biggest distributor of offfice products.
RhoneHoechst: Rhone-Poulenc shareholders approved
overwhelmingly plans to merge with Germany's Hoechst to form the world's largest life
sciences company. The French pharmaceuticals and chemicals company said 99.5 per cent of
its shareholders approved the deal that will create Aventis, a company that should have
almost $20 billion in sales.
AccorRed Roof Inns:
French travel firm Accor said it had
agreed to buy U.S. economy lodging chain Red Roof Inns for $613 million plus debt, in a
deal that would make it the world's third-largest hotel company.
MicrosoftRogers Communications Inc: Microsoft Corp said it
would invest about $400 million in Rogers Communications Inc Canada's largest cable
television company, as part of a series of deals that will accelerate interactive
television services in millions of Canadian homes.
Clifford ChanceRogers & Wells:
British law firm
Clifford Chance and U.S. counterpart Rogers & Wells have agreed to merge and set the
stage for Germany's Puender, Volhard, Weber & Axster to join them to create the
world's largest law firm.
Swisscom AG said it was splashing out
2.56 billion Swiss francs ($1.63 billion) on a 58-per cent stake in Germany's debitel AG
to become Europe's number eight mobile telecommunications group.
Japanese bankruptcy data
Japanese corporate bankruptcy data flashed conflicting signals from the
first half of the year, although analysts considered the numbers on balance a positive
sign for the nation's nascent economic recovery.
In the January-June period, bankruptcy debt rose to a postwar record
while the number of bankruptcies fell, credit research firm Teikoku Databank said.
BoJ chief rules out rate rise
Japan's central bank chief Masaru Hayami all but ruled out any increase
in the record low 0.5 per cent official discount rate because of the threat of deflation
in the fragile economy.
Tokyo willing to lift economy
Japan signalled it was ready to spend more money if needed to bolster a
nascent recovery, while the central bank promised to maintain its support with rock-bottom
Speaking in parliament, Finance Minister Kiichi Miyazawa said he would
be flexible in deciding whether to take any new fiscal measures to provide maximum support
to the economy.
U.S. revenge in EU beef dispute by month-end (Box)
U.S. retaliation on $116.8 million of European Union goods in a
long-running beef trade dispute should be in place by the end of July, a top U.S. trade
Peter Scher, special U.S. ambassador for agricultural trade, said the
United States would consider a suggestion by U.S. cattle producers to impose the heaviest
punitive duties on France, Germany and Britain.
But in the end, the composition of the retaliation list will be
determined by a number of factors, including a desire to minimise the impact on small U.S.
businesses that depend on EU goods for much of their inventory, Scher said.
Blow to German recovery hopes
Hopes for a German economic recovery suffered another setback as
figures showed retail sales and exports fell in May and a leading economic institute
shaved its 1999 growth forecast for Europe's largest economy.
The data, which follows on the heels of Monday's weak German industrial
output figures, helped send the euro to a life low of $1.0108 against the dollar.
Germany's Federal Statistics Office said May retail sales weakened 2.8
per cent year-on-year. It also reported a drop in exports, for so long the one bright spot
in the economy.
EU seeks to stop euro rot as parity
European Union finance ministers agreed a common line on the euro in a
last-ditch bid to stop the sickly single currency from sliding to parity with the dollar.
"The exchange rate reflects largely, differences in economic
development and temporary factors such as Kosovo," Finnish Finance Minister Sauli
Niinisto said at the end of a meeting.
"The euro has potential for appreciation, firmly based on internal
price stability. As the European economy is now clearly recovering, this is likely to be
reflected in the exchange rate in due course," Niinisto, who chaired the EU meeting,
The ailing eurofaced with the prospect of a barrage of data this
week showing the strength of the U.S. economyplumbed a new low of $1.0114 before
recovering slightly to around $1.0150.
The euro has now shed roughly 15 per cent of its value against the
dollar since hitting a high just above $1.19 hours after its debut on January 4.
Analysts have critised European policy makers for sending conflicting
signals about how they view the euro bloc's economy and their currency's slide. They say
the divergent views have contributed to the euro's weakness.
Niinisto and other ministers present said they hoped the rot would now
"The euro is a currency for which 11 countries speak and this may
have created confusion on the markets," said Italian Treasury Minister Giuliano
Amato, tacitly admitting past mistakes.
"What we agreed is that the president of the Euro-11 area speaks
for everybody. If anybody has to say something which has been agreed," Amato added.
The newly agreed common line echoed almost word for word statements
made by European Central Bank governors since their last meeting on July 1.
SocGen says no to BNP's fresh offer
French bank Societe Generate rejected an increased takeover bid from
rival BNP, throwing the outcome of the three-way battle in France's banking sector into
the hands of investors.
In a brief statement, SocGen sought to woo shareholders to support its
friendly bid for Paribas by estimating that its profit would double in the first half of
1999 compared to the same period in 1998.
Fiat pinning hopes on Punto relaunch
Italy's Fiat said it was investing 700 million euros ($708.6 million)
in a new version of its best-selling Punto model aiming to manufacture 600,000 to 700,000
units a year and sell half of those outside Italy.
The first Punto was Europe's best-selling car in 1997 and Fiat is
pinning its hopes on the redesign to bring its auto unit into the black after piling up
losses since the third quarter.
Japanese shares soar to 21-month high
Tokyo shares closed at a 21-month high, but most other Asian stock
markets ran out of steam after a strong start in the morning.
Hong Kong and Taiwan closed down more than one per cent and Seoul lost
more than two per cent. Australian stocks rose just 0.3 per cent and Singapore 0.8 per
The Nikkei 225 average finished up 1.9 per cent at 18,275 as foreigners
bought heavily into high-technology and blue-chip shares.
Hong Kong's Hang Seng Index closed down 1.1 per cent at 14,062, after
an early surge ran into profit-taking on concerns that more blue chips planned share
Australia's All Ordinaries index ended 0.3 per cent higher at 3,050.2.
The Dow closed Friday up 0.6 per cent at a record closing high of
11,193.70, spurring Asian markets higher in early trade on Monday.
In Seoul, the Korea Composite Stock Price Index closed down 2.3 per
cent at 1,004.3 after hitting 1,053 as investors felt the recent rally might have peaked.
Singapore's Straits Times Index ended up 0.8 per cent at 2,198.8
largely due to gains in a few heavyweights like SingTel Singapore Press Holdings and some
Taiwan stocks closed down one per cent at 8,463.9 after heavy technical
resistance and active selling by local mutual funds took the wind of out of an early Wall
Mumbai shares leapt over five per cent, and Karachi shares also rose
five per cent after guerrillas in Kashmir began to withdraw in line with an agreement
between India and Pakistan.
Thailand's key index ended up 0.5 per cent at 511.87 while New Zealand
shares ended at 2,197.2, down 0.6 per cent.
Malaysia's Composite Index ended flat at 851.49, while Philippine
shares closed 0.4 per cent higher at 2,606.2.
Moderate earnings seen for Canadian companies
Other than some gushing gains in the oil-and-gas sector, the upcoming
round of second quarter earnings reports in corporate Canada will show only moderate
improvements over last year, analysts say.
An almost doubling in the price of crude oil since early 1998 will show
strongly in Canadian oil-and-gas company earnings.
Volvo admits price fixing
Volvo Motor Corp suffered a serious dent to its image when it admitted
supporting secret agreements to fix car prices in Britain, keeping them higher than in
British trade practices watchdog, the Office of Fair Trading (OFT),
said Volvo Car UK, the company's British arm, had given written assurances that it would
not repeat the offence. Further violations would expose it to punishment including stiff
Japan exporters ease pressure on dollar
Japanese exporters, with a helping hand from the Bank of Japan (BoJ),
have completed much of their currency hedging for the July-September quarter, easing
downward pressure on the dollar for now.
But they are poised to start selling dollars for the second half of
this fiscal year to next March if the spot rate rebounds above 123 yen, dealers and
corporate sources say.
Asia faces tough choices
Asian financial regulators face tough choices in reforming their
Open up to foreign competition now and put at risk domestic insurers
pushed to the edge of insolvency by Asia's economic crisis, or hold back and block the
capital and expertise needed to strengthen indigenous industries long term.
The problem is that insurers are generally so weak either option is
likely to see a number of failures.
Asia has about 850 insurers vying for a slice of the region's
fast-growing $620 billion a year market. The bulk of premiums though are concentrated in
just two marketsJapan, the world's biggest at $490 billion and South Korea, worth