Oil rallies as Opec mulls longer cuts
Oil prices rose sharply after major exporting nations said they were
considering extending the duration of limits on output beyond the end of next March.
International marker Brent crude traded 40 cents higher at $22.27 a
barrel after commend from three of the major exporters who banded together earlier this
year to restricts supplies. Later, it closed 23 cents up at $22.10.
Mexican Oil Minister Luis Tellez said he would propose that Opec and
non-Opec exporters maintain a tight leash on production into the second quarter of next
year "We will propose to our colleagues in Saudi Arabia and Venezuela, so that they
in turn propose to Opec that there should not be an increase in supply," he said
The Organisation of the Petroleum Exporting Countries and a handful of
non-Opec states agreed last March to remove some five million barrels a day from the 75
million barrels daily world market for a year In an effort to lift prices from below $10 a
Gold breaks through key support level
Spot gold broke through support at $305 an ounce, forced lower by
easier short-term lease rates which made short selling more attractive, dealers said
Dealers put gold's next support level at $300.
Spot gold was last at $302.60/ $304.60 compared to Now York's Wednesday
close of $305.30/$307.30.
Gold surged through $300 to two-year highs near $340 in recent weeks
after a September 26 pledge by 13 European central banks to limit sales, lending and
derivatives activities for the next five years.
Gold hit a 20-year low of $251.70 bid in late August amid bearishness
about Britain's ongoing sales and fears that other central bank sales were looming
But in recent weeks, lease rates came down from around 10 per cent at
the peak of gold's rally to be quoted around 1.8 per cent for one-month metal.
Chase: The No. 2 U.S. bank, Chase Manhattan Corp, said its
third-quarter profits rose 42 per cent to $1.19 billion. The bank, earned $1.37 a share in
the quarter, up from 94 cents a share, or $837 million in the year-ago quarter.
Volvo: Sweden's AB Volvo, posted a profit after financial items
at 32.18 billion crowns for the period against market forecasts of 32.52 billion and
warned that demand in its key growth markets remained weak.
SAP: Leading European business software group SAP, which issued
a profit warning last week, said net profit in the June-September quarter fell to 45
million euros ($48.57 million), while sales rose seven per cent to 1.12 billion euros.
Norwich: British insurer Norwich Union reported a 50 per cent
surge in new life and pensions business for the first nine months of 1999. Norwich said
total new life pensions and investment rose 50 per cent to £450 million ($752 million) in
annual premium equivalent terms in the nine months to September 30.
ABB: Swiss-Swedish engineering group ABB Ltd said net profit for
the nine months to end-September jumped 31 per cent to $1.11 billion. Operating earnings
rose 33 per cent to $1.75 billion in the nine months and third quarter net earnings were
$275 million compared to a restated 1998 figure of $214 million.
Ford: Ford Motor Co reported third-quarter earnings rose 11 per
cent to $1.11 billion a record for the period. The world's No. 2 automaker posted earnings
of 90 cents per fully diluted share, up from 80 cents a year ago.
Bank of America: The No. 1 U.S. bank, Bank of America Corp, said
its third-quarter profits rose more than five-fold to a record $2.15 billion, including a
merger charge last year, as fee income surged.
U.S. inflation data cheer stock marts
Stock markets raced further ahead and the dollar rose after U.S.
inflation data matched market expectations, easing concerns that the Federal Reserve might
sharply increase U.S. interest rates next month.
Share prices on Wall Street soared two per cent at the European close
after data showed U.S. consumer prices rose 0.4 per cent in September bang in line with
U.S. stocks were sharply higher at midday as Wall Street shifted its
focus to strong corporate earnings after the government issued a benign report on
inflation for September.
The Dow Jones industrial average at 2 pm was 165.58 points up at
10,281.86. Earlier it shot up more than 210 points, triggering trading curbs on the New
York Stock Exchange.
The Nasdaq composite index rose 28 points, or 1.08 per cent to 2,718.
The Standard & Poor's 500 index was up 19 points, or 1.56 percent, at 1,273.
The 30-year U.S. Treasury bond rose 16/32 with the yield falling to
6.28 per cent from 6.32 per cent..
The stock market rallied, with particular strength in the drug and
financial sectors, on news that the Consumer Price Index for September, a measure of
inflation, rose 0.4 per cent as expected.
The so-called "core" CPI, which excludes food and energy
prices, rose 0.3 per cent, also matching expectations of economists polled by Reuters.
The market has been on the inflation watch when the Producer Prices
Index came in much stronger than expected and triggered a slide of 267 points in the Dow
European shares were higher across the board with London's FTSE 100
index, Frankfurt's Dax and Paris Cac-40 surging more than two per cent at the close.
The pan- Euro Dean Eurotop index of 300 shares was up 26.20 points or
2.1 per cent at 1,272.42 while the narrower Euro Stoxx index of 50 blue chip euro zone
shares was up 83.62 points or 2.32 per cent at 3689.40.
Mergers & Acquisitions
Banco Bilbao VizcayaArgentaria:
Spain's Banco Bilbao
Vizcaya and Argentaria announced a long-awaited merger, creating the second-largest bank
in the euro zone by market capitalisation.
RWEVEW: RWE AG may be nearing a merger deal with rival
utility VEW AG in a move that would protect its position as the market leader in Germany's
rapidly consolidating energy sector, industry sources said.
HypoVereinsbank AG played down a
report that it would merge with Dresdner Bank AG, but analysts said a link-up next year
was feasible heralding a new phase in German bank consolidation.
AsarcoPhelps Dodge Corp:
Copper producer Asarco Inc said
it planned to break a planned $1.17 billion cash and stock merger pact with Phelps Dodge
Corp in favour of a newly sweetened $1.18 billion cash bid from Grupo Mexico AG.
RabobankDG: Unlisted Dutch Rabobank and German cooperative
DG Bank said they were merging their corporate and investment banking activities as a
first step in the formation of a wider European network of mutuals.
German cement giant Heidelberger gave
details of its bid to buy out minority shareholders in its Belgian subsidiary CBR, saying
it hoped to speed up expansion in growing Asian markets.
MobilComTelePassport: The German telecommunications
operator MobilCom said that it was buying its Erfurt-based rival TelePassport. The exact
purchase price was not revealed, but MobilCom said it was less than 20 billion marks
(10.23 billion euros, $11 billion).
Malaysia 'may announce tax cuts'
Malaysia's government may announce tax cuts and a phaseout of capital
controls when it unveils an election-eve budget late this month, the head of a leading
Mohammed Ariff, executive director at the Malaysian Institute of
Economic Research (MIER), said the 2000 budget deficit was likely to be at least five per
cent of gross national product (GNP) and would include a cut in individual income tax
But he did not speculate on how the government would phase out the
country's year-old capital controls, which fixed the value of the ringgit and sought to
shore up a fragile economy.
"I don't see any major policy departures in the budget. But I
expect government will make announcements to phase out capital controls that are in
place," he said.
"I expect the budget to be expansionary and it will aim at
stimulating the domestic economy," he added.
"With elections round the corner it may carry some goodies which
is quite normal in any country."
South Korea to maintain low interest rate poliy
South Korean President Kim Dae-jung said the government would maintain
its low interest rate policy, confirming that inflationary pressure is not an immediate
"The government will support the economic recovery by maintaining
the low price and low interest rate stance," Kim said in a speech to parliament read
by Prime Minister Kim Jong-pil.
Kim's remarks, a reiteration of what his top ministers have been saying
for weeks, failed to impress the local debt market, which instead welcomed a government
plan allowing high-yield funds to be set up to buy speculation grade debt instruments.
He said the low interest rate policy was among the measures aimed at
helping the economy regain its potential growth power.
Asian markets cautious ahead of U.S. CPI data
Asian stock markets were mostly slow, with indices slipping lower ahead
of release of the September U.S. consumer price index (CPI) data.
Investors worried that if the data indicated rising inflation, higher
interest rates could be in store. Tokyo stocks ended a lacklustre session on a mixed note
with the 225-issue Nikkei average, which had plunged 326.24 points closing at 17,254.17,
down 0.12 per cent.
Tokyo shares were buoyed in morning trade by Monday's Wall Street
rebound that saw the Dow Jones Industrial Average rise almost one per cent to 10,116.28.
But the Japan market soon lost steam as players moved to take profits and wariness over
the CPI set in. Australian stocks ended at a 10-month low.
The Korea Composite Stock Price Index fell 1.8 per cent to close at
Hong Kong stocks closed 1.3 per cent lower at 12,134.13 as investors
pulled back ahead of the CPI data, after the market had been closed for a holiday.
Elsewhere in Asia, Taiwan stocks were dragged down 0.7 per cent to
7,692.96 on confusion over comments made by communist Chinese leader Jiang Zemin, who was
quoted by a London newspaper as saying Taiwan's reabsorption by the mainland would be
accomplished in the new millennium.
Singapore's Straits Times Index lost 0.5 per cent to 1,983.21, while
Thailand's benchmark index was down over-one per cent to 368.58 at 0944 GMT after earlier
gains as investors bought into banking shares, dealers said.
Malaysian shares jumped more than three per cent to 738.28 at 0937 GMT,
spurred by hopes an impasse over Malaysian shares formerly traded in Singapore might
shortly be resolved. The issue has been viewed as one obstacle to foreign investment.
NTT may slash 20,000 staff over three years
Japanese telecom powerhouse Nippon Telegraph and Telephone Corp (NTT)
has proposed cutting 20,000 workers by March 2003, a source at its labour union said.
NTT presented a three-year "NTT Group Management Plan" on
Monday, the union source said.
If NTT's 214,000-member union, Japan's biggest, agrees with the plan,
the job cuts will approach the size of those at Nissan Motor Co, which said it planned to
cut 21,000 jobs by March 2002.
Nissan to cut 21,000 jobs; shut five units
Nissan Motor Co, sapped by years of disappointing sales and financial
losses, announced it would shut down five factories and cut 21,000 jobs to emerge as a
leaner, more competitive company.
Prodded by its major shareholder Renault SA, Nissan said it would close
a 37-year-old assembly plant in Tokyo, two components plants and two plants belonging to
affiliates as part of an effort to cut costs by one trillion yen ($9.5 billion).
Nasdaq, Crest in link-up
Nasdaq and UK securities settlement system Crest announced a link
between Crest and U.S. settlement system DTC to significantly cut the cost of UK and Irish
private investors buying Nasdaq and S&P 500 shares.
Nasdaq and executives from CrestCo, which runs the Crest system, said
the cost of investing in Nasdaq stocks such as Microsoft can be up to four times as high
for UK investors than commission and charges for investing in domestic UK securities.
Turkey expects $30.9b deficit
Turkey's draft budget for next year envisages a deficit of 14,400
trillion turkish lira ($30.90 billion) and spending of around 46,900 trillion lira, State
Minister Tunca Toskay said after a cabinet meeting.
The budget deficit target for this year is some 9,000 trillion lira
($19.3 billion). The year-on-year comparison does not take into account annual inflation
of around 60 per cent.
The budget, to be presented to parliament, is being closely watched by
financial markets amid pressure from the International Monetary Fund to maintain fiscal
The budget draft forecasts 32,500 trillion lira in state revenues, of
which 24,000 trillion lira was expected to be from tax revenues, the same official said.
He said this figure included privatisation revenues.
DaimlerChrysler says it can go alone in Asia
As global carmakers trumpet alliances to secure a future in the
developing Asian region, the world's fifth-largest automaker DaimlerChrysler AG said it
can go it alone in Asia.
"We refuse to say that you can't become a player unless you find a
partner, " James Holden, DaimlerChrysler president for North America, told reporters
ahead of official opening of the Tokyo Motor Show.
"If along the way we happen to find a partner, that's okay too.
But if we have to, we'll take the long view and grow it alone,"he said.
A senior DaimlerChrysler official later reinforced this message,
telling reporters the GermanAmerican automaker was not engaged in "serious
talks" to acquire another company.
DaimlerChrysler has been rumoured to be eyeing Italy's Fiat, France's
PSA Peugeot Citroen and the van-making division of Korea's Ssangyong Motor Co.
Three Japan jnsurers join merger wave
Three insurers set forth plans to create Japan's biggest casualty and
property insurance group, joining a tide of consolidation already sweeping the banking
Mitsui Marine & Fire Insurance, Nippon Fire & Marine Insurance
and Koa Fire & Marine Insurance said they would set up a joint holding company by
April 2002 and merge operations two to three years thereafter.
Their combined assets of over 6.1 trillion yen would top Japan's
current top non-life insurer, Tokio Marine & Fire Insurance Co with 5.4 trillion yen.