Euro slips to lowest
level against yen
The euro plumbed all-time lows against the yen and set four-month lows
against the dollar amid concern that Europe's economy needed structural reforms before it
could achieve sustained growth.
The contrasting positive view growing on the Japanese economy also cast
the single European currency in a bad light, keeping it broadly under pressure
particularly as investors sought safe-havens for the thin year-end market.
"Japan's got weaker growth than Europe, but the point is that it's
instituted a structural change," said Claudio Piron, treasury economist at Standard
Chartered Bank in London. "So it looks promising in the sense that it may sustain an
extended upturn once things kick off."
Besides some weak economic data recently from Germany, Europe's largest
economy, a number of high-profile government interventions in private sector business
clouded the outlook for investment in Europe, analysts noted.
Shares soar to new highs in Europe
With Wall Street shut for Thanks-giving European traders had expected
the day to be dull and yet European shares sprinted to new records while the euro wobbled
The main action was in Europe's share markets which took their cue from
Wall Street's Nasdaq index which rose 2.32 per cent to a new record close of 3,420.5 on
The star performer was Italian software house Finmatica which provoked
frenzied demand on its debut and hit a high of 40 euros, 100 per cent above its five euro
The Internet-inspired buying spree lifted the Milan bourse almost two
per cent to above its end-1998 level for first time since July.
The mania for tech stocks and telecoms also drove the Paris bourse up
more than three per cent to a new record close, its 16th over the past 20 sessions,
Canal Plus surged 18.6 per cent to 92 euros amid a re-crating of its
interest in inter-active television operations linked to the Internet.
Among the telecoms, France Telecom and Bouygues both rose 5.55 per
cent, while Alcatel gained 5.3 per cent.
Germany's DAX index climbed almost 2.5 per cent with Mannesmann
rallying for a second straight day after its takeover predator Vodafone AirTouch Plc, said
Mannesmann shareholders overwhelmingly backed its bid.
Mannesmann, the most heavily traded stock, put on 8.2 per cent.
Meanwhile, building firm Philipp Holzmann gained 32.9 per cent after a
Chancellor Schroeder-led rescue bid succeeded.
Britain's FTSE 100 closed up 1.8 per cent at a new record at 6,682.8,
smashing the previous record of 6,620.6 set on July 6.
The new level meant the index has risen by 13.6 per cent since the
start of the year.
It reached an intra-day peak of 6,686.1 as Vodafone Airtouch shot up
7.2 per cent and British Telecommunications rose 4.6 per cent.
US, Japan officials fail to make trade progress
US and Japanese trade negotiators failed on Friday to narrow their
differences over US anti-dumping policies, which Tokyo wants to add to the agenda of
upcoming World Trade Organisation (WTO) discussions.
"They remained at odds on antidumping," a spokeswoman for
Deputy US Trade Representative Susan Esserman said after Esserman met with Japan's Vice
Minister for International Affairs Hisamitsu Arai in Washington.
Arai was in Washington ahead of a meeting of WTO trade ministers in
Seattle starting Nov 30.
Tokyo alleges that US antidumping laws, which protect US companies
against import surges, violate international free trade rules, and wants the WTO to
Anti-dumping is one of a number of disputes between the United States
and Japan ahead of a new round of global trade talks that is expected to be launched in
Seattle. Other issues include competition policy, investment agreements and agriculture.
The United States opposes dragging anti-dumping into the next round of global trade talks.
US Under Secretary of Commerce for International Trade David Aaron has
described Japan as the "greatest dumping country in the world," and has said it
was hypocritical of Tokyo to assail US trade policies given its own record.
Japan said on Thursday it had formally filed a complaint with the WTO
over the United States' imposition of anti-dumping duties against its steel exports.
Tokyo charges that Washington violated WTO and other tariff agreement
rules when it decided in June to impose anti-dumping duties of 17 to 67 per cent on
Japanese hot-rolled steel sheet.
Japan's Trade Ministry, which first flagged the move last month, said
in a statement on Thursday Japan would seek bilateral talks on the issue, the first stage
of the trade organisation's dispute settlement procedure.
Holzmann rescue stains Germany's reputation
Philipp Holzmann AG promised to earn the trust banks placed in it with
a govemment-backed rescue that has raised doubts about Germany's commitment to the free
Saved by the dramatic intervention of Chancellor Gerhard Schroeder on
Wednesday night, the building giant said it would now shed 3,000 jobs, sell non-core units
and focus on profitable projects to avoid repeating the losses that almost wrecked it.
But the 4.3 billion-mark ($2.2 billion) bailout, agreed by reluctant
creditor banks only after Schroeder offered 250 million marks in state aid, failed to
remove doubts about Holzmann's long-term viability and enraged rival construction firms.
Congress approval of IMF gold plan expectedGramm
Republican leaders and the Clinton administration were close to a deal
that would allow the International Monetary Fund to revalue part of its gold reserves to
fund international debt relief, Texas Republican Sen. Phil Gramm told reporters on Monday.
"I think we are about to make a deal," Gramm told reporters
during a late-night negotiation with US Treasury officials on Capitol Hill. "The deal
is basically going to allow for the revaluation of gold sufficient to raise roughly $3.1
Gold higher in range in European trade
Spot gold ticked higher in a range in London on Tuesday morning, but
dealers said it was capped at around $300 a troy ounce ahead of next week's third Bank of
Spot gold was last quoted at $296.45($296.95 an ounce, up from Monday's
New York close at $294.50)$295.50.
Mergers & Acquisitions
German-US car giant DaimlerChrysler
is interested in buying Japanese group Honda, the business weekly WirtschaftsWoche said in
a report. DaimlerChrysler chairman Juergen Schrempp saw Honda as a preferable takeover
candidate to either Fiat in Italy or Peugeot in France, the magazine reported without
quoting any sources.
The French government refused to allow
Coca-Cola to buy Orangina from the French drinks group Pernod-Ricard due to opposition
from the country's Competition Council.
Bank of ScotlandWest:
Bank of Scotland announced an
increased offer for National Westminster Bank PLC worth 1,532 pence per share. The total
value of the increased offer is 25.58 bln stg, compared with 22 bln stg previously.
Carlton Communications PLC and United News
& Media PLC have unveiled merger plans which will create the UK's biggest TV company
valued at 7.8 bln stg.
Vodafone Airtouch PLC chairman Chris
Gent said he has received largely positive feedback from institutional Mannesmann AG
shareholders on his plans to submit a written offer for Mannesmann shares at the end of
BridgestonePT Mahkota Bumi: Bridgestone Corp
said it has purchased a rubber plantation in southern Kalimantan Selatan in Indonesia from
PT Mahkota Bumi.
The debt of Automobiles Citroen's
Chinese joint venture Dongfeng Citroen Automobile Co Ltd valued at 2.43 bln yuan will be
converted into equity, Shenzhen's Securities Times said.
Anglo-Dutch food and consumer
products group Unilever Plc/NV said it was buying French mustard maker Amora Maille for
4.7 billion francs, or £460 million ($743.8 million).
NTTTelekom: Ending months of speculation, Telekom Malaysia
Bhd said its major state shareholder was negotiating for Japan's Nippon Telegraph and
Telephone Corp (NTT) to buy a stake.
UBS CapitalGroupe Serse:
UBS Capital, the private equity
division of UBS AG, said it had agreed to buy French Groupe Serse which specialises in
services to the banking and retailing industry.
Singapore's Changi Airport, one of
Asia's busiest hubs, made its first foreign investment by buying a small stake in New
Zealand's international flagship airport for about NZ$87 million ($44 million).
Thames WaterU.S. utility:
British utility Thames Water
Plc, facing regulatory constraints at home, took the latest step in its strategy of
expanding overseas with the £575 million ($922.8 million) buy of U.S. utility E'town
French car parts maker Valeo announced the sale
of its 50 per cent share of German clutch firm LuK to the company's other shareholder, INA
Holding-Schaeffler, for 1.215 billion euros ($1.25 billion).
British insurance broker Lambert
Fenchurch Plc agreed to a £135 million ($218.3 million) takeover bid from privately-held
fellow broker Heath Group Plc, creating the world's sixth largest insurance broker.
Firms set up e-commerce wrong-expert
Many big companies believe that putting up an Internet website will get
them onto the roaring e-commerce bandwagon but they're wrong, an electronic business
consultant said on Thursday.
Many websites set up by large companies focused only on their own
products, or failed to provide a one-stop shop for consumers, Alison Spottiswoode, the
global head of e-business at PA Consulting Group, told Reuters in an interview.
"If you take large organisations, quite often they have different
parts of their group to deal with a different product.
They're not thinking in terms of the customers, thinking in terms of
the products," Spottiswoode said.
CCF: French bank CCF reported a 39.8 per cent jump in net
attributable profit to 323 million euros in the nine months through September and said net
earnings per share would be over six euros this year.
Meyer: British building materials firm Meyer International Plc
said pre-tax profits rose seven per cent to £39.8 million in the six months ended
September 30 compared with £37.1 million a year earlier. It raised its dividend to 5.3
pence a share from five pence.
ING: Amsterdam Financial services group ING Groep reported a 51
per cent rise in nine-month net operating profit. Net operating profit of the Netherlands'
second largest bank came in at 2.42 billion euros slightly better han analysts' consensus
UBS: Swiss banking giant UBS AG announced a near doubling in
profits for the first nine months of the year. Net profits rose to 5.18 billion Swiss
francs from 2.60 billion in the same period in 1998, in line with analysts' forecasts.
Japanese bank sector begins to recover
A set of healthy interim earnings unveiled by top Japanese banks backed
up the view that the nation's troubled banking sector took the first steps towards a
long-awaited earnings recovery.
The announcements included results from industry leader Bank of
Tokyo-Mitsubishi (BTM), whose current profits more than doubled on a parent-only basis to
101.04 billion yen ($953 million) for the six months to September.
But analysts warned that the sector, humbled by years of painful losses
amid bad loans, still needed more years to boost profitability, adding that a possible
rise in problem loans remained a worry in a climate of fragile economic growth.
BTM, Japan's biggest commercial bank, said its current profits were
fattened by one-off gains from a surging stock market. Current profits are before tax and
include profits and losses from non-operational activities.
The bank predicted a 180 billion yen profit for the full year against a
loss of 22.3 billion yen the previous year.
Japan firms need to do more: S&P
The credit standing of Japanese companies is unlikely to get any worse
but much needs to be done as they emerge from economic crisis, Standard & Poor's said
In a survey of more than 250 firms in Japan, the U. S . credit ratings
agency said their financial performance was stabilising after years of deterioration in
But to maintain credit quality "Japanese companies need to boost
profitability and cash-flow generation while at the same time lowering their debt
usage," said the agency's corporate ratings chief Daisuke
The median S&P rating of Japanese firms had fallen to
"BBB" from "A" in 1992, when Japan's bubble economy burst, Fukutomi
noted in the report.