U.S. inventory data trigger crude rally
Oil's record rally found fresh legs as dealers were dealt a sharp
reminder of declining petroleum inventories in the West.
London futures for benchmark North Sea Brent crude surged 51 cents to
$25.53 a barrel in late afternoon trade, within sight of November's $25.90 nine-year high,
up from less than $10 in February.
Dealers cited latest weekly data from the United States showing another
sharp decline in crude stocks as the driving force behind price rise.
The U.S. Department of Energy said crude stocks were down 5.6 million
barrels at 293 million barrels in the week to December 10, the lowest level since January
1997 when a harsh winter caused a big stockdraw.
"The U.S. inventory data has definitely added fuel to the
fire," said a trader in London.
Oil also found support from a U.S. report showing demand for petroleum
products up 5.7 per cent from a year earlier to 19.746 million barrels a day.
The American Petroleum Institute said this was the largest year-on-year
increase in petroleum deliveries since October 1996.
Most of November's increase was due to a jump in heating oil and diesel
demand, up almost 14 per cent from a year ago to 3.782 million barrels a day.
The API said the rise reflected higher purchases by distributors in
case prices rose further ahead of the winter.
Oil's latest spike comes despite the imminent resumption of Iraqi
exports under the UN's oil-for-food programme.
Shipping officials said the first vessel under a new tranche of the
deal was due to berth at Iraq's Gulf terminal Mina Al-Bakr late last night.
BTM joins race for Japan online trade
The Bank of Tokyo Mitsubishi (BTM) joined the race for a stake in
Japan's online trading business, saying it would form a Net trading company with U.S.
discount brokerage TD Waterhouse Group Inc.
Analysts said the move, together with confirmation of a separate tieup
with Kokusai Securities, should give Japan's biggest bank extra muscle in the key retail
BTM said that as well as agreeing to start online trading with TD
Waterhouse around next spring it had finalised an October agreement with Kokusai to work
together in the investment banking and securities business.
Mergers & Acquisition
GMDaewoo: General Motors Corp has offered to pay between
six and seven trillion won ($5.3-$6.2 billion) to take over South Korea's ailing Daewoo
Motor Co, local Yonhap news agency reported.
GeneraliINA: Italian insurer Generali seized control of
smaller rival INA at the climax of a two-month campaign to beef up its domestic market and
strengthen its position as Europe's third-largest insurer.
NTLCablecom: Fast growing NTL Inc said yesterday it was
paying some $3.7 billion for Cablecom Group, Switzerland's largest cable company, as part
of its strategy of expanding in continental Europe.
CibaMGPE: Ciba Specialty Chemicals said it was selling its
Performance Polymers unit to Morgan Grenfell Private Equity (MGPE) for 1.845 billion Swiss
francs ($1.17 billion).
Two Internet services firms, USWeb/CKS Corp
and WhittmanHart Inc Inc. said yesterday they plan to merge in deal worth $8 billion based
on Friday's prices, but stocks of both companies dropped.
A U.S.-based investment consortium has
agreed to take over South Korea's insolvent Hanbo Iron and Steel Co Ltd. local creditors
of the failed steel maker said.
DDI Corp said it is to merge with IDO
Corp and KDD Corp to create Japan's second largest telecoms company behind NTT Corp.
Energis PLC announced the
acquisition of 74.9 pct of BusinessOnline, a Berlin-based internet service provider, for
14.1 mln dm equivalent to 4.7 mln stg.
Marconi PLC said it has won a commitment
from BellSouth Corp to use its ATM-based DISC*S MX access platform, which it projects will
generate over 1 bln usd in sales revenue for Marconi over the next three years.
Smiths Industries PLC said it
has agreed to acquire the aerospace division of Invensys PLC for a total of 109 mln stg in
a move to extend its range of aerospace electronics into a closely-related area of systems
and components for aircraft.
GKNOpel: GKN PLC said it has agreed to buy the production
assets of General Motors Corp unit Opel AG's automotive driveline facility at
Motorola Inc and Oracle Corp said they
have formed a strategic alliance to develop products jointly for interactive TV.
Societe Generale said it has
acquired a block of shares in Credit Lyonnais SA, representing some 3.8 pct of the bank's
capital. SocGen did not identify the seller.
AngloGold Ltd has announced that 58.2 pct
of Acacia Resources Ltd shareholders have accepted its takeover offer of 3.5 of its shares
for every 100 Acacia shares they hold.
TTNetC&W: Tokyo Electric Power Co Inc's fixed phone
operator TTNet is considering an offer made by Cable & Wireless PLC to take a stake in
the company, the Financial Times reported, citing TTNet.
U.S., Japan clash over role of IMF
The United States and Japan clashed over the role of the International
Monetary Fund before the first meeting of a new forum designed to boost the role of the
developing world in managing financial crises.
U.S. Treasury Secretary Larry Summers, who will attend the first
meeting of the "Group of 20" countries in Berlin said the IMF's role should be
limited to providing emergency assistance to countries in trouble.
With the world economy showing increasing signs of recovery from the
1997 Asian crisis, Summers said it was time for the IMF to move away from providing
long-term financial help, saying that encouraged dependency.
"The IMF can best supplement rather than supplant private sector
capital flows," Summers said.
But Japan, the world's number two economy after the U.S., warned it
would oppose any proposals to restrict the IMF's role.
"I haven't heard any U.S. proposal, but if it were to set too many
limits, saying the IMF can only do this or that, it would be too much," Parliamentary
Vice Finance Minister Yoshimasa Hayashi said in Tokyo.
The clash adds an edge to what was otherwise expected to be a bland
meeting of the G20, which was proposed by the Group of Seven rich countries at their
summit in Cologne in June.
The G20 groups rich industrialised nations with key emerging market
economies. Its backers say it is vital for emerging countries to speak as equals at the
table when often in the past they have had to go cap-in-hand to the IMF for emergency
The thinking goes that this will encourage them to take more
responsibility for making their financial systems crisis-proof and make for earlier
warnings of trouble ahead.
Euro slumps on French bank report
The euro slumped toward parity with the dollar and hit a record low
value against the pound, undermined by suspicion that the French central bank had blocked
a foreign takeover of a French bank.
The dollar, meanwhile, gained from the latest raft of price data in the
United States, which showed inflation in check thereby averting fears of an imminent rise
in U.S. interest rates that some had feared might undermine Wall Street.
The euro fell to $1.0060-here from $1.0137 late Monday in New York just
a few notches clear of its ail-time low point of $0.9990 touched earlier this month.
Berkeley profit rise
British homebuilder Berkeley Group Plc's pre-tax profits slightly
exceeded expectations with a rise to £60.3 million ($97.85 million) in the six months
ended October 31, 1999 from £52.5 million in the year earlier period.
Tankan lets down marts
The Bank of Japan's Tankan survey showed only a modest rise in
corporate confidence underlining the economy's patchy emergence from its longest downturn
since World War II.
The index of large manufacturers' confidence rose to minus 17 in the
past three months from minus 22 in the three months to September. The figure was worse
than expected and dented spirits on the financial markets.
The Bank of Japan, whose forecast was at the low end of predictions by
analysts, had expected the index to come in at minus 16.
The index measures the difference between firms saying economic
conditions are favourable and those saying they are unfavourable. A negative figure means
a majority of firms believes conditions are bad.
The Tokyo stock market fell after the release of the survey, with the
Nikkei-225 average losing 66.77 points0.4 per cent to end the day at
Nasdaq, HK exchange to co-list shares
The Nasdaq, the No. 2 U.S. stock market, and the Hong Kong Stock
Exchange yesterday said they would co-list shares traded on each other's markets in an
effort to globalise trading of highprofile, universally recognised stocks.
As part of the programme, the Hong Kong Stock Exchange will initially
list seven top Nasdaq companies, starting in February. They include Microsoft Corp Intel
Corp, Dell Computer Corp Cisco Systems, Amgen Inc. Applied Materials Inc and Starbucks
Japanese insurers may realign fast
Two mutually owned Japanese life insurers announced plans for a
comprehensive tie-up that analysts said could hasten a realignment of the industry at a
time of increasingly fierce competition.
The deal between Yasuda Mutual Life Insurance Co, Japan's sixth-largest
life insurer, and Fukoku Mutual Life Insurance Co, the 11th largest, is the first such
domestic alliance involving a major life insurer.
The two firms, which have combined assets of 14.47 trillion yen ($141
billion), said they had no plans to merge but would co-operate in a range of fields,
including marketing, asset management and product development.
Ciena reports higher profit
Telecommunications equipment maker Ciena Corp posted a
higher-than-expected fourth-quarter profit as its customer base increased, and said its
revenues could grow more than 50 per cent in 2000.
Daily Mail profits rise
Daily Mail & General Trust PLC revealed 9 pct rise in full year
pretax profit to 201.9 mln stg but said the figure would have been higher had it not been
for a "considerable" rise in new business investment.
French Finance Minister Christian Sautter said that Europe's economic
growth will strengthen the euro currency.
He made the comments at a dinner for finance ministers inaugurating the
new G20 international forum which started its Financial Stability Forum meeting.
Treasury Secretary Lawrence Summers said the U.S. economy remains
fundamentally strong, but warned businesses against being excessively optimistic about the
"I think the fundamentals of our economy are strong," Summers
said in an interview with CNN television.
ECB to leave rates steady
The European Central Bank will leave its main refinancing rate at 3.00
pct at governing council meeting, but the stronger-than-expected economic upturn in the
euro zone makes a further rate hike inevitable in the first half of next year, economists
Of 34 economists polled by AFX News and Agence France-Presse, all said
they expect the refi rate to remain unchanged at this week's meeting, the last of the