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 service business.

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

GM—Daewoo: 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.

Generali—INA: 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.

NTL—Cablecom: 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.

Ciba—MGPE: 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).

USWeb—Whittman: 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.

U.S. group—Hanbo: 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—KDD—IDO: 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—BusinessOnline: 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—BellSouth: 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—Invensys: 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.

GKN—Opel: GKN PLC said it has agreed to buy the production assets of General Motors Corp unit Opel AG's automotive driveline facility at Kaiserslautern, Germany.

Motorola—Oracle: Motorola Inc and Oracle Corp said they have formed a strategic alliance to develop products jointly for interactive TV.

SocGen—Credit Lyonnais: 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—Acacia: 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.

TTNet—C&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 help.

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 points—0.4 per cent— to end the day at 18,205.08.

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 Corp.

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.

Economic growth

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.

U.S. economy

Treasury Secretary Lawrence Summers said the U.S. economy remains fundamentally strong, but warned businesses against being excessively optimistic about the future.

"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 said.

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 year.