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INTERNATIONAL

Jan 03 - 16, 2000

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

S. African marts end year on high note

South Africa's financial markets have reason to celebrate as they end 1999 on a high note and look set to extend a recent bull rally into the new year. The bourse's key All-Share index was up 1.28 per cent at a fresh historic high of 8 556.8 points at 1100 GMT.

China's GDP grows only 7.1pc in l999

China's economy grew by 7.1 per cent this year, down from 7.8 per cent last year, according to data released, but economists said an export rebound pointed to a fairly robust recovery next year.

A generally bullish outlook for economic growth in 2000 was reinforced by figures showing China's two-year downward spiral of deflation appears to have bottomed out.

Gross domestic product grew to 8.319 trillion yuan ($1.005 trillion) in 1999, according to provisional figures released by the State Statistical Bureau. The expansion was slightly faster than the officially targeted 7 per cent.

The trade surplus for the year hit $30 billion, down from $43.6 billion last year. Imports surged 18 per cent to $165 billion. Exports grew 6 per cent to $195 billion.

The benchmark retail price index fell 2.9 per cent for the whole of the 1999 after dropping by a steeper 3.2 per cent in the first half.

IT stocks boost Asian markets' year-end rally

Asian bourses cruised to a strong finish for the year, with infotech stocks continuing to fuel the rally.

Singapore reached a new record high on interest from the retail sector. Hong Kong was one of the few casualties, as profittakers moved in on over-bought stocks.

Financial markets in Seoul and Taipei were closed for the New Year holidays.

Share prices in Tokyo ended 0.1 per cent higher, lifted by rallying information-related stocks in slow year-end trading.

The 225-issue Nikkei average gained 27.06 points to end at 18,810.58 on the Tokyo Stock Exchange.

The Topix index of all first-section issues advanced 11.26 points at 1,712.27, with turnover coming to an estimated 320 million shares against previous day's 306.7 million shares.

The bullish Wall Street failed to inspire the Tokyo market.

In Tokyo "buying ran its course because there are few market participants in year-end trading," Kurokawa said.

Sony Corp, which announced Monday it would split its common stock by exchanging two new shares for each old one in May, still attracted many investors. Sony shares ended at a record-high of 28,300 yen each, up 2,000 yen, or 7.6 per cent.

In Hong Kong, share prices closed 1.6 per cent lower amid profittaking following recent technology stock-fuelled rises.

The key Hang Seng Index passed through the 17,000-point barrier for the first time soon after the market opened but fell away sharply during morning trade to finish 267.47 points down at 16 660.82.

Japanese firms

Many Japanese companies are reluctant to provide confidential information to credit rating agencies preparing unsolicited ratings, results of a survey released has showed.

The Japan Center for International Finance (JCIF) surveyed Japanese companies' evaluation of seven credit rating firms. Its survey drew responses from 145 of its 259 corporate members, which include 58 banks and 41 finance companies.

Korean output jump

South Korea reported a 26.8 per cent jump in November industrial output year-on-year, reflecting the economy's robust recovery from crisis but adding to concerns of overheating in 2000.

The growth in output compared with a scant 0.3 per cent gain in the same month a year ago, the National Statistical Office said. Industrial output rose 3.6 per cent on October 1999.

The central Bank of Korea (BoK) also reported November's current account surplus fell to $2.37 billion from $2.87 billion a year earlier, as imports surged 41 per cent.

Mergers & Acquisitions

Japan: Merger and acquisition activity in Japan surged 343 per cent to hit a record high of $78 billion in 1999 spurred by deregulation and growing foreign interest in Japanese companies.

Cross-border M&A activity was also up threefold at $24.2 billion —reflecting a slew of transactions such as the NissanRenault deal and Cable and Wireless's acquisition of IDC, the Japanese telecommunications company, according to a survey by Thomson Financial Securities Data.

Tenaga: Malaysia's Tenaga Nasional Bhd will invite bids to buy two of its power plants by April as part of a plan to move away from the power generation business.

Telekom—Deutsche Bank: The New Year could mark the start of a new ice age between two of Germany's biggest companies Deutsche Telekom and Deutsche Bank, the Wall Street Journal Europe reported.

BT—Vodafone: British Telecommunications Plc has trumped a 4.5 billion ($7.3 billion) bid by arch-rival Vodafone AirTouch Plc in a battle for a key stake in Spain's number two cellphone group Airtel, a source said.

Malaysia warns investors over CLOB impasse

Malaysia told impatient investors that more than $4 billion in stock formerly traded in Singapore will be transferred to the government unless a 16-month impasse over the shares is resolved this week.

Finance Minister Daim Zainuddin said he hoped for a quick solution to the stalemate over shares once traded on the Central Limit Order Book (CLOB) over-the-counter market in Singapore.

But Daim, dampening expectations of an imminent breakthrough, said he had not seen the most recent proposal to break the deadlock, and the government had not been asked to intervene in what he called Singapore's problem.

Turkey Parliament passes budget for 2000

Turkish deputies approved early the government's 2000 budget which stresses fiscal discipline and is a key component of a newly sealed $4 billion International Monetary Fund loan accord.

Lawmakers gave their full consent for the budget later in the day in a final procedural vote, Anatolian news agency said.

The bill envisages a budget deficit of 14,383 trillion lira ($25.1 billion) next year, or 11.5 per cent of gross national product up from a targeted 9, 114 trillion lira ($21.9 billion) in 1999.

Top Korean banks paint rosy picture

South Korea's top banks unveiled forecasts showing profits in 2000 after heavy loan provisioning in 1999, but sector analysts said hefty problem loans may force some top banks to raise new capital next year. Even after generous provisioning for debts owed by struggling Daewoo Group firms and for nonperforming loan burdens fattened by stringent reserve rules analysts said they had doubts about the banks' rosy outlooks.

All 10 banks surveyed on Tuesday expect profits in 2000 even though four of them expect losses in 1999. The largest 1999 net loss is Seoulbank's estimate of 2.38 trillion won ($2.1 billion).

Taiwan-China trade soars

Indirect trade between Taiwan and China soared 45.7 per cent to $2.48 billion in October due to a recovery in exports after a slowdown in outward shipments caused by the September earthquake, official data showed.

Exports shot up 48.8 per cent to $2.05 billion and imports moved up 33 per cent to $436 million, the Board of Foreign Trade said.

Taiwan posted a trade surplus with China in October of$ 1.61 billion, up 53.7 per cent from a year earlier, the board said.

In the ten months to October, bilateral trade rose 13.1 per cent year-on-year to $20.84 billion, which accounted for 11 per cent of Taiwan's total trade in the period, it added.

Tokyo welcomes

The Japanese government welcomed data showing the number of jobless had fallen below three million for the first time in 10 months. Japan's unemployment rate fell to 4.5 per cent in November from 4.6 per cent the previous month the management and co-ordination agency said. The number of unemployed totalled 2.95 million in November, down 160,000 from October.

Japan industrial output surges

Japan produced more evidence of an economic upturn as industrial output showed a sharp gain in November, shrugging off the strong yen. Industrial production rose 3.8 per cent in November from the previous month on a seasonally adjusted basis, according to preliminary data released by the Ministry of International Trade and Industry (MITI).

Japan unfazed by strong yen

A strong yen is not likely to be as much of a burden on Japan's economy as it once was, since corporations have had learned to cope with it over the years, the Economic Planning Agency (EPA) said in its annual economic report.

The report, also saw a silver lining to a stronger yen, often considered a threat to Japan's economy because it erodes profits at exporters and overseas manufacturers.

Euro zone growth seen picking up

Euro zone M3 money supply growth is expected to have picked up in November driven by increased demand for liquid assets ahead of the millennium changeover, a poll showed.

Economists surveyed last week predicted on average the annual growth of the broad M3 aggregate at 6.2 per cent after October's 6.0 per cent expansion.

Indonesia 'immune to millennium bug'

Some Indonesians may confuse Y2K with a popular brand of zipper, but authorities insist the world's fourth most populous nation is Y2K ready.

The government has spent more than $100 million updating computers and running simulations to millennium-proof key sectors and its national command centre is already running around the clock to deal with any problems as 1999 ticks over into 2000, Y2K taskforce deputy chairman J.B. Kristiadi said.

Taiwan to open second board

Taiwan is to ease listing requirements for Internet start-ups by opening a second board on the over-the-counter (OTC) market next year. In face of the burgeoning ecommerce worldwide, Vice President Lien Chan has vowed the second board similar to Hong Kong's Growth Enterprise Market (GEM), will be in place before June next year to allow Internet companies to raise funds much easier and faster.

Eurostocks waft to record highs on lazy trade

European stocks opened broadly higher on Thursday, led by technology issues, with some key market benchmarks breaking records despite paper-thin volumes on the last trading day before the new millennium.

All-time intraday highs were hit early by London's FTSE 100, Amsterdam's AEX and Helsinki's HEX. Both the broad-based pan-European FTSE Eurotop 300, up to 1,579.04, and the narrower Dow Jones Euro Stoxx 50, up to 4,876.39, also achieved record highs.

Technology shares, true to form for most of 1999, held center stage, leveraging off strong US gains overnight.

Two Finnish tech stocks were Europe's biggest early gainers.

In London, the market's two biggest stocks, BP Amoco and Vodafone AirTouch, gained over 1.5 percent early.

The Paris Bourse started strong with technology issues Cap Gemini, Equant and STMicroelectronics among top gainers.

French insurance companies were still under pressure as damage from the storm that wreaked havoc throughout Europe was estimated at $4.0 billion.

Dutch shares traded higher with semiconductor equipment maker ASM Lithography up 2.3 percent and Baan up 2.7 percent.

Milan stock indices edged higher at the open on Thursday to hover just below record highs, helped by further gains in insurance and financial stocks which could gain from a tax-cut on pension funds approved on Wednesday evening.

US stocks surged Wednesday, with four major market indices logging records. The Dow Jones industrial average gained 7.95 points, or, 0.07 percent, to 11,484.66 - its second record in a row. The blue-chip index hit a new intraday high at 11,543.08 but fell off its highs in the final minutes of trade.

The tech-driven Nasdaq composite marked its first close above 4,000.

Oil prices extend gains in Asia as US stocks slip

Crude oil prices rose in Asia on Wednesday as falling inventories in the United States helped bolster the market.

February crude oil futures on the New York Mercantile Exchange's ACCESS overnight trading system were at $26.95 a barrel by 0715 GMT, up 13 cents from the New York close, after the American Petroleum Institute (API) reported a drop in weekly crude and distillate stocks.

The contract had gained 49 cents during the day in New York amid expectations of a bullish inventory report.

The API report, released after the market close on Tuesday, showed crude oil stocks in the United States, the world's largest energy consumer, fell 3.2 million barrels in the week ended December 24, slightly more than market expectations of a three million barrel decline.

Stocks of distillates, which includes heating oil, also fell a huge 3.9 million barrels over the same period, API said.

The distillate stocks drawdown was much sharper than market expectations of a 1.4 million barrel drop.