Greenspan chides lenders
Federal Reserve Chairman Alan Greenspan used his bully pulpit Wednesday
to criticize a growing practice by some mortgage and home-equity loan companies of seeking
out low-income borrowers and charging them unfairly high fees and interest.
The practice, called predatory lending by its critics, can damage
poorer neighbourhoods, Greenspan said in a speech to a meeting of the National Community
Reinvestment Coalition, a liberal group.
Greenspan said the Federal Reserve is concerned about "abusive
lending practices that target specific neighbourhoods or vulnerable segments of the
population and can result in unaffordable (mortgage) payments," loss of homeowners'
equity and foreclosure.
It was the first time Greenspan has spoken publicly on the subject.
Other federal banking regulators have criticized predatory lending recently, but the
central bank chairman's remarks raised the profile of the issue.
Japan telecom talks fail
Talks between Japan and the United States on the sensitive issue of
deregulation in the telecommunications sector have ended without agreement, Japanese media
said on Thursday.
The issue, currently the thorniest between the two powers on the trade
front, is at the centre of deregulation talks between U.S. and Japanese officials that
began in Tokyo on Tuesday.
Japan and the United States completed their talks, which were extended
by an extra day after they became deadlocked on Tuesday, but failed to iron out
differences over the size of planned cuts in connection fees charged by Nippon Telegraph
and Telephone Corp. (NTT), Japanese officials said.
NTT, still 59 per cent government-owned, is under intense U.S. pressure
to slash interconnection fees for carriers using its networks.
Washington is pressing for an immediate 41 per cent reduction in the
charges, saying this would not only benefit U.S. firms seeking access to the Japanese
telecom market but would provide a much-needed lift for Japan's fragile economy.
Tokyo has not budged from its offer of a 22.5 per cent cut implemented
over four years, arguing that bigger cuts would jeopardize NTT's profits and threaten its
workers with unemployment. NTT shares ended morning trade in Tokyo up 10.07 per cent or
140,000 yen ($1,306) at 1.53 million yen ($14,280)
Russia poised for Putin
Barring an electoral debacle, Vladimir Putin will be Russia's new
president by this time next week. Yet if past history is any guide, Russia's recovering
financial markets could run into some friction once the ballots are counted Sunday and
Boris Yeltsin's anointed heir steps into the Kremlin cockpit.
For investors, the coming weeks and months will be a time to scan the
horizon for signs of a steady hand at the controls. That would be a welcome change after a
decade of turbulence that underscored the New Russia's reputation as a risky but
potentially rewarding - place to park your portfolio cash.
Trade deficit hits record
Americans' appetite for goods produced abroad resulted in a record
trade deficit in January as demand for consumer products surged and oil prices jumped to
near nine-year highs, the government reported Tuesday. Exports declined for the first time
in eight months.
January's trade deficit widened to a record $28 billion, the Commerce
Department said. That was well above December's revised $24.6 billion deficit and $1.5
billion above economists' estimates of a $26.5 billion gap. January's figure was revised
downward from the $25.5 billion deficit first reported.
Brown unveils U.K. budget
U.K. finance minister Gordon Brown presented his budget for the year
ahead Tuesday, holding back on some spending as he eyed a general election in the next two
Brown praised Britain's economic performance during the four years
under his stewardship, but reined in the impulse to spend some cash hoarded during the
past year. Brown's budget injected a net 1.2 billion pounds ($1.9 billion) into the
economy, short of the 2 billion pounds most economists had predicted.
Brown raised his forecast for Britain's economic growth over the next
12 months to between 2.75 per cent and 3.25 per cent, an increase of half a percentage
With the government's finances in robust shape, Brown also raised his
forecast to a likely surplus of 12 billion pounds from a previous 3-billion-pound deficit.
Brown, Britain's chancellor of the exchequer, refused to hand out all
of the extra cash in the coffers, saying that a budget surplus often previously meant
governments had "fallen into imprudent ways." He ruled out the additional cut in
the basic tax rate that some economists had predicted, and the opposition had demanded.
A large part of Brown's 50-minute speech to Parliament focused on
improvements and additional funds for social services such as health care and education.
He promised an extra 1 billion pounds for schooling over the next year, and double that
amount to spend on Britain's National Health Service.
Brown made the usual assault on smokers, adding a duty of 5 per cent on
top of inflation to a pack of cigarettes. He had previously promised that the cash from
all such tax increases would go directly to healthcare spending.
Drinkers and drivers were let off more lightly. Duties on spirits were
frozen because of intense competition in the industry, while beer and wine duties will
rise in line with inflation. Car taxes were generally frozen, while heavy truck owners,
suffering from the high fuel price, have had their road tax levy reduced.
Taiwan drops China ban
Taiwan's parliament Tuesday dropped a five-decade ban on direct trade,
transport and postal links with mainland China, opening exchanges between offshore islands
and Chinese cities.
It was the first concrete goodwill gesture by Taiwan following the
election as president of Chen Shui-bian, whose party openly advocates independence.
A parliament spokesman said direct links will be allowed between
Taiwan's offshore islands including Quemoy, Matsu, and Penghu and Chinese
cities facing them across the narrow Taiwan Strait, including Xiamen and
The heavily fortified islands are Taiwan's frontline defence against
China, although a flourishing smuggling trade already exists between them and China.
Clariant '99 net rises 7%
Swiss specialty-chemicals producer Clariant posted a 7 per cent rise in
full-year income. Net income for 1999 rose 7 per cent to 553 million Swiss francs ($337
million), although revenue slipped 3 per cent to 9.26 billion.
M&A reports boost Europe
European markets rose Friday as speculation about mergers and
acquisitions stoked investor interest in equities. German steel maker Thyssen Krupp said
it was interested in buying Mannesmann's auto-parts business, while power generators Veba
and Viag were reported to be seeking a merger with a French utility.
Frankfurt's electronically traded Xetra Dax was the leading gainer
among Europe's biggest markets, rising 1.7 per cent to 7,821.51. London's benchmark FTSE
100 rose 66.8 points, or 1 per cent, to 6,661.4, and in Paris, the CAC 40 rose 1.2 per
cent to 6340.51. Zurich's SMI rose 0.5 per cent to 7397.5.
The pan-European FTSE Eurotop 300, a broader index of the region's
largest stocks, climbed 0.8 per cent to 1,639.11, led by its steel, insurance, aerospace
and computer sectors.
Americas move upward
Toronto's benchmark stock index hit an intraday all time high of
10,057.80, breaking the 10,000 mark for the first time, and still had a record close.
Brazilian stocks traded modestly as investors awaited government
officials to decide a new minimum wage.
The Mexican stock exchange experienced an early day but closed up more
than 2 per cent.
Toronto breaks record, hits key intraday mark Toronto's benchmark stock
index hit 10,000 for the first time, then slipped a bit, but still closed 1.2 per cent
higher, marking another record.
In New York, the Dow Jones industrial average soared 253.16 points, or
2.33 per cent, to close at 11,119.86. The rally put the Dow above 11,000 for the first
time in six weeks. The blue chip index has climbed more than 1,300 points since March 7.
The broader Standard & Poor's 500 index gained 26.71 points, or
1.78 per cent, to 1527.35, improving on Wednesday's record finish.
The Nasdaq composite rose 75.86 points, or 1.56 per cent, to 4940.61.
BP Amoco in China deal
U.K.-based oil and gas group BP Amoco announced a gas marketing joint
venture with China's largest oil and gas company PetroChina, and said it plans to take 20
per cent of the shares being floated next month in China's largest energy company.
Around 25 per cent of PetroChina, an arm of state-owned China National
Petroleum Corp, is scheduled to be sold in a global public offering expected to raise
around $3 billion. The price of BP Amoco's stake has been capped at $1 billion.
Mexico, EU open trade
Mexico and the European Union signed an ambitious free trade agreement
Thursday that will give EU companies more access to a major Latin American market and
reduce Mexican dependence on the United States."
"We Mexicans very much appreciate that this is the broadest
agreement that the EU has signed with a nation outside its geographic region,"
Mexican President Ernesto Zedillo said after signing the pact with Portuguese Prime
Minister Antonio Guterres, representing the 15-nation EU. "It is the first free trade
accord between Europe and a country on the American continent."
EU negotiators and Mexico completed talks last November on the
free-trade agreement that the EU hopes will put European companies on more equal footing
in the Mexican market with U.S. and Canadian rivals which have benefited from the 1994
North American Free Trade Agreement.
Japan trade surplus up
Japan's trade surplus with the world surged in February from the same
month last year, the government said Thursday.
The merchandise trade surplus, the measure of all goods exported minus
those imported, rose 26.8 per cent to about $11.1 billion (1.18 trillion yen), the
Ministry of Finance said.
The surplus was unadjusted for seasonal factors. Japan's trade surplus
with the United States rose 66 per cent to $6.45 billion (687.3 billion yen) during the
Japan is fighting to emerge from its worst economic downturn in 50
years, and one cause is weak consumer demand.
The government has been under heavy pressure from the United States and
other trading partners to rein in the surplus by bolstering its weak economy to spark
demand for imports.
IMF appoints new director
The International Monetary Fund on Thursday picked Germany's Horst
Koehler to be its new managing director, ending months of bickering that peaked with a
bruising trans-Atlantic dispute.
Megers & Acquisitions
Japanese Internet investor Softbank
Corp. said it sold its holdings in anti-virus software maker Trend Micro Inc. for 66.9
billion yen (about $627 million) to raise cash for new investments.
The Gillette Co. announced
Thursday that it is selling its White Rain and other hair-care brands to concentrate on
more global products. Diamond Products Co. is buying White Rain, Adorn, Dippity-Do, Mindk
Difference, Tame, The Dry Look, Toni, and other brands, which generate sales of about $110
France Telecom, seeking a foothold in
Germany, said Thursday it had taken a 28.5 per cent stake in German phone company
ChaseU.K. bank: U.S. commercial bank Chase Manhattan is in
advanced talks to acquire Robert Fleming Holdings, the U.K.-based investment bank and
asset manager, according to a report published Thursday.
Internet service provider PSINet
Inc. agreed to buy Metamor Worldwide Inc., a technology consulting firm, for $1.9 billion
in stock, the companies said Wednesday.
BASFAHP: Germany's BASF agreed Tuesday to acquire the
Cyanamid agricultural products unit of U.S. drug maker American Home Products Corp. (AHP)
for $3.8 billion.
U.K. mortgage bank Halifax has agreed to
buy 60 per cent of life and pensions company St. James's Place Capital in a £750 million
($1.2 billion) deal that will give Halifax a firmer foothold in the rapidly growing market
for high-net-worth clients.
BHCUPN: Media conglomerate Viacom Inc. on Monday said it
has agreed to buy BHC Communications Inc.'s 50 per cent stake in the UPN television
network for $5 million, following a court order last week clearing the way for the
Oilfield equipment company Varco
International Inc. and services company Tuboscope Inc. said on Wednesday they had agreed
to merge in a stock deal valued at about $834 million.
Lou DobbsNBC: NBC scored a minor coup over rival Cable
News Network Wednesday, acquiring an equity stake in a space news Web site run by Lou
Nortel Networks agreed Tuesday to acquire
optical component maker CoreTek for $1.43 billion in stock, extending a recent shopping
spree that has seen the No. 2 telecom company add four small high-tech companies in the
last three months.
Taking its first step into e-commerce,
Italian food retailer Parmalat said it is buying a $30 million equity stake in Web grocery
German media group EMTV is poised to pay around
$1.9 billion to buy a 50 per cent stake in Formula One Administration (FOA), the company
that controls international grand prix motor racing, according to reports published
YahooeBay: Yahoo! and eBay have returned to the
negotiating table and are discussing a $30 billion merger, according to a published report
GMLand Rover: General Motors is eyeing a rival bid for
Land Rover, the U.K. maker of sport/utility vehicles that Germany's BMW has agreed to sell
to Ford for $2.9 billion, according to a report published Friday.