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 years.

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 point.

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 Mawei.

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 same period.

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

Softbank—Trend Micro: 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.

Gillette—Diamond Products: 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 million annually.

France Tel—Mobilcom: France Telecom, seeking a foothold in Germany, said Thursday it had taken a 28.5 per cent stake in German phone company Mobilcom.

Chase—U.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.

PSINet—Metamor Worldwide: 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.

BASF—AHP: 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.

Halifax—St. James: 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.

BHC—UPN: 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 transaction.

Varco—Tuboscope: 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 Dobbs—NBC: NBC scored a minor coup over rival Cable News Network Wednesday, acquiring an equity stake in a space news Web site run by Lou Dobbs.

Nortel—CoreTek: 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.

Parmalat—NetGrocer: Taking its first step into e-commerce, Italian food retailer Parmalat said it is buying a $30 million equity stake in Web grocery site NetGrocer.com.

EMTV—FOA: 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 Monday.

Yahoo—eBay: Yahoo! and eBay have returned to the negotiating table and are discussing a $30 billion merger, according to a published report Friday.

GM—Land 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.