Nov 13 - 19, 2000

Official results not before 17th

George W. Bush's lead over Al Gore in crucial Florida shrank to fewer than 400 votes by unofficial count on Thursday with allegations of irregularities swirling and ballots from overseas residents still to be counted, reported AP at 0500 am (Friday).

However, Reuters quoting the Florida Secretary of State Katherine Harris said after the recounting of 53 counties that Republican George W. Bush was leading Democrat Al Gore by 1,784 votes in unofficial and incomplete results in a recount of the presidential race in Florida.

"The Division of Elections reported receiving recount results from 53 counties in Florida," she said. "We are still awaiting the results from the supervisors of elections in 14 counties which by law have until Tuesday, November 14, to submit those returns."

She added: "The unofficial, certified results of the recount are as follows - Governor George W. Bush, 2,909,661. Vice President Al Gore, 2,907,877, a difference of 1,784 votes."

Florida election officials had said earlier they were hoping by late Thursday to complete the recount of the state's election tally that will determine the winner of the Nov 7 presidential election.

AP said recount results from 64 of the state's 67 counties gave Republican Bush a lead of 362 votes out of nearly 6 million cast, according to an unofficial tally by The Associated Press.

She also pointed out that it would take even longer — at least until Nov. 17 — to tabulate ballots cast by Floridians overseas and postmarked by Election Day.

She said the official results of the US presidential election in Florida will not be known before November 17.

The Gore campaign has criticized the ballots in use in Palm Beach County as confusing, and has asked for a hand count of votes cast there and in three other counties.

Japan PC shipments hit record

Japanese were avid buyers of personal computers in the latest half-year, boosting domestic PC shipments to record levels despite sluggish consumer spending in the economy overall, an industry body said on Thursday.

PC shipments rose 28 per cent in the April-September period from a year earlier to 5.63 million units, buoyed by solid demand in both the consumer and corporate sectors, the Japan Electronics and Information Technology Industries Association said.

The group, comprising 17 major PC makers operating in Japan, also raised its shipment forecast for the full year to next March to 12 million units — a 21 per cent jump from the year before — compared with its prior forecast of 11.5 million. The more bullish view reflected the first half's better-than-expected results, it said.

With more Japanese exchanging e-mail and surfing the Internet, retail purchases — especially by first-time users — have surged, while a modest recovery in the economy and capital spending on information technology have spurred corporate buying.

Quarterly data showed shipments rose 23 per cent year-on-year in July-September to 2.9 million units, a modest slowdown from the prior quarter's torrid pace of 35 per cent growth.

In value terms, domestic shipments of PCs and peripheral equipment totalled 660 billion yen ($6.16 billion) in the July-September quarter, up 11 per cent from a year earlier, the group said.

"The (July-September) figure is a touch lower than we had expected but it continued to mark double-digit increases and we can call this growth quite favourable," said Hitoshi Kuriyama, a senior analyst at Merrill Lynch.

With only 40 per cent of Japanese households owning PCs, against 70 to 80 per cent in the United States, shipments in Japan will likely continue rising at least another three to five years, particularly with the government focused on promoting the spread of information technology, he said.

Wall St.: White House woes

U.S. stocks plunged but then nearly recovered Thursday as Wall Street tried to keep pace with a fast-changing White House contest two days after the nation went to the polls.

Word from Democrat Al Gore's campaign that the ballot count in Florida could drag on, and perhaps end up in court, sent the Dow Jones industrial average tumbling nearly 300 points at one point.

But the Dow and Nasdaq ended with only slight losses. Late news from Republican George W. Bush's staff countered the Gore claims and may have soothed a market that for days bet on a Republican win.

The Nasdaq lost 31.35 points, or 1 per cent, to 3,200.35, well above the 144-point loss suffered earlier in the afternoon. And after being lower by 289 points, the Dow ended down 72.81 to 10,834.25. The S&P 500 declined 9.14 to 1,400.14.

More stocks fell than rose. Declining issues on the New York Stock Exchange topped advancing ones 1,730 to 1,085, on volume of 1.1 billion shares. Nasdaq losers winners 2,598 to 1,266. More than 1.9 billion shares changed hands.

U.S. hurts Asian markets

Waning tech, chip maker and telecom issues, in conjunction with general market nervousness concerning the unresolved United States presidential election, put pressure on markets in Asia by midday Friday.

In Tokyo, the benchmark Nikkei 225 average fell 132.28 points or 0.88 per cent to 14,927.77 by midday. In Hong Kong, the Hang Seng Index fell 0.95 per cent, or 149.33 points, to 15,504.80.

The Taiwan Weighted index was down 32.19 points, or 0.53 per cent, at 6,057.36 in early trade. Turnover was moderate at T$29.8 billion. Taiwan Semiconductor Manufacturing Co. was down T$3.00 at T$112.00, while rival United Microelectronics Corp. fell T$2.00 to T$65.

In South Korea, the KOSPI was down 0.80 per cent, or 4.47 points, to 556.19. Hyundai Securities rose 440 won to 6,980. Dongyang Mechatronics Corp. fell 80 won to 4,830. Sam Lip Precision, an axle supplier to Daewoo Motor, slid 250 won to 23,200.

Australia's benchmark S&P/ASX 200 opened 35.4 points lower at 3,298.1.

Europe ends lower

Europe's major bourses ended lower Thursday as technology and telecom stocks lagged in step with losses in their U.S. counterparts on the Nasdaq composite index.

London's FTSE 100 failed to hold on to its modest earlier gain, dropping 0.5 per cent to 6,442.2, with fiber-optic component firm Bookham Technology (BHM) plunging and COLT Telecom (CTM) falling sharply.

In Paris, the blue-chip CAC 40 index fell 1 per cent to 6,271.15, led by chipmaker STMicroelectronics' (PSTM) and consumer electronics firm Thomson Multimedia (PTMM).

Frankfurt's electronically traded Xetra Dax dipped 49.14 points, or 0.7 per cent to 6,959.50 as losses in tech and telecom outweighed gains in the financial industry.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, declined 0.8 per cent, with its information technology sub-index and its computer segment each down 3 per cent.

ECB buys euros yet again

Reaching into its policy quiver yet again, the European Central Bank purchased euros in the currency market for the fourth time in a week Thursday, continuing its effort to reinforce a common currency that has stubbornly sat near its record lows against the dollar.

The euro strengthened against the dollar following the move, climbing to 86.13 U.S. cents from 85.52 cents in late New York trading on Wednesday. The euro hit an all-time low against the dollar on Oct. 26 at 82.25 cents, and is currently down about 27 per cent from its value at launch in January 1999.

As with similar moves on Monday and two separate bouts of buying last Friday, the ECB intervention took the action unilaterally - in contrast to its unified purchase of euros with other leading central banks in late September.

IMF urges Russia to speed up reforms

The IMF on Thursday commended Russian authorities for their "impressive" economic performance but warned that structural reform had to be stepped up for recovery to be maintained.

International Monetary Fund executive directors, according to a summary of their recent assessment of the Russian economy, also praised authorities for budgetary restraint and improved tax collection procedures.

The directors noted that Russia's "impressive recent macroeconomic performance" had come with "a strong output recovery and the achievement of a considerable measure of financial stability."

But the IMF report made it clear that generally favourable prospects for the country were under threat from the lacklustre implementation to date of institutional reform.

IBRD warns Bangladesh against risks

The World Bank has warned Bangladesh against the rising trend of accepting suppliers' credit for state-run projects, saying it could increase the country's debt burden to unsustainable levels, bank officials said on Thursday.

"If current trends (of taking suppliers' credit) persist, the economy's debt burden could rise to unsustainable levels with the debt service ratio tripling in a decade," an official quoted a World Bank report — "Challenges for Fiscal and External Debt Management" — as saying.

He said the report found, in general, suppliers' credit extended to public sector agencies was not good value mainly due to a lack of transparency and reliance on single-source contracts instead of competitive bidding.

The bank's warning came as the credit received by Bangladesh for public sector projects rose to $398 million in the fiscal year to June 2000 from $146.3 million three years ago.

World oil demand

World demand for oil, which amounted to 75.5 million barrels per day in the third quarter, will increase by more than two million barrels per day in the fourth quarter and in the first quarter of next year, the International Energy Agency forecast on Thursday.

Demand would then fall in the second quarter of 2001, it said in a monthly report.

Mergers & Acquisitions

Sunoco—Aristech: Sunoco Inc., an independent oil refiner and marketer, said Thursday it acquired Aristech Chemical Corp. for $695 million in a deal that includes five chemical plants and a research and development center.

Utilities: The consolidation of the U.S. energy industry continued to accelerate Thursday as Western Resources Inc. agreed to sell its utility operations to Public Service Co. of New Mexico for about $1.5 billion in stock, plus the assumption of about $2.9 billion in debt.

EMI—Warner: Time Warner Inc. and EMI Group PLC officials Tuesday denied a published report that they are on the verge of officially abandoning plans for a $20 billion joint venture.

Vodafone—France Telecom: Vodafone Group PLC and France Telecom SA, two of Europe's largest mobile-phone operators, raised the stakes in Switzerland's market Wednesday through separate investments in Swiss cell-phone companies, worth a total of nearly $4 billion.

U.S. Treasurys rally

U.S. Treasurys rallied Thursday after a report showed core wholesale inflation remains tame and amid forecasts a gridlocked Congress will stymie the fiscal plans of a yet-to-be-determined U.S. president-elect.

10-year Treasury notes rose 11/32 to 99-18/32, yielding 5.81 per cent. Thirty-year bonds jumped 8/32 to 105-16/32, yielding 5.86 per cent. Five-year notes climbed 7/32 to 99-30/32, yielding 5.76 per cent. Two-year Treasury notes rose 1/32 to 99-21/32, yielding 5.93 per cent.

Mortgage rates edge up

U.S. Mortgage rates moved higher a week after a higher-than expected employment wage growth sparked fears of inflation, according to a survey released by Freddie Mac.

The benchmark 30-year fixed-rate mortgage (FRM) averaged 7.79 per cent for the week ending Nov. 10. The average this week for a 15-year fixed-rate mortgage was 7.44 per cent. One-year adjustable-rate mortgages (ARMs) this week averaged 7.23 per cent.

Jobless claims soar

The number of Americans filing new claims for unemployment benefits rose to a nearly 22-month high of 344,000 for the week ended Nov. 4 from a revised 309,000 the previous week, the government reported Thursday. Economists polled by Briefing.com had forecast U.S. jobless claims of 310,000 for the period. U.S. jobless claims are at their highest since 354,000 in the Jan. 9, 1999, week.

U.K. interest rates on hold

The Bank of England left U.K. interest rates unchanged at 6 per cent on Thursday for the ninth consecutive month, as most economists had forecast, judging that this week's government announcement on future spending and taxation plans was not inflationary.

The bank's policy makers seemed to back Chancellor of the Exchequer Gordon Brown's assertion Wednesday that his pre-budget report took a "balanced approach to keep interest rates low".

Business leaders welcomed the Bank of England's decision to hold interest rates at current levels.

U.S. import prices slide

Prices of U.S. imports fell for the first time in six months in October as the cost of petroleum imports declined, the government reported Wednesday.

U.S. import prices fell 0.5 per cent last month following a 1.2 per cent increase in September, the Labor Department said. Import prices last declined in April when they fell 1.4 per cent.

UK plans fuel tax freeze?

Britain's finance minister Gordon Brown will announce a freeze on fuel tax as part of a package of measures to address truck drivers' and farmers' concerns about the high cost of gasoline, British newspapers reported Monday. A loose coalition of truck drivers and farmers has threatened a fresh round of protests aimed at disrupting Britain's road traffic if the government fails to cut fuel taxes by 26 pence (37 U.S. cents) a liter by Nov. 13.

Daewoo fallout global

The bankruptcy of South Korea's Daewoo Motor under $10 billion in debt has rippled across its global business, with Poland threatening to take over the carmaker's plants and a major supplier in Australia announcing it would have to cut 15 per cent of its workforce.

Daewoo, which has total annual output capacity of 2.15 million units, has 12 plants in 11 countries employing around 53,000. It has five domestic plants including one Ssangyong Motor plant and 26,950 employees.

Nissan to build new plant

Nissan Motor Co. Ltd. said Thursday it will build a $930 million assembly plant — the first auto factory in Mississippi — outside Jackson, the state capital, employing up to 4,000 people to build full-size pickups, sport/utility vehicles and its next-generation minivans.