Euro plumbs new depths against dollar
The euro slid to a record low against the dollar, undermined by
offficial silence about the single currency's weakness, stronger than expected U.S.
economic data and gains on Wall Street.
European government bond yields rose as the euro sank, with cash bonds
falling amid growing speculation the European Central Bank will soon raise interest rates.
Telecoms, drugs and bank stocks lifted European bourses.
Oil prices fell as traders cashed in their gains and as the United
States raised the heat on the Organisation of Petroleum Exporting Countries (Opec) to
supply more crude.
The euro fell below the one-to-one level against the dollar to hit a
new low of $0.9869, dragging the Swiss franc to 10-year troughs against the greenback in
its wake. At 1700 GMT, the euro was trading at $0.9890 from $1.0015 late Wednesday in New
The euro slipped nearly two yen to below 103 yen, before recovering
slightly. The dollar's yen rate slipped three-quarters of a yen to around 104.80 yen.
U.S. stocks climbed as a profit warning from the world's No. 2 personal
computer maker, Dell Computer Corp, failed to roll investors and the technology sector led
the market up.
The Dow Jones Industrial Average was up 73. 22 points at 11,106.21 by
the the European traders headed home. The technology-heavy Nasdaq was up 30.49 points at
Among leading European blue-chip bourse indices London's FTSE 100 added
1.03 per cent, Frankfurt's DAX rose 2.25 per cent and Paris' CAC was up 0.74 per cent.
European government cash bonds slid on the falling euro, accelerating
losses after a strong rise in U.S. durable goods orders of 4.1 per cent in December. U.S.
Treasuries also weakned.
Asia stocks 'to rise 25pc despite U.S. rate risk'
Asian share prices are set to rise 25 per cent in 2000, outperforming
most other global markets despite the risk of higher U.S. interest rates and a correction
on Wall Street, a top Sardine Fleming analyst said.
"Although Asian markets will fall short of l999's impressive 53
per cent rise in 2000... (we) expect Asian markets to rise at least 25 per cent this
year," Dan Fineman, the investment house's Hong Kong-based regional strategist, said
in a report.
"The U.S. poses far and away the largest risk to Asia but, even
here, investors can do better in Asia than in other regions at worst we expect Asia to
perform in line with the U.S., not underperform," said the report. It said Asian
shares would be buoyed by strong earnings growth, stable low-interest rates, ample
liquidity, strong currencies and falling risk premiums.
Taiwan, Malaysia, India, China and Hong Kong are the top picks in the
region, in that order. Fineman backed a switch into "old economy" cyclical
stocks like consumer, bank and property shares, and he also suggested a shift within the
technology sector from pure Internet plays to hardware manufacturers.
Asian banks 'set to raise $11b'
Asian banks are forecast to raise more than $11 billion in 2000 to
recapitalise their balance sheets in the wake of the Asian financial crisis, Credit Suisse
First Boston (CSFB) banking analysts said.
"Across Asia in 2000, banks are looking to issue equity totalling
$11 billion, " John Ogden, head of regional banking research at Credit Suisse First
Boston, told a briefing.
Equity investors would be very selective because of the large volume of
new issues and not all the banks' issues would be successful, he said.
Approximately 25 per cent of the expected new issuance would come from
Korean banks, particularly those banks with relatively large exposures to Daewoo Group,
CSFB analysts said they favoured Korea, India and Singapore banks in
the coming year.
The better capitalised banks such as Shinhan Bank and Kookmin Bank,
were the best investments, Hobson said. The brokerage also liked Housing and Commercial
Bank, Hana Bank and KorAm Bank.
In Singapore, further consolidation in the industry was likely,
Both OCBC and OUB, the two favoured banks in the sector, have retained
independent advisers to study the feasibility of in-market consolidation, it said.
In addition, Singapore should enjoy a cyclical recovery in 2000,
improving capital management, and positive regulatory changes.
The brokerage house was also upbeat on Indian banks' earnings growth on
the back of greater political certainty and rising private sector consumption in 2000.
The house is neutral on Hong Kong banks. Its top picks in the Hong Kong
market are Dah Sing Financial, Dao Heng Bank Group Ltd. and Heng Seng Bank Ltd.
CSFB had a zero weighting on Indonesia banks, regional analyst Mehdee
Reza told the briefing.
Ford: Ford Motor Co said that fourth quarter profits increased
73 per cent to $1.81 billion. Ford's fourth period earnings per share were $1.47 versus 84
DuPont: DuPont Co, the No. 1 U.S. chemical company, said its
earnings fell more than 14 per cent and income from continuing operations dropped to $583
million from $682 million in the same period last year.
Compaq: Compaq Computer Corp has said fourth-quarter net income
fell 56 per cent to $332 million. Net income fell to $332 million, or 19 cents per diluted
share, from $758 million, or 43 cents, in the year-earlier quarter.
AT&T: Long-distance telephone company AT&T Corp's
earnings fell 42 per cent, to $1.15 billion, or 36 cents a share, from $1.99 billion, or
75 cents a share, a year ago.
BBVA: Spain's new bank Banco Bilbao Vizcaya Argentaria (BBVA)
reported a 22.6 per cent rise in earnings. The bank said net attributable profit was 1.75
billion euros ($1.76 billion) in 1999.
Kodak: Photography icon Eastman Kodak Co reported fourthquarter
profit jumped by 21 per cent. The film maker reported net profit of $475 million or $1.50
a diluted share, compared with $272 million, or 83 cents a share in the year-earlier
Siemens: Germany's Siemens AG said income after tax and before
extraordinary items more than doubled to 625 million euros from 327 million in the October
1 to December 31 period.
Caterpillar: Caterpillar Inc. said that net income fell more
than 20 per cent in the fourth quarter. Net income for the quarter was $239 million, down
from $301 million a year ago.
Sun Micro: Palo Alto, California-based Sun said its net income
rose to $353 million from $273 million, excluding one-time acquisition-related items, in
the year-ago quarter.
Lucent: Telecommunications equipment maker Lucent Technologies
Inc has said its first quarter profits fell 23 per cent. New Jerseybased Lucent said it
earned $1.175 billion or 36 cents a share, compared with $1.52 billion, or 48 cents a
share, a year ago .
Chipmaker Samsung Electronics Co announced
a record net profit of $2.8 billion in 1999, up over 900 per cent from a year earlier.
Samsung Electronics, said net profit for the year totalled 3.17 trillion won, compared
with 313 billion won in 1998.
Mergers & Acquisitions
EMI-Warner: Britain's EMI Group Plc and Time Warner Inc said
they were merging their music businesses to create the world's top record company, worth
$20 billion, with a powerful presence on the Internet.
Singapore Telcommunications Ltd
(SingTel) confirmed it was in talks about a merger with Hong Kong's Cable & Wireless
to create an Asian telecoms giant with a combined market capitalisation of about $61
Bell Atlantic: New York-based Bell Atlantic said profits,
excluding one-time items, rose to $1.2 billion or 77 cents a share, compared with $1.1
billion or 69 cents a year ago.
FrontLine Capital Group, a
developer of business-to-business Internet companies, said it planned to buy CarrAmerica
Realty Corp's executive office suites affiliate for $380 million in cash.
Norway's state bank fund reiterated its
opposition to a $3.1 billion bid for Norway's Christiania Bank from Swedish-Finnish
Long-distance telephone company Sprint
Corp said it will sell its stake in money-losing international joint venture Global One to
Deutsche Telekom AG and France Telecom for $1.13 billion in cash.
U.S. financial giant Citicorp wants
to buy Poland's biggest corporate Bank Handlowy and a stake in insurer PZU, a banking
source said extending its foray into Europe after buying the investment unit of Britain's
Bangladesh drug firm eyes U.S. market
Bangladesh's largest private pharmaceuticals producer, Beximco
Pharmaceuticals Limited (BPL), expects to start exporting to the United States in three
years under a market expansion plan, the company said.
The BPL, with a 16 per cent local market share, aims to raise its
exports by 10 per cent in 2000 from 250 million taka ($4.90 million) in 1999, BPL's
commercial director Nazmul Hassan said.
British gold auction surprises market
The Bank of England sold 25 tonnes of official gold reserves for
$289.50 a troy ounce yesterday, a price above market expectations as the auction attracted
more bids than the previous bullion sale.
The auction will provide the UK Treasury revenue of around $233 million
and was the fourth in a series aimed at reducing British gold holdings by 58 per cent to
300 tonnes as part of a plan to modernise its holdings.
By mid-aftenoon, gold had slipped some $3 to $287.90/ 8.50. The
afternoon fix was $288.00 an ounce, down from the morning's $288.70.
The world's number one miner, Anglogold, said it bought less than 10
per cent of the gold sold at auction. It gave no further details of its purchase but
earlier it had said it did not intend to take part in the auction.
Just hours after the UK sale, the Dutch central bank said it sold 23
tonnes of gold last week as part of its programme to sell 100 tonnes before next
Analysts said the auction result was good in terms of the level of
cover, with bids covered 4.3 times compared to the 2.1 times at the previous auction in
"It is good in terms of level of cover, and good in terms that
there was sufficient bids above the prevailing morning price to lift it to higher than the
"What detracts from it is that it looks as if 60 per cent was at
levels below the price at which it went out. On balance it is marginally positive, given
that last time around nobody seemed to be particularly interested, " said T Hoare
Canaccord metals analyst Rhona O'Connell.
Japan receives four bids for Nippon Credit Bank
Japan's commission handling banking reforms said it had received four
bids to take over the failed Nippon Credit Bank (NCB).
The Financial Reconstruction Commission "has received bids from
four parties but given the fact that negotiations are still under way, we are not
commenting on who the individual bidders are," an official said.
The official, who declined to be named, would not confirm a Financial
Times report saying insurance giant American International Group (AIG) and U.S. investment
bank Lehman Brothers could be among the four.
The newspaper reported that New York-based AIG and Lehman Brothers were
holding informal discussions about a possible joint bid for NCB.
FTSE to create new e-tailing stock index
Britain's FTSE International said it would recognise e-commerce
retailers by creating a new e-tailing index sub-sector from April 3.
FTSE International said the provisional list of companies to be
included in the new subsector included Amazon.com Inc. eBay Inc. Gameplay Plc and QXL Plc.
FTSE International said it would also monitor the level of e-commerce
companies within the financial, leisure and media sectors and would introduce new
e-commerce subsectors for these types of companies when appropriate.
S. Korea, foreign banks reach Daewoo debt pact
South Korea said that leading foreign creditors had reached a debt
restructuring agreement with troubled Daewoo Group, once one of the country's mightiest
The plan to purchase loans for cash would apply to $4.84 billion in
non-secured loans to four Daewoo affiliates out of Daewoo's total foreign debts of $6.7
billion, South Korea's Corporate Restructuring Coordination Committee (CRCC) said.
"If all debt is tendered, the purchase price on an overall basis
will be the equivalent of between 39 per cent to 40 per cent of face value," the CRCC
Oil prices up as cold snap cuts US stocks
World oil prices made a renewed push towards nine-year highs on
Wednesday as fresh data showed larger-than-expected declines in US petroleum stockpiles.
North Sea benchmark Brent Blend for March delivery climbed more than 40
cents per barrel in opening trade in London to hit an early peak at $26.95 per barrel.
By 1145 GMT, Brent stood 29 cents higher at $26.83 per barrel, just 28
cents off the previous nine-year high of $27.11 set on Friday.
Brent prices, which had dipped below $26 per barrel on Tuesday, were
pulled higher by weekly stocks data from the American Petroleum Institute (API) showing
stocks eaten away by recent cold weather in the United States.
US oil inventories fell by three million barrels in the week to January
21, doubling expectations of around 1.5 million barrels.
Moulinex may close
Ailing appliance-maker Moulinex will probably close some French
factories as part of a restructuring plan which includes cutting 1,500-2,000 jobs over 18
months, chairman Pierre Blayau said.
Blayau, asked on French radio whether he would close factories in
France, said: It's probable." He added that he did not want to sum up the future of
Moulinex in terms of closed factories.