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Jan 22 - 28, 2001

El Salvador worst hit

At least 260 people were confirmed dead and hundreds more missing in El Salvador and Guatemala on Sunday, the day after an earthquake of 7.6 magnitude rocked Central America and southern Mexico, officials said.

The quake's epicentre was 105kms southeast of San Salvador, off the Pacific coast. The 7.6 magnitude quake occurred at 11:34am (10.34pm PST) on Saturday and was felt across El Salvador, Guatemala, Nicaragua and Honduras and as far north as Mexico City.

The Red Cross said 200 people had been injured and 1,200 were missing in El Salvador alone.

Electrical power remained cut off across the country and the international airport was closed, hampering efforts to bring in relief supplies.

Rescue workers were losing hope of finding survivors.

Mayor Oscar Ortiz of New San Salvador, 12 kilometres west of the capital, said that 127 bodies had been recovered in the Las Colinas suburb alone, where a landslide triggered by the quake buried more than 300 houses.

But an official of Guatemala's fire department, which was aiding the rescue effort in Las Colinas, said "it is nearly impossible that there are more survivors, given the incredible amount of earth that has fallen on the houses, practically crushing them".

A Red Cross spokesman said at least 1,200 people were missing there and the death toll was likely to rise.

Many of the homes in Las Colinas were completely buried in earth from the section of wooded hillside that had collapsed onto them.

In a preliminary estimate, the national emergency committee said that in 19 other communities across El Salvador, 132 deaths had been recorded, 350 people had been injured and 1,336 had been forced to flee their homes. Other humanitarian groups put the number of wounded at 500.

Singapore economy to grow by 5-7%

Economists said on Thursday they were confident Singapore would achieve its 5-7 per cent economic growth target this year despite a fall in exports, provided the US economy has a soft-landing.

The first half of the year will be tough but if the United States economy picks up in the second half, Singapore will rise with it, they said.

The economy grew a robust 10.1 per cent last year, but the sudden year-on-year 4.9 per cent drop in non-oil domestic exports (NODX) in December indicated slackening demand from the United States was having an impact earlier than expected.

It was the first contraction in 21 months in the NODX, a key barometer of the health of Singapore's trade-driven economy.

Paul Schymyck, a regional economist with research house IDEAglobal.com, said GDP growth in the first quarter of 2001 was likely to be sharply lower year-on-year and flat if compared to the preceding three months. What we are seeing is that the economic growth trajectory has dramatically changed course as a result of the US slowdown, he told AFP.

The government's 5-7 per cent GDP growth target for the year is achievable if the slowing US economy was able to get back on its feet in the second half, Schymyck said.

If what we saw in the December quarter continues for the rest of the year, there's no way to get five (per cent).

This is an export-driven economy. Domestic demand can't really offset the slowdown in exports, he said, adding that even a projected recovery in the construction sector was too small to make an impact.

The Trade Development Board said the December contraction was in line with the slowdown in global electronics demand as well as falling DRAM (dynamic random access memory chip) prices.

Daniel Gay, a senior economist with Strategic Intelligence, said Singapore would be "hit hard" by the falling electronics exports but a 5.5 per cent GDP growth was still attainable.

Tokyo rally continues

Asian markets racked up strong gains Friday, with technology stocks the main beneficiaries of a stellar performance from the U.S. Nasdaq.

In Tokyo, the Nikkei 225 rose 115.2 points, or 0.8 per cent, to 13,989.12, led by chip maker NEC Corp and consumer electronics powerhouse Sony Corp. Hong Kong's benchmark Hang Seng index jumped 415.58 points, or 2.7 per cent, to 15,944.33.

In Sydney, the S&P/ASX 200 gained 0.7 per cent to 3,311.6 points. Singapore's Straits Times index advanced 0.7 per cent to 1,900.93.

In other markets, the KOSPI index in Seoul rose 2.6 per cent, the Taiwan Weighted index added 1.3 per cent, the KLSE composite in Malaysia gained 1.7 per cent, Manila's PHS Composite advanced 1 per cent, Bangkok's SET index added 0.5 per cent and Mumbai's BSE Sensex rose 1.4 per cent. Jakarta's JSX index was the only market to buck the trend of rising markets, slipping 1.1 per cent.

Europe slips, London gains

European markets closed mostly lower Thursday as weak drug and financial stocks lost ground while tech shares left London in the black.

London's FTSE 100 bucked the trend and ended up 12.5 points, or 0.2 per cent, at 6,209.9, with software firm Logica (LOG) and Internet search software company Autonomy (AU-) leading gainers.

In Paris, the CAC 40 blue-chip index dropped 23.93 points, or 0.4 per cent, to 5,860.16, led by a 3.9 per cent drop by train maker Alstom (PALS) and a 3.6 per cent slide by car parts maker Valeo (PFR).

Frankfurt's electronically traded Xetra Dax was down 24.70 points, or 0.4 per cent, at 6,628.68 in late trade, with airline Lufthansa (FLHA) down 4.1 per cent and software maker SAP (FSAP3) down 2.6 per cent.

In Amsterdam, the AEX index slipped 1.3 per cent as insurer ING fell 2.1 per cent, while the SMI in Zurich dipped 0.5 per cent and Milan's MIB30 slipped 0.2 per cent.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, fell 0.5 per cent, with its health care index down 3 per cent.

Nasdaq surges 3%

The Nasdaq composite index rallied to its highest levels in more than a month Thursday as investors optimistic about strong earnings snapped up Sun Microsystems and Microsoft ahead of their quarterly profit reports.

The Nasdaq rose 85.71 points, or 3.2 per cent, to 2,768.49, its second straight advance. Thursday marks the Nasdaq's highest close since Dec. 13, when the index finished at 2,822.77.

But Friday brings a bigger test. If the Nasdaq closes higher that day, it would be only the second three-session gain for the index since early September.

The Dow gained 93.94, or nearly 1 per cent, to 10,678.28, lifted by IBM. And the S&P 500 advanced 18.50, or 1.4 per cent, to 1,347.97.

More stocks rose than fell. Advancing issues on the New York Stock Exchange topped declining ones 1,627 to 1,290, on volume of 1.3 billion shares. Nasdaq winners beat losers 2,187 to 1,748, as 2.5 billion shares changed hands.

Foreigners may not be able to hide money in US

Just before the end of the term, the Clinton administration plans to announce new measures that banks may take to deter foreign leaders and their associates from hiding money in the United States, a leading destination for illicit wealth, the New York Times said in a report published on Tuesday.

American authorities hope that the steps will help deter corruption in developing nations because political leaders will find it harder to channel illicit wealth into ordinary investments. Regulators will suggest that banks and brokerage houses adopt voluntary but detailed procedures that, if fully enacted, would sound an alarm whenever a foreign leader or that leader's family and business partners use financial companies as conduits for large sums, the paper says.

Pakistan and several other developing nations had made an appeal at the United Nations summit meeting last September asking the United States and other industrialized nations to enact laws to help them get back the ill-gotten wealth siphoned-off by the corrupt politicians now in the western banks.


Citigroup: Citigroup, the nation's biggest financial services company, posted earnings of $3.33 billion, or 65 cents a share, up from $3 billion, or 56 cents a year earlier.

Bank of America: Bank of America, meantime, reported fourth-quarter earnings of $1.39 billion, or 85 cents a share, down from $1.10 in the year-ago period.

Bank of New York: Bank of New York Co., posted net income of $372 million, or 50 cents a share, compared with year-ago fourth-quarter net income of $327 million, or 44 cents.

IBM: IBM reported fourth-quarter earnings of $1.48 per share, compared with $1.12 during the same period a year earlier.

Apple: Apple Computer recorded its first quarterly loss in three years of $247 million, or 73 cents per share, versus net income of $123 million, or 78 cents, in the same period last year.

US Airways: US Airways lost $101 million in the fourth quarter. The airline reported a loss Wednesday of $1.50 per share for the last three months of 2000.

Microsoft: Microsoft said its net income for the quarter ended Dec. 31 was $2.62 billion, or 47 cents per share, versus $2.44 billion, or 47 cents, in the year-ago period.

Sun: Sun Microsystems posted earnings of 16 cents per share, up from 10 cents per share during the same period a year earlier. The company's second-quarter revenue totaled $5.1 billion, up 44 per cent from the year-ago quarter.

eBay: Popular online auction site eBay Inc. reported fourth-quarter net income of $23.9 million, or 9 cents a share.

Genentech: Biotechnology company Genentech Inc reported higher fourth-quarter profits. The company said pro forma income rose to $83.4 million, or 16 cents a diluted share, compared with $48 million, or 9 cents, in the year-ago quarter.

Nortel: Nortel Networks Corp earned $825 million, or 26 cents a diluted share.

Ford: Ford Motor Co. posted fourth-quarter operating earnings of $1.2 billion, or 64 cents per diluted share, in the year-earlier quarter, Ford reported earnings of $1.8 billion, or 83 cents a share.

Prices down on OPEC cut

U.S. oil prices fell sharply Wednesday after OPEC announced a Feb. 1 cut of more than five per cent of the cartel's self-imposed output quota.

"Buy the rumor. Sell the fact," said Ed Silliere of Energy Merchant in New York, reciting a futures trading adage. "Traders had built in a cut of 1.5 million barrels and when it wasn't any higher than that, they sold."

February crude futures on the New York Mercantile Exchange (NYMEX) Wednesday settled down 69 cents to $29.60 a barrel, up from the day's low of $29.02.

In London, European benchmark crude Brent was down 73 cents to $24.79 a barrel.

ECB holds rates at 4.75%

The European Central Bank left interest rates on hold at 4.75 per cent Thursday, as expected, though a rate cut could come as soon as the second quarter.

Economists said there was little immediate incentive for the ECB to lower its benchmark rate, with inflation in the eurozone above the bank's target level and economic growth around 3 per cent.

"The story is the ECB will sit on its hands, talk tough and see what happens in the U.S.," Allan Saunderson of Eurozone Advisors told CNNfn before the announcement. "It could be April before we see easing in ECB policy."

Michael Dicks, an economist at Lehman Brothers, also said any move would depend heavily on economic conditions in the United States.

Mergers & Acquisitions

JDS: JDS Uniphase Corp., a provider of fiber-optic components, is negotiating to sell the plant for about $3 billion, the Wall Street Journal's Web site said.

Ford—Hertz: Ford Motor Co. said Tuesday it had struck a $710 million deal with Hertz Corp. to acquire all outstanding shares of the car rental agency it does not own in a cash tender offer priced at $35.50 a share.

Forstmann—Citadel: New York investment firm Forstmann Little & Co. will acquire radio broadcasting company Citadel Communications for nearly $961 million cash.

Schneider—Legrand: France's Schneider Electric said Monday it would buy rival components maker Legrand in a 6.72 billion euro ($6.4 billion) deal.

O'Neill lifts Treasurys

U.S. Treasury bond prices surged Wednesday after Treasury Secretary nominee Paul O'Neill backed current policies promoting fiscal discipline and a strong dollar, policies that fired last year's sharp rally in government debt.

30-year bonds were up 1-14/32 to 110-26/32, yielding 5.50 per cent, while benchmark 10-year notes were up 18/32 to 104-14/32, yielding 5.15 per cent.

Two-year Treasury notes rose 4/32 to 100-18/32. Their yield, which moves inversely to price, fell to 4.82 per cent. Five-year notes rose 11/32 to 103-26/32, yielding 4.85 per cent.

Yen goes over cliff

The Japanese yen has fallen to its lowest level in more than a year and a half, and Japanese officials don't appear the least bit worried.

Finance Minister Kiichi Miyazawa has indicated that a weaker yen would be welcome, because it would benefit exports. With the Japanese economy refusing to recover and the Nikkei stock average at 27-month lows and nearing decade-long lows, it is little wonder that the yen is dropping, analysts said.

A slowing U.S. economy could weaken Japanese exports, causing a renewed downturn in Japan at a time when the government is burdened with debt and unwilling to launch new spending programs, they warned.

FedEx buys super-jumbos

FedEx Corp.'s FedEx Express unit said Tuesday it will buy 10 of the new super-jumbo, long-range A380 aircraft planned by Europe's Airbus Industrie in a deal valued at $2.3 billion at list prices, becoming the first U.S. carrier to order the aircraft.

Murdoch seeking DirecTV?

Media mogul Rupert Murdoch has put a freeze on new acquisitions as his News Corp. plans to make a bid for U.S. satellite broadcaster DirecTV, the Financial Times reported on Tuesday. The deal would be the largest in the company's history, worth some 27 billion pounds or about $40 billion, the paper said.