Asian Business news summary:
SINGAPORE: Asian currencies lose steam - Stock markets build on gains: Asia's troubled currencies lost steam Friday after staging a good run in early trading as jittery investors locked in profits ahead of the weekend.
1. Singapore dollar: The Sing dollar which led the rise of the regional units in anticipation of pro-business budget, lost all its gains for the day and ended lower against the US dollar to 1.6235 from Thursday's close of 1.6225.
2. The Philippines Peso closed higher at 39.85 to the dollar from 40.18 while the Thai baht dipped to 43.00 against the dollar from 42.84,
3. The Taiwan dollar rose to 32.09 against the dollar from 32.20 while the South Korean won was higher at 1,633 from 1,653.
4. The closely-watched Indonesian rupiah ended a shade higher at 8,950 against the US dollar from Thursday's close of 9,000 amid cautious trading ahead of a crucial meeting of the Indonesian People's Consultative Assembly in Jakarta next week to elect a president and vice president.
5. The Malaysian ringgit rose to a day's high of 3.6200 against the dollar but ended at 3.6750, still higher than Thursday's close of 3.7050.
Asia-Pacific stock markets extended their gains Friday as regional currencies held firm, encouraging investors who were also enthused by prospects of government stimulus and lower interest rates. Tokyo, Hong Kong, Singapore, Kuala Lumpur, Seoul and Bangkok ended higher on the momentum of the previous day's gains. Expectations of economic stimulus propped up Tokyo, while easing interbank rates and prospects of an interest rate cut underpinned gains in Hong Kong and the Philippines. Singapore stocks rose on anticipation of a business-friendly government budget and active buying by foreign investors lifted Seoul. Bangkok won a boost from the release of positive economic indicators.
NIKKEI: The key Nikkei stock average on the Tokyo Stock Exchange surged 329.97 points to end at 16,831. The low was 16,561.34 points touched at the open. Share prices gained on a report in the Nihon Keizai newspaper that the government would adopt a next economic stimulus package in mid-March, led by domestic demand-linked stocks such as construction issues, brokers said.
LONDON: Yet again - record highs on Euro bourses - Oil flat as doubts grow about Opec meet: In what is becoming a habit, major European share markets, London, Paris and Frankfurt, finished at record closing highs on Friday.
FTSE: The London share market posted a small advance in an uneven session that was enough to take the Footsie index to a new record closing high of 5,767.3 points, up a slight 2.5 points or 0.04 per cent from the Thursday close. Traders said the London market had been helped by rises in New York, Tokyo and Hong Kong, amid optimism about the future of share values in a context of low inflation in the industrialized world.
CAC-40: The Paris Bourse powered ahead to reach its 14th record closing high of the year as the CAC 40 index finished at 3,421.92 points. Volume was strong, with 16.6 billion francs changing hands on the monthly settlement market.
DAX: The Frankfurt stock market posted a moderate gain, the Dax index finishing at 4,709.83 points, up 0.38% from 4,692.03 points at the official close on Thursday. Traders said the Frankfurt market had been encouraged by Wall Street gains on Thursday and by good German public deficit figures, strengthening confidence in the single currency, the euro.
JAPANESE YEN: US data showed the world's powerhouse economy advanced a bit less vigorously than previously thought in the closing months of 1997 and inflation was slower - a nearly ideal combination showing expansion still solidly on track. Thus the yen was the currency market focus as it firmed further on growing expectations of fiscal boosts for the Japanese economy.
OIL: World oil prices were steady on Friday as oil dealers grew doubtful that Opec can mount a quick rescue operation to help lift glutted global oil markets. Brent blend, the world benchmark grade, was up three cents a barrel at $14.07 a barrel at 1636 GMT. This is more than $5 below the average price for last year and some $11 below a post-Gulf War peak hit about 16 months ago.
TOKYO: Japan mulls stimulative extra budget, pledges help for Asia - Hashimoto hints at easier grip on fiscal spending: The Japanese government has begun to consider a supplementary budget for the coming fiscal year to finance public works spending and possibly tax cuts to stimulate the economy. The Asahi Shimbun, a major newspaper , and public broadcaster NHK reported that members of the government have begun to consider calls from within the ruling LDP, the political opposition and from the rest of the G7 nations for more fiscal stimulus.
The Asahi said the budget would centre on public works but its size and whether it would include tax cuts would depend on economic conditions in late March, when the regular 1998/1999 budget is expected to clear the Lower House of Parliament.
NHK said a corporate tax cut was possible, and both it and Kyodo News Service said an extra budget might include a continuation of one-off income tax rebates amounting to two trillion yen in 1998/99.
If the economy still appeared unable to recover, the Asahi said, the government may freeze the fiscal reform law, which requires the budget to cut issuance of deficit-financing bonds every year until they are eliminated by 2003/04.
The reported moves by the government follow stepped-up pressure from the US for Japan to pump up its weak economy and statements by Prime Minister Ryutaro Hashimoto leave the door open for such moves.
BEIJING: China to cut 4m govt jobs: China plans to shed four million government jobs over three years as part of its boldest effort yet to streamline a bloated bureaucracy, state media reported on Friday. Chinese sources said the number of ministries and cabinet-level commissions would be immediately cut by around one third, leaving 29 out of the current 41. A number of super ministries would be formed, including a tentatively-named Information Industry Ministry grouping telecommunications, electronics and the broadcast media. The measures would be reviewed by the National People's Congress, or parliament, as economic tsar Zhu Rongji steps up his campaign to eliminate obstacles to industrial and financial sector reform.
AMSTERDAM: Asian turbulence hits Dutch Bank business: The Netherlands' leading banking group, ABN-Amro, on Thursday announced a disappointing net profit increase for 1997 of 16.7% after the Asian financial crisis hit business in the second half of the year. The bank reported a net profit for 1997 of 3.853 guilders ($1.88 billion) compared to 3.303 guilders in 1996. During a press conference, ABN-Amro Bank NV chairman Jan Kalff said the bank would be laying on total extra provisioning of around 500 million guilders to cover the increased bad debt risk in a number of Asian countries. ABN-Amro's net profit increase of 16.7% paled in comparison to the net profit increase registered in 1996 of 26.3%. The Amsterdam stock exchange reacted badly to the news and ABN-Amro shares dropped 2.36% at the end of morning trading.
OIL: London: Opec consults on how to lift weak market - Audis may review spending plans: Ministers from the Orgaisation of the Petroleum Exporting Countries (Opec) are consulting on ways to respond to the recent sharp drop in oil prices, Opec officials said on Thursday. Crude has lost some 40% of its value in recent months to hover just above four-year lows. North Sea Brent now stands at $14.33 a barrel.
Saudi Arabia, Opec's linchpin, has said it wants to check the group's March output before giving its crucial support to an emergency meeting. Riyadh has also made it clear that it wants Venezuela, Opec's biggest quota buster, to make the first move towards reigning in overproduction among the 11-member cartel. Saudi Arabia maybe forced to consider reviewing its 1998 spending plans if oil continues to trade near four-year lows, economists said Thursday. The price of crude from the world's largest oil producer and exporter has fallen to an average of $13 a barrel so far this year, below the $14.50 to $15 on which the budget is thought to be based. This week a barrel of Saudi crude was valued around $11. The low prices come after two years of windfall oil revenue which helped the kingdom recover from the huge costs of the 1991 Gulf War, estimated at $50 billion, and large local debts.
BRUSSELS: EU data confirms EMU looks set to roll with 11 members - Big three clear deficit hurdle: Europe's most ambitious project to date, its planned single currency, passed its day of reckoning on Friday with virtual confirmation that economic and monetary union (EMU) will start with 11 member states.
Germany, Italy and France, EMU's three big guns, came in under the wire with 1997 deficit figures that beat the most optimistic forecasts. The data, pouring into the European Commission's Eurostat agency, means national treasury officials have done their job. Now, politicians will take the lead in shaping EMU for its scheduled January 1999 kick-off.
The Commission and European Monetary Institute will put forward their recommended starting line-up on March 25, with EU leaders expected to endorse their choices at a special EU summit on May 2-3. Three EU members - Britain, Denmark, Sweden - have opted out of EMU's first wave, while Greece has conceded it cannot yet make the grade. Ten of the remaining 11 members have now unveiled 1997 budget deficit figures meeting the key monetary union qualification of 3% or less of gross domestic product. The Netherlands is expected to announce a qualifying 2.0% deficit later on Friday.
Germany, the bloc's traditional economic powerhouse, has stumbled towards the euro finishing line, burdened by reunification and record post-war joblessness. But on Friday, Chancellor Helmut Kohl, claimed victory. Speaking after Germany's 1997 budget deficit dropped to 2.7% of GDP, Kohl said the data undermined "all doubters who, without any specific knowledge of the data, repeatedly started new discussions about a (EMU) delay. He said Germany's good news dovetailed with signs of an improving economy which was set to grow even stronger next year.
Italy, whose economic readiness for EMU has been under closest scrutiny after decades of towering debt and political and financial instability, announced a deficit of 2.7% of GDP, well below recent forecasts.
France said its deficit was exactly 3.0% of GDP last year and added that its economy, stuck in the doldrum for the last two years, grew last year at its fastest pace since 1994.
Amid the political backslapping, European Monetary Affairs Commissioner Yves-Thibault de Silguy, visiting Italy, warned EMU hopefuls that controlling their debt levels would be key to avoiding future monetary instability. De Silguy welcomed the signs of economic growth, saying Europe, crippled with 18 million out of work, had begun to create more jobs. Maintaining EU partners' rapid congress in fiscal rectitude and belt-tightening will be crucial to the euro's stability.
Business briefs:
NEW YORK: Viacom posts profit rise, Blockbuster recovering: Viacom Inc. reported Thursday that profits jumped in the fourth quarter, boosted by a big gain from selling its stake in the USA cable network and solid performances from its other cable TV networks and the Simon & Schuster book publishing business. The entertainment group also said its ailing Blockbuster video rental division showed an improvement in the period, and analysts said the unit appeared to be on the road to recovery.
The developments were cheered by Wall Street, which sent Viacom's class B stock up $1.75 to close at $46 on the American Stock Exchange. Viacom reported net profit of $596.6 million, or $1.65 per basic common share, after the USA Network sale, compared with $17.2 million, or 1 cent a share. Viacom posted a $1.17 billion gain from selling USA Network and several TV stations. Excluding the gain, Viacom recorded a loss of 29 cents a share, better than the 34 cents expected by Wall Street, according to a survey by First Class, which tallies analysts' views.
The Blockbuster video rental unit, which had been ailing, improved. Revenues gained 7% to $1.02 billion, while cash flow jumped 30% to $115.2 million.
HONG KONG: US investment bank J.P. Morgan & Co Inc said on Friday it would lay off 6% of its 1,700 staff in Asia as the economic crisis in the region forced it to adapt to new market conditions. While it will continue to offer a range of services - including investment banking and capital raising, market-making, asset management and private banking - J.P. Morgan said it would refocus some activities and scale back others.
TOKYO: Nippon Telegraph and Telephone Corp (NTT) said Friday it expected a parent pre-tax profit of 274 billion yen ($2.2 billion) in the fiscal year from April, down from 387 billion yen forecast for the year to March. The telecommunications giant expects to post revenue of 6,365 billion yen in the year to March 1999 under its business plan for the year. The revenue figure is slightly lower than the 6,423 billion yen NTT forecast for the year ending in March 1998.
TORONTO: Toronto-dominion Bank and National Bank of Canada continued the Canadian industry's profit parade on Thursday with earnings that met or bettered expectations. But of the two, National Bank's profit was better received by stock markets and analysts. TD's earnings, which were just in line with expectations, prompted at least one Canadian brokerage to lower their ranking on the stock. Toront-Dominion Bank, the fifth largest of Canada's Big Six banks, said its first quarter profit rose 11% to C$293 million from a year earlier. Earnings were 95 cents per share, which was the consensus estimate of four analysts surveyed by I.B.E.S.
DAR ES SALAAM: International airlines flying to Tanzania on Thursday threatened by boycott Dar es Salaam and Kilimanjaro airports following a steep rise in aviation fuel costs, the airlines said here Thursday. A statement released here by the Board of Airlines Representatives (BAR) chairman Gerwin Mhenga said the airlines were concerned that the dramatic 28% price increase in jet-fuel would hike their operational costs, as fuel comprised 40% of their operational bill. The Tanzanian government raised the price of jet-fuel effective January 24 from 1.31 to 1.62 dollars at the Dar es Salaam airport and from 1.51 to 1.81 dollars at the Kilimanjaro airport in northern Tanzania, the country's two major airports receiving international flights.
KUCHING, MALAYSIA: More than 100 countries have reaffirmed their commitment to ban the dumping of toxic waste from rich countries into poor nations, United Nations officials and environmentalists said on Friday. A five-day conference in the Malaysian city of Kuching ended after delegates agreed a list of hazardous wastes and turned down an attempt to circumvent the dumping ban, they said.
The Basel Convention was adopted in March 1989 after a series of toxic cargoes from industrialised countries galvanised world outrage over the dumping of hazardous wastes in developing and East European countries. More than 400 million tonnes of hazardous waste are generated each year, according to the United Nations Environment Programme (UNEP). The convention entered into force in 1992, and its 117 parties were represented in Kuching, on the island of Borneo.
ARLINGTONHEIGHTS: Motorola wins deal in Kuwait: US electronics giant, Motorola, announced Wednesday that it had signed a contract worth $38 million to expand the digital cellular telephone network in two Kuwaiti cities. Motorola's Cellular Infrastructure Group (CIG) said the expansion project in the cities of Jahra and Kuwait City would enable the system to provide service to more than 200,000 subscribers nationwide and will also offer improved in-building coverage to customers.
MOSCOW: The Russian Central Bank said Friday it would lower its key refinancing rate by three points to 36 per cent from Monday, Interfax reported.
Meanwhile, Russian Prime Minister Viktor Chernomyrdin said on Thursday his top priority was to produce a realistic budget and he warned ministers big spending cuts lay ahead to plug a gap of 50 billion roubles ($8 billion). In an address to a cabinet meeting assessing his government's performances, Chernomyrdin also said Russia was moving towards five per cent growth by the turn of the century.
MANILA: Microsoft chairman Bill Gates will visit the Philippines next month for meetings with local businessmen on the last leg of an Asia-Pacific tour, it was announced on Thursday. The visit would partly be in response to Philippine President Fidel Ramos's invitation to visit this country when the met in the US in October. Gates will meet Ramos in the presidential palace but most of his schedule will be taken up in meetings with businessmen and academics. This will include meetings with prospective partners in software development such as Ayala Corp., the Lopez group of companies and the Social Security System, a government pension fund that is one of the heaviest users of information technology. Among the issues he will discuss are greater protection of intellectual property rights in this country, the Philippine government's plan to promote information technology as well as Gates' vision of a "connected community."
Samira |
