ECI and Lucent both counter ALA's dire message yesterday:
WSJ on LU:
"We believe there is absolutely no evidence to support expectations of a slowdown despite the difficulties experienced by some of our competitors," Lucent said. Analysts are expecting Lucent to post $30 billion in revenue and earnings of $1.70 a share for fiscal 1998.
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ECI Telecom says Asia, Europe business picking up
Reuters Story - September 18, 1998 16:09
NEW YORK, Sept 18 (Reuters) - Israeli Telecommunications company ECI Telecom said on Friday that the company is not experiencing a slowdown due to global economic woes, rather business has picked up in Europe and Asia.
"We have not suffered any slowdown," ECI Investor Relations Director Leo Hinkley told Reuters. "We have not experienced a slowdown in Europe and have been very strong in Germany, Sweden, France and England."
He added that year-to-date, "we have not experienced a slowdown in Asia. In fact, we have seen a small pickup of business in Asia, especially China."
Second-quarter earnings, released on July 30, showed net income up 36 percent on revenue growth of 21 percent.
"It was the best quarter since 1992," Hinkley said. "Since then, we have not experienced a slowdown. Business has been very good throughout the year and we don't anticipate any decline in the future."
In late trading on Friday, ECI's shares were at 25-11/16, up 1/16. The stock was hammered on Thursday, dragged down with the rest of the telecommunications sector after France's Alactel warned of lower profits.
Last week, ECI announced a merger with fellow Israeli telecom company Tadiran Telecommunications Ltd. . >>>>
And from the Financial Times on Japanese banking development:
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SATURDAY SEPTEMBER 19 1998ÿÿAsia-Pacificÿ
Japan's parties agree on finance formula
By Michiyo Nakamoto in Tokyo
<Picture: Graph>Japan's government and opposition parties yesterday agreed on banking sector reforms that pave the way for measures to tackle the country's massive bad loan problem and revitalise the failing financial sector.
The deal will allow Keizo Obuchi, the prime minister, to meet US President Bill Clinton next week with evidence that Japan is working to solve its financial sector problems. US officials have recently increased pressure on Japan to speed its banking sector reforms and resuscitate its economy to prevent a global slump.
The agreement calls for the temporary nationalisation of the troubled Long Term Credit Bank of Japan and the establishment of an independent body, the Financial Revival Committee, to oversee the process. A 13,000bn ($97bn) public fund to recapitalise weak banks will be abolished and the finance ministry will be stripped of its powers over financial policy formation.
The agreement was reached in Tokyo after round-the-clock negotiations on Thursday between the ruling Liberal Democratic party and an opposition alliance. In the end, Mr Obuchi and the LDP had to give in to most of the opposition's demands on key issues.
Naoto Kan, leader of the Democratic Party of Japan, the largest opposition group, hailed the deal as a victory for the opposition. "The government and LDP have accepted the proposals of the three (opposition) parties almost in their entirety," he said.
Mr Obuchi said his decision to give in to the bulk of the opposition's demands was based on his determination that "no matter what, Japan must not cause a financial recession in other countries".
There was general relief that a deal had at last been reached. However, analysts expressed concern that the measures agreed were not a comprehensive blueprint for reform but only one step in a long process of dealing with the problems of the financial sector.
"I think this is a very significant first step which is a much clearer plan (than the LDP's)," said Yoshimasa Nishimura, professor at Waseda University in Tokyo. "But it is just the beginning and it will be very hard to implement it."
Questions remained over how and at what price the government would buy the shares of LTCB and other banks which ask to be nationalised, and what criteria would be used to determine healthy and unhealthy borrowers.
Neither does the plan address the issue of how to revitalise weak banks and prevent a further credit squeeze, critics say. "You're going to have to privatise (the banks) eventually, which assumes someone needs to have the capital to buy the bank's good assets," said Richard Koo, chief economist at Nomura Research Institute.
Mr Koo warned that the strict measures could drive other troubled Japanese banks to cut off their weaker borrowers, resulting in a further credit squeeze. The LDP is calling for an alternative mechanism for recapitalising weak banks to be included in the deal.>>>> |
