**OT** REGIONAL BUSINESS BRIEFING
Issue Dated: March 9, 2000
INDIA
Tata Tea, the world's largest integrated tea company, announced it was acquiring privately held British tea company Tetley, which owns the second-largest global tea brand, for $433.7 million.
Unit Trust of India, the country's largest domestic mutual fund, said its net income in the six months to December 31 rose more than threefold from a year earlier, to $1.4 billion.
MALAYSIA
The economy grew 10.6% in the fourth quarter of 1999 and 5.4% over the full year, Finance Minister Daim Zainuddin reported. The budget deficit came in at $2.5 billion, or 3.4% of GDP. Daim raised the growth forecast for this year to 5.8% from 5%.
A dispute with Singapore over the repatriation of shares worth $4 billion was resolved. The shares, once traded on Singapore's over-the-counter Central Limit Order Book system, were frozen when Malaysia imposed capital controls in September 1998. (See story on page 56.)
CHINA
GDP grew 7.1% in 1999, according to the National Bureau of Statistics. Exports grew 6.1% to $194.9 billion while imports rose 18% to $165.8 billion, resulting in a trade surplus of $29.1 billion. Foreign-exchange reserves at year-end totalled $154.7 billion.
Foreign direct investment declined by 10% in January from a year earlier to $1.8 billion, according to the ministry of foreign trade. But contracted foreign investment, or proposed spending on projects, rose 10% to $3.5 billion.
HONGKONG
Exports rose 14.1% while imports jumped 16.4% in December from a year earlier, the Census and Statistics Department reported. The external trade deficit totalled $1.3 billion.
Pacific Century CyberWorks, an Internet start-up, won control of the city's biggest telecoms firm, Cable & Wireless HKT, after paying $38.1 billion to beat a rival bid by Singapore Telecommunications. (See story on page 51.)
HSBC Holdings reported a net profit of $5.4 billion for 1999, up 25%. Its Hong Kong-listed subsidiary Hang Seng Bank also reported strong 1999 earnings with net profit increasing 22% over the previous year.
SOUTH KOREA
European insurance giant Allianz will take a 12.5% stake in Korea's Hana Bank for $150 million and set up a joint-venture asset-management company in Korea.
An agreement with North Korea will allow fishing boats from the South to operate in Northern waters from March. The five-year accord, which provides for profit sharing between the two sides, is particularly welcome for South Korea's fishermen, who would otherwise have to retire 3,000 boats following a new treaty with Japan.
State-run Korea Electric Power Corp., or Kepco, reported a 33% jump in net profits last year to $1.3 billion. The gain came from a revival of demand for power and a switch to cheaper fuel sources.
Korea Telecom, the country's largest telecoms company, reported a net profit of $336 million for 1999, up 48% over the previous year. It said the increase was due to drastic cost-cutting and a lower interest burden following the repayment of most of its debt.
JAPAN
Consumer spending declined in January, belying hopes of a revival in consumption. The trade ministry said retail sales were 2.2% lower than a year ago.
Internet financier Softbank and its partners won the right to purchase Nippon Credit Bank, one of two major Japanese banks toppled by bad debts and nationalized in 1998. Talks over the price were under way.
Sega Enterprises forecast a group loss of $407.5 million for the year ending March 31, citing poor sales of its Dreamcast game machine in Japan. The company plans to raise $1 billion by issuing fresh equity to its largest shareholder, CSK Corp., and to Isao Ohkawa, who serves concurrently as chairman of CSK and Sega.
Output of four-wheeled vehicles declined 2% in January over a year earlier on account of a 15% fall in exports. Analysts expect the industry to trim four-wheel production capacity from the present 14 million vehicles a year to 12 million by 2004.
AUSTRALIA
The trade deficit widenedto $837 million in January from $693 million in December, pushing the Australian dollar to a 14-month low against the U.S. dollar. Analysts, however, expect the trade gap to narrow in 2000 thanks to growth in Asia and a boost to exports from the weaker currency.
AMP, the country's biggest fund manager and insurer, reported a rise in operating profits for 1999 but said an extraordinary charge related to reinsurance losses in insurer GIO Australia Holdings led to a net loss of $263.7 million. It had a net profit of $806 million in 1998.
THAILAND
Thai Petrochemical Industry and its 140-odd creditors were asked by the central bankruptcy court to negotiate a settlement to restructure the group's $3.5 billion debt. A deal to restructure $2.7 billion of the debt unravelled in mid- February. (See story on page 59.)
SINGAPORE
Finance Minister Richard Hu outlined a budget that rescinds tax rebates meant to stimulate the economy and projected a budgetary surplus of $1.4 billion, or 1.5% of GDP, in the fiscal year starting on April 1. In the year just ending, Singapore will chalk up a surplus of $1.9 billion thanks to strong economic growth. A deficit had been expected.
Industrial output surged 26.8% in January over the previous year. That compared with a growth rate of 7.2% in December, according to the Economic Development Board. Electronics, pharmaceuticals and precision-engineering goods were the main contributors.
Oversea-Chinese Banking Corp.'s net profit rose 45% in 1999 to $402.6 million. The bank attributed higher earnings to an increase in trading income and lower provisions for bad loans.
INDONESIA
Indofood Sukes Makur, the instant-noodles giant, said its net profit in 1999 trebled to $186.7 million. Sales increased 31% to $1.5 billion.
-Far Eastern Economic Review |
