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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Brad Yonkman who wrote (3606)	11/27/1997 12:57:00 AM
From: Sergio R. Mejia	Respond to of 116790

Tokyo: Calm urged in face of low confidence Finantial Times: THURSDAY NOVEMBER 27 1997 Finance minister and Bank of Japan call for 'sensible' action, write Gillian Tett and Paul Abrahams in Tokyo. The Japanese government took the rare step of appealing for calm yesterday, amid signs that investors were losing confidence in the country's financial institutions. Hiroshi Mitsuzuka, finance minister, and Yasuo Matsushita, Bank of Japan governor, issued a joint statement "strongly requesting people not to be guided by groundless rumours and to act sensibly". The warnings followed the collapse yesterday of the shares of several financial institutions. The Nikkei 225 average was up 178.02 points, or 1.12 per cent, to 16,045.55 but shares in the broking and banking sectors fell an average 7 per cent and 2.6 per cent respectively, but some shares plunged more than 30 per cent. Two of Japan's big three securities companies dropped sharply. Daiwa Securities tumbled a maximum 100 to 446 and Nikko Securities fell 72 to 312. Analysts said there were fears the companies would be implicated in illegal off-balance sheet dealings similar to those that brought down Yamaichi Securities, the country's fourth-largest broker, earlier this week. Seven second-tier brokers are now quoted below the danger level of 100. Taiheiyo Securities, a small broker linked to Yamaichi, denied it planned to close after its shares dropped 22 per cent to 40. "The markets are highly nervous and are losing confidence in the financial system," said Peter Tasker, strategist at Dresdner Kleinwort Benson. "After the failure of Yamaichi, it is clear that size is no protection." Analysts said the risk of investing in Japan had increased substantially, because it was no longer certain that the ubiquitous corporate families, or keiretsu groupings, would protect all their members. But investors were finding it difficult to assess the risks facing individual companies because of poor disclosure and fears of further hidden debts or losses similar to those uncovered at Yamaichi. Bank shares also tumbled, following the announcement by Tokuyo City Bank, a regional bank, early yesterday morning that it was closing its business. Shares in Daiwa Bank, one of the country's largest, fell 27 per cent to 130. They have halved in value in two days' trading. Long Term Credit Bank dropped 80, or 29 per cent, to 196, while Mitsui Trust's shares dropped 32 per cent to 167, Fuji Bank fell a maximum 100 to 626, and Yasuda Trust 38 per cent to 79. Adding further to the banks' plight, Moody's, the US ratings agency, said it was considering downgrading the debt of Long Term Credit Bank, Mitsui Trust, Yasuda Trust, Nippon Credit Bank and Chuo Trust.If the last two are downgraded, their debt would have junk-bond, non-investment status. It was a similar downgrading that precipitated the collapse of Yamaichi.

To: Brad Yonkman who wrote (3606)	11/27/1997 1:06:00 AM
From: Sergio R. Mejia	Read Replies (1) \| Respond to of 116790

"US investment funds that have been selling gold short" Gold: Price below $300 for first time in 12 years From the Finantial Times: THURSDAY NOVEMBER 27 1997 By Kenneth Gooding, Mining Correspondent The price of gold fell below $300 an ounce yesterday for the first time in 12« years. US investment funds that have been selling gold short - selling gold which they do not own and in effect betting on the price falling - will now attempt to push it down to about $285, analysts suggested. The funds have been benefiting from fears that other central banks will sell more of their gold reserves. The banks and other official institutions own about 35,000 tonnes of gold, enough to meet present demand for 10 years. These worries have been putting pressure on the price for more than a year, but the slide became steeper after Australia's central bank announced in July it had sold two-thirds of its gold reserves in the previous six months. The idea that one of the world's big gold producing countries could take such action shocked many observers. "Gold is acurrency looking for a new fair value," said Andy Smith, analyst at Union Bank of Switzerland. "There is no floor for the price, just a trap door." Paradoxically, demand for gold is at record levels. The World Gold Council, a promotional organisation financed by a number of producers, said demand in the markets it monitors - accounting for 80 per cent of the global total - was up by 11 per cent to a record 2,119 tonnes in the first nine months of this year. Analysts suggested yesterday that the turmoil in Asian stock markets was taking its toll and there were signs that some important gold markets had become net sellers. Rhona O'Connell, analyst at specialist mining stockbroker T Hoare, suggested physical demand was playing no part in gold's fall. "The funds were looking to drive the price below $300 and we are now there. They are now looking for $285, so we will probably get there before long. Typically, when markets are very volatile, the day-to-day buyers tend to stand back." Mr Smith saw yesterday's fall as "just another chapter in a story that has been unwinding for two years". Low prices have forced the closure of some gold mines and projects have been shelved. The price was fixed in London yesterday afternoon at $297.