Ike: Asian Business news
Saturday/Sunday
JAKARTA: Indonesian markets grind to a halt swamped by fear in the aftermath of two days of riots, looting and arson in Jakarta. Most Asian currencies ended largely higher against the US dollar Friday following the suspensions of rupiah trading but analysts said underlying sentiment remained bearish due to the chaos in Indonesia.
LONDON: Euro bourses jittery about rates, Jakarta; Dollar stable against yen.
KUWAIT: Kuwait's Stock Exchange index dropped 2.7% in the week, reversing some of the gains of the previous two weeks. The index rose 12% in the previous two weeks boosted by hopes the government planned to reform stock market and economic regulations.
RIYADH: Saudi bourse keeps up recovery and stocks closed 4.2% higher on Thursday at the end of a week in which electricity companies made strong performances. Turnover jumped sharply in the week, with 15.32 million shares worth 2.62 billion riyals ($700 million) changing hands as compared to the 8.8 million shares worth about 1.6 billion riyals dealt the previous week. Banks accounted for 52% of trading value, followed by industrials with 26 and services with 11 per cent.
BEIRUT: Qatari Oil Minister Abdullah Al Attiyah said on Thursday that Qatar, Saudi Arabia and the United Arab Emirates reached consensus on the need for more production cuts if oil prices linger at current levels. Petroleum inventories are on the rise again in the West, strangling the recovery in oil prices engineered in March by producers who cut supplies. Analysts said the recovery had hit a wall of stocks in the United States market where inventories are near five-year highs. A gap in UN-monitored exports from Iraq when it renews its oil-for-food exchange in early June could provide some relief before global demand picks up later in the year. Otherwise oil producers will have to deliver a second round of output reductions to stop prices sinking again.
WASHINGTON: US set to skip curbs on Tehran energy deal: The Clinton administration is set to announce within days a decision not impose sanctions on three major foreign energy companies (Total SA of France, Petronas of Malaysia and Gazprom of Russia) for entering a deal to develop an Iranian natural gas field.
BIRMINGHAM: Clinton welcomes Japan tax cuts, urges economic reforms; US, Japan agree on $1b Tokyo deregulation.
TOKYO: Japan's new $230b financial scheme for saving its financial system may begin with restructuring the troubled banking sector. Finance Minister Hikaru Matsunaga confirmed Kobe-based Hanshin Bank was negotiating a possible merger with the heavily indebted Midori Bank. The Deposit Insurance Corp. (DIC), a deposit safety net, will make fiscal contributions and buy non-performing loans to help Midori Bank write off bad loans and latent losses. Nihon Keizai estimated the cost of cleaning up Midori Bank's debts at 500-600 billion yen.
Meanwhile, German industrial giant, Daimler-Benz AG will buy up the truck-making affiliate of Japan's Nissan Motor Co Ltd, taking more than half the outstanding shares. Daimler-Benz would hold a 60% stake in the company, becoming the first foreign company to take official control of a Japanese auto manufacturer.
The world's largest automaker General Motors Corp. has a 37.5% stake in Isuzu Motors Ltd and the second largest, Ford Motor Co., a 33.4% in Mazda Motor Corp. Nissan Motor was most interested in a tie-up with Daimler-Benz's low-emission engines. By gaining access to the German group cleaner engine technology, Nissan hopes to reduce future costs of developing such engines which meet tight emission requirements in foreign countries.
Also, some of Japan's industrial giants and biggest banks said on Friday they had halted their operations in Indonesia and were taking steps to protect employees and clients from the violence there. Some have closed offices and factories, while others have advised their Japanese employees to stay home and their families to evacuate from Indonesia. Among the top Japanese firms affected are Toyota Motor Corp, Hitachi Ltd., Mitsubishi Heavy Industries and Bank of Tokyo-Mitsubishi Ltd.
Japan's Shin-Etsu Chemical Co Ltd, the world's largest maker of semiconductor silicon said Friday its group pre-tax profit rose 7.5% to 80.7 billion yen in the year to March on strong sales at home and abroad.
SEOUL: US telecommunications giant Motorola Inc. unveiled a 300 million dollar plan Thursday to expand operations and improve its sluggish performance in South Korea's mobile phone market over the next three years.
WASHINGTON: Microsoft Corp won a reprieve on Thursday from major government antitrust lawsuits by agreeing to delay release of its upcoming Windows 98 program for a few days. The temporary ceasefire will allow the US Justice Department and 20 US states to pursue a negotiated settlement with Microsoft in a new round of face-to-face talks starting Friday. Microsoft's stock got a boost from news of settlement talks, initially rising as much as $14.125 to $91 before closing at $88.94 in heavy trading.
SINGAPORE: US electronics firm Western Digital Corp said Thursday that it had laid off 439 employees here following a cutback in production of computer disk drives due to excess global supply. Japan's Toshiba Corp and another US electronics company Silicon Systems were also reported to be holding retrenchment exercises this week.
Meanwhile, Singapore Airlines Ltd (SIA) announced Friday that it had signed a letter of intent with European consortium Airbus Industrie to purchase 10 super-long range jetliners in a deal worth $2.2 billion. Airbus and Boeing Co. have been locked in an intense battle to sell their planes to SIA, one of the world's most profitable carriers.
PALO ALTO: The US computer giant Hewlett-Packard on Wednesday warned that its 1998 second-quarter net earnings would be 10 cents below the same period a year earlier. The company attributed price competition and weakness in Asia for its prediction that earnings in the quarter to April 30 would come to 65 cents, down from 75 cents in the same quarter of 1997.
MOSCOW: The Russian government has selected a US company, American Appraisal Inc. to evaluate a 25% stake in telecommunications giant Svyazinvest, due to be sold off in the autumn. It will be the second stage in the privatization of Svyazinvest. A consortium led by Russia's Onexim financial-industrial group paid $1.87 billion for a 25 per cent stake in a controversial auction last July.
JAKARTA: Indonesia's total foreign debt at the end of February stood at $131.671 billion, according to central bank figures released on Thursday. Total public sector debt was $65.395 billion, of which 53.465 billion was owned by the government including a $3 billion IMF credit.
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JAKARTA: Riot toll soars to nearly 500; Suharto digs in.offers reshuffle amid calls for resignation; Expats evacuate in `relative calm'.
WASHINGTON: US, IMF back policies for Jakarta - Economic liberalisation essential to spur growth: The US and IMF closed ranks over Indonesia Friday, saying that tough economic policies did not drive the Southeast Asian country to social explosion. The State Department maintained that turmoil in Indonesia resulted from the lack of political reform and that economic liberalisation was still essential to spur growth.
HONG KONG: The emergence of a euro market offers an alternative for Asian borrowers, who have had experienced the dangers of depending exclusively on the US dollar market for funds.
BANGKOK: BoT chief spearheads drive for sharper teeth: Thailand's new central bank governor Chatumongol Sonakul hinted at major changes to the structure of the troubled institution but committed himself to maintaining core economic policies. In his first official statement as Bank of Thailand governor following his appointment last week, Chatumongol said he expected to oversee a time of restructuring at the central bank including a toughening of its policing powers. Speaking as the stock market dived on rumours of further failures among finance companies to recapitalize, the governor said the BoT would not force the closure of any firms. Troubled finance firms which failed to meet minimum capital requirements would be taken over by the central bank, he said.
WASHINGTON: The US Federal Reserve will keep monetary policy on hold until at least the third quarter, waiting for more data on the likely drag on the economy from the Asian crisis. A small majority of the economists questioned expected Fed to raise interest rates before the end of the year. But only one of 33 economists expected the Fed to move short-term interest rates in either direction in the second quarter.
MOSCOW: Rouble steady, no crisis: Russia's central bank, struggling to reassure investors worried by turmoil on Asian markets, said on Saturday that the rouble was stable and dismissed talks of financial crisis.
BIRMINGHAM: G-8 leaders debate debt amid protest, pledge to tackle crisis: World leaders attending the Group of Eight summit met at an elegant retreat in the English countryside on Saturday, while campaigners for a reduction in Third World debt took over the streets of England's second city. After devoting their first formal session on Friday night in Birmingham to trying to defuse the crisis in India and prevent a nuclear arms race between India and Pakistan, they turned their attention on Saturday to the debt mountain weighing on the world's poorest countries. Industrial nations trying to prevent a repeat of the Asian crisis have put private investors on notice that they will have to share the burden of both preventing and resolving any future meltdown.
TOKYO: Nomura, IBJ grow closer.full blown alliance seen unlikely - Japan set to liberalize financial markets: Nomura Securities and the Industrial Bank of Japan announced a groundbreaking alliance on Wednesday that moved them one step closer to a complete union, but analysts said the unwillingness of either firm to be a junio partner could prevent any future marriage. Different corporate cultures and a rivalry between the leading long-term credit bank and the giant broker in the corporate bond business could also make it difficult for them to go all the way. Analysts said there had been speculation over the past year that IBJ was angling to join with Nomura, as the bank, which raises funds through bank debenture issues and provides long-term loans, faced tough times ahead due to deregulation. Under the Big Bang, Japan is expected to liberalise its financial markets and break down barriers separating banks and securities houses.
BOMBAY: Indian share prices are expected to edge up next week as New Delhi moves to dampen the effect of US and Japanese sanctions slapped on India after its nuclear tests, an analyst forecast Saturday. The Bombay bourse reacted to the nuclear tests this week by going on a roller-coaster ride, plunging four per cent on one day following the announcement of sanctions and rising three per cent the next day on hopes the country would be able to ride out the measures.
TOKYO: Nissan to unveil survival plan: Japan's troubled Nissan Motor Co. Ltd., which is seeking a business tie-up with Germany's Daimler-Benz, said Saturday it ould announce a survival plan later this month. The spokesman said the number-two Japanese carmaker would agree the plan by May 27 when it releases earnings results for the year to last March. He was commenting on press reports that Nissan planned to stop production of unprofitable models and would reduce its four dealer networks in Japan to two in a bid to cut costs. Under a reform plan covering 1998-2000, Nissan will also sell its shareholdings in associated companies and sell unused real estate. With the plan Nissan hopes to slash its debts by some one trillion yen ($7.7 billion) from the current 2.3 trillion yen at the group level.
ABU DHABI: Price slump set to brakes on Kingdom economic growth - Riyadh could make further cuts, say analysts: Saudi Arabia's economic growth will slow down in 1998 because of weak oil prices after bounding ahead over the previous two years. GDP of the world's oil powerhouse surged by nearly 7.1% in 1997 and 8.7% in 1996 because of high oil prices and an upturn in the private sector. Inflation is also expected to remain at below 1% this year compared with a decline of 0.5% in 1997.
Oil analysts said Riyadh could make further cuts along with other major producers in the Gulf if crude prices do not improve through the year.
PARIS: A French truckers' union seeking higher pay threatened on Saturday to bring motorway traffic to a halt across the country ahead of the World Cup soccer championships which begin next month. The exact timing would be kept a secret and would depend on the pace of negotiations for a pay hike. The truckers are one of several groups threatening to disrupt the World Cup and embarrass host France to squeeze out concessions from the government and their employers. Others include train drivers, police and airline pilots. The truckers want their basic wages raised to 56 francs an hour from 43.15 francs.
Samira |
