MARKET ACTIVITY / TRADING NOTES FOR DAY ENDING FRIDAY., MAY 15 1998 (3)
Canadian Firms Continue Operations amid Indonesian Unrest
Canadian companies based in Indonesia said on Friday their operations were largely unaffected by the civil unrest threatening to topple President Suharto, but some firms have moved to evacuate employees.
Hundreds of people have been killed during the past four days as mass protests and widespread looting has gripped the Indonesian capital Jakarta in the first serious threat to the ageing Suharto's 32-year rule.
The riots, however, have failed to convince Canadian companies, who have been mining, drilling and extracting wealth in resource-rich Indonesia since a 1966 coup installed Suharto, to pack up and leave.
The Western world's largest nickel producer Inco Ltd. , whose subsidiary P.T. Inco operates a nickel mine on Sulawesi, a remote island 1,000 miles northeast of Jakarta, said all its operations were running normally.
''There have been no problems, no strife whatsoever out there. We've been in constant contact with them and with our office in Jakarta,'' Inco spokesman Jerry Rogers told Reuters.
Toronto-based Inco has 2,300 employees, less than two-dozen of whom are Canadians, working on Sulawesi. Inco also said its 32 employees in Jakarta were not affected by this week's unrest.
Rogers, however, said the company was prepared to move its expatriate employees out of Indonesia if the rioting and looting worsened. ''We have a contingency plan in place if anything were to escalate,'' he added.
Canadian energy firms developing oil and gas projects in Indonesia also were carefully monitoring the situation.
Talisman Energy Inc. and Gulf Canada Resources Ltd. unit Gulf Indonesia Resources Ltd. have operations in various parts of Indonesia, but drilling and production sites were in remote locations and not affected by the turmoil, company officials said.
About 50 Canadians who work in Gulf Canada's Jakarta office remained in the city, but their families were being airlifted to Singapore before being sent back to Canada, Gulf spokeswoman Jennifer Martin said.
''We've successfully taken out over 100 family members of our staff there and will continue to do that through the weekend,'' Martin said.
Talisman, the other major Canadian oil company operating in Indonesia, said on Friday it would pull most of its 30 Jakarta-based employees out of the country.
''We're looking at plans right now to evacuate all family and staff members except for a small core over the next three days,'' Talisman spokesman Dave Mann said.
Several large U.S. companies have also moved to spirit their expatriate employees out of Indonesia.
U.S. Mining firm Freeport-McMoRan Copper & Gold said on Friday it had
begun evacuations to Singapore after the U.S Embassy in Jakarta recommended the move.
Canada, which has about 2,100 expatriates living in Indonesia, has also advised its citizens to consider leaving as soon as possible.
U.S. Firms Shut Down In Indonesia
American companies doing business in Indonesia told their employees to pack, put them on buses and sped them to Jakarta's airports Friday, getting them to safety after four days of deadly rioting.
Oil powerhouses like Mobil, Atlantic Richfield and Conoco said they had begun airlifting employees out of the capital, as did Citicorp, Merrill Lynch and other financial giants. General Motors halted its car-making operations in Bekasi, just outside Jakarta, and evacuated its expatriate employees and their families.
The State Department told American citizens to get out of Indonesia's two major cities, Jakarta and Surabaya ''as soon as possible.'' It estimated that at least 8,000 Americans lived in Indonesia, mostly in Jakarta.
Commercial airlines were besieged by people trying to flee Jakarta. In response, the U.S. embassy chartered two Boeing 747s to fly Americans to Singapore or Bangkok early Saturday. All nonessential U.S. Embassy staff and their families were being evacuated.
Many companies gave employees and their families one-way tickets to nearby foreign cities and told local employees to stay home.
Jakarta's downtown business district - which has been spared from the looters because of a heavy police presence - was eerily quiet Friday. Midday phone calls to the offices of McDonald's and Freeport-McMoRan were answered only by recordings.
A few top executives went into work ''but if you can get someone on the phone, you'll hear that they're on their way out,'' said Joe Bartlett of the American Chamber of Commerce, who visited a few American companies to see how they are coping.
The buses Friday had to weave their way around smashed traffic lights, debris on the street, armored personnel vehicles and patrolling soldiers. Some drove by looters who were picking clean those shopping malls that had not been burned. Many evacuees left from Halim airport, the city's secondary airport, used mainly by the military.
Jakarta's International Airport has been overrun since Thursday by throngs of fleeing Chinese, the targets of violent rioters who have burned and looted homes and businesses around the city. Its departure terminal was overflowing Friday but the airport's arrivals hall was virtually empty.
One American who was leaving described the last 24 hours as ''chaos.''
''We're just looking to get to a safer spot,'' said Nancy Carmack, from Grand Junction, Colo., whose husband works for an oil concern. Carmack said she and her two children packed their bags in less than an hour after the company called to say their flight to Singapore had been secured.
''It's kind of exciting,'' said 18-year-old Clayton Carmack, who watched from his bedroom window Thursday as flames and black smoke from burning homes and businesses filled the skyline. ''But it's probably best to watch it from a TV,'' he said.
A Stock Market Tip: Listen To The Whispers
As an investor in stocks you have of course heard about whispers. You haven't? Then there's a good chance you're not getting the very latest and best forecasts of corporate earnings.
The whispers referred to are not the old-fashioned kind - "Psst, have I got a stock for you" - but the new electronic sort.
As newly defined, whispers are somewhat mysterious estimates that appear on computer Web sites prior to the release of corporate earnings. They are unsourced; seldom can you find their origin. But on average, they can be more accurate than professional estimates.
If you want a short-term investing edge, therefore, listen to the whispers. It's what clever Internet-bright investors are doing, and a university study suggests that they may be profiting. The computer nerd seems to have joined the investing mania.
Like old-fashioned rumors, whispers are pass-along information newly fashioned for the Internet. They could be nothing more than the source's personal estimates; but who knows, they also could be based on what is sometimes called inside information.
Whatever, a university study indicates that whispered earnings projections are more accurate than analyst estimates offered by First Call Corp., whose earnings reports are the most widely used in the marketplace. And that savvy traders can use them to make money.
Professors Mark Bagnoli of the University of Michigan, Messod Benish of Indiana University and Susan Watts of Purdue University began their study at the most elemental level: They simply began searching under the key word "whisper."
It seems nobody had ever gathered and analyzed whispers. In fact, the researchers could find no mention of the term before 1984, and interest didn't seem to grow until around the time of a Wall Street Journal article in 1997.
In all, they gathered 943 whisper forecasts for 127 companies and compared them with forecasts by more than 3,500 traditional analysts as provided by First Call, a division of Thomson Financial Services. The research covered the period January 1995 to May 1997.
Traditional forecasts often were released on First Call during the first week of a new quarter, with revisions occurring infrequently. Whisper forecasts, says Watts, "appear closer to the release of the actual earnings statement."
Their study indicated that the analyses contributed to the First Call network tended to be pessimistic, those in the whisper forecasts more optimistic. So, says Watts, we suspect the whisper forecasts are "the 'street response' to undo these underestimations."
She speculates that the whisper forecasts are more accurate because they may contain information not incorporated in traditional analysts' forecasters and because they circulate closer to the time at which the actual earnings are released.
Stan Levine, who managers First Call's academic program and who contributed data to the researchers, says "there seems to be a subset of investors out there who have both the knowledge and the time to post these whispers on the Internet."
He expresses concern about them.
"Since there are no authors listed, these are the kinds of numbers that could be fraudulently disseminated," he told the researchers. It is a comment that could also be applied to much (unsourced) Internet information.
Nevertheless, Bagnoli states that besides anecdotal indications of whispers outperforming the more formal analyst projections, there is statistical evidence that whispers right now are having an impact on trading.
Whether you buy shares or sell short - bet the stock price will go down - on the basis of whispers, he says, early evidence indicates you can profit.
VSE Dishes Out $328,000 In Series Of Penalties
The Financial Post
The Vancouver Stock Exchange levied $328,000 in penalties Friday, including $101,000 on stock manipulator Andrew Katz.
Two months ago, the VSE ordered him to pay a record $350,000 for manipulating the price of Caprice Greystoke Enterprises Ltd. shares.
The hole got deeper for Katz on Friday when the VSE barred him for life, fined him an extra $50,000, ordered him to return $41,000 in profit and demanded he pay $10,000 in investigation costs.
The new penalties stem from his trading in ATS Wheel Inc. of Richmond, B.C., and Bonaventure Resources Ltd. of Vancouver.
Between January and May of 1996, the exchange said, Katz violated its rules by accepting third-party trading orders for ATS shares without prior written approval.
The Bonaventure trading activity dates from June 1, 1993, to March 7, 1994.
The exchange said Bonaventure hired Euro Pacific Management Ltd., also known as the Investor Relations Group, to promote Bonaventure via telemarketers, using "high pressure and aggressive sales tactics."
Interested investors were referred to Pacific International Inc., where Katz worked.
Katz and three other Pacific employees - Darren Anthony Ricci, Thomas Lutzke and Stephen Anthony Yehle - manipulated Bonaventure's stock price through high-volume buying and selling.
During the period in question, Bonaventure's share price rose to a high of $5.625 from $1.25.
In a negotiated settlement agreement made public Friday, the exchange said Katz violated VSE rules by creating a false appearance of trading activity and by unduly influencing the Bonaventure market.
Since Katz was disciplined last March, a cloud has been hanging over his former employer, Pacific, for its role in the Caprice affair. National Bank of Canada bought a 35% interest in Pacific in March.
On Friday, the VSE said Pacific would be punished for its involvement in the Caprice and Bonaventure swindles.
Pacific was fined $125,000 and ordered to pay $25,000 in costs for "failing to detect deceptive and misleading trading patterns in the accounts and the shares of Bonaventure and Caprice."
The balance of the penalties were levied on Ricci, Lutzke and Yehle. All worked for Pacific and were found to have taken part in the Bonaventure scam.
Ricci was fined $33,500 and suspended from the VSE for 30 days, after which he will be suspended from the exchange's computerized trading system for six months.
Yehle received an $18,000 fine and was suspended for 18 months.
Lutzke was ordered to pay $25,500.
In the March settlement, Katz was found to have used manipulative or deceptive schemes while trading Caprice shares between 1991 and 1993.
His $350,000 penalty - a $150,000 fine, $100,000 in costs and an order to return $100,000 in profit - was thought to be the largest applied against a single broker in Canada.
California-based Caprice was associated with products such as appetite suppressant Spray-U-Thin and stimulant Spray-N-N-N-Wake.
The company was delisted from the VSE in 1996 and later filed for bankruptcy protection in the U.S. Its shares rose to $4.65 in 1993 from 45› in 1991. It was trading at 39› when it was delisted.
Katz was the fourth broker to be punished for questionable trading in Caprice. He joined Puneet Sharan of Brink Hudson & Lefever Ltd. (fined $25,000) and Yorkton Securities Ltd.'s Buddy Brown ($6,500) and David Kuznecov ($11,500).
VSE spokesman Gary Knowles said the latest fines conclude the investigation into Caprice trading.
Investor Relations Group was not part of the VSE investigation because it is not a member of the exchange.
Trading in ATS (ATK/VSE) was halted May 12 at the request of the company. Trading in Bonaventure (BOC/VSE) was suspended Oct. 1, 1997.
|
