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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (11499)	6/29/1998 2:12:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACTIVITY/ WEEKEND EDITION OF TRADING NOTES JUNE 28, 1998 (3) OIL & GAS Saudi Oil Minister Suggests New Alliance For Guiding Oil Prices, Say Reports NEW YORK (AP) -- Saudi Arabia, the world's biggest oil producer, is suggesting creation of a new alliance of oil exporters that would stand ready to guide prices by direct intervention in the markets. The remarks by Saudi oil minister Ali Ibrahim Naimi, carried in today's editions of the Financial Times and The Wall Street Journal, came only a day after OPEC reached an agreement to cut production in the face of slumping prices. Naimi told the Financial Times that the new alliance would not mean the immediate demise of the Organization of Petroleum Exporting Countries but said the existing OPEC system had become outdated. OPEC meets periodically to set production quotas for its 11 members but some have persistently cheated on those allotments. Non-OPEC members include producers like Mexico, Oman, Norway, Russia and Egypt. Naimi declined to specify which countries he would like to see in the proposed new group but told the Financial Times there were "eight or nine countries that have the reserves, production capacity and dependence on oil revenues." Market intervention would probably be like the action central banks take in currency markets when trying to influence the rates at which particular currencies are traded, the Financial Times said. But in this case the alliance would supply more or less oil as conditions warrant. OPEC has agreed on two rounds of cuts since its decision in November to raise stated output by 10 per cent. The extra oil started flooding the market just as the southeast Asian economic crisis began cutting into demand for crude oil. OPEC's average price was less than $11 a barrel US last week, barely half the group's official target of $21 US. The new round of 1.355 million barrels of cuts -- following an earlier batch in March that failed to improve depressed markets -- would put the group's total output at around 26.5 million barrels a day, said the OPEC secretary-general, Rilwanu Lukman of Nigeria. That would be around a half million barrels less than OPEC was pumping before last year's plan for higher production. But Naimi told the Journal that cheating by some nations was inevitable and that it was unlikely that the full amount of the cuts would be withdrawn from the market as pledged. "The market doesn't believe the compliance will be 100 per cent and they are probably right," he told the Journal. But the newspaper said he expects the vast majority of cuts will be fulfilled, enough to drive prices higher later this year. In trading today, Brent crude oil to be delivered in August was up by 25 cents at $13.36 a barrel by late afternoon on London's International Petroleum Exchange. Light sweet crude oil for August was up 19 cents at $14.22 US at midmorning on the New York Mercantile Exchange. Mexico Confident Oil Cut Accord Will Be Respected MEXICO CITY, June 26 - Mexico's Energy Minister Luis Tellez said on Friday he was confident that oil-producing countries will comply with supply cuts agreed to by OPEC members this week in a bid to boost flagging oil prices. ''I am sure the different countries will comply with what they have committed themselves to,'' Tellez said at a news conference. Oil monopoly Petroleos Mexicanos (Pemex) said in a document distributed to reporters that it had programmed crude exports of 1.644 million barrels per day for the rest of the year. This complies with its commitment to slash exports by 200,000 bpd, compared with first-quarter exports of 1.84 million bpd, it said. Pemex chief Adrian Lajous reiterated that Mexico was strictly complying with its export cuts, but said rising internal demand prohibited it from slashing production as such. Mexico, together with Organization of Petroleum Exporting Countries members Venezuela and Saudi Arabia, spearheaded a second round of output cuts by oil-producing nations in an effort to boost flagging oil prices. Saudi Arabia surprised the market by saying it believed some of the countries that agreed to the cuts would cheat. Mexican officials, however, said they were sure all would comply with their commitments. WORLD OIL Oil Claws Back Slim Gains In OPEC Aftermath LONDON, June 26 - Oil prices edged nervously higher on Friday as traders covered pre-weekend positions at a time when a new OPEC agreement to reduce future output was still being overshadowed by concerns about excess supply. International benchmark Brent clawed to a high of $13.41 in London's afternoon, but closed 11 cents up at $13.22 a barrel, having closed 49 cents lower on Thursday in spite of an OPEC bail-out plan unveiled in Vienna this week. Traders described Friday's rise as technical short-covering rather than any genuine confidence in the Organisation of the Petroleum Exporting Countries' promised cuts of 2.6 million barrels from world markets beginning July 1. Brent shed some of its gains late in the day on profit taking, traders said. The oil cartel said it would chop nearly 10 percent off output in an effort to drain brimming oil storage tanks and boost prices from their lowest levels in 12 years but traders were sceptical. "You have to react to the cuts, because the market reacts to them, but do I believe in them? Never have, never will," said one trader on the floor of London's International Petroleum Exchange. OPEC credibility was further undermined on Friday by reports of comments from the oil minister of OPEC linchpin Saudi Arabia, Ali al-Naimi that he expected producers would cheat on the deal. "The market doesn't believe the compliance will be one hundred percent and they are probably right. I don't think anybody expects one hundred percent compliance." the minister told the Wall Street Journal. While many analysts applauded both the size and duration of the promised cuts and forecast a steady rise in oil prices as seasonal demand kicks in toward the end of the year, traders continued to focus on a present-day market awash with oil. "Tanks are full, there's very little in the way of storage, and I'm just not going to be buying the deal until we see some of that surplus come down," said one floor trader. Many oil industry analysts were predicting that the world's call on OPEC would outpace the group's supply sometime in the fourth quarter and boost prices, but others were less certain. "While the latest agreement will help to reduce the supply surplus later in the year, it certainly won't remove it," said Michael Barry of Energy Market Consultants in London. "We don't go for the consensus view," Barry said, noting that the consultancy had upwardly adjusted its forecast for oil prices by the end of the year to only $14-$15. Oil prices are floundering well below last year's average of $19.32 a barrel, and petrodollar revenues of many major oil producers have collapsed. Prices were on an upward trend until last November when OPEC raised output just as Asian demand was fading, oil storage tanks were swelling and the West basked in unusually warm winter weather. Prices in dollars per barrel: ..............................................................Jun 26 Jun 25 IPE August Brent................................... 13.22 13.12 NYMEX August light crude................... 14.12 14.03 NYMEX CRUDE Slight Gain For NYMEX Crude Crude oil futures prices gained slightly Friday after Saudi Arabia's oil minister suggested the creation of a new alliance of oil exporters that would stand ready to guide prices by intervening in the market. The remarks by Saudi oil minister Ali Ibrahim Naimi, carried in Friday's editions of the Financial Times and The Wall Street Journal, came only a day after OPEC reached an agreement to cut production in the face of slumping prices. Naimi told the Financial Times that the new alliance would not mean the immediate demise of the Organization of Petroleum Exporting Countries but said the existing OPEC system had become outdated. The group meets periodically to set production quotas for its 11 members but some have persistently cheated on those allotments. Non-OPEC producers include Mexico, Oman, Norway, Russia and Egypt. Naimi declined to specify which countries he would like to see in the proposed new group but told the Financial Times there were "eight or nine countries that have the reserves, production capacity and dependence on oil revenues." At a meeting earlier in the week, OPEC said it would reduce daily output by 1.355 million barrels to try to drive prices higher. OPEC and non-OPEC producers plan to remove a total of 3.1 million barrels a day from the world oil market. Light sweet crude oil for August delivery rose 10 cents to $14.13 a barrel on the New York Mercantile Exchange. July heating oil fell .15 cent to 38.65 cents a gallon; and July unleaded gasoline fell .13 cent to 45.80 cents a gallon. In London, North Sea Brent Blend crude oil for August delivery gained 10 cents to settle at $13.21 per barrel on the International Petroleum Exchange. NYMEX NATURAL GAS NYMEX Natural Gas Mostly Ends Up NEW YORK, June 26 - NYMEX Hub natural gas futures mostly ended flat to higher Friday in active trade, but technical selling when an early move up stalled pressured July down slightly just before expiration, industry sources said. July expired 0.6 cent lower at $2.358 per million British thermal units after trading today between $2.33 and $2.45. August settled 2.9 cents higher at $2.423. Other deferreds ended flat to up 2.8 cents. "July was capped at $2.45. There were plenty of scale up sellers above $2.40. The weather is supposed to cool off a bit in Chicago and New York next week, but the funds are long, and I'd be looking for a place to buy," said one Midwest trader, noting some longer-term forecasts call for more heat late next week. But traders said prices today were partly pressured by growing concerns a storm moving into the South would slow demand. Eastern temperatures through Tuesday are expected to average six to 12 degrees F above normal, with cooler levels forecast early next week. Similar levels are predicted for the Midwest. Readings in Texas are expected to stay hot, averaging as much as 12 degrees F above normal, but cooling a few degrees early next week. Florida will average three to six degrees above normal for the period. In the Southwest, the mercury will remain at about normal levels. Forecasts for midweek next week call for more seasonal weather in the Midwest and East. Florida may drop closer to normal levels from the near-record highs seen this week. Texas and parts of the Southwest are expected to remain hot. With July now off the board, traders focused on August, which also on Thursday filled a gap from Monday at $2.32, then rebounded, leaving the uptrend intact. Resistance was seen at today's high of $2.48, with better selling likely at the $2.655 double top from April. A close below $2.32 could send prices down to the low-$2.20s, the 50 percent retracement of the recent rally to $2.48. In the cash Friday, Gulf Coast weekend quotes firmed two cents to the mid-to-high $2.30s. Midwest pipes were up the same amount to the $2.30 level. Chicago city gate gas was talked slightly higher in the mid-to-high $2.40s. Hot temperatures and high humidity in New York kept prices firm in the mid-$2.60s. In the West, El Paso Permian slipped about a nickel to the high-teens. The NYMEX 12-month Henry Hub strip gained 1.3 cents to $2.512. NYMEX said an estimated 120,134 Hub contracts traded today, down slightly from Thursday's revised tally of 123,520. NORTH AMERICAN SPOT NATURAL GAS U.S. Spot Price Report Unavailable Canada Spot Gas Prices Lose Ground For Weekend NEW YORK, June 26 - Canadian spot natural gas prices mostly moved lower Friday in quiet trade, still pressured by reports of rising Alberta field receipts and expectations for more plant returns over the weekend. "Receipts are rising, and there are more plants due back Saturday, so people are expecting even more gains," said one cash trader, noting planned maintenance work this month cut Alberta supplies this month by up to 800 mmcfd. Total field receipts yesterday in Alberta climbed to 12.175 billion cubic feet per day (bcfd), up from 12.1 bcfd the previous day but still down from the normal level of about 12.4 bcfd. In June, receipts have averaged just 11.92 bcfd. Linepack yesterday was at 12.68 bcfd, up from 12.5 bcfd the previous day but below NOVA's target of 12.8 bcfd. Storage injections yesterday totaled 282 million cubic feet (mmcf), up from just 95 mmcf the previous day. Spot gas at the AECO storage hub in Alberta slipped two cents to the C$2.00-2.05 per gigajoule range, still 30 cents over the June index. July delivery at AECO was talked flat to a penny lower at C$1.88-1.89, while one-year packages at AECO held relatively steady in the mid-C$2.50s. Export prices also were mostly lower, with quotes at Huntingdon/Sumas again off more than five cents to US$1.45-1.50 per million British thermal units, still 10 cents over index. Emerson, Manitoba gas destined for the U.S. Midwest was little changed in the low-to-mid US$1.60s, helped by modest gains in the U.S. In the east, gas for export at Niagara again edged up slightly to the mid-US$2.40s, boosted by more heat and humidity on the East Coast. Canadian Gas Assoc storage survey for June 19 can be found at biz.yahoo.com Of Interest Stifling Heat Has Much Of U.S. Under Its Thumb - Power Plants Near Their Limits CHICAGO (CNN), Jun 26 - A stifling, early-summer heat wave blanketed much of the nation with temperatures well into the 90s on Friday, causing factories in the Midwest to shut down or scale back production and bringing power plants perilously close to their limits. With demand for electricity soaring toward record levels, utilities in nearly every Midwestern and Northeastern state asked customers to conserve energy by turning down their air conditioners and reducing appliance use. In cities from Texas to New York, the mercury climbed past 90 by noon. In Midland, Texas, the mercury hit 104 degrees Fahrenheit, and in Garden City, Kansas, it was 105. State inspectors said drought in Georgia has killed half of the state's corn crop and is threatening to turn cotton stalks to twigs, while farmers in the Plains states report that their cattle is dying. The heat -- which began Thursday in most areas -- isn't expected to break until next week. "It's terrible," said a Chicago man, "the worst I can remember in a while." "It's been very hot," said a Chicago woman. "I love the heat, but it ran me back into the building." "A day like today, you'll find yourself dizzy and sick real fast," said Richard Babington, a landscaper in Montgomery, Alabama, where it was close to 100. "It's hard to keep working when you see someone lying by a pool." 'It's ugly' Virginia Power expected to set a peak demand record Friday. In Nebraska, near-record electricity use in the Omaha area Thursday contributed to an outage that left 6,500 homes without power for nearly five hours. "It's ugly," said Steve Brash, a spokesman for Cinergy Corp., the parent of Cincinnati Gas & Electric Co. "We've got weather forecast to hit a high today of 94 degrees (Fahrenheit), with a heat index of 105 degrees." Cinergy, which serves about 1.4 million electric customers in southwestern Ohio, Kentucky and Indiana, hit record demand on its system Thursday and expected to break it again Friday. Officials at Midwest utilities said the public was responding well to calls for voluntary conservation and that this was clearly easing some of the strain on their systems. But to be on the safe side, they said they were cutting power for a second day to "interruptible" customers. Many companies, especially those in heavy manufacturing like steel mills and refineries, buy interruptible power at a discount to regular power. In doing so they agree to be cut off on short notice if the power is needed to avoid blackouts. American Electric Power Co. Inc., based in Columbus, Ohio, also cut off interruptible customers and asked customers to conserve energy. Detroit Edison, Chicago-based Commonwealth Edison and FirstEnergy Corp. in Akron, Ohio, were also among the big regional utilities asking the public to help. Unheard-of prices for power Under normal circumstances, they might also go to neighboring regions to secure power in the spot market. But Joan Goodman, a utilities analyst, said that three nuclear plants in the Midwest -- two of them belonging to Commonwealth Edison -- are off-line and "one of them is down permanently. So that left something like 8,000 megawatts of capacity short." And in the East, PJM, the Pennsylvania-New Jersey-Maryland Interconnect, said it would probably stop power transmissions from its territory since it was needed by member utilities closer to home. PJM, the most active power trader on the East Coast, oversees operation of the country's biggest network of power plants and lines, linking 9 million customers and utilities between Washington D.C. and Newark, New Jersey. PJM officials estimated demand on their system would hit 49,700 megawatts on Friday, just short of the record 49,820 megawatts it set on July 15, 1997. The scramble for surplus power pushed electricity prices to unheard-of levels. Electricity bought Thursday for delivery Friday into the Tennessee Valley Authority system fetched up to $4,900 per megawatt-hour. Spot electricity in the region averaged about $38 a megawatt hour last summer. Plants close in Ohio The cost of electricity -- and the shortage of it -- caused a Honda auto plant and a steel plant in Ohio to close. A steel plant in Butler, Indiana, limited production to off-peak hours and reduced output by at least 30 percent to avoid paying 60 cents per kilowatt hour -- nearly 20 times the average cost. "Power has been available to run, but at such a high cost that it would make no commercial sense," said Mark Millett, vice president and general manager of Steel Dynamic. Still, most workers across the heat-soaked regions stayed on the job, and many customers ignored pleas to conserve energy. "I work nights, so as far as sleeping during days like these, you have to have the air conditioning on," said Neil Cormier, a postal worker in Peabody, Massachusetts. "It's kind of ridiculous. We just started getting hot days, and they're already calling for a power watch?" Larry Stambaugh, a manager at Hilzinger Ace Hardware in Royal Oak, Michigan, sold out of fans Thursday before getting a new shipment Friday. "There are a lot of different makes and models, but that doesn't seem to matter to anybody lately. They just want to get the air moving," he said. "The other thing I've noticed is that lately there've been no questions asked as far as price." North American Rig Count Canadian Rig Count Fell 32 From Previous Week, to 223 vs. 321 A Year Ago. The number of rigs exploring for oil and natural gas in the United States stood at 823 as of Friday, down 40 from the previous week, and down from 966 a year ago, oil services firm Baker Hughes Inc. said. The number of rigs drilling on land fell 27 to 678, while rigs working offshore fell two to 122. The number of rigs active in inland waters fell 11 to 23. Among individual states, the biggest changes occurred in Texas, which was down 18; Louisiana, which was down 15, and Wyoming, down two. The Gulf of Mexico rig count fell one to 121. The number of rigs searching for gas dropped 29 to 560, the number of rigs searching for oil fell 10 to 261, and the number of miscellaneous drilling projects fell one to two. There were 205 rigs drilling directionally, 38 drilling horizontally and 580 drilling vertically. In Canada, the number of working rigs fell 32 from the previous week, to 223 vs. 321 a year ago. The weekly rig count reflects the number of rigs exploring for oil and gas, not those producing oil and gas. In a separate report, Offshore Data Services said there were 162 rigs under contract in the U.S. Gulf as of Friday, down five from the previous week. The utilization rate for rigs working in the Gulf, based on a total fleet of 175, was 92.6 percent. The number of working rigs in the European/Mediterranean area was unchanged at 109 rigs under contract out of a total fleet of 113, a utilization rate of 96.5 percent. The worldwide rig count was down six at 570 out of a total fleet of 609, with a utilization rate of 93.6 percent. Reference + More = bakerhughes.com U.S. Gulf Rig Count Falls 3 to 162 There were 162 rigs under contract in the U.S. Gulf as of June 26, down five from the previous week, Offshore Data Services said. The utilization rate for rigs working in the Gulf, based on a total fleet of 175, was 92.6 percent. The number of working rigs in the European/Mediterranean area was unchanged at 109 rigs under contract out of a total fleet of 113, a utilization rate of 96.5 percent. The worldwide rig count was down six at 570 out of a total fleet of 609, with a utilization rate of 93.6 percent. Statscan Data - Canada April Crude, Gas Output Up OTTAWA, June 26 - Statistics Canada issued the following data on Friday. biz.yahoo.com Petroleum & Natural Gas Sales Results For June 24, 1998 ftp://ftp.energy.gov.ab.ca/minten/png/19980624.psr Public Offering Of Crown Petroleum & Natural Gas Rights July 8, 1998 ftp://ftp.energy.gov.ab.ca/minten/png/19980708.pon

To: Kerm Yerman who wrote (11499)	6/29/1998 2:39:00 AM
From: Kerm Yerman	Read Replies (1) \| Respond to of 15196

MARKET ACTIVITY/ WEEKEND EDITION OF TRADING NOTES JUNE 28, 1998 (4) FRIDAY'S TOP STORIES Oil Alliance Suggested By Saudis Saudi Arabia, the world's biggest oil producer, is suggesting creation of a new alliance of oil exporters that would stand ready to guide prices by direct intervention in the markets. The remarks by Saudi oil minister Ali Ibrahim Naimi, carried in today's editions of the Financial Times and The Wall Street Journal, came only a day after OPEC reached an agreement to cut production in the face of slumping prices. Naimi told the Financial Times that the new alliance would not mean the immediate demise of the Organization of Petroleum Exporting Countries, but said the existing OPEC system had become outdated. OPEC meets periodically to set production quotas for its 11 members but some have persistently cheated on those allotments. Non-OPEC members include producers such as Mexico, Oman, Norway, Russia and Egypt. Naimi declined to specify which countries he would like to see in the proposed new group, but said there were "eight or nine countries that have the reserves, production capacity and dependence on oil revenues." Market intervention would probably be like the action central banks take in currency markets when trying to influence the rates at which particular currencies are traded, the Financial Times said. But in this case, the alliance would supply more or less oil as conditions warrant. OPEC has agreed on two rounds of cuts since its decision in November to raise stated output by 10%. The extra oil started flooding the market just as the Southeast Asian economic crisis began cutting into demand for crude oil. OPEC's average price was less than $11 a barrel US last week, barely half the group's official target of $21 US. Africa's Gushing - Angola Oilfields Help Ranger Oil Boost Production Calgary Sun Ranger Oil Ltd. has started pumping oil from new wells in Angola that could boost the Canadian exploration company's production by more than 5%. Development of the Kiame field off the coast of the West African nation will produce about 7,000 barrels of oil a day, with about 40% going to the Calgary based company. That will add about 2,800 barrels to Ranger's daily output of 53,000 in the first quarter. It's the second of several new oilfields Ranger expects to begin pumping this year, and one of the most active new areas in the world. "Offshore Angola is one of the world's most exciting exploration plays and is a key area for Ranger's future activities," said Fred Dyment, the company's president and chief executive officer. Ian Doig, publisher of the oilpatch bible Doig's Digest, agreed. The West African coast is becoming "the world's hotspot, he said. "It's a function of the operating costs compared to places like Canada and the fact that you can get the resources on stream much faster," Doig said. "From the time you get the concession until production, it's only four years compared to 18 for Hibernia." With little government interference and proven reserves equal to Canada's recoverable reserves of conventional oil at five-billion barrels, Angola has attracted a lot of attention, Doig said. "This is where the big boys are," he said. It costs about $5 a barrel to extract oil from Kiame, a small field with a productive life is expected to be four years. In addition to drilling at least three wells in Angola over the next two years, Ranger also has rights to drill in five regions off the Ivory Coast, also in West Africa. The company will boost production again next year, when it expects to start production from the Espoir field in waters off the Ivory Coast. Espoir is "about 10 times the size of Kiame, and we have a 20 per cent stake in the field," Bell said. Ranger is also developing several other fields in the North Sea. In May, Ranger's Columba E field produced 9,000 barrels a day. The company has a 34.06% stake in Columba. Ranger said it paid $44 million to develop the Angolan field, which contains 8.5-million barrels. That's worth about $119 million based on the current prices of Brent crude oil traded in London. Mobil Canada Narrows Sites For Upgrader Fort McMurray Today And then there were two. Mobil Canada announced yesterday that either Fort McMurray or metropolitan Edmonton will be the site for the upgrader that will process bitumen mined and extracted at its planned Fort McMurray plant. The company narrowed the field to the two cities after looking at various locations around Alberta. The final decision on which town will be home to the facility will be based on economic feasibility, environmental impact and public input, according to a news release. "We are currently examining the potential for both locations," said Jan Nowicki, vice-president of the Kearl oilsands project. "Before we proceed with our final decision, we will continue to work with local stakeholders to arrive at a decision that will be in the best interests of the communities involved, Mobil and the province of Alberta." She told Today formal and informal consultation in McMurray has been ongoing since the Kearl project was announced in April 1997. "We've certainly been welcomed by the community. It's been part of our chamber discussions and speeches. We're looking forward to working with the community in the future as well. "We're a founding member of the RIWG (regional infrastructure working group), and we also sit on many environmental groups in the area. We're looking for people to communicate with us on the upgrader as well." She said a final decision on the upgrader's location is expected to be made by the fourth quarter of 1998. The upgrader would process bitumen from the planned Kearl oilsands project into synthetic crude oil. The mine is expected to produce about 130,000 barrels per day of bitumen and would be built and operated on lease 36. Mobil has a 100-per-cent working interest in the lease. The upgrader is expected to cost between $1 billion and $1.5 billion, depending on the final location and technology used to process the bitumen. Big Bucks Need A Home Calgary Sun Here's $10 million worth of cash looking for a home. Harold Pedersen is the new president of KeyWest Energy Co. Ltd. If you think Pedersen's name sounds family, it should. KeyWest is the new name for San Fernando Mining Co. Ltd., and aside from being listed on the Vancouver Stock Exchange, it has just been approved for listing on the Alberta Stock Exchange. That brings the company right back home. The company was formerly a mining concern, but its focus is now being redirected into the oil and gas business in Western Canada. Aside from Pedersen, the new principals of KeyWest are executive vice-president Mary Blue, and Gary West, vice-president of engineering and production. Both are the former co-founders of Jordan Petroleum Ltd., which was sold in December 1997 for $435 million. KeyWest now has 16.8 million issued shares and its sole current asset is a cash chest of $10 million. Its management is looking at merger, acquisition and drilling opportunities to start building the new oil and gas company. Showtime Calgary Sun Two weeks ago, it was the National Petroleum Show. Last week, it was the Canadian Association of Petroleum Producers (CAPP) investment symposium -- and this week, the Canadian Energy Research Institute (CERI) will hold a two-day conference in Kananaskis to discuss industry issues with leading oil and gas researchers and decision makers. The conference comes amidst plans for some $3 billion in new petrochemical plant construction in Alberta in 1999-2000. On one hand, after almost 50,000 delegates here for the petroleum show and 300 analysts and investment fund managers here for the CAPP conference, it's hard to think of what more can be said about our oil and gas potential. But whatever will be said will be on the bright side -- projects led by companies such as Nova, Union Carbie and Amoco. Shell and Dow will spearhead industry expansion in our province and the job creation will surely make the rest of Canada envious. ZCL Composites Inc. Posts Major Loss Before Plant Sale Edmonton Sun Underground tank maker ZCL Composites Inc. lost more than $6 million last year before draining off a division full of red ink. The Edmonton-based company reported yesterday a March 31 year-end net loss of $6,019,000 compared to $38,000 in earnings the year before. Revenue fell to $54.3 million for the year from $58.6 million for the year ended March 31, 1997. The company's money-losing pultrusion division, which was officially sold March 31, hadproduced decking under the trade name E-Z Deck. The E-Z Deck division lost $6.7 million for the year, including loss on disposal, said a ZCL statement. The company was also hit by the January ice storm in Eastern Canada and warm weather in Western Canada slowed exploration activity in the upstream sector. "The impact of the discontinued pultrusion division is now fully behind us with the March 31 sale of the division and we look forward to improved performance as we start the new year with a fresh slate," said ZCL president Ven Cote in a statement. Executive vice-president Rob Day said this year's bottom line is no indication that the company is in trouble, and next year's results will show a turnaround as a result of the sale of the pultrusion unit. "It was a one-time event," said Day. "We had significant losses on disposal of that division, plus the operating losses during the year." The Asian flu has slowed down ZCL's entry in the Philippines, which the company expects to use as a stepping stone into Asia, said Day. But a new plant near Manila is still expected to open early in the second quarter. ZCL is Canada's largest manufacturer of fibreglass underground storage tanks and distributes petroleum handling equipment. Innovative Approach Calgary's Sigamor Inc. On The Leading Edge Calgary Sun If you attended the National Petroleum Show earlier this month, you'll know what began as basic wildcat drilling in Turner Valley has turned hi-tech. Over at the Stampede Grounds were about $1 billion worth of oil and gas equipment that would have done credit in its sophistication to the NASA control centre at Cape Kennedy. And a Calgary company, Sigmacor Inc., is about to demonstrate innovation in the oil and gas servicing industry hasn't reached a plateau. Company president Pat Beauchamp has just told me his company is currently launching its Gas Micro device into the potential $670-million North American market with an agreement with Interprovincial Satellite Services Ltd. (Intersat). It's a complex business, but in a nutshell, Gas Micro is a microprocessor-based electronic volume corrector designed to measure the flow of natural gas use, taking into account all kinds of variables. Through its agreement with Intersat, Gas Micro will allow utilities customers to collect measurement data and receive or transmit it over any communications medium in the world. Beauchamp estimates on top of the basic potential of the $670-million market, an additional market for Gas Micro communications hardware and software may be worth as much as $170 million in North America. Both Sigmacor and Intersat are listed on the Alberta Stock Exchange. TCPL may dominate merger with Nova Shareholders vote Monday on 'the arrangement' Calgary Herald What's in a name? Plenty, if you work for TransCanada PipeLines Ltd. or Nova Corp., the two Calgary energy giants that have spent the last five months trying to smoosh their respective organizations into a new corporate entity. In January, TCPL president and chief executive officer George Watson and Nova president and chief executive officer Ted Newall announced plans to merge their companies into a single entity that would have $21 billion in assets and annual revenues of $15.6 billion, making it the fourth largest energy services company in North America. But with shareholders of the two companies set to vote Monday on what is euphemistically described in legal documents as "the arrangement," suspicion is growing that the deal, once touted as a merger between equals, will in essence only create a bigger, more powerful TransCanada. More to the point, if and when the dust clears and TransCanada -- but not Nova -- is an integral part of the new company's name, it could prove a bitter pill for almost half the new company's workforce to swallow. "I don't think that's any real surprise to people who have been watching the industry," says Goepel McDermid financial analyst Bob Hastings of the proposal that appears to be leveraged in favor of TransCanada. Nor, says Hastings, should it be a revelation that the senior management team being proposed to shareholders carries a distinctly TCPL flavor. Former TCPL president and chief executive officer George Watson has been nominated to head up the new company, while five other senior TCPL execs -- including Garry Mihaichuk, Stephen Letwin and Lawrence Spackman -- will fill a handful of the most powerful jobs in the new organization. Bruce Simpson, president and chief operating officer of Nova Gas Transmission Ltd., will be the top Nova executive in the company, having been designated an executive vice-president in the office of the chief executive officer. The fact that key Nova executives like president and chief executive officer Jeffrey Lipton have opted for positions with Nova Chemicals, the $3.4-billion subsidiary that is being quietly spun off into a separate entity as a byproduct of the amalgamation, has had the rumor mills churning. "But that is where many of those people are most comfortable," points out Hastings. "So in a way, it only follows that TCPL's top people will fill most of the slots in this organization." But the reality is that weeks of pitched -- sometimes acrimonious -- battles between the internal power-brokers in both companies were the order of the day before a consensus on a final roster of top executives could be reached. And by all accounts, the fighting over the second tier of executive placements, which has yet to be made public, has been even more ferocious. "It has been a long and sometimes difficult process," acknowledges TransCanada chairman and guiding force Gerry Maier. "But I would add that it has gone as well as could be expected. "Unfortunately, when these things (mergers) happen, some very good people tend to get pushed aside," he adds. Just what lies ahead for the 6,300 employees of the new company -- there will be some degree of yet to be determined rationalization -- will be decided over the next four to six months. At this point Nova employees -- who see themselves as part of a distinctly different corporate structure -- seem particularly anxious about their futures. "I think it's fair to say we feel like we're being taken over by TransCanada," says a worried longtime Nova employee who asked to remain unidentified. Rumors about yet to be determined corporate reporting structures, and an impending controversy over whether or not the new company will have a new name reflective of the two disparate organizations it will comprise, have only served to exacerbate the feelings of angst and anger coursing through the subdued corridors of Nova's downtown offices. "This might be a good time for those Nova employees who have been trained in hug therapy to put their training into practice," says University of Calgary faculty of management professor Bob Schultz. The sooner employees know everything that is slated to happen at the new company, says Schultz, the sooner they can begin to focus on their jobs. Employees at both companies have been scanning corporate bulletin boards, e-mails and any and all other news sources for tidbits of information that might provide some insight into their future. Nova employees were especially disheartened to learn that while the joint company is referred to by the generic term of EnergyCo in legal documentation, it will in fact carry on business under the TransCanada name for at least the next year. A name change is not on the agenda for Monday's TransCanada shareholders meeting and no change can be adopted without shareholder approval. That, say company officials, means it will be at least a year before the issue is revisited. Naseem Javed, president of ABC Namebank, a company that specializes in creating and researching business names, says executives should do their homework but still move quickly to decide on a new name. "A new name would allow the companies to shed the skins of two old snakes and get a fresh start," says Javed. Kent Allan, of Calgary's Kent Allan Design Group, says work is proceeding on a brand strategy -- which presumably includes development of a corporate name -- but that confidentiality agreements are in place. However, Maier raises some ominous questions (for Nova employees, at least) about the amalgamated company's new identity. "I go to the bottom line. It could cost $40 million to $50 million to implement a name change -- and if there is no good reason to change, why do it?" Maier adds that company executives and officials have more important things to be focusing on than company names if they are to begin returning value to their shareholders as soon as possible. "I think it will be at least three years before we see the full synergies of this arrangement," predicts Sam Kanes, an analyst with Scotia Capital Markets. "But I think we could see some lift in TransCanada stock prices in the near term." But a recent survey by Andersen Consulting suggests alliances between companies are most often poorly managed and that many are often failures. In the survey, 214 executives reported that 70 per cent of alliances they had been involved with had failed or had only achieved initial goals. "Most companies launch into alliances with high hopes but with no real plans to realize those hopes and no clear way to measure whether their hopes are being accomplished," says Charles Kalmbach, global managing partner with Andersen. COUNTRIES IN THE NEWS Kuwait Seen Setting Foreign Oil Role By Summer's End Kuwait is moving closer to a major oil policy change that would eventually open potentially lucrative drilling operations to huge foreign oil companies, which have been patiently waiting in the wings since the 1991 Gulf War. Kuwait controls slightly less than 10 percent of the world's proven oil reserves, which will last it more than 100 years at current production levels. As of July 1, Kuwait's oil production will drop to 1.96 million barrels per day (bpd) from 2.19 million bpd earlier this year as part of a collective effort by the Organisation of Petroleum Exporting Countries to boost world prices. Kuwait "is still studying the formulae on offer and how to go about it (foreign participation)...A response is expected by the end of the summer," a senior executive familiar with official thinking told Reuters. Kuwaiti officials and Western oil executives told Reuters the Gulf Arab state was eager to grant foreign oil companies some role in its oil industry to boost production capacity, but it is still searching for a formula acceptable to both the country's sceptical parliament and foreign bidders. While some MPs stress that production sharing violates the constitution, industry executives say formulae under discussion would work around that limitation. The much-awaited move was at the centre of separate high-level talks earlier this month in Kuwait by John Browne, the chief executive of British Petroleum Co. Plc and Richard Matzke, president of Chevron Overseas Petroleum Inc., a unit of U.S.-based Chevron Corp. . BP and Chevron are just two of many foreign firms eager to secure a role in the fully state-controlled local oil production operations in Kuwait. Mainly "Exxon Shell BP, Total Chevron presented ideas for a role and a formula, but they did not include details. We have not reached that stage yet but we are getting there," said an official, who asked to not be identified. For Kuwait, providing a role for foreign firms in the country's oil production is key to securing needed technology to implement a plan estimated to cost some $13 billion to raise production capacity by one million bpd early in the next century from a current 2.4 million bpd. International hopes for a role in Kuwait's upstream operations, including oil fields close to the northern border with former occupier Iraq, were renewed last year when the country's highest oil policy decision making body gave its approval in principle to foreign participation. Twice before, in 1993 and 1995, Kuwait's Supreme Petroleum Council gave a similar approval. Sources told Reuters that market talk of a joint Chevron-BP offer was not "exactly correct" nor did Kuwait officially ask them to make such an offer. Western executives and diplomats here say Chevron and BP are the front-runners in the race, noting that Washington and London led the 1991 Gulf War to free Kuwait of Iraq's occupation that began in August 1990. State-owned and -controlled Kuwait Petroleum Corp. and its upstream arm Kuwait Oil Co. brought in Coopers & Lybrand to help in "evaluating international agreements and study the formulae. What they (foreign firms) have presented is slightly different from one another, but they are still general ideas. "Talk linking BP and Chevron probably came from the fact that they both showed interest in the northern fields. That is the similarity," a senior official added. Kuwait explained to its Western allies that the decision was a "difficult political" move, both on the domestic and international fronts. "We want many firms to get involved," said the official, adding that Kuwait has yet to decide on whether to take the international tender approach or direct negotiations with firms it favours dealing with. "They (foreign firms) told us, 'If you have difficulty, why not think of the consortium option to make things easier?'...When we look around us, we see that consortia now are the standard practice in the oil industry," the official said. Eni4 Offer Proves Rip-Roaring Success Italy cashed in a fourth rip-roaringly successful sale of shares in oil and gas giant ENI on Saturday but Treasury Minister Carlo Azeglio Ciampi said he had no plans to put any more of the company on the block. Ciampi told a news conference that both the retail and institutional offerings were more than two times over subscribed and the "extremely gratifying" sale had netted nearly 13 trillion lire ($7.3 billion) for Treasury coffers. Italy's newly savvy private shareholders, who were reserved the lion's share of stock in the country's biggest equity offering so far this year, clamoured and queued in an offering made more attractive by the prospect of bonus shares. Low yields on government bonds -- formerly Italians' favourite method of saving -- has also fuelled equity interest. Ciampi said the price for retail investors was set at 11,430 lire per share, Friday's official market price, and the global offering had been increased to 1,036 billion shares from one billion to cope after the avalanche of demand. The retail offer was 2.5 times oversubscribed. A further 101 million shares will be available under a green shoe option for excess demand by institutional investors. The institutional sale had been seen as less of a hit, depressed by low oil prices, the fact that many funds have reached their maximum holdings for ENI stock and the prospect of ENI losing its near monopoly on Italy's gas distribution market after 2000. But it was also more than two-times oversubscribed. Following the fourth tranche sale, the Treasury's stake in ENI, Italy's largest publicly traded company and Europe's third largest publicly traded oil and gas company, now falls to 38.26 percent from 51.16 percent. It will fall further to 37.06 percent if the green shoe is taken up in full. The government, however, intends to retain control of ENI and Ciampi said the Treasury's stake would not fall below 35 percent. "We said the intention was to arrive at a percentage below 51 percent and the result is abundantly below 51 percent. The government's intention is to keep this position of a strong force in ENI," he said. Ciampi said the privatisation of ENI, begun with the sale of a first tranche in December 1995, had raised more than 40 trillion lire overall but asked if the Treasury planned a fifth offering, he said: "At the moment...I exclude further tranches." The Treasury said that more than three million people had subscribed for shares in the four ENI offerings, more than the two million who sought shares in Telecom Italia in what was dubbed the "mother of all privatisations" last year. The ENI sales had netted more than $23 billion, compared with more than $22 billion in the British Telecom privatisation, $15.1 billion in Telecom Italia, $13.3 billion in Deutsche Telekom, $12.4 billion in British Petroleum, $7.6 billion in British Gas and $7.588 billion in France Telecom. Italy, which needs to keep up the momentum on its privatisation programme to ensure a steady flow of cash into state coffers with which to cut its mountain of debt, is looking ahead to further sell-offs in the pipeline, starting with motorways operator Autostrade.

To: Kerm Yerman who wrote (11499)	7/5/1998 11:13:00 AM
From: Kerm Yerman	Read Replies (4) \| Respond to of 15196

MARKET ACTIVITY/ WEEKEND EDITION OF TRADING NOTES JULY 5, 1998 (1) MARKET OVERVIEW Toronto Stocks End A Bit Firmer After Dull Day The Canadian stock market's key index eked out a gain in a session of muted trading as U.S. investors took the day off. Canadian brokerages were nearly as deserted as the closed New York exchange. The Toronto Stock Exchange's 300 composite index rose 13.16 points, or 0.2%, to 7383.71. On the week, Toronto's benchmark index gained 45.05 points, or 0.6%. Advancers outnumbered decliners 452 to 358 Friday with another 301 issues remaining unchanged. Trading volume was a mere trickle at 28.9 million shares, down sharply from Thursday's 98.2 million shares. Trading value amounted to C$508.3 million. tse.com Canada's largest equities bourse traveled in a narrow range over the North American holiday-laden week, adding 45.05 points from last Friday's closing level of 7338.66 points. The Toronto Stock Exchange acknowledged that it had been feeding erroneous figures for the 300, 100 and 35 indices to other systems throughout the day after wrong data was entered. Exchange spokesman Steve Kee said the closing numbers reflected the day's true activity. Other Toronto benchmarks reflected gains with the Toronto 35 index rising 0.2%, TSE 100 index 0.1% and the TSE 200 0.4%. U.S. markets were closed for a long weekend in celebration of the Independence Day holiday on Saturday. Many Canadian players were away as well after the mid-week Canada Day holiday. "It's deader than a doornail," one trader said. "Thank God for soccer games." "It's just that the Canadian market doesn't do anything when New York is closed," said Rolie Bradley, Maison Placements Canada trader. "Gold is a bit better." "I think a lot of people were not in today," said Irwin Michael, a portfolio manager at ABC Funds. "Markets are going to be very thin and they're going to be volatile. I don't think anyone is going to make any audacious moves," he added. Michael said the market will likely be quiet next week as well and still lacks a clear direction. "We need a catalyst." Many players will be back Monday and Bradley anticipates a negative start to the week. "I think what's going to happen is most of the summer rally has taken place," Bradley said. Investors will be eyeing the next wave of quarterly corporate earnings, Bradley said. "The focus of attention will be on earnings," he noted. "That will dictates what the market's going to do." Other analysts expect the TSE 300 to rally in the weeks ahead as investors move back into stocks. They also expect that earnings may better reflect future earnings after a 9% decline in the second quarter. "July is typically a good month for summer rallies," said Andrew Martyn, a portfolio manager at Davis-Rea Ltd. Investment Counsel. "May and the first 20 days of June were choppy, but the index gained in the last days of June and that will set the tone for a positive July." Other than a few pieces of specific news which moved stocks such as Northern Telecom Ltd. and Abitibi-Consolidated Inc., nothing much happened on Friday, said Fred Ketchen, managing director at Scotia Capital Markets. Of Toronto's 14 sub-index's, ten inched upward led by consumer products, up 0.6%. Gold and precious minerals rose 0.6%, buoyed by a better bullion price in London. Decent gains were also made by industrial products, paper/forest products, and oil & gas all rising 0.4%. The weaker sectors included transportation, down 1.0%, and base metals losing 0.3%. Nortel's (ntl/tse) $2.10 gain to $84.75 accounted for a good part of the TSE 300's rise as the industrial products group gained 0.4%. Nortel investors got some good news, as Mexico's Sistemas Profesionales de Communicacion SA chose the networking company to build its wireless network in Mexico in a deal valued at US$590 million. "It's a good deal for Northern Telecom, particularly as it was their big competition, Lucent, who dropped out," said Fred Ketchen, managing director of equity trading at ScotiaMcLeod Inc. The paper and forest product group also edged higher, up 0.4%, as Abitibi (a/tse) gained 55› to $19.80. The company confirmed it's in discussions with Norske Skogindustrier A/S of Norway and Hansol Paper of South Korea to form a newsprint joint venture in Asia. The oil & gas composite index also gained 0.4% or 21.38 to 6123.57. Among sub-components, the integrated oil's rose 0.4% or 30.24 to 8525.44. The oil & gas producers gained 0.5% or 28.72 to 5433.61 and the oil & gas services suffered a loss of 1.2% or 28.25 to 2381.28. For the week, the TSE oil & gas composite index gained 61.40 points or 1.0% from 6062.17. The integrated oil's rose 62.08 or 0.7% from 8463.36. The oil and gas producers reflected a strong gain of 86.00 or 1.6% from 5347.61. The oil & gas service index continued its downward trend, losing 68.87 or 2.8% from 2450.15. INDEX CHARTS TSE 300.......... canoe.quote.com O&G Composite. chart.canada-stockwatch.com Integrated Oil's.... chart.canada-stockwatch.com O&G Producers.. chart.canada-stockwatch.com O&G Services..... chart.canada-stockwatch.com NEW PHLX OIL SERVICE SECTOR bigcharts.com. lonestar.texas.net Tarragon Oil & Gas, Abacan Resources, Northstar Energy, Petro-Canada, Pacalta Resources, Rio Alto Exploration, Westfort Energy, Bow Valley Energy and Renaissance Energy were among the top 50 most active traded issues on the TSE. Imperial Oil Ltd. (imo/tse) gained $0.50 to $26.30 and Berkley Petroleum rose $0.40 to $12.10 on speculation that enough oil producers will keep to pledged production cuts to ease an oversupply of crude in world markets. Service issues appearing on the top gainers list included Shaw Ind A $0.45 to $18.20 and Akita Drilling $0.40 to $10.40. On the flipside, Rio Alto Exploration fell $0.30 to $16.85. Among service and industry related issues, Tesco fell $1.50 to $12.75 and Precision Drilling gave up $0.45 to $28.25. Newly listed Nova Corp. (ncxwi/tse), formed by a merger of TransCanada PipeLines Ltd. and Nova Corp., closed at $30.75 on its first day of trading. The name changes are a bit confusing. The newly merged entity of TransCanada and Nova will remain under the TransCanada name. The new chemical business, spun out of the merger, will trade under the name Nova Corp., but with a new ticker symbol. The biggest loser on the day was the transportation subindex, which fell 1%. Laidlaw Inc. extended yesterday's tumble, slipping 0.45 to 15.25. A U.S. judge ruled this week that the transportation giant must pay $141 million in back taxes and interest. The firm also might have to pay as much as $500 million if all existing and possible IRS tax claims are upheld. Among individual blue chips, BCE Inc. (bce/tse) inched down 5› to $62.30 and Royal Bank of Canada (ry/tse) rose 25› to $89.70. Canadian Pacific Ltd. (cp/tse) edged down 10› to $40.40 and aluminum producer Alcan Aluminium Ltd. (al/tse) ended down 25› at $40. Mining company Inco Ltd. (n/tse) climbed 5› to $19.80, Seagram Co. (vo/tse) closed up 35› at $60.75 and networking firm Newbridge Networks Corp. (nnc/tse) gained 20› to $35.15. TransAlta Corp. (ta/tse) eased 15› to $23.60 after announcing it is considering building a gas-fired generation plant that would add up to 370 megawatts of capacity to the Alberta consumer market. Groupe Vid‚otron Lt‚e (vdo/me) swung to a profit of 6› a share in its third quarter from a loss of 1› a share a year earlier. The stock edged up 20› to $21.20 on the Montreal Exchange. Coscient Group Inc.'s class B shares (cstb/me) gained 55› to $5.05 on the Montreal Exchange after Telesystem Ltd. said its Telesystem Financial Corp. subsidiary acquired 2.4 million shares of Coscient held by companies controlled by Laurent Gaudreau and Richard Laferriere. The purchases bring Telesystem's interest in Coscient to 17.2% on a fully diluted basis and make it Coscient's principal shareholder. In Montreal, the market portfolio index rose 10.85 points, or 0.3%, to 3752.72. Advancers exceeded decliners 153 to 136. The index rose 40.98 points, or 1.1%, on the week. me.org The Vancouver Stock Exchange rose 2.55 points, or 0.5%, to close at 537.62 on Friday. The index rose by 5.73 points, or 1.1%, on the week. vse.ca The Alberta Stock Exchange's combined value index rose 23.11 or 1.1% to 2115.15. Gainers outpaced declining issues 126 to 88 with another 88 issues unchanged. Trading activity on Friday allowed the index to show a weekly gain of 21.61 or 1.0% from 2093.54 the previous Friday. Oil & gas issues appearing in the top 25 most active traded issues included Anvil Resources, Alta Pacific Capital, HEGCO Canada, First Star Energy, Raptor Capital and Scimitar Hydrocarbons. Hawk Oil A gained $0.28 to $1.10, Slade Energy $0.20 to $0.70, Cirque Energy $0.10 to $2.60, Fairline Energy $0.10 to $0.40, Circle Energy $0.09 to $0.53 and Kensington Energy A $0.09 to $0.59. On the downside, Solid Resources fell $0.25 to $6.95, BXL Energy $0.11 to $0.95, Corridor Energy $0.10 to $1.30, Draig Energy $0.10 to $1.40 and Encounter Energy $0.10 to 1.40. The Canadian dollar closed weaker in very thin trading on Friday, hurt by a slight recovery in the U.S. dollar against the Japanese yen and the sale of Canadian dollars by a local bank. Canada's dollar weakened to C$1.4683 (US$0.6811) from its open at C$1.4650 (US$0.6826). "The yen was again dictating. Dollar/yen came back a little bit higher, so funds traded along those lines as well. But basically there's not much activity because the U.S. has been off most of the day," said one dealer at a Canadian bank. Canada's dollar had opened stronger, benefiting from gains in the yen after Japan's Prime Minister Ryutaro Hashimoto gave his strongest hint yet of permanent income tax cuts. The Canadian currency has been taking its direction from the yen for much of the week. Each rise or fall in the yen produced the opposite move in the U.S. dollar, which in turn affected Canada. But the U.S. dollar, in a shortened pre-Fourth of July session, on Friday regained some of the ground lost overnight after Hashimoto talked about the need for tax reforms. Dealers also said one purchase of U.S. dollars by a Canadian bank pushed the unit lower because the market is so thin. On the crosses, the Canadian unit weakened to 1.2384 marks from 1.2401 marks and softened to 94.87 yen from 95.79 yen. Canadian bonds ended a shortened session little changed on Friday, with the absence of a market in the U.S. keeping activity very subdued, analysts said. Lackluster early trading prompted the Toronto Bond Traders' Association to recommend the market close at 1300 EDT/1700 GMT. "I don't think the bonds have traded in the last few hours, since the soccer game started," said Sheldon Dong, manager of fixed-income research with Midland Walwyn Capital Inc. "There's nothing on the trading screens whatsoever. The broker screens are all empty," he added. Canada's benchmark 30-year bond fell C$0.01 to C$136.44 to yield 5.474 percent. Its U.S. counterpart last traded with a yield of 5.60 percent. The spread between the bonds was 13 basis points. U.S. fixed-income markets markets were closed ahead of the U.S. Independence Day holiday, which falls on Saturday. At the short end of the curve, Canada's three-month when issued T-bill firmed to yield 4.77 percent from 4.80 percent at the previous close. NEW YORK Stock exchanges were closed Friday. INTERNATIONAL Rest Of America's End Quiet, Mixed Mexico recover's from early dip, most Latin markets close higher but Venezuelan bolsa dips Mexican stocks reversed an early dip to close substantially higher. "The bourse opened down a tick then rebounded, but there's no volume," a desk trader said. The leading IPC share index was up 51.95 points, or 1.17 percent, at 4,483.75. Volume was wafer thin. Brazilian shares closed higher on Friday amid low volume, after session that was shortened because of a soccer match between Brazil and Denmark for the World Cup quarter-finals, brokers said. The Sao Paulo bolsa's Bovespa index of the 52 most active stocks ended up 2.14 percent or 212 points at 10,113. Market volume was a lower-than-average 334.2 million reals ($290.6 million). "It was a sluggish day. Despite the sharp rise in prices, the volume was very thin," said a senior trader, adding that a holiday in the United States contributed to slow activity. The Sao Paulo bolsa closed two hours earlier than usual to allow traders to watch the game scheduled to be televised from France. Among leading Brazilian blue-chips, preferred stocks of Telebras, the Sao Paulo exchange's benchmark, rose 2.33 percent, ending at 132 reals. The company's preferred share accounted for 60 percent of the cash market. Venezuelan shares prices dropped, squeezed by high interest rates, with trade thinned by the U.S. market holiday, dealers said. According to preliminary figures from the exchange, the 15-share IBC index dropped 0.6 percent to end at 4,861.26 points as 19 million shares traded, worth 1.1 billion bolivars ($2 million). "With central bank paper offering 52 percent, there's not been much interest in stocks," Exterior broker Reinaldo Uribe said. Europe Touches Peaks Lonely traders push stocks higher, but volume is thin in Wall Street's absence European shares closed at or near record levels on Friday as worries about Japan's fragile economy momentarily subsided, but investors lacked inspiration due to the closure of U.S. markets for a public holiday, dealers said. In Paris, the CAC-40 share index closed at a record high for the second straight session, ending at 4,304.38, up 52.29 points or 1.23 percent, with car stocks setting the pace. Renault closed up nearly 10 percent or 21.7 francs at an all-time high of 388.0 ($63.55). "The sector has really come into favor," one trader said. Another trader said the stock was helped by the announcement that the company had finalized an agreement with the city of Moscow to produce cars in Russia. In London, Europe's biggest bourse, the FTSE 100 ended 28.2 points, or 0.47 percent, higher at 5,988.4 after touching a four-week high of 6,022.1 in the opening minutes of trade. The FTSE 100 meandered in the absence of a trading spur and no steerage from Wall Street, dealers said. "With the U.S. market closed today we have returned to the sporting sideshows. It is turning out to be one of quietest days of the year," said NatWest Stockbroker head of research Jeremy Batstone. German shares held their gains in late Friday trade, but volumes were thin and a dearth of news canceled hopes that the benchmark DAX would break through the 6,000-point barrier. The floor-traded DAX index was 49.06 points stronger, or 0.83 percent, to 5,953.16. The electronic XETRA DAX index was up 56.3 points, or 0.95 percent, at 5,961.0. A market holiday in the United States was the main reason for Friday's quiet trading, traders said. "It's very quiet here today and there is nothing from the United States of course," one trader said. Elsewhere: Zurich - Shares set record highs for a fifth straight session, ending just below new peaks. The Swiss market index closed at 8,099.0, up 51.7 points, or 0.64 percent, up 282.1 since last week. Johannesburg - Shares shrugged off an ailing currency and prime rate hikes to end firmer for the third day running, supported by a scramble for rand hedge stocks, dealers said. The All-share index closed at 7,004, up 82.8 points, or 1.20 percent, up 129.7 from a week ago. The All Gold index closed at 1,069.6, up 76.9 points, or 7.75 percent, a gain of 264.8 from last Friday. The Industrial index closed at 8,157.9, up 37.5 points, or 0.46 percent, cutting its loss for the week to 103.9. Moody Day For Asia Stocks Weakened yen pulls down Hong Kong; Tokyo, Sydney end flat It was a yo-yo day for Pacific Rim markets as investor sentiment started out negative over Japan's bank plan, improved on hints of a Japanese tax cut, then soured again as cynicism set in. In Hong Kong, stocks were tripped up by an early sell-off as investors eyed a weaker Japanese yen, brokers said. The Hang Seng Index dropped 226.85 points, or 2.56 percent, to end at 8,639.31. It hit a low of 8,550.61 but recovered some ground as the yen strengthened in afternoon trade on speculation of Japanese tax cuts. "It is very much led by news on the currency," said David Williamson, director at Indosuez W.I. Carr. "We are probably near, in the short-term, the high end of the trading range." Brokers expected the blue chip index to meet stern resistance at around 9,000 to 9,200. Turnover shrank to a quiet HK$4.51 billion from Thursday's HK$7.98 billion, and brokers said many overseas investors stayed away with U.S. markets closed on Friday for Independence Day. The Japanese yen dictated Friday's direction and brokers expected it to steer the market next week. The U.S. dollar fell to a low of 138.20 yen after reports that Japanese Prime Minister Ryutaro Hashimoto had hinted at permanent tax cuts. The dollar was earlier hovering around 140.50 yen after reaching overnight highs of 141.70 as traders reacted coolly to the outline of Japan's plan to clean up its bad loan crisis. Higher local interbank rates also weighed on sentiment, as the benchmark three-month HIBOR rate rose to 9.27431 percent at Friday's fixing against 8.94079 percent at the same time on Thursday. The Hong Kong Association of Banks said on Friday it was leaving deposit interest rates unchanged. Tokyo falls, leaps, then flattens - The Tokyo stock market's key Nikkei average closed nearly unchanged on Friday, after having shot up briefly on remarks by Prime Minister Ryutaro Hashimoto that hinted about possible permanent tax cuts, brokers said. But stocks' sharp rebound soon lost momentum, as market participants became skeptical over whether the government will really able to make tax cuts permanent in a speedy way. The benchmark Nikkei average closed up 39.66 points, or 0.24 percent, at 16,511.24, extending a winning streak to an eighth session. It briefly jumped as high as 16,625.42. Brokers said the eight-session winning streak was the Nikkei 225 average's first in seven years and five months. The reported remarks reversed the Nikkei average's fall in the morning. Jiji news agency reported that Hashimoto pledged permanent tax cut reforms in a news conference. "I hope to have a permanent tax reform and that is the direction I think it will go," Jiji quoted him as telling a news conference on Friday in Kumamoto, southern Japan, where he was campaigning for July 12 parliamentary elections. The report caught market participants off guard, but many of them soon became skeptical over his intentions in the remarks. "It (the comment) reeks of electioneering," said Paul Migliorato, a senior manager at the institutional sales department, Jardine Fleming Securities (Asia) Ltd. Masatoshi Sato, manager at Kankaku Securities Co. Ltd, said: "The fact that Hashimoto mentioned permanent tax cuts had an impact but the market has actually pretty much factored it in." Singapore shares slip slightly after tax joy - Singapore stocks ended weaker Friday after euphoria over a potential Japanese tax cut faded. The Straits Times Industrials index finished a choppy session down 2.20 points, or 0.20 percent, to 1,122.67. "The market was looking for something sensational to latch onto, but there are too many deep seated problems," a dealer at a local brokerage said, referring to a brief rebound during the day. Blue chips recovered before the noon break, but selling hit property and electronic stocks again in the afternoon. Overall market volume was a moderate 115 million shares with losers outnumbering gainers 197 to 79. One more Sydney gain - The Australian share market managed a narrow rise by the close on Friday, its sixth successive rise, as the market consolidated recent strength. The All Ordinaries benchmark index ended up 0.4 points, or 0.01 percent, at 2,743.1, after picking up 150.7 points or nearly 6 percent in the previous five trading sessions. Traders said the market lacked direction ahead of a holiday on Friday in the United States, although reports that Japan might make its tax cuts permanent offered support. "That's given the yen a rally and bolstered the Aussie dollar a little, but that's about all that's gone on today," said Macquarie Investment Management's head of equities Greg Matthews. Some signs of stability in Japan should be positive for Australia in the medium term, particularly for stocks which may have suffered if rates had been tightened to defend the Australian dollar, Matthews said. Elsewhere: Seoul - Share prices closed lower on disappointment over the government's plan to privatize 11 state owned corportations. The Korea Composite Stock Price Index rose 3.24 points, or 1.0 percent, to 308.53. Jakarta - Share prices closed higher, boosted by the rise in mining stocks. The Composite Index rose 4.172 points, or 0.9 percent, to 470.545. Kuala Lumpur - Malaysian shares closed lower as investors took profits on gains made over the last two days. The Composite Index fell 4.42 points, or 0.9 percent, to 473.78. Bangkok - Thai share prices closed lower on profit-taking. The Stock Exchange of Thailand index fell 4.24 points, or 1.5 percent, to 273.74. Taipei - Share prices closed lower, dragged down by a strong sell-off in technology stocks. The market's key Weighted Stock Price Index fell 58.48 points, or 0.7 percent, to 7,758.63. Manila - Philippine shares closed generally lower, but advancing blue chips helped the market's main index eke out a slight gain. The Philippine Stock Exchange index of 30 selected stocks edged up 3.05 points, or 0.2 percent, to 1,859.24. Wellington - New Zealand share prices closed lower on profit-taking. The NZSE-40 Capital Index 11.16 points, or 0.5 percent, to 2,043.04.