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Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme/No Pennies -- Ignore unavailable to you. Want to Upgrade?

To: TokyoMex who wrote (1823)	8/16/1998 8:40:00 AM
From: TokyoMex	Respond to of 119973

The Oil Analyst: Seeing More Mergers as an Industry Adjusts By RICK GLADSTONE British Petroleum's agreement to buy Amoco for $48.2 billion, announced last Tuesday, would be the largest oil company merger in history and could lead to a scramble by rivals to find partners to survive in an era of extraordinarily low prices. The decline in oil also has played a role in financial market volatility -- contributing, for example, to the panicky selloffs in Russia, where oil sales help repay foreign debts. In an interview last week, Dr. Daniel Yergin, chairman of Cambridge Energy Research Associates, discussed the implications of the merger as well as the causes and consequences of the decline in oil prices. Yergin won a Pulitzer Prize in 1992 for "The Prize," a history of the oil industry. More recently he was co-author, with Joseph Stanislaw, of "The Commanding Heights," an economic history of the last half of the 20th century. Q. (italics)What is the significance of a British Petroleum-Amoco merger?(end italics) A. Clearly this takes place in an environment of low prices, which focuses the mind on long-term competitive position. I think this merger is not about low oil prices, though. It really is about strategic position, about how you can be competitive for the long term, and getting the right resources, the reach and cost structure you need to be competitive around the world. Q. (italics)Wasn't the depressed price of oil a catalyst for this merger?(end italics) A. It added to the pressure in general. There was recognition that it's going to be a tough competitive environment for a long period, and the news out of Asia does not suggest a quick recovery in oil prices by any means. Q. (italics)Are we likely to see more consolidation among oil companies?(end italics) A. (italics)I think it forces everybody to go back and look at what are they good at, what are they not good at, what would they gain from mergers and consolidation. A lot of people will decide that it's not necessary for them. But for others this will be a triggering event. This just sort of transforms the competitive landscape of the business. Q. (italics)Would you care to speculate on who is likely to merge with whom? (end italics) A. I'd better not. But I think everyone's going to go through a re-examination of their competitive position. Q. (italics)Why have prices fallen so much?(end italics) A. There are a number of factors that came together. Obviously the warm winter meant you had built-up inventories, and by last March the situation started to get desperate because there was no place to put the oil. But the fundamental cause is Asia. Q. (italics)How could Asia have such an impact?(end italics) A. Fourteen months ago, the forecast for growth in Asian oil demand was an additional one million barrels a day this year. Asia was the new "prize" -- where you had to be, where the growth was. At this point, we expect it to be down by 200,000 barrels a day for this year. Q. (italics)What about overproduction?(end italics) A. That's the other factor. You basically have both OPEC and non-OPEC countries continuing to produce, assuming the market would absorb it. You have Iraq coming back. You have continuing buildup of supply. When I finished "The Prize," I thought of all the hundreds of characters in the book and came to the conclusion that only two characters really counted -- supply and demand. Now there's too much supply and not enough demand. Q. (italics)The oil industry plans far ahead. Why didn't it see the Asia crisis coming?(end italics) A. I think there is a kind of modesty, actually, about oil pricing forecasts. Until the mid-80s, there was a belief you could forecast the future, and now people really see prices more as assumptions rather than as actual forecasts. The IMF has consistently underestimated -- everybody has consistently underestimated -- the gravity of the Asia crisis. The oil industry is in the same boat. Q. (italics)Efforts earlier this year by OPEC and non-OPEC producers to cut production appear to be doing nothing for prices. Which oil-exporting countries are most at risk?(end italics) A. The combination of the Asian economic crisis and the oil crisis has hit Russia very hard because oil is such an important source of its earnings. Venezuela has been very hard-hit. For any of these countries that depend on oil for a substantial part of national revenues, their revenue targets will fall far, far short. Q. (italics)Low oil prices have helped keep inflation and interest rates low, but what about the harm done in the United States?(end italics) A. If you think back to the last price collapse, in 1986, the difference was that there was much greater regional outcry about low oil prices, and although this does hurt the energy sector, the state of Texas is much more diversified now. Low oil prices, on the other side, are kind of a central bank chairman's Christmas present. Q. (italic)From an investor's point of view, do you see opportunities in depressed prices?(end italic) A. The thing you have to keep in mind about the oil business is that it is a commodity business. It's a business of cycles. When prices are up people tend to think they're going to be up forever and when they're down people think they're going to be down forever. It is for now, in the next year or two, dependent on what happens in Asia. That's a critical variable. One of the things that strikes me about this industry is that it can, at $15 or $16 a barrel, do things that it thought it couldn't do at $30 a barrel a decade ago. It's an industry that's being transformed by technology and computers. It's an industry that can do much better at lower prices. It's an industry that's surprised itself. Q. (italic)How low can prices get?(end italic) A. Let me put it this way. I think the reason producers got together and said, "O.K., OPEC's not working; let's use some other mechanism to cut production," was a recognition that there wasn't much of a floor and you could be looking at single-digit prices without some moderation of supply. The industry has gotten accustomed to producing 2 percent annual volume growth, and what it's going through now is this very painful process of recalibrating its output to a lower demand level, and who's going to bear the cost of those cutbacks. Sunday, August 16, 1998 Copyright 1998 The New York Times

To: TokyoMex who wrote (1823)	8/16/1998 8:41:00 AM
From: TokyoMex	Respond to of 119973

3 Pros Are Grabbing the Bear by the Horns By NOELLE KNOX The bungee-like gyrations in the stock market the last two weeks may have scared away the faint of heart, but for money managers who are paid to stomach such swings, a plunge is simply a chance to pick up shares of solid companies on the cheap. Ronald Baron, who runs the Baron Asset fund, was buying Libbey Inc. as it hit new lows on Tuesday, when the Dow Jones industrial average fell 225 points before springing back up to end the day off 111. Less than a week earlier, on Aug. 5, the day after the market suffered a 299-point decline, Christian A. Felipe, who heads the MFS Massachusetts Investors Growth fund, stepped in to buy shares of the Promus Hotel Corp., then trading at record lows. Computer-driven buyers got into the act, too. On July 27, Jeff Tyler, co-portfolio manager at the American Century Income and Growth fund, crunched the cold, hard numbers on the Tommy Hilfiger Corp. and started adding shares to his fund. Listening to their reasons, one gets the sense that it doesn't take courage so much as conviction to buy a plunging stock. All these managers strongly believe in a turnaround, a takeover bid or a mathematical formula. Christian A. Felipe Promus escaped much of the sell-off on Aug. 4, but after the market closed, the company announced that Raymond E. Schultz, chief executive, and Richard M. Kelleher, president, would resign, as would two directors. The shake-up was a result of the clashing corporate cultures of Promus and Doubletree, which merged last December. The company, which owns and franchises 1,200 hotels in North America under the Doubletree, Embassy Suites and Hampton Inn banners, among others, was also sucked down by market fears that the hotel industry had hit a cyclical peak. Promus, which had lost just 75 cents on Aug. 4, fell 22 percent on Aug. 5, to an intraday low of $26.50. Felipe, 38, didn't hesitate as he reached for a buy ticket. While he declined to say how many Promus shares he has bought, the company, based in Memphis, now ranks among the fund's top 15 holdings. "This stock is a takeover candidate," he declared, adding that he expected the Bass brothers, Marriott International, Hilton Hotels or a similar hotel company to bid more than $50 a share for Promus. Felipe has been the portfolio manager of MFS Massachusetts Investors Growth since 1995. The fund, with $3.56 billion in assets, invests in big companies with steady growth potential. This year, through Aug. 12, the fund's A shares returned 18.7 percent, compared with 16.2 percent for the average large-capitalization growth fund, according to Morningstar Inc. of Chicago. Even without a takeover offer, Promus, which is trading at less than 16 times 1998 earnings, still fits in Felipe's portfolio because of what he called its "very valuable brand franchise." He said he expected the company to earn $2.10 a share this year and $2.65 next year. While the industry may be saturated at the low end, he said there was still room to grow in the mid-price segment where Promus operates. "It's only a matter of time." he added, "before this company is gone." Ronald Baron This wasn't just a bad week for Libbey, the maker of restaurant glasses and tableware. The company has had a bad year. Its stock declined gradually, but steadily, from a high of $41 last December to close at $32 on Tuesday; it now trades at $31.125. But Ronald Baron, 55, manager of the Baron Asset fund, didn't care. He has owned Libbey stock for a couple of years, and on Tuesday he bought 30,000 shares for an average price of $31.41. He now has $78 million, or 1.5 percent, of the fund's assets invested in the company, which is based in Toledo, Ohio, making Libbey the fund's 18th-largest holding. Baron is a long-term, out-of-the-box thinker, and his portfolio shows it. Baron Asset has half of its money in about a dozen small-capitalization stocks, including Sotheby's and Ralph Lauren, and the fund has a very low turnover rate -- 12 percent. Baron likes Libbey because it is shielded from new competition by the high costs of furnaces and glass molds. Ninety percent of Libbey's orders come from restaurants' replacement of inventory. "It's a good, stable, modestly growing business," he said. "Their costs are stable and now they have production outside the country" in Mexico, which should help cut costs. Libbey is adding more flatware to its product lines while pressing to sell more glasses, dishes and bud vases to consumers through department stores and other retailers. Still, Baron is obviously more bullish on Libbey than many of his peers. "Wall Street thinks they can make between $2.50 and $2.60 this year; I think they can make $2.80," he said, referring to per-share earnings. His investors hope he is right. The market has been unkind to small-cap stocks this year, and Baron Asset, which has $5.25 billion under management, was down 4.0 percent for the year through Aug. 12, compared with 3.3 percent for the average small-cap growth fund. Jeff Tyler Tommy Hilfiger, the designer who turned sweatshirts into a fashion statement, saw his company's stock tumble almost 30 percent from a high of $70.375 on June 3. When it fell below $50 on July 27, Jeff Tyler's computer screens were aglow. The way Tyler, 40, figures it, the company's stock was "guilty by association" with those of weaker garment makers like Liz Claiborne, which not only reported disappointing second-quarter earnings, but also warned investors that its second-half results might be ugly, too. Tommy Hilfiger "was a stock that had been attractive, but with the way the market was being abused, Tommy became a lot more attractive," Tyler explained. "We picked up on it and increased our position." As co-manager of American Century Income and Growth, with $3.36 billion in assets, Tyler uses three complex formulas to pick stocks. The first looks at a company's price-to-earnings and price-to-cash-flow ratios, as well as stock price and earnings momentum -- the pace and direction of upward and downward changes in those numbers. Based on those criteria, a company is scored on a scale of 0 to 100, with higher scores being better. Hilfiger boasted a score of 95, versus 48 for the average company in the Standard & Poor's 500-stock index. Then Tyler uses a second model to look at the changes in analysts' earnings estimates and the likelihood of an earnings surprise. In January, for example, analysts projected that Hilfiger would earn $1 a share in the fourth quarter, but the most recent survey showed a consensus estimate of $1.15. Again, a company is ranked from 0 to 100. Hilfiger scored 94, compared with 47 for the average company in the S&P 500. "A company that has good earnings momentum will score favorably, especially if it is getting abused unfairly from the viewpoint of analysts and our model," Tyler said. Finally, he uses a third, so-called pure-valuation model that pegs a stock as cheap or pricey based on -- among other things -- its price-to-cash flow ratio in relation to the overall market. It ranks a stock on a scale of (plus)20 to (minus)20, with high-scoring companies being cheaper and, hence, better buys. Hilfiger scored a (minus)13, making it a fair bit more expensive than the average company in the S&P 500, which nets a (minus)6. But Hilfiger's score on the two other measures made up for that. Through Aug. 12, Tyler's fund has returned 12.1 percent for the year compared with 3.4 percent for the average large-cap value fund. Sunday, August 16, 1998 Copyright 1998 The New York Times

To: TokyoMex who wrote (1823)	8/16/1998 8:42:00 AM
From: TokyoMex	Read Replies (1) \| Respond to of 119973

Market Snapshot Sun, 16 Aug 1998, 7:32am EDT Following is a summary of activity in EQUITY, BOND, CURRENCY, and COMMODITY markets around the world. DOW JONES INDUS AVERAGE The Dow may be volatile in coming days on mixed views about profits. S&P 500 US stocks may be turbulent in coming days on shifting profit views. NASDAQ COMPOSITE Strong Dell earnings may lift the Nasdaq in coming days. CANADIAN TSE300 Concern about Canada dollar weakness may hurt stocks in coming days. FTSE Renewed profit optimism may send U.K. stocks up in coming days. EUROPEAN STOCKS European stocks may be turbulent in coming days on profit views. EUROPEAN BONDS Russian and Asian woes may keep European bonds steady in coming days JAPANESE STOCKS Concern about Asian woes may hurt Japanese stocks in coming days. HONG KONG STOCKS Economic concerns may keep HK stocks volatile in coming days. MEXICAN BOLSA Mexico's budget surplus may support stocks in coming days. BRAZILIAN BOVESPA The ruble's woes may leave Brazil stocks mixed in coming days. ARGENTINA STOCKS Russian, Asian news may keep Argent. stocks volatile in coming days. CHILEAN STOCKS Concern about exports to Asia may hurt Chilean stocks in coming days JAPANESE YEN Japan's banking crisis may drive the yen down in coming days. GERMAN MARK Russia's financial turmoil may hurt the mark in coming days BRITISH POUND News of slower U.K. growth may hurt the pound in coming days. SWISS FRANC Emerging market turmoil may keep the franc volatile in coming days AUSTRALIAN DOLLAR Concern about Japan's woes may hurt the Aussie dollar in coming days NEW ZEALAND DOLLAR Government changes may buoy the NZ dollar in coming days. BRENT OIL Brent may fall in coming days amid a continuing global glut. CRUDE OIL (NYMEX) Crude prices may fall in coming days amid bountiful supplies. GOLD The dollar's strength vs the yen may hurt gold in coming days. AGRICULTURE Soybeans, corn may fall in coming days on good growing weather. LIVESTOCK Cattle may rise in coming days amid record feedlot supplies. AUSTRALIA STOCKS Aussie stocks may be volatile in coming days on Asia concerns. INDONESIAN STOCKS Indonesian stocks may be turbulent in coming days on economic views MALAYSIAN STOCKS Malaysian stocks may be mixed in coming days on economic views NEW ZEALAND STOCKS New Zealand's government change may lift stocks in coming days. PHILIPPINES STOCKS Philippine stocks may fall in coming days amid economic woes. SINGAPOREAN STOCKS Singapore stocks may be volatile in coming days on economic views U.K. BONDS Economic reports may keep U.K. bonds steady in coming days COPPER Copper prices may fall in coming days amid weak Asian demand. TSY BONDS Asian and Russian woes may drive U.S. bonds up in coming days

To: TokyoMex who wrote (1823)	8/16/1998 8:44:00 AM
From: TokyoMex	Respond to of 119973

Major Newspaper Headlines Sun, 16 Aug 1998, 5:07am EDT BN 8/16 Top Stories From Japanese Morning Newspapers, Aug. 16 (Update2) Tokyo, Aug. 16 (Bloomberg) - The following stories appeared in major Japanese newspapers this morning: (Adds 6th to 10th items.) Front Page: Fujitsu to Switch to Online Transactions By 2000, Nikkei Says Fujitsu Ltd., Japan's largest computer maker, plans to switch by April 2000 to online transactions between its 810 sales agents and their 1,400 offices, the Nihon Keizai newspaper reported without citing sources. Fujitsu hopes the online system will save 1.5 billion yen ($10.2 million) by cutting administrative and marketing costs. The Tokyo-based company will invest 1.1 billion yen over the next two years to develop the system, the paper said. (Nihon Keizai)(6702 JP ) Health Ministry to Accept Results of Overseas Clinical Tests The Ministry of Health and Welfare decided to accept the results of clinical tests done in foreign countries in deciding whether to approve some drugs for the domestic market, the Nihon Keizai newspaper reported without citing sources. The move is to accelerate approval of foreign drugs to counter U.S. and European criticism. It also will benefit Japanese pharmaceutical companies that conduct clinical tests in foreign countries, the paper said. (Nihon Keizai) (TNI JAPAN MEDICAL) Non-Life Insurers To Sell New Type of Disaster Insurance Major non-life insurers will begin selling in September a new type of customized disaster insurance to corporate customers, the Nihon Keizai newspaper said without citing sources. The new policies will allow corporate customers to limit the breadth of coverage, thereby paying less than for current umbrella-type coverage. For example, a firm now pays 75,000 yen ($512) a year to insure a property in Saitama prefecture against up to 100 million yen in damage caused by natural disasters. Under the new policies, it can cut that premium by 2 percent by eliminating coverage for flood damage, or by 10 percent by dropping coverage for damage caused by typhoons. (Nihon Keizai) (TNI JAPAN INS) International Body to Require Market-Based Accounting Standards The London-based International Accounting Standards Committee will hold a directors meeting in mid-December to decide IAS standards, the Nihon Keizai newspaper said without citing sources. The IAS standards will require market-based calculations be used as a global accounting standard. Japan and other countries are expected to conform to the new rule after it is endorsed, the paper said. (Nihon Keizai) (TNI FIN JAPAN) Hashimoto to Become Top Diplomatic Adviser to Obuchi Japanese former Prime Minister Ryutaro Hashimoto has been appointed as a top diplomatic adviser to Premier Keizo Obuchi, Japanese papers reported. Hashimoto will visit Moscow next month to meet Russian President Boris Yeltsin to discuss concluding a Russo-Japanese peace treaty, the reports said. (The two nations haven't signed a peace treaty since World War II ended due to Japan's demand that Russian first cede control of a group of disputed island off Hokkaido. Russian re-occupied the islands in the final days of WWII.) Obuchi hopes Hashimoto's relationship with Yeltsin will help to conclude a peace treaty by 2000, the target date agreed to between Yeltsin and Hashimoto while he was still prime minister, papers said. (Asahi, Mainichi) (TNI JAPAN RUSSIA) Number of Employees at Companies Listed on TSE Drops 10% The number of employees at companies listed on the Tokyo Stock Exchanges dropped 10 percent, or by 510,000, over the past three years, the Sankei newspaper said, citing Teikoku Databank. The survey of 1,725 listed companies found about 70 percent had reduced payrolls. The number of workers fell by 2.5 percent, or 127,600, to 4.89 million in the September-March half year, sinking below 5 million for the first time ever. Some 28 of 30 industries cut workers, with the communication industry cutting back the most. Only the service and transportation industries increased their payrolls. (Sankei, Tokyo)(NI JNECO) Other pages: Construction Industry Writes Off Billions of Yen in Bad Debts The amount owed to Japanese construction companies declined 9.3 percent over the past year to 5.28 trillion yen ($30 billion), primarily because major constructors wrote off tens of billions of yen in bad debts, the Asahi newspaper said citing Teikoku Databank. Constructors are also unlikely to collect 845 billion yen, or 16.8 percent of the total still owed them, the paper said. Sato Kogyo Co. holds 69.3 billion yen in loans on which no payments have been received for more than a year. Other contractors with at least 40 billion yen in such problem loans include Mitsui Construction Co., Aoki Corp., Sumitomo Construction Co. and Kajima Corp, the report said. (Asahi, 7) (For Sato, see 1804 JP CN, for Mitusi, see 1821 JP CN, for Aoki, see 1886 JP CN, 1823 JP CN and for Kajima, see 1812 JP VN) Sunterra of U.S. to Open 2 Hotels in Japan Next Month Japan to Provide Additional 70.6 Bln Yen to Thailand The Japanese government will provide an additional 70.64 billion yen ($482 million) in credit to Thailand in the year to next March, the Nihon Keizai newspaper reported without citing sources. The money will be directed at bolstering Thailand's manufacturing industry in order to pull it out of its deflationary spiral, the newspaper said. The new credit is in addition to emergency financial support decided in June, bringing Japan's total yen credits to Thailand this fiscal year to 120 billion yen, the paper said. (Nihon Keizai, 3) (TNI JAPAN THAI) Nippon Steel Jointly Develops Aluminum Alloy for Auto Bodies Nippon Steel Corp. has jointly developed an aluminum alloy with Sky Alminium Co. for use in making roofs or other auto body parts, the Nihon Keizai newspaper said without citing sources. The companies said the aluminum alloy, ''TM30'' -- a mixture of aluminum, silicon and magnesium -- is stronger and easier to process than current aluminum alloys. The companies solved difficulties concerning the flexibility and strength of the aluminum alloy and will now try to reduce its cost, which is twice that of steel, the report said. (5401 JP CN) Sunterra Japan KK, a unit of California-based Sunterra Corp., will open two hotels in Chiba and Niigata prefectures next month, the Nihon Keizai newspaper reported, without citing sources. Sunterra, whose operations include 83 resorts in 10 countries, opened a resort hotel near Mt. Fuji last month. Sunterra also opened an office in central Tokyo to make reservations and offer other information on its hotels and services, the paper said. (Nihon Keizai, p. 7)(OWN US ) --Kae Inoue and Tomomi Sekioka in the Tokyo newsroom (813) 3201- 8950 /re -------------------------------------------------------------------------------- c Copyright 1998, Bloomberg L.P. All Rights Reserved.

To: TokyoMex who wrote (1823)	8/16/1998 8:45:00 AM
From: TokyoMex	Respond to of 119973

U.S. Equity Movers Sun, 16 Aug 1998, 6:05am EDT BN 8/14 U.S. Equity Movers: Apple, AT&T, Ciena, Hewlett-Packard (Final) U.S. Equity Movers: Apple, AT&T, Ciena, Hewlett-Packard (Final) New York, Aug. 14 (Bloomberg) -- The following is a list of companies whose shares moved in U.S. markets. The stock symbol's in parentheses after the company name. Prices are at closing. 24/7 Media Inc. (TFSM) rose 6 1/4 to 20 1/4 as the Internet- advertising company sold 3.25 million shares in an initial public offering. Amoco Corp. (AN) rose 1 1/16, or 2.2 percent, to 50 1/16 as the oil company was raised to ''buy'' from ''market perform'' by analyst Adam Sieminski at BT Alex Brown Inc. Sieminski also reiterated British Petroleum Co. (BP)'s American depositary receipts a ''buy.'' Sieminski expects BP's management will prevent earnings deterioration from the company's planned $53 billion acquisition of Amoco. Amoco's struggled for a decade with different strategies of running the company, and should benefit from BP's track record of cost cutting and restructuring. The acquisition gives both companies increased diversity and economies of scale, he said. BP ADRs, each representing six ordinary shares, rose as much as 2 3/4, or 3.5 percent, to 82. Apple Computer Inc. (AAPL) rose 1 1/16, or 2.7 percent, to 40 1/2 as the computer maker is unveiling its $100 million advertising campaign, its largest ever, to tout its new iMac home computer that goes on sale Saturday. Charles Schwab Corp. (SCH) fell 1 3/8, or 3.8 percent, to 35 1/16 as it and E*Trade Group Inc. (EGRP), the two largest electronic brokerages, saw their shares of the fast-growing online trading market fall in the second quarter, as customers flocked to deep discount brokers, Credit Suisse First Boston said in a report. Ciena Corp. (CIEN) fell 17 1/16, or 24 percent, to 54 1/8 after the fiber-optics company said it expects net income for the fiscal third quarter ended Aug. 1 to be 13 cents to 15 cents a share, excluding charges, compared with 34 cents a year ago. The company was expected to earn 32 cents, the average of analysts polled by First Call Corp. Also, Tellabs Inc.'s (TLAB) pending acquisition of Ciena has some analysts wondering whether Ciena will win a much hoped-for contract from AT&T Corp. (T), and if it will be able to keep getting business from its two main customers, WorldCom Inc. (WCOM) and Sprint Corp. (FON), the Wall Street Journal reported in its ''Heard on the Street'' column. Tellabs fell 13 11/16, or 19 percent, to 58 1/8. Complete Management Inc. (CMI) fell 3/8, or 19 percent, to 1 5/8 after the service provider for doctors was cut to ''hold'' from ''accumulate'' by analysts Kenneth Bohringer and Cynthia Capitena at Prudential Securities Inc., who cited a delay in the company returning to profitability. Bohringer said CMI executives yesterday said on a conference call that its restructuring, which originally was slated to be completed by the end of the third quarter, had slipped to the fourth quarter. Bohringer also expected a modest profit for the third quarter excluding restructuring charges; CMI instead posted a loss of 40 cents a share. Bohringer lowered his 1998 financial estimate for CMI to a loss of 35 cents from earnings of 55 cents. Cubic Corp. (CUB) rose 2 1/16, or 8.8 percent, to 25 1/2 as the maker of electronic equipment and Electronic Data Systems Corp. (EDS) were named by the London Underground to install a ''smart card'' ticketing system and replace a 93-year-old power station, contracts each valued at about $1.6 billion, as the world's oldest subway undergoes a facelift. Daou Systems Inc. (DAOU) fell 5 3/4, or 31 percent, to 12 3/4 after a quarterly regulatory filing indicated that second- quarter profit for the maker of information networks for the health-care industry was less than what the company reported two weeks ago. EVI Weatherford Inc. (EVI) fell 4, or 17 percent, to 19 after the fifth-largest oilfield-services and equipment company in the U.S. said it will miss third-quarter and 1998 earnings estimates by a small margin as lower oil prices cut demand. Chief Executive Bernard Duroc-Danner said EVI still expects full-year earnings to be higher than 1997's. The company's expected to earn 65 cents in the third quarter and $2.63 for the full year, the average estimates of analysts by First Call Corp. Global Crossing Ltd. (GBLX) rose 6 1/2 to 25 1/2 as the company, which is laying fiber-optic cables under the Atlantic and Pacific oceans, rose in its first day of trading on optimism for the telecommunications industry. Hewlett-Packard Co. (HWP) rose 1 1/4, or 2.4 percent, to 52 3/4 as the world's No. 3 computer maker is expected to report that profit for the fiscal third quarter ended July 31 fell to 54 cents a share from 58 cents a year earlier, based on a survey of analysts by First Call. The company is scheduled to report results Monday after the close of U.S. markets. IFR Systems Inc. (IFRS) fell 6 7/16, or 40 percent, to 9 9/16 after the maker of products that test wireless communications, avionics and fiber-optic equipment said it lost 38 cents a diluted share, including charges, in its fiscal fourth quarter ended June 30, compared with earnings of 25 cents a year ago. IFR also said it will break-even in the first quarter, compared with earnings of 22 cents a year earlier. ILX Resorts Inc. (ILX) fell 9/16, or 13 percent, to 3 5/8 as the developer, operator and marketer of upscale vacation ownership resorts in the western U.S. said second-quarter earnings fell to 10 cents a diluted share from 15 cents a year ago. J.P. Morgan & Co. (JPM) rose 9 5/8, or 8.2 percent, to 126 7/8 after a Business Week report prompted speculation that Deutsche Bank AG (DBK AG), Europe's second-largest bank, may be in talks on a $30 billion takeover of the fourth-largest U.S. bank. LCC International Inc. (LCCI) fell 1 7/8, or 18 percent, to 8 3/4 as the maker of wireless equipment posted a surprising second-quarter loss of 10 cents a share, before charges, because of lower sales in Asia and the delay of a new product. Lucent Technologies Inc. (LU) fell 2 3/16, or 2.5 percent, to 85 7/8 as the top seller of phone equipment in North America expects to take more than $145 million in charges for acquisitions in this fiscal fourth quarter ending Sept. 30. MGIC Investment Corp. (MTG) fell 5 11/16, or 11 percent, to 45 1/8 after Goldman, Sachs & Co. downgraded the biggest private mortgage-insurance company in the U.S. Analysts Robert Hottensen Jr. and Michael Hodes cut MGIC to the firm's recommended list from its priority list. Hottensen declined to comment on the downgrade. Old Kent Financial Corp. (OKEN) rose 1 3/16, or 3.4 percent, to 36 as the bank holding company filed with the U.S. Securities and Exchange Commission to sell as much as $250 million of securities. Proceeds from the offering will be used for general corporate purposes, including working capital, the reduction of short-term debt, and repurchasing common stock. Panavision Inc. (PVI) fell 1 5/8, or 7.8 percent, to 19 1/8 after the maker and renter of cameras and other equipment for the film and television industries warned that results will soften in the third quarter because major studios are shooting fewer large- budget films. and television-commercial production in the U.S. and the U.K. is lower than expected. Panavision had a second- quarter loss of $3.57 a diluted share, including non-recurring compensation charges and transaction expenses, compared with earnings of 15 cents a year earlier. PHP Healthcare Corp. (PPH) fell 15/16, or 25 percent, to 2 3/4 after the company said it lost $3.06 a diluted share in the fiscal year ended April 30, compared with a loss of 37 cents in fiscal 1997. Platinum Technology Inc. (PLAT) fell for a second day, 1 5/16, or 4.8 percent, to 26 1/16 after the security-software developer agreed to acquire Memco Software Ltd. (MEMCF) for $400 million, or $26 a share, in stock. Memco Software fell 1 5/16, or 6.1 percent, to 20 3/8. Premier Bancshares Inc. (PMB) rose 1 13/16, or 7.5 percent, to 26 1/16 as the banking company will replace Collagen Corp. (CGEN) in the Standard & Poor's SmallCap 600 Index after the close of trading on Aug. 17. Collagen's spinning off its Cohesion Technologies unit. Quantum Corp. (QNTM) rose 1 9/16 or 8.8 percent, to 19 1/4 and Seagate Corp. (SEG) rose 1 7/8, or 7.4 percent, to 27 1/4. The disk-drive makers are now beginning to see the sales pick-up that has already rippled through other computer-component companies, said BancAmerica Robertson Stephens Inc. analyst Daniel Niles, who reiterated his ''buy'' rating on Seagate earlier this week. Sands & Co. analyst Matthew Russo said that while pricing does remain competitive, things are getting better for the components makers. Shares in Read-Rite Corp. (RDRT), another disk-drive maker, rose 1 1/8, or 15 percent, to 8 9/16. Scheid Vineyards Inc. (SVIN) fell 1 7/16, or 22 percent, to 5 after the grower of wine grapes posted a second-quarter loss of 4 cents a share, and said 1998 revenue and earnings per share will be lower than analysts' expectations. Shaw Industries Inc. (SHX) rose 1 9/16, or 8.7 percent, to 19 9/16 after the carpet maker agreed to buy closely held Queen Carpet Corp. for $690 million as it seeks to increase its share of the carpet market following the sale of its 2-year-old retail business. Somanetics Corp. (SMTS) rose 3/8, or 18 percent, to 2 1/2 as the maker of computer-based medical-diagnostic and monitoring equipment's expected to post a loss of $1.09 a share in fiscal 1998 ending in November, compared with a fiscal 1997 loss of $1.88, the Wall Street Journal reported, citing analyst Amy Bell of H.J. Meyers & Co. Telecommunications Group Inc. (TCOMA) fell 1 13/16, or 4.7 percent, to 36 7/16 after its cable-television unit, TCI Group, said its second-quarter loss narrowed less-than-expected and warned about small rate increases, lower revenue from premium channels and higher spending. AT&T Corp. (T), which agreed to acquire TCI in June for about $43 billion, fell 2, or 3.5 percent, to 55 5/16. Cablevision Systems Corp. (CVC) fell 4 1/16, or 4.7 percent, to 82 1/2; Cox Communications Inc. (COX) fell 2, or 4.2 percent, to 46; Liberty Media Group (LBTYA) fell 1 3/8, or 3.6 percent, to 36 1/4; and MediaOne Group Inc. (UMG) fell 1 15/16, or 4 percent, to 47 1/2. Turbodyne Technologies Inc. (TRBD) fell 25/32, or 22 percent, to 6 7/32 as the maker of pollution-control equipment said first-half sales fell due to weaker-than-expected aftermarket wheel orders. The company said it had a second- quarter loss of 11 cents a share, compared with a 15-cent loss a year ago. UAL Corp. (UAL) rose 3 9/16, or 5.4 percent, to 69 3/16 after the parent of United Airlines reiterated its expectations for record third-quarter and 1998 earnings, two days after it said operating revenue would be little changed as international sales slow. Unidigital Inc. (UNDG) rose 7/8, or 14 percent, to 7 after the printing company was rated ''buy'' in new coverage by analyst Rudolf Hokanson at CIBC Oppenheimer. Hokanson said the demand for the digital solutions the company provides, such as wide format and color digital printing, is growing faster than traditional print. He expects the company to earn 49 cents a share for the fiscal year ending this month, 67 cents for the fiscal year ending in August 1999 and 90 cents for fiscal 2000. Hokanson predicts the stock will reach 12 in 12 months. Valspar Corp. (VAL) fell 2 13/16, or 7.5 percent, to 34 9/16 as the paint and coatings manufacturer posted earnings for its third quarter ended July 31 of 50 cents a diluted share, less than the 55-cent average estimate of five analysts surveyed by First Call, because of July sales and continued pressure on gross margins from increased raw-material costs. Vesta Insurance Group Inc. (VTA) rose 2 1/8, or 16 percent, to 15 5/8 as the insurer said it hired Morgan Stanley Dean Witter as its financial adviser to consider strategic alternatives to boost shareholder returns. The company also appointed Norman Gayle as chief executive and James Tait as chief financial officer. Yahoo! Inc. (YHOO) fell 1, or 1.1 percent, to 91 3/4 as the No. 1 Internet directory's operating chief, Jeff Mallett, said the Internet company's ruled out buying a media business because it doesn't want to make an alliance with a single content provider. Mallett also dismissed speculation that Yahoo! could be a takeover target for large media companies wanting to expand into the Internet industry. Chemical companies: The shares of chemical companies fell in response to DuPont Co. (DD)'s warning that its third-quarter earnings will be below year-earlier levels because of difficult business conditions. DuPont fell for a second day, 1 3/4, or 3.2 percent, to 53 1/4. Dow Chemical Co. (DOW) fell 4 5/8, or 5.1 percent, to 85 1/2, Lyondell Chemical Co. (LYO) fell 1 7/8, or 7.6 percent, to 22 15/16 and Rohm & Haas Co. (ROH) fell 4 1/2, or 4.8 percent, to 90. -------------------------------------------------------------------------------- c Copyright 1998, Bloomberg L.P. All Rights Reserved.

To: TokyoMex who wrote (1823)	8/16/1998 8:46:00 AM
From: TokyoMex	Respond to of 119973

Yeltsin rejects option to devalue rouble By John Thornhill in Moscow President Boris Yeltsin yesterday strongly rejected any possibility of devaluing the rouble, saying his government was fully in control of the situation in spite of the battering the country's markets had received this week. "There will not be a devaluation of the rouble," Mr Yeltsin said yesterday on a visit to the ancient city of Novgorod. "My conviction is not simply based on my own fantasy or my wish that we should not have a devaluation. My conviction is based on the fact that everything has been calculated. . . The situation is fully under control." Mr Yeltsin's comments brought some temporary relief to Russia's fevered financial markets, with the RTS-IF index bouncing more than 15 per cent at one stage before closing 13.67 per cent higher on the day at 115.00. Yields on domestic debt fell slightly but remained around 150 per cent. Trading volumes remained extremely thin at $23.6m (œ14.3m). The pressure on the foreign exchange market, though, continued unabated with the rouble closing at 6.37 to the US dollar, marginally outside the daily indicative trading band set by the central bank. But there remained few signs that the Russian population were being panicked by the financial crisis and rushing to exchange their savings into dollars. The central bank lifted the temporary restrictions on commercial banks buying dollars for their own accounts although the foreign exchange market remained sticky. Some investors experienced difficulties in exchanging roubles into US dollars and were forced to accept a rate of 6.5. Rumours continue to swirl about the scale of the liquidity difficulties being experienced by some of the big banks. In a remarkable demonstration of sang-froid, Mr Yeltsin said he would not change his holiday plans because of the financial crisis. He said people would only misinterpret the situation if he returned to the Kremlin prematurely. "If I return, people would say: that means there is a panic, that means there is a catastrophe, that means that things are collapsing," he said. "But, on the contrary, everything will go on as necessary." However, a central bank official said Sergei Dubinin, central bank governor, and Anatoly Chubais, who negotiated Russia's financial assistance package with the IMF, would cut short their holidays to grapple with the financial crisis. Mr Yeltsin urged parliament to hold an extraordinary session next week to reconsider additional tax-raising measures, warning he might dissolve it if it continued to block key parts of the government's anti-crisis package. The Communist party, which forms the biggest party in the lower house of parliament, said that it would decide on Monday whether to respond to the president's request. Mr Yeltsin also criticised the performance of some government ministers, picking out Yakov Urinson, the economics minister, for his lack of practical expertise.

To: TokyoMex who wrote (1823)	8/16/1998 8:47:00 AM
From: TokyoMex	Respond to of 119973

Hong Kong ECONOMY: A test of nerve Events abroad will mainly determine how deep and long the downturn will be, writes Peter Montagnon For much of last year Hong Kong seemed to have weathered the worst of the Asian economic storm: property prices turned softer after the July handover, there was evident weakness in the tourism and retail sector and there were even sporadic speculative attacks on the currency. But Hong Kong's strong banking system and its sound economic management record seemed sufficient to stand it in good stead. Only after the government revealed last month that the economy shrank by 2 per cent in the first quarter of this year did the full extent of the damage sink in. Now the territory is bracing itself for a full-scale recession, and the questions are how deep will it be and how long will it last. The answers are made all the harder because only some of Hong Kong's troubles are internally generated, and those that are - such as weakness in property prices and consumer spending - are mainly related to confidence. A large part of the problem relates to external factors over which the territory has no control. Worries about Japan and the persistent slowdown in China's economy have put pressure on Hong Kong's currency peg, prompting the high real interest rates and the credit crunch from which the territory is now suffering. The government's initial response was cautious. It offered only minor palliative measures such as extra training, limited spending on infrastructure and technical measures intended to support the property and the money markets. But signs that the negative growth was lasting into the second quarter prompted a much more dramatic intervention last week with a temporary halt to land sales in a HK$432bn package which will lead to a budget deficit of HK$21bn. Though the deficit is manageable the volte face raises serious questions about whether Hong Kong is moving away from its traditional laisser faire economic policy. The answer is probably not - despite its tradition of non-intervention the Hong Kong government has always interfered with the property market. But the move has left doubts about whether government will become more interventionist, or whether its close connection to business led it to choose to favour property developers over the mass of the population for whom house purchase is still inaffordable despite the sharp fall in prices. The danger, if the latter course is true, is that the government will have interfered with the adjustment process before the bubble is properly deflated. Residential property prices fell by about a third between last June and May this year and have fallen further since. Commercial property prices have also fallen by about 50 per cent from their peak, and though rents have lagged, these too will come down because several large developments - including the prestigious Cheung Kong Centre on the site of the old Hilton Hotel - are due to come on the market over the next 12 months. Prices are still above their 1996 levels, but, according to C.Y.Leung, a surveyor who is a senior adviser to chief executive Tung Chee-hwa, there is good underlying demand for residential property and the government's land sales have satisfied demand. "Demand for housing is still very strong," he says. "The reason behind the reduction in volume in the past few months is not so much lack of willingness to buy but the lack of mortgage finance which is in turn a result of reduced liquidity." Others are less sure. Dong Tao, regional economist at Credit Suisse First Boston, believes Hong Kong is only at the beginning of what could be a protracted and deep recession. "This is a long night, and we are only at 10pm," he says. There are three areas of concern, he argues. The first is excessively high real interest rates. As a result of the pressure on the peg, money market rates have been going up while inflation is falling. This will add to the interest pain in the second half when real rates could reach 7 to 9 per cent. Second, he says, is a large contraction in credit which is looming as foreign banks pull out of the Hong Kong loan market in an attempt to reduce their exposure to Asia. Finally, the territory is about to see a sharp increase in unemployment. Already nearly 4 per cent, and the rate could rise to about 7 per cent, its worst level since the mid-1970s. These factors could combine to produce what Mr Tao refers to as "a structural crack" over the coming months. So far it has tended to be smaller retailers who have faced cash flow problems. Large property developers are under-geared but the squeeze is spreading into middle ranking manufacturing companies and into some smaller property developers, bankers say. As the credit crunch intensifies even well-known companies could experience trouble. "I would not be surprised to see one or two blue-chip companies get into cash flow problems," says Mr Tao. Much depends, however, on the external environment. If Japan takes steps to revive its economy after the forthcoming upper house elections, some of the fear that is currently stalking the exchange markets could recede, and with that, the pressure on interest rates in Hong Kong. Similarly, a revival of economic growth in mainland China would provide a tonic for Hong Kong, while a majority of economists expect Beijing to resist pressure for a currency devaluation. China's current account remains in surplus and its reserves are large, while devaluation would not help China's depressed inland provinces. "Our view is that the renminbi won't go," says Clive McDonnell of the SG Group. "China's real effective exchange rate, taking account of inflation elsewhere, has not risen nearly as far as the nominal rate against other Asian currencies." If he is right, then Hong Kong's troubles may be reasonably short-lived. If he is wrong, then much worse is in store for the territory. A renminbi devaluation would almost certainly undermine the Hong Kong peg which would devastate the economy: according to Mr Tao, GDP would shrink by 10 per cent next year if that happened. Hong Kong will have to live off its nerves for several months while it waits to see which way things go.