European Business News 96-08-09

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From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated August 9 8:30 CET

CONTENTS

[01] President Yeltsin's inauguration shadowed by illness

[02] UK retail sales remained strong in July - second largest monthly rise in over six years

[03] The London Investment Banking Association report highlights implications of EMU

[04] ABB's profit climbs 9% in first-half of 1996

[05] Rank announces major restructuring on the back of a 71% drop in earnings

[01] President Yeltsin's inauguration shadowed by illness

The inauguration is the first since Russia became independent after the 1991 collapse of the Soviet Union.

The ceremony was to take place in Kremlin square, next to the cathedral where czars were once crowned, but Yeltsin this week decided to move it indoors, to the State Kremlin Palace, known in Soviet days as the Palace of Congresses. Aides said an indoor ceremony was simpler and cheaper - and thus more palatable given Russia's budget woes.

News reports suggested officials had decided to shorten the ceremony to accommodate a frail Yeltsin.

Yeltsin spokesman Sergei Medvedev said the president worked too hard during his last break and was planning a long vacation following the ceremony.

[02] UK retail sales remained strong in July - second largest monthly rise in over six years

The volume of retail sales moderated only slightly in the year through July after rising at the fastest rate for nearly six-and-a-half years in June, the CBI monthly distributive trades survey shows.

It was the second largest rise since January 1990, and the three-month trend suggests that underlying sales growth has strengthened a little further since the spring, said the CBI.

The survey shows that 56% of retailers said they sold more goods last month than they did in July 1995, compared with 13% who said they sold fewer. The difference between the two, a gap of 43 percentage points, was just below retailers' expectations and only slightly lower than June's 45 points.

Business remained above average for the time of year in July, although to a lesser extent than in June, said the CBI.

[03] The London Investment Banking Association report highlights implications of EMU

The report is designed to assist LIBA members, settlement institutions and other U.K. market authorities to identify the key changes to settlement procedures that would take place whether the U.K. participates in EMU, due in 1999, or opts out of it.

LIBA reaches several conclusions relating to the various markets it analyzes and makes 60 recommendations to a range of U.K. financial institutions on how they could make sure the U.K.'s settlement systems experience a smooth changeover to the Euro.

It addresses equity, corporate and debt settlement as well as over-the- counter and exchange-traded derivative settlement and foreign exchange settlement procedures.

The report urges the U.K. Treasury to initiate discussions before the end of the year on how gilts should be redenominated after the introduction of EMU.

LIBA also recommends that the Bank of England should co-ordinate this redenomination process and decide on the appropriate treatment of accrued interest on gilts.

[04] ABB's profit climbs 9% in first-half of 1996

ABB AB holds 50% in Asea Brown Boveri ABB Limited which reported a first- half pretax profit of $940 million. ABB AB's share of that was $464 million or 3.13 billion kronor.

The U.S. dollar has weakened from 1995 to 1996 against the Swedish krona which has had a negative effect when translating ABB AB's share in Asea Brown Boveri ABB Ltd.'s earnings, the company said.

[05] Rank announces major restructuring on the back of a 71% drop in earnings

The company said pretax profit dropped 71% to 128 million pounds in the period from a restated figure of 444 million pounds a year ago. The latest result was well below analysts forecasts of about 170 million pounds. The most stunning announcement, however, was that Rank Organisation plans to transfer its assets to a new holding company, the Rank Group PLC, which will issue new shares to replace those of Rank Organisation.

The company said it expects the move will allow it to sell its 60% stake in Rank Xerox without incurring prohibitive taxes.

'The reorganization is intended to be a first step towards a simplified group structure which would facilitate the disposal of the Rank Xerox interest more tax efficiently than is currently possible,' Rank said.

From the European Business News (EBN) Server at http://www.ebn.co.uk/

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