Read the Protocol to the North Atlantic Treaty on the Accession of Greece and Turkey (October 22, 1951) A)? GHT="50">
Compact version
Today's Suggestion
Read The "Macedonian Question" (by Maria Nystazopoulou-Pelekidou)
HomeAbout HR-NetNewsWeb SitesDocumentsOnline HelpUsage InformationContact us
Thursday, 21 November 2019
 
News
  Latest News (All)
     From Greece
     From Cyprus
     From Europe
     From Balkans
     From Turkey
     From USA
  Announcements
  World Press
  News Archives
Web Sites
  Hosted
  Mirrored
  Interesting Nodes
Documents
  Special Topics
  Treaties, Conventions
  Constitutions
  U.S. Agencies
  Cyprus Problem
  Other
Services
  Personal NewsPaper
  Greek Fonts
  Tools
  F.A.Q.
 

European Business News (EBN), 97-03-07

European Business News (EBN) Directory - Previous Article - Next Article

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

Page last updated March 7 1800 CET


CONTENTS

  • [01] U.S. jobless rate edges down to 5.3% as economy generates new jobs
  • [02] BSkyB and Kirch end joint venture
  • [03] Aerospatiale swings back into profit, profits could double in 1997
  • [04] GKN allays worries over $601 million damages from US lawsuit
  • [05] Banque Nationale de Paris doubles net profits to 682m dollars
  • [06] Nomura admits that directors may have carried out illegal share deals
  • [07] Spanish cabinet expected to clear Repsol sale
  • [08] Thomson Multimedia posts a loss for 1996
  • [09] EU's 'harmonised' consumer price data shows most states will meet Maastricht inflation criteria
  • [10] Corporate and Economic Briefs

  • [01] U.S. jobless rate edges down to 5.3% as economy generates new jobs

    The US economy created 339,000 new non-farm payroll jobs last month, an increase that pushed the national unemployment rate down to 5.3%. At the same time, average hourly earnings rose three cents to $12.09 in February, while average hours worked rose 0.8 to 35 hours.

    But the raw strength of the US labor market in February, coupled with comments by Federal Reserve Chairman Alan Greenspan, significantly increases the odds of a Fed rate hike later this month, analysts say. The undisputable brawn of the employment sector is likely to bring the central bank closer to raising interest rates this month than at any time since mid- 1996, analysts say. A tightening of credit conditions could come as soon as the Fed's next policy-making meeting on March 25.

    'We think the Fed will move,' says Marilyn Schaja, Fed watcher at Donaldson, Lufkin & Jenrette Securities Corp. The February gain in payrolls to a seasonally-adjusted level of 121.3 million was the largest since the economy created 410,000 jobs in May 1996. Since then, payroll gains have averaged 238,700 per month.

    The balance of recent data on employment poses problems for the financial markets and Fed policy makers, who worry that continued growth in the economy and wages will boost inflation. Rising prices would imperil the six- year-old business expansion and force the Fed to raise short-term interest rates in the months ahead, analysts say.

    Fed Chairman Alan Greenspan repeated this week that inflation risks in the U.S. remain skewed to the upside and that the central bank is on heightened alert for signs of imbalances that might place upward pressure on the nation's cost structure. 'The justification for a tightening has been established,' notes John Williams, chief economist at Bankers Trust Co.

    But considering the way the Fed has operated of late, Williams of Bankers Trust thinks it's more likely the Fed will boost rates in May. Policy makers, he says, are taking a ''whites of their eyes'' approach to inflation and will probably hold their fire in March.

    William Pesek Jr., AP-Dow Jones, Washington

    [02] BSkyB and Kirch end joint venture

    British Sky Broadcasting has confirmed that it has 'mutually agreed' with Kirch Gruppe to end talks over the setting up of a pay television platform in Germany, a move that may signal the end of Rupert Murdoch's ambitions in the German television market.

    The UK satellite and cable company said in a statement that talks ended 'because of failure to agree a number of fundamental issues.'

    Last year BSkyB agreed to take a 49% stake in DF1 - a proposed German digital satellite joint venture with Kirch. But the partnership plan was undermined by BSkyB's interest in taking a stake in a second German tv venture, Premiere, in which Kirch owns 25 percent.

    Kirch fell out with partners Bertelsmann of Germany and French pay TV group Canal Plus when they declared that they wanted Premiere, currently an analogue service, to be Germany's main digital television outlet rather than DF1.

    BSkyB had appeared poised to take a 25 percent stake in Premiere last year, before switching its focus to DF1.

    [03] Aerospatiale swings back into profit, profits could double in 1997

    French state-controlled aerospace group Aerospatiale is back in the black. After making a loss of 1995 the company has returned a profit of FF812 million ($142 million) for 1996. The company is also predicting that profits will double in 1997.

    Aerospatiale makes parts and assembles passenger jets for the Airbus Industrie consortium, and also manufactures tactical and strategic missiles, satellites and helicopters. The company is slated for privatisation and is in merger talks with combat jet maker Dassault Aviation.

    Aerospatiale foresees a 20% rise in sales in 1997. It also expects to deliver 190 planes to Airbus by the end of the 1997 year, compared to 126, which will boost turnover to 60 billion francs. Sales last year rose to FF50.9 billion from FF49.2 billion, but new orders last year jumped 61% to FF63.3 billion and orders at year-end 1996 rose to FF129.9 billion from FF101.5 billion.

    Aerospatiale Chairman Yves Michot noted that the primary cause of the swing into the black was the lack of restructuring charges in 1996. He added that there had been little progress in cost reduction last year.

    Though Michot said ongoing restructuring was necessary in the industry, he said the FF1.4 billion set aside in 1995 for that was sufficient to carry Aerospatiale through 1998.

    The lack of major restructuring charges in 1996, the first year without such charges in at least five years, also allows Aerospatiale to present a much better balance sheet in advance of its upcoming merger with Dassault Aviation SA and ahead of its subsequent privatization.

    Michot declined to speculate on just how soon the Aerospatiale merger with Dassault would be be completed, but said he expected the combined company to be privatised in November or December 1997.

    France's Privatization Commission is currently assessing the value of Dassault and Aerospatiale in order to set the terms of a share swap.

    [04] GKN allays worries over $601 million damages from US lawsuit

    British engineering giant GKN has swiftly reacted to the news that US district court has ordered it to pay nearly $601 million for misusing advertising fees. The company calmed investor worries by saying that it would appeal the award and announced that it would be taking a provision of 270 million in its annual accounts to cover the outcome.

    The jury's award came late on Thursday, just hours after GKN reported 363.1 million pounds ($583.9 million) pretax profits for 1996, and was based on lost profits from money improperly taken from the fraud.

    The action arose from the Charlotte-based Meineke franchiser's administration of an advertising fund to which all 2,500 Meineke franchisees contributed 10% of their weekly revenue. The plaintiff's attorneys said Meineke, GKN and other related corporations were found liable for breach of contract, breach of fiduciary duty, and fraud for secretly diverting millions from the advertising fund.

    GKN says that it has been advised that it was on 'very strong substantive and procedural grounds' to take its case to the U.S. court of appeals. 'It is expected that the appeal will take about 18 months to resolve,' the company said.

    [05] Banque Nationale de Paris doubles net profits to 682m dollars

    Banque Nationale de Paris, a leading French retail bank, more than doubled net profit in 1996.

    The bank reported that profits soared to 3.86 billion francs ($668.2 million dollars) from 1.78 billion francs a year earlier, helped in part by a reduction in new provisions, a steep rise in deposits and robust lending activity. Net banking profit rose 4.8% to 39.5 billion francs, at the high end of analysts' expectations, while the increase in operating charges was kept to 1.6%.

    Michel Pebereau, the retail bank's chief executive, said he didn't expect 1997 earnings to increase as much as last year because a bank cannot double its profit each year. He declined to give a specific percentage for growth in 1997, saying only that the year had begun well, along the same lines as 1996, and that he expects profit to grow every year from 1997-2000. 'It was not a bad year for BNP,' he said about the 1996 results.

    The bank's gross operating profit grew 14% to 10.84 billion francs; net earnings per share doubled to 18.6 francs. The company said it intends to pay a net dividend of 5.40 francs a share, up 50% from last year's 3.60- franc payout.

    Mr. Pebereau said he wants BNP to be a major European bank as Europe's single currency comes into being, and that the bank will take a 600-million- franc provision for costs associated with the changeover.

    [06] Nomura admits that directors may have carried out illegal share deals

    Shares in Nomura Securities fell sharply Friday after news that two of its executives may have conducted illegal transactions that could expose the brokerage house to punishment by the Japanese Finance Ministry.

    But industry analysts said the scandal was unlikely to hurt Japan's biggest brokerage or its share price in the long term. 'This scandal could lead to a weak performance by the company's stock in the short term, but when investors want to come back into the sector, they will go for the top names, ' said Robert Garone, an analyst at Dresdner Kleinwort Benson (Asia) Ltd.

    Confirming longstanding market rumors of a scandal, Nomura announced that two managing directors may have carried out illegal stock transactions since March 1995, placing the profits in a client's account.

    Nomura declined to say whether the transactions involved gangsters, in a practice known as 'sokaiya,' or to estimate the size of the deals. The Nihon Keizai Shimbun daily said one deal produced a profit of Y40 million yen.

    But a probe into the scandal by Japan's Securities and Exchange Surveillance Commission could result in heavy administrative penalties against Nomura. Finance Minister Hiroshi Mitsuzuka said his ministry will consider a 'strict measure' against Nomura depending on the result of the investigation.

    Some analysts said the scandal could damage the overall securities industry in Japan, which is struggling to regain the confidence of the individual investor after losing it because of the market's plunge and brokerage scandals in the early 1990s.

    But James Fiorillo at ING Barings Securities believes Japan's financial deregulation will eventually help to resolve the problem. With deregulation, supervisory bodies will have more powers, and greater disclosure will shed more light on trading practices.

    [07] Spanish cabinet expected to clear Repsol sale

    As the next step in Spain's privatization program, the cabinet today is expected to clear the sale of the state's remaining 10% stake in oil company Repsol.

    The offer, tentatively set for April, will raise some 170 billion pesetas ($1.17 billion) for the state. It also will remove the last traces of government participation in Repsol. Hurt by the downward turn in the chemical-business cycle, Repsol's consolidated net income rose 1.3% to 119.2 billion pesetas in 1996.

    But analysts expect profit to rebound this year, bolstered by higher volumes in its basic businesses in Spain and Latin America, where it sharply increased its presence in 1996. Repsol rose 160 pesetas on the Madrid Stock Exchange to close at 5,740.

    [08] Thomson Multimedia posts a loss for 1996

    Thomson Multimedia, the French state-owned television maker, has recorded a 1996 net loss after restructuring charges of FF1.3 billion ($536 million).

    Thomson Multimedia is the consumer electronics arm of state-owned Thomson and is slated for privatisation.

    The 1996 loss of FF3.13 billion includes FF1.3 billion for restructuring charges and FF1.4 billion for debt financing. The company's operating loss increased to FF409 million from a profit of FF352 million. A newspaper reported that the company plans to cut between 8,000 and 10,000 jobs worldwide, about one in five positions, by closing eight factories, including two in Germany, two in the U.S. and one each in Canada and Malaysia.

    France's privatization commission last Dec. 4 rejected a bid by Daewoo Electronics of South Korea to acquire Thomson Multimedia, citing a lack of job guarantees in France, where the company employs less than 10% of its worldwide job force.

    Chairman Alain Prestat said he hopes the company breaks even on an operating level. The state is due to put around 11 billion francs into Thomson Multimedia.

    [09] EU's 'harmonised' consumer price data shows most states will meet Maastricht inflation criteria

    Eurostat, the European Union's statistical arm, has unveiled its latest version of 'harmonised' price indexes for the 15 member states that suggest only Greece, Spain and Portugal remain out of reach of the inflation target for monetary union qualification.

    While the harmonised versions won't replace national price indexes - countries likely will publish both simultaneously - the former are to be used as a basis for comparison when E.U. leaders decide in early 1998 which member states have fulfilled the Maastricht Treaty's inflation criterion. The judgement will be based on data through 1997.

    The Treaty's wording is typically vague, but the inflation yardstick generally is interpreted to mean that a country's CPI mustn't be more than 1.5% above the average of the three best E.U. performers.

    Harmonised figures for January released by Eurostat Friday would yield a benchmark figure of 2.66%, leaving showed 13 of the 15 member states were in compliance with Maastricht at that time. Spain and Portugal weighed in at 2.8%, while Greece was 6.6%.

    Some E.U. countries published February CPI figures Friday alongside their harmonised alternatives, with no significant gap between them. In France, for example, both were up 1.8% year-on-year, although on a monthly basis the regular CPI gained 0.3% and the harmonised was up 0.2%.

    Other Maastricht criteria cover interest rates, public debt, public deficits, and currency stability.

    The new formula builds on interim CPI indices that Eurostat started publishing in February 1996, and in most cases they showed little divergence from national CPIs.

    But despite all the work done, Eurostat admitted that its harmonisation job isn't complete. Grey areas persist in the treatment of sectors like health and education where state subsidies can play a big role. E.U. statisticians are debating whether to use net prices consumers actually pay, or the total cost of providing the good or service.

    Another sticking point is owner-occupied housing, for which the common measures of 'imputed' rents or mortgage interest payments have been deemed unwieldy by Eurostat for international comparisons.

    Meanwhile, the harmonised indexes aren't likely to quiet the continuing debate over the lack of clarity in the Maastricht criteria, which are meant only as guidelines for the E.U. leaders when they gather at a special summit in April of next year to decide which member states will lock exchange rates irrevocably on Jan. 1 1999 - the first step in the launch of the euro.

    [10] Corporate and Economic Briefs

    Dutch wholesaler for the healthcare sector ACF said its net profit declined to 16.3 million guilders last year from 22.3 million guilders the year before. Sales dropped to 1.19 billion guilders from 1.29 billion guilders in 1995. ACF said the 1996 results were substantially influenced by the Dutch government's new Medicines Prices Act. The implementation of this new law led to prices of pharmaceutical products in the Netherlands falling on average by 15%.

    Dutch specialty textile company Koninklijke Ten Cate said net profit in 1996 rose to 30.2 million guilders from 20.5 million guilders in 1995. Net profit before extraordinary items rose to 35.7 million guilders from 27.5 million guilders. Sales increased 6% to 1.42 billion guilders.

    Consumer prices in the Netherlands rose 2.2% in February from the same month a year earlier, and gained 0.2% from January, the Dutch Cantral Bureau for Statistics said. According to the CBS, the Consumer Price Index registered 118.2, up from 118 in January and 115.7 in February 1995.

    Swedish state owned holding company Securum sold 7.26 million shares in Dutch chemicals group Akzo Nobel for a total of 7.9 billion kronor, the company said. Buyers are international institutions and the price was 279.20 guilders, the closing price on the Amsterdam Stock Exchange. The 7.6 million shares represented 10.2% of the shares in Akzo Nobel. After the sale, Securum has 3% of the shares. On these remaining shares, Securum has issued put options with a strike price of 215guilders a share and exercise date May 1 1998. Securum is divesting assets taken over by the state in connection with the crisis in the Swedish banking system in the early 1990's.

    Canada's unemployment rate was unchanged in February at 9.7% from December, but the country shed 18,700 jobs in a month where expectations had called for a rise of almost 30,000. The total number of employed fell to 13,740,100 in February from 13,758,800 in January.

    Sweden's unemployment rate was unchanged at 8.8% in February from January but up from 7.7% in February 1996, according to figures released Friday by the national statistics agency. The total number of employed dropped to 3.85 million in the month from 3.87 million in January, and 3.92 million in February a year earlier.

    Switzerland's unemployment rate held steady at 5.7% in February, breaking a string of five straight months of increases, the government said. A year ago, the jobless rate was 4.6%. It had held at around 4.5% to 4.6% for much of 1996 before surging toward the end of the year as the country's economy stagnated. A bright spot in the February report showed a 30% increase from January in the number of open jobs recorded by the federal Office of Industry, Commerce and Employment. Unfilled jobs totaled 7,508, up from 5, 794 in January and from 5,369 in February 1996. Whitbread will sell its Keg restaurant business to Canada's Raleigh in a deal valuing the chain at 23 million. The transaction, still conditional at this stage, is expected to be completed in April, Whitbread said.

    Austria's wholesale price index rose a preliminary 0.7% in February compared with a year earlier and was up a preliminary 0.1% from January. In January, the WPI had gained 0.9% from a year earlier and 0.3% from December, the agency reported.

    Austria's current account deficit reached a preliminary 42.4 billion schillings in 1996. In 1995 the deficit had reached a record 47.0 billion schillings.

    Belgium's index of industrial production was 89.7 in December 1996, down 5.6% from 95.1 in November, but up 5.2% from 85.3 in December 1995. Excluding construction, the index was 96.6 in December 1996, up from 92.7 in December 1995. A comparable figure for November 1995 wasn't provided.

    The Czech Republic's unemployment rate increased marginally at the end of February to 4.1% from 4% at the end of January. February's jobless rate of 4.1% compares to 3.1% in February 1996.

    Wholesale sales in Germany rose by 2.5% in real, seasonally and calendar adjusted terms in January from December and were up 3% from a year earlier. In nominal terms, it added, the rise was 2.6% on the month and up 4% from a year ago.

    Italy's retail sales index rose 4.6% in November 1996, over the same month in 1995, and compares to a 7.4% year-on-year rise in October 1996. Sales at large distribution chains rose 5.7% and sales at medium-sized retailers fell 2.9% in November on the year earlier period.


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


    European Business News (EBN) Directory - Previous Article - Next Article
    Back to Top
    Copyright 1995-2016 HR-Net (Hellenic Resources Network). An HRI Project.
    All Rights Reserved.

    HTML by the HR-Net Group / Hellenic Resources Institute, Inc.
    ebn2html v1.01a run on Friday, 7 March 1997 - 18:15:13 UTC